June 22, 2011

Iraq 2011: Jet skiing the Triangle of Death, listening to Bee Gee songs--and pondering what comes next

Emma Sky

The taxi driver to Beirut airport tells me that yom al-qiyama (the day of judgment) is approaching. There will be a big explosion soon -- a very big explosion. The revolutions sweeping the Arab World are not good. Islamic parties will come to power everywhere. There will be no more Christians left in the Middle East. Believe me, believe me, he insists. In anticipation, he will make the Hajj to Mecca this year, inshallah. I tell him that I am traveling to Iraq as a tourist. The look he gives me in the rear view mirror says it all: He thinks I am crazy.

I am heading back to Iraq nine months after I left my job as Political Advisor to the Commanding General of U.S. Forces Iraq. Earlier this year, a Sheikh emailed me from his iPad, "Miss Emma we miss you. You must come visit us as a guest. You will stay with me. And you will have no power!" I am excited and nervous. The plane is about a third full. I am the only foreigner. I look around at my fellow passengers. I wonder who they are and whether they bear a grudge for something we might have done.

The flight is one and a half hours long. I read and doze. As we approach Iraq, I look out of the window. The sky is full of sand and visibility is poor. But I can make out the Euphrates below. Land of the two rivers, I am coming back.

I do not have an Iraqi visa. Visas issued in Iraqi Embassies abroad are not recognized by Baghdad airport. I have a letter from an Iraqi General in the Ministry of Interior, complete with a signature and stamp. In the airport, I present my passport and letter, fill out a form, pay $80, and receive a visa within 15 minutes. I collect my bag. I am through. I want to reach down and touch the ground, this land that has soaked up so much blood over the years -- ours and theirs.

Posted by jez at 5:25 AM

June 21, 2011

US doctors braced for deep cuts in spending

Matt Kennard:

Doctors treating the poor in the US are braced for significant reductions to their services amid increased pressure from both the Obama administration and Republicans for deep cuts in health spending.

Twenty-nine Republican governors have called for greater flexibility in how states administer Medicaid programmes for the poor, a move which coincides with the Obama administration's withdrawal of stimulus funds used to pay for treatment.

Nearly 49m people in the US, or one in six Americans, were covered by Medicaid in 2009. The figure is thought to be higher today.

The federal government increased its subsidies to the states under the stimulus programme, spending $2.68 for every dollar a state spent on Medicaid, nearly twice as much as before the stimulus.

Posted by jez at 9:20 PM

June 5, 2011

Madison Farmer's Market Scenes June 3, 2011

Posted by jez at 4:13 PM

June 4, 2011

The Dilemma

Ed Wallace:

If there is one most frightening thing that war always exposes, even if one is on the winning side, it's weakness in the supply logistics. While most never consider it, official policy often changes during a war because supplies that are critical to the war effort seem in danger of being disrupted. Such jeopardy, moreover, forces the accountants, economists and politicians waging the conflict to start thinking about how the world will be changed once the fighting has ended.

Few today appreciate the fact that our foreign policy, particularly as it is tied to the Middle East, came about because of just such concerns in the first years of the Second World War. As one might expect, that official policy was based on real fears that America would one day run out of oil.

"The European War"
It was the summer of 1941 and the State Department had requested that the White House include Saudi Arabia in our Lend Lease program. It wasn't because the Saudis were going to become a direct ally against the European Axis Powers, but because we were about to embargo U.S. oil shipments to Japan. Many believed - correctly, as it turned out - that this would probably lead to hostilities with Japan that would draw us into the war.

Standard Oil of California, which had been drilling for oil in Bahrain for over a decade, now had oil concessions granted by King ibn Saudi. The first six wells Standard drilled into the Arabian desert were nothing to write home about, but when Well No. 7 came in on March 4, 1938, the engineers and wildcatters all knew that Saudi Arabia was going to be an oil bonanza.

Yet on July 18, 1941, Roosevelt refused the request for Lend Lease for Saudi Arabia. He saw no immediate benefit to diverting U.S. dollars overseas simply because Standard had oil concessions there. In any case, the outbreak of the European War in 1939 had reduced oil production in the Kingdom to an insignificant volume -- a trickle, considering that American oil amounted to 60 percent of the world's crude at the time. Instead Roosevelt asked Federal Loan Administrator Jesse Jones to look into the possibility of having England deal with the Saudi King's pressing needs.

Posted by jez at 8:04 PM

June 3, 2011

Stupid IT Tricks: Medical Records, or Why a Federal Subsidy Makes No Sense (I Agree)


A reader asked me to write tonight about the Health Information Technology for Economic and Clinical Health Act, which is about as far from something I would like to write about as I can imagine, but this is a full service blog so what the heck. The idea behind the law is laudable -- standardized and accessible electronic health records to allow any doctor to know what they need to know in order to treat you. There's even money to pay for it -- $30 billion from the 2009 economic stimulus that you'd think would have been spent back in 2009, right? Silly us. Now here's the problem: we're going to go through that $30 billion and end up with nothing useful. There has to be a better way. And I'm going to tell you what it is.
But first a word from my reader:

Posted by jez at 9:31 AM

May 21, 2011

Henry Kissinger talks to Simon Schama

Simon Schama:

Not so much, though, as to get in the way of treating China as an indispensable element in any stabilisation of perilous situations in Korea and Afghanistan. Without China's active participation, any attempts to immunise Afghanistan against terrorism would be futile. This may be a tall order, since the Russians and the Chinese are getting a "free ride" on US engagement, which contains the jihadism which in central Asia and Xinjiang threatens their own security. So was it, in retrospect, a good idea for Barack Obama to have announced that this coming July will see the beginning of a military drawdown? The question triggers a Vietnam flashback. "I know from personal experience that once you start a drawdown, the road from there is inexorable. I never found an answer when Le Duc Tho was taunting me in the negotiations that if you could not handle Vietnam with half-a-million people, what makes you think you can end it with progressively fewer? We found ourselves in a position where to maintain ... a free choice for the population in South Vietnam ... we had to keep withdrawing troops, thereby reducing the incentive for the very negotiations in which I was engaged. We will find the same challenge in Afghanistan. I wrote a memorandum to Nixon which said that in the beginning of the withdrawal it will be like salted peanuts; the more you eat, the more you want."

Posted by jez at 9:07 PM

Investing, Risk, Politics & Taxes: Global Central Bank Leverage

Source: Grant's Interest Rate Observer, 5/20/2011 edition. Worth considering for financial & risk planning.

Related: Britannica: Central Banks and currency.

Basell III details: Clusty.com and Blekko.

Posted by jez at 7:31 PM

May 10, 2011

The Most Interesting Man in the Senate: Rand Paul reshapes the national debate.

Matt Welch:

"What is so great about our bloated federal government that when a libertarian threatens to become a senator, otherwise rational and mostly liberal pundits start frothing at the mouth?" the old New Left columnist Robert Scheer wrote at Truthdig. "What Rand Paul thinks about the Civil Rights Act, passed 46 years ago, hardly seems the most pressing issue of social justice before us. It's a done deal that he clearly accepts. Yet Paul's questioning the wisdom of a banking bailout that rewards those who shamelessly exploited the poor and vulnerable, many of them racial minorities, is right on target. So too questioning the enormous cost of wars that as he dared point out are conducted in violation of our Constitution and that, I would add, though he doesn't, prevent us from adequately funding needed social programs."

The dead-enders of the Beltway left, however, continued to treat Paul like a mental patient. "By nominating a lunatic," Center for American Politics blogger Matthew Yglesias wrote after Paul's primary victory, "Republicans have suddenly taken what should be a hopeless Senate race and turned it into something Democrats can win. At the same time, by nominating a lunatic, Republicans have suddenly raised the odds that a lunatic will represent Kentucky in the United States Senate." Nor was this sentiment confined to the left. "Rand Paul's victory in the Kentucky Republican primary is obviously a depressing event for those who support strong national defense and rational conservative politics," former George W. Bush speechwriter David Frum wrote at the time. "How is it that the GOP has lost its antibodies against a candidate like Rand Paul?"

Paul parries these attacks with a bemused but direct engagement; you can see he thinks he's going to win a long-overdue David vs. Goliath argument. A good portion of his book is spent examining and decrying how the Republican Party became "tainted by neoconservative ideology," mistaking "national greatness" for a willingness to intervene willy-nilly into the affairs of foreign countries, while tolerating big spending projects at home. "The Tea Party," Paul claims, "is now a threat to the old Republican guard precisely because its stated principles prevent it from being brought into the neoconservative fold."

Posted by jez at 9:12 PM

May 2, 2011

Wikileaks Founder: Facebook is the most appalling spy machine that has ever been invented

Matt Brian:

Despite awaiting extradition to Sweden on sexual assault charges, Wikileaks founder Julian Assange is still the subject of much media interest.

Russia Today (RT) interviewed Assange, getting his viewpoint on political unrest in Egypt and Libya, particularly probing what the Wikileaks founder makes of social media's roles in the recent revolutions in both countries. In his interview, Assange focuses particularly on Facebook calling it the "most appalling spy machine that has ever been invented".

Posted by jez at 8:35 PM

April 22, 2011

Oil: We're Being Had Again

Ed Wallace:

No matter how many of his Fed presidents claim they are not to blame for the high price of oil, the real problem starts with Ben Bernanke. The fact is that when you flood the market with far too much liquidity and at virtually no interest, funny things happen in commodities and equities. It was true in the 1920s, it was true in the last decade, and it's still true today.

Richard Fisher, president of the Dallas Federal Reserve, spoke in Germany in late March. Reuters quoted him as saying, "We are seeing speculative activity that may be exacerbating price rises in commodities such as oil." He added that he was seeing the signs of the same speculative trading that fueled the first financial meltdown reappearing.
Here Fisher is in good company. Kansas City Fed President Thomas Hoening, who has been a vocal critic of the current Fed policy of zero interest and high liquidity, has suggested that markets don't function correctly under those circumstances. And David Stockman, Ronald Reagan's Budget Director, recently wrote a scathing article for MarketWatch, titled "Federal Reserve's Path of Destruction," in which he criticizes current Fed policy even more pointedly. Stockman wrote, "This destruction is, namely, the exploitation of middle class savers; the current severe food and energy squeeze on lower income households ... and the next round of bursting bubbles building up among the risk asset classes."

Posted by jez at 9:53 PM

April 18, 2011

The 30-Cent Tax Premium: Tax compliance employs more workers than Wal-Mart, UPS, McDonald's, IBM and Citigroup combined.

There is a lot more to taxes than simply paying the bill. Taxpayers must spend significantly more than $1 in order to provide $1 of income-tax revenue to the federal government.

To start with, individuals and businesses must pay the government the $1 in revenue plus the costs of their own time spent filing and complying with the tax code; plus the tax collection costs of the IRS; plus the tax compliance outlays that individuals and businesses pay to help them file their taxes.

In a study published last week by the Laffer Center, my colleagues Wayne Winegarden, John Childs and I estimate that these costs alone are a staggering $431 billion annually. This is a cost markup of 30 cents on every dollar paid in taxes. And this is not even a complete accounting of the costs of tax complexity.

Like taxes themselves, tax-compliance costs change people's behavior. Taxpayers, whether individuals or businesses, respond to taxes and tax-compliance costs by changing the composition of their income, the location of their income, the timing of their income, and the volume of their income. So long as the cost of changing one's income is lower than the taxes saved, the taxpayer will engage in these types of tax-avoidance activities.

Posted by jez at 4:10 AM

April 15, 2011

The Real Housewives of Wall Street: Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?

America has two national budgets, one official, one unofficial. The official budget is public record and hotly debated: Money comes in as taxes and goes out as jet fighters, DEA agents, wheat subsidies and Medicare, plus pensions and bennies for that great untamed socialist menace called a unionized public-sector workforce that Republicans are always complaining about. According to popular legend, we're broke and in so much debt that 40 years from now our granddaughters will still be hooking on weekends to pay the medical bills of this year's retirees from the IRS, the SEC and the Department of Energy.

Why Isn't Wall Street in Jail?

Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size -- a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.

Now, following an act of Congress that has forced the Fed to open its books from the bailout era, this unofficial budget is for the first time becoming at least partially a matter of public record. Staffers in the Senate and the House, whose queries about Fed spending have been rebuffed for nearly a century, are now poring over 21,000 transactions and discovering a host of outrages and lunacies in the "other" budget. It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure. The Fed sent billions in bailout aid to banks in places like Mexico, Bahrain and Bavaria, billions more to a spate of Japanese car companies, more than $2 trillion in loans each to Citigroup and Morgan Stanley, and billions more to a string of lesser millionaires and billionaires with Cayman Islands addresses. "Our jaws are literally dropping as we're reading this," says Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont. "Every one of these transactions is outrageous."

Posted by jez at 9:35 AM

April 13, 2011

On The US Budget Deficit & Debt

Obama adds fuel to confusion but no resolution, Mohamed El-Erian:

A friend and former colleague of mine, Paul McCulley, once made the distinction between those who were "responsibly irresponsible" and those who were "irresponsibly irresponsible". The two notions explain why more unsatisfactory last-minute policy compromises are now likely, despite President Barack Obama's impressive speech on how America must move forward to tackle its debt ceiling, and its wider problem of budgetary reform.

Mr Obama proposed cutting $4,000bn from deficits over the next 12 years, reducing government outlays to Medicare and Medicaid healthcare programmes, and even considered tax increases. His speech therefore provides an important opportunity to advance this debate, but a much broader context is still needed if it is to succeed in overcoming both domestic political stalemates and growing concerns abroad.

Back in the final quarter of 2008 and the beginning of 2009, it was right for the US to behave responsibly irresponsible. At that moment every available part of the public sector balance sheet, from the Federal Reserve's to the Federal budget, had to be used to avoid an economic depression. And it worked.

The radical right and the US state by Martin Wolf:
What does the rise of libertarianism portend for the future of the US? This is not a question of interest to Americans alone. It matters almost as much to the rest of the world. A part of the answer came with the publication of a fiscal plan, entitled "Path to Prosperity", by Paul Ryan, Republican chairman of the house budget committee. The conclusion I draw is the opposite of its author's: a higher tax burden is coming. But that leads to another conclusion: much conflict lies ahead, with huge implications for politics, federal finance and the US ability to play its historic role.

An analysis of the Ryan plan by the Congressional Budget Office makes the point. Its "extended-baseline scenario" assumes that current law remains unchanged. Under that assumption, revenue would rise from 15 per cent of gross domestic product to 21 per cent in 2022 and on to 26 per cent in 2050. Spending would rise substantially, too, from 23¾ per cent of GDP in 2010 to 30¼ per cent in 2050. As a result, the deficit would fall from today's levels while debt held by the public would rise to 90 per cent of GDP in 2050.

As the CBO makes plain, this is an optimistic scenario. Current law includes, most notably, the assumption that the 2001 and 2003 tax cuts will expire, as legislated. Together with the impact of fiscal drag from economic growth and inflation, this generates the rising share of revenue in GDP. On the side of spending, the share of social security in GDP rises modestly, from 4¾ per cent of GDP in 2010 to 6 per cent in 2050. The share of all other spending (including defence), apart from that on health, is assumed to fall to close to its long-run average of 8 per cent of GDP. But health spending explodes, from 5½ per cent of GDP in 2010 to 12¼ in 2050.

Posted by jez at 7:49 PM

White House visitor logs leave out many

Viveca Novak & Fred Schulte:

A foot of snow couldn't keep Bob Dylan, Joan Baez, Jennifer Hudson and other celebrities away from a star-studded celebration of civil-rights-era music, hosted by President Barack Obama and first lady Michelle Obama at the White House in February 2010.

Dylan's haunting rendition of "The Times They Are a-Changin'" was a highlight of the dazzling evening. The digitally friendly White House even posted the video of his performance on its website.

But you won't find Dylan (or Robert Zimmerman, his birth name) listed in the White House visitor logs -- the official record of who comes to call at 1600 Pennsylvania Ave., which is maintained by the Secret Service.

Ditto Joan Baez.

Posted by jez at 10:37 AM

April 8, 2011

You Call This Global Leadership?

Suddent Debt:

The US government is about to be shut down in the next 24 hours over the federal budget impasse. Here are the only numbers you need:

Federal spending is approx. $3.7 trillion, the deficit this year alone is projected at $1.4 trillion - and the politicians are squabbling over spending cuts amounting to $33-40 billion; that's 1% of spending and 2.9% of the deficit. You gotta be joking, right?


Posted by jez at 9:29 AM

Reforming the Banks

Michael Pettis:

just got back from a very interesting but hectic week in New York and Washington, followed by two days at a conference in Hangzhou. During my meetings I noticed that much of the discussion, and many of the questions I was asked by both government officials and investors, focused on debt levels and reforms in the Chinese financial system. I have written a lot about rising debt in China and am glad that analysts and policymakers seem to be spending a lot more time thinking about balance sheet issues. Every case of rapid, investment-driven growth in the past century, as far as I can make out, has at some point reached a stage in which debt levels rose to unsustainable levels and precipitated either a debt crisis or a long grinding adjustment period.

The reason debt levels always seem to grow unsustainably, I suspect, is that in the initial stages of the growth model much if not all of the investment is economically viable as it pours into building necessary infrastructure whose profits and externalities exceed the cost of the investment. The result is real growth. At some point, however, the combination of subsidies, distorted incentives (in which investment benefits accrue to those making the investment while costs are shared broadly through the banking system), and very cheap financing costs leads inexorably to wasted investment and debt rising faster than asset values. This is when the debt burden begins to rise in an unsustainable way.

Posted by jez at 9:27 AM

March 28, 2011

Consumers have a beef with Fed over inflation

Food riots, deposed Middle Eastern despots and now this? Last week, a Texas man brandishing an assault rifle was involved in a three-hour shoot-out with police and had to be subdued with tear gas after ordering seven Beefy Crunch Burritos at a Taco Bell drive-through and being informed that their price had risen from 99 cents to $1.49.

Late night comedians and serious pundits alike had a field day with the story, opining on issues like fast-food culture, obesity (the seven burritos contain 3,600 calories, double the recommended daily intake) and gun control.

With his petty gripe, the gunman, Ricardo Jones, is no Muhammad al Bouazizi, the self-immolating Tunisian fruit seller who inspired millions across the region to throw off the yoke of tyranny, but 50 per cent is 50 per cent in San'a or San Antonio. Food inflation is a global phenomenon.

Posted by jez at 10:41 AM

March 24, 2011

G.E.'s Strategies Let It Avoid Taxes Altogether

David Kocieniewski:

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.'s giant tax department, led by a bespectacled, bow-tied former Treasury official named John Samuels, is often referred to as the world's best tax law firm. Indeed, the company's slogan "Imagination at Work" fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

Posted by jez at 10:03 PM

March 13, 2011

Modern muckraking does free speech a disservice

Christopher Caldwell:

James O'Keefe is either the sleaziest kind of journalist or the most respectable kind of con artist. His Project Veritas group uses lies, scams and hidden cameras to entrap his political adversaries. This week, Project Veritas released a video of its latest victim: Ron Schiller, a fundraising executive for National Public Radio. Mr Schiller and a colleague were lured to a Washington restaurant with promises of $5m in donations from the "Muslim Education Action Center". Meac, supposedly set up by the Muslim Brotherhood to "spread the acceptance of sharia", does not actually exist. It was an invention of Project Veritas. But Mr Schiller was voluble in assuring its leaders of his contempt for the kind of middle-class Americans who voted for the Tea Party last autumn. "They believe in white, middle America, gun-toting ... it's scary," he said. "They're seriously racist, racist people." Of course, they also happen to elect the congressional majority that controls the fate of $450m in public broadcasting funding. Mr Schiller has resigned from NPR, as has its chief executive, Vivian Schiller (no relation).

Political pranksterism is all the rage. Sacha Baron Cohen practised a form of it in Borat and, more recently, the editor of the Buffalo Beast news website phoned Scott Walker, the embattled Wisconsin governor, passing himself off as the Republican donor David Koch.

Posted by jez at 1:49 AM

February 28, 2011

Dollar's haven status hangs in the balance

Peter Garnham

Long seen as a place of safety in times of turmoil, the dollar may be losing its haven appeal.

Soaring oil prices, driven by upheaval in the Middle East, falling equities and elevated volatility have all made investors uneasy. A flight to the dollar usually accompanies increased risk aversion.

This time, though, while the traditional havens of the Swiss franc and the yen have benefited, the US currency has suffered.

"It seems the dollar's haven status has vanished," says Steve Barrow at Standard Bank. "And, even for long-term dollar bears like ourselves, this is a worry."

The main reason for the dollar's underperformance, say analysts, is concern about the effect of rising oil prices.

The dollar has dropped to a record low against the Swiss franc and fallen 2 per cent to Y81.82 against the yen in the past two weeks, just shy of the all-time low of Y79.7 it hit against the Japanese currency in 1995. It has also lost ground against the euro and sterling.

The fear is that higher oil prices will lead to a transfer of funds from oil-importing countries to the sovereign wealth funds of oil-exporting nations.

Posted by jez at 9:40 PM

February 21, 2011

Why Isn't Wall Street in Jail?

Matt Tabi:

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

"Everything's _______ up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."

I put down my notebook. "Just that?"

"That's right," he said, signaling to the waitress for the check. "Everything's ______ up, and nobody goes to jail. You can end the piece right there."

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth -- and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

Posted by jez at 9:27 PM

February 20, 2011

Saturday Afternoon Ice Fishing Panorama: Madison

Panoramas and photos from Saturday's Pro-union & Tea Party rallies at the Capitol can be seen here.

Posted by jez at 8:21 PM

February 12, 2011

The "National Insecurity" of Imported Oil

Ed Wallace:

Getting America off imported oil is always urged in the context of national security. No matter how often that refrain is repeated, however, it always points toward how much imported oil American motorists use.

It's never about the amount of oil imported into the United States, refined into numerous products and shipped back out of the country. Nor are people arguing that we need to quit using imported oil for manufacturing concerns - like making fertilizers to grow corn, to make into ethanol to put into our gas, so we can quit importing oil. (That's the most comical circular argument currently making the rounds.) But we also use oil for things like asphalt for our roads, and in the plastics industry, and even the most ardent "get America off imported oil" advocates don't talk about constraining those industries.
In reality, the country from which we import the most oil is Canada. And I'm fairly certain that we aren't too worried about the national security aspect of bringing that oil into America, now or in the future. Yet we're still hearing the constant mantra that this is a national security issue, and that's what troubles me most. And, if you own one of the nation's 240 million vehicles, the "national insecurity of imported oil" refrain should trouble you, too.

Posted by jez at 4:18 PM

February 10, 2011

How the crisis catapulted us into the future

Martin Wolf:

Did the financial crisis change very much? That was my question as I went to the annual meeting of the World Economic Forum in Davos last week. The answer is: yes. Above all, it has accelerated the arrival of our future. Even for the winners, this is quite a shock.

It is three and a half years since the financial crisis began and a little more than two years since it reached its worst. Bob Diamond, chief executive of Barclays, gave the financial sector's thanks to governments for the rescue. Now the mood is one of wary optimism. According to the International Monetary Fund's World Economic Outlook update, global output grew in 2010 by 5 per cent, at purchasing power parity, and 3.9 per cent, at market exchange rates. This contrasts with declines of 0.6 per cent and 2.1 per cent, respectively, in 2009. The IMF expects growth to slow only slightly to 4.4 per cent at PPP and 3.5 per cent at market exchange rates, in 2011. Optimism continues to reign.

With the crisis fading into memory, how will historians assess its legacy? Journalists do not have the luxury of distance. So here are my guesses. I will start with possible turnrounds.

The crisis was neither the beginning of a depression nor the end of capitalism. But it has caused a tightening of financial regulation, particularly of banks, though this has occurred within the pre-existing intellectual and institutional framework. After three decades of deregulation, movement is in the opposite direction, though not without resistance.

Posted by jez at 9:23 PM

January 30, 2011

GOP pushing for ISPs to record user data

Declan McCullagh:

he House Republicans' first major technology initiative is about to be unveiled: a push to force Internet companies to keep track of what their users are doing.

A House panel chaired by Rep. F. James Sensenbrenner of Wisconsin is scheduled to hold a hearing tomorrow morning to discuss forcing Internet providers, and perhaps Web companies as well, to store records of their users' activities for later review by police.

One focus will be on reviving a dormant proposal for data retention that would require companies to store Internet Protocol (IP) addresses for two years, CNET has learned.

Tomorrow's data retention hearing is juxtaposed against the recent trend to protect Internet users' privacy by storing less data. Last month, the Federal Trade Commission called for "limited retention" of user data on privacy grounds, and in the last 24 hours, both Mozilla and Google have announced do-not-track technology.

Amazing. I thought the economy was job #1 for the Republicans.

Posted by jez at 8:18 PM

January 24, 2011

Antitrust bulldog Gary Reback pushes Google probe

James Temple:

In the 1990s, attorney Gary Reback helped goad the Department of Justice into launching the landmark antitrust lawsuit against Microsoft Corp. by hauling willing witnesses and damning information before any government body that would listen.

Reback, of Menlo Park law firm Carr & Ferrell LLP, is now waging a similarly relentless campaign against a technology giant of this era, Google Inc.

In an extensive interview with The Chronicle, he argued the Mountain View search company is engaging in a host of anti-competitive behaviors that are no less egregious than the earlier actions of Microsoft.

He also claims the Federal Trade Commission recently backed off an inquiry into certain of Google's practices at the behest of the DOJ. It's known to be conducting a separate investigation into, and possibly preparing to block, the company's proposed acquisition of travel data company ITA Software. (Read on for his take on what that means.)

Posted by jez at 10:08 PM

January 21, 2011

Avoiding a U.S.-China cold war

Henry Kissinger:

America's exceptionalism finds it natural to condition its conduct toward other societies on their acceptance of American values. Most Chinese see their country's rise not as a challenge to America but as heralding a return to the normal state of affairs when China was preeminent. In the Chinese view, it is the past 200 years of relative weakness - not China's current resurgence - that represent an abnormality.

America historically has acted as if it could participate in or withdraw from international affairs at will. In the Chinese perception of itself as the Middle Kingdom, the idea of the sovereign equality of states was unknown. Until the end of the 19th century, China treated foreign countries as various categories of vassals. China never encountered a country of comparable magnitude until European armies imposed an end to its seclusion. A foreign ministry was not established until 1861, and then primarily for dealing with colonialist invaders.

America has found most problems it recognized as soluble. China, in its history of millennia, came to believe that few problems have ultimate solutions. America has a problem-solving approach; China is comfortable managing contradictions without assuming they are resolvable.

American diplomacy pursues specific outcomes with single-minded determination. Chinese negotiators are more likely to view the process as combining political, economic and strategic elements and to seek outcomes via an extended process. American negotiators become restless and impatient with deadlocks; Chinese negotiators consider them the inevitable mechanism of negotiation. American negotiators represent a society that has never suffered national catastrophe - except the Civil War, which is not viewed as an international experience. Chinese negotiators cannot forget the century of humiliation when foreign armies exacted tribute from a prostrate China. Chinese leaders are extremely sensitive to the slightest implication of condescension and are apt to translate American insistence as lack of respect.

Posted by jez at 7:41 AM

January 15, 2011

When China Ruled the World Or why the "China Century" will be the shortest on record

Thomas P.M. Barnett:

I'm here to tell you that America plunged its fingertips into the Middle Kingdom's body politic across the 1970s, beginning with Nixon going to China in 1972 and culminating with Jimmy Carter's normalization of relations in 1979. The first embrace allowed aged Mao Tse-tung to extinguish his nonstop internal purge known as the Cultural Revolution by firewalling his fears of Soviet antagonism. The second cemented China's wary-but-increasingly-warm relationship with the United States and allowed Deng Xiaoping, who narrowly survived Mao's insanities, to dismantle the dead emperor's dysfunctional socialist model, quietly burying Marx with the most revolutionary of eulogies -- to get rich is glorious!

Deng chose wisely: Reversing Mikhail Gorbachev's subsequent logic, he focused on the economics while putting off the politics. This decision later earned him the sobriquet "the butcher of Tiananmen" when, in 1989, the political expectations of students quickly outpaced the Party's willingness for self-examination. But it likewise locked China onto a historical pathway from which it cannot escape, or what I call the five D's of the dragon's decline from world-beater to world-benefactor: demographics, decrepitude, dependency, defensiveness, and -- most disabling of all -- democratization.

Let us begin this journey right where Deng did, with a focus on the family.

Posted by jez at 1:53 AM

January 13, 2011

Goldman's pieties go too far

Sebastian Mallaby:

For sheer, toe-curling embarrassment, it's hard to choose between last year's populist attack on Goldman Sachs by the US Securities and Exchange Commission and this week's cringe-worthy response from the investment bank.

Last April, when the SEC filed suit against Goldman, the bank could have fought back. The suit complained it had sold fancy mortgage securities without disclosing that a hedge-fund manager, John Paulson, was betting that those same securities would blow up. To which Goldman could have answered: so what? Any time an investment bank sells any derivative, it should be obvious to the buyer that somebody somewhere must be taking the other side. The SEC's assertion that Goldman had misled customers about the nature of Paulson's involvement was potentially more damaging, except that the SEC produced no evidence to make this charge stick.

It was surely not beyond the wit of Goldman's publicists to communicate these simple points. Banks cannot be held responsible for the profits or losses of their clients, since middle-men necessarily have customers who lose as others win. But after one vain attempt to explain market making at a belligerent Senate hearing, Goldman's boss, Lloyd Blankfein, gave up. He settled with the SEC, even though most lawyers think he could have beaten the charges. Then he ordered up an elaborate cleansing ritual to relaunch the firm of Goldman Sachs.

Several months later, the fruits of Goldman's sun salutations are out. A 67-page manifesto of self-purification proclaims that "our clients' interests always come first," and that "if we serve our clients, our own success will follow." But these pieties misrepresent the true nature of an investment bank just as surely as the SEC did.

Posted by jez at 8:01 AM

Study: We've Got Plenty of Land for Biofuels

Chuck Squatriglia:

One of the great arguments against biofuels is the wisdom, if not the morality, of using land to produce fuel instead of food. But research out of Illinois suggests it doesn't have to be an either-or proposition.

Researchers at University of Illinois Urbana-Champaign have found that biofuel crops cultivated on land unsuitable for food crops could produce as much as half the world's current fuel consumption without adverse impact on food crops or pastureland.

The study, published in Environmental Science and Technology, identifies land around the world that is unsuitable for food production but could be used to raise biofuel feedstocks like switchgrass.

According to the researchers, many studies examining biofuel crop viability focus on yield -- how productive the crop can be. They wanted to examine land availability to determine whether it is possible to produce sufficient biofuel to meet demand without sacrificing food production.

Posted by jez at 7:53 AM

January 8, 2011

Politics & The Internet

The Economist:

FOR wizened cyberpunks, it is a seemingly timeless debate: does the internet inherently promote openness and democracy, or can it just as easily strengthen the hand of authoritarian regimes? A decade ago Andrew Shapiro's book "The Control Revolution" argued the former, while Shanthi Kalathil's and Taylor Boas's tome "Open Networks, Closed Regimes" dissented. This week sees the publication of "The Net Delusion: The Dark Side of Internet Freedom" by Evgeny Morozov, which sides with the pessimists.

The argument usually ends in a stalemate of competing anecdotes. Street protests organised by mobile text messages successfully oust Philippine President Joseph Estrada in 2001; Iran's supposedly Twitter-powered Green Movement gets quashed in 2009. And so on. Clay Shirky, one of the preeminent public intellectuals of the internet, who has previously sided with cyber-utopian optimists, has now elegantly squared the circle by establishing an intellectual framework to consider the topic in "The Political Power of Social Media", an article in the current Foreign Affairs. (Users must register to access the complete essay, but it is free.) Mr Shirky's essay makes three principal contributions to the debate.

Posted by jez at 2:58 PM

December 27, 2010

Lessons in Scroogenomics

Martin Wolf:

Ebenezer Scrooge came into the room slowly. He was, to my surprise, much as Charles Dickens had described him. How, I wondered, could he have changed so little over 170 years? It must be the benefit of being a literary character, I decided.

"Good morning, Mr Scrooge," I remarked politely. "I have come to interview you about your best-selling new book Scroogenomics - or How to Do Well out of Doing Good."

Scrooge smiled. "Yes," he responded, "I had to show that Joel Waldfogel's Scroogenomics, cleverly reviewed by your John Kay, merely portrayed my unenlightened self. But Dickens, albeit a talented writer, was just a sentimental fool. He never understood what my change over that Christmas was about. I learnt, above all, to appear benevolent. That, with my business acumen, turned Marley & Scrooge into a global enterprise. Fortunately, that philanthropy has become less painful, since my charities are tax deductible. What can be less painful for a miser than state-subsidised charity?"

I was shocked by his candour. He must have drunk too much at the book party earlier. After the abstinence described by Dickens, one drink would have a big effect.

Posted by jez at 4:06 PM

December 23, 2010

On Net Nuetrality

Steve Wozniak:

To whom it may concern:

I have always loved humor and laughter. As a young engineer I got an impulse to start a Dial-a-Joke in the San Jose/San Francisco area. I was aware of such humor services in other countries, such as Australia. This idea came from my belief in laughter. I could scarcely believe that I was the first person to create such a simple service in my region. Why was I the first? This was 1972 and it was illegal in the U.S. to use your own telephone. It was illegal in the U.S. to use your own answering machine. Hence it also virtually impossible to buy or own such devices. We had a monopoly phone system in our country then.

The major expense for a young engineer is the rent of an apartment. The only answering machine I could legally use, by leasing (not purchasing) it from our phone company, the Codaphone 700, was designed for businesses like theaters. It was out of the price range of creative individuals wanting to try something new like dial-a-joke. This machine leased for more than a typical car payment each month. Despite my great passion and success with Dial-a-Joke, I could not afford it and eventually had to stop after a couple of years. By then, a San Francisco radio station had also started such a service. I believe that my Dial-a-Joke was the most called single line (no extensions) number in the country at that time due to the shortness of my jokes and the high popularity of the service.

Posted by jez at 2:46 PM

2011: And Still No Energy Policy

Ed Wallace:

"First generation [corn] ethanol I think was a mistake. The energy conversion ratios are at best very small."

- Al Gore, speaking at a Green Energy Conference on November 22, 2010

"Ethanol is not an ideal transportation fuel. The future of transportation fuels shouldn't involve ethanol."

- Secretary of Energy Steven Chu, November 29, 2010

No one knows what brought on the blast of political honesty in the last eight days of November. Having been a rabid ethanol booster for most of his political career, there was former Vice President Al Gore reversing course and apologizing for supporting ethanol. Of course Gore's reason for taking that position was perfectly understandable -- for a politician. As he told the Athens energy conference attendees, "One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers of Iowa because I was about to run for President."

Translated from politics-speak into English, pandering to farmers gets votes. But if your claimed position is to plan some sort of energy policy for everyone else, then getting farmers' votes shouldn't determine what's the right thing to do for the nation's fuel supplies.

Posted by jez at 5:55 AM

December 6, 2010

Regulators Look at Farming Landscape

Ian Berry

Food prices are back on the march, and the powerful U.S. farm lobby faces a day of reckoning on Wednesday as the Obama administration wraps up a yearlong study into competition and consolidation in the agricultural sector.

The Departments of Justice and Agriculture are holding their fifth and final workshop to review the competitive landscape in food production and livestock rearing after a unique collaboration that has left some of the industry's largest players looking nervously over their shoulders.

Monsanto Co. is already embroiled in a Justice Department investigation into alleged anticompetitive practices linked to the sale and distribution of genetically modified seeds that dominate U.S. farming. Dean Foods Inc., the country's largest milk producer, has also seen antitrust officials move to block a small acquisition.

Lawmakers already have had to wrestle with external forces on the sector, such as the rise of speculative funds that critics contend have inflated prices. The latest run-up in commodity prices has also reawakened the long-running food-versus-fuel debate as Congress decides whether to renew subsidies to the ethanol industry.

Posted by jez at 12:17 AM

December 3, 2010

Some Data-Miners Ready to Reveal What They Know

Emily Steel

Seeking to head off escalating scrutiny over Internet privacy, a group of online tracking rivals are building a service that lets consumers see what information those companies know about them.

The project is the first of its kind in the fast-growing business of tracking Internet users and selling personal details about their lives. Called the Open Data Partnership, it will allow consumers to edit the interests, demographics and other profile information collected about them. It also will allow people to choose to not be tracked at all.
When the service launches in January, users will be able to see information about them from eight data and tracking firms, including BlueKai Inc., Lotame Solutions Inc. and eXelate Inc.

Additional tracking firms are expected to join once the system is live, but more than a hundred tracking firms and big Internet companies including Google Inc. and Yahoo Inc. are not involved.

Posted by jez at 9:47 PM

December 2, 2010

Wall Street owes its survival to the Fed

Sebastian Mallaby

For a brief, surreal moment, the prevailing narrative in Washington was that the 2008-09 bail-outs were not really so bad. In September, Treasury secretary Tim Geithner called the government's troubled asset relief programme "one of the most effective emergency programmes in financial history", claiming that the final cost to taxpayers would be less than $50bn.

Steven Rattner, the Wall Street banker who oversaw the Obama administration's rescue of the auto sector, wrote in the Financial Times in October that "without exaggeration, this legislation [establishing Tarp] did more to keep America's financial system - and therefore its economy - functioning than any passed since the 1930s".

But Wednesday's document dump from the Federal Reserve - a congressionally ordered "WikiLeak moment" - puts this bargain-bail-out patter in a new perspective. The post-Lehman rescues were far broader than Tarp, and far riskier for taxpayers, even if the alternative of a systemic meltdown would have been worse.

Posted by jez at 7:47 PM

December 1, 2010

Moral Hazard, Thy Price Is $3.3 Trillion

David Reilly & Rolfe Winkler

Sunshine doesn't hurt after all. Bank shares leapt Wednesday despite the Federal Reserve's detailed disclosure of who got $3.3 trillion of emergency lending during the crisis. That is hardly what investors might have envisaged, given dark warnings from the Fed that such disclosure could endanger financial institutions. The central bank released the data only because of a provision in the Dodd-Frank financial-overhaul bill.

True, it will take time for investors to comb through all the gory details of about 21,000 transactions by multiple emergency Fed lending facilities. And some details may leave firms with egg on their face: Goldman Sachs, which insisted it would have survived the crisis without government assistance, tapped one special Fed facility 84 times to borrow nearly $600 billion in overnight money. Morgan Stanley tapped the facilities more than 200 times.

Even if individual details of the programs aren't that surprising, the breadth of companies that accessed them is notable. The disclosure shows how far the Fed went in attempting to prop up just about every part of the financial markets, with users ranging from the biggest U.S. and international banks to small firms that peddled complex and often toxic securities, as well as industrial companies such as General Electric, Harley-Davidson and Verizon.

Posted by jez at 10:23 PM

In search of a lightning bolt of rational thought.

Peter M. De Lorenzo

In the midst of the biggest green car push in automotive history - what with Chevrolet touting its extended-range electric Volt as the greatest thing since sliced bread while crossing green swords with Nissan, which is shouting similar missives from the rooftops about its all-electric Leaf - it has become readily apparent that the vast majority of the American consumer public couldn't be bothered. As in they couldn't care less. That is unless someone - i.e., Washington - is throwing money at them to care.

Hybrid sales in this market are going to finish the year down again, which will mark three straight years of decline, and this includes the $4.00+ per gallon spike in the late spring-summer of 2008, when fuel economy hysteria took hold in the U.S. for four solid months. It seems that the Shiny Happy Green Sensibilities Act - or whatever you want to call the ongoing "shove-it-down-the-American-consumer-public's-throats-and-they-will-learn-to-lilke-it" mentality that pollutes the political brainiacs/stumblebums in Washington and Northern California - is going nowhere.

As a matter of fact our illustrious leaders in Washington used a considerable chunk of money from the 2009 economic stimulus package to buy up hybrids from various auto manufacturers to prop-up hybrid vehicle sales, couching it as a noble attempt at improving the overall fuel-efficiency of the government fleet, when in fact the real reason was to not only - hopefully - jump-start American consumer thinking into accepting these vehicles as being mainstream choices, but to help the vehicle manufacturers who were battered and bullied to build the vehicles in the first place to keep the production lines going.

But alas, this is the pattern we find ourselves in as a nation at the moment. A minority of the citizenry in an absolute lather about climate change - aided and abetted by maliciously clueless politicos with an axe to grind and an agenda that has more to do with their personal ambitions than it does with such quaint ideas as "being good for the country" - dictating to the majority of the American public how it's going to be.

Posted by jez at 8:29 AM

November 23, 2010

The ultimate carry trade

The Economist

JUDGING by the callers on a late-night BBC radio programme, the British public is none too enthusiastic about the country's participation in the Irish bailout. The standard reasoning was "Why are we giving money to Ireland when we haven't got any ourselves?" Perhaps similar sentiments were being expressed on Radios Luxembourg, Belgium and Portugal.

But of course, the money isn't being given to Ireland, it's being lent. And even if the eventual rate is below the market level of 8%, the new debt may still carry a rate of 5% or so. Well, Britain is still paying 3.3% for 10-year money. So this is a profitable gig, borrowing at 3.3% to lend at 5%. Perhaps the government should sell the scheme to the public as the ultimate carry trade, turning Britain into a hedge fund like LTCM.

Posted by jez at 10:23 AM

Congressional Members' Personal Wealth Expands Despite Sour National Economy


Despite a stubbornly sour national economy congressional members' personal wealth collectively increased by more than 16 percent between 2008 and 2009, according to a new study by the Center for Responsive Politics of federal financial disclosures released earlier this year.

And while some members' financial portfolios lost value, no need to bemoan most lawmakers' financial lot: Nearly half of them -- 261 -- are millionaires, a slight increase from the previous year, the Center's study finds. That compares to about 1 percent of Americans who lay claim to the same lofty fiscal status.

And of these congressional millionaires, 55 have an average calculated wealth in 2009 of $10 million or more, with eight in the $100 million-plus range.

Posted by jez at 10:01 AM

November 17, 2010

Cartography: Google goofs

The Economist

THE Caribbean end of the border between Costa Rica and Nicaragua follows the course of the San Juan river, which was once considered a possible route for the trans-isthmus canal. The border was originally determined by the Cañas-Jerez Treaty of Limits in 1858.

The boundary follows the northern branch as the river splits into two, the southern branch is called the Colorado river. According to the treaty, the right bank of the San Juan river is Costa Rican territory but the river itself is Nicaraguan. In 1888 Grover Cleveland, then president of America, arbitrated in the dispute and gave a ruling stating that Costa Rica had the right to use the river for commerce but "has not the right of navigation of the river San Juan with vessels of war". President Cleveland also commissioned a mapping survey of the area, conducted in 1897 by E.P. Alexander.

In 2009 the International Court of Justice (ICJ) ruled that Costa Rica cannot re-supply its armed police border posts using the river, but also that Nicaragua cannot demand visas from Costa Rican tourists traveling along the river.

Posted by jez at 9:34 AM

US muni bonds see biggest drop since 2008

The Financial Times

Municipal bonds had their biggest one-day sell-off yesterday since the height of the financial crisis, prompting some borrowers to delay financing plans.

The yields on triple A 10-year bonds rose 18 bps to 2.93 per cent, the largest one-day rise since October of 2008, according the MMD index, which is owned by Thomson Reuters.

Absolute yields, however, remain well below crisis-era levels.

The $2,800bn "muni" bond market where states and municipalities raise money has been under pressure over the past week amid a rise in the yields of benchmark US Treasury bonds, heavy bond sales and uncertainty about federal support for the market.

The market declines have made investors, who are mostly wealthy individuals benefiting from tax breaks on muni debt, nervous about an uptick in defaults. Munis historically have been a relatively safe place to invest, but budget deficits and underfunded public pensions have created widespread concern that local entities could struggle to pay their debts.

Posted by jez at 9:31 AM

November 7, 2010

Germany Criticizes Fed Move Finance Minister Says Policy 'Doesn't Add Up,' Sees U.S. Model in 'Deep Crisis'

Patrick McGroarty

German officials, concerned that Washington could be pushing the global economy into a downward spiral, have launched an unusually open critique of U.S. economic policy and vowed to make their frustration known at this week's Group of 20 summit.

Leading the attack is Finance Minister Wolfgang Schäuble, who said the U.S. Federal Reserve's decision last week to pump an additional $600 billion into government securities won't help the U.S. economy or its global partners.

The Fed's decisions are "undermining the credibility of U.S. financial policy," Mr. Schäuble said in an interview with Der Spiegel magazine published over the weekend, referring to the Fed's move, known as "quantitative easing" and designed to spur demand and keep interest rates low. "It doesn't add up when the Americans accuse the Chinese of currency manipulation and then, with the help of their central bank's printing presses, artificially lower the value of the dollar."

At an economics conference in Berlin Friday, Mr. Schäuble said the Fed's action shows U.S. policy makers are "at a loss about what to do."

Mr. Schäuble hit back at critics in the Der Spiegel interview. "Germany's exporting success is based on the increased competitiveness of our companies, not on some sort of currency sleight-of-hand. The American growth model, by comparison, is stuck in a deep crisis," he said. "The USA lived off credit for too long, inflated its financial sector massively and neglected its industrial base. There are many reasons for America's problems--German export surpluses aren't one of them."

Posted by jez at 9:22 PM

Wisconsin Evokes Democrats' Dilemma

Douglas Belkin & Neil King, Jr.

Last week's election rout did more than put Republicans in charge of the U.S. House of Representatives. It upended the electoral map that propelled President Barack Obama to the White House.

Mr. Obama bagged traditionally liberal Wisconsin and its ten electoral votes two years ago, part of a sweep that also included states that hadn't tilted Democratic for decades. That went into reverse Tuesday. The party suffered heavy losses in Ohio and Pennsylvania, two big states that had backed Mr. Obama in 2008, as independent voters swung to the right. Other presidential territory--Virginia, Indiana and North Carolina--swung back to the GOP.

The depth of the party's losses outside Washington, in state-level-contests, can be seen in this working-class city. The president won handily here in 2008 along with surrounding Brown County. Last week, Republicans carried all 18 races on the county's ballots, right down to the clerk of the court. The GOP took control of the governor's office, the state assembly and the state senate--the first time the state has reverted so abruptly to one side since 1938.

Posted by jez at 9:16 PM

October 25, 2010

The Subprime Debacle: Act 2, Part 2

John Mauldin
At the end of last week's letter on the whole mortgage foreclosure mess, I wrote:

"All those subprime and Alt-A mortgages written in the middle of the last decade? They were packaged and sold in securities. They have had huge losses. But those securities had representations and warranties about what was in them. And guess what, the investment banks may have stretched credibility about those warranties. There is the real probability that the investment banks that sold them are going to have to buy them back. We are talking the potential for multiple hundreds of billions of dollars in losses that will have to be eaten by the large investment banks. We will get into details, but it could create the potential for some banks to have real problems."

Real problems indeed. Seems the Fed, PIMCO, and others are suing Countrywide over this very topic. We will go into detail later in this week's letter, covering the massive fraud involved in the sale of mortgage-backed securities. Frankly, this is scandalous. It is almost too much to contemplate, but I will make an effort.
Posted by James Zellmer at 9:57 PM

On China's Renminbi

Michael Pettis
As my reference to the Japanese yen might suggest, I am pretty skeptical about the likelihood of this happening, at least with some of the more excited predictions. So, by the way, is the ADB, whose recent report (“The Future Global Reserve System — An Asian Perspective”), suggests that by 2035, the RMB may comprise about 3 to 12 per cent of international reserves. This is a pretty reasonable prediction, in my opinion, and far from the more feverish claims we see reported almost daily.

If the renminbi ever becomes a major trading or reserve currency, it is going to take a long time for this to happen and will require a radical transformation of the Chinese economy and the role of the government. This may seem like a surprising statement. After all nearly every week we see reports about a new breakthrough for the renminbi, and almost every day someone important somewhere speculates publicly about what the world will be like when (never if) the renminbi displaces the dollar.

But away from all “qualitative” arguments about why this is unlikely, and there are many, I think there is a problem with the arithmetic of reserve currency accumulation. If the rest of the world is going to use the renminbi as a reserve or trading currency, clearly it needs a mechanism by which to accumulate renminbi. This is something on which a surprisingly large share of people who talk about the future of reserve currencies don’t seem to focus.
Posted by James Zellmer at 9:54 PM

October 13, 2010

Why America is going to win the global currency battle

Martin Wolf:
The US is going to win this war, one way or the other: it will either inflate the rest of the world or force their nominal exchange rates up against the dollar. Unfortunately, the impact will also be higgledy piggledy, with the less protected economies (such as Brazil or South Africa) forced to adjust and others, protected by exchange controls (such as China), able to manage the adjustment better.

It would be far better for everybody to seek a co-operative outcome. Maybe the leaders of the group of 20 will even be able to use their “mutual assessment process” to achieve just that. Their November summit in Seoul is the opportunity. Of the need there can be no doubt. Of the will, the doubts are many. In the worst of the crisis, leaders hung together. Now, the Fed is about to hang them all separately.
Moahmed El-Erian has more.
Posted by James Zellmer at 8:59 AM

October 7, 2010

Currency Wars

Alan Beattie:
If the world is on the brink of an out-and-out currency war, a variety of battalions has been out on manoeuvres in the past few weeks. The Bank of Japan, after six years off the battlefield, has launched a fusillade of intervention to hold down the yen in foreign exchange markets. Brazil used the guerrilla tactic of doubling taxes on capital inflows to stop the real surging. India and Thailand warned that they too might bring heavy ordnance into play.

The main combatants, the US and China, continued to exchange rhetorical salvos. Washington (and Brussels) identified undervalued currencies such as the renminbi as a prime cause of global macroeconomic imbalances. Beijing retorted that such aggression risked bringing mutual destruction upon the great economic powers.

On Monday Dominique Strauss-Kahn, managing director of the International Monetary Fund, voiced his concern. “There is clearly the idea beginning to circulate that currencies can be used as a policy weapon,” he said. “Translated into action, such an idea would represent a very serious risk to the global recovery.”
Posted by James Zellmer at 9:57 PM

October 5, 2010

Condoleezza Rice on German Reunification

In a SPIEGEL interview, former United States Secretary of State Condoleezza Rice discusses America's fight for German reunification, Soviet leader Mikhail Gorbachev's woes at the time, Chancellor Helmut Kohl's merits and the later mistakes of his successor, Gerhard Schröder.

SPIEGEL: Madame Secretary, when the Berlin Wall fell in 1989, European nations like Great Britain and France were very worried about the prospect of German unification. America was the only country that didn't appear to be concerned. Why not?

Condoleezza Rice: The United States -- and President George H.W. Bush -- recognized that Germany had gone through a long democratic transition. It had been a good friend, it was a member of NATO. Any issues that had existed in 1945, it seemed perfectly reasonable to lay them to rest. For us, the question wasn't should Germany unify? It was how and under what circumstances? We had no concern about a resurgent Germany, unlike the British or French.

SPIEGEL: Because a unified German was in America's strategic interest?

Rice: If you were going to have a Europe that was whole and free, you couldn't have a Germany that was divided. So, with the possibility that Soviet power was going to be receding from Europe, it made perfectly good sense to try to achieve reunification on terms that nobody would have thought thinkable, even four or five years before.
Posted by James Zellmer at 10:30 PM

October 2, 2010

Rise of the Online Autocrats

Evgeny Morozov
The tweets started arriving in August, and they did not mince words. One of the first accused the South Korean government of being "a prostitute of the United States." The Twitter account, under the name "uriminzok," or "our nation," seemed to be part of a sprawling North Korean digital operation that included a Facebook account (registered as a man interested in "meeting other men," but solely for "networking purposes") and a series of YouTube videos meant to celebrate the might of the North Korean military.

A spokesman for the North Korean government quickly denied any involvement with the Facebook and Twitter accounts, but he acknowledged that they were the work of government supporters living in China and Japan. The owner of the Facebook page (which the Palo Alto, Calif., company eventually deleted, citing violation of its terms of service) told a South Korean news agency that it was run by a Pyongyang-based publishing outlet affiliated with the government. Apparently, even the notoriously isolated rulers of North Korea know how to practice what the U.S. State Department calls "21st-century statecraft."
Posted by James Zellmer at 9:45 AM

September 28, 2010

Currencies clash in new age of beggar-my-neighbour

Martin Wolf
“We’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness.” This complaint by Guido Mantega, Brazil’s finance minister, is entirely understandable. In an era of deficient demand, issuers of reserve currencies adopt monetary expansion and non-issuers respond with currency intervention. Those, like Brazil, who are not among the former and prefer not to copy the latter, find their currencies soaring. They fear the results.

This is not the first time for such currency conflicts. In September 1985, now 25 years ago, the governments of France, West Germany, Japan, the US and the UK met at the Plaza Hotel in New York and agreed to push for depreciation of the US dollar. Earlier still, in August 1971, the US president Richard Nixon imposed the “Nixon shock”, levying a 10 per cent import surcharge and ending dollar convertibility into gold. Both events reflected the US desire to depreciate the dollar. It has the same desire today. But this time is different: the focus of attention is not a compliant ally, such as Japan, but the world’s next superpower: China. When such elephants fight, bystanders are likely to be trampled.

Here there are three facts, relevant to today’s currency wars.
Posted by James Zellmer at 10:05 PM

September 27, 2010

Bärbel Bohley, artist and toppler of the Berlin Wall, died on September 11th, aged 65

The Economist
COURAGE rarely failed Bärbel Bohley. Others quailed at the hands of the East German secret police, the Stasi. Frail but steely, she mocked them: an eye for the absurd, she said, helped to keep her mental distance from those “brutal, cold, murderous, contemptuous people”. “I will get out of here; you won’t,” she once snapped at an interrogator.

She was right. Born in the ruins of Berlin in 1945, her early life was shaped by the post-war division of her country into western (soon West) Germany, and a Soviet-occupied zone that claimed to be the “German Democratic Republic”. But in the end it was not the bullying communists who shaped the wiry little painter. It was she who shaped them—and their downfall.

Her life as an artist started in her 30s, after unhappy early stints in industry and teaching. Her métier was brightly coloured pictures with dark angry lines, part abstract, part-figurative. Her inspiration, she said, came from Käthe Kollwitz, the great radical pacifist painter and print-maker of the Weimar years, venerated in post-war East Germany. The regime liked that, and her work: she won prizes, including a trip to the Soviet Union. But the promised Utopia turned out to be shockingly grim and grey. In 1980 the idealistic socialist convictions of her youth, long undermined by the regime’s hypocrisy, finally crystallised into ardent opposition.
Posted by James Zellmer at 8:12 AM

September 9, 2010

US Tax Reform: How about this for a tax plan: cut most people’s taxes by half, eliminate the need to file returns, and provide the Treasury with a better way to reduce the deficit. Sound impossible? It’s not. Here’s how to get it done.

Keith Libbey & Evan Thomas:
Most Americans spend dozens, if not hundreds, of hours attempting, not always successfully, to do their tax returns. We spend almost $30 billion paying accountants to fill out the complicated forms, and by some estimates we devote $110 billion of our own labor just keeping track of all the necessary records and paperwork. Americans pay about 85 percent of the taxes they owe, better than in most countries, but the shortfall is still a drain on the Treasury (and the rich seem to find a way to avoid taxes legally). Is this costly, demoralizing struggle between the IRS and the rest of us really necessary?

The short answer is no. There is a way to relieve almost all Americans of the annual April 15 nightmare. What’s more, it’s a necessary first step toward a plan to cut the looming federal deficit. The time is right for thoroughgoing tax reform—a true clean slate—that will bring in more revenue while giving the public a greater sense of fairness. The reforms we propose will even allow most people to take home more pay than they do now.

The place to start is to cut almost everyone’s payroll and income taxes by half. Yes, you read that right. Cut most tax rates, which now run from 10 to 39 percent, by half. All individual taxes would be collected through company withholding taxes on compensation (salary, bonus, deferred payments, etc.) and investment income (dividends, interest, capital gains, rents) to individuals. The very rich—those making more than $2 million a year—would still pay a top tax rate of 30 percent on earned income. The rate on investment income would be 15 percent. The result: individuals would not have to file tax returns, most Americans would take home more pay than they do now, the tax base would be broadened, and the AMT—the alternative minimum tax, which sweeps up more taxpayers every year—would be eliminated.

Too good to be true? There’s no free lunch. The revenue lost to the government—roughly half of all personal federal taxes—has to come from someplace else. The best fix is to eliminate all deductions and exemptions for individual taxpayers—all those tax breaks that were intended to promote economic activity or serve worthy social goals but have ended up creating myriad unfair outcomes. It’s true that the wealthiest 1 percent currently pays about 18 percent of all taxes. Still, thanks to clever tax dodges, the top 400 income earners pay an average tax rate of 16.6 percent; megabillionaire Warren Buffett notes that his secretary pays a higher tax rate than he does.
Posted by James Zellmer at 8:58 AM

September 3, 2010

The enduring solitude of combat vets

Retired Army Special Forces Sgt. Maj. Alan Farrell
Retired Army Special Forces Sgt. Maj. Alan Farrell is one of the more interesting people in this country nowadays, a decorated veteran of the Vietnam War who teaches French at VMI, reviews films and writes poetry. Just your typical sergeant major/brigadier general with a Ph.D. in French and a fistful of other degrees.

This is a speech that he gave to vets at the Harvard Business School last Veterans' Day. I know it is long but a lot of you can't go outside anyway because of the hurricane:


"Ladies and Gentlemens:

Kurt Vonnegut -- Corporal Vonnegut -- famously told an assembly like this one that his wife had begged him to "bring light into their tunnels" that night. "Can't do that," said Vonnegut, since, according to him, the audience would at once sense his duplicity, his mendacity, his insincerity... and have yet another reason for despair. I'll not likely have much light to bring into any tunnels this night, either.

The remarks I'm about to make to you I've made before... in essence at least. I dare to make them again because other veterans seem to approve. I speak mostly to veterans. I don't have much to say to them, the others, civilians, real people. These remarks, I offer you for the reaction I got from one of them, though, a prison shrink. I speak in prisons a lot. Because some of our buddies wind up in there. Because their service was a Golden Moment in a life gone sour. Because... because no one else will.
Posted by James Zellmer at 3:35 PM

August 31, 2010

A Conversation with Jay Rosen on "The Problem With News Media in America Today"

The Economist
What is the biggest problem with the news media in America today?

Mr Rosen: The cost of changing settled routines seems too high, but the cost of not changing is, in the long term, even higher. A good example is the predicament of the newspaper press: the print edition provides most of the revenues, but it cannot provide a future. I know of no evidence to show that young people are picking up the print habit. So if the cost of abandoning print is too high, the cost of sticking with it may be even higher, though slower to reveal itself. That's a problem.

Another example is the decline of trust. In the mid-1970s over 70% of Americans told Gallup they had a great deal or fair amount of confidence in the press. Today: 47%. Clearly, something isn't working. But revisions to the code of conduct that has led to this decline would be seen by most journalists as increasing the risk of mistrust. I've tried to argue that the View from Nowhere—also called objectivity—should be replaced by "here's where we're coming from." That strikes most people in the American press as dangerous and unworkable. But the current course is unsustainable: trust continues to decline, with a big acceleration after 2003. When I mention this to journalists, they say: "Trust in all big institutions has declined, Jay." Which is true (except for the military). But is that really an answer? You're supposed to be the watchdogs over dubious actors. Why aren't you an exception?

I could go on, but I think you see the pattern. Change is too expensive; the status quo is unsustainable.
Posted by James Zellmer at 9:08 AM

August 29, 2010

A Tale of Two Cities

Ed Wallace
"It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness ..."
-- Charles Dickens, A Tale of Two Cities, 1859

For the past 120 days I have pored over economic reports, commerce data, home sales across America, stats on inflationary trends and sales tax reports by state (when they can be found). I've sorted the data by date published, then prioritized it by importance to the economy, and looked for correlations positive or negative. But no matter how many times I read over the data, I can come to only one solid conclusion: We have now finished changing into a two-tiered economy.

This change didn't start with the downturn of the past two and a half years; instead, the completion of our segregation into two financial classes is what directly caused the downturn. No longer is the belief that "there's the 20 percent of the population that live in poverty and then there's the rest" a comfortably distant concept.

The discomfort line now divides those who "feel afraid" that they live in poverty-like circumstances, or soon will - even if they are gainfully employed - from "the rest." And instead of a 20/80 split, have-nots to haves, today it may well be 60/40.
Posted by James Zellmer at 8:53 AM

August 20, 2010

Truth and An Open Society

Ed Wallace
In order to be for a democracy, or in our case, a functioning Federal Republic, one has to have an informed electorate. Of course, that is infinitely more difficult than one might think. For even when the raw truth of a story comes to light from unimpeachable sources, it is frightening how the vested interests today will immediately attack the information and the source involved - in order to lessen the impact of the truth on the public at large - with frightening speed.

As mentioned in this column, I seem to spend an inordinate amount of time refuting e-mails in which there is no truth to the claim being made, whether it's about the Auto Task Force, why the financial system melted down or any other major hot-button issue. On the other hand, I get such e-mailings far more often than I do links to a legitimate news story. Moreover, all too often the e-mail's forwarder, who believes completely in the e-mail no matter how outrageous the claims made in it, often point out to me that they no longer read newspapers because of "known" bias.

That is scary. People will trust an unknown and angry blogger - whose bias screams through his or her words, and who knowingly and intentionally misleads the reader - before they'll trust verifiable facts in the media.
Posted by James Zellmer at 5:17 PM

August 15, 2010

Google On the Future. Will It All Be Good In the Googlesphere?

Professor Sabena
The nice people of Rupert's world sat down with Google head man - Eric Schmidt. The Wall Street Journal team peppered Eric with lots of interesting questions. Some of his answers would make the usual PRHHM (Public Relations hacks handlers and minders) squirm.

In the Googlesphere it has become clear that all information should be held sacred as long as Google has a copy and is in charge of what gets shown and not shown. As Schmidt noted in the Techonomy conference on August 4, 2010 , all information should be subject to "much greater transparency and no anonymity." ... because he assumes that (Google) technology is ultimately good (as opposed to evil). I think that makes me very nervous. And thank you, I vote for my Government which I think is called a democracy. Going back to the WSJ article, Schmidt continues - "Most people..... They want Google to tell them what they should be doing next."

In general I believe that personalization is part of the mix. My view is that 'context' is better term than 'personalization'. I don't think that everything needs to be/should be uniquely or personalized. That is not how we are in our work and personal lives. To assume that this is the case is blatantly arrogant in my view. What happens if you get this wrong? And yes people who should know better do get these sort of things wrong - frequently. Just look at credit reports. But Google doesn't seem to want to think about that because.... Mr. Schmidt is a believer in targeted advertising because, simply, he's a believer in targeted everything: "The power of individual targeting—the technology will be so good it will be very hard for people to watch or consume something that has not in some sense been tailored for them." ....This is a direct quote from the WSJ. Too bad that Big Brother Google will be the arbiter or this and thence directly or indirectly control and influence our tastes.
Posted by James Zellmer at 4:04 PM

August 10, 2010

Matt Simmons, Author of "Twilight in the Desert" and Peak Oil Speaker, Dies at Age 67

Gail the Actuary:
In his view (and in ours, too), way too many people hear about the huge reported reserves of Saudi Arabia and other Middle Eastern countries, and assume that this oil is really available for extraction. Matt makes the point that these reserves, and many others around the world, have not been audited. In fact, they seem to be political numbers, so we cannot depend on them. He also points out that we also do not have detail data with respect to historical oil extraction from individual fields in the Middle East, so we really do not know how close to decline Saudi Arabia and other Middle Eastern countries really are.

In 2005, Matt Simmons wrote a book called Twilight in the Desert. In it, he summarized what he learned about Saudi Arabian oil production by reading 200 academic papers. He concluded from his analysis that the oil extraction techniques being used there were techniques that one might use if the fields were quite depleted. Because of this, he doubted that we should believe stories that Saudi oil production can be greatly expanded. Instead, he raised the possibility that in the not too distant future, Saudi oil production will suddenly decline. Matt's research underlying the book was no doubt behind his concern that oil reserves and oil production rates are not audited.

Another thing Matt is known for is his educational graphics about "what is really going on" with respect to oil extraction. For example, in his talk at the 2009 ASPO--USA conference, he shows this graphic of the amount of conventional oil discovered by decade.
Posted by James Zellmer at 9:06 AM

July 30, 2010

The GM $50,000,000,000 Taxpayer Bailout and The $41,000 Volt

Edward Niedermeyer:
By taking a loss on the first several years of Prius production, Toyota was able to hold its price steady, and then sell the gas-sippers in huge numbers when oil prices soared. Today a Prius costs roughly the same in inflation-adjusted dollars as those 1997 models did, and it has become the best-selling Toyota in the United States after the evergreen Camry and Corolla.

Instead of following Toyota’s model, G.M. decided to make the Volt more affordable by offering a $350-a-month lease over 36 months. But that offer allows only 12,000 miles per year, or about 33 miles per day. Assuming you charged your Volt every evening, giving you 40 miles of battery power, and wanted to keep below the mileage limit, you would rarely use its expensive range-extending gas engine. No wonder the Volt’s main competition, the Nissan Leaf, forgoes the additional combustion engine — and ends up costing $8,000 less as a result.

In the industry, some suspect that G.M. and the Obama administration decided against selling the Volt at a loss because they want the company to appear profitable before its long-awaited initial stock offering, which is likely to take place next month. For taxpayers, that approach might have made sense if the government planned on selling its entire 61 percent stake in G.M. But the administration has said it will sell only enough equity in the public offering to relinquish its controlling stake in G.M. Thus the government will remain exposed to the company’s (and the Volt’s) long-term fate.
Posted by James Zellmer at 11:59 AM

July 28, 2010

On Blog Comments

A More Intelligent Life:

A colleague over at Democracy in America (DiA), The Economist's blog about American politics, has written a very interesting post on the nature of online commenters. While the formality of composing a letter to the editor continues to generate considered and often polite prose by even the most aggrieved readers, the immediacy and anonymity of online commenting seems to encourage a tendency to insult and attack. "Faceless communication leads to disinhibition, whether it's online, in a car or on the phone with a customer-service representative... Psychologists even have a name for the online phenomenon: 'online disinhibition effect'."

Publishers keen on a solution to nasty commenters will follow what happens at the Buffalo News. The paper has just proposed requiring readers to supply accurate identification if they want to weigh in, which is promising. (As one of the 65 commenters on the DiA post wrote, "I used to think anonymity was a good thing... However, over time my view has changed to the opposite. For every unique voice, there are thousands of mindless, thuggish screams.")

Posted by James Zellmer at 8:08 AM

July 26, 2010

US Senate Candidate Ron Johnson's WisPolitics Appearance

A brief clip from Jeff Mayer's introductory Q & A with Senate Candidate Ron Johnson. from Jim Zellmer on Vimeo.

Johnson faces Dave Westlake in the September Republican primary. The winner will take on 18 year incumbent Democrat Senator Russ Feingold.

In my humble opinion, should the November election turn on economic issues, the Republicans will win (Feingold's 30 years in the political world is a liability in this scenario). On the other hand, should the election turn on debates, Russ will be tough to beat.

I hope we have a serious competitor to Herb Kohl.....

I attended a Senator Feingold WisPolitics appearance last fall.

I very much appreciate candidates and office holders taking questions from the public in such settings. I asked Ron Johnson a question on three of Senator Feingold's votes: The 2004 5.25% offshore tax scheme for big business, the Patriot Act and the vote to kill Washington, DC vouchers. Websites: Russ Feingold, Ron Johnson and Dave Westlake.
Posted by James Zellmer at 5:21 PM

July 4, 2010

Insider Trading Inside the Beltway

Professor Bainbridge:
My new article, Insider Trading Inside the Beltway, has been posted to SSRN. Now it just needs to find a nice law review home somewhere in the top 50.

Abstract: A 2004 study of the results of stock trading by United States Senators during the 1990s found that that Senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to – and were using – material nonpublic information about the companies in whose stock they trade.

Under current law, it is unlikely that Members of Congress can be held liable for insider trading. The proposed Stop Trading on Congressional Knowledge Act addresses that problem by instructing the Securities and Exchange Commission to adopt rules intended to prohibit such trading.
Posted by James Zellmer at 8:20 PM

Michael Hastings of Rolling Stone on the Story that Brought Down Gen. McChrystal and Exposed Widening Disputes Behind the U.S. Debacle in Afghanistan

Democracy Now:
In a rare extended interview, we speak to Michael Hastings, whose article in Rolling Stone magazine led to the firing of General Stanley McChrystal. Hastings’ piece quoted McChrystal and his aides making disparaging remarks about top administration officials, and exposed long-standing disagreements between civilian and military officials over the conduct of the war. The Senate confirmed General David Petraues as McChrystal’s replacement on Wednesday, one day after McChrystal announced his retirement from the military on Tuesday after a 34-year career.
Posted by James Zellmer at 8:18 PM

Lunch with Luca Cordero di Montezemolo

Richard Milne:
Screaming down the home straight of Ferrari’s test track at 200kmph an hour in a classic red 458 Italia, I suddenly don’t feel like lunch. The Fiorano track near Bologna in central Italy is, at 3km, not long. But, partly in an attempt to impress the test driver next to me with some fast cornering, I feel as if I have left part of my stomach on one of its hairpin bends. Matters fail to improve as, in heavy fog untypical of early summer, I take the car off the track and, rather more slowly, on to the winding roads of the Apennines, heading for Ferrari HQ in nearby Maranello.

I am still spinning slightly when we pull into the car park just before the company’s elegant and aristocratic chairman, Luca Cordero di Montezemolo, who somewhat incongruously arrives in a small Fiat. He explains that his journey from Rome has been a nightmare as fog diverted his helicopter and forced him to take trains and cars – hence the Fiat. Nevertheless he appears in characteristically enthusiastic mood. “I’ve just been to a conference at the Vatican [on the financial crisis]. Fantastic,” he explains. “Fantastic” is a word Montezemolo uses a lot. Ferrari is “fantastic”, Italian food is “fantastic”, his new high-speed train company, NTV, is “fantastic”, as is the 458 Italia I have been driving.

On my way out he hands me a white postcard. “This is what I give to all new employees at Ferrari,” he says. Looking at it in a Ferrari 599 on the way back to Milan, it looks to me like the perfect credo for Montezemolo. It starts: “The real secret of success is enthusiasm. You can do anything if you have enthusiasm ... With it there is accomplishment. Without it there are only alibis.”
Clusty Search: Luca Cordero di Montezemolo
Posted by James Zellmer at 10:28 AM

July 3, 2010

Happy Independence Day!

US Constitution, Declaration of Independence and the Bill of Rights.

We have so much to be thankful for.
Posted by James Zellmer at 8:33 PM

June 30, 2010

RBS tells clients to prepare for 'monster' money-printing by the Federal Reserve

Ambrose Evans-Pritchard:
As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve.

Entitled "Deflation: Making Sure It Doesn’t Happen Here", it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy. The speech is best known for its irreverent one-liner: "The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost."

Bernanke began putting the script into action after the credit system seized up in 2008, purchasing $1.75 trillion of Treasuries, mortgage securities, and agency bonds to shore up the US credit system. He stopped far short of the $5 trillion balance sheet quietly pencilled in by the Fed Board as the upper limit for quantitative easing (QE).

Investors basking in Wall Street's V-shaped rally had assumed that this bizarre episode was over. So did the Fed, which has been shutting liquidity spigots one by one. But the latest batch of data is disturbing.
Posted by James Zellmer at 9:51 AM

June 22, 2010

"The Time We Have is Growing Short"

Paul Volcker:
If we need any further illustration of the potential threats to our own economy from uncontrolled borrowing, we have only to look to the struggle to maintain the common European currency, to rebalance the European economy, and to sustain the political cohesion of Europe. Amounts approaching a trillion dollars have been marshaled from national and international resources to deal with those challenges. Financing can buy time, but not indefinite time. The underlying hard fiscal and economic adjustments are necessary.

As we look to that European experience, let’s consider our own situation. We are not a small country highly vulnerable to speculative attack. In an uncertain world, our currency and credit are well established. But there are serious questions, most immediately about the sustainability of our commitment to growing entitlement programs. Looking only a little further ahead, there are even larger questions of critical importance for those of less advanced age than I. The need to achieve a consensus for effective action against global warming, for energy independence, and for protecting the environment is not going to go away. Are we really prepared to meet those problems, and the related fiscal implications? If not, today’s concerns may soon become tomorrow’s existential crises.

I referred at the start of these remarks to my sense five years ago of intractable problems, resisting solutions. Little has happened to allay my concerns. But, of course, it is not true that our economic problems are intractable beyond our ability to react, to make the necessary adjustments to more fully realize the enormous potential for improving our well-being. Permit me a note of optimism.

A few days ago, I spent a little time in Ireland. It’s a small country, with few resources and, to put it mildly, a troubled history. In the last twenty years, it took a great leap forward, escaping from its economic lethargy and its internal conflicts. Responding to the potential of free and open markets and the stable European currency, standards of living have bounded higher, close to the general European level. Instead of emigration, there has been an influx of workers from abroad.
Posted by James Zellmer at 9:49 AM

June 6, 2010

Wall Street's War

Matt Taibbi:
Congress looked serious about finance reform – until America's biggest banks unleashed an army of 2,000 paid lobbyists.

t's early May in Washington, and something very weird is in the air. As Chris Dodd, Harry Reid and the rest of the compulsive dealmakers in the Senate barrel toward the finish line of the Restoring American Financial Stability Act – the massive, year-in-the-making effort to clean up the Wall Street crime swamp – word starts to spread on Capitol Hill that somebody forgot to kill the important reforms in the bill. As of the first week in May, the legislation still contains aggressive measures that could cost once- indomitable behemoths like Goldman Sachs and JP Morgan Chase tens of billions of dollars. Somehow, the bill has escaped the usual Senate-whorehouse orgy of mutual back-scratching, fine-print compromises and freeway-wide loopholes that screw any chance of meaningful change.

The real shocker is a thing known among Senate insiders as "716." This section of an amendment would force America's banking giants to either forgo their access to the public teat they receive through the Federal Reserve's discount window, or give up the insanely risky, casino-style bets they've been making on derivatives. That means no more pawning off predatory interest-rate swaps on suckers in Greece, no more gathering balls of subprime shit into incomprehensible debt deals, no more getting idiot bookies like AIG to wrap the crappy mortgages in phony insurance. In short, 716 would take a chain saw to one of Wall Street's most lucrative profit centers: Five of America's biggest banks (Goldman, JP Morgan, Bank of America, Morgan Stanley and Citigroup) raked in some $30 billion in over-the-counter derivatives last year. By some estimates, more than half of JP Morgan's trading revenue between 2006 and 2008 came from such derivatives. If 716 goes through, it would be a veritable Hiroshima to the era of greed.
Posted by James Zellmer at 3:16 PM

Group cites study in push for Google antitrust case

Consumer Watchdog continues to push its case that Google Inc.'s behavior necessitates antitrust scrutiny, releasing a report that alleges that the company is abusing its dominance in online search to direct users to its own services.

The study cites online traffic data that the Santa Monica group claims show the Mountain View Internet giant seized large portions of market share in areas like online maps, video and comparison shopping after its search engine began highlighting links to its products in results.

Google called the report's methodology and premise flawed and said its practices are designed to benefit users.
Posted by James Zellmer at 3:10 PM

Ukraine Agriculture: Investment climate will determine yield

Amid all the doom and gloom, one sector in the country’s economy has a bright future and promises high yields.

Despite a deep recession that sent gross domestic product plunging 15 per cent last year, some budding domestic agribusinesses reported double-digit growth.

Agriculture was one of the few economic sectors to grow, albeit a small 0.2 per cent rise.

But to see the real potential, one must look further ahead. Global demand for food is expected to surge in coming decades. And Ukraine is well positioned to benefit.

With its rich black soil, favourable climate and proximity to markets, experts say the country could go far beyond regaining its position as the breadbasket of Europe.

“Ukraine is already among the top five grain exporters in the world,” says Andriy Yarmak, an agribusiness expert. “With investment, it could double its recent annual harvests and “become one of the top exporters of meat in about 10-15 years”.
Posted by James Zellmer at 2:51 PM

May 31, 2010

Google has mapped every WiFi network in Britain

Duncan Gardham:
Google has mapped every wireless network in Britain in order to use the information for commercial purposes, it has emerged.

Every WiFi wireless router – the device that links most computer owners to the internet - in every home has been entered into a Google database.

The information was collected by radio aerials on their Street View cars, which have now photographed almost every home in the country.

The data is then used on Google's Maps for Mobile application to locate mobile phones such as iPhones in order for users to access information relevant to the area such as restaurants, cinemas, theatres, shops and hotels.

The project had remained secret until an inquiry in Germany earlier this month in which Google was forced to admit that it “mistakenly” downloaded emails and other data from unsecured wireless networks where they we
Posted by James Zellmer at 6:40 PM

May 29, 2010

Feingold for Senate Campaign @ the Madison Farmer's Market

I've appreciated a number of Russ's votes, but found his recent vote to kill the Washington, DC voucher program unpalatable. No K-12 program is perfect, but given the very challenging District K-12 climate, it is difficult to see the status quo improving on its own.

Russ Feingold will likely face Republican Ron Johnson this fall.
Posted by James Zellmer at 9:18 PM

May 28, 2010

Identity cards scheme will be axed 'within 100 days'

The National Identity Card scheme will be abolished within 100 days with all cards becoming invalid, Home Secretary Theresa May has said.

Legislation to axe the scheme will be the first put before parliament by the new government - with a target of it becoming law by August.

The 15,000 people who voluntarily paid £30 for a card since the 2009 roll out in Manchester will not get a refund.
Posted by James Zellmer at 8:28 PM

May 19, 2010

The fate of a generation of workers: Foxconn undercover fully translated

Richard Lai: I know of two groups of young people.

One group consists of university students like myself, who live in ivory towers and kept company by libraries and lake views. The other group works alongside steel machineries and large containers, all inside a factory of high-precision manufacturing environment. These guys always address their seniors as "laoban" (boss), and call their own colleagues -- regardless of familiarity -- the rude "diaomao" (pubic hair) in loud.

After going undercover in Foxconn for 28 days, I came back out. I've been trying to tie the two pictures together. But it's very difficult. Even with people living in these two places sharing the same age, the same youth dream.

My undercover was part of Southern Weekend's investigation on the then six Foxconn suicides. We soon found out that most of Southern Weekend's reporters were rejected due to age -- Foxconn only recruits people around the age of 20. In comparison, being just under 23 years old, I was quickly brought into Foxconn.

The 28-day undercover work made a strong impact on me. It wasn't about finding out what they died for, but rather to learn how they lived.
Posted by James Zellmer at 10:09 PM

May 12, 2010

Understanding the Greek Aftershocks

Mahamed El-Erian:
Given the tragic events in Greece and the financial contamination of other eurozone peripheral countries, most people now recognize that sovereign risk matters and it matters a great deal. Unfortunately, the recognition lag has already caused significant damage, including forcing the current approach to European integration to an historical juncture.

What is less well understood at this stage is that the externalities, negative and positive, are not limited to Europe. It is only a matter of time when this issue, too, becomes a driver of policies and market valuations and correlations.

The general context is critical here, and should never be forgotten. As argued in my March 11 FT commentary, the sovereign debt explosion in industrial countries involves a regime shift with consequential long-lasting effects. And what is happening in Europe is yet another illustration how, in our highly interconnected world, previously unthinkable phenomena can become reality in a surprising and highly disruptive manner.

Rather than just observe, other countries are well advised to understand the debt dynamics at play. They should draw the appropriate policy implications given their own debt burdens, maturity profiles and funding sources.

They must also go well beyond this.
Posted by James Zellmer at 9:51 AM

Murder City: Ciudad Juarez and the Global Economy's New Killing Fields

Oscar Villalon:
It's hard to wrap your brain around the numbers, to make sense of what they portend. Mexico, home to the world's richest man, has had more than 10,000 people killed -- often horrifically -- since January 2007, just a month after President Felipe Calderon declared a literal war on drugs in his country.

Calderon has flooded the country with nearly 50,000 soldiers and federal police to combat the various regional cartels -- Juarez, Sinaloa, Gulf and Zetas -- mostly in the northern and northwest parts of Mexico. The United States, through the Merida Initiative, has committed $1.4 billion to fund the effort. The results have been less than stellar.

According to the Los Angeles Times (the only major U.S. newspaper that has been extensively covering this political and social calamity), not only has the military racked up more than 3,400 alleged violations with Mexico's human rights commission, but in Juarez, the bloodiest of this war's battlefields -- if you can call a city of about 1.2 million people a battlefield -- the army's presence coincided with an increase in slayings. Since 2008, more than 4,000 people have been killed there, though Juarez was being patrolled by about 10,000 troops and federal police. In 2007, there were about 2,300 drug-related killings -- in the entire country.
I visited Juarez 26 years ago.... during a trip into Mexico. The people were wonderful to a stranger.
Posted by James Zellmer at 9:44 AM

May 5, 2010

This Time Its Different

Financial Times:
800 years of financial crises - Carmen Reinhart, co-author of This Time is Different, talks about the history of financial crises and their patterns
Posted by James Zellmer at 9:40 PM

April 21, 2010

The decline of the Great Writ: The sad history of habeas corpus

The Economist:
Habeas Corpus: From England to Empire. By Paul Halliday. Harvard University Press; 502 pages; $39.95 and £29.95. Buy from Amazon.com, Amazon.co.uk

WHEN discussing habeas corpus or the “Great Writ of Liberty”, as the most revered legal device of the Anglophone world is often known, jurists and civil libertarians tend to become misty-eyed. In 1777 Charles James Fox, a radical British politician, described habeas corpus during a parliamentary debate on its suspension as “the great palladium of the liberties of the subject” and deplored the “insolence and temerity” of those “who could thus dare to snatch it from the people”.

Nearly 230 years later, in an impassioned attack from the Senate floor on the Bush administration’s bill to suspend habeas corpus for anyone determined to be an “unlawful enemy combatant”, Barack Obama declared: “I do not want to hear that this is a new kind of world in which we face a new kind of enemy.” Another senator, Arlen Specter, roared: “The right of habeas corpus was established in the Magna Carta in 1215…what the bill seeks to do is set back basic rights by some 900 years.” In Britain, Lord Hoffmann, a law lord reviewing government “control orders” to detain terrorist suspects in 2007, thundered: “Such is the revulsion against detention without charge or trial, such is this country’s attachment to habeas corpus, that the right to liberty ordinarily trumps even the interests of national security.”
Posted by James Zellmer at 10:06 AM

April 11, 2010

Prayers for Poland, Again

Poland's Embassy in Prague; June, 2009. The banner celebrates the 20th anniversary of the Wall coming down.

Many links on the tragic plane crash in Smolensk. Clusty Search: Katyn film and Solidarity Poland.
Posted by James Zellmer at 8:47 PM

April 10, 2010

Energy Secretary Chu provides an optimistic view of our energy future at EIA conference

Gail The Actuary:
Energy Secretary Chu gave a talk at the EIA/SAIS Energy Conference on April 6-7. I want to share a few highlights of it, and give my impression. Both the Powerpoint slides and audio can be accessed at this link.

My general view of the talk is that Chu is extremely optimistic, in terms of what he thinks can be done. He also fails to tell listeners what our real problems are.

Wow! Slide 2 indicates that Chu thinks America has the opportunity to lead the world in a new industrial revolution. How does he think that is going to be done?

The first industrial revolution was during a time of increasingly available energy, because of the new use of coal. That is very unlikely in the future, both because of peak oil, and because of hoped-for constraints on fossil fuel use because of climate change issues. Net energy available to society is likely to be going down, not up! It is hard to understand an industrial revolution under those circumstances, unless it is a retooling to a much lower level--but later slides make it clear that is not what he is thinking of.
Posted by James Zellmer at 4:03 PM

April 7, 2010

The Europe roundup: Iceland, from the financial crisis to open data

Antonella Napolitino:
Iceland | From the financial crisis to open data
In 2008 in Iceland the financial system imploded. "Not surprisingly, this has led to a demand for more transparency, more access to public data and more effective communication by the government. All of a sudden Open Data is seen as a high priority among various lobby groups, branches of government and in restoration planning" says Hjalmar Gislason, an open data activist and member of the Open Knowledge Foundation’s Working Group on EU Open Data. In a long and detailed post, Gislason explains how this is not just part of the "momentum" open data is gaining in Europe, but a further step in a path that started in late '90s.
The Icelandic Modern Media Initiative and the presence of Wikileaks surely have a positive impact on the whole scenario and there is no doubt they will help boosting any future open data bill. The effects will be seen soon: "In December a rare cross-party parliamentary proposal (the first step in passing new legislation) was made, proposing a “default open” strategy for any public sector data. The Prime Minister’s Office has formed a committee that is to propose changes and improvements in legislation and suggest how to define the boundaries between data that is to be open and data that shall remain closed."
Posted by James Zellmer at 10:06 AM

April 5, 2010

German Government Minister's Letter to Facebook

German Consumer Protection Minister Ilse Aigner:
Dear Mr. Zuckerberg,

I was astonished to discover that, despite the concerns of users and severe criticism from consumer activists, "Facebook" would like to relax data protection regulations on the network even further. Your current privacy policy states that in future user data is to be automatically passed on to third parties. These parties are supposed to comprise previously vetted operators of websites and applications. Anyone who does not want this to happen must take action themselves and use the opt-out function. I use the Internet every day, both professionally and privately, and am a member of several social networks, including Facebook. Social networks are an enrichment and it is difficult to imagine our lives without them. Networks such as Facebook link millions of people across national boundaries, and it is for this very reason that particular importance must be attached to protecting privacy. As you know, I, in my capacity as Federal Minister of Consumer Protection, am striving to ensure that personal data on the Internet is protected. Private information must remain private - I think that I speak for many Internet users in this respect. Unfortunately, Facebook does not respect this wish, a fact that was confirmed in the most recent study by the German consumer organisation "Stiftung Warentest". Facebook fares badly in this study. Facebook was graded as "poor" in respect of user-data policy and user rights. Facebook also refused to provide information on data security - it was awarded a "5" (= poor) in this category as well.

It is therefore all the more astounding that Facebook is not willing to eliminate the existing shortcomings regarding data protection, but is instead going even further. Decisions such as this will not engender trust in an enterprise in the long term.
Posted by James Zellmer at 3:05 PM

March 30, 2010

What Does Greece Mean to You?

John Mauldin:
“To trace something unknown back to something known is alleviating, soothing, gratifying and gives moreover a feeling of power. Danger, disquiet, anxiety attend the unknown – the first instinct is to eliminate these distressing states. First principle: any explanation is better than none… The cause-creating drive is thus conditioned and excited by the feeling of fear…” Friedrich Nietzsche

“Any explanation is better than none.” And the simpler, it seems in the investment game, the better. “The markets went up because oil went down,” we are told, except when it went up there was another reason for the movement of the markets. We all intuitively know that things are far more complicated than that. But as Nietzsche noted, dealing with the unknown can be disturbing, so we look for the simple explanation.

“Ah,” we tell ourselves, “I know why that happened.” With an explanation firmly in hand, we now feel we know something. And the behavioral psychologists note that this state actually releases chemicals in our brains that make us feel good. We become literally addicted to the simple explanation. The fact that what we “know” (the explanation for the unknowable) is irrelevant or even wrong is not important to the chemical release. And thus we look for reasons.

How does an event like a problem in Greece (or elsewhere) affect you, gentle reader? And I mean, affect you down where the rubber hits your road. Not some formula or theory about the velocity of money or the effect of taxes on GDP. That is the question I was posed this week. “I want to understand why you think this is so important,” said a friend of Tiffani. So that is what I will attempt to answer in this week’s missive, as I write a letter to my kids trying to explain the nearly inexplicable.
Posted by James Zellmer at 3:44 PM

March 23, 2010

"One Google, One World; One China, No Google"

Rebecca MacKinnon:
China's insomniac twitterati were on fire this afternoon U.S. time, powered no doubt by much caffeine and sugar in the the wee hours of the morning in China. Half an hour before Google's David Drummond posted his announcement that Google.cn is now effectively operating from Google.com.hk, Guangzhou-based open source programmer @LEMONed broke the news that google.cn was being redirected to the Hong Kong service. Reacting to the news, @wentommy quipped: "One Google, One World; One China, No Google."

As of now (still early morning in Beijing), Google.com.hk is accessible from mainland China although specific search results for sensitive terms result in a browser error - or in other words, are blocked. Same as it's always been for sensitive searches on Google.com from inside mainland China. This is network filtering and would happen automatically as part of the "great firewall" Internet filtering system.

The ball is now in the Chinese government's court in two ways:

1) Whether they will block all of google.com.hk, which until now has not been blocked. If they are smart they will just leave the situation as is and stop drawing media attention to their censorship practices. The longer this high profile fracas goes on, the greater Chinese Internet users awareness will be about the lengths to which their government goes to blinker their knowledge of the world. That may inspire more people to start learning how to use circumvention tools for getting around the censorship. Chinese censorship is only effective if a large percentage of the population isn't very conscious of what they're missing. As I like to explain it: if you're born with tunnel vision you assume it's normal until somehow you're made aware that life without tunnel vision is both possible and much better. The longer this story remains in the headlines, the more people will become conscious of their tunnel vision and think about ways to eliminate it.
Posted by James Zellmer at 9:33 PM

March 13, 2010

Déjà vu: Energy Prices

Ed Wallace:
It's hard to believe it's been two years this month since this column first revealed that speculators were running riot in the oil futures market. I pointed out that unrestrained commodities speculators were causing the oil price climb we were seeing, which would send the cost of crude to a peak of $147 a barrel by the summer of 2008. At the time most "experts" quoted in the media were saying that oil prices were skyrocketing because world supplies couldn't keep up with demand, or because we had passed the point of Peak Oil. Neither position was true, of course; just looking at tanker shipments and worldwide oil supplies on hand, those concepts were obviously invalid.

Many of the columns I wrote for BusinessWeek in the spring and summer of 2008 debunked all the excuses being given for oil prices' suddenly doubling. Today it has come to be considered common knowledge, even common sense, and that's good for my track record.

Unfortunately for the country's track record, however, knowing the truth hasn't changed a thing.

Hegel, Call Your Publicist

Last October, in a follow-up column for BusinessWeek, "How Wall Street Will Kill the Recovery," I pointed out how investment banks were again profiting from taxpayer-funded bailout benefits.

They were taking those near-zero-interest loans and, instead of using the money to restart lending (and thus, it's hoped, the economy), they were pumping much of it into equities and commodities. There they were profiting from the ever-rising paper prices caused by the huge influx of cheaply borrowed money.
Posted by James Zellmer at 9:56 PM

February 25, 2010

Fabulous: Health Care Video Stream with Campaign Contributions...

The Sunlight Foundation provides a great service here.
Posted by James Zellmer at 1:42 PM

February 19, 2010

If Our Grandparents Could See Us Now

Ed Wallace:
"The OECD rates Canada's banks as the safest in the world - the United States comes in fortieth, two places behind Botswana."

-- From I.O.U., by John Lanchester

There's always a pile of new books near my desk; currently, most of them deal with the history of the financial crisis. When time allows I open a couple more, read them and mark key points with highlighters for easier reference. It's always gratifying to find a passage in which a well-regarded economics writer makes the same points I have in my work, but I like books even better when they teach me things I did not already know.

An example: Barry Rithholtz, a market commentator, put the total cost of the current bailout in terms that most anyone can understand. It is now more than the nation spent for "The Marshall Plan, the Louisiana Purchase, the Apollo moon landings (and all costs of NASA's space flights), the Korean War, the Vietnam War, FDR's New Deal, the Invasion of Iraq and the 1980s Savings and Loan Scandal, combined and adjusted for inflation."

That statement alone should have the public up in arms, demanding smart actions that will make sure it never happens again.

The books I've been reading lately also cover the fundamental economic theories of both John Maynard Keynes and Milton Friedman. Keynes is known for promoting government deficit spending in hard times, while Friedman believes in deregulating and privatizing everything. What I now find interesting is that nobody carrying the banner of either of these two economic giants seems to get Keynes' or Friedman's fundamental economic viewpoints entirely right.
Posted by James Zellmer at 5:08 PM

February 17, 2010

Why the Technology Sector Should Care About Google Books

Gary Reback @ TechCrunch:
Antitrust lawyer and Open Book Alliance leader Gary Reback has been called the “antitrust champion” and the “protector of the marketplace” by the National Law Journal, and has been at the forefront of many of the most important antitrust cases of the last three decades. He is one of the most vocal opponents of the Google Books settlement. I interviewed Reback a few months ago, and Google Books was one of the topics we discussed. In the column below, Reback discusses Google Books and its ties to Google search.

This Thursday leaders of the international publishing industry will watch with bated breath as a federal judge in New York hears arguments over whether to approve the Google Book Settlement.

More a complicated joint venture among Google and five big New York publishers than the resolution of pending litigation, the proposed settlement once promised unprecedented access to millions of out-of-print books through digital sales to consumers and online research subscriptions for libraries. But with the passage of time and the ability to examine the deal more closely, the promises proved illusory. The big publishers, as it turns out, have reserved the right to negotiate secret deals with Google for the books they claim through the settlement (pdf).

Meanwhile, torrents of outrage rained down on the New York court – from authors whose ownership rights will be appropriated through the settlement’s procedures, from librarians fearful of price exploitation by Google, from privacy advocates worried that Google will monitor the reading habits of library patrons, from libertarians incensed over the use of a legal procedure to effect the widespread appropriation of property, from digital booksellers concerned about Google’s unfair advantage in the marketplace.
Posted by James Zellmer at 10:24 AM

February 12, 2010

Iceland aims to become an offshore haven for journalists and leakers

Jonathan Stray:
On Tuesday, the Icelandic parliament is expected to introduce a measure aimed at making the country an international center for investigative journalism publishing, by passing the strongest combination of source protection, freedom of speech, and libel-tourism prevention laws in the world.

Supporters of the proposal say the move would make Iceland an “offshore publishing center” for free speech, analogous to the offshore financial havens that allow corporations to hide capital from authorities. Could global news organizations with a home office in Reykjavík soon be as common as Delaware corporations or Cayman Islands assets?

“This is a legislative package to create a haven for freedom of expression,” Icelandic member of parliament Birgitta Jónsdóttir confirmed to me, saying that a proposal for comprehensive media law reform will be filed in parliament on Tuesday, and that whistle-blowing specialists Wikileaks has been involved in drafting it. There have been persistent hints of an Icelandic media move in recent weeks, including tweets from Wikileaks and a cryptic message from the newly created @icelandmedia Twitter account.

The text of the proposal, called the Icelandic Modern Media Initiative, is not yet public, but the most detailed evidence comes from a video of a talk by Julian Assange and Daniel Schmitt of Wikileaks, given at the Chaos Communications Congress hacker conference in Berlin on Dec. 27:
Posted by James Zellmer at 9:00 PM

The Legacy of Billy Tauzin: The White House-PhRMA Deal

Paul Blumenthal:
More than a million spectators gathered before the Capitol on a frosty January afternoon to witness the inauguration of Barack Obama, who promised in his campaign to change Washington’s mercenary culture of lobbyists, special interest influence and backroom deals. But within a few months of being sworn in, the President and his top aides were sitting down with leaders from the pharmaceutical industry to hash out a deal that they thought would make health care reform possible.

Over the following months, pharmaceutical industry lobbyists and executives met with top White House aides dozens of times to hammer out a deal that would secure industry support for the administration’s health care reform agenda in exchange for the White House abandoning key elements of the president’s promises to reform the pharmaceutical industry. They flooded Congress with campaign contributions, and hired dozens of former Capitol Hill insiders to push their case. How they did it—pieced together from news accounts, disclosure forms including lobbying reports and Federal Election Commission records, White House visitor logs and the schedule Sen. Max Baucus releases voluntarily—is a testament to how ingrained the grip of special interests remains in Washington.
Posted by James Zellmer at 3:30 PM

February 7, 2010

Trouble Down South for US Republicans

Ryan Bowman and Andrew K. Woods:
At first glance, McLeod’s Tyre Shop in Lucedale, Mississippi, seems an unlikely venue for a political salon. It is a large, spare room, its contents pushed to the corners as if by an invisible centrifugal force, or maybe the weak wind of the ceiling fan. To the right of the entrance, four tyres stand on tiny podiums like sculptures in an art gallery. In the far right-hand corner of the room, a large 1920s stove slumbers beneath a Mississippi State football flag, which Doug McLeod hung to taunt his rivals from Ole Miss – the University of Mississippi. And in the far left-hand corner, a long counter is crowded with well-thumbed copies of every newspaper (local, state and national) from the past two weeks – kindling for starting and settling scores.

“A Mississippi lady once asked me where I went to church. I told her Sacred Heart and she said, ‘Well, we all have to worship somewhere, don’t we?’”

We walk in at the tail end of an argument between four men, just in time for McLeod to jam his finger into one of the newspapers and say, with an air of finality, “And that’s why they should raise interest rates.” McLeod has owned this tyre shop for more than 30 years, and in that time he has established himself as a local character and the shop as a destination: a place where he and others can hold forth. The scene is both chaotic and relaxed, with high-energy McLeod spinning like a top while visitors sit or lean, idling on about all subjects but their tyres.

The men assembled here, in one of the most Republican counties in the American deep south, are conservative. In fact, the latest demographics say they – southern, white males aged over 35 – are the Republican party. Despite differences on many subjects – football, Ford trucks, fiscal policy – they all agree that their interests are not represented in Washington, not by Barack Obama and the Democrats and not even by their own party.
Posted by James Zellmer at 3:50 PM

February 5, 2010

How to Get Our Democracy Back: If You Want Change, You Have to Change Congress

Larry Lessig:
We should remember what it felt like one year ago, as the ability to recall it emotionally will pass and it is an emotional memory as much as anything else. It was a moment rare in a democracy's history. The feeling was palpable--to supporters and opponents alike--that something important had happened. America had elected, the young candidate promised, a transformational president. And wrapped in a campaign that had produced the biggest influx of new voters and small-dollar contributions in a generation, the claim seemed credible, almost intoxicating, and just in time.

Yet a year into the presidency of Barack Obama, it is already clear that this administration is an opportunity missed. Not because it is too conservative. Not because it is too liberal. But because it is too conventional. Obama has given up the rhetoric of his early campaign--a campaign that promised to "challenge the broken system in Washington" and to "fundamentally change the way Washington works." Indeed, "fundamental change" is no longer even a hint.

Instead, we are now seeing the consequences of a decision made at the most vulnerable point of Obama's campaign--just when it seemed that he might really have beaten the party's presumed nominee. For at that moment, Obama handed the architecture of his new administration over to a team that thought what America needed most was another Bill Clinton. A team chosen by the brother of one of DC's most powerful lobbyists, and a White House headed by the quintessential DC politician. A team that could envision nothing more than the ordinary politics of Washington--the kind of politics Obama had called "small." A team whose imagination--politically--is tiny.

These tiny minds--brilliant though they may be in the conventional game of DC--have given up what distinguished Obama's extraordinary campaign. Not the promise of healthcare reform or global warming legislation--Hillary Clinton had embraced both of those ideas, and every other substantive proposal that Obama advanced. Instead, the passion that Obama inspired grew from the recognition that something fundamental had gone wrong in the way our government functions, and his commitment to reform it.

For Obama once spoke for the anger that has now boiled over in even the blue state Massachusetts--that our government is corrupt; that fundamental change is needed. As he told us, both parties had allowed "lobbyists and campaign contributions to rig the system." And "unless we're willing to challenge [that] broken system...nothing else is going to change." "The reason" Obama said he was "running for president [was] to challenge that system." For "if we're not willing to take up that fight, then real change--change that will make a lasting difference in the lives of ordinary Americans--will keep getting blocked by the defenders of the status quo."
"Meet the new boss, same as the old boss"....
Posted by James Zellmer at 11:39 AM

February 4, 2010

Google to enlist NSA to help it ward off cyberattacks

Ellen Nakashima:
The world's largest Internet search company and the world's most powerful electronic surveillance organization are teaming up in the name of cybersecurity. Under an agreement that is still being finalized, the National Security Agency would help Google analyze a major corporate espionage attack that the firm said originated in China and targeted its computer networks, according to cybersecurity experts familiar with the matter. The objective is to better defend Google -- and its users -- from future attack.

Google and the NSA declined to comment on the partnership. But sources with knowledge of the arrangement, speaking on the condition of anonymity, said the alliance is being designed to allow the two organizations to share critical information without violating Google's policies or laws that protect the privacy of Americans' online communications. The sources said the deal does not mean the NSA will be viewing users' searches or e-mail accounts or that Google will be sharing proprietary data.

The partnership strikes at the core of one of the most sensitive issues for the government and private industry in the evolving world of cybersecurity: how to balance privacy and national security interests. On Tuesday, Director of National Intelligence Dennis C. Blair called the Google attacks, which the company acknowledged in January, a "wake-up call." Cyberspace cannot be protected, he said, without a "collaborative effort that incorporates both the U.S. private sector and our international partners."
Posted by James Zellmer at 10:21 AM

A fight over freedom at Apple’s core

Jonathan Zittrain:
In 1977, a 21-year-old Steve Jobs unveiled something the world had never seen before: a ready-to-program personal computer. After powering the machine up, proud Apple II owners were confronted with a cryptic blinking cursor, awaiting instructions.

The Apple II was a clean slate, a device built – boldly – with no specific tasks in mind. Yet, despite the cursor, you did not have to know how to write programs. Instead, with a few keystrokes you could run software acquired from anyone, anywhere. The Apple II was generative. After the launch, Apple had no clue what would happen next, which meant that what happened was not limited by Mr Jobs’ hunches. Within two years, Dan Bricklin and Bob Frankston had released VisiCalc, the first digital spreadsheet, which ran on the Apple II. Suddenly businesses around the world craved machines previously marketed only to hobbyists. Apple IIs flew off the shelves. The company had to conduct research to figure out why.

Thirty years later Apple gave us the iPhone. It was easy to use, elegant and cool – and had lots of applications right out of the box. But the company quietly dropped a fundamental feature, one signalled by the dropping of “Computer” from Apple Computer’s name: the iPhone could not be programmed by outsiders. “We define everything that is on the phone,” said Mr Jobs. “You don’t want your phone to be like a PC. The last thing you want is to have loaded three apps on your phone and then you go to make a call and it doesn’t work any more.”

The openness on which Apple had built its original empire had been completely reversed – but the spirit was still there among users. Hackers vied to “jailbreak” the iPhone, running new apps on it despite Apple’s desire to keep it closed. Apple threatened to disable any phone that had been jailbroken, but then appeared to relent: a year after the iPhone’s introduction, it launched the App Store. Now outsiders could write software for the iPhone, setting the stage for a new round of revolutionary VisiCalcs – not to mention tens of thousands of simple apps such as iPhone Harmonica or the short-lived I Am Rich, which for $999.99 displayed a picture of a gem, just to show that the iPhone owner could afford the software.
Posted by James Zellmer at 10:06 AM

February 2, 2010

Microsoft's Police State Vision?

Lauren Weinstein:
Greetings. About a week ago, in Google and the Battle for the Soul of the Internet, I noted that:
Even here in the U.S., one of the most common Internet-related questions that I receive is also one of the most deeply disturbing: Why can't the U.S. require an Internet "driver's license" so that there would be no way (ostensibly) to do anything anonymously on the Net?

After I patiently explain why that would be a horrendous idea, based on basic principles of free speech as applied to the reality of the Internet -- most people who approached me with the "driver's license" concept seem satisfied with my take on the topic, but the fact that the question keeps coming up so frequently shows the depth of misplaced fears driven, ironically, by disinformation and the lack of accurate information.

So when someone who really should know better starts to push this sort of incredibly dangerous concept, it's time to bump up to orange alert at a minimum, and the trigger is no less than Craig Mundie, chief research and strategy officer for Microsoft.

At the World Economic Forum in Davos two days ago, Mundie explicitly called for an "Internet Driver's License": "If you want to drive a car you have to have a license to say that you are capable of driving a car, the car has to pass a test to say it is fit to drive and you have to have insurance."
Posted by James Zellmer at 10:15 AM

January 24, 2010

Lunch With FW de Klerk

Alec Russell:
The last white president of South Africa is deep into his reminiscences on the dying days of apartheid when a fruit fly, no doubt overcome by the day’s intense 35°C heat, dives into my glass of crisp Cape Sauvignon. Unconsciously, I fish it out and make to have another sip. FW de Klerk is having none of it. He abandons the story of his once fraught relationship with Nelson Mandela, raises his hand and attracts the attention of the waitress.

For a moment, seen from afar, it could have been the quintessential apartheid tableau: black servant summoned by Afrikaner patriarch. But this is 21st-century Cape Town and, apart from on remote farms on the veld, that relationship is of the past. The waitress confidently looks de Klerk in the eye. There is none of the pre-emptive cringing that once marked such inter-racial encounters . It is, I reflect over a replacement glass of Sauvignon, a reminder of the revolutionary changes that my lunch guest set in motion almost exactly 20 years ago.

History is moving rather fast in South Africa. In June the country hosts football’s World Cup, as if in ultimate endorsement of its post-apartheid progress. Yet on February 2 1990, when the recently inaugurated state President de Klerk stood up to deliver the annual opening address to the white-dominated parliament, such a prospect was unthinkable. The townships were in ferment; many apartheid laws were still on the books; and expectations of the balding, supposedly cautious Afrikaner were low.
Posted by James Zellmer at 7:25 AM

January 17, 2010

Other People's Privacy

Nicholas Carr:
In the wake of Google's revelation last week of a concerted, sophisticated cyber attack on many corporate networks, including its own Gmail service, Eric Schmidt's recent comments about privacy become even more troubling. As you'll recall, in a December 3 CNBC interview, Schmidt said, "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place. But if you really need that kind of privacy, the reality is that search engines - including Google - do retain this information for some time and it's important, for example, that we are all subject in the United States to the Patriot Act and it is possible that all that information could be made available to the authorities."

For a public figure to say "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place" is, at the most practical of levels, incredibly rash. You're essentially extending an open invitation to reporters to publish anything about your life that they can uncover. (Ask Gary Hart.) The statement also paints Schmidt as a hypocrite. In 2005, he threw a legendary hissy fit when CNET's Elinor Mills, in an article about privacy, published some details about his residence, his finances, and his politics that she had uncovered through Google searches. Google infamously cut off all contact with CNET for a couple of months. Schmidt didn't seem so casual about the value of privacy when his own was at stake.
Posted by James Zellmer at 8:51 PM

January 7, 2010

Bill Gross Puts US On Notice over Debt Binge

Tom Petruno:
If the bond vigilantes are ready to ride again, there should be little doubt who will be leading the charge.

Bond guru Bill Gross at Pimco in Newport Beach this week has ramped up his warnings to the Obama administration and the Federal Reserve about the perils of unfettered government borrowing.

In an interview in Time magazine on Tuesday, Gross suggested that Pimco, which manages nearly $1 trillion in mostly fixed-income assets, now feels more comfortable owning German government debt than U.S. Treasury debt:

"There are a number of reasons to have doubts about Treasuries, not just because of America's sovereign risk but also from the standpoint of an over-owned currency [the dollar]. . . . At Pimco we would probably try and substitute for our Treasuries with sovereign bonds of potentially higher quality. Germany looks interesting to us. Germany has problems, but it's in a much better budget situation than the U.S. because of a constitutional amendment three months ago that forces a balanced budget in four years."
Posted by James Zellmer at 8:32 AM

January 1, 2010

Double Bubble & Built on Sand

The Financial Times - Cartoon.
Posted by James Zellmer at 11:05 AM

Banking after the kindness of strangers

Francesco Guerrera:
”Whoever you are, I have always depended on the kindness of strangers”. The last line of Tennessee Williams’ A Streetcar Named Desire – uttered by its desperate heroine to the doctor taking her to a mental asylum – is an apt summary of the US financial sector in 2009.

As the crisis abated, banks took maximum advantage of the kindness of taxpayers and regulators to return to their core business: making money for shareholders and employees.

Ultra-low interest rates, dwindling competition and pent-up demand for their services sparked a renaissance in profits and share prices of the financial institutions that emerged from the turmoil in reasonable shape.

The question is whether history will repeat itself, or even just rhyme, this year. Here are my ten, utterly personal and non-exhaustive, predictions for the year ahead in US finance.

1) Strangers will be a lot less kind. With banks boasting about their new-found health, regulators will pull the plug on most of the measures they introduced to drag the financial industry back from the brink. A host of acronyms (Tarp, Talf, PPIP, TLGP) will be forgotten but not missed.
Posted by James Zellmer at 10:56 AM

December 29, 2009

Neda Soltan: Person of the Year

Times of London:
Every few years a man, or a woman, whose name is often familiar to few beyond the circle of their family and friends, is ambling through a more or less anonymous life when they find themselves ambushed by history. For many of these people, their life changes forever. Frequently, tragically, it ends; leaving behind an image that haunts the world long after they themselves have gone.

Neda Soltan was such a person, a young beautiful woman who had studied philosophy, was now an aspiring singer, who found herself abruptly catapulted from the crowds of Tehran to become the face of protest against Iran’s repressive rulers; a symbol of rebellion against the fraudulent election that had just returned Mahmoud Ahmedinejad to power.

Like the nameless student who taunted that tank in Tiananmen Square, like Jan Palach, the Czech student who died after setting himself alight in Wenceslas Square in January 1969 to protest against the Soviet-led invasion of Czechoslovakia, Neda Soltan became the icon for the mutiny against Iran’s brutish regime as images of her face, and amateur footage of her murder by a sniper from the pro-government Basij militia, sprinted around the world. Like the photograph taken in South Vietnam of a bewildered young girl, the victim of a napalm attack, running naked down a road; and like the images of those skin-and-bones internees, standing semi-naked in the prison camp run by Bosnian Serb forces in Omarska in 1992, their ribs as prominent as xylophone keys, the image of Neda Soltan lying bleeding on a Tehran street has become the shorthand for the horrors of a conflict. With their beseeching eyes such images become, as the war photographer Don McCullin has pointed out, our modern versions of religious icons.
Certainly a superior choice to the Political Class bank's CEO: Goldman's Lloyd Blankein.
Posted by James Zellmer at 1:15 AM

December 28, 2009

"Person of the Year" - Goldman Sachs' Lloyd Blankfein: "Doing God's Work"

John Gapper:
Under other circumstances, this would have been a year to savour in the long, rapid ascent of Lloyd Blankfein. Goldman Sachs, the investment bank he has led for three years, not only navigated the 2008 global financial crisis better than others on Wall Street but is set to make record profits, and pay up to $23bn (€16bn, £14bn) in bonuses to its 31,700 staff.

For Mr Blankfein, a scholarship boy from the Bronx whose first financial job at Goldman was selling gold coins in its commodities trading arm, has prospered to an extent that was implausible even 10 years ago, when it became a public company. Its influence has spread throughout the world, from New York and London to Shanghai and São Paulo.

A good slice of its success is attributable to Mr Blankfein, a tough, bright, funny (everyone remarks upon his unpretentious, wisecracking manner) financier who reoriented Goldman. Under his leadership, trading and risk-taking have pushed to the fore, reducing the influence of its investment banking advisers.

In 2009, however, Wall Street faced a wave of public anger at how banks that survived only with the assistance of taxpayers seemed unchanged and unrepentant. Goldman’s profitability, and suspicions that its deep links with governments around the world give it unfair advantages, made it a symbol of Wall Street greed and excess. It was described by the Rolling Stone writer Matt Taibbi as “a great vampire squid wrapped around the face of humanity”.
Posted by James Zellmer at 1:25 AM

December 16, 2009

Congress Travels, The Public Pays

Brody Mullins & TW Farnam:
The expenses racked up by U.S. lawmakers traveling here for a conference last month included one for the "control room."

Besides rooms for sleeping, the 12 members of the House of Representatives rented their hotel's fireplace-equipped presidential suite and two adjacent rooms. The hotel cleared out the beds and in their place set up a bar, a snack room and office space. The three extra rooms -- stocked with liquor, Coors beer, chips and salsa, sandwiches, Mrs. Fields cookies and York Peppermint Patties -- cost a total of about $1,500 a night. They were rented for five nights.

While in Scotland, the House members toured historic buildings. Some shopped for Scotch whisky and visited the hotel spa. They capped the trip with a dinner at one of the region's finest restaurants, paid for by the legislators, who got $118 daily stipends for meals and incidentals.

Eleven of the 12 legislators then left the five-day conference two days early.

The tour provides a glimpse of the mixture of business and pleasure involved in legislators' overseas trips, which are growing in number and mostly financed by the taxpayer. Lawmakers travel with military liaisons who carry luggage, help them through customs, escort them on sightseeing trips and stock their hotel rooms with food and liquor. Typically, spouses come along, flying free on jets operated by the Air Force. Legislative aides come too. On the ground, all travel in chauffeured vehicles.
Posted by James Zellmer at 8:27 AM

December 14, 2009

Goldman's Collateral Damage

Tracy Alloway:

Cast your mind back to that SigTarp report, published last month.

Readers will recall there’s been a persistent stink over whether the efforts of the Federal Reserve and the US Treasury to prop up AIG had the effect of bailing out Goldman Sachs — its largest trading partner. Goldman Sachs always denied that idea, saying its exposure to AIG was collateralised and hedged against the mega-insurers’ fall. Others, were not so sure.

Last week the Wall Street Journal continued that particular line of thought with an article titled “Goldman fueled AIG gambles“, which examined GS’s role in acting as a middleman between the insurer and other banks. In short, Goldman offered banks protection on some of their investments (for instance on CDOs of home loans), which it in turn hedged with AIG in the form of CDS.

Posted by James Zellmer at 9:49 AM

December 1, 2009

Throwing Computers At Healthcare

Nicholas Carr:
Computerworld reports on an extensive new Harvard Medical School study, appearing in the American Journal of Medicine, that paints a stark and troubling picture of the essential worthlessness of many of the computer systems that hospitals have invested in over the last few years. The researchers, led by Harvard's David Himmelstein, begin their report by sketching out the hype that now surrounds health care automation:
Enthusiasm for health information technology spans the political spectrum, from Barack Obama to Newt Gingrich. Congress is pouring $19 billion into it. Health reformers of many stripes see computerization as a painless solution to the most vexing health policy problems, allowing simultaneous quality improvement and cost reduction ...

In 2005, one team of analysts projected annual savings of $77.8 billion, whereas another foresaw more than $81 billion in savings plus substantial health gains from the nationwide adoption of optimal computerization. Today, the federal government’s health information technology website states (without reference) that “Broad use of health IT will: improve health care quality; prevent medical errors; reduce health care costs; increase administrative efficiencies; decrease paperwork; and expand access to affordable care.
Posted by James Zellmer at 8:22 PM

November 27, 2009

Dubai's Debt Default

James Mackintosh:

Asking to delay repayment on your debt - or defaulting, as the world’s press is carefully not calling it - has turned out not to be a good way for Dubai’s Sheikh Makhtoum to win friends and influence lenders to Nakheel, the property arm of the state-owned conglomerate Dubai World. Markets have tumbled worldwide; investors, reminded that governments can be subprime too, have dumped the debt of other dodgy-looking economies (including Greece); and in Dubai… everyone is on holiday.

What is surprising here is not that Dubai is on the verge of default. It is that anyone was willing to lend them ludicrous sums of money in the first place. Calculated Risk points out that Sir Win Bischoff, then at the (US) state-controlled Citi and now, appropriately enough, at the (British) state-controlled Lloyds Banking Group, was raving about raising $8bn of loans for Dubai last year and as recently as December chose to go public with a “positive outlook on Dubai”. Another non-surprise: state-controlled Royal Bank of Scotland was Dubai World’s biggest loan arranger. In the UK, Dubai World has been buying up a long list of property, according to Anita Likus at The Source; the assumption is it will shortly be selling.

More here.
Posted by James Zellmer at 8:21 AM

The Berlin Wall: 20 Years Gone

The Big Picture:
Twenty years ago, on the night of November 9, 1989, following weeks of pro-democracy protests, East German authorities suddenly opened their border to West Germany. After 28 years as prisoners of their own country, euphoric East Germans streamed to checkpoints and rushed past bewildered guards, many falling tearfully into the arms of West Germans welcoming them on the other side. Thousands of Germans and world leaders gathered in Berlin yesterday to celebrate the "Mauerfall" - the dismantling of the Berlin Wall and German reunification - and to remember the approximately 100-200 who died attempting to cross the border over the years. Collected here are photographs both historic and recent, from the fall of the Berlin Wall. Be sure to pause on photos 12 - 15, and click them to see a fade effect from before to after. (38 photos total)
Posted by James Zellmer at 7:25 AM

November 26, 2009

Asia Trip Financial News

David Kotok:
Now to the regional takeaway from our trip

We believe that few trust the United States. This is obvious in private conversation. And it is clear to all that confidence in the dollar is low. This is mostly mentioned only in private.

In public there is quiet response when the Treasury Secretary of the United States utters words about a strong dollar. Asians have heard that for years and with the many different accents of the various Treasury Secretaries. Geithner would serve the country better by ceasing to mouth the same words that his predecessor Snow and others used. He is not believed. Frankly, in some circles he is actually seen as an incompetent political hack. He is blamed by some for the insufficiency of the New York Fed under his presidency to supervise the primary dealers that failed – Countrywide, Bear Stearns, and Lehman. And the ethics issues surrounding the NY Fed under his tenure are viewed as appalling; this continues to surface in private conversations. Some folks are puzzled about why Obama maintains his support for Geithner. Some just attribute it to the President’s inexperience as a leader.

My takeaway is that our present Secretary of the Treasury is seriously and sustainably injuring the image of the United States. He has lost credibility. His actions are real and they impact markets. My conversations with those who are attempting to market GSE securities to Asians and getting rebuffed are validation enough for me on this point. When the Fed stops buying GSE mortgage backed securities, this reality will hit the markets in a re-pricing of that asset class. Spreads are going to widen.

The American federal budget deficits are worrisome everywhere. Policy promises from Washington to reduce them are greeted with great skepticism. Often they are privately described as American arrogance. Publicly, Asians are very polite and do not often subject their guests to embarrassing criticism. Privately they are quite candid. In my view they are correct: America is arrogant and seems to pretend that it is still the best and most trustworthy financial and capital market in the world. There is no basis for the US to have such a view of itself. We have squandered our reputational capital as a financial center leader.
Posted by James Zellmer at 10:11 PM

November 25, 2009


Madison is truly blessed to have such a fine facility, courtesy of Jerry Frautschi's landmark $200M+ gift. However and unfortunately, the financial spaghetti behind its birth is complicated and controversial, particularly at this moment when Overture's parent lacks liquidity to fund the project's remaining debt.

Yet, the facility is simply stunning. Have a look at these panoramic views.

Overture Hall Lobby:


In an effort to preserve the pre-Overture scene, we shot panoramic images in 1999 and again, after construction in 2006.

I do have one financing suggestion. Give Goldman Sachs Lloyd Blankfein a call. After all, Goldman Sachs' record bonuses are a direct result of massive taxpayer intervention to prop up certain banks and other "too big to fail" entities such as AIG. GS is well connected at the very top of our Government.
Posted by James Zellmer at 10:06 AM

Presidential Cabinet Appointments: Private Sector Experience 1900-2009

Nick Schultz:
A friend sends along the following chart. It examines the prior private sector experience of the cabinet officials since 1900 that one might expect a president to turn to in seeking advice about helping the economy. It includes Secretaries of State; Commerce; Treasury; Agriculture; Interior; Labor; Transportation; Energy; and Housing & Urban Development and excludes Postmaster General; Navy; War; Health, Education & Welfare; Veterans Affairs; and Homeland Security — 432 cabinet members in all.
Posted by James Zellmer at 9:37 AM

Auditing the central bank: a jolly good thing!

Willem Buiter:
What is so important about H.R. 1207: the Federal Reserve Transparency Act of 2009 aka the ‘Audit the Fed’ bill? This bill “To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.” may not sound terribly exciting, but in addition to making the Fed accountable for its quasi-fiscal activities, it could well set an important precedent for the enhanced accountability of operationally independent central banks everywhere.

The Finance Committee of the US House of Representatives has just passed this bill, which is an amendment sponsored by Representatives Ron Paul (Republican) and Alan Grayson (Democrat) to Representative Barney Frank’s HR 3996, the “Financial Stability Improvement Act of 2009″. The amendment allows the US Government Accountability Office to conduct a wide-ranging audit of the financial activities of the Federal Reserve Board. Specifically (and quoting from the RonPaul.com website):

The Paul/Grayson amendment:
Posted by James Zellmer at 9:20 AM

Investigating The Card Game: Consumer Lending

As credit card companies face rising public anger, new regulation from Washington and staggering new rates of default and bankruptcy, FRONTLINE correspondent Lowell Bergman investigates the future of the massive consumer loan industry and its impact on a fragile national economy.

In The Card Game, a follow-up to the Secret History of the Credit Card and a joint project with The New York Times, Bergman and the Times talk to industry insiders, lobbyists, politicians and consumer advocates as they square off over attempts to reform the way the industry has done business for decades.

"The card issuers could do anything they want," Robert McKinley, CEO of CardWeb.com, tells FRONTLINE of the industry's unchecked power over consumers. "They could change your interest rate. They could impose an annual fee. They could close your account." High interest rates along with more and more penalty fees drove up profits for the industry, Bergman finds, as the banks followed the lead of an aggressive upstart: Providian Bank. In an exclusive interview with FRONTLINE, former Providian CEO Shailesh Mehta tells Bergman how his company successfully targeted vulnerable low-income customers whom Providian called "the unbanked."

"They're lower-income people-bad credits, bankrupts, young credits, no credits," Mehta says. Providian also innovated by offering "free" credit cards that carried heavy hidden fees. "I used to use the word 'penalty pricing' or 'stealth pricing,'" Mehta tells FRONTLINE. "When people make the buying decision, they don't look at the penalty fees because they never believe they'll be late. They never believe they'll be over limit, right? ... Our business took off. ... We were making a billion dollars a year."
Posted by James Zellmer at 9:12 AM

Playing with fire Forget China, the US Federal Reserve is the world's biggest currency manipulator

Andy Xie:
As US President Barack Obama glided through China, a chorus erupted in New York and Washington: the problem with the global economy is China's exchange-rate policy, and Obama's No 1 job is to slay it. It's sad that these people actually believe what they are saying: the same "logic" got the world into the current mess. In the feverish hallucination of salvation, they think that moving China's currency policy would right all wrongs.

The US Federal Reserve is the biggest currency manipulator in the world. Not only does it keep the short-term interest rate at zero through its vast purchase programme for mortgage-backed securities, it also keeps credit spreads and bond yields artificially low. Its manipulation stops money, bond and credit markets from pricing either the Fed's policy or the US economic plight. All the firepower is packed into the currency market, giving speculators a sure bet on a weaker dollar and everything else rising. Here comes the biggest carry trade ever: the Fed is promising no downside for shorting the dollar.

The US Treasury writes an annual report, judging if other countries are manipulating their exchange rates. It should look in the mirror. Even though the Fed is not directly intervening in the currency market per se, its manipulation is equivalent to pushing down the dollar by non-market means.
Posted by James Zellmer at 9:08 AM

November 19, 2009

Playing with fire Forget China, the US Federal Reserve is the world's biggest currency manipulator

Andy Xie:
As US President Barack Obama glided through China, a chorus erupted in New York and Washington: the problem with the global economy is China's exchange-rate policy, and Obama's No 1 job is to slay it. It's sad that these people actually believe what they are saying: the same "logic" got the world into the current mess. In the feverish hallucination of salvation, they think that moving China's currency policy would right all wrongs.

The US Federal Reserve is the biggest currency manipulator in the world. Not only does it keep the short-term interest rate at zero through its vast purchase programme for mortgage-backed securities, it also keeps credit spreads and bond yields artificially low. Its manipulation stops money, bond and credit markets from pricing either the Fed's policy or the US economic plight. All the firepower is packed into the currency market, giving speculators a sure bet on a weaker dollar and everything else rising. Here comes the biggest carry trade ever: the Fed is promising no downside for shorting the dollar.

The US Treasury writes an annual report, judging if other countries are manipulating their exchange rates. It should look in the mirror. Even though the Fed is not directly intervening in the currency market per se, its manipulation is equivalent to pushing down the dollar by non-market means.
Posted by James Zellmer at 7:00 PM

November 17, 2009

Goldman apologises for role in crisis

Francesco Guerrera, Justin Baer and Tom Braithwaite :
Goldman Sachs apologised for its role in the financial crisis on Tuesday and pledged $500m over five years – or about 2.3 per cent of its estimated bonus and salary pool for 2009 – to help 10,000 US small businesses recover from the ­recession. The moves come as the bank tries to defuse a political and public backlash over its plans to share billions of dollars among top dealmakers after rebounding sharply from the turmoil and earning record profits in the first nine months of the year.

Lloyd Blankfein, Goldman’s chief executive, told a corporate conference in New York that the bank regretted taking part in the cheap credit boom that had fuelled the pre-crisis bubble. “We participated in things that were clearly wrong and have reason to regret,” said Mr Blankfein. “We apologise.”

Mr Blankfein also told the conference he wished he had not told the UK’s Sunday Times newspaper that Goldman did “God’s work” – a remark that was seized upon by the bank’s critics – and said it had been meant as a joke.

Mr Blankfein spoke hours before Goldman revealed plans to invest $500m over five years in business education, technical assistance and venture capital to help 10,000 small businesses across the US. The yearly amount of about $100m to be spent on the initiative – which will be overseen by a panel co-chaired by Warren Buffett, a Goldman investor – is equivalent to a good trading day at Goldman. In the third quarter, the bank had 36 days in which traders made more than $100m.

Mr Buffett told the Financial Times that the small business programme was not a response by the bank to recent criticism. “This is a big initiative,” he said. “This is not a one-day or one-year wonder. It’s a continuous programme.”
Posted by James Zellmer at 7:57 PM

November 7, 2009

Buffett's Betrayal....

Rolfe Winkler:
When I was 14, Warren Buffett wrote me a letter.

It was a response to one I’d sent him, pitching an investment idea. For a kid interested in learning stocks, Buffett was a great role model. His investing style — diligent security analysis, finding competent management, patience — was immediately appealing.

Buffett was kind enough to respond to my letter, thanking me for it and inviting me to his company’s annual meeting. I was hooked. Today, Buffett remains famous for investing The Right Way. He even has a television cartoon in the works, which will groom the next generation of acolytes.

But it turns out much of the story is fiction. A good chunk of his fortune is dependent on taxpayer largess. Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out.

Berkshire Hathaway, in which Buffett owns 27 percent, according to a recent proxy filing, has more than $26 billion invested in eight financial companies that have received bailout money. The TARP at one point had nearly $100 billion invested in these companies and, according to new data released by Thomson Reuters, FDIC backs more than $130 billion of their debt.

To put that in perspective, 75 percent of the debt these companies have issued since late November has come with a federal guarantee. (Click chart to enlarge in new window)

Posted by James Zellmer at 2:03 PM

October 27, 2009

The Best Summary (to date) of Taxpayer Funded Events that Lead to Goldman Sachs' Survival and Recent Large Payouts

Joe Nocera:
A few weeks ago, shortly after Goldman Sachs reported its latest blowout quarter, the firm’s chief executive, Lloyd Blankfein, spoke at a Fortune magazine breakfast.

In normal times, Mr. Blankfein might have been forgiven for bragging a bit about the just-reported quarter — over $3 billion in profit on $12 billion in revenue. It had generated some $6 billion just in one division: fixed income. It had more than $160 billion in cash or cash equivalents on its balance sheet. And of course it had long since repaid, with interest, the $10 billion it had accepted from the Treasury Department during the darkest days of the crisis.

But of course those weren’t the numbers the media and the public had focused on in the wake of Goldman’s earnings. Instead, people were fixated on the $5.3 billion the firm had set aside for its executives’ year-end bonuses. Added to first and second quarter set-asides of $4.6 billion and $6.6 billion, the firm had put aside $16 billion so far this year for employee bonuses. Nearly 50 percent of the firm’s revenue was going toward compensation. And there was still one more quarter to go!

Was it fair, commentators kept asking, that barely a year after the taxpayers had essentially saved the financial system, this firm that took government capital should now be paying multimillion-dollar bonuses? Was it right? Which, not surprisingly, is what Fortune’s managing editor, Andrew Serwer, asked Mr. Blankfein within minutes of taking the stage.

In private, Goldman executives are scornful of the sentiment behind this question. Their view, in essence, is that they should be applauded for being able to pay such big bonuses, because it means their business is successful. People who want them to pay less, they believe, want them to fail.

But Mr. Blankfein, a charming, funny man who has been Goldman’s boss since 2006, is far too smart to say that out loud. Nonetheless, what he did say was revealing. Treasury’s original decision to use the Troubled Asset Relief Program to shore up the banks’ capital, Mr. Blankfein said, “was a sensible thing to do at the time.”
Posted by James Zellmer at 9:45 AM

October 14, 2009

A credibility problem for Goldman

John Gapper:
It will be business as usual for Goldman Sachs this morning. The bank will annoy a lot of people.

Goldman, the institution that came through last year’s financial crisis best – arguably the only pure investment bank left standing – will say how much money it made in the third quarter (a lot) and how many billions it has stored for bonuses (about $5.5bn towards a likely 2009 bonus pool of $23bn).

For believers in Goldman’s ethical standards and way of doing business, these are difficult times. Although it avoided the mistakes that brought down Bear Stearns and Lehman Brothers, forced Merrill Lynch into Bank of America’s arms, and prodded Morgan Stanley further into lower-risk retail broking, Goldman has become a whipping boy.

There is outrage that, having taken government money to survive the crash, Goldman is in such rude health that it will hand out billions in bonuses. Matt Taibbi, a Rolling Stone writer, caught the mood memorably by describing Goldman as “a giant vampire squid wrapped around the face of humanity”.

Such is Goldman’s importance to Wall Street and regulation that I am devoting a pair of columns to it. Today, I will discuss the Goldman problem (different and less egregious to what Mr Taibbi believes, but still a problem). Next week, I will suggest what should be done about it by regulators and the bank itself.

Goldman executives were wounded by how seriously Mr Taibbi’s piece was taken despite their riposte that vampire squids are small creatures that present no danger to humanity. He accused it of profiting from bubbles such as the US internet and housing booms, and of repeatedly “selling investments they know are crap” to retail investors.
Posted by James Zellmer at 10:35 PM

October 10, 2009

How banks will get customers to cover a round of big losses

John Dizard:
This, they toss off with the certainty of wine-fuelled genius, also explains the rise in the gold price.

Actually, I do not think that is how the bank risk paradox will play out.

There are going to be much larger write-offs and reserves taken at all the big banks, with the peak in reported bad news probably coming next year. However, the taxpayer will not be asked for more capital, and the Federal Reserve and Treasury will gradually dismantle the temporary support structures, just as they say.

How is this possible? Because the public will pay through usury, not taxation. There is a big difference, of course. Usury is less visible, and you cannot effectively vote against it.

Blood will flow, but it will do so not as a catastrophic bath for the banks, but as a gradual transfusion to them from their customers.

There will be headline risk for the banks' management and public securities, which is why I think that their CDS protection is too cheap at the moment.

One source of headline risk is the spectre of Federal Government reform of the financial system. God knows there is a good case to be made for de-cartelising the industry, but that is not going to happen.
Bank spreads are at record levels. Their cost of funds is nearly 0, while they lend it out at 4.99% or (much) greater. Plus, the fees.
Posted by James Zellmer at 10:09 PM

October 3, 2009

One Year Later, Little Has Changed

Ed Wallace:
"By buying U.S. Treasuries and mortgages to increase the monetary base by $1 trillion, Fed Chairman Ben Bernanke didn’t put money directly into the stock market, but he didn’t have to. With nowhere else to go, except maybe commodities, inflows into the stock market have been on a tear. The dollars he cranked out didn’t go into the hard economy, but instead into tradable assets."

— "The Bernanke Market," Wall Street Journal, July 15, 2009

"In the last week alone, the European Central Bank allocated the record sum of $619 billion to 1,1,00 financial institutions – at a paltry 1 percent interest rate. And yet the money is not going where the central banks want it to go, namely into the pockets of businesses and consumers – at least not at reasonable interest rates."

— "How German Banks are Cashing In on the Financial Crisis," Der Spiegel, July 1, 2009

Two weeks ago, in meetings with their North Texas dealers, both Toyota and Honda voiced concern about how the economic recovery was going to hold up over the next few quarters. It wasn’t public news yet in the States, but Japanese executives already knew that their imports and exports had fallen sharply through the summer. And, while our business media were cheerleading because the Dow Jones was once again flirting with 10,000, in Japan their exports had just fallen 36 percent; metal shipments to the U.S. were down by more than 80 percent, automobile shipments by 50 percent. This was a problem here, too: In August America’s dealers seriously needed Japanese vehicles to restock their depleted inventories.

Toyota and Honda took different tacks for the fourth quarter. Toyota said it will spend $1 billion in advertising to move the retail market. Honda, always more cautious in difficult times, said it would spend nothing during the same period. Honda added that it will keep dealer inventories at a 30-day supply of unsold vehicles, half the inventory considered normal.
Posted by James Zellmer at 10:50 PM

October 2, 2009

Madison Unified Fiber Network, Madison Broadband Initiative

Details appear on the next Madison School Board meeting agenda [PDF].

Good news, if it happens. The Madison lags other parts of the country and world in fiber deployment.
Posted by James Zellmer at 4:29 PM

September 11, 2009

An Interesting Look at France & Great Britain During as the Wall Came Down...

James Blitz:
The tensions that rocked the British government following the collapse of the Berlin Wall in 1989 are revealed in a series of Whitehall documents published today.

The papers throw fresh light on the struggle between Margaret Thatcher, prime minister at the time, and senior Foreign Office figures over German reunification.

As the Financial Times revealed yesterday, the documents show that Mrs (now Lady) Thatcher and François Mitterrand, the late French president, harboured fears that a united Germany would threaten Europe. They display the degree to which Mrs Thatcher clashed with Douglas Hurd, then foreign secretary, and Sir Christopher Mallaby, then ambassador to Bonn, who felt reunification was inevitable.

After Helmut Kohl, the West German chancellor, announced a 10-point plan for reunification on November 28, 1989, Mrs Thatcher expressed her opposition.

She told Mr Mitterrand in talks on December 8 that Mr Kohl had "no conception of the sensitivities of others in Europe, and seemed to have forgotten that the division of Germany was the result of a war which Germany had started".

A separate memorandum by Charles Powell, her foreign policy adviser, underscores her opposition. "We do not want to wake up one morning and find that. . . German reunification is to all intents and purposes on us," he wrote.
Posted by James Zellmer at 8:17 PM

August 31, 2009

The Iraqi who saved Norway from oil

Martin Sandbu:
When he boarded his flight from London to Oslo, Farouk al-Kasim, a young Iraqi geologist, knew his life would never again be the same. Norway was a country about as different as it was possible to imagine from his home, the Iraqi port city of Basra. He had no job to go to, and no idea of how he would make a living in the far north. It was May 1968 and al-Kasim had just resigned from his post at the Iraq Petroleum Company. To do so, he had had to come to the UK, where the consortium of western companies that still controlled most of his country’s oil production had its headquarters.

For all its uncertainties, al-Kasim’s journey to Norway had a clear purpose: he and his Norwegian wife, Solfrid, had decided that their youngest son, born with cerebral palsy, could only receive the care he needed there. But it meant turning their backs on a world of comforts. Al-Kasim’s successful career had afforded them the prosperous lifestyle of Basra’s upper-middle class. Now they would live with Solfrid’s family until he could find work, though he had little hope of finding a job as rewarding as the one he had left behind. He was not aware that oil exploration was under way on the Norwegian continental shelf, and even if he had known, it wouldn’t have been much cause for hope: after five years of searching, still no oil had been found.

But al-Kasim’s most immediate problem on arriving in Oslo that morning was how to fill the day: his train to Solfrid’s home town did not depart until 6.30pm. “I thought what I am going to do in these hours?” he says. “So I decided to go to the Ministry of Industry and ask them if they knew of any oil companies coming to Norway.”
Posted by James Zellmer at 9:35 AM

August 21, 2009

Britain's National Medical Records Project - "No money spent on training"...

Nicholas Timmins:
“If you live in Birmingham,” declared Tony Blair when he was UK prime minister, “and you have an accident while you are, for example, in Bradford, it should be possible for your records to be instantly available to the doctors treating you.”

Not any more. Or not, at least, if the Conservatives win the next general election. For the Tories have pledged to scrap the country-wide version of the National Health Service’s electronic patient record.

Back in 2002, the idea of a full patient record, available anywhere in an emergency, was the principal political selling point for what was billed as “the biggest civilian computer project in the world”: the drive to give all 50m or so patients in England (the rest of the UK has its own arrangements) an all-singing, all-dancing electronic record. Roll-out was meant to start in 2005 and be completed by 2010.

Under a Conservative government, development of the local record – exchangeable between primary care physicians and their local hospitals – would continue. Nationally, clinicians would still be able to seek access to it when needed from the doctors who would hold it locally. But the idea of a national database of patients’ records, instantly available in an emergency from anywhere in the country, would disappear.

This may or may not matter, depending on your point of view. For many clinicians, the idea of an instantly available national record was always something of a diversion. It is access to a comprehensive record locally that is crucial for day-to-day care.

Nonetheless, the Conservatives’ decision to scrap the central database is a symbolic moment for a £12bn ($20bn, €14bn) programme that has struggled to deliver from day one. It is currently running at least four years late – and there looks to be no chance in the foreseeable future of its delivering quite what was promised.


On top of that, while there was a £6bn budget for the 10-year central contracts, no money was earmarked for training, in spite of the lesson, from the relatively few successful installations of electronic records in US hospitals, that at least as much has to be spent on changing the way staff work as is spent on the systems themselves.
Posted by James Zellmer at 9:33 AM

Flickr vs. Free Speech

Mike Arrington:
One thing I’ve learned over the years is this - screwing over your users while yelling “the lawyers made me do it!” rarely ends well. Particularly when the lawyers are just being lazy, and free speech rights are at stake.

Flickr really stepped in it this time. And they’ve sparked a free speech and copyright fascism debate that is unlikely to cool down any time soon.

Sometime last week they took down a photoshopped image of President Obama that makes him look like the Heath Ledger (Joker) character from The Dark Knight. The image was created and uploaded to Flickr by 20 year old college student Firas Alkhateeb while “bored over winter school break.” It was also later altered yet again by someone else and used to create anti-obama posters that went up in Los Angeles.

Thomas Hawk has a good overview of some of the other details, but the short version is the image was removed by Flickr sometime last week due to “due to copyright-infringement concerns.”

People are angry over the takedown. There are lots of pictures mocking President Bush on a Time Magazine cover on Flickr that haven’t been removed. And of the Heath Ledger Joker character.
Posted by James Zellmer at 8:23 AM

August 14, 2009

On Locational Privacy, and How to Avoid Losing it Forever

Over the next decade, systems which create and store digital records of people's movements through public space will be woven inextricably into the fabric of everyday life. We are already starting to see such systems now, and there will be many more in the near future.

Here are some examples you might already have used or read about:
  • Monthly transit swipe-cards
  • Electronic tolling devices (FastTrak, EZpass, congestion pricing)
  • Cellphones
  • Services telling you when your friends are nearby
  • Searches on your PDA for services and businesses near your current location
  • Free Wi-Fi with ads for businesses near the network access point you're using
  • Electronic swipe cards for doors
  • Parking meters you can call to add money to, and which send you a text message when your time is running out
These systems are marvellously innovative, and they promise benefits ranging from increased convenience to transformative new kinds of social interaction.

Unfortunately, these systems pose a dramatic threat to locational privacy.
Posted by James Zellmer at 2:47 PM

August 10, 2009

A runaway deficit may soon test Obama’s luck

Niall Ferguson:
President Barack Obama reminds me of Felix the Cat. One of the best-loved cartoon characters of the 1920s, Felix was not only black. He was also very, very lucky. And that pretty much sums up the 44th president of the US as he takes a well-earned summer break after just over six months in the world’s biggest and toughest job.

His stimulus bill has clearly made a significant contribution to stabilising the US economy since its passage in February. His cap-and-trade bill to reduce carbon dioxide emissions passed the House of Representatives in June. He has set in motion significant overhauls of financial regulation and healthcare. Considering the magnitude of the economic crisis he inherited, his popularity is holding up well. His current 56 per cent approval rating is significantly better than Bill Clinton’s (44 per cent) at the same stage in his first term and about the same as George W. Bush’s.

Consider the evidence that the economy has passed the nadir of the “great recession”. Second-quarter gross domestic product declined by only 1 per cent, compared with a drop of 6.4 per cent in the first quarter. House prices have stopped falling and in some cities are rising; sales of new single-family homes jumped 11 per cent from May to June. Credit spreads have narrowed significantly and the big banks are recovering, some even making enough money to pay back Tarp bail-out funds. The S&P 500 index is up nearly 48 per cent from its low in early March. Best of all, the economy lost fewer jobs in July than most pundits were expecting. Non-farm payrolls declined by just 247,000, half the number that were disappearing each month in the spring. The unemployment rate has actually declined slightly to 9.4 per cent.
Posted by James Zellmer at 8:18 PM

July 31, 2009

Lunch with Rory Stewart

Emily Stokes:
I was thinking we should do questions first and chat later,” says Rory Stewart, 36 and director of the Carr Centre for Human Rights at Harvard’s Kennedy School. I ask if the distinction is absolutely necessary; we are, after all, settling down for lunch, not preparing for a seminar.

“There might”, he says, “be a holistic theory that there’s no real distinction between interview and personal chat, just like there’s a theory that there’s no distinction between development, state-building and counter-insurgency, but I like to see things in categories.” He pauses to gauge whether I’m still following: “It’s like my belief that counter-terrorism is completely different from development.”

It is perhaps not surprising Stewart has no time for small talk. He has walked 6,000 miles across Asia; written a bestselling travel book at 28, and last year was chosen as one of Esquire magazine’s 75 most influential people of the 21st century.

Upon accepting the position at Harvard, he bought a huge house in Cambridge, where he now lives alone, filling it with furniture from his family home in the Scottish Highlands – evidence, perhaps, that he had renounced the life of an adventurer and charity director in Asia to settle down.

The restaurant where we meet is certainly sedate. Harvest specialises in New England cuisine (stews and seafood). Jazz plays in the background, and the napkins are shaped into concertinas. Stewart greets me with a toothy smile, sits down and, after a brief tutorial on the difference between counter-terrorism and development, opens a menu. He has, he says, had clam chowder for breakfast, and, undaunted by the prospect of yet more soupy seafood, orders mussels, followed by bouillabaisse. “Oh yes, I’m very New England,” he says.

Stewart has a detached way of speaking, in perfect paragraphs, without hesitation. He once told a former colleague that he added “um”s and “er”s to his speech at school because he was scaring the other children. You can tell when he is excited by a topic because his speech seems less scripted, and he surprises me by becoming more animated when I ask him about whether he feels at home in Cambridge – even though he answers my question by talking about Afghanistan: “There, I wake up looking at a mud courtyard with peacocks prancing on the grass; I go down to the old city…”

Since arriving at Harvard in June last year, he has been consultant to several members of Barack Obama’s administration, including Hillary Clinton, and is a member of Richard Holbrooke’s special committee for Afghanistan and Pakistan policy. “I do a lot of work with policymakers, but how much effect am I having?” he asks, pronging a mussel out of its shell.

“It’s like they’re coming in and saying to you, ‘I’m going to drive my car off a cliff. Should I or should I not wear a seatbelt?’ And you say, ‘I don’t think you should drive your car off the cliff.’ And they say, ‘No, no, that bit’s already been decided – the question is whether to wear a seatbelt.’ And you say, ‘Well, you might as well wear a seatbelt.’ And then they say, ‘We’ve consulted with policy expert Rory Stewart and he says ...’”
Posted by James Zellmer at 10:42 PM

July 19, 2009

The Devil is in The Retail

Edwin Heathcote:
The only way these big developments have been able to get planning permission is for a local authority to parcel together a big tract of land (usually formerly industrial or railway land, often formerly publicly owned) and to give over the whole thing to a developer who is charged with driving the “regeneration” that the public sector has largely lost the ability to conceive. Consequently, rather than the network of public streets interspersed with public spaces, private blocks and semi-private but accessible courtyards that forms the fabric of the traditionally complex city centre, we get the pseudo-civic space of the mall without walls. Protest in these spaces is banned, as is public gathering, distribution of leaflets, drinking, sleeping and, of course, photography. Yet there has been no outcry.

Particularly in the UK, we have become so inured to the smooth transition of public assets into private ownership that even the loss of our public spaces seems to us quite natural. I have been asked to stop taking photos of new office buildings from the public street outside, I have been stopped in malls, in piazzas and by canals. I have even been asked to stop taking notes. What Debord was calling for was a city in which what was important was not the way it looked or how many new shops it had but the multiplicity of ways in which it could be used. His way of subverting the structure of a Paris that had been conceived by Baron Haussmann, with wide avenues to enable an army swiftly to quell a revolution, was to walk across it on an aimless walk – the famous dérive – in which the flâneur concentrates on the mundane and the banal and does not allow his gaze to be directed to the formal or the ceremonial.

. . .

The Guatamalan architect Teddy Cruz, who works in the strange hinterlands between the wealth of San Diego and the poverty of Tijuana just across the border in Mexico, has called for a new system of measuring the success of a city – one based not on density of population or on the value of turnover and rent but on the frequency of social transactions. It represents a radical departure. The idea of regeneration that has emerged over the past couple of decades has been based solely on the generation of money. Big, retail-led and commercial schemes are encouraged, even subsidised, planning controls are loosened to accommodate them and civic democracy and local objections are overridden as the objectives of rising property prices, increased local taxes and the presence of “flagship” and “anchor” stores and brands becomes a planning Xanadu.
Posted by James Zellmer at 1:41 PM

July 12, 2009

Global Banking Economist Warned of Coming Crisis

Beat Balzli and Michaela Schiessl:
William White predicted the approaching financial crisis years before 2007's subprime meltdown. But central bankers preferred to listen to his great rival Alan Greenspan instead, with devastating consequences for the global economy.

William White had a pretty clear idea of what he wanted to do with his life after shedding his pinstriped suit and entering retirement.

White, a Canadian, worked for various central banks for 39 years, most recently serving as chief economist for the central bank for all central bankers, the Bank for International Settlements (BIS), headquartered in Basel, Switzerland.

Then, after 15 years in the world's most secretive gentlemen's club, White decided it was time to step down. The 66-year-old approached retirement in his adopted country the way a true Swiss national would. He took his money to the local bank, bought a piece of property in the Bernese Highlands and began building a chalet. There, in the mountains between cow pastures and ski resorts, he and his wife planned to relax and enjoy their retirement, and to live a peaceful existence punctuated only by the occasional vacation trip. That was the plan in June 2008.
Posted by James Zellmer at 6:13 PM

A New News Media Emerges for Our New World

Fabius Maximums:
Summary: One indicator of the massive changes sweeping America is the destruction of longtime solid business models. This post discussed colleges; today we look at the news media. Tons of ink have been spilled on this, but IMO ignoring some likely outcomes.

The major news media are on a treadmill. Loss of credibility shrinks their audience, hence less revenue, hence reduced funding. Which reduces the quality of their product, hence even less audience. Worse is the loss of advertisers to new media (e.g., Craigslist and Google), which means less revenue, less funding for news collection, and smaller audiences.

This posts speculates about the future, what new models might emerge from this turmoil. Here are some guesses.
Posted by James Zellmer at 6:00 PM

July 6, 2009

Change You Won't Believe

Ed Wallace:
I don’t mean to slight Michael Jackson’s once-formidable talent, nor do I dismiss his troubled personal life. But have we become so frivolous as a nation that any entertainer’s tragic and untimely death warranted more news coverage — day after day after day — than the real issues that will confront each of us now and in the all-too-near future? Apparently so. Most of us know more about the last two days of Jackson’s life than we know about the negotiations in which Washington forced GM and Chrysler into bankruptcy. You certainly know more about Jackson’s death that the names on the list of the 25 individuals who destroyed the world’s financial system. Of course, none of the 25 has died; they still work at the same jobs.

Let Them Eat Cowboys?

Not to be overly dramatic, but this should remind any thinking person of the declining days of the Roman Empire. Its citizens refused to deal with the decay and legitimate problems of their cities and empire, instead demanding more and more coliseums be built for their personal entertainment.

Well, we do have a new billion-dollar stadium for the Cowboys. And it has certainly received far more press coverage than the recently passed House Bill that proponents claim will save the planet from global warming. Yes, forces are gathering to reverse our 100-year history of citizens’ free travel to work and for leisure – and of that freedom’s benefits to our economy.
Posted by James Zellmer at 2:14 PM

July 4, 2009

Independence Day USA

I had the opportunity to recently visit Budapest's House of Terror Museum. The museum is housed in a former security services building and provides a powerful reminder of the forces of tyranny. This photo features victim images above a Soviet era tank.

An appropriate reminder of the price of freedom, today, the Fourth of July, 2009.

An a more pleasant note, Jeff Sullivan posted a gorgeous Yosemite image set here.

It is hard to go wrong at stunning Yosemite! God Bless America.
Posted by James Zellmer at 11:23 AM

July 2, 2009

Washington Post Sells Access to Lobbyists

For $25,000 to $250,000, The Washington Post is offering lobbyists and association executives off-the-record, nonconfrontational access to "those powerful few" — Obama administration officials, members of Congress, and the paper’s own reporters and editors.

The astonishing offer is detailed in a flier circulated Wednesday to a health care lobbyist, who provided it to a reporter because the lobbyist said he feels it’s a conflict for the paper to charge for access to, as the flier says, its “health care reporting and editorial staff."

The offer — which essentially turns a news organization into a facilitator for private lobbyist-official encounters — is a new sign of the lengths to which news organizations will go to find revenue at a time when most newspapers are struggling for survival.

And it's a turn of the times that a lobbyist is scolding The Washington Post for its ethical practices.

"Underwriting Opportunity: An evening with the right people can alter the debate," says the one-page flier. "Underwrite and participate in this intimate and exclusive Washington Post Salon, an off-the-record dinner and discussion at the home of CEO and Publisher Katharine Weymouth. ... Bring your organization’s CEO or executive director literally to the table. Interact with key Obama administration and congressional leaders …

“Spirited? Yes. Confrontational? No. The relaxed setting in the home of Katharine Weymouth assures it. What is guaranteed is a collegial evening, with Obama administration officials, Congress members, business leaders, advocacy leaders and other select minds typically on the guest list of 20 or less. …

Read more: http://www.politico.com/news/stories/0709/24441.html#ixzz0K6yNKyHp&C
Related: Helen Thomas.
Posted by James Zellmer at 9:16 AM

June 30, 2009

US vs. Japan: Residential Internet Service Pricing

Chiehyu Li:
The following chart lists the price, download and upload speeds of residential Internet services in the U.S. and Japan.
NTT (Nippon Telegraph and Telephone) is the major incumbent telephone operator in Japan. NTT has focused on fiber-optic business while Yahoo! BB (a subsidiary of SoftBank Telecom Corp.) has had first-mover advantage for DSL Internet. Due to unbundling requirements, Yahoo! BB and @nifty provide DSL service by renting NTT’s telephone lines at low prices.

Cable/DSL service In the U.S., the price for cable or DSL (1Mbps-7 Mbps) ranges from roughly $20-45/month. Comcast has higher speed Internet, 15Mbps-50Mbps, and costs $43-$140 per month.
In Japan, the typical Internet speed is higher than the U.S. (8Mbps-50Mbps), and costs $30-60 per month. J:COM, a large cable Internet provider, has cable Internet up to 160Mbps, costs $63 ($0.4 per megabit).
Posted by James Zellmer at 8:29 AM

June 17, 2009

Who Switched the Playbooks

Jack Perkowski:
When I was starting up in China, many experts cautioned me on what I would encounter. “It’s not a free market and there’s no rule of law, they told me. “The government controls the courts, the companies and the banks. Central planners in Beijing, not the marketplace, decide what goods to produce and which companies should produce them.”

“Decisions are made for political, not economic reasons,” they went on to explain. “The heads of China’s state-owned enterprises serve at the pleasure of the Party, the banks are told what loans to make, and making a profit is secondary to ensuring employment. That’s the reason why China’s banks are a mess and full of non-performing loans.”

Occasionally, I would push back, noting the economic progress that China had made since Deng Xiaoping opened the economy in 1978. “You don’t believe the government’s numbers, do you?” they would ask incredulously. “Everyone knows they’re manufactured to convey whatever message the government wants. And, when it comes to financial statements, forget it. Chinese companies have at least three sets of books, and you can’t believe any of them.”
Posted by James Zellmer at 10:17 AM

June 16, 2009

Peter Bernstein's Lasting Lessons

Julia Kirby:
The news came to us at HBR just after our newest issue went to the printer; that issue contains, sadly, the last article he wrote for our pages. Because it is the July-August issue, and will arrive on newsstands two weeks hence, it will seem strange to many readers that the byline makes no note of his passing -- and worse, that the editor's letter is mute on the many accomplishments of his rich and long life. Such are the perils of print publishing, and for that we apologize.

But here let it be said that, when work began last January on envisioning the July-August issue -- a special, double-sized issue devoted wholly to exploring how the business landscape would be transformed by the financial crisis and recession -- Peter Bernstein's voice was the first we sought to include. He was the master at explaining issues of financial risk, and there has scarcely been a time when the world needed his kind of clear analysis more.

In response to a vaguely worded invitation from us (deliberately so, in the interests of giving Peter full license to address what he felt needed to be addressed), he came back with a tightly crafted essay called "The Moral Hazard Economy."
Posted by James Zellmer at 4:42 PM

May 30, 2009

The End of the Affair

PJ O'Rourke:

The phrase "bankrupt General Motors," which we expect to hear uttered on Monday, leaves Americans my age in economic shock. The words are as melodramatic as "Mom's nude photos." And, indeed, if we want to understand what doomed the American automobile, we should give up on economics and turn to melodrama.

Politicians, journalists, financial analysts and other purveyors of banality have been looking at cars as if a convertible were a business. Fire the MBAs and hire a poet. The fate of Detroit isn't a matter of financial crisis, foreign competition, corporate greed, union intransigence, energy costs or measuring the shoe size of the footprints in the carbon. It's a tragic romance--unleashed passions, titanic clashes, lost love and wild horses.

Foremost are the horses. Cars can't be comprehended without them. A hundred and some years ago Rudyard Kipling wrote "The Ballad of the King's Jest," in which an Afghan tribesman avers: Four things greater than all things are,--Women and Horses and Power and War.

Posted by jimz at 1:43 AM

May 21, 2009

A Letter to America from a Dodge Dealer

George C. Joseph:
My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.

We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood.

We are financially strong with great respect in the market place and community. We have strong local presence and stability. I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.

On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them.
Posted by James Zellmer at 10:22 PM

May 17, 2009

U.S. Blues

Andrew Bary:
The bear market in Treasuries will worsen, because of a glut of government bonds. Instead, consider high-yielding mortgage securities and certain munis. (Video)

We're talking about U.S. Treasury securities, not housing. At the end of 2008, risk-averse investors poured into Treasuries, driving down yields to the lowest levels in decades. The 30-year Treasury bond fetched less than 3%, and short-term T-bills carried yields of zero.

Since then, the economy has shown signs of bottoming, the credit markets are functioning more normally, and the stock market has roared back from its March lows. Treasuries now are in a bear market, while bullish enthusiasm has taken hold in other parts of the credit market, including corporate bonds, municipals and mortgage securities, all of which had fallen from favor late last year. The 30-year Treasury, for instance, has risen to a yield of 4.10% from 2.82% at the end of 2008, cutting its price by 20%.

Barron's called a top in Treasuries and a bottom in the rest of the bond market in an early 2009 cover story ("Get Out Now!" Jan. 5). We weren't alone in recognizing some of the nutty year-end developments. Warren Buffett highlighted the sale in late 2008 by his Berkshire Hathaway of a Treasury bill for a negative yield. Buffett wrote in Berkshire's annual letter in February that when "the financial history of this decade is written...the Treasury-bond bubble of late 2008" may rank up there with the housing bubble of the early to middle part of the decade. - How does the market look now? Treasuries still look unappealing for several reasons. Yields are very low by historical standards, the government is issuing huge amounts of debt to fund record budget deficits, and the massive federal stimulus program ultimately may lead to much higher inflation.
Posted by James Zellmer at 10:10 PM

Finance It Again Tim Geihtner

Ed Wallace:
They say you don’t recognize history while you’re living through it, but it won’t be long before there’s no doubt about the historic character of what’s happening now. In the not too distant future, everyone will look back on this period and shake their heads, at both the disruption to our economy and many of our solutions to it. And when that day comes and today’s events can be seen with real clarity, we will all turn to each other and ask, "What were we thinking?"

Oh, well. There is at least one man today whose mind is already focused on where he will be standing many years from now. He has coolly witnessed the turmoil inflicted on our financial system and is dispassionately observing the panic that has overtaken us all in its wake. And, knowing that foolish decisions almost always follow emotional trauma, he alone is standing out front, gladly waiting to receive the fruits of the outrageous decisions we seem ready to make. He is Sergio Marchionne, the CEO of Fiat, and he is undoubtedly a genius without peer.

Encouraging Words

Consider if you will what is happening in the automobile industry today: A near catastrophic collapse in new car sales in most countries of the world. One might think that this signals consumers’ inability to purchase new cars, either for lack of a job or — as we have been told since last September — because they can’t get a loan for their transportation needs. But those issues are not really the problem. Many of the jobs lost were low paying jobs and therefore not new car buyers, for the rest, loans are readily available.
Posted by James Zellmer at 12:40 PM

May 16, 2009

The Machinery Behind Health-Care Reform How an Industry Lobby Scored a Swift, Unexpected Victory by Channeling Billions to Electronic Records

Robert O'Harrow, Jr:
When President Obama won approval for his $787 billion stimulus package in February, large sections of the 407-page bill focused on a push for new technology that would not stimulate the economy for years.

The inclusion of as much as $36.5 billion in spending to create a nationwide network of electronic health records fulfilled one of Obama's key campaign promises -- to launch the reform of America's costly health-care system.

But it was more than a political victory for the new administration. It also represented a triumph for an influential trade group whose members now stand to gain billions in taxpayer dollars.

A Washington Post review found that the trade group, the Healthcare Information and Management Systems Society, had worked closely with technology vendors, researchers and other allies in a sophisticated, decade-long campaign to shape public opinion and win over Washington's political machinery.
Automation certainly makes sense, but we taxpayers should not be subsidizing it....
Posted by James Zellmer at 6:58 AM

May 13, 2009

America's Triple A Credit Rating at Risk

David Walker:
Long before the current financial crisis, nearly two years ago, a little-noticed cloud darkened the horizon for the US government. It was ignored. But now that shadow, in the form of a warning from a top credit rating agency that the nation risked losing its triple A rating if it did not start putting its finances in order, is coming back to haunt us.

That warning from Moody’s focused on the exploding healthcare and Social Security costs that threaten to engulf the federal government in debt over coming decades. The facts show we’re in even worse shape now, and there are signs that confidence in America’s ability to control its finances is eroding.

Prices have risen on credit default insurance on US government bonds, meaning it costs investors more to protect their investment in Treasury bonds against default than before the crisis hit. It even, briefly, cost more to buy protection on US government debt than on debt issued by McDonald’s. Another warning sign has come from across the Pacific, where the Chinese premier and the head of the People’s Bank of China have expressed concern about America’s longer-term credit worthiness and the value of the dollar.

The US, despite the downturn, has the resources, expertise and resilience to restore its economy and meet its obligations. Moreover, many of the trillions of dollars recently funnelled into the financial system will hopefully rescue it and stimulate our economy.
Posted by James Zellmer at 3:43 PM

May 9, 2009

Khosla on Renewable Energy

Robert Rapier:
EC (13:40): In the past 90 days we have seen something like a billion dollars being put into solar investments - whether in the form of equity or debt. Is that stupid money?

VK: The people who are putting in gobs of money, behind people chasing First Solar at billion dollar valuations - I won't say it's stupid but it's not something I would do with my money. (EC: That pretty much counts as stupid). A diversity of opinion is good. I am often wrong. (EC: Sometimes you are). You only need to be correct once in a while because in our business you only lose one time your money but you can make 100 times quite easily. I don't have to be very right.

(RR: I would like to hear that during his next congressional testimony where he is trying to drive the direction of energy policy: "I am often wrong." But this also gets to the heart of why I often object to what he is saying. If he uses his high level of influence to help put us down the wrong path on energy policy, then what are the consequences of being wrong? They could be severe.)

EC (14:38): How many companies do you currently have in your portfolio?

VK: Our clean tech portfolio has probably about 50 companies.

EC (15:48): Which was the biggest disappointment?

VK: We have not had any large cut-offs - I am trying to think - in our clean tech portfolio. When we have invested a lot of money, there's one or two places - well one we wrote off; one called Altra. (RR: Altra is a corn ethanol producer that is on the ropes). There's one place we actually decided to change the plan - Cilion - and made it capital neutral, so they don't need a lot of cash. Got rid of the debt; the company is going fine, but sort of on the slow boat.
Posted by James Zellmer at 7:00 AM

May 7, 2009

The Americans in Pyongyang

Isaac Stone Fish:
The first thing our guide Mr. Li said to the people whom he knew had inflicted untold suffering onto his country was “Welcome. I hope you had a good flight.” Then he paused. "We call you the U.S. Imperialists, since you came in and divided our homeland. When some Korean calls you U.S. Bastards or U.S. Imperialists, I will just translate that. I hope that’s okay, I’m just doing my job.”

a Mr. Li was one of the guides on a tour of Pyongyang in October of 2008, the last month that American tourists were allowed access to the city. I visited as part of a group of 25 Americans, mostly young professionals and students; many said they wanted to see the country before it collapsed under the weight of its own obsolescence. We knew beforehand that our movements would be strictly controlled throughout the tour, and that we were not allowed to wander freely. Our guides showed us the parts of Pyongyang that we were supposed to see. Their filtering the trip was a very valuable way to process information in a place so radically different from anything resembling our definition of normality.
Posted by James Zellmer at 11:09 PM

May 1, 2009

The Political Elite.....

Woody Hochswender:
That is why it was all the more bewildering to have Sen. Dodd come to the gymnasium of the Cornwall Consolidated School on a beautiful spring afternoon for two hours and somehow manage not to utter a single word about the controversies surrounding his role as chairman of the Senate Banking Committee.

These are not exactly state secrets. There was the widely reported sweetheart or VIP mortgage loan from Countrywide Financial to the senator as well as the six-figure campaign contributions from the American Insurance Group whose executives, according to language Sen. Dodd wrote into a bailout bill, were entitled to large bonuses paid for with our tax dollars.

The organizer and moderator of Saturday's forum, Harriet Dorsen, a member of the local Democratic Party committee, told the Lakeville Journal newspaper last week, "I think there are going to be a lot of tough questions."

There weren't. They were all softballs. Instead of the usual give and take, with citizens speaking their minds, all the questions had to be written out in advance on index cards and then submitted to the moderators. A contingent from the Lakeville Journal (including my wife, Cynthia, who is the newspaper's executive editor) was on hand, armed with probing questions.
Posted by James Zellmer at 8:48 AM

April 14, 2009

What I Learned in My 16 Years on the Tax Beat What I Learned in My 16 Years on the Tax Beat

Tom Herman:
Nearly 40 years ago, as a recent college graduate, I made a painful discovery: I couldn't figure out how to do my own federal income-tax return.

That was embarrassing, and it made me wonder what other Americans do. So I wrote my first major tax story: I asked five different tax-preparation services in the Atlanta area to prepare returns for a family of four with fairly typical finances. The results: At one extreme, a tax expert said the family was entitled to a federal income-tax refund of $652.04. But another said the family owed $141 -- a difference of $793.04.

That experience made me feel somewhat less dumb, but the article didn't have much impact: Since then, our tax system has evolved from a mess to a nightmare. The pace of change has accelerated in recent decades as lawmakers increasingly have tried to use tax laws to reward or punish conduct. The number of pages in the CCH Standard Federal Tax Reporter, which records tax law, regulations and related material, has soared to 70,320 from 26,300 in 1984.

More than 60% of all individual returns are signed by professional preparers, up from 46% in the mid-1980s. Joel Slemrod, an economics professor at the University of Michigan, estimates that the time and money individuals spend on tax compliance now comes to about $90 billion a year.
Posted by James Zellmer at 11:23 PM

April 11, 2009

McCain in Hong Kong & Vietnam

Greg Torode:
His performance in Vietnam was particularly intriguing. He knows the country well and is treated almost as a celebrity - a reflection of both the quirks of history, and his moral and political courage, qualities that helped propel his White House run.

Senator McCain spent five years as a prisoner of war in Hanoi at the height of the Vietnam conflict, having been shot down and crashing his jet fighter into a lake on the edge of the capital. His vivid descriptions of being tortured - he refused offers of early release as the son of a leading admiral - did not stop his efforts years later. He not only returned to enemy territory but, as a prominent and hawkish Republican, played a key role through the late 1980s and 1990s in America's long delayed reconciliation and normalisation with its victorious opponent.

In his political twilight, Senator McCain could be forgiven for resting easy during his first return to the Vietnamese capital in five years. Despite political and social differences, the two countries are open to trade and investment, and have taken the first steps to a military relationship - a pipe dream just a decade ago.

He remains restless, however. In a speech to the country's diplomatic academy, he passionately urged both nations to get even closer. "Today, the hardest work of normalisation is behind us. The time has come, I believe, for us to move from the normalisation of our ties commensurate with Vietnam's rising status in the region and the world. We should not simply rest on our laurels and allow the relationship to plateau. It is time to take the next step."
Posted by James Zellmer at 6:40 AM

April 9, 2009

Pirates and the CIA: What would Thomas Jefferson have done?

Ken Silverstein:
“It was the sixth such attack this week and one of 66 this year by Somali pirates, a collection of shrewd businessmen and daring opportunists who have pulled off a series of spectacular seizures using high- and low-tech gear, from satellite phones and rocket-propelled grenades to battered wooden skiffs and rickety ladders,” the Washington Post reported today about the attack on a U.S.-operated container ship. “In the past year, their booty has included the MV Faina, a Ukrainian ship loaded with tanks and antiaircraft guns, and the MV Sirius Star, a 300,000-ton, 1,000-foot-long Saudi oil tanker that is the largest ship to be seized in history.”

For months, a former senior CIA officer has been telling me that pirate activity off Somalia was a problem that needed to be aggressively dealt with. By chance, I had a meeting with him yesterday as the Maersk Alabama hijacking was unfolding. Here’s what he had to say (he updated his remarks today):

The American response to date has been incredibly naïve and woefully ineffective. Now, predictably, you have an American taken hostage. All of which should have been prevented. You’ve got a failed state in Somalia and pirates operating in an area of ocean that is larger than the state of Texas but we’ve been trying to deal with this from the ocean side, by sending the navy and with a limited application of technology, such as satellites and drones. We can’t afford to patrol that big a piece of the ocean; it’s too expensive to leave a naval task force out there.
Posted by James Zellmer at 11:31 PM

March 31, 2009

How Bailouts Can Butcher Capitlism

Rick Newman:
One unhappy hallmark of the Great Recession is a dramatic spike in financial distress. Moody's predicts that the default rate on corporate debt--which helps foretell bankruptcies--will be three times higher this year than in 2008. Home foreclosures are already at record highs, and going higher. Defaults on credit cards and other consumer debt will crest right behind mortgages.

The Obama administration is on the case, bailing out banks and homeowners and aiding dozens of industries either directly, through a financial-rescue scheme that could top $2 trillion, or indirectly, through the $787 billion stimulus bill. Automakers, furniture companies, real estate developers, and even porn magnates have their hands out.

[See a tally of the bailout efforts so far.]

Those efforts ought to help soften a sharp recession. But the unprecedented aid to the private sector may also unleash new problems, the way antibiotics have generated stronger strains of bacteria. "There's something fundamental about the need for failure," says Syd Finkelstein, a professor at Dartmouth's Tuck School of Business and author of Think Again: Why Good Leaders Make Bad Decisions and How to Keep It From Happening to You. "We're tinkering with the genetic DNA of a capitalist society."
Posted by James Zellmer at 11:31 AM

March 27, 2009

The Quiet Coup

Simon Johnson:
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF's staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we're running out of time.
Posted by James Zellmer at 7:32 AM

March 24, 2009

Fed & Treasury: Putting off Hard Choices with Easy Money (and Probable Chaos)

John Hussman:
Brief remark - from early reports regarding the toxic assets plan, it appears that the Treasury envisions allowing private investors to bid for toxic mortgage securities, but only to put up about 7% of the purchase price, with the TARP matching that amount - the remainder being "non-recourse" financing from the Fed and FDIC. This essentially implies that the government would grant bidders a put option against 86% of whatever price is bid. This is not only an invitation for rampant moral hazard, as it would allow the financing of largely speculative and inefficently priced bids with the public bearing the cost of losses, but of much greater concern, it is a likely recipe for the insolvency of the Federal Deposit Insurance Corporation, and represents a major end-run around Congress by unelected bureaucrats.


Last week, the Federal Reserve announced its intention to purchase a trillion dollars worth of Treasury debt by creating the little pieces of paper in your pocket that have “Federal Reserve Note” inscribed at the top. In effect, the Fed intends to monetize the Treasury debt in an amount that exceeds the entire pre-2008 monetary base of the United States.

Apparently, the Fed believes that absorbing part of the massively expanding government debt and maybe lowering long-term rates by a fraction of a percentage point will increase the capacity and incentive of the markets to purchase risky and toxic debt. Bernanke evidently believes that the choice between a default-free investment and one that is entirely open to principal loss comes down to a few basis points in interest. Even now, the expansion of federal spending as a fraction of GDP has clear inflationary implications looking a few years out, so any expectation that long-term Treasury yields will fall in response to the Fed's buying must be coupled with the belief that investors will ignore those inflation risks.
Posted by James Zellmer at 8:56 AM

March 23, 2009

The Political Class & Taxes, More

Andrew Malcolm:
Oh-oh, looks like more tax troubles for another Democrat in Washington.

California's Rep. Pete Stark, a senior House Democrat who helps write the nation's tax laws, has been claiming a $1.7 million Maryland home as his principal residence in recent years, although he represents the Golden State's 13th District on the east side of San Francisco Bay.

The 77-year-old Stark has saved himself nearly $3,900 in state and county taxes by claiming the six-acre waterfront estate as his principal residence, according to an investigation by Bloomberg News.

Maryland law allows the tax break only to those residences used "for the legal purposes of voting, obtaining a driver's license, and filing income tax returns."

Notified of the discovery, a state official said an investigation would be launched.
Posted by James Zellmer at 5:04 PM

March 18, 2009

How Rich Countries Die

Philip Greenspun:
This is a book report on The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, by Mancur Olson. There isn’t a whole lot about how nations pulled themselves out of their medieval stagnation (see A Farewell to Alms for that), so a better title for this still-in-print book from 1982 would be “How Rich Countries Die.”

Table 1.1 shows annual rates of growth in per-capita GDP for each of three decades, the 1950s, 60s, and 70s, in a range of rich countries. Contrary to our perception of the U.S. as a growth dynamo and the Europeans as sclerotic, France and Germany tremendously outperformed the U.S., as did most of the other countries. If we have grown larger it is because our population has expanded much faster than the European countries.

Chapter 2 summarizes Olson’s groundbreaking work on how interest groups work to reduce a society’s efficiency and GDP. Some of this work seems obvious in retrospect and indeed Adam Smith noted that businessmen rarely met without conspiring against the public interest. There are a handful of automobile producers and millions of automobile consumers. It makes sense for an automobile company, acting individually, to lobby Congress for tariffs. The company will reap 20-40 percent of the benefits of the tariff. It doesn’t make sense for an individual consumer, however, to lobby Congress. It will cost him millions of dollars to lobby against Congress and preventing the tariff will save him only a few thousand dollars on his next car purchase. The economy suffers because some resources that would have been put to productive use are instead hanging around Washington and because cars are more expensive than they should be.
Posted by James Zellmer at 2:27 PM

Slaughtering sacred cows: it's the turn of the unsecured creditors now

Willem Buiter:
Why are the unsecured creditors of banks and quasi-banks like AIG deemed too precious to take a hit or a haircut since Lehman Brothers went down? From the point of view of fairness they ought to have their heads on the block. It was they who funded the excessive leverage and risk-taking of banks and shadow banks. From the point of view of minimizing moral hazard - incentives for future excessive risk taking - it is essential that they pay the price for their past bad lending and investment decisions. We are playing a repeated game. Reputation matters.

Three arguments for saving the unworthy hides of the unsecured creditors are commonly presented:
Posted by James Zellmer at 2:18 PM

March 16, 2009

Wisconsin: No Fiber to the Home Activity.....

Scott Wilkinson & Benoit Felton:
I have been collaborating with Benoit Felton, a Yankee Group analyst based in Paris, and others on a map of FTTP (fiber to the premises) sites worldwide. For now, I'm doing most of the U.S. sites as time permits. There are still quite a few to add, since the U.S. FTTP deployments tend to be local municipal or utility networks, with the notable exception of Verizon's successful FiOS service.

It’s pretty impressive, and is something to think about when your local telecommunications provider claims that you should be happy with your 1Mbps DSL connection.
The "video competition bill" - largely pushed by AT&T was a major miss for Wisconsin.
Posted by James Zellmer at 8:22 AM

March 15, 2009

The Shaming of John Thain

Greg Farrell & Henny Sender:
John Thain is giving us a tour of what is soon to become America’s most infamous office, with its $87,000 rug, $68,000 sideboard, $28,000 curtains – all part of a $1.2m redecoration scheme. This was early December, a little under two months before Thain would be fired in the same room by his new boss, Ken Lewis, chief executive of Bank of America.

For now, before a price tag had been placed on every item in his office, the 53-year-old chief executive of Merrill Lynch was in high spirits. The worst year on Wall Street in nearly a century was coming to an end, and Thain could rightfully claim to have saved his bank from ruin. Over a weekend in mid-September, as Lehman Brothers collapsed into bankruptcy, Thain pulled off a coup: he persuaded BofA, one of the few financial giants in the US that didn’t need government money to survive, to pay $29 per share for his own firm, even though Merrill was days away from following Lehman into bankruptcy.

Thain had taken over as Merrill chief executive nine months before that weekend deal. Now, he appeared to be one of the few Wall Street leaders who grasped the enormity of the credit crisis. Thanks to his analytical approach to the marketplace, it seemed, Merrill shareholders could look forward to a stake in Bank of America. “I have received thousands of e-mails saying, ‘Thank you for saving our company’,” Thain told us that day. And yet he admitted that the decision to sell Merrill Lynch – a 94-year-old institution that was always “bullish on America” – had been painful. “This was a great job. This was a great franchise. Emotionally, it was a huge responsibility.”
Posted by James Zellmer at 10:08 PM

March 10, 2009

Buffett Speaks Against the Obama Splurge

Mickey Kaus:
BUFFETT: ...And, Joe, it--if you're in a war, and we really are on an economic war, there's a obligation to the majority to behave in ways that don't go around inflaming the minority. If on December 8th when--maybe it's December 7th, when Roosevelt convened Congress to have a vote on the war, he didn't say, `I'm throwing in about 10 of my pet projects ... [snip] ... JOE: Yeah, but you might--might not have fixed...
BUFFETT: But I say...

JOE: You might not--you might not have fixed global warming the day after--the day after D-Day, Warren.
BUFFETT: Absolutely. And I think that the--I think that the Republicans have an obligation to regard this as an economic war and to realize you need one leader and, in general, support of that. But I think that the--I think that the Democrats--and I voted for Obama and I strongly support him, and I think he's the right guy--but I think they should not use this--when they're calling for unity on a question this important, they should not use it to roll the Republicans all.
More from Shailagh Murray.
Posted by James Zellmer at 9:19 AM

March 9, 2009

SNL on Treasury Secretary Tim Geithner

Posted by James Zellmer at 7:55 AM

March 7, 2009

The Fed's moral hazard maximising strategy

Willem Buiter:
The reports on the evidence given by the Vice Chairman of the Federal Reserve Board, Don Kohn, to the Senate Banking Committee about the Fed's role in the government's rescue of AIG, have left me speechless and weak with rage. AIG wrote CDS, that is, it sold credit default swaps that provided the buyer of the CDS (including some of the world's largest banks) with insurance against default on bonds and other credit instruments they held. Of course the insurance was only as good as the creditworthiness of the party writing the CDS. When it was uncovered during the late summer of 2008, that AIG had nurtured a little rogue, unregulated investment banking unit in its bosom, and that the level of the credit risk it had insured was well beyond its means, the AIG counterparties, that is, the buyers of the CDS, were caught with their pants down.

Instead of saying, "how sad, too bad" to these counterparties, the Fed decided (in the words of the Wall Street Journal), to unwind ".. some AIG contracts that were weighing down the insurance giant by paying off the trading partners at the full value they expected to realize in the long term, even though short-term values had tumbled."

An LSE colleague has shown me an earlier report in the Wall Street Journal (in December 2008), citing a confidential document and people familiar with the matter, which estimated that about $19 billion of the payouts went to two dozen counterparties between the government bailout of AIG in mid-September and early November 2008. According to this Wall Street Journal report, nearly three-quarters was reported to have gone to a group of banks, including Société Générale SA ($4.8 billion), Goldman Sachs Group ($2.9 billion), Deutsche Bank AG ($2.9 billion), Credit Agricole SA's Calyon investment-banking unit ($1.8 billion), and Merrill Lynch & Co. ($1.3 billion). With the US government (Fed, FDIC and Treasury) now at risk for about $160 bn in AIG, a mere $19 bn may seem like small beer. But it is outrageous. It is unfair, deeply distortionary and unnecessary for the maintenance of financial stability.

Don Kohn ackowledged that the aid contributed to "moral hazard" - incentives for future reckless lending by AIG's counterparties - it "will reduce their incentive to be careful in the future." But, here as in all instances were the weak-kneed guardians of the common wealth (or what's left of it) cave in to the special pleadings of the captains of finance, this bail-out of the undeserving was painted as the unavoidable price of maintaining, defending or restoring financial stability. What would have happened if the Fed had decided to leave the AIG counterparties with their near-worthless CDS protection?

The organised lobbying bulldozer of Wall Street sweeps the floor with the US tax payer anytime. The modalities of the bailout by the Fed of the AIG counterparties is a textbook example of the logic of collective action at work. It is scandalous: unfair, inefficient, expensive and unnecessary.
Posted by James Zellmer at 6:33 PM

March 4, 2009

Wall Street on the Tundra

Michael Lewis:
celand’s de facto bankruptcy—its currency (the krona) is kaput, its debt is 850 percent of G.D.P., its people are hoarding food and cash and blowing up their new Range Rovers for the insurance—resulted from a stunning collective madness. What led a tiny fishing nation, population 300,000, to decide, around 2003, to re-invent itself as a global financial power? In Reykjavík, where men are men, and the women seem to have completely given up on them, the author follows the peculiarly Icelandic logic behind the meltdown. by MICHAEL LEWIS April 2009

Just after October 6, 2008, when Iceland effectively went bust, I spoke to a man at the International Monetary Fund who had been flown in to Reykjavík to determine if money might responsibly be lent to such a spectacularly bankrupt nation. He’d never been to Iceland, knew nothing about the place, and said he needed a map to find it. He has spent his life dealing with famously distressed countries, usually in Africa, perpetually in one kind of financial trouble or another. Iceland was entirely new to his experience: a nation of extremely well-to-do (No. 1 in the United Nations’ 2008 Human Development Index), well-educated, historically rational human beings who had organized themselves to commit one of the single greatest acts of madness in financial history. “You have to understand,” he told me, “Iceland is no longer a country. It is a hedge fund.”
Posted by James Zellmer at 9:12 AM

March 3, 2009

Uwe Reinhardt on the health of the economy and the economics of health

Willem Buiter:
My friend professor Uwe E. Reinhardt of Princeton University presented ECONOMIC TRENDS IN U.S HEALTH CARE: Implications for Investors, at J.P. Morgan's annual healthcare conference on Tuesday, January 13 2009. The first half of the presentation (46 slides!) deals with macroeconomic and financial issues in Uwe's inimitable style - equal portions of wit and insight. The second half deals with the embarrassing mess known as health care in the US.
Posted by James Zellmer at 9:27 PM

March 2, 2009

The banking crisis as a foreign policy issue

Tyler Cowen:
Here is some simple background:
If we let A.I.G. fail, said Seamus P. McMahon, a banking expert at Booz & Company, other institutions, including pension funds and American and European banks “will face their own capital and liquidity crisis, and we could have a domino effect.” A bailout of A.I.G. is really a bailout of its trading partners — which essentially constitutes the entire Western banking system.
No one wants to say it, but essentially the Fed has been bailing out European banks.

The inflation-adjusted cost of the Marshall plan has been estimated at about $115 billion in current dollars. If we end up spending $250 billion on AIG, how much of that sum will go to European financial institutions and might it someday exceed the scope of the Marshall plan? (I do not, by the way, think that central banks ought to treat foreign creditors differently.)
More from the Economist.
Posted by James Zellmer at 7:22 AM

March 1, 2009

Visualization of the Credit Crisis

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
Posted by James Zellmer at 5:14 PM

February 26, 2009

Obama Speech TV Audience Lags Clinton (1993) and Bush (2001)

Andrew Malcolm:
For his maiden congressional address, Obama cleaned President Bush's clock in terms of TV viewers willing to watch him speak to a bunch of stuffed congressional suits in the House chamber. Which isn't saying much. But it is something for a new president to cling to, especially when you're otherwise up against the sleuths of "NCIS."

Obama got 52.4 million viewers last night (rounded off for those visiting the bathroom) in 37.2 million homes for a 49 share and 32.5 rating. In his last joint address in 2008 GWB got 37.5 million in 27.7 million homes for a 38 share and 24.7 rating. Bush did top Obama in 2003 with 62 million and a 56 share and we didn't even have the Iraq reality show going then. (But it was coming.)

Bush's first joint session appearance drew nearly 39.8 million and a 42 share.

However, Obama still lags the audience-drawing power of one President Bill Clinton. Sixteen years ago this week, when there were millions fewer Americans, Big Bill drew nearly 15 million more viewers -- 66.9 million for his first congressional speech in 44.2 million homes for a 44.3 rating.
Posted by James Zellmer at 8:35 AM

February 25, 2009

An Email to Congresswoman Tammy Baldwin and Senators Russ Feingold and Herb Kohl

Dear [ ]: I hope this message finds you well.

I am writing to express my great concern over this information. Please investigate and determine if it is true.

DoD Officials Vow Secrecy on Budget


If so, this is very disappointing and wrong.

I also would like you to investigate the amount of private jet use by elected officials (both government aircraft and those provided by campaigns and lobbyists). Dilbert has it right:


Website and contact information: Tammy Baldwin, Russ Feingold and Herb Kohl.
Posted by James Zellmer at 9:23 AM

February 24, 2009

Barack Obama Tells Germany Not To Abandon Their Auto Industry

Robert Farago quoting President Obama:
“As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices.

“But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it.”
Posted by James Zellmer at 9:45 PM

February 22, 2009

An Interview with FedEx CEO Fred Smith

SF Chronicle:
Frederick W. Smith, the founder, president, chairman and CEO of FedEx, built the first overnight express delivery company in the world, starting in 1971. Today, FedEx, based in Memphis, has service in more than 220 countries and territories.

Like most other businesses, FedEx is encountering economic turmoil and is operating by Smith's belt-tightening orders. He cut his own salary by 20 percent.

Legend has it that Smith, 64, outlined his concept for FedEx in a paper in an economics class at Yale University for which he earned a C. (He corrects the record in this interview.) At Yale, he was a friend and fraternity brother of former President George W. Bush, to whom he believes history ultimately will be more kind.

In the Marine Corps in Vietnam, Smith received the Silver Star, the Bronze Star and two Purple Hearts as a platoon leader and forward air controller. It was there that he observed military procurement and delivery procedures and thought he could improve on them.

Smith is unwavering in his belief that U.S. corporate tax policy must change, but practical enough to know that the new administration and Congress will not go along with the idea. He still believes one aspect could be enacted - accelerating the expensing of capital investment that would put money into corporate hands sooner.
Posted by James Zellmer at 8:21 PM

Recovery.gov is Web 1.0; Stimuluswatch.org is Web 2.0

President has signed The American Recovery and Reinvestment Act of 2009, which includes $7.2 billion for broadband access. You can see a brief summary of the bill here.

As we have seen, the Obama administration hopes to use the Internet for transparent, two-way communication with the public. To this end, they have launched the Recovery.gov Web site, which will be continuously updated, telling us "how, when and where" the recovery funds are spent.

As of today, Recovery.gov is definitely a Web 1.0 site -- it summarizes the Recovery Act, requests comments using an email form, and asks us to check back frequently for data on spending. They don't even have RSS feeds.

Contrast that with Stimuluswatch.org, a Web 2.0 site. Stimuluswatch began by importing a database of "shovel ready" projects that was posted by the US Conference of Mayors. Users can search the database by city, keyword and project type, and view the project descriptions and estimated cost and number of jobs created.
Posted by James Zellmer at 7:49 PM

February 20, 2009

Just the Tip of the Iceberg...

The Peter Peterson Foundation. Video
Posted by James Zellmer at 8:40 AM

February 16, 2009

Federal Government Contracts: Wisconsin's 2nd Congressional District

Top 5 Contractors
Wisconsin Physicians Service Insurance Corporation $161,241,933
Didion Milling, Inc. $28,254,732
University of Wisconsin System $21,021,695
Facility Leaders In Architectural/Engineering Design, P.C. $20,405,886
Metastar Inc $19,600,777

Complete list of 2nd Congressional District contractors.
Top 5 contractors: State of Wisconsin:
Top 5 Contractors
Oshkosh Corporation $1,481,203,487
General Electric Company $248,269,326
The Manitowoc Company Inc $178,329,866
Wisconsin Physicians Service Insurance Corporation $161,241,933
National Presto Industries, Inc. $125,773,563

Complete list of 2008 Wisconsin contractors.
Posted by James Zellmer at 8:55 AM

February 11, 2009

February 10, 2009

A Comparison of the House & Senate Stimulus/Splurge Bills

Josh Tauberer @ Govtrack.us:
One of the concrete benefits of open government data is that third parties can use the data to do something useful that no one in government has the mandate, resources, or insight to do. If you think what I am about to tell you below is cool, and helpful, then you are a supporter of open government data.

On my site GovTrack, you can now find comparisons of the text of H.R. 1, the stimulus bill, at different stages in its legislative life --- including the House version (as passed) and the current Senate version (amendment 570).

The main page on GovTrack for HR 1 is: http://www.govtrack.us/congress/bill.xpd?bill=h111-1 Here's a direct link to the comparison: http://www.govtrack.us/congress/billtext.xpd?bill=h111-1&version=as2&compareto=eh&view=side:

Comparisons are possible between any two versions of the bill posted by GPO. Comparisons are available for any bill.

If you find this useful, please take a moment to consider that something like this is possible only when Congress takes data openness seriously. When GPO went online and THOMAS was created in the early 90s, they chose good data formats and access policies (mostly). But the work on open government data didn't end 15 years ago. As "what's hot" shifts to video and Twitter, the choices made today are going to impact whether or not these sources of data empower us in the future, whether or not we miss exciting opportunities such as having tools like the one above.

(Thanks to John Wonderlich and Peggy Garvin for some side discussion about this before my post. GovTrack wasn't initially picking up the latest Senate versions because GPO seems to have gone out of its way to accommodate posting the latest versions before they were passed by the Senate, which is great, but caught GovTrack by surprise.)

Josh Tauberer
Posted by James Zellmer at 10:10 AM

February 1, 2009

A Guide To Bailout Transparency Sites

Elinore Longobardi:
It is no secret that bailout transparency is a problem.

Now that taxpayers have become financiers, we have a right to know where the money is going. In search of organizations with the curiosity and resources to help figure that out, we trolled the Internet for good, easily available bailout information and came up with several sites worth looking at.

You can get charts describing the allocation of bailout money from a variety of sources. Some are easier to find than others, and we’ll leave it up to the reader to figure out what it means that the WSJ has a quick link for the Super Bowl but not the bailout.

But even after you find them, charts will only get you so far.

If you are looking to understand the big picture, you should go first to organizations that focus specifically on tracking the bailout. Not only do they piece together information from a variety of sources, saving you the trouble, but a few also do their own snooping around.

A good place to start is Open the Government, an organization devoted to greater government transparency in general, and with a specific page on the bailout. The page is a good launching pad because it compiles a lot of information—from government organizations, news outlets and watchdogs—as well as providing a calendar of relevant dates. In the spirit of common cause, Open the Government also links to other bailout watchdog groups.
Posted by James Zellmer at 8:40 PM

January 28, 2009

Iron Curtain Memories: Budapest

The Economist:
But few of the former Soviet bloc countries had better jokes than the Hungarians. After all, several of their national characteristics—quick intelligence, mordant wit and an eye for the main chance—are summarised in the now legendary humorous definition of a Hungarian: “Someone who enters a revolving door behind you but comes out in front”.

My two favourites are set in the time immediately after the 1956 revolution:

In the first, Comrade teacher announces the day’s lesson in School Number One, Budapest: Marxist criticism and self-criticism.

“Istvan, please stand up and tell us what Marxist criticism and self-criticism means,” she instructs.

The little boy stands up. “Comrade teacher, Marxist criticism is how we must view my parents, who joined the reactionary counter-revolutionary forces who sought to destroy our heroic workers’ and peasants’ state, and then fled to the imperialist, capitalist west, to continue their intrigues against the Socialist regime.”

“Excellent, Istvan. And what is your Marxist self-criticism?”

“I didn’t go with them.”
Posted by James Zellmer at 2:37 PM

January 25, 2009

When the News Was New

Edward Rothstein:
Look carefully, and it is really the birth of the modern West that we see taking place here: snippets of news and sensation helped define a shared experience of the past and present, as political debates laid the foundations of democratic culture. If the Reformation is often credited with having turned the West toward the Enlightenment, another such force must be the growing taste for news and its multiple retellings. While other cultures were arguing over the interpretations of sacred texts, England’s was arguing over the nature of government in print. We are the beneficiaries.

The exhibition itself could have been much more clear in its chronological and thematic organization, particularly because the knotty politics of 17th-century England — centering on its civil wars — are treated as if they were far more familiar than is the case, but these documents repay the patience of careful reading.

When Sir Walter Raleigh was convicted of treason and executed in 1618, his eloquent speech on the scaffold was reported not by newspapers — which had not yet evolved — but in private written accounts. The real revolution came in the 1620s under the influence of “corantos” imported from Amsterdam, which provided the main news of the week. The corantos (which are still recalled in the names of newspapers, like The Hartford Courant) also inspired opposition from the government over their reports of troop movements during the Thirty Years’ War, leading to censorship and even imprisonment.

But the demand for news — and opinion — increased. Press censorship collapsed with the beginning of the civil wars of the 1640s, but the debates of this era were so intense and so much a part of public consciousness that news publications became instruments in the political battles between monarchists and parliamentarians. Newspapers were counterfeited, imitated, mocked and attacked. Parliament tried to reimpose censorship in 1643, and the poet John Milton wrote his famous speech demanding “Liberty of Unlicenc’d Printing.” But newspapers, complained Sir Roger L’Estrange, an ardent monarchist, make “the multitude too familiar with the actions and counsels of their superiors.” He created The Observator, shown at the Folger — the “pre-eminent Tory journal of its day.”
Posted by James Zellmer at 5:48 PM

January 22, 2009

"Government Checks for Consumer Spending?"

Philip Geier's 232K PDF advertisement in today's fishwrap edition of the New York Times. Use the grandkids credit cards to spend now.....
Posted by James Zellmer at 9:51 PM

Our Tax Dollars Supporting Goldman Sach's Latest Acquisition

Bill Perkins is at it again in the New York Times. More Bill Perkins activism on the bailout/splurge, here.
Posted by James Zellmer at 9:44 PM

TARP Funds: State by State Analysis

Wall Street Journal:
In unveiling its bank-share purchase program, the Treasury Department required nine of the nation's largest financial-services companies to sell a total of $125 billion in preferred stock to the government, and said an additional $125 billion in stock could be bought from other firms on a voluntary basis. Below, see a list of participating companies.
Posted by James Zellmer at 10:56 AM

January 20, 2009

600 Private Jets Expected for the Obama Nomination; 2X the 2004 Number

Robert Frank:
For the wealthy, Tuesday's inauguration is the dream party: a chance to rub elbows with the similarly rich and powerful, to become part of a historic moment, and (most importantly), to get access to the man of the moment.

It also is a chance to drown their financial sorrows in an emotional wave of optimism.

Yet it may come as a surprise that at a time of financial crisis and Green correctness, many of the wealthy are choosing to arrive by private jet.

According to an article in Bloomberg, as many as 600 private jets were expected to touch down in D.C. for the inauguration. The runway at Washington Dulles was closed Saturday to allow as many as 100 small planes to park. And the Metropolitan Washington Airports Authority said it expected a total of 500 small jets to land from Jan. 16 through Jan 21.

"That would set a record, topping the 300 the airport accommodated for President George W. Bush's 2004 inaugural," an Airports Authority says in the article.
Posted by James Zellmer at 10:15 AM

A Crackdown on Vietnam's Press

The Economist:
LIKE their counterparts in China, Vietnam's ruling Communists seem even more than usually sensitive to criticism. This month two leading reformist newspaper editors, Nguyen Cong Khe, of Thanh Nien (Young People), and Le Hoang, of Tuoi Tre (Youth Daily), were both told that their contracts would not be renewed, apparently because they were too good at their jobs. Their papers have assiduously uncovered official corruption, most notably with a joint exposé in 2006 about a crooked transport-ministry road-building unit. The journalists behind that story were punished by a Hanoi court last October for "abusing democratic freedoms". Now it looks as if their editors, too, have been culled. A spate of other arrests last year suggests a wider clampdown. AFP Read all about it (or not)

Ever since the start of doi moi (renewal) reforms in 1986, economic liberalisation has been accompanied by a gradual political loosening. There are around 700 newspapers in circulation. All are government controlled, but some are relatively outspoken. Meanwhile, a young, tech-savvy population has taken to reading opinion on the internet, in blogs penned by pseudonymous authors. These commentators are questioning government policy with increasing zeal. A day after the two journalists were arrested last year, their newspapers openly attacked the government's actions, hitting a few raw nerves. The government now also wants to curb the pesky bloggers, announcing rules in December restricting politically sensitive content on the internet.
Posted by James Zellmer at 8:41 AM

January 13, 2009

The Case for Overhauling a U.S. Tax System Even Congress Doesn't Understand

Sam Dealey:
"The monopoly on good ideas does not belong to a single party," President-elect Obama reportedly told congressional leaders Monday during a private meeting about an economic stimulus package. "If it's a good idea, we will consider it."

When it comes to taxpayer money—raising, spending, and occasionally deigning to return it—neither party in Congress has demonstrated particularly good ideas lately. The majority of lawmakers seem to believe that stimulating the economy means expanding recurring welfare programs, plowing money into pet projects of only limited or short-term use, and bestowing inadequate, selective tax cuts.

But if Obama is looking for ideas, he might consult with Nina Olson, the national taxpayer advocate at the IRS. In her annual report to Congress, released yesterday, Olson makes a persuasive case for overhauling the U.S. tax system.
Posted by James Zellmer at 9:43 AM

January 12, 2009

"Counter Blog"

Noah Shachtman:
Bloggers: If you suddenly find Air Force officers leaving barbed comments after one of your posts, don't be surprised. They're just following the service's new "counter-blogging" flow chart. In a twelve-point plan, put together by the emerging technology division of the Air Force's public affairs arm, airmen are given guidance on how to handle "trolls," "ragers" -- and even well-informed online writers, too. It's all part of an Air Force push to "counter the people out there in the blogosphere who have negative opinions about the U.S. government and the Air Force," Captain David Faggard says.

Over the last couple of years, the armed forces have tried, in fits and starts, to connect more with bloggers. The Army and the Office of the Secretary of Defense now hold regular "bloggers' roundatbles" with generals, colonels, and key civilian leaders. The Navy invited a group of bloggers to embed with them on a humanitarian mission to Central and South America, last summer. Military blogger Michael Yon recently traveled to Afghanistan with Defense Secretary Robert Gates.

In contrast, the Air Force has largely kept the blogosphere at arms' length. Most of the sites are banned from Air Force networks. And the service has mostly stayed away from the Pentagon's blog outreach efforts. Captain Faggard, who's become the Air Force Public Affairs Agency's designated social media guru, has made strides in shifting that attitude. The air service now has a Twitter feed, a blog of its own -- and marching orders, for how to comment on other sites. "We're trying to get people to understand that they can do this," he tells Danger Room.
Posted by James Zellmer at 8:45 AM

January 11, 2009

Doctor Side Pay from Drug Companies

John Fauber:
Barry Fox is in big demand. The UW infectious disease specialist had lucrative side jobs working for seven different drug companies in just one year, including one that paid an undisclosed sum of $20,000 or more, records show.

Fox is one of dozens of University of Wisconsin-Madison physicians who also work for drug companies. Some sit on advisory boards; others do promotional or educational work. Fox, for example, did promotional work involving an antibiotic for one company in 2007, working five days for what appears to be at least $2,000 a day, his disclosure form says.

Doctors' moonlighting for drug companies - though legal - is coming under increased scrutiny, both at UW and across the country. This month, the trade group Pharmaceutical Research and Manufacturers of America enacted a voluntary ban on company gifts of branded pens, sticky notes and other items and dinners for doctors. Also of special concern are university physicians who are sought by drug companies because of the influence and respect they wield with colleagues practicing in communities.

Most patients have no knowledge of the side work. Even the university is not aware of exactly how much its doctors earn from drug and medical device companies; they are required to disclose only ranges of income received, and no range beyond $20,000.

More than 30 UW physicians exceeded the $20,000 threshold in 2006 and 2007, records show. At least one of those doctors made at least 20 times that amount in previous years - more than $400,000, paid by a maker of orthopedic implants. But that became known in 2006 only because of records filed in a lawsuit.

Last week, for the first time, signs went up in a handful of UW Health clinics alerting patients about doctors' drug company ties. In addition, the dean of the medical school said the university's policies need to be shored up. Among other things, the medical school might begin requiring doctors to specify how much they are paid, said Robert Golden, head of the UW School of Medicine and Public Health.

Further, U.S. Sens. Herb Kohl (D-Wis.) and Chuck Grassley (R-Iowa) have introduced a bill that would require drug and medical device companies to disclose payments made to physicians. Kohl said it would be best to ban the practice, noting that the medical industry spends $20 billion a year in payments and gifts to doctors.

"The relationship between the doctor and patient is frayed," Kohl said.
Posted by James Zellmer at 1:32 PM

January 8, 2009

Vietnam imposes new blogging restrictions

The rules ban any posts that undermine national security, incite violence or crime, disclose state secrets, or include inaccurate information that could damage the reputation of individuals and organizations, according to a copy of the regulations obtained Wednesday by The Associated Press.

The rules, which were approved Dec. 18, attempt to rein in Vietnam's booming blogosphere. It has become an alternative source of news for many in the communist country, where the media is state-controlled.

The new rules require Internet companies that provide blogging platforms to report to the government every six months and provide information about bloggers on request.

The companies are also required to prevent and remove content the government deems harmful.
Posted by James Zellmer at 7:49 AM

January 5, 2009

Can the US economy afford a Keynesian stimulus?

Willem Buiter:
Economic policy is based on a collection of half-truths. The nature of these half-truths changes occasionally. Economics as a scholarly discipline consists in the periodic rediscovery and refinement of old half-truths. Little progress has been made in the past century or so towards understanding how economic policy, rules, legislation and regulation influence economic fluctuations, financial stability, growth, poverty or inequality. We know that a few extreme approaches that have been tried yield lousy results - central planning, self-regulating financial markets - but we don't know much that is constructive beyond that.

The main uses of economics as a scholarly discipline are therefore negative or destructive - pointing out that certain things don't make sense and won't deliver the promised results. This blog post falls into that category.

Much bad policy advice derives from a misunderstanding of the short-run and long-run impacts of events and policies. Too often for comfort I hear variations on the following statements: "The long run is just a sequence of short runs, so if we make sure things always make sense in the short run, the long run will take care of itself." This fallacy, which I shall, unfairly, label the Keynesian fallacy, compounds three errors.
Via Yves Smith.
Posted by James Zellmer at 11:34 AM

January 4, 2009

Samuel Huntington Obituary

The Economist:
IN THE early 1990s America’s opinion-makers competed to outdo each other in triumphalism. Economists argued that the “Washington consensus” would spread peace and prosperity around the world. Politicians debated whether the “peace dividend” should be used to create universal health care or be allowed to fructify in the pockets of the people or quite possibly both. Francis Fukuyama took the optimists’ garland by declaring, in 1992, “the end of history” and the universal triumph of Western liberalism.

Samuel Huntington thought that all this was bunk. In “The Clash of Civilisations?” he presented a darker view. He argued that the old ideological divisions of the Cold War would be replaced not by universal harmony but by even older cultural divisions. The world was deeply divided between different civilisations. And far from being drawn together by globalisation, these different cultures were being drawn into conflict.

Huntington added another barb to his argument by suggesting that Western civilisation was in relative decline: the American power-mongers who thought that they were the architects of a new world order were more likely to find themselves the victims of cultural forces that they did not even know existed. The future was being forged in the mosques of Tehran and the planning commissions of Beijing rather than the cafés of Harvard Square. His original 1993 article, in Foreign Affairs, was translated into 26 languages and expanded into a best-selling book.
Posted by James Zellmer at 9:42 PM

December 27, 2008

The Marshfield Clinic's Electronic Medical Records System in the News

Steve Lohr:
Joseph Calderaro, 67, is one of health care’s quiet success stories. Over the last four years, he has carefully managed his diabetes by lowering his blood sugar, blood pressure and cholesterol with diet, exercise and medication.

To keep on track, Mr. Calderaro visits his doctor, attends meetings for diabetes patients and gets frequent calls from a health counselor. It is a team effort, orchestrated by the Marshfield Clinic here. And it is animated by technology, starting with Mr. Calderaro’s computerized patient record — a continuously updated document that includes his health history, medications, lab tests, treatment guidelines and doctors’ and nurses’ notes.

To visit the Marshfield Clinic, a longtime innovator in health information technology, is to glimpse medicine’s digital future. Across the national spectrum of health care politics there is broad agreement that moving patient records into the computer age, the way Marshfield and some other health systems have already done, is essential to improving care and curbing costs.
There has been some loose talk about the Obama administration providing "incentives" for health care automation. These investments should be made on their merits, rather than funded by yet another taxpayer give-away.

Marshfield apparently built their own system, a competitor to Verona based Epic Systems.

Might this article be part of their initial marketing efforts to other health care organizations?
Posted by James Zellmer at 7:45 AM

December 22, 2008

On the Fed Printing Money

James Grant:
It is a sorry place at which we Americans find ourselves this none-too-festive holiday season. The biggest names on Wall Street have gone to their rewards or into partnership with the U.S. Treasury. Foreigners stare wide-eyed from across the waters. A $50 billion Ponzi scheme (baited with, of all things in this age of excess, the promise of low, spuriously predictable returns)? Interest rates over which tiny Japanese rates fairly tower? Regulatory policy seemingly set by a weather vane? A Federal Reserve that can't make up its mind: Is it in the business of central banking or of central planning? And to think -- our disappointed foreign friends mutter -- all of these enormities taking place under a Republican administration.

Trust itself entered a bear market in 2008, complementing and perhaps surpassing the selloffs in stocks, mortgages and commodities. Never to be confused with angels, we humans seem to outdo ourselves when money is on the line. So it is that Bernard Madoff, supposed pillar of the community, stands accused of perpetrating one of the greatest hoaxes since John Law discovered the inflationary possibilities of paper money in the early 18th cent
Posted by James Zellmer at 10:29 PM

December 19, 2008

The Year in Business: 2008

The Economist:
Party of the year: The $86,000 partridge-hunting trip funded by AIG, a government-rescued insurance firm, for some top clients. They had fun, but the public outcry was such that lots of other firms cancelled their holiday parties lest they be accused of wasting money in tough times. Cheers!

Badly-timed nickname: Awarded jointly to Whole Foods Market and Starbucks. Being known, respectively, as Whole Paycheck and Fourbucks is fine when the going is good, but not when consumers are obsessed with value for money. Both of these pricey retailers have had a miserable year. Whole Foods’ shares are down by 75% so far in 2008, and shares in Starbucks are down by over half.

In memoriam: A posthumous award for this year’s notable departures. Contenders include Alan Greenspan’s reputation as a great central banker; investment banks; the newspaper industry; sport-utility vehicles; fiscal prudence; the inexorable rise of BRIC economies and the theory that BRICs had “decoupled” from rich world economies; pay increases; and capitalism. But the winner is economic growth—gone, though one hopes not forever.
Posted by James Zellmer at 7:25 AM

December 13, 2008

Campaign Contributions & Congressional Votes for the "Auto Bailout"


BERKELEY, CA, Dec. 11 —Members of the U.S. House of Representatives voted to pass the Auto Industry Financing and Restructuring Act last night. MAPLight.org's research department revealed that over the past five years (January 2003 - October 2008), auto manufacturers, auto dealers and labor unions gave an average of $74,100 in campaign contributions to each Representative voting in favor of the auto bailout, compared with an average of $45,015 to each Representative voting against the bailout--65% more money, on average, given to those who voted Yes. The final vote: 237 Representatives voted Yes and 170 voted No, with 26 Not Voting and 1 voting “Present.”

MAPLight.org's analysis included contributions from auto manufacturers, auto dealers, auto-related industries and labor unions, groups that have expressed support for this bill's passage.
Related: Lessig is moving back to Harvard:
As faculty director of the Center, Lessig will expand on the center’s work to encourage teaching and research about ethical issues in public and professional life. He will also launch a major five-year project examining what happens when public institutions depend on money from sources that may be affected by the work of those institutions — for example, medical research programs that receive funding from pharmaceutical companies whose drugs they review, or academics whose policy analyses are underwritten by special interest groups.
Posted by James Zellmer at 8:20 PM

November 26, 2008

Thanksgiving in a Time of Fear & Uncertainty

Terry Heaton:
The brilliant mind of Kevin Kelly wrote about the origins of science a few weeks ago (The Origins of Progress, Anachronistic Science). If you want to expand your mind, read Kevin Kelly, for his is one of the most significant voices of contemporary culture. But Kelly uses science to try and answer a question about science that perplexes him: Why was science “discovered” in Western Civilization and not before? It’s a fascinating question, and one that is terribly important for us today, because we’re at the beginning of the post-modern, post-colonial era in the West.

I’ve been studying and writing about postmodernism for over ten years, and I see the conflicts of a culture in change everywhere. I actually prefer the term “postcolonial,” because, from a practical perspective, it fits better. Colonialism is a top-down, “teach a man to fish” philosophy ideally suited to the application of logic, reason and science. Where it runs into problems is when the top wants to maintain its position on top, but I digress.

The thing that Kelly refuses to acknowledge — as do most people of science — is the role of faith in the origins of science, and that brings me back to Thanksgiving 2008.

We’re in the midst of a second Gutenberg moment, in which knowledge (The Jewel of the Elites) is spreading throughout the globe like a giant mushroom cloud, and I would argue that this significantly will alter any future projections, just as the first Gutenberg moment did centuries ago.
Posted by James Zellmer at 10:29 PM

November 25, 2008

Protesters Force Bangkok's Airport to Suspend Takeoffs

Anti-government demonstrators swarmed Bangkok's international airport late Tuesday -- halting departing flights -- as opponents and supporters of Thailand's government fought running battles in the streets of the city.

Minutes after outbound flights at Suvarnabhumi International Airport were suspended, hundreds of demonstrators -- some masked and armed with metal rods -- broke through police lines and spilled into the passenger terminal.

The road to Suvarnabhumi.

Thomas Fuller has more.

Posted by James Zellmer at 10:53 AM

America’s Debt to Income Ratio as Compared with Other Countries

Credit Loan Blog:
Seven of the top ten debtor nations are included in the world’s top ten economies. Not surprising. This is largely a result of widespread availability of affordable credit, and relatively large middle classes in these countries, and consequently a large ratio of home/property owners. Most popular rhetoric on the topic would claim that wealthy countries have grown accustomed to being wealthy and they are enthralled by consumerism – it could be argued that this high level of debt could be a result of a culture that is used to and willing to buy now, and pay later…even if it means with interest.

According to our data, Japan has the highest positive income (in gross terms) at US $2,892 Billion. Similarly, the US economy is $1,594 Billion. At the other side of the spectrum, Great Britain’s income to debt ratio is a US -$7,677 Billion, and that of France is -$1,890 Billion. But what do these statistics mean on an individual level? Well, if you were to boil down what each person in this country contributed to the nation’s income vs. debt ratio, the results would be startling. We would have to take into consideration the nation’s population to better understand this. And some may be surprised to see that the US does not fare quite as bad as imagined, comparatively:
Posted by James Zellmer at 10:39 AM

November 24, 2008

Wisconsin Capitol: Late Night View

Posted by James Zellmer at 7:15 PM

November 23, 2008

2008 Wisconsin Public Records Audit: 3 in 10 public-records requests not properly fulfilled, new study finds

Bill Lueders & Jason Shephard:
A statewide public records audit found that one in 10 requests for basic documents were denied or ignored by local governments.

Another two in 10 requests were fulfilled only after records custodians required the requesters to identify themselves or explain why they wanted the documents, in violation of state law.

The audit, conducted by the Wisconsin Freedom of Information Council and the University of Wisconsin-Madison School of Journalism and Mass Communication, involved 318 public records requests filed in 65 counties.

“We were not trying to trick anyone," says Bill Lueders, the Council's elected president and news editor of Isthmus newspaper. "We asked for basic information that no one should have any problems getting. And yet there were problems."
Posted by James Zellmer at 3:46 PM

Has the Fed Mortgaged Its Own Future?

Jack Willoughby:
The Fed's highly leveraged balance sheet will make it hard to fight inflation.

IF THE FEDERAL RESERVE BANK WERE A COMMERCIAL LENDER, it would be a candidate for receivership, based on its capital ratios. Bank examiners generally view any lender with a ratio below 2% to be dangerously undercapitalized. The Fed's current capital ratio, or capital as a percentage of assets, is 1.9%.

The Fed has provided so many loans and emergency credits -- to banks, brokers, money funds and foreign countries -- that its balance sheet, viewed one way, is as leveraged as any hedge fund's: Its consolidated assets amount to 53 times capital. Only 11 months ago, its leverage on this basis was a more modest 25 times, and its capital ratio 4%. A caveat: Many of the loans are self-liquidating facilities that will disappear in a few months if the financial crisis eases.

Although the Fed's role as a central bank is much different from the role of a private-sector operation, the drastic changes in the size and shape of its balance sheet worry even some long-time Fed officials. Its consolidated assets have swelled to $2.2 trillion from $915 billion in about 11 months, and contain at least a half-dozen items that weren't there before. Some, like a loan to backstop the purchase of a brokerage, Bear Stearns, are unprecedented. (See table for highlights.)
Posted by James Zellmer at 3:33 PM

November 21, 2008

Time to look at bonds but keep an eye on our heroes

Hugh Hendry:
Someone once said there are certain things that cannot be adequately explained to a virgin, either by words or pictures. It is therefore with some trepidation that I attempt to outline our investment policy. We are bullish on agriculture and bearish on the financial community. For 10 years we have contended that equity markets can, and do, stagnate for periods as long as a quarter of a century. Accordingly, we have refused to follow the market, choosing instead to invest in unleveraged sectors which have endured long bear markets.

However, there are complicating cycle considerations. A process of debt liquidation is under way that resembles a turning point heralding weaker global growth. This undermines almost all risk taking, including agriculture, and for this reason we presently favour only government bonds.

According to Prada: "There is a rejection of fakeness - the fake avant-garde." And the inflation scare that took the price of oil to almost $150 per barrel, and created a hawkish central banking community, was perhaps the biggest head-fake of all. Certainly, the market for 10-year government bonds is beginning to think so. It is trading near a record high.

And today, even those regional Fed governors and hawkish European central bankers seem to see it as well. As I say, this is the time to own government bonds. But we are aware of just how out of sync we are with our heroes. Can the combined intellectual weight of Mark Faber, George Soros and James Grant all be wrong? Why do they insist on shorting Treasuries during the worst financial crisis since the Depression? I blame the Romans.
Posted by James Zellmer at 10:21 PM

November 17, 2008

Memorandum to US Treasury Secretary Hank Paulson

Michael Lewis:
A former chief executive officer of Goldman Sachs Group Inc. does not mingle with boat dealers; he mingles with investment bankers; and the first rule, before handing out taxpayer money, is to have mingled with the people you want to hand it to.(That way they know whom they owe). I admire your ability to recognize your “circle of competence” and live within it.

Still, I do feel that in me, and my little literary business, there is opportunity for you, and your $700 billion. Allow me to explain why.

Be Fair

1) By giving the money to me, instead of someone less deserving, you will make the world a fairer place.

As much as I admire all of your decisions I can’t help but notice that the main qualification of the bankers to whom you have been giving money, so that they might make smart loans, is that they have gone almost bankrupt by making stupid loans.

As your mind is subtle, I can only assume that you secretly believe that the American economy right now needs not smart loans, but more stupid ones -- and thus that you have targeted the bankers who have proven they can make them.

I, unfortunately, have not flirted with bankruptcy, or made any stupid loans. But here’s my point: I haven’t been given the chance! Allow me to prove my financial ineptitude to you. I swear to you that when I return for my second round of assistance I will have proven myself fully qualified to receive it.
Posted by James Zellmer at 8:11 AM

November 12, 2008

The End of Wall Street's Boom

Michael Lewis:

To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital--to decide who should get it and who should not. Believe me when I tell you that I hadn't the first clue.

I'd never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous--which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people's money, would be expelled from finance.

When I sat down to write my account of the experience in 1989--Liar's Poker, it was called--it was in the spirit of a young man who thought he was getting out while the getting was good. I was merely scribbling down a message on my way out and stuffing it into a bottle for those who would pass through these parts in the far distant future.

Posted by jez at 9:18 AM

November 9, 2008

The Crisis Last Time

Richard Parker:
For writers who seek to influence public affairs, timing plays a paramount role. And few writers have had better timing than Adolf Augustus Berle.

In the summer of 1932, with America trapped in the greatest financial crisis in its history, Berle published “The Modern Corporation and Private Property,” a scholarly yet readable analysis of America’s largest companies and their managers. Berle is largely forgotten today, yet with that book he succeeded in persuading Americans to see their economic system in a new way — and helped set the stage for the most fundamental realignment of power since abolition.

The stock market had plunged vertiginously three years earlier, and by 1932 Americans were desperate to reverse the much wider collapse that had ensued — and to make sure it wouldn’t happen again. The New Republic was soon hailing “The Modern Corporation” as the book of the year, while The New York Herald Tribune pronounced it “the most important work bearing on American statecraft” since the Federalist Papers. Louis Brandeis would cite its arguments in a major Supreme Court ruling on corporate power. Running for president, Franklin Delano Roosevelt recruited Berle — a Republican Wall Street lawyer who had supported Hoover — to join his “brain trust,” and that fall entrusted him with drafting what became the most important speech of the campaign. After the election, Berle remained in New York, yet his connection to the president he audaciously addressed as “Dear Caesar” was such that Time would characterize “The Modern Corporation” as “the economic bible of the Roosevelt administration.”
Posted by James Zellmer at 10:02 PM

November 5, 2008

Destroying Oil as a Strategic Commodity

Joe Francica:
A Summary of Remarks by Former CIA Director Jim Woolsey at the GEOINT Symposium

At the GEOINT Symposium in Nashville, Tennessee, former director of the Central Intelligence Agency (CIA) Jim Woolsey gave a chilling account of the implications for national security related to the United States' dependence on foreign oil. He described the vulnerabilities of a resource located far from our shores, highlighting how consumer habits could have dramatic geopolitical consequences. He then offered a solution to the crisis by suggesting a way to remove oil as a strategic commodity.

Woolsey's assessment of the problem is similar to what we have heard from T. Boone Pickens, the oil businessman-turned wind power advocate. We spend in the range of $350 - $700 billion per year for oil, depending on the price per barrel. The reality is that the U.S. and other oil importers like China and India are engaging in the biggest transfer of wealth in history. The result is that the U.S. is either directly or indirectly providing funds to support countries that may not have our best interests at heart. "Oil tends to be produced by countries that are either run by autocrats or dictators. (One exception: Norway). So, one of the things we are doing with this money is contributing to the support of dictators. Putin [Russia] and Chavez [Venezuela] are a bit quieter with oil at $65 per barrel," said Woolsey. "[However], a national energy policy that depends on oil is probably one of the stupider policies ever done. Even at $65 per barrel, we still have one of the biggest transfers of wealth the world has ever seen."
Posted by James Zellmer at 1:52 PM

November 4, 2008

6:45a.m. Election Queue - Madison

Posted by James Zellmer at 8:57 AM

November 3, 2008


Wisconsin polling locations can be found here.

Posted by jez at 1:33 AM

November 1, 2008

Obama's Secret Weapons: Internet, Databases and Psychology

Sarah Lai Stirland:
During a sweltering Friday evening rush hour in early October, Jeanette Scanlon spent two-and-a-half hours with 20 other people waving a homemade Barack Obama sign at the cars flowing through a busy intersection in Plant City, Florida.

"I got shot the bird one time," laughs the easy-natured Scanlon, a 43-year-old single mother of three and a Tampa psychiatrist's billing manager. "That wasn't the thumbs up I was looking for."

Scanlon is one of an estimated 230,000 volunteers who are powering Obama's get-out-the-vote campaign in the swing state of Florida. And while sign-waving is a decidedly low-tech appeal to voters' hearts and minds, make no mistake: The Obama campaign's technology is represented here. Scanlon organized the gathering — and 24 others since September — through Obama's social networking site, my.BarackObama.com. Similarly, she used the site's Neighbor-to-Neighbor tool in September to find registered voters in her own neighborhood, so she could canvass them for Obama. And this weekend, Scanlon and another 75 or so Plant City volunteers will be phoning thousands of Floridians to urge them to vote, using a sophisticated database provided by the Obama campaign to ensure they don't call McCain supporters by mistake.

The Obama campaign has been building, tweaking and tinkering with its technology and organizational infrastructure since it kicked off in February 2007, and today has most sophisticated organizing apparatus of any presidential campaign in history. Previous political campaigns have tapped the internet in innovative ways — Howard Dean's 2004 presidential run, and Ron Paul's bid for this year's Republican nomination, to name two. But Obama is the first to successfully integrate technology with a revamped model of political organization that stresses volunteer participation and feedback on a massive scale, erecting a vast, intricate machine set to fuel an unprecedented get-out-the-vote drive in the final days before Tuesday's election.
A friend recently mentioned that one of the canvasers asked if they could leave an orange dot on their mailbox, notifying other workers that they have already voted! I wonder how long it will be until citizens push back on the extensive personal data mining.
Posted by James Zellmer at 3:57 PM

October 20, 2008

A Fascinating Video Obituary on Jorg Haider

The Economist:

Posted by James Zellmer at 9:19 AM

October 17, 2008

The Latest from Tommy Thompson

Dan Slater:
Enter Akin Gump partner Tommy Thompson — the former Wisconsin governor, former secretary of Health and Human Services and former presidential hopeful. Yesterday, Thompson was officially named independent counsel for the National Thoroughbred Racing Association’s newly created Safety and Integrity Alliance. According to a press release, Thompson will lead a team that will monitor the reform program and provide annual progress reports.

The Law Blog recently spoke to the 66 year-old Thompson to talk about politics, ponies and his new gig.

Why were you the man for the job?

I was the secretary of Health and Human Services, and was there when 9/11 and all those other things had to be taken care of. I was responsible for the FDA. I was governor for 15 years. I’m a farmer. I had an interest in Flashy Bull. I’ve been passionate about horse racing. Plus, My law firm, Akin Gump, does this kind of work. We’ve done it for the NFL in the past, and for all kinds of investigations into government.
Horse racing....
Posted by James Zellmer at 11:00 AM

October 7, 2008

Wisconsin Senator Russ Feingold on the $700,000,000,000 bailout, or Splurge

Via email:

Thank you for contacting me to share your thoughts on the administration's proposal to purchase up to $700 billion of bad mortgage debt. I very much appreciated hearing from you.

I opposed the bailout plan passed by Congress, because though well intentioned, and certainly much improved over the administration's original proposal, it remained deeply flawed. It failed to offset the cost of the plan, leaving taxpayers to bear the burden of serious lapses of judgment by private financial institutions, their regulators, and the enablers in Washington who paved the way for this catastrophe by removing the safeguards that had protected consumers and the economy since the great depression. Second, this bill did not include meaningful provisions to help families facing foreclosure. This is more than just a matter of fairness - the housing crisis is the root cause of the credit market collapse, and unless we address it, any rescue package is far less likely to work. Finally, the measure failed to address the deeply flawed regulatory structure that paved the way for this crisis. Taxpayers deserve a plan that puts their concerns ahead of those who got us into this mess.

Again, thank you for contacting me. Please feel free to do so again in the future.

Much more on the splurge, here.

Posted by jez at 11:07 AM

October 5, 2008

Bill Perkins Bailout Cartoon

Appeared recently in the New York Times print edition. More here.

Declan McCullagh notes the large amount of pork in the bill that passed Friday.

Posted by jez at 12:30 PM

September 28, 2008

Updates on the $700,000,000,000 Fed / Wall Street / Mortgage Bailout

Lori Montgomery & Paul Kane:

The proposed legislation would authorize Treasury Secretary Henry M. Paulson Jr. to initiate what is likely to become the biggest government bailout in U.S. history, allowing him to spend up to $700 billion to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates.

The plan would give Paulson broad latitude to purchase any assets from any firms at any price and to assemble a team of individuals and institutions to manage them. In wielding those powers, Paulson and others hope to contain a crisis that already has caused the failure or forced the rescue of a half-dozen major Wall Street firms and unnerved markets around the world.

  • Draft Bailout bill (200K PDF)
  • Letter to Paulson & Bernanke
  • Larry Summers:
    Congressional negotiators have now completed action on a $700bn authorisation for the bail-out of the financial sector. This step was as necessary as the need for it was regrettable. There are hugely important tactical issues regarding the deployment of these funds that the authorities will need to consider in the weeks and months ahead if the chance of containing the damage is to be maximised. I expect to return to these issues once the legislation is passed.

    In the meantime, it is necessary to consider the impact of the bail-out and the conditions necessitating it on federal budget policy. The idea seems to have taken hold in recent days that because of the unfortunate need to bail out the financial sector, the nation will have to scale back its aspirations in other areas such as healthcare, energy, education and tax relief. This is more wrong than right. We have here the unusual case where economic analysis actually suggests that dismal conclusions are unwarranted and the events of the last weeks suggest that for the near term, government should do more, not less.

  • Tom Wolfe's latest is worth a read.
  • My email to our Washington delegation.

Posted by jez at 10:22 PM

September 26, 2008

My Thoughts on the Proposed $700,000,000,000 Fed/Wall Street / MortgageBailout

My email to Wisconsin Senators Russ Feingold and Herb Kohl. I also sent this to Congresswoman Tammy Baldwin:

Dear Senator Feingold:

I am writing to express my opposition to the proposed $700,000,000,000 toxic debt instrument bailout.

I believe it is wrong for us to continue the practice of spending beyond our means and simply passing more debt to our children and grandchildren. It is also wrong to stoke the fires of inflation.

If you believe these funds are necessary, then I suggest the following:

  1. Mandatory across the board spending cuts that pay for at least 50% of this initiative. They must be across the board.
  2. A slight change in tax policy so that every American pays some taxes. The annual base tax cost should follow spending changes. Choose a small number. Think of this as a "co-pay". We have a real problem with the perception that federal (and state) dollars somehow fall out of the sky.
  3. You might be able to insert the beginning of a consumption tax. I would be in favor of such a tax on luxury vehicles, large boats and private aircraft over $1M.
  4. Restore the estate tax rate to early 1990's levels.
  5. Gas tax. Add a provision to raise the gas tax annually. We need to do this for economic and national security reasons.
In other words, if necessary, support the initiative, but not on the backs of our children and grandchildren.

Best wishes,



Posted by jez at 8:19 PM

Financial Sector Fetes Lawmakers Making Bailout Decisions

Sunlight Foundation:

Some 258 parties, a number of them hosted by lobbyists for the finance, insurance, and real estate industries, have been thrown for members of the U.S. House Financial Services Committee this year, according to an investigation by the Sunlight Foundation's Party Time project. Members of the House committee, along with the Senate Banking Committee, are considering the $700 billion bailout legislation for the financial sector proposed by the administration.

A sampling of parties include:

Posted by jez at 7:59 PM

September 24, 2008

America Must Rescue the Bonuses at Goldman Sachs: Michael Lewis

Michael Lewis:

Anyone who caught even a sliver of yesterday's hearings in the U.S. Senate on the proposed Treasury bailout of the mortgage-backed securities market knows that the current financial crisis is far from over. Suddenly all sorts of previously unthinkable catastrophes seem possible.

The total collapse of the global financial system is one thing -- everyone at Davos in January saw that coming. But the shrinkage of the Goldman Sachs Group Inc. bonus pool is another. Whatever else the Treasury achieves it must know that if the employees of Goldman suffer any sort of pay cut, it will be judged to have failed. And our country may never recover.

Last year Goldman paid its employees $20 billion, 44 percent of the firm's revenue. Chief Executive Officer Lloyd Blankfein took home $68.5 million, and many otherwise ordinary human beings took home $10 million or mor

Posted by jez at 1:44 PM

September 23, 2008

Notes from the Federal Bailout Hearing

Mike Nizza:

From Paulson to You | 11:41 a.m. In response to a question, Secretary Paulson sought to clear the air about who the bailout was supposed to help. "This is all about the American taxpayer," he said. "That's all we care about." He continued:

Any banking operation in the United states that is doing business with the American public is important. The American public in dealing with the financial system doesn't know who owns that bank.

Later, he added, "You ask me about taxpayers being on the hook? Guess what, they are already on the hook."

Related: Public Markup of the Dodd bailout proposal.

Posted by jez at 1:46 PM

The Power of One

A few years ago, I had an opportunity to hear "her deepness" Sylvia Earle speak. She included this short video in her presentation - "the Power of One".

Earle emphasized the opportunities we all have to change the world. I recalled her talk while visiting with Hal Herron recently. Herron, of Riverton, Wyoming has been adding outdoor art to his home town in an interesting way.

Museums often create large banners to promote an exhibit. Herron sought out these banners after a showing is complete. He pays for shipping to Riverton and places them around the community for all to enjoy. Fascinating. He forwarded two photos, seen below:

Bill Perkin's full page New York Times ad in today's paper is another illustration of the "Power of One".

Perkins approach requires a certain size checkbook, of course :)

All of which reminds me of the "two greatest commandments".

Posted by jez at 8:38 AM

September 22, 2008

"The Era of Leverage is Over"

Gillian Tett:

A few years ago, senior officials at the Bank for International Settlements started ringing alarm bells about the scale of leverage that was quietly building up in the financial system. Back then, though, it was fantastically hard to get American policymakers - let alone bankers - to listen.

In the go-go days of the credit bubble, Washington policymakers blithely assumed that the Western financial system had plenty of capital to cope with any potential risks. Consequently, as one former BIS official admits: "Worrying about leverage wasn't fashionable at all - no one wanted to hear."

Fast-forward a couple of years and, my, how those Western financiers are having to eat humble pie (even to the point of accepting a helping hand from the once-ailing Japanese). After all, the events of the past year have now made it patently - horrifically - obvious that the Western banking system has become dangerously undercapitalised in recent years, to the point where even the Federal Reserve is having to shore up its defences.

Moreover, it is now also clear that Western policymakers are belatedly trying to correct this state of affairs. The days when high leverage, mega bonuses and wacky instruments were equated with financial virility have gone; instead a more humble, back-to-basics and slim-line approach is what investors are demanding. Thus, deleveraging is now all the rage - in whatever form it might take.

Posted by jez at 6:13 PM

Five Reasons to Give Thanks for the Financial Collapse of the Decade

Michael Lewis:

One of life's rules is that there's bad in good and good in bad. The total collapse of the U.S. financial system is no exception. Even in the midst of the current financial despair we can look around and identify many collateral benefits.

A lot of attractive office space seems to be opening up in midtown Manhattan, for instance, and the U.S. government is now getting paid to borrow money. (And with T-bills yielding 0 percent, they really ought to borrow a lot more of it, and quickly.)

And so as Morgan Stanley Chief Executive Officer John Mack blasts short sellers for his problems, and Goldman Sachs CEO Lloyd Blankfein swans around pretending to be above this little panic, we ought to step back and enjoy the positives.

Posted by jez at 11:47 AM

September 19, 2008

Justice Wheels in Madison


Posted by jez at 8:42 PM

September 18, 2008

The Presidential Contest in Wisconsin

The Economist:

TAMMY WYNEN stands near the back of a crowd outside a paper mill in Kimberly, Wisconsin. At a bank of microphones, speakers rail against Adam Smith; one, from the United Steel Workers, literally blames "The Wealth of Nations" for the mill's impending closure. Many also hint that the soon-to-be unemployed mill workers should vote for Barack Obama in November.

But Mrs Wynen, a 27-year veteran of the paper mill, is not so sure. She cannot remember the last time she saw Mr Obama recite the pledge of allegiance. And her family loves Sarah Palin, John McCain's new running-mate. Her children have lines from Mrs Palin's convention speech off pat. Still, Mrs Wynen says she doesn't know who she will vote for. The candidates look poised to spend a lot of time and money in Wisconsin wooing her.

Posted by jez at 8:59 AM

September 7, 2008

KAL Illustrations at the Republican Convention

The Economist. Democrat convention illustrations can be found here.

Great stuff.

Posted by jez at 5:57 PM

September 6, 2008

Obama 12 Sighting

Driving the speed limit early this morning, a dark blue car with flags zoomed past. A blur on my left. The nearby stop light provided an opportunity to take this photo.

Obama 12? Does it imply there are numbers 1 to 11 driving around? Or, is it a play on Adam 12? One needs to be of a certain age to recall the TV series Adam 12.

Finally, the car is a new Chevy Malibu. It's interesting that there is no mention of Joe Biden on the flags, stickers or plate, which is perhaps, for the best.

Posted by jez at 5:50 PM

September 4, 2008

Privatizing What the Public Paid For

Ed Wallace:

"Right. It takes unconventional and courageous thinking to come up with a plan that clears a highway lane for the well off, while the middle class and working poor are left to inhale each other's $5-a-gallon exhaust fumes. The worst thing about this ill-conceived decision ... is it allocates freedom of movement according to income."

-- From "Diamond Lanes for the Rich," by Tim Rutten (Los Angeles Times, April 26, 2008)

Few think of it this way, but America already has a major flat tax that we all pay equally: the 18.4-cent federal tax that is applied to each and every gallon of gasoline we purchase, or the 24.4 cents on every gallon of diesel. Say a young person, who just lost his job at McDonald's, buys a gallon of gas to get to an interview at Burger King at the same time Warren Buffet buys a gallon of gas to get to the airport in Omaha to board his personal jet: Both the unemployed, below-minimum-wage worker and America's richest billionaire contribute the exact same amount toward the nation's highway system on that day.

Now, however, we are being told - to an increasingly urgent drumbeat - that America can no longer afford the luxury of building new infrastructure or even maintaining our current road system, because there's just no funding for these programs. It's here that the complete absence of critical thinking about America's future should astonish and dismay anyone who looks at the facts even casually.

Posted by jez at 10:46 PM

September 3, 2008

Open Records Guerrilla

Nathan Halverson:

But if you want to download and save those laws to your computer, forget it.

The state claims copyright to those laws. It dictates how you can access and distribute them -- and therefore how much you'll have to pay for print or digital copies.

It forbids people from storing or distributing its laws without consent.

That doesn't sit well with Carl Malamud, a Sebastopol resident with an impressive track record of pushing for digital access to public information. He wants California -- and every other federal, state and local agency -- to drop their copyright claims on law, contending it will pave the way for innovators to create new ways of searching and presenting laws.

"When it comes to the law, the courts have always said there can be no copyright because people are obligated to know what it says," Malamud said. "Ignorance of the law is no excuse in court."

Malamud is spoiling for a major legal fight.

Posted by jez at 8:15 PM

August 28, 2008

Political Cartoonist KAL at the Democratic Convention

The Economist:

Every day this week, our cartoonist is sending his sketches from the Democratic convention in Denver, Colorado. Sketches from previous days can be found here. You can find up-to-the-minute coverage on our American politics blog.

Posted by jez at 10:36 AM

August 22, 2008

Dangerously in Debt
Former U.S. Comptroller General David Walker speaks out on the perils of the rising federal deficit in the new film "I.O.U.S.A.

Anthony Kaufman:

If "An Inconvenient Truth" sounded the alarm on global warming, "I.O.U.S.A.," a new documentary opening in theaters Friday, hopes to do the same for the rising federal deficit.

Backed by Blackstone Group Chairman Peter Peterson, "I.O.U.S.A." follows former U.S. Comptroller General David Walker and the Concord Coalition's Robert Bixby on a "fiscal wake-up tour" across America. In the movie, which is co-written by "Empire of Debt" co-author Addison Wiggin and directed by "Wordplay" filmmaker Patrick Creadon, Messrs. Walker and Bixby argue that unless the government alters its policies and spending habits, the U.S. will be in for a serious financial meltdown.

Mr. Walker, who headed the Government Accountability Office from 1998-2008, exited his official U.S. post five years early in order to head the Peter G. Peterson Foundation and dedicate himself fulltime to fiscal education before, as he says, "we face a real economic crisis." Mr. Walker spoke with The Wall Street Journal about the dangers of the debt and what needs to be done to prevent what he foresees to be an economic catastrophe.>

Posted by jez at 9:32 PM

August 19, 2008

Big Box Retail 2008: Costco Arrives in (Madison) Middleton

Costco held a very well attended party this evening celebrating the opening of their new Middleton warehouse club [Map].

I did not see a stand to purchase law degrees.

Middleton provided a TIF (Tax Incremental Financing) agreement to the site developer. A related Isthmus article can be found here.

A few additional photos:

Clusty search: Costco.

Posted by jez at 8:58 PM

Lessig on John McCain's Technology "Platform"

Larry Lessig

I have my doubts - unfortunately - that Obama will be much better on the crucial broadband issue for two reasons:

  • AT&T, very good at spreading the love money, or the king of telco lobbying is sponsoring the Democratic convention
  • Our own Democratic Governor - Jim Doyle, recently signed a AT&T supported "Video competition bill" into law - maybe useful for AT&T, but hardly good for citizens.

Posted by jez at 12:54 PM

August 18, 2008

The new age of authoritarianism

Chrystia Freeland:

In 1989, the Berlin Wall fell, democracy was on the march and we declared the End of History. Nearly two decades later, a neo-imperialist Russia is at war with Georgia, Communist China is proudly hosting the Olympics, and we find that, instead, we have entered the Age of Authoritarianism.

It is worth recalling how different we thought the future would be in the immediate, happy aftermath of the end of the cold war. Remember Francis Fukuyama's ringing assertion: "The triumph of the west, of the western idea, is evident first of all in the total exhaustion of viable systematic alternatives to western liberalism."

Even in the heady days of 1989, that declaration of universal - and possibly eternal - ideological victory seemed a little hubristic to Professor Fukuyama's many critics. Yet his essay made such an impact because it captured the scale, and the enormous benefits, of the change sweeping through the world. Not only was the stifling Soviet - which was really the Russian - suzerainty over central and eastern Europe and central Asia coming to an end but, even more importantly, the very idea of a one-party state, ruthlessly presiding over a centrally planned economy, seemed to be discredited, if not forever, then surely for our lifetimes.

Posted by jez at 9:37 AM

August 17, 2008

Meet the New Boss, Same as the Old Boss


When the Democratic Party holds its convention the week after next, members of Congress will be able to hear singer Kanye West at an all-expenses paid party sponsored by the recording industry.

They can play in a poker tournament with Ben Affleck, courtesy of the poker industry. They can try to hit a home run at Coors Field, home of the Colorado Rockies, thanks to AT&T Corp. Free drinks and cigars will be on offer at a bash thrown by the liquor industry.

The corporate largesse is on tap despite new ethics laws and rules that both chambers of Congress adopted in 2007, aimed at weakening the links between lawmakers and lobbyists. Spearheaded by the Democratic Party, the ethics effort included an attempt to ban corporations and lobbyists from throwing lavish parties for members at the national political conventions.

But in the months since the new rules took effect, lawmakers have watered down the guidelines, and Capitol Hill and K Street have teamed up to find ways around the guidelines as written. Politicians and lobbyists are now preparing about 400 of the biggest parties -- both at the Democratic gathering in Colorado and when Republicans convene the following week in St. Paul -- that conventioneers have ever seen.

Posted by jez at 3:33 AM

August 16, 2008

California Declares Free Market Broken, Recommends Price Controls For Phone Services

The Consumerist:

Verizon, AT&T, and their regulated cohorts love to blab how the "free market" and "competition" will keep prices low for consumers. According to California, it's a big fat expensive lie. The cost of basic phone service has soared since the Public Utilities Commission lifted price controls in 2006, leading the agency to conclude:

"There is no indication of any change in the near future regarding the current state of competition. Market forces have not yet met the challenge of controlling price increases."

Posted by jez at 6:40 PM

August 14, 2008

AT&T Mulls Watching You Surf

Saul Hansell:

AT&T is "carefully considering" monitoring the Web-surfing activities of customers who use its Internet service, the company said in a letter in response to an inquiry from the House Committee on Energy and Commerce.

While the company said it hadn't tested such a system for monitoring display advertising viewing habits or committed to a particular technology, it expressed much more interest in the approach than the other big Internet providers who also responded to the committee's letter.

AT&T did however promise that if it does decide to start tracking its customers online, it will "do so the right way." In particular, the advertising system will require customers to affirmatively agree to have their surfing monitored. This sort of "opt-in" approach is preferred by privacy experts to the "opt-out" method, practiced by most ad targeting companies today, which records the behavior of anyone who doesn't explicitly ask to not to be tracked.

Posted by jez at 9:37 PM

August 12, 2008

The Front-Runner’s Fall

Joshua Green:

For all that has been written and said about Hillary Clinton’s epic collapse in the Democratic primaries, one issue still nags. Everybody knows what happened. But we still don’t have a clear picture of how it happened, or why.

The after-battle assessments in the major newspapers and newsweeklies generally agreed on the big picture: the campaign was not prepared for a lengthy fight; it had an insufficient delegate operation; it squandered vast sums of money; and the candidate herself evinced a paralyzing schizophrenia—one day a shots-’n’-beers brawler, the next a Hallmark Channel mom. Through it all, her staff feuded and bickered, while her husband distracted. But as a journalistic exercise, the “campaign obit” is inherently flawed, reflecting the viewpoints of those closest to the press rather than empirical truth.

More from James Fallows.

Posted by jez at 8:32 AM

July 30, 2008

TDS Telecom sues Monticello over city's plan to build its own high-speed network

Heron Marquez Estrada:

A failure to communicate between Monticello and TDS Telecom, its chief phone and cable provider, is threatening to short-circuit plans to make the city one of the most wired communities in the nation.

Both Monticello and TDS Telecom are constructing multi-million dollar fiber-optic networks that will directly connect to every home, office and business in the city.

When the networks come online in the next year or so, they would be among only about 45 in the country that provide such connectivity.

But Monticello -- a city of about 11,000 in northern Wright County -- also may be the only locale where the public and private sectors are competing so directly for paying customers.

The acrimony from such direct competition has led to the filing of what may become a precedent-setting lawsuit by TDS questioning whether municipalities can use revenue bonds to create fiber-optic networks.

Fascinating. It's not like TDS is building fiber to the home here. We're stuck with (and continue to pay for) nearly century old copper networks. Much like roads, I believe that public fiber networks (open to any player) make sense, particularly when there is no evidence that the incumbent telcos plan to upgrade their infrastructure.

Posted by jez at 2:48 PM

July 20, 2008

Why No Outrage?

James Grant:

Raise less corn and more hell," Mary Elizabeth Lease harangued Kansas farmers during America's Populist era, but no such voice cries out today. America's 21st-century financial victims make no protest against the Federal Reserve's policy of showering dollars on the people who would seem to need them least.

Long ago and far away, a brilliant man of letters floated an idea. To stop a financial panic cold, he proposed, a central bank should lend freely, though at a high rate of interest. Nonsense, countered a certain hard-headed commercial banker. Such a policy would only instigate more crises by egging on lenders and borrowers to take more risks. The commercial banker wrote clumsily, the man of letters fluently. It was no contest.

The doctrine of activist central banking owes much to its progenitor, the Victorian genius Walter Bagehot. But Bagehot might not recognize his own idea in practice today. Late in the spring of 2007, American banks paid an average of 4.35% on three-month certificates of deposit. Then came the mortgage mess, and the Fed's crash program of interest-rate therapy. Today, a three-month CD yields just 2.65%, or little more than half the measured rate of inflation. It wasn't the nation's small savers who brought down Bear Stearns, or tried to fob off subprime mortgages as "triple-A." Yet it's the savers who took a pay cut -- and the savers who, today, in the heat of a presidential election year, are holding their tongues.

Posted by jez at 9:32 AM

July 18, 2008

Biofuels Deathwatch Map

Craig Rubens:

Biofuel plants have been put on hold faster than your phone company’s tech support line. With corn and soy prices hitting record high prices and an ethanol glut flooding the market, ethanol’s profit margin per gallon has dropped to a meager 25 cents from $2. That’s causing numerous ethanol and biodiesel plants to get put on hold or downright canceled. Hundreds of millions of gallons of production capacity and hundreds of millions of dollars in biofuel investments are now hanging in limbo, as investors hope prices will level out.

That’s not to say that ethanol is dead in the water. There’s a variety of positive reports coming out on the future of the industry — there’s reports that see a meaningful future for ethanol , as well reports saying ethanol could be deliver a better-than-expected energy return. Add in a healthy merger and acquisition market and biofuels will play a role in the future of weaning the U.S. off oil.

Posted by jez at 10:43 AM

June 30, 2008

I've Seen the Future, and It Has a Kill Switch

Bruce Schneier:

It used to be that just the entertainment industries wanted to control your computers -- and televisions and iPods and everything else -- to ensure that you didn't violate any copyright rules. But now everyone else wants to get their hooks into your gear.

OnStar will soon include the ability for the police to shut off your engine remotely. Buses are getting the same capability, in case terrorists want to re-enact the movie Speed. The Pentagon wants a kill switch installed on airplanes, and is worried about potential enemies installing kill switches on their own equipment.

Microsoft is doing some of the most creative thinking along these lines, with something it's calling "Digital Manners Policies." According to its patent application, DMP-enabled devices would accept broadcast "orders" limiting capabilities. Cellphones could be remotely set to vibrate mode in restaurants and concert halls, and be turned off on airplanes and in hospitals. Cameras could be prohibited from taking pictures in locker rooms and museums, and recording equipment could be disabled in theaters. Professors finally could prevent students from texting one another during class.

The possibilities are endless, and very dangerous. Making this work involves building a nearly flawless hierarchical system of authority. That's a difficult security problem even in its simplest form. Distributing that system among a variety of different devices -- computers, phones, PDAs, cameras, recorders -- with different firmware and manufacturers, is even more difficult. Not to mention delegating different levels of authority to various agencies, enterprises, industries and individuals, and then enforcing the necessary safeguards.

Posted by jez at 6:19 AM

June 27, 2008

Verizon's fiber guru talks strategy

Marguerite Reardon:

Fios also has helped future-proof Verizon's network. While its cable competitors buckle under the pressure of peer-to-peer traffic on their networks, Verizon has enough capacity in its network, thanks to its fiber upgrades, to weather the storm unscathed and work on its own timetable to find more efficient ways to handle peer-to-peer traffic.

Mark Wegleitner, Verizon's senior vice president of technology in charge of broadband and consumer services, has helped develop and drive Verizon's fiber strategy. I sat down with him at the Nxtcomm trade show in Las Vegas last week to talk about a wide variety of topics, including the controversy over Comcast's treatment of BitTorrent traffic, faster speeds for Fios, and what the company plans to do next when it reaches its 2010 goal of passing 18 million homes with fiber.

The Madison area is stuck with an aging telco infrastructure. Neither AT&T, nor TDS have any plans to upgrade their networks to the home. Not good.... Verizon FIOS Deployment Map.

Posted by jez at 2:10 PM

June 19, 2008

Walter Bagehot Was Wrong

James Grant:

The governor of the Central Bank of Luxembourg raised some eyebrows when he questioned the integrity of the fast-growing balance sheet of the European Central Bank. Yves Mersch, a member of the ECB's governing council as well as the Ben Bernanke of the Grand Duchy of Luxembourg, raised the issue at a gathering of the International Capital Market Association in Vienna two weeks ago.

Insofar as a currency derives its strength from the balance sheet of the issuing central bank, the euro is unsound and becoming more so, as Mr. Mersch did not quite say. We, however, will say it for him. In fact, we will say the same for most of the leading monetary brands, that of the United States not excluded. The mortgage mess is the immediate cause of the new debasement. A long-held article of central banking dogma is the remote cause.

Mr. Mersch landed on the front page of the Financial Times by acknowledging that the ECB is accepting a dubious kind of mortgage collateral in exchange for loans to the world's liquidity-parched financial institutions. In so many words, Mr. Mersch charged that the commercial banks are gaming the central bank, a situation he called of "high concern." Reading Mr. Mersch, we thought of Thomson Hankey.

Posted by jez at 11:00 PM

Tammy Baldwin's Office on the Farm Bill

Dear Mr. Zellmer:

Thank you for contacting me about the 2007 Farm Bill (the Farm, Nutrition, and Bioenergy Act, H.R. 2419). It is good to hear from you, and I apologize for the delay in my response.

As you know, the U.S. House of Representatives recently considered the 2007 Farm Bill. The Farm Bill is a comprehensive piece of legislation which touches on a number of agriculture-related issues, including commodity price support programs, nutrition programs, alternative energy, and rural development.

After a considerable amount of deliberation in a conference committee, the House and Senate each passed a conference report that represented the resulting policy compromises. You may be interested to know that I joined my colleagues in the House of Representatives to pass this conference report by a vote of 318 to 106.

While I believe that the U.S. House of Representatives should have taken this opportunity to implement expansive agricultural policy reforms, I supported the conference report because it does contain some noteworthy improvements in the Farm Bill programs. The alternatives to reauthorizing the Farm Bill this year were to extend the previous version of the farm bill or to revert to regulations dating to the 1940s. In my view, neither of these alternatives are desirable or acceptable.

The aspects of the conference report that I strongly support include expanding and updating the Milk Income Loss Contract (MILC) program, and investments in nutrition programs that help 38 million American families afford healthy food. For the first time, the MILC program will include the cost of feeding dairy cows as a factor for triggering program payments, a relief for Wisconsin dairy farmers who face increasing costs of inputs. The nutrition title includes an additional $10 billion to expand food stamp eligibility and increase the minimum weekly benefit, as increase funding for many worthy programs such as food banks, food pantries, soup kitchens, and schools providing healthy snacks to students.

I am pleased that the legislation makes progress in lowering the income limits for wealthy farmers to qualify for federal farm payments, although I believe these limits should be made even lower to ensure payments go to those farmers who need the aid the most. Under the conference report, individuals making over $500,000 in non-farm income, or $750,000 in farm income, would become ineligible for federal payments. This report ceases Conservation payment eligibility at incomes of $1 million. In contrast, the 2002 Farm Bill discontinued federal farm payments to individuals earning over $2.5 million.

The conference report also makes progress on several issues I have long-supported. These reforms include levying the Dairy Import Assessment against companies that import dairy products into the U.S., and implementing mandatory Country Of Origin Labeling (COOL) for all meats. I am also very pleased it contains a farm flexibility pilot program that will allow farmers receiving direct payments for commodities to opt out of these payments on a year-by-year basis, and grow fruits and vegetables for processing. This program is especially meaningful for the Upper Midwest, and I am hopeful the program will prove successful and be expanded in coming agricultural authorizations. Additionally, the 2007 Farm Bill conference report:

Increases the Wetland Reserve Program's (WRP) enrollment ceiling to more than 3 million acres;

Reestablishes the WRP's budget authority at $1.3 billion over five years, through 2012;

Authorizes the Conservation Reserve Program (CRP) to enroll 32 million acres from 2010-2012, a 7.2 million acre decrease from the 2002 Farm Bill;

Provides a one-time $84 million mandatory funding for the McGovern-Dole International Food for Education and Child Nutrition Program during fiscal year 2009, $24 million over previous discretionary funding levels;

Rejects Farm Credit Service proposals to expand their lending authority and deviate from their stated mission;

Directs the Department of Agriculture (USDA) to review studies on the use of random source animals for research, and consider the recommendations in those studies to end the black market trade in stolen pets;

Provides for penalties for animal fighting ventures, increases penalties for violations of the Animal Welfare Act, and prohibits the importation of puppies under the age of 6 months.

You may be interested to know that shortly after the House vote the Senate also passed the conference report by a vote of 81 to 15. I am disappointed that the President vetoed this bill, but I am pleased that both the House and Senate voted to override the President's veto. However, due to an administrative error the bill vetoed by the President and passed into law by a veto override was only part of the conference report Farm Bill. As a result, I joined my colleagues in the House in passing the same version of the Farm Bill as new legislation. This identical copy is still pending in the U.S. Senate, and will likely be passed. It is my hope that in light of the veto override the President will acknowledge widespread support for this Farm Bill and sign it instead of forcing a second veto override vote.

In a country as vast as ours, crafting legislation that addresses vastly different regional and industrial priorities is painstaking, and often contentious, work. I believe the 2007 Farm Bill conference report does represent some positive changes in our agricultural policy, and it is my hope that a consensus will exist for far greater reforms in the future. Please know that I will keep your thoughts in mind as the U.S. Congress continues to consider the 2007 Farm Bill.

Again, thank you for sharing your views. Your opinion matters to me. If I can be of service to you in any other way, please do not hesitate to let me know. As a security precaution, all mail sent to Congress is first irradiated. This process causes significant delays. To ensure the fastest response, I encourage all constituents who have access to the internet to contact me through my website at http://tammybaldwin.house.gov.


Tammy Baldwin
Member of Congress

P.S. I regularly send out email updates on federal issues and opportunities. These reports also include regular surveys through which you can express your opinion. If you would like to receive these email updates, you may sign up by visiting my website at: http://www.house.gov/formbaldwin/IMA/get_address_news.htm

Posted by jez at 9:30 PM

June 17, 2008

June 11, 2008

Russ Feingold's Office on the Farm Bill & Special Interest Legislation from Herb Kohl

via email, in response to my message:

Dear Mr. Zellmer,

Thank you for contacting me to share you concerns about the Farm Bill. I appreciate hearing from you. While I was disappointed by the lack of reform to the commodity programs in the Farm Bill, significant improvements were made in other areas of the bill to assist small and medium farmers.

As you may know, the House approved the final version of the Farm Bill on May 14, 2008, by a vote of 318-106. The Senate passed it the following day by a vote of 85-15. The President vetoed the Farm Bill on May 21, 2008. The House voted to override the veto the same day, and the Senate the next day. I was pleased to support both the Farm Bill itself and the motion to override the President's veto. The bill became law on May 22, 2008, although an enrollment error meant that the Trade and Food Aid Title was not included. The House and Senate have passed a new version of the bill to correct the error.

For instance, the bill restores the payment rate for the Milk Income Loss Contract (MILC) program and, for the first time, factors in the cost of production for farmers. MILC is vital for Wisconsin's dairy farmers, and is an extremely responsible program as it kicks in when times are tough and covers only a certain amount of milk. Thus, it targets small and medium farms rather than subsidizing the expansion of large farms.

The bill also makes significant improvements to nutrition programs, including Food Stamps and the Emergency Food Assistance Program, totaling more than $10 billion over the five-year life of the bill and accounting for about three-quarters of total spending in the bill. Other positive provisions of the Farm Bill include a new livestock title, which contains important competition provisions and over $4 billion for agriculture conservation programs. The bill also provides more funding for smaller-scale programs such as the Community Food Program, Value-Added Producer Grants, and the Beginning Farmer and Rancher Program.

I was also able to have several amendments accepted to the bill on a range of issues important to Wisconsin farmers. I was particularly pleased to have an amendment accepted to strengthen the office for small farmers at USDA.

I share the disappointment I have heard from some Wisconsinites that the reforms in the Farm Bill don't go far enough. I supported a number of amendments to reform the bill when the Senate considered it in December 2007, including an amendment offered by Senators Byron Dorgan (ND) and Chuck Grassley (R-IA) to cap subsidy payments to the largest producers. I also filed an amendment with Senator Robert Menendez (D-NJ) to trim direct payments. In addition, I supported and cosponsored an amendment offered by Senators Sherrod Brown (D-OH) and John Sununu (R-NH) to trim government subsidies to crop insurance companies, and voted in favor of an amendment offered by Senator Amy Klobuchar (D-MN) that would have prohibited farm support payments to wealthy individuals. I was disappointed that these amendments failed. The final bill does reform the commodity support programs by modestly trimming direct payments and reducing the adjusted gross income eligibility cap, but more reforms are needed.

To read my full statement on the bill, please visit here. While we may not always agree, I look forward to hearing from you in the future.

Speaking of our politicians, Bruce Murphy notes some special interest assistance from Senator Kohl and link to this New York Times article:
Senator Herb Kohl, Democrat of Wisconsin, persuaded the Appropriations Committee and the full Senate to accept legislative language benefiting Aurora BayCare Medical Center in Green Bay.

The hospital’s lobbyists include Theodore H. Bornstein, a former chief of staff for Mr. Kohl, and Bill Broydrick, whose Web site quotes a description of him as “the state’s No. 1 super lobbyist.”

The Kohl provision would allow the Green Bay hospital to expand by building a new cardiac catheterization laboratory.

The issue often puts lawmakers in the awkward position of having to choose between doctors and hospitals.

Critics say that when doctors have a financial stake in a hospital, they have an incentive to send patients there because they not only receive professional fees for their services, but also can share in hospital profits and see the value of their investment increase. Such arrangements can lead to greater use of hospital services and higher costs for Medicare and other insurers, say the critics, including many in Congress.

My email to Senator Kohl:
Dear Senator Kohl:

I hope this message finds you well.

I am writing to express my disappointment at your support for the "Aurora BayCare Medical Center in Green Bay" carve out in what I believe to be upcoming health care legislation.


Such narrow special interest treatment is at odds with your "Nobody's Senator but Yours" mantra.

These carve outs simply increase costs for middle America.

I am disappointed.

Best wishes,

Jim Zellmer

Posted by jez at 1:19 PM

June 6, 2008

Senator Kohl's Office on the Farm Bill

I received an email from Senator Kohl's office regarding my recent Farm Bill Vote (he voted for it) correspondence:

Dear Mr. Zellmer:

Thank you for sharing your thoughts with me about the 2008 Farm Bill. I appreciate hearing from you and apologize for the delay in my response.

As you know, Congress recently overrode President Bush's veto of the 2008 Farm Bill and I supported that effort. Though it may not be perfect, I believe this farm bill puts our rural communities first and provides the means to enhance the quality of life for people in Wisconsin and throughout the nation. It
provides substantial improvements to federal nutrition programs, increased commitment to conservation, and a significant investment in renewable energy.

I was particularly pleased that the bill continues the national dairy assistance program I helped create in the 2002 Farm Bill. The Milk Income Loss Contract (MILC) program is a way to provide dairy farmers support when prices plummet. And when prices are strong, the program goes dormant. The Farm Bill extends the MILC program through fiscal year 2012, increases the quantity of per-farm eligible milk to more accurately reflect trends in the dairy industry, and restores the original 45% payment rate beginning in 2009. Moreover, it includes a 'feed cost adjuster' which acknowledges the tremendous challenges many dairy producers face because of high feed prices.

The Farm Bill will also help millions of low-income Americans who struggle to put food on the table each day. It includes nearly $7.8 billion for improvements to the Supplemental Nutrition Assistance Program (SNAP), formerly the Food Stamp Program, and $1.26 billion for The Emergency Food Assistance Program (TEFAP), which helps supply food banks. The SNAP will see a number of important reforms that include an increase in the minimum benefit (which had not been updated for 30 years) and changes to encourage retirement and education savings among program participants.

The legislation shows a continued commitment to conservation. It extends and expands important programs like the Wetlands Reserve Program (WRP), the Conservation Reserve Program (CRP), the Conservation Stewardship Program (CSP), and the Environmental Quality Incentive Program (EQIP). These programs work well in Wisconsin and deserve to be sufficiently funded.

I am pleased that the Farm Bill also contains a provision I helped author to facilitate interstate commerce for state-inspected meat. Wisconsin produces some of the finest specialty meat products in the world and our processors are gaining more and more attention across the region. Enhancing their ability to move state-inspected products in interstate commerce has been an objective of mine for many years and this bill represents a significant step forward on that front.

While I voted for and would have preferred stricter farm program payment limits and eligibility requirements, the bill does make progress on this front. I heard from many Wisconsinites on these complex topics and ultimately came to the conclusion that this new Farm Bill was one that I could support.
We have renewed our commitment to rural America to ensure that farming remains a viable industry in our nation.

Your input was important to me and I will certainly have your comments in mind as the new Farm Bill is implemented.


Herb Kohl
U.S. Senator

Posted by jez at 12:07 PM

June 4, 2008

Message to Tammy Baldwin, Russ Feingold and Herb Kohl Regarding the Farm Bill Vote

I sent this email to Representative Tammy Baldwin along with Senators Russ Feingold and Herb Kohl regarding their support for the pork laden farm bill:

Dear ___________:

I am writing to express my disappointment in your vote for the pork laden farm bill.

Similar to the support given for a 5% large corporation offshore tax rate a few years ago, this legislation benefits only the rich on the backs of middle class taxpayers.

I am surprised and disappointed.

Jim Zellmer

Much more on the farm bill here.

Wisconsin Democrat Ron Kind, to his credit, voted against the farm bill:

“Today Congress squandered the best opportunity in decades to reform our wasteful, outdated subsidy system.

“We need a Farm Bill, but we need the right kind of farm bill. Let me be clear: This bill is not a reform bill. It is not even the illusion of reform. Continuing to send unlimited subsidies to millionaires is not reform. Creating a new disaster entitlement program is not reform. And setting ourselves up for billions in unaccounted spending is not reform. The president was right to veto it.

“As families kick off their summer vacations this weekend facing the highest gas prices ever, skyrocketing food costs, stagnant paychecks and a lagging economy, I urge them to ask their member of Congress how they could justify sending unlimited taxpayer subsidies to agribusinesses and wealthy landowners making up to $2.5 million a year in profit.

Related: Wisconsin Radio Network notes that Green Bay Democrat Steve Kagen and Wausau Democrat David Obey also voted for the farm bill.

2007 Farm Subsidy Database by Congressional District.

Posted by jez at 8:50 AM

May 29, 2008

Propaganda Is Now Officially Hip

Virginia Postrel:

"An interesting Metafilter discussion on Obama campaign graphics." (Via Design Observer.)

I'll note, however, that propaganda has been hip for at least 40 years. All you have to do is check out a book like War Posters: Weapons of Mass Communications and you'll fine that through WWII, most of the graphic propaganda is put out by governments and their supporters and is mostly patriotic and pro-military (whichever country or military that might be).

Posted by jez at 8:10 AM

May 28, 2008

A Tear: Vietnam Approves a $4.5 Billion Dollar Coastal Casino Project. Atlantic City on the South China Sea?

Bruce Stanley:

Communist Vietnam is set to become the latest country in Asia to embrace Las Vegas-style casinos, with a Canadian property developer planning to break ground Saturday on the first phase of a $4.5 billion casino-resort project on the nation's southern coast.

The project, called Ho Tram, will be the biggest foreign investment to date in Vietnam, said Michael Aymong, chairman of Toronto-based Asian Coast Development Ltd., the project's lead investor, with a 30% stake. Its main partner in the project is New York hedge fund Harbinger Capital LLC, which has a 25% share.

The initial phase will cost $1.3 billion and consist of two five-star hotels with a combined 2,300 rooms and a casino with approximately 90 gambling tables, 500 slot machines and an area for VIP customers. When completed in 2015, the resort will comprise five hotels with 9,000 rooms and a second casino, Mr. Aymong said.

Ho Tram also will target vacationing families, with features including an 18-hole golf course designed by Greg Norman, a Cirque du Soleil theater, and a site for guests to swim with dolphins.

"It's a needed project in Vietnam" that, in spite of the country's poor infrastructure, will be able to "effectively compete" with integrated resorts in neighboring China, Malaysia and Singapore, Mr. Aymong said

Susan Spano offers another perspective after a recent visit.

The photo was taken on Highway 1 several hundred kilometers northeast of Ho Chi Minh City (Saigon).

Posted by jez at 8:30 AM

May 18, 2008

Cities Startup Broadband Efforts

Christopher Rhoads:

Internet traffic is growing faster than at any time since the boom of the late-1990s. Places like Chattanooga are trying hard not to get stuck in the slow lane.

Some 60 towns and small cities, including Bristol, Va., Barnsville, Minn., and Sallisaw, Okla., have built state-of-the-art fiber networks, capable of speeds many times faster than most existing connections from cable and telecom companies. An additional two dozen municipalities, including Chattanooga, have launched or are considering similar initiatives.

The efforts highlight a battle over Internet policy in the U.S. Once the undisputed leader in the technological revolution, the U.S. now lags a growing number of countries in the speed, cost and availability of high-speed Internet. While cable and telecom companies are spending billions to upgrade their service, they're focusing their efforts mostly on larger U.S. cities for now.

Smaller ones such as Chattanooga say they need to fill the vacuum themselves or risk falling further behind and losing highly-paid jobs. Chattanooga's city-owned electric utility began offering ultrafast Internet service to downtown business customers five years ago. Now it plans to roll out a fiber network to deliver TV, high-speed Internet and phone service to some 170,000 customers. The city has no choice but to foot the bill itself for a high-speed network -- expected to cost $230 million -- if it wants to remain competitive in today's global economy, says Harold DePriest, the utility's chief executive officer.

Madison's pitiful broadband infrastructure could certainly use a shot in the arm.

Posted by jez at 10:30 PM

May 17, 2008

Laptop Security While on Travel

Bruce Schneier:

Last month a US court ruled that border agents can search your laptop, or any other electronic device, when you're entering the country. They can take your computer and download its entire contents, or keep it for several days. Customs and Border Patrol has not published any rules regarding this practice, and I and others have written a letter to Congress urging it to investigate and regulate this practice.

But the US is not alone. British customs agents search laptops for pornography. And there are reports on the internet of this sort of thing happening at other borders, too. You might not like it, but it's a fact. So how do you protect yourself?

Encrypting your entire hard drive, something you should certainly do for security in case your computer is lost or stolen, won't work here. The border agent is likely to start this whole process with a "please type in your password". Of course you can refuse, but the agent can search you further, detain you longer, refuse you entry into the country and otherwise ruin your day.

Posted by jez at 2:01 AM

May 8, 2008

"Crisis of Confidence in Dane County and Madison Leadership"

Jason Shepard, speaking on UW-Madison graduate Greta Van Susteren's program mentioned that a "crisis of confidence exists in Dane County and Madison Leadership". Jason discussed the growing controversy over murder victim Brittanny Zimmerman's botched 911 call.

Fox News link (will disappear at some point)

40MB MPEG4 download for ipod/iphone/playstion and others. CTRL Click here.

Posted by jez at 9:36 AM

May 1, 2008

A Tip of the Hat to Jason Shepard

Grad student and former NYC teacher Jason Shepard has set the standard for investigative reporting over the past few years. His Isthmus expose of the 911 problems in Zimmerman's recent murder is just the latest in a string of substantive works on the local scene.

Shepard has done an exemplary job diving deep into a number of subjects, particularly our $367,806,712 school district.

A link to many of Jason's articles.

Posted by jez at 9:59 PM

April 22, 2008

McCain's Font

Steven Heller:

Can a typeface truly represent a presidential candidate? It depends on the typeface and the candidate. John McCain’s printed material relies on Optima, a modernistic sans serif designed by the German type designer Hermann Zapf in 1958 that was popular among book and magazine designers during the 1970s.

While it is not the most robust sans serif ever designed, it is not entirely neutral either. It embodies and signifies a certain spirit and attitude. And if a typeface is not just an empty vessel for meaning, but a signifier that underscores personality, then it is useful in understanding what the candidates’ respective typefaces are saying about them and their campaigns.

So, I asked various designers, design curators and critics, who get rather heated when it comes to analyzing type design, to weigh in on two questions regarding Senator McCain’s campaign logo set in a bold version of Optima: What does Optima say about John McCain? And should this, or any, candidate be judged by a typeface?

Posted by jez at 2:22 PM

Another Round for the Guild

Private Equity Hub:

The Guild Inc., a Madison, Wis.-based online art retailer, has raised $2.5 million in Series C funding, according to a regulatory filing. Shareholders include Dolphin Equity Partners
The Guild, a company with many lives, must be north of $50,000,000 (!) in funds raised over the years.

Related: A Pravda View of Guild and 1/11/2006: Guild Raises another $6M.


Posted by jez at 8:35 AM

April 14, 2008

On Energy: "Some home truths about tomorrow"

Ed Wallace:

It’s about 179 miles from Fort Worth to the campus of Texas A&M in College Station, and I drove there to speak at the Student Conference On National Affairs on Thursday, February 21. It was not lost on me that making the round trip between the Metroplex and A&M’s Memorial Student Center meant that I would use the equivalent of one barrel of oil to discuss the fallacy of America’s quest for energy independence.
My slight amusement continued when one of the first students I met had arrived late from Chicago because his luggage had been misrouted and lost by the airline. I doubted that he got the irony of how much fuel it took to bring him the 1,100 miles from Chicago to Texas to attend SCONA 53, which was titled "Creating A Sustainable Global Energy Policy."

Simply Selfish: Ethanol or Food

My talk came after an address by the Ambassador of Azerbaijan and before talks by Mark Albers, a senior vice president of Exxon, and by Virginia Governor George Allen. I had been asked to speak that afternoon about the magic of alternative fuels’ saving the day and alleviating the current energy crisis – assuming that high price is the sole determining factor in today’s energy debate. I felt the best way to do that was to discuss the beginnings of the automotive age in both America and the world, to relate to the students and professionals attending how, in the 1920s, these exact same circumstances led to a campaign to wean the American public off of oil – and why today the debate is back, but the end results will be the same.

I usually find it best to use 4th-grade math to show the fallacy of the again-current line of thinking about alternative fuels such as ethanol. After all, most people seem shocked to learn the fact that a new 2008 Suburban, designed to run on E85 ethanol and in which the owner uses only E85 as fuel, requires four acres of farmland be dedicated to corn production to keep that one vehicle running. But it’s true: That Suburban owner may live in a beautiful home on a quarter acre in the Metroplex, but somewhere in America four acres of corn must be set aside to provide fuel for just that one SUV.

Posted by jez at 9:07 AM

April 3, 2008

"The National Data Center and Personal Privacy"

Arthur Miller:

I can’t tell you how excited I was when I found this magazine on eBay. I thought that the author was this Arthur Miller. An article about the personal privacy threats inherent in massive government databases, written by the author of the Crucible sounded amazing. It turns out that the author was actually this Arthur Miller, and I don’t think anyone could have done a better job.

This is the most amazingly prescient article I’ve ever read. When people write about the future they are usually wrong. When people write about the future of computers, they are usually even more wrong. This article got everything right. If you changed the tense and a few bits of jargon, then handed to me and told me it was written by the EFF, I’d believe it.

Just to give you an idea of how right he was on even the basic computer stuff, here’s the second paragraph of the article. Keep in mind that this is what desktop computers looked like in 1967.

“The modern computer is more than a sophisticated indexing or adding machine, or a miniaturized library; it is the keystone for a new communications medium whose capacities and implications we are only beginning to realize. In the foreseeable future, computer systems will be tied together by television, satellites, and lasers, and we will move large quantities of information over vast distances in imperceptible units of time.”

Forty-one years ago Arthur R. Miller laid out all of the privacy threats that we face now. The power that credit reporting databases have over us. The illegal government use of our financial and phone records. The attempt to build a master database tying all of these together. The fact that the government might consider you a threat if you so much as sent a Christmas card to someone the government has on a watch list. It’s all here. He basically predicted and laid out all of the arguments against the Total Information Awareness program and the current NSA programs that have been so much in the news.

It’s nice to know there were people who were so ahead of the curve in trying to protect our rights, and it’s a tragedy that more people didn’t listen. I think it speaks strongly to the need to pay attention to this stuff now, because this problem will only get worse.

Posted by jez at 9:14 AM

March 31, 2008

"Quote du jour"

Brad Templeton:

Cable is not a monopoly. You can choose from any cable company you want in America, just by moving your house.
@ Freedom to Connect.

Posted by jez at 9:06 AM

Press Coverage & Political Accountability

James Snyder & David Stromberg:

In this paper we estimate the impact of press coverage on citizen knowledge, politicians' actions, and policy. We find that a poor fit between newspaper markets and political districts reduces press coverage of politics. We use variation in this fit due to redistricting to identify the effects of reduced coverage. Exploring the links in the causal chain of media effects -- voter information, politicians' actions and policy -- we find statistically significant and substantively important effects. Voters living in areas with less coverage of their U.S. House representative are less likely to recall their representative's name, and less able to describe and rate them. Congressmen who are less covered by the local press work less for their constituencies: they are less likely to stand witness before congressional hearings, to serve on constituency-oriented committees (perhaps), and to vote against the party line. Finally, this congressional behavior affects policy. Federal spending is lower in areas where there is less press coverage of the local members of congress.
This is an interesting subject. Locally, I've seen very little traditional media coverage of our elected officials actual voting record. Via Tyler Cowen.

Posted by jez at 8:33 AM

March 24, 2008

Gasoline Tax Comparison

Via The Economist.

Posted by jez at 4:57 PM

March 18, 2008

Lessig Launches Change Congress 3/20/2008

Via email:

Colorado Congressman Wayne Allard has taken over $45,900 from ConAgra
Food Corporation and over $405,000 from the oil and gas industry. His campaign is fueled by over $3.6 million in PAC contributions. He is just one example of a problem that affects members of both parties. And just one example of why the system in Washington D.C. puts special interests before the American people.

That system will not change on its own. It will only change if people like you and me stand up and fight for it.

A month ago I considered running for Congress to help bring about this change from the inside. Many of you supported the idea and urged me to run. After thinking very hard about whether such a campaign
could win, I decided against it. And instead I am asking you to join me in a new grassroots effort to Change Congress.

Learn more here.

Posted by jez at 5:24 PM

March 14, 2008

Tibet: Fire on the Roof

The Economist:

THE Chinese authorities had been fearing trouble, but nothing on this scale. An orgy of anti-Chinese rioting convulsed the Tibetan capital, Lhasa, on Friday March 14th, leaving security forces uncertain how to respond. For many hours mobs controlled the streets, burning and looting as they pleased.

The approach of Beijing’s Olympic games in August is seen by many of Lhasa’s residents as an opportunity to put their contempt for Chinese rule on display to the outside world. China’s desire to ensure the games are not marred by calls for boycotts is tying its hands as it considers how to respond.

Your correspondent, the only foreign journalist with official permission to be in Lhasa when the violence erupted, saw crowds hurling chunks of concrete at the numerous small shops run by ethnic Chinese lining the streets of the city’s old Tibetan quarter. They threw them too at those Chinese caught on the streets—a boy on a bicycle, taxis (whose drivers are often Chinese) and even a bus. Most Chinese fled the area as quickly as they could, leaving their shops shuttered.

Posted by jez at 7:57 PM

March 12, 2008

So, the Fed is in the Mortgage Business?

Steve Barr:

Apparently, Britney has some shaky assets on her balance sheets. Well, don’t worry Britney. You’re not the only one.

In an announcement that has sent produced a large and varied reaction, the FED has announced that they will attempt to bail out banks by letting them use mortgage-backed securities as collateral for loans. This move is unprecedented in the Fed’s history. For the first time, they are entering the mortgage business. Since its inception, the Fed has used open market operations (the buying and selling of treasury bonds) to expand or contract the monetary policy. A good detailed discussion is here, at interfluidity. Simplistically, the Fed’s balance sheet looks like:

A Bailout, for Everyone by Steven Pearlstein:
Last week, it was a $200 billion cash-for-bond swap for the banks.

This week, it was a $200 billion bond-for-bond swap for the big investment houses.

If they keep this up, pretty soon you'll be able to walk into any Federal Reserve bank and hock that diamond brooch you inherited from Aunt Mildred.

Forget all that nonsense about the Bernanke Fed being too timid or behind the curve. In the face of what is turning into the most serious financial market crisis since the Great Depression, the Fed has been more aggressive and more creative in using its limitless balance sheet -- in effect, its ability to print money -- than at any time in history.

We can argue till the cows come home about whether this is a bailout for Wall Street. It is -- but only to the extent that it is also a bailout for all of us, meant to prevent a financial and economic meltdown that drags everyone down with it. In broad strokes, we're going through a massive "de-leveraging" of the economy, wringing out trillions of dollars of debt that had artificially driven up the price of real estate and financial assets, and, more generally, allowed Americans to live beyond their means. The Fed's goal has not been to impede that process, simply to make sure that it proceeds in an orderly fashion. But even that has required central bank intervention that is unprecedented in scale and scope. And despite yesterday's huge rally in the stock market, Fed officials warn that this de-leveraging is nowhere near finished.

Posted by jez at 7:39 PM

March 10, 2008

Evaluating the Proposed Delta/Northwest Merger

Victor Cook:

Doug Parker had a vision. His successful America West had completed a merger agreement with bankrupt US Airways Group on May 19, 2005. With this deal he planned to become the dominant low cost carrier in the country as the new US Airways (NYSE: LCC). And he would be its CEO. The next day CNN reported that "Parker thinks he can buck history and make a success out of merging his more successful airline with one in bankruptcy." The company's press release said:
Building upon two complementary networks with similar fleets, closely- aligned labor contracts and two outstanding teams of people, this merger creates the first nationwide full service low-cost airline.
On September 29, 2005 trading began for Mr. Parker's new carrier. On that day its stock closed a little above $20. Then in a remarkable run-up to November 24, 2006 it was trading at around $63. Doug Parker seemed close to realizing his vision. Close, but no cigar. The run-up was followed by a steady erosion in shareholder value that on Friday March 7, 2008 saw his stock close at just under $11. That represented an 82% loss in value from its peak and a 46% loss from its initial price. What went wrong?
Northwest is Madison's largest carrier. This proposed merger, combined with high oil prices that will dramatically reduce the number of small jets servicing airports like ours may require rethinking local air service.

Posted by jez at 11:20 AM

NSA's Domestic Spying Grows As Agency Sweeps Up Data

Siobhan Gorman:

Five years ago, Congress killed an experimental Pentagon antiterrorism program meant to vacuum up electronic data about people in the U.S. to search for suspicious patterns. Opponents called it too broad an intrusion on Americans' privacy, even after the Sept. 11 terrorist attacks.

But the data-sifting effort didn't disappear. The National Security Agency, once confined to foreign surveillance, has been building essentially the same system.

The central role the NSA has come to occupy in domestic intelligence gathering has never been publicly disclosed. But an inquiry reveals that its efforts have evolved to reach more broadly into data about people's communications, travel and finances in the U.S. than the domestic surveillance programs brought to light since the 2001 terrorist attacks.

Posted by jez at 11:05 AM

March 5, 2008

Kill the Farm Bill

Alex Tabarrok:

Farm subsidies in the United States go to just a handful of crops, corn, wheat, cotton, soybeans, and rice. Most fruits and vegetables are not subsidized, at least not directly but don't forget opportunity cost!

David Zetland has the dirt.

Posted by jez at 9:22 AM

March 3, 2008

Panoramic Political Scenes in Ohio & Texas

The Washington Post has posted some great scenes from tomorrow's primary states.

Posted by jez at 7:58 PM

February 24, 2008

2007 Farm Subsidy Database by Congressional District and a Wisconsin Earmark Update

Environmental Working Group. Wisconsin's Ron Kind ranks 37th @ 264,820,105 and Tammy Baldwin ranks 61st @ $140,993,229.

Audrey Hoffer takes a useful look at Wisconsin politician's use of earmarks to further redistribute federal income taxes - otherwise known as pork:

Earmark is a dirty word.

That's the tacit message of Taxpayers for Common Sense, which describes itself as a progressive nonpartisan budget watchdog.

An earmark is a project in their district for which members of Congress designate funds. Earmarks often are awarded without public hearings or other congressional debate over their merits. Congress inserted 12,881 earmarks worth $18.3 billion into this year's spending bills, according to the watchdog group.

While some taxpayers and their representatives decry earmarks as boondoggles and wasteful government spending, others defend them as a way to accomplish important objectives while bringing jobs and benefits to their constituents.

Taxpayers for Common Sense 2008 Earmark Database.

Wisconsin political earmark (deficit) spending:

Herb Kohl $153,438,700

Russ Feingold: $0

Dave Obey: $102,137,950

Steve Kagen: $24,547,700

Tammy Baldwin: $16,443,500

Tom Petri: $12,999,000

Ron Kind: $11,433,000

Gwen Moore: $7,482,300

Paul Ryan: $5,396,000

Jim Sensenbrenner: $932,000

It would be interesting to compare campaign contributions to earmark recipients.

Hoffer closes with these quotes:

Steve Ellis, vice president of Taxpayers for Common Sense, said: "It's really easy to isolate an earmark and say it's a good thing, but if we do that, we miss the overall context. It's a zero-sum game. We need to make sure we spend every penny wisely."

Obey has his own reservations about the system and said last summer on the "Bill Moyers Journal" television show:

"The reason I hate earmarks is because they suck everybody in. They suck them into the idea that we have to be ATM machines for our districts, and so they focus on the tiny portion of most bills that are earmarks instead of focusing on the policy that is represented by the legislation that we produce.

Posted by jez at 7:12 PM

February 22, 2008

A Font We Can Believe in

Gary @ Helvetica, The Film:

Unless you’ve been avoiding television, newspapers, and all other forms of mass media for the past few months, you’ve probably seen Democratic presidential candidate Barack Obama’s “Change We Can Believe In” and “Stand for Change” banners. The typophiles among you have realized that the “change” font Obama’s campaign uses is Gotham, designed by Hoefler & Frere-Jones, originally as a commission for GQ Magazine.
The film Helvetica is well worth watching.

Posted by jez at 3:11 PM

February 19, 2008

4GW Meets Campaign '08: Is Obama inside Hillary's OODA Loop?

James Fallows, viewing events from Beijing:

I have known and liked Chuck Spinney for a very long time, since I wrote about him and his original "defense reform" colleagues, notably John Boyd and Pierre Sprey, in the Atlantic and in National Defense in the early 1980s. Boyd of course originated the concept of the "OODA Loop." This was the idea, derived from Boyd's "Patterns of Conflict" briefing, that the victor in any conflict would not necessarily be the stronger or better-prepared party. Rather it would be the one who recognized changing realities, and chose and implemented the right new course of action, faster than the opponent. Boyd came up with the theory by analyzing aerial combat among fighter planes, but in his view it could be applied to every sort of human contest, from sports to business to armed conflict.

(OODA stands for Observe, Orient, Decide, and Act. To react to changing reality faster than the opponent can, or to interfere with the opponent's ability to perceive realistically what is happening to him, is to "get inside his OODA loop." Everything anyone would ever want to know about Boyd, Spinney, Sprey; about their contemporary colleagues like Chet Richards, Donald Vandergriff, WIlliam Lind, GI Wilson, etc; and about OODA loops and the related concept of 4GW, or Fourth Generation Warfare, can be found at two excellent, related "Defense and the National Interest" sites, here and here.)

And the theory also applies to politics, as Spinney has argued in a recent item about the contest for the Democratic nomination. His analysis, "Is Obama inside Hillary's OODA loop?" comes after the jump. The incidents he mentions are all familiar; what's at least a little new is his combination of them in Boyd-style perspective -- in particular Bill Clinton losing his sense for how the battle is shifting. I am posting this before the Wisconsin results are known, and before the (in my view bogus) "plagiarism" flap has died down, so that Spinney's observation can be tested against those results.

Interesting and useful read.

Posted by jez at 3:40 PM

February 16, 2008

"Madison’s council to clarify open records law" - Fascinating

Cara Harshman via a friend's email:

On the heels of an open records requests in Michigan that publicized an extramarital affair of Detroit Mayor Kwame Kilpatrick, Madison city officials are looking to set standards for changing technologies in the city.

After a year of detailed study and work, Mayor Dave Cieslewicz and Ald. Zach Brandon, District 7, will introduce an ordinance to the City Council later this month clarifying the forms of electronic communication city employees use that are open to the public.

Rapidly changing electronic communication technology, like text messages, instant messages and Facebook prompted Brandon to ask, “What is an open record and what is not an open record?”

Currently, the Wisconsin public record law says electronic communications are open records, but does not specify which types of electronic communication are included, Brandon said.

“[The city] has gone the extra step to define what that means,” Brandon said. Bill Lueders, president of the Wisconsin Freedom of Information Council said the city essentially used the state’s record law as a model to update its own open records law.

This will certainly be more fodder for the courts. Much more on Wisconsin open records here.

Posted by jez at 8:19 AM

February 13, 2008

Herb Kohl's Office on FISA

I phoned Senator Kohl's Washington office [(202) 224-5653] regarding his vote against the Dodd/Feingold telco immunity amendment yesterday. The telephone operator said that Senator Kohl supported an amendment that would have the government (we taxpayers) defend the telcos in court and that these cases should be heard in a court where intelligence information could be shared. John McCain voted with Senator Kohl, while Barack Obama voted with Russ Feingold and Hillary Clinton did not vote. David Isenberg has more as does Dave Farber. The Electronic Frontier Foundation posted a summery here.

Posted by jez at 9:38 AM

February 12, 2008

Barack Obama in Madison

A few photos from a late arriving visitor to the University of Wisconsin's Kohl Center.madisonobamazmetro22008.jpg
While I did not arrive early enough to catch the speech inside the Kohl Center, I always find it interesting to note the political opportunism during these events. Governor Doyle, Milwaukee Mayor Tom Barrett and local Mayor Dave Cieslewicz all rated a nod from Obama. John Kerry's 2004 appearance with Bruce Springsteen included a number of local politicians, including Elizabeth Burmaster, Wisconsin Department of Public Instruction Superintendent (a nonpartisan position).

Finally, a few Ron Paul supporters promoted their candidate in front of the proceedings.

Posted by jez at 8:52 PM

The List: The World’s Best Places to Be an Immigrant

Foreign Policy:

Throughout the developed world, countries are tightening up border security, building fences, and raising citizenship requirements. But there are still a few places left that are willing to say: “Give us your huddled masses.”

Posted by jez at 9:27 AM

February 4, 2008

Fixing US broadband: $100 billion for fiber to every home

Nate Anderson:

The US is in desperate need of 100Mbps "big broadband." That's the conclusion of a new report from EDUCAUSE (PDF), a group that represents IT managers at over 2,200 colleges and universities. But these 100Mbps connections are coming slowly; in the meantime, countries like Japan already have them. To avoid falling further behind, the report calls for a national broadband policy to be passed this year, one that includes $100 billion for a fiber-to-the-home infrastructure that will connect every household and business in the country.

The report opens by citing the familiar, dreary facts: US broadband might now be widely available, but it's slow and relatively expensive. Between 1999 and 2006, the US fell from third place to 20th in the International Telecommunications Union's broadband usage measurements. When it comes to average connection speeds, the US isn't beaten just by Japan but also by France, Korea, Sweden, New Zealand, Italy, Finland, Portugal, Australia, Norway, Luxembourg, the United Kingdom, and Germany. And it's not about population size or density, either; Finland, Sweden, and Canada beat us on most broadband metrics despite having lower population density. Finally, we're getting beat on price, coming in 18th worldwide when it comes to cost per megabyte.

Posted by jez at 12:01 AM

January 29, 2008

Security vs. Privacy

Bruce Schneier:

If there's a debate that sums up post-9/11 politics, it's security versus privacy. Which is more important? How much privacy are you willing to give up for security? Can we even afford privacy in this age of insecurity? Security versus privacy: It's the battle of the century, or at least its first decade.

In a Jan. 21 New Yorker article, Director of National Intelligence Michael McConnell discusses a proposed plan to monitor all -- that's right, all -- internet communications for security purposes, an idea so extreme that the word "Orwellian" feels too mild.

The article (now online here) contains this passage:

In order for cyberspace to be policed, internet activity will have to be closely monitored. Ed Giorgio, who is working with McConnell on the plan, said that would mean giving the government the authority to examine the content of any e-mail, file transfer or Web search. "Google has records that could help in a cyber-investigation," he said. Giorgio warned me, "We have a saying in this business: 'Privacy and security are a zero-sum game.'"

I'm sure they have that saying in their business. And it's precisely why, when people in their business are in charge of government, it becomes a police state. If privacy and security really were a zero-sum game, we would have seen mass immigration into the former East Germany and modern-day China. While it's true that police states like those have less street crime, no one argues that their citizens are fundamentally more secure.

Posted by jez at 8:45 AM

January 21, 2008

Oil Demand, the Climate and the Energy Ladder

Jad Mouawad:

Energy demand is expected to grow in coming decades. Jeroen van der Veer, 60, Royal Dutch Shell’s chief executive, recently offered his views on the energy challenge facing the world and the challenge posed by global warming. He spoke of the need for governments to set limits on carbon emissions. He also lifted the veil on Shell’s latest long-term energy scenarios, titled Scramble and Blueprints, which he will make public next week at the World Economic Forum in Davos, Switzerland. Following are excerpts from the interview:

Q. What are the main findings of Shell’s two scenarios?

A. Scramble is where key actors, like governments, make it their primary focus to do a good job for their own country. So they look after their self-interest and try to optimize within their own boundaries what they try to do. Blueprints is basically all the international initiatives, like Kyoto, like Bali, or like a future Copenhagen. They start very slowly but before not too long they become relatively successful. This is a model of international cooperation.

Posted by jez at 7:22 PM

January 11, 2008

The Airport Security Follies

Patrick Smith:

Six years after the terrorist attacks of 2001, airport security remains a theater of the absurd. The changes put in place following the September 11th catastrophe have been drastic, and largely of two kinds: those practical and effective, and those irrational, wasteful and pointless.

The first variety have taken place almost entirely behind the scenes. Explosives scanning for checked luggage, for instance, was long overdue and is perhaps the most welcome addition. Unfortunately, at concourse checkpoints all across America, the madness of passenger screening continues in plain view. It began with pat-downs and the senseless confiscation of pointy objects. Then came the mandatory shoe removal, followed in the summer of 2006 by the prohibition of liquids and gels. We can only imagine what is next.

To understand what makes these measures so absurd, we first need to revisit the morning of September 11th, and grasp exactly what it was the 19 hijackers so easily took advantage of. Conventional wisdom says the terrorists exploited a weakness in airport security by smuggling aboard box-cutters. What they actually exploited was a weakness in our mindset — a set of presumptions based on the decades-long track record of hijackings.

In years past, a takeover meant hostage negotiations and standoffs; crews were trained in the concept of “passive resistance.” All of that changed forever the instant American Airlines Flight 11 collided with the north tower. What weapons the 19 men possessed mattered little; the success of their plan relied fundamentally on the element of surprise. And in this respect, their scheme was all but guaranteed not to fail.

Posted by James Zellmer at 2:55 PM

January 8, 2008

The Search Party: Google Squares off with its Capitol Hill Critics

Ken Auletta:

In June, 2006, Sergey Brin, one of the co-founders of Google, went to Washington, D.C., hoping to create a little good will. Google was something of a Washington oddity then. Although it was a multibillion-dollar company, with enormous power, it had no political-action committee, and its Washington office had opened, in 2005, with a staff of one, in suburban Maryland. The visit, which was reported in the Washington Post, was hurried, and, in what was regarded by some as a snub, Brin failed to see some key people, including Senator Ted Stevens, of Alaska, who was then the chairman of the Commerce Committee and someone whose idea of the Internet appeared to belong to the analog era. (He once said that a staff member had sent him “an Internet.”) Brin told me recently, “Because it was the last minute, we didn’t schedule everything we wanted to.” It probably didn’t help that his outfit that day included a dark T-shirt, jeans, and silver mesh sneakers.

Brin did meet with Senators John McCain and Barack Obama, and they spoke about “network neutrality”—an effort that Google and other companies are making to insure that the telephone and cable companies that provide high-speed access to the Internet don’t favor one Web site over another. Around the time of Brin’s visit, an organization called Hands Off the Internet, financed in part by telecommunications companies, ran full-page newspaper advertisements in which it accused Google of wanting to create a monopoly and block “new innovation”; one ad featured a grim photograph of a Google facility housing a sinister-looking “massive server farm.” Brin recognized it as a warning. “I certainly realized that we had to think about these things, and that people were going to misrepresent us,” he said. “We should be entitled to our representation in government.”

Fascinating to see Herb Kohl mentioned here. He's not been active on many issues so it is surprising to see him pick Google (perhaps there's something on the other side?)

Posted by James Zellmer at 9:34 AM

David Cay Johnston on How the Rich Get Richer

Fresh Air:

Investigative reporter David Cay Johnston explores in his new book how in recent years, government subsidies and new regulations have quietly funneled money from the poor and the middle class to the rich and politically connected.

Posted by James Zellmer at 9:10 AM

January 5, 2008

The $100M Giveaway

Ed Wallace:

Put down your highlighter and don’t bother checking your lottery tickets, because the State of Texas has announced a $100 million winner. Only it’s actually 30,000 drivers living in ozone goal non-attainment areas, and it will be doled out $3,000 at a time. And if you or your family are constrained by a certain income level, if you drive a vehicle 10 years old or older that’s been registered in the county for over a year and passed an emissions test up to 15 months ago, yet failed one recently, then the state is willing to pay you $3,000 to scrap your vehicle and get something newer. All in the name of clean air.

Considering that Texas is notoriously clutch-fisted with money for public projects, particularly when the bank account starts with $100 million, this is big news. Especially if your vehicle’s more than 10 years old and has extremely high mileage – or the kind that brings virtually nothing when you go to trade it in – this is a money-for-nothing proposition that can benefit you tremendously. So, before we go on with today’s column, check out the rules for this program at www.driveacleanmachine.com, and then call 1-800-898-9103 to apply for your voucher.

Posted by James Zellmer at 5:58 PM

January 2, 2008

Funny Endorsement

Adam Curry (who lives in England) endorses Ron Paul. Perhaps it is all about the weak dollar vs. pound?

Posted by James Zellmer at 8:51 AM

December 10, 2007

Rolling Over for AT&T: "Video Competition" Bill is a Major Missed Opportunity for Wisconsin

A reader forwarded this full page, color advertisement paid for by large telco (AT&T, etc.) front group TV4us. The advertisement appeared in this morning's Wisconsin State Journal. The State Journal supports the AT&T "video competition bill".
Click to view a larger version

Brian Clark has more:

Vergin said he's pleased he'll only have to get one state franchise, instead of having to deal with the 33 different municipalities in his service area.

“That’s a big benefit for us and what I think the bill is all about,” he said.

Vergin said his company’s prices won’t be any lower than Charter’s. But he's convinced his firm will be able to offer better service and options to bundle cable, phone and wireless service.

He said he was opposed to proposed rules that would have required his company to serve entire communities. He also rejected suggestions telecommunications firms should be ordered to run fiber optic to homes and businesses.

“The 100 requirement would limit us,” he said. “And we are running fiber optic to new construction, but not existing buildings. I just don’t think the government should tell us what technology we should use. The market should decide that. I also think have 50 percent of any area covered is better than none.”


(Charles) Higley (Citizen's Utility Board Executive Director) said he, too, would have liked to have seen a requirement that companies build fiber optic cable.

“We’ve had promises to build it before and it didn’t come,” he said. “In the future, if not already, broadband is an essential service like telephone and electricity. We think government should require essential services.”

The Governor and Legislature appear to have obtained nothing while giving away significant regulatory changes. A disaster for Wisconsin business, schools residents and public agencies. What a deal for the large telcos: spend money on lobbying and advertising but not fiber to the home. Classic rentier approach: milk the slow copper network that we've paid for many times over as long as possible.

Keep in mind Verizon's FIOS, a fiber to the home product installed in many communities [Service Map] - none in Wisconsin.

I recently had the opportunity to use basic FIOS service while on travel. The service was symmetrical - that is, upload and download speeds are the same. Local dsl services are not symmetrical - AT&T and TDS limit upload speeds to a very slow 768kpbs.

This archaic approach is awful for those of us creating, uploading and backing up media (photos, videos and music, not to mention data heavy scientific applications). FIOS provides at least 5 to 50X the speeds of the fastest dsl service generally available in the Madison area. Slow networks limit entrepreneurial opportunities, particularly emerging home based businesses.

Finally, I spoke briefly some years ago with then Gubernatorial candidate Jim Doyle at a campaign event. I mentioned Wisconsin's very poor broadband infrastructure. He said he understood these issues but could not address them in his first term but hoped to in a second. Will Doyle leave a legacy of aging, slow copper networks? I put a call into Susan Goodwin, Chief of Staff, for an update.


A bit of sugar for AT&T. This giant organization is fully capable of implementing a modern, high quality, fast fiber network. They simply need to make the strategic decision, as Verizon has, to upgrade their network. How much longer must we pay for the old, old copper lines? I've received excellent, economical service from AT&T's cell network.


Posted by James Zellmer at 6:52 PM

December 9, 2007

Mayor Dave's 2007 Property Tax Letter

Madison Mayor Dave Cieslewicz:[72K PDF]

Enclosed you will find your 2007 property tax bill. While the City of Madison processes your taxes, the property tax bill is actually made up of five parts. The Madison Metropolitan School District has the largest share, followed by the City, Dane County, and Madison Area Technical College. A small amount is also levied for the state forestry tax.

The primary concern in our community today is the quality of life and safety in our neighborhoods. This summer and fall, I attended eight listening sessions across the City on these issues. People told me they wanted their City government to make sure their neighborhoods are safe and healthy. In response, the City budget makes the following investments:

  • Increasing Police Resources. In addition to 30 new officers, the City budget includes two additional crime analysts to make sure we' re not j ust stronger, but also smarter, in use of our resources.
  • Targeting Bad Landlords. The addition of three new building inspectors and our new nuisance abat ement ordinance give us the tools we need to get after landlords who don't maintain their properties or adequatel y screen their tenants.
  • Strengthening Neighborhoods. We doubled the Emerging Nei ghborhoods Fund to $200,000, giving us quick-access resources to prevent small problems from becoming bigger, more expensi ve ones. We' re launching a Neighborhood Indicators Project to give us statistical early warning signs of neighborhood decline. The budget also funds another graffiti elimination crew to keep our neighborhoods free of gang-related messages.
  • Programs for Young People. We are increasing Communi ty Service programs by over 7%, funding initiatives for after school and youth programs, and doubling the number of youth conservation corps crews.
The City budget also includes park improvements, expanded library hours at some branches, road
projects, energy efficiency initiatives, a new effort to clean our beaches, and other programs to maintain and improve Madi son' s quality of life.
These words are a useful look at the Mayor's perspective on local taxpayers.

Posted by James Zellmer at 3:21 PM

December 8, 2007

Everyone's Poop

Nate Blakeslee:

“Down the drain, off the brain” is how most people think about it, but human waste—or effluent, as the professionals call it—has a lot to tell us about how we live, what we eat, and who we are.

They say that shit runs downhill. This is commonly understood to mean that the world is an unfair place, except among those few people who actually work with the substance, for whom it is considered something of an article of faith. This is because municipal sewerage systems are powered almost entirely by gravity, which means that when working properly, they move millions of gallons of sewage a day across considerable distances with only a minimum expenditure of energy, a feat of efficiency virtually unparalleled in the annals of engineering. When sewage stops running downhill, as it inevitably does from time to time, very bad things indeed can happen, as they did on Pecan Springs Road, in the Austin neighborhood known as Windsor Park, one morning last September.

I was spending the day with an Austin Water Utility emergency-response crew when dispatch got a call from a woman reporting that two rooms of her house were flooded with sewage. Our crew consisted of a TV truck, piloted by a twenty-year line-maintenance veteran named David Eller, and a flusher truck, driven by another longtime utility employee, named Dale Crocker. At the house, Eller, who wears wraparound sunglasses and looks a little like the country singer Dwight Yoakam, unspooled a thick red cable from the back of his truck. On the end of the cable was a camera about the size of a roll of quarters, which Crocker shoved down into a PVC clean-out pipe near the curb in the front yard. The woman leaned on a walker in her driveway, looking worried.

Excellent Article.

Posted by James Zellmer at 9:35 PM

November 28, 2007

Ministers of Silly Walks

"Sudden Debt":

Put yourself at Bernanke's shoes; better yet, get Paulson's shoes too and combine them: wear Ben's shoe on the left and Hank's on the right. The goal is to try and walk a straight and narrow a line for the economy, without embarrassing yourself. I submit that this is, in fact, impossible.

On the one foot, the Fed is getting screamed at to lower interest rates by at least another 200-250 basis points: PIMCO, Greenspan, The Conference Board, every bank and broker in town and abroad - they all demand and expect cheaper money for a variety of reasons, all immediately and extremely mercenary. The bond fund managers are salivating at the potential of capital gains from short and medium treasurys, the banks and brokers need the massive cash bailout to stanch the bloodletting from their toxic paper and real estate portfolios, the businessmen need the consumer to keep spending and Greenspan wishes above all to remain relevant - even in retirement.

Posted by James Zellmer at 9:08 AM

November 18, 2007

Sarkozy's Speech to Congress

French President Nicholas Sarkozy [8.5MB mp3 Audio File]:

From the very beginning, the American dream meant proving to all mankind that freedom, justice, human rights and democracy were no utopia but were rather the most realistic policy there is and the most likely to improve the fate of each and every person.

America did not tell the millions of men and women who came from every country in the world and who--with their hands, their intelligence and their heart--built the greatest nation in the world: "Come, and everything will be given to you." She said: "Come, and the only limits to what you'll be able to achieve will be your own courage and your own talent." America embodies this extraordinary ability to grant each and every person a second chance.

Here, both the humblest and most illustrious citizens alike know that nothing is owed to them and that everything has to be earned. That's what constitutes the moral value of America. America did not teach men the idea of freedom; she taught them how to practice it. And she fought for this freedom whenever she felt it to be threatened somewhere in the world. It was by watching America grow that men and women understood that freedom was possible.

What made America great was her ability to transform her own dream into hope for all mankind.

C-SPAN Video.

Posted by James Zellmer at 12:10 AM

November 16, 2007

The Weird World of Indecency


So as readers of this site know, I represent Robert Greenwald (pro bono) in a some fair use matters. My first work was on his film Outfoxed. Robert has been continuing the campaign against Fox. His latest is a very clever set of attacks on the "indecency" of Fox News. (The purpose is to push the FCC to unbundle cable channels). Watch the video below and you'll see the point.

Posted by James Zellmer at 10:31 AM

November 7, 2007

Former Technician 'Turning In' AT&T Over NSA Program

Ellen Nakashima:

His first inkling that something was amiss came in summer 2002 when he opened the door to admit a visitor from the National Security Agency to an office of AT&T in San Francisco.

"What the heck is the NSA doing here?" Mark Klein, a former AT&T technician, said he asked himself.

A year or so later, he stumbled upon documents that, he said, nearly caused him to fall out of his chair. The documents, he said, show that the NSA gained access to massive amounts of e-mail and search and other Internet records of more than a dozen global and regional telecommunications providers. AT&T allowed the agency to hook into its network at a facility in San Francisco and, according to Klein, many of the other telecom companies probably knew nothing about it.

Klein is in Washington this week to share his story in the hope that it will persuade lawmakers not to grant legal immunity to telecommunications firms that helped the government in its anti-terrorism efforts.

Perhaps our elected officials might consider this matter vis a vis AT&T's flawed video "competition" bill. unlikely

Posted by James Zellmer at 9:34 PM

November 6, 2007

$1.5M Congressional Earmark to Madison's ConjuGon via Tammy Baldwin

Earmarkwatch.org. Via Lessig.

Posted by James Zellmer at 2:37 PM

October 23, 2007

Inside Wal-Mart's Bid to Slash State Taxes - Our Political Class at Work

&Jesse Drucker:

About a decade ago, Wal-Mart adopted another approach, following advice from Ernst & Young. Wal-Mart transferred ownership of its stores to various in-house real-estate investment trusts. REITs pay no corporate income tax as long as they pay out at least 90% of their income to shareholders as dividends, which are usually taxed. Wal-Mart paid tax-deductible rent to those REITs. For one four-year period, the setup saved the retailer an estimated $230 million on its tax bill, even though the rent payments never left the company.

That strategy was the focus of a Wall Street Journal article in February. Since then, at least six states, including New York, Illinois, Maryland and Rhode Island, have passed laws attempting to prohibit the maneuver, which also has been used by banks and other retailers such as AutoZone Inc. The practice is being challenged by tax authorities in at least four other states, court records show.

Legislative sausage supported by our elected officials only makes these "loopholes" worse. Here's an example that both Russ Feingold and Herb Kohl supported - a 5.25% offshore earnings tax rate for major corporations. More here. Another example of special interest legislation.

Posted by James Zellmer at 4:25 PM

October 18, 2007

The Subprime Collapse Didn't Start Bothering the Bush Administration until Wall Street Bankers Started Whimpering

Daniel Gross:

When individual borrowers began to suffer, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson didn't seem overly concerned. The market would clear out the problem through the foreclosure process. Loans would get written off; properties would change hands and be resold. When upstart subprime mortgage lenders ran into trouble, Bernanke and Paulson shrugged again. The market would clear out the problem through the bankruptcy process. Subprime companies like New Century Financial filed for Chapter 11, others liquidated or restructured, and loans made to the lenders were written down. Meanwhile, Paulson and Bernanke assured us that the subprime mess was contained.

But as the summer turned to fall, and the next several shoes dropped, their attitude changed. And that is because the next group of unfortunates to fall victim to subprime woes were massive banks. In recent years, banks in New York, London, and other financial capitals set up off-balance-sheet funding vehicles called SIVs, or conduits. The entities borrow money at low interest rates for short periods, say 30 to 90 days, and use the funds to buy longer-term debt that pays higher interest rates. To stay in business, the conduits must continually roll over the short-term debt. But as they searched for higher yields, some conduits stuffed themselves with subprime-mortgage-backed securities. And when lenders became alarmed at the declining value of those holdings, they were reluctant to roll over the debt. Banks thus faced a choice. They could either raise cash by dumping the already-depressed subprime junk onto the market, or bring the conduits onto their balance sheets and assure short-term lenders they'd get paid back.

Related: Credit Risk is Rising Again.

Posted by James Zellmer at 8:17 AM

October 17, 2007

Morning Workout Zeitgeist, or "Let's turn the Capitol into a Casino/Waterpark"

Props to the early morning workout group for this inspiration.

Posted by James Zellmer at 9:38 AM

October 13, 2007

On Political Corruption

Larry Lessig turns his attention to political corruption. Video. Well worth watching.

Posted by James Zellmer at 10:27 PM

October 3, 2007

Mayor Bloomberg's Manifesto

via Richard Edelman:

Mayor Bloomberg, aka Mayor Mike, made a few important points that are as relevant to business as to government yesterday in his Keynote Address at the Economist’s Conference on The Future of New York City as the World’s Business Hub.

1) A Mayor (or any leader) cannot be short term focused nor obsessed with photo opportunities. One has to be as excited about completing a new water tunnel for the City as about glamorous new buildings in Lower Manhattan. Infrastructure upgrades cannot wait; his Administration put more money into the water tunnel project than the five previous mayors combined.

Posted by James Zellmer at 8:10 AM

September 30, 2007

Prosecutor Over-Reaching

Dee Hall covers an issue vital to our democracy - over zealous prosecutors:

A Wisconsin State Journal investigation, however, found instances in which court records and transcripts back up his critics' claims that he has crossed ethical lines. Stretching back to the early 1990s, Humphrey has been the subject of criticism accusing him of ethical lapses, poor judgment and unreasonably aggressive tactics. Critics have included defendants, defense attorneys, judges and three of the four district attorneys who've supervised him.

The State Journal examined more than 2,000 pages of documents, including records from Humphrey's office files obtained under the open-records law. The newspaper also interviewed more than two dozen attorneys, judges, defendants, legal experts and law-enforcement officials.

The newspaper's investigation found that the veteran prosecutor:

— Wrongfully kept a young man in the Dane County Jail for a month, even after he was repeatedly notified of the error.

— Made false or misleading statements in affidavits, in correspondence and in court hearings to advance his case or to cover up mistakes.

— Charged two witnesses and had a third arrested for failing to show up for trials that had been cancelled — a tactic his boss had warned him was "an abuse of your authority."

— Aggressively pursued seven felony charges against a bankrupt father who was $2,846 behind in child support — a prosecution the judge said should "make one wonder about the integrity of (the) justice system."

— Twice pursued vehicular-homicide charges using speed estimates his own experts told him were inflated.

One of those cases was Humphrey's failed prosecution of Adam Raisbeck, a 17-year-old from Marshall. Humphrey's actions in the case prompted a blunt reprimand from his boss, and the misconduct findings that are headed to the Supreme Court.

US District Judge Lewis Kaplan recently expressed concern over "prosecutor's expansive power".

Posted by James Zellmer at 6:15 PM

September 23, 2007

France & America


Paris Sunrise: August 2007 (taken while zooming around in a Paris cab driven by a former exchange student - who spent a year on a Iowa dairy farm).

Interesting interview with French President Nicolas Sarkozy:

“I want to tell the American people that the French people are their friends,” he said. “We are not simply allies. We are friends. I am proud of being a friend of the Americans. You know, I am saying this to The New York Times, but I have said it to the French, which takes a little more courage and is a little more difficult. I have never concealed my admiration for American dynamism, for the fluidity of American society, for its ability to raise people of different identities to the very highest levels.”

Mr. Sarkozy, who has been accused of being too enamored of all things American, said he considered France and the United States to be on equal footing and somehow better than many others, because they believe that their values are universal and therefore destined to “radiate” throughout the world. The Germans, the Spaniards, the Italians, the Chinese, by contrast, do not think that way, he said.

I had an opportunity to visit with a French Foreign Legion officer while on travel. This man mentioned that he had served with Americans in many places, including Afghanistan, Bosnia and other locales. I asked him for an impression of America after these interactions (he's also travelled to the states with family): Resources. He said that when the Americans arrive, they always seem to have incredible resources. An well equipped base can be in service within "days".

Posted by James Zellmer at 10:24 PM

September 9, 2007

State of Wisconsin Federal Spending Profile

Eagle Eye:

The following tables show aggregated prime contract dollar totals for the state of Wisconsin. Key data elements (agencies, companies, metropolitan areas) are ranked by their FY2006 - FY2007 YTD Totals. All aggregated data is copyrighted by Eagle Eye Publishers, Inc. Tables may not be reproduced without written permission from Eagle Eye.

Posted by James Zellmer at 10:20 PM

Parsing Earmarks with Our Entrenched Political Class: David Obey....

John Solomon & Jeffrey Birnbaum:

Rep. Jeff Flake (R-Ariz.) confronted David R. Obey (D-Wis.), chairman of the House Appropriations Committee, on the House floor in March over this practice, noting that a spending bill then under debate contained $35 million for a risk-mitigation program at a federal space-exploration facility, even though the measure had been certified to contain no earmarks.

"We have passed some good rules with regard to earmark reform and transparency," Flake said. "But we have found a way around them already." Obey said that the provision was not an earmark under the rules. "An earmark is something that is requested by an individual member," Obey said. "This item was not requested by any individual member; it was put in the bill by me."

Two months later, Obey again rebuffed Flake when Flake pointed out that a supposedly earmark-free bill on the House floor contained an allocation of $8.7 million to ward off floods in New York. The provision was not called an earmark, Flake noted, but Rep. Nita M. Lowey (D-N.Y.) put out a news release applauding the provision and its potential benefit to her district.

Much more on earmarks, here.

Posted by James Zellmer at 7:07 AM

September 4, 2007

Your DNA, Please

The Economist:
Rapid advances in genetic testing promise to transform medicine, but they may up-end the insurance business in the process “IF YOU can make a good soufflé, you can sequence DNA.” That assertion sounds preposterous, but Hugh Rienhoff should know. When his daughter was born about three years ago, she suffered from a mysterious disability that stunted her muscle development. After many frustrated visits to specialists, Dr Rienhoff, a clinical geneticist and former venture capitalist, decided to sequence a specific part of her genome himself. He discovered that her condition, which most resembled a rare genetic disorder known as Beals's syndrome, was probably due to a new genetic mutation. “Without a lab and for just a few hundred dollars, you can contract or outsource almost all the steps,” he explains. What a well-connected and highly motivated scientist in California can do today the rest of the world will be able to do tomorrow. Indeed, a number of firms are already offering tests for specific ailments (or predispositions to ailments) directly to the public, cutting out the medical middle-man. Dr Rienhoff, for his part, will soon launch MyDaughtersDNA.org, a not-for-profit venture intended to help others to unravel the mysteries of their family's genes in the way that he unravelled those of his own.
Posted by James Zellmer at 9:21 PM

September 3, 2007


Presidential Candidate in waiting Fred Thompson weighs in on Federalism and the "compelling reasons not to look to the federal government first". Video

Posted by James Zellmer at 7:01 PM

September 2, 2007

Politicians "Hypocrisy on SUV's"

Arthur St. Antoine:

You can't make this stuff up, folks. Last week, during a speech to a labor group in Lake Buena Vista, Florida, Democratic presidential candidate John Edwards told the crowd: "One of the things [Americans] should be asked to do is drive more fuel-efficient vehicles." Asked if by saying that he was specifically telling Americans to give up their SUVs, Edwards replied, "Yes."

t's a wonder we Americans haven't choked to death on all the hypocrisy we've been force-fed of late. Naturally, Edwards owns and drives an SUV himself -- several, in fact. In Washington D.C. he often pilots his Cadillac SRX, while at his North Carolina spread -- a 28,000-square-foot manse more than ten times the size of the average American home -- one can easily spot several more those-aren't-Priuses (click to enlarge accompanying photo). Asked at the labor-group speech how he can reconcile asking other Americans to sacrifice while he's living so large, Edwards replied: "I have no apologies whatsoever for what I've done with my life. My entire life has been about the same cause, which is making sure wherever you come from, whatever your family is, whatever the color of your skin, you get a real chance to do something great in this country."

Posted by James Zellmer at 12:54 AM

August 31, 2007

Taxes & The Closing of Foreign Car Specialists

Marv Balousek:

Beebe bought the business after working there a year and Lucey sold the building to the family of President Kennedy. Beebe said the Kennedys bought the building because they wanted a business reason to visit Wisconsin where the former president's sister, Rosemary Kennedy, who was mentally retarded and lobotomized at age 23, spent decades at St. Coletta's in Jefferson until her 2005 death at age 86.

Beebe bought the building from the Kennedy family in 1979 and recently paid off the mortgage

Posted by James Zellmer at 11:38 AM

August 18, 2007

IRS Taxpayer's Advocacy Panel 2006 Report

Taxpayer Advocacy Panel: [PDF]
Posted by James Zellmer at 5:41 AM

August 11, 2007

"Where iPhones are Made"

A Wall Street Journal Video: An interesting look at Foxconn.

Posted by James Zellmer at 12:50 AM

August 9, 2007

Google News Hypocrisy: Walled Off Content

Mike Arrington:

TechMeme founder Gabe Rivera makes an interesting observation on the Google News story all over the blogosphere today.
One thing that bugs me: they’re now hosting original news content, yet they prohibit other aggregators from crawling it (per robots.txt restrictions and TOS). Of course Google News relies on the openness of other organizations with original news content.

Posted by James Zellmer at 9:21 AM

August 5, 2007

On Earmark Reform

Tyler Cowen:

Maybe not:
Eight months after Democrats vowed to shine light on the dark art of “earmarking” money for pet projects, many lawmakers say the new visibility has only intensified the competition for projects by letting each member see exactly how many everyone else is receiving...

The earmark frenzy hit fever pitch in recent days, even as the Senate passed new rules that allow more public scrutiny of them.

Far from causing embarrassment, the new transparency has raised the value of earmarks as a measure of members’ clout. Indeed, lawmakers have often competed to have their names attached to individual earmarks and rushed to put out press releases claiming credit for the money they bring home.

Posted by James Zellmer at 11:59 AM

August 4, 2007

Community Broadband Act would overturn bans on municipal broadband

Eric Bangeman:

A bill introduced into the House of Representatives this week will attempt to spur broadband development in the US by overturning existing state bans on municipal broadband deployments. Titled the Community Broadband Act of 2007, the bill (PDF) is cosponsored by Rep. Rick Boucher (D-VA) and Rep. Fred Upton (R-MI).

Currently, laws in Arkansas, Florida, Missouri, Texas, and a handful of other states prevent cities and towns from installing and operating their own broadband networks. Most of those laws were enacted in the wake of heavy lobbying from the telecommunications industry, which doesn't want to see competition coming from local governments.

Last year's attempted rewrite of the Telecommunications Act contained a similar provision but never made it to the floor of the Senate for a vote. With the state of broadband in the US a hot topic of discussion lately, both on Capitol Hill and around the country, Reps. Boucher and Upton may be able to find allies in Congress a bit more easily this time around. The congressmen are hopeful that, should it be passed, the Act would lead to more—and better—broadband options for US citizens.

Posted by James Zellmer at 3:54 PM

August 3, 2007

Wisconsin Congressional Earmarks: Spending our Children's Money via a Bloated Defense Bill

Taxpayers for Common Sense posted a very useful and in some ways surprising look at $3,000,000,000 in Congressional Earmarks attached to a $459,600,000,000 defense appropriation bill (not the entire defense budget). This amount is $40,000,000,000 more than last year's authorization (nice). Wisconsin congressional earmarks are lead by long time incumbent David Obey with $42,000,000, who also conveniently serves as Chair of the House Appropriations Committee. Obey's earmark methods have been criticized recently: John Solomon & Jeffrey Birnbaum writing in the Washington Post:

Democrats had complained bitterly in recent years that Republicans routinely slipped multimillion-dollar pet projects into spending bills at the end of the legislative process, preventing any chance for serious public scrutiny. Now Democrats are poised to do the same.

"I don't give a damn if people criticize me or not," Obey said.

Obey's spokeswoman, Kirstin Brost, said his intention is not to keep the projects secret. Rather, she said, so many requests for spending were made to the appropriations panel -- more than 30,000 this year -- that its staff has been unable to study them and decide their validity.

Here's a list of all earmarks (.xls file) attached to this defense bill. Wisconsin delegation earmarks:
  1. David Obey 42,000,000 (Unique ID Column 837, 854, 874, 921, 947, 1053, 1093, 1165)
  2. Tammy Baldwin $7,500,000 (Unique Id Column 56, 740, 1334)
  3. Steve Kagen $5,000,000 (Unique ID 496, 561, 562)
  4. Ron Kind $4,000,000 (Unique Id 1033 and 1083)
  5. Tom Petri $4,000,000 (Unique Id 782)
  6. Gwen Moore $2,000,000 (Unique Id 575, 898, 978 and 1151)
  7. Paul Ryan $0.00
  8. Jim Sensenbrenner $0.00 (shocking)
HouseDefenseEarmarks.xls. Congress's approval ratings (3%) are far below the President's (24%), which isn't saying much (Zogby Poll)

Much more on local earmarks, here [RSS Feed on earmarks]

Posted by James Zellmer at 11:00 PM

August 1, 2007

"The Plan is to have no Plan"

Tom Peters:

The deal is this—and I am drawn to it because it mirrors exactly my own half-century journey and rant: Namely "planners," especially "master planners," more or less believe that the plan is the thing—and that the messy process of implementation on the ground will take care of itself if The Plan is "right." (Reminiscent of Iraq, eh?) In The White Man's Burden, Easterly describes "planners" and "searchers." While planners treat the plan as holy writ, searchers live by rapid trial and error and learn through constant experimentation and adjustment. To wit:

"In foreign aid, Planners announce good intentions but don't motivate anyone to carry them out; Searchers find things that work and get some reward. Planners raise expectations but take no responsibility for meeting them; Searchers accept responsibility for their actions. Planners determine what to supply; Searchers find out what is in demand. Planners apply global blueprints; Searchers adapt to local conditions. Planners at the top lack knowledge of the bottom; Searchers find out what the reality is at the bottom. ... A Planner thinks he already knows the answers; he thinks of poverty as a technical engineering problem that his answers will solve. A Searcher admits he doesn't know the answers in advance; he believes that poverty is a complicated tangle of political, social, historical, institutional and technological factors; a Searcher hopes to find answers to individual problems only by trial and error experimentation. A Planner believes outsiders know enough to impose solutions; a Searcher believes only insiders have enough knowledge to find solutions, and that most solutions must be homegrown."

Posted by James Zellmer at 8:35 PM

July 30, 2007

A Conversation with Kip Hawley, TSA Administrator

Bruce Schneier:

In April, Kip Hawley, the head of the Transportation Security Administration (TSA), invited me to Washington for a meeting. Despite some serious trepidation, I accepted. And it was a good meeting. Most of it was off the record, but he asked me how the TSA could overcome its negative image. I told him to be more transparent, and stop ducking the hard questions. He said that he wanted to do that. He did enjoy writing a guest blog post for Aviation Daily, but having a blog himself didn't work within the bureaucracy. What else could he do?

This interview, conducted in May and June via e-mail, was one of my suggestions.

Posted by James Zellmer at 8:40 AM

July 23, 2007

Madison Ron Paul Supporter Sighting

Ron Paul has been getting some attention lately:

  • The Economist:
    Paul the Apostate.
    Is this would-be president brave or crazy?

    RON PAUL, a libertarian Republican congressman from Texas, likes to say what he thinks. And among the things he thinks is that the census is a violation of privacy. He has opted out of the congressional pension programme. He claims never to have voted for a tax increase, or for an unbalanced budget, or for a congressional pay rise and never to have gone on a congressional junket. He wants to return to the gold standard. Most notably, he strongly opposes the Iraq war and has from the beginning.

    Mr Paul is running for president. And according to the latest report from the Federal Election Commission, he is in better financial shape than John McCain, once the front-runner. Mr Paul raised $2.4m in the second quarter of the year, has roughly that much on hand, and has no debts. Mr McCain raised far more money but spent it just as fast, ending the quarter with $3.2m on hand but with $1.8m in debt.

  • Christopher Caldwell, writing in the NYT Magazine:
    Paul’s opposition to the war in Iraq did not come out of nowhere. He was against the first gulf war, the war in Kosovo and the Iraq Liberation Act of 1998, which he called a “declaration of virtual war.” Although he voted after Sept. 11 to approve the use of force in Afghanistan and spend $40 billion in emergency appropriations, he has sounded less thrilled with those votes as time has passed. “I voted for the authority and the money,” he now says. “I thought it was misused.”

    There is something homespun about Paul, reminiscent of “Mr. Smith Goes to Washington.” He communicates with his constituents through birthday cards, August barbecues and the cookbooks his wife puts together every election season, which mix photos of grandchildren, Gospel passages and neighbors’ recipes for Velveeta cheese fudge and Cherry Coke salad. He is listed in the phone book, and his constituents call him at home. But there is also something cosmopolitan and radical about him; his speeches can bring to mind the World Social Forum or the French international-affairs periodical Le Monde Diplomatique. Paul is surely the only congressman who would cite the assertion of the left-leaning Chennai-based daily The Hindu that “the world is being asked today, in reality, to side with the U.S. as it seeks to strengthen its economic hegemony.” The word “empire” crops up a lot in his speeches.

Posted by James Zellmer at 3:53 PM

July 7, 2007

NH Rejects Real ID Law

Marc Songini:
New Hampshire Gov. John Lynch last week signed into law a bill that forbids New Hampshire government agencies from complying with the controversial federal national identification act, or Real ID bill.

The New Hampshire Legislature had overwhelming passed the bill this past spring and handed it off to Lynch, who signed it on June 27.

"Real ID is intended to make us all safer, which I think we can all agree is a laudable goal," said Lynch in a statement. "However, I strongly believe Real ID's proposed haphazard implementation and onerous provisions would have the exact opposite effect. The federal government obviously did not think this burdensome system through and that is why we in New Hampshire are right to reject it."
Posted by James Zellmer at 9:43 PM

July 5, 2007

Sarkozy's "Lesson for America"

Interesting words from Newt Gingrich:

The country is at a crossroads, a different kind of place from where we've been before. The special interests seem more reactionary and entrenched than ever, the bureaucracies much larger. We need to marshal the courage to change, and we need to understand what needs changing.

Two books guide my thoughts these days. One is " Testimony: France in the Twenty-first Century," by the new French president, Nicolas Sarkozy. The second is American: " The Forgotten Man: A New History of the Great Depression," by Amity Shlaes. Together they form a map for the crossroads.

France has a reputation as a country averse to change. But President Sarkozy translated his general exhortation about the need to change and the importance of work into a simple and direct policy proposal: All overtime will be tax-free.

Posted by James Zellmer at 10:08 AM

June 27, 2007

When Public Records are Too Public

Jason Fry:

But then there's another set of personal details that have made their way online, and these documents are much more worrisome. Property deeds, marriage and divorce records, court files, motor-vehicle information and tax documents are increasingly being digitized, and contain a wealth of information that few of us would want online: Social Security numbers, birth dates, maiden names and images of our signatures. Local governments have rushed to put those documents online for a decade or so, often without scrubbing them of such information. And that's made them potentially fertile ground for busybodies, stalkers and identity thieves.

Betty "BJ" Ostergren, a 58-year-old from outside Richmond, Va., has made it her mission to alert people to the dangers of public records online. Ms. Ostergren is feisty bordering on ferocious: Her tactics include mailing letters to people alerting them that their personal information is online and posting copies of public documents (or links to them) displaying the personal information of circuit-court clerks and other politicians, including former House Majority Leader Tom DeLay and Florida Gov. Jeb Bush. (See her Web site, the Virginia Watchdog, here; this Washington Post profile of her is also a good read.)

Posted by James Zellmer at 10:47 AM

June 25, 2007

Eliminate Agriculture Subsidies?

Andrew Martin:

Mr. Kind, a six-term congressman, has introduced legislation that would drastically reduce farm subsidies while pouring more money into land conservation programs and rural development. He gathered 200 votes for a similar bill in 2002 and says he believes he has additional momentum this time around.

“There are so many reasons to do it,” Mr. Kind said, ticking off high crop prices and increasing pressure from foreign trading partners as two reasons to curb subsidies. “Now we are going to see if this Congress has the stomach for meaningful reform.”

To no one’s surprise, Mr. Kind’s crusade has raised the hackles of the powerful farm lobby and its supporters in Congress, who describe his proposal as naïve, ill conceived and even dangerous.

Posted by James Zellmer at 8:50 PM

June 19, 2007

The Next 10 Years: Focusing on Corruption

Lessig chooses an excellent new direction:

The bottom line: I have decided to shift my academic work, and soon, my activism, away from the issues that have consumed me for the last 10 years, towards a new set of issues. Why and what are explained in the extended entry below.

Three people I admire greatly are responsible for at least inspiring this decision.


Yet governments continue to push ahead with this idiot idea -- both Britain and Japan for example are considering extending existing terms. Why?

The answer is a kind of corruption of the political process. Or better, a "corruption" of the political process. I don't mean corruption in the simple sense of bribery. I mean "corruption" in the sense that the system is so queered by the influence of money that it can't even get an issue as simple and clear as term extension right. Politicians are starved for the resources concentrated interests can provide. In the US, listening to money is the only way to secure reelection. And so an economy of influence bends public policy away from sense, always to dollars.

Posted by James Zellmer at 9:03 AM

June 13, 2007

AT&T: Sticking it to us Yet Again

James Granelli:
AT&T Inc. has joined Hollywood studios and recording companies in trying to keep pirated films, music and other content off its network — the first major carrier of Internet traffic to do so.

The San Antonio-based company started working last week with studios and record companies to develop anti-piracy technology that would target the most frequent offenders, said James W. Cicconi, an AT&T senior vice president.

The nation's largest telephone and Internet service provider also operates the biggest cross-country system for handling Internet traffic for its customers and those of other providers.

As AT&T has begun selling pay-television services, the company has realized that its interests are more closely aligned with Hollywood, Cicconi said in an interview Tuesday. The company's top leaders recently decided to help Hollywood protect the digital copyrights to that content.

"We do recognize that a lot of our future business depends on exciting and interesting content," he said.

But critics say the company is going to be fighting a losing battle and angering its own customers, and it should focus instead on developing incentives for users to pay for all the content they want.
AT&T's complicity in domestic surveillance via an EFF lawsuit. Duncan Riley offers up a name change: American Tracking & Takedown. David Weinberger notes that AT&T is going to "exit the internet". It is disappointing to see our local politicians carrying the water for AT&T.
Posted by James Zellmer at 9:00 PM

June 9, 2007

There's a Difference Between Politic Support for (Big and Small) Business

A friend recently remarked over lunch that the Bush Administration was decidedly pro-busines. I quickly corrected him by pointing out the the Administration is pro "BIG" business. There's a difference. Case in point - Microsoft's political power within the Bush Justice Department (here's another example: 5.25% offshore corporate tax rate - supported by our Senators Feingold & Kohl):

Stephen Labaton:

Nearly a decade after the government began its landmark effort to break up Microsoft, the Bush administration has sharply changed course by repeatedly defending the company both in the United States and abroad against accusations of anticompetitive conduct, including the recent rejection of a complaint by Google.

In the most striking recent example of the policy shift, the top antitrust official at the Justice Department last month urged state prosecutors to reject a confidential antitrust complaint filed by Google that is tied to a consent decree that monitors Microsoft’s behavior. Google has accused Microsoft of designing its latest operating system, Vista, to discourage the use of Google’s desktop search program, lawyers involved in the case said.

The official, Thomas O. Barnett, an assistant attorney general, had until 2004 been a top antitrust partner at the law firm that has represented Microsoft in several antitrust disputes. At the firm, Justice Department officials said, he never worked on Microsoft matters. Still, for more than a year after arriving at the department, he removed himself from the case because of conflict of interest issues. Ethics lawyers ultimately cleared his involvement.

Mr. Barnett’s memo dismissing Google’s claims, sent to state attorneys general around the nation, alarmed many of them, they and other lawyers from five states said. Some state officials said they believed that Google’s complaint had merit. They also said that they could not recall receiving a request by any head of the Justice Department’s antitrust division to drop any inquiry.

Posted by James Zellmer at 2:58 PM

June 8, 2007

Obama T-Shirt Sighting

Seen on the street. I'm told these t-shirts are available on Obama's website.

Posted by James Zellmer at 5:09 PM

May 25, 2007

The Visible Man

Clive Thompson:

Hasan Elahi whips out his Samsung Pocket PC phone and shows me how he's keeping himself out of Guantanamo. He swivels the camera lens around and snaps a picture of the Manhattan Starbucks where we're drinking coffee. Then he squints and pecks at the phone's touchscreen. "OK! It's uploading now," says the cheery, 35-year-old artist and Rutgers professor, whose bleached-blond hair complements his fluorescent-green pants. "It'll go public in a few seconds." Sure enough, a moment later the shot appears on the front page of his Web site, TrackingTransience.net.

There are already tons of pictures there. Elahi will post about a hundred today — the rooms he sat in, the food he ate, the coffees he ordered. Poke around his site and you'll find more than 20,000 images stretching back three years. Elahi has documented nearly every waking hour of his life during that time. He posts copies of every debit card transaction, so you can see what he bought, where, and when. A GPS device in his pocket reports his real-time physical location on a map.

Posted by James Zellmer at 9:23 AM

May 24, 2007

Earmarks, "Phonemarking", Congressional Excesses and Wisconsin Representative David Obey

John Solomon & Jeffrey Birnbaum:

But the new majority is already skirting its own reforms.

Perhaps the biggest retreat from that pledge came this week, when House Appropriations Committee Chairman David R. Obey (D-Wis.) told fellow lawmakers that he intends to keep requests for earmarks out of pending spending bills, at least for now. Obey said the committee will deal with them at the end of the appropriations process in the closed-door meetings between House and Senate negotiators known as conference committees.

Democrats had complained bitterly in recent years that Republicans routinely slipped multimillion-dollar pet projects into spending bills at the end of the legislative process, preventing any chance for serious public scrutiny. Now Democrats are poised to do the same.

"I don't give a damn if people criticize me or not," Obey said.

Obey's spokeswoman, Kirstin Brost, said his intention is not to keep the projects secret. Rather, she said, so many requests for spending were made to the appropriations panel -- more than 30,000 this year -- that its staff has been unable to study them and decide their validity.

For instance, a new emergency spending bill for the Iraq war passed by the House this month had no specific earmarks, but it included a clause declaring that all the projects lawmakers had included in a previously vetoed bill were, in effect, included.

Likewise, the House Appropriations Committee report accompanying the Iraq supplemental spending bill vetoed by President Bush boldly declared: "This bill, as reported, contains no congressional earmarks, limited tax benefits, or limited tariff benefits." But it set aside money for pet projects including $25 million for spinach, $60 million for salmon fisheries and $5 million for aquaculture.

"Absolutely nothing has changed," said the Center for Defense Information's Winslow T. Wheeler, a Senate appropriations and national security aide who worked for both Democrats and Republicans over three decades before stepping down in 2002. "The rhetoric has changed but not the behavior, and the behavior has gotten worse in the sense that while they are pretending to reform things, they are still groveling in the trough."

A 2006 spending bill included $6.9M for Obey's Northern Wisconsin District. Much more on earmarks, including those spread around Madison, here.

More from the Examiner here.

Posted by James Zellmer at 2:46 PM

May 19, 2007

More US Inflation than Government Data Lets On?

Barry Ritholtz:

This week's Up and Down Wall Street looks at a recent analysis out of QB Partners. They are a hedge fund run by Lee Quaintance and Paul Brodsky.

QB put together an analysis of the US dollar, and why its ongoing weakness is both significant and ongoing. In their analysis they see the buck ultimately endingits run as the world's reserve currency.

The heart of the analysis is the quandry left for the current Fed chairman Ben Bernake by new PIMCO flack and former Fed Chair Alan Greenspan.

Poor Ben is confronted with a long term Hobson's choice: tighten the monetary and credit screws to bolster the dollar, go the other way -- loosen credit and lower rates even further to prop up asset prices. Why is this no choice at all? Because History has taught us the Central Bank will continue to "inflate the money supply and promote more credit, thereby sustaining asset prices at the expense of the purchasing power of the dollar."

There's something to this. Grocery shopping recently I noticed that Stonyfield's yogurts are now .99 each, up from .79 not so long ago. I also noticed that Listerine has shrunk their $6.50ish container, thereby increasing the price. I wonder how solid the Government data is?

Posted by James Zellmer at 3:55 PM

May 13, 2007

True Broadband: Vermont vs. Wisconsin

Tom Evslin:

An hour or so ago the Vermont House and Senate both gave final approval to a bill designed to make Vermont the nation’s first e-state. As defined in Vermont, e-stateness means cellular and adequate broadband coverage – fixed and mobile – everywhere in the state by 2010. The initial definition of adequate fixed broadband is 3 megabits per second service in at least one direction; but the bill contains a mechanism for ratcheting that up as requirements escalate. It is estimated that this requirement may be as high as 20 megabits in both directions by 2013.

Although the bill passed the Vermont House with an overwhelming 132-2 vote more than a month ago, it was by no means assured of passage. Vermont’s citizen legislature is hoping to adjourn for the year sometime tonight. There was a danger that the Senate would not have the time it needed to consider all aspects of this very large bill. But they did!

Quite a contrast to Wisconsin's process, where AT&T's stagnant infrastructure (and more importantly, their lobbying prowess) carries the day. Gotta love our forward thinking politicians.

Posted by James Zellmer at 11:30 AM

I-80: Inverse Traffic Therapy

I read with interest two recent posts regarding Madison's traffic congestion. I, too have a fleeting moment or two when I consider Madison's growing traffic congestion. It is difficult to use the words "Madison" together with "traffic congestion" after one has experienced the real, big city version. The photo above was taken recently while stuck in traffic on I-80. We're a long way from that. Regional growth certainly makes our transportation system a rather useful topic for discussion and action. My dream? TGV type train service connecting Chicago, Madison, Milwaukee and Minneapolis.

Posted by James Zellmer at 10:44 AM

May 3, 2007

Obama Blows it on MySpace

John Robb:

Micah Sifry has a great example of how the Obama campaign staff crushed a volunteer that had generated a huge following on MySpace. When the site Joe Anthony had sweated over reached epic proportions, the Obama campaign decided they needed to take control. So rather than hire the guy (or even fly out to meet him to interview/qualify him for the job) or even pay him a nominal sum ($40 k or so, for years of labor, a bargain no matter how you cut it), they went to MySpace (a company they were paying oodles to to help them promote the campaign at levels much less than Anthony's site) to seize control of the it.
Robb has a new book out "Brave New War", worth checking out.

OTOH, he's done the right thing on debate media, via Lessig.

Posted by James Zellmer at 8:43 AM

May 1, 2007

Red Tape for Tourists visiting the US

Cory Doctorow:
America is rated the world's most unfriendly destination for foreign travellers in a recent global poll. The War on Terror (which includes a $15 billion fingerprinting program that humiliates every visitor to America's shores and has yet to catch a single terrorist) has destroyed America's tourist industry, killing $94 billion worth of tourist trade, and 194,000 American jobs.
There's something to this challenging issue. A driver on Hong Kong told me recently that passengers destined for most countries, other than the USA can check in (and check luggage) downtown, then take the train to the airport and go right to the gate. The security "friction" does have significant costs all around.
Posted by James Zellmer at 8:18 AM

April 23, 2007

A few Suggestions for Governor Doyle Regarding the AT&T "Video Competition" Bill

AT&T's lobbying efforts to change Wisconsin's cable TV regulations has generated a refreshing amount of commentary. 5 years ago, during Governor Doyle's first Gubernatorial campaign, I had a chance to briefly talk with him after a debate with Scott McCallum. I mentioned Wisconsin's poor broadband infrastructure (we continue to stand still, which means we're falling further behind) and how AT&T had failed to invest in fiber networks. Doyle mentioned that he was aware of this, but could not do anything about it in a first term.....

Fast forward to 2007. This map, via broadbandreports.com displays the communities that have Verizon's fiber to the home available. Fiber networks provide much higher speeds and more citizen choice than our aging and long since paid for copper networks (we continue to pay and pay and pay for the old stuff).

Perhaps, Governor Doyle might put citizen's interests first and sign the bill only if:
  • Those who provide service via this bill must do so via symmetrical fiber to the home, and,
  • Customers may purchase the symmetrical fiber to the home service for internet use only (ie, without phone or video service). Such "naked" internet service shall be available at speeds equal or greater to those offered via phone/video bundles.. Cost and terms shall not penalize naked internet buyers vis a vis bundled phone/video purchases
  • Customers shall have complete access to all internet services. Vendors will not restrict any IP services.
What are the odds? UPDATE: A friend emailed simply: "Lotsa luck". Interestingly, this type of an initiative would be quite a legacy for the Governor. The fiber will be connected to our homes for many, many years.
Posted by James Zellmer at 4:41 PM

April 22, 2007

AT&T Lobbying Investments (rather than fiber networks)

AT&T, parent of troubled Cingular Wireless, continues to invest in non-network related initiatives, as this article by Steven Walters illustrates:
AT&T doles out $54,000 ahead of cable bill debate

Doyle, lawmakers say money won't affect stands on deregulation legislation

Communications giant AT&T pushed a controversial bill to have state government license cable systems by showering more than $54,000 in campaign cash on dozens of lawmakers and Gov. Jim Doyle over the past 15 months.

Campaign-finance records show that AT&T's political action committee gave a total of $10,000 to four legislators and the Assembly Republican Campaign Committee in the past two months, when legislators negotiated details of the complex package with AT&T's 15 registered lobbyists.
Posted by James Zellmer at 7:34 AM

March 24, 2007

AT&T's Rhetoric on Competition

Mark Pitsch:
Wisconsin residents would lose their rights to cable television repairs within 72 hours, credit for service interruptions and advance notice of rate increases, under a bill on the fast track in the state Legislature.

The proposal, designed to increase competition in an industry dominated by cable companies, is supported by the lobbying muscle of telecommunications giant AT&T.

It's part of AT&T's challenge to cable companies such as Charter Communications, which are licensed by local governments.

There is little agreement on whether the proposal would help consumers or hurt them.
Pitsch mentions this:
But proponents say the bill would lower costs for telecast delivery - whether by cable or AT&T's fiber optic lines - by up to 23 percent by introducing competition and deregulating the industry.
What fiber optic lines would that be? AT&T has done nothing to upgrade it's copper based network to the home (other than spend money on lobbying and advertisements regarding the ongoing resale of the old network, something we've paid for over and over and over...), unlike Verizon in other parts of the country. Nice to see our politicians continue to "stick it to us". `
Posted by James Zellmer at 9:38 AM

March 23, 2007

"My National Security Letter Gag Order"

Via the Washington Post:
The Justice Department's inspector general revealed on March 9 that the FBI has been systematically abusing one of the most controversial provisions of the USA Patriot Act: the expanded power to issue "national security letters." It no doubt surprised most Americans to learn that between 2003 and 2005 the FBI issued more than 140,000 specific demands under this provision -- demands issued without a showing of probable cause or prior judicial approval -- to obtain potentially sensitive information about U.S. citizens and residents. It did not, however, come as any surprise to me.
Posted by James Zellmer at 8:56 AM

March 22, 2007

Crossing the Border

Tom Kyte:
It was that last bit. The customs agent wanted to know "is that your employers laptop" - nope, it is mine. "Do you do work on it, business work?". Well, I read email, browse the web, have all of my presentations on it, use it to present, run Oracle on it, demonstrate with it. "So, it is your companies laptop then?". Nope, it is mine.

They scribbled someone on the immigration form, handed it to me and said "have a nice trip". I head out of baggage claim - but instead of being told to go right (to freedom), I'm directed to the left - to additional scrutiny. No worries - nothing to be found, no problem.
Posted by James Zellmer at 8:50 PM

March 21, 2007

Madison's Overture Center: 1999 and 2006

Compare a 1999 view with a fall, 2006 scene of Madison's Overture Center:



Virtual Properties.
Posted by James Zellmer at 3:06 PM

March 20, 2007

Meet The New Boss, Same as the Old Boss....

Jeff Birnbaum:
KAI RYSSDAL: There'll be an all-star cast tomorrow night at a Democratic fundraiser outside Washington. Speaker Nancy Pelosi and chairmen of the ten most powerful committees in the House of Representatives are scheduled to headline the event. And even though the presidential election's still 18 months away, corporate America is already placing its bets with well-timed donations. Commentator Jeff Birnbaum points out it's the same story as before...just a different cast of characters.

JEFF BIRNBAUM: The asking price for access to Nancy Pelosi and all her colleagues is $28,500 a couple. That's one of the steepest prices ever charged since new campaign finance limits were imposed five years ago.

It wasn't supposed to be this way. Remember Democratic Party Chairman Howard Dean railing against Republicans last year for selling access to their chairmen? The "intimate briefings" they gave to big donors was part of what Democrats derided as the GOP's "culture of corruption." If the Democrats ever took charge, they promised, all that would change.

Well, it hasn't changed. Actually, it's gotten worse. Democratic campaign committees are systematically showcasing a whole series of Democratic chairmen at fundraising receptions as a way to lure lobbyists' money. That's right, lobbyists are being asked to donate to the lawmakers who are in charge of the legislation that their clients care most about.
Posted by James Zellmer at 6:11 PM

March 17, 2007

How Lobbying Became Washington's Biggest Business

Robert Kaiser:
For Gerald Sylvester Joseph Cassidy, creator and proprietor of the most lucrative lobbying firm in Washington, May 17, 2005, was a day to exult. That bright, clear spring Tuesday marked the 30th birthday of Cassidy & Associates, and an impressive crowd had come to pay tribute to a godfather of the influence business.

Hundreds of guests gathered on the rooftop terrace of a handsome new office building at the foot of Capitol Hill, 13 stories above Constitution Avenue. A vivid orange sun descended gently behind the Washington Monument and the Lincoln Memorial at the western end of the Mall, casting angular beams of light across the assembled throng. The guests' view from the roof was filled by the United States Capitol, which from this startling vantage point could be seen, from end to end, in a single field of vision. The Capitol looked contained and compact, almost a plaything within easy reach.
Great series by the Post.
Posted by James Zellmer at 8:24 PM

March 10, 2007

More on the Battle Over Real ID

Jim Harper:
Senator Susan Collins, a Republican of Maine, is the author of the latest effort to sell reluctant states on the REAL ID Act, the 2005 measure which would coerce states into issuing nationally standardized driver's licenses and require them to enter information about their drivers in nationally accessible databases.

Despite Homeland Security Secretary Michael Chertoff's public insistence that the Act needs to be implemented rapidly, the administration, and Mr. Chertoff himself, appear happy to avoid an immediate confrontation with the states and to go along with Ms. Collins' sales tactic. The Maine Senator introduced a bill, and pressed it as an amendment on the Senate floor, to extend the deadline for state compliance with the REAL ID Act, allowing companies in favor of the measure time to work in state capitols to calm the burgeoning rebellion.

Sen. Collins' counter-rebellion role is laden with irony. The revolt, after all, started in her own New England state. In late January, George Smith, executive director of the Maine Sportsmen's Alliance, stood to denounce the REAL ID Act at a community forum in Augusta. A Norman Rockwell painting come to life with the directness and accent of a lifelong Mainer, he said: "They had their Boston Tea Party. Let's have a REAL ID Party!"

The next day, the Maine House and Senate passed a resolution to reject REAL ID by overwhelming margins.
More on Real ID, which both Russ Feingold and Herb Kohl supported....
Posted by James Zellmer at 4:17 PM

Wake-up Call

Niall Ferguson:
AT AGE 42, NIALL FERGUSON HAS BECOME one of the world's most famous and provocative historians, with high-profile posts ranging from Harvard to Oxford to Stanford University's Hoover Institution. Born in Scotland and educated at Oxford, he is not only a prolific author of books, including Colossus (2004), an examination of American empire, and The War of the World (2006), a study of World War II, but a media star with a weekly newspaper column and numerous television projects. Ferguson also has developed a growing fan club on Wall Street and in British financial circles, where he has stressed in speeches that investors are too complacent about geopolitical risk, notably growing instability in Iraq and elsewhere in the Middle East.

Geopolitical issues and economic history are Ferguson's specialty, and he approaches both with uncommon intelligence, style and vigor. His rightward-leaning views have been embraced by those who believe that the American empire can and should be a force for good in the world. Some on the left have attacked him, perhaps unfairly, as an apologist for imperialism -- Britain's in days of old, and the American strain that critics charge has mired the U.S. in Iraq. In a recent column, reprinted in the Chicago Tribune, Ferguson berated Democratic presidential hopeful Barack Obama, "with his melting-pot roots and his molten-hot rhetoric," for calling for a withdrawal of U.S. forces from Iraq by March 2008, in the misguided notion it would hasten a peaceful solution to that nation's "internecine conflict."

Amplifying this theme, Ferguson told Barron's that America's speedy departure likely would transform Iraq into "as violent and unstable a place as Central Africa was in the 1990s." An ardent supporter of Britain's former prime minister Margaret Thatcher, he is about to be named an adviser to Republican presidential candidate John McCain.

FERGUSON IS FASCINATED by what he calls the "paradox of diminishing risk in an apparently dangerous world." By that, he means ebullient global stock markets and record-tight yield spreads between risk-free U.S. Treasuries and junk bonds and emerging-market debt. He also cites declining volatility in stock, bond and foreign-exchange markets, and an abiding faith in the ability of the Federal Reserve and other central banks to rescue the investment community from any potential financial crisis. Although the global stock-market selloff two weeks ago wasn't spurred by geopolitical events, it validated his concern that investors have willingly downplayed risk.
Posted by James Zellmer at 7:48 AM

March 8, 2007

2 States Opt out of Real Id; Where's Wisconsin?

Jay Stanley:
Idaho opted out of Real ID today, becoming the second state to say "no thanks," along with Maine. And there are a lot of other states moving in the same direction (we have a map that tracks them online at http://www.realnightmare.org/news/105/).
Senator's Russ Feingold and Herb Kohl supported the National ID (Real ID) legislation. Related: Nathan Cochrane on becoming an unperson. Bruce Schneier has more.
Posted by James Zellmer at 3:32 PM

Chinese Dissident's Wife to Sue Yahoo

Richard Komen:
Speaking with VOA's Mandarin Service Wednesday after arriving in Washington, Yu Ling said Chinese police arrested her husband, Wang Xiaoning, partly because Yahoo's Hong Kong office gave Chinese authorities information about his e-mail accounts.

Yu Ling said she has come to the United States to sue the company for damages and to demand an apology.

Last year, Yahoo provided the Chinese with information about Shi Tao, a journalist who emailed to Western news outlets details of China's plans to handle the 15th anniversary of Tiananmen Square.
Posted by James Zellmer at 12:33 PM

March 7, 2007

Publicly owned networks are the key to universal access and healthy competition

Becca Vargo Daggett:
Local governments have taken the lead in U.S. broadband policy. Hundreds of communities of all sizes are making decisions about how to best deliver universal, affordable access to high-speed information networks. Many are offered seemingly attractive arrangements with no upfront cost to the city. They do themselves and their households and businesses a disservice if they do not seriously explore the costs and benefits of a publicly owned network.

In this report, we highlight five arguments for public ownership.

1. High-speed information networks are essential public infrastructure.

Just as high quality road systems are needed to transport people and goods, high quality wired and wireless networks are needed to transport information. Public ownership of the physical network does not necessarily mean the city either manages the network or provides services. Cities own roads, but they do not operate freight companies or deliver pizzas.
Posted by James Zellmer at 8:29 PM

We Can't Tell You, It's a Secret"

Joe Francica:
At GITA, Dr. Bill Gail of Microsoft's Virtual Earth team addressed a question as to working with highly sensititve imagery of perhaps a national security concern and whether they might be asked to black out areas on Virtual Earth. Google had been asked to do this previously for certain areas and Microsoft wanted to preempt such situations. Gail said that Microsoft has sat down with various government agencies to ask them about these potential conflict areas that they thought might be blacked out if asked to do so. Their answer was, "it's a secret, we can't tell you."
Posted by James Zellmer at 5:36 PM

March 5, 2007

The Killing of Wifi?

John Dvorak:
There is mounting evidence that the cellular service companies are going to do whatever they can to kill Wi-Fi. After all, it is a huge long-term threat to them. We've seen that the route to success in America today is via public gullibility and general ignorance. And these cell-phone–service companies are no dummies.

The always-entertaining Pew Internet & American Life Project ran a survey, and the results show that 34 percent of Internet users have gone online with a Wi-Fi connection or one of those newly popular and overpriced cell-phone services. Two years ago, this number was 22 percent. Another factoid from the survey: 19 percent of all users have Wi-Fi in the home. This number was a mere 10 percent just one year ago. The last tidbit from the survey worth noting is that only 56 percent of the people who have PDAs that hook to the Internet have actually gone on the Net via their PDA. The same goes for the people who have cell phones with Internet capability; not much more than half have actually used it.
Posted by James Zellmer at 10:47 PM

March 3, 2007

Stewart on Afghan Policy

Rory Stewart:
The international community’s policy in Afghanistan is based on the claim that Afghans are willing partners in the creation of a liberal democratic state. Senator John McCain finished a recent speech on Afghanistan by saying, “Billions of people around the world now embrace the ideals of political, economic and social liberty, conceived in the West, as their own.”

In Afghanistan in January, Tony Blair thanked Afghans by saying “we’re all in this together” and placing them in “the group of people who want to live in peace and harmony with each other, whatever your race or your background or your religion.”

Such language is inaccurate, misleading and dangerous.

Afghans, like Americans, do not want to be abducted and tortured. They want a say in who governs them, and they want to feed their families. But reducing their needs to broad concepts like “human rights,” “democracy” and “development” is unhelpful.
Stewart wrote the excellent: "The Places in Between" on his walk across Afghanistan.
>For many Afghans, sharia law is central. Others welcome freedom from torture, but not free media or freedom of religion; majority rule, but not minority rights; full employment, but not free-market reforms. “Warlords” retain considerable power. Millions believe that alcohol should be forbidden and apostates killed, that women should be allowed in public only in burqas. Many Pusthu clearly prefer the Taliban to foreign troops.

Yet, senior officials with long experience with Afghanistan often deny this reality. They insist that Taliban fighters have next to no local support and are purely Pakistani agents. The U.N. argues that “warlords” have little power and that the tribal areas can rapidly be brought under central control. The British defense secretary predicted last summer that British troops in Helmand Province could return “without a bullet fired.” Afghan cabinet ministers insist that narcotics growth and corruption can be ended and the economy can wean itself off foreign aid in five years. None of this is true. And most of them half-know it.

It is not only politicians who misrepresent the facts. Nonprofit groups endorse the fashionable jargon of state-building and civil society, partly to win grants. Military officers are reluctant to admit their mission is impossible. Journalists were initially surprisingly optimistic about transforming Afghanistan. No one wants to seem to endorse a status quo dominated by the Taliban and drugs. Humankind cannot bear very much reality, particularly in Afghanistan.

Does it matter? Most people see our misrepresentations as an unappealing but necessary part of international politics. The problem is that we act on the basis of our own lies. British soldiers were killed because they were not prepared for the Helmand insurgency. In the same province, the coalition recommended a Western-friendly technocrat as governor; he was so isolated and threatened he could barely leave his office. Hundreds of millions of dollars invested in anticorruption efforts, and the police and the counternarcotics ministry, has been wasted on Afghans with no interest in our missions. Other programs are perceived as a threat to local culture and have bred anger and resentment.

Still others have raised expectations we cannot fulfill, betraying our friends. I experienced this in Iraq, where I encouraged two friends to start gender and civil society programs; we were unable to protect them, and both were killed. Even when we fail, instead of recognizing the errors of the initial assessment and the mission, we blame problems in implementation and repeat false and illogical claims in order to acquire more money and troops.

The time has come to be honest about the limits of our power and the Afghan reality. This is not to counsel despair. There is no fighting in the streets of Kabul, the Hazara in the center of the country are more secure and prosperous than at almost any time in their history, and the economy grew last year by 18 percent. These are major achievements. With luck and the right kind of international support, Afghanistan can become more humane, prosperous and stable.

But progress will be slow. Real change can come only from within, and we have less power in Afghanistan than we claim. We must speak truthfully about this situation. Our lies betray Afghans and ultimately ourselves. And the cost in lives, opportunities and reputation is unbearable.

Rory Stewart’s latest book is the “The Prince of the Marshes and Other Occupational Hazards of a Year in Iraq.” He runs the Turquoise Mountain Foundation in Kabul and is a guest columnist this month.
Posted by James Zellmer at 4:24 PM

February 27, 2007

Some Good Reasons for Governments NOT to invest Taxpayer Money in Schemes

Richard Aboulafia:
Finding Two. If a state plays this game it quickly reaches an absurd level. Just after the LoPresti micro-triumph New Mexico announced a $100 million investment to build…a spaceport (I really wish I was making this up). This will service Richard Branson’s Virgin Galactic and is obviously a necessary subsidy, because Branson, for some reason, has no cash. (See the December 2005 press release at http://ww1.edd.state.nm.us. Title: Richardson Announces $100 Million Commitment to Build World’s First Spaceport. Implicit subtitles: “Private Sector Baulks At Risky Project; We’re enlisting New Mexico Taxpayers To Provide Generous Help” and “Hooray! We’re Morons!”). Today, Kansas and Florida. Tomorrow, Low Earth Orbit. Who can stop New Mexico from operating like an aerospace banana republic? In search of good government I asked my friend Jeff Schwartz what could be done. Jeff is one of the smartest government guys I know, and he works for the Appalachian Regional Commission, which funds development work in states in their jurisdiction. “We’re on it,” he reassured me, referring me to their code (http://www.arc.gov/index.do?nodeId=1242#chap8). The ARC prohibits its money from going to “(A) Any form of assistance to relocating industries; (B) recruitment activities that place a state in competition with another state or states; and (C) projects that promote unfair competition between businesses within the same immediate service area.”
Brenda Konkel recently wondered about the City of Madison's $700K loan to Tomo Therapy. Generally, I think governments should stay out of this. We're all better off if they spend time simplifying processes, taxes and paperwork.
Posted by James Zellmer at 4:54 PM

February 23, 2007

Specter's Letter from Moscow

Michael Specter:
The murder of Anna Politkovskaya was at once unbelievable and utterly expected. She had been hunted and attacked before. I 2001, she fled to Vienna after receiving e-mailed threats claiming that a special-services police officer whom she had accused o committing atrocities against civilians (and who was eventually convicted of the crimes) was bent on revenge. While she was abroad a woman who looked very much like her was shot and killed in front of Politkovskaya’s Moscow apartment building. Polic investigators believe the bullet was meant for Politkovskaya. In 2004, she became violently ill after drinking tea on a flight to Beslan in North Ossetia, where, at the request of Chechen leaders, she was to negotiate with terrorists who had seized a school and take more than eleven hundred hostages, most of them children. The Russian Army, which had bungled its response to the siege, did no want her there. Upon landing in Rostov, she was rushed to the hospital; the next day, she was flown by private jet to Moscow fo treatment. By the time she arrived, her blood-test results and other medical records had somehow disappeared. She survived, only t be called a “midwife to terror.” The threats became continuous: calls in the middle of the night, letters, e-mails, all ominous, al promising the worst. “Anna knew the risks only too well,’’ her sister told me. Politkovskaya was born in New York while her fathe was serving at the United Nations, in 1958; not long ago, her family persuaded her to obtain an American passport. “But that was a far as she would go,” Kudimova said. “We all begged her to stop. We begged. My parents. Her editors. Her children. But she alway answered the same way: ‘How could I live with myself if I didn’t write the truth?’
Posted by James Zellmer at 2:39 PM

February 20, 2007

Fear and Loathing the Cable Company

Jeff Jarvis:
But then, that’s not news. I’ve been trying to get Joost working at home and was cursing it, but I was cursing the wrong party. Joost works fine at work. I can’t wait until Verizon finishes laying fibre on my street so I can get FIOS. Except Verizon hired the worst contractor imaginable to get the job done. They have been at it for more than two months on a street with fewer than 20 homes; they’ve managed to cut our cable and gas line and a neighbor’s electric line and they’re not nearly done. I’m about to go out with a shovel myself just so I can get rid of Cablevision sooner.
At least Jarvis can look forward to fiber to the home, via Verizon. Locally, AT&T is content to spend money on advertising and resell us the copper lines we've paid for over and over and over.
Posted by James Zellmer at 11:16 AM

February 19, 2007

Anderson on "We Media"

Chris Anderson correctly analyzes the "we media" bubble. Change is certainly underway in the media world, but it will not, clearly be linear:
First, let's agree that "media" is anything that people want to read, watch or listen to, amateur or professional. The difference between the "old" media and the "new" is that old media packages content and new media atomizes it. Old media is all about building businesses around content. New media is about the content, period. Old media is about platforms. New media is about individual people. (Note: "old" does not mean bad and "new" good--I do, after all, run a very nicely growing magazine/old media business.)

The problem with most of the companies Skrenta lists is that they were/are trying to be a "news aggregators". Just as one size of news doesn't fit all, one size of news aggregator doesn't either.
Posted by James Zellmer at 9:08 AM

February 17, 2007

Declining Demand for Luxury Sports Suites?

Russell Adams:
It was like watching an era of sports history being erased. In early December, construction workers sawed through the multiple layers of drywall and metal studs separating a row of skyboxes at the Seattle Mariners' Safeco Field. They tore up the suites' beech-hardwood floors and carted away their oriental rugs and leather furniture. By the end of the week, the eight skyboxes were gone.

In a reversal that strikes at a cornerstone of pro-sports finances -- and of the way corporate America entertains -- teams around the country are ripping out luxury suites. These perches have been used to justify billions of dollars in stadium construction over the past two decades. But in many cities, they are losing luster with surprising speed, partly the result of factors that couldn't have predicted five or 10 years ago, from changes in tax laws to scandal-driven reforms on corporate entertaining.

"At GM, you can't even buy them a cup of coffee anymore," says Lin Cummins, the marketing chief at automotive supplier Arvin Meritor in Troy, Mich, which has let the leases expire for its suites in four different sports.
Posted by James Zellmer at 8:37 AM

February 11, 2007

Google's Arrogance in North Carolina: Learning from AT&T?

Ed Cone:
But it turns out that there was a lot more to the story. Google leaned hard on North Carolina lawmakers and officials, not just to get the fattest deal possible but to choke off the flow of information along the way.

According to documents obtained by The News & Observer of Raleigh, the company went beyond reasonable expectations of confidentiality to demand absolute secrecy while negotiations were under way, even asking participants to sign nondisclosure agreements; some legislators and local officials did so, but Department of Commerce officials did not. Google executive Rhett Weiss badgered Commerce Secretary Jim Fain about the state's adherence to process, complaining, for example, when lawmakers wanted an estimate of the cost to North Carolina in lost tax revenue, and threatening to kill the whole thing if Google didn't get its way.

Businesses need some measure of confidentiality when putting together this kind of transaction. Fair enough. But this is the people's business, and Google's high-handedness is an affront to the people of this state.

And then there's that whole "Don't be evil" thing. Google spokesman Barry Schnitt told me that the company's negotiations with the state were "very standard." If that's the case, and this is standard operating procedure for the company, then something has gone wrong in Silicon Valley.
Barry Orton keeps up with AT&T's Wisconsin Lobbying.

Yet another reason to use the excellent Clusty search engine.
Posted by James Zellmer at 10:56 AM

February 9, 2007

GPS Spying Case

Tom Foremski:
The 7th Circuit Court of Appeals ruled last week that police can place a GPS tracking unit on a suspect's car without obtaining a search warrant. In US v Garcia (2007 U.S. App. LEXIS 2272), decided Feb. 2, Judge Richard Posner found that such a device was a mere "augmentation" of police officers' natural ability to follow a car.

In the Garcia case, an information alerted police that Garcia used meth with her, said he intended to resume producing meth, and was taped on a security camera buying chemicals to make meth. The police found his car and attached a GPS tracking device. When they retrieved the device, they discovered that he had visited a large tract of land. They obtained consent from the owner to search the land and found a meth lab. As they were searching, Garcia drove up. They searched his car and found additional evidence against him.
Posted by James Zellmer at 10:52 PM

February 6, 2007

Advocating DRM-Less Music

Steve Jobs:
With this background, let’s now explore three different alternatives for the future.

The first alternative is to continue on the current course, with each manufacturer competing freely with their own “top to bottom” proprietary systems for selling, playing and protecting music. It is a very competitive market, with major global companies making large investments to develop new music players and online music stores. Apple, Microsoft and Sony all compete with proprietary systems. Music purchased from Microsoft’s Zune store will only play on Zune players; music purchased from Sony’s Connect store will only play on Sony’s players; and music purchased from Apple’s iTunes store will only play on iPods. This is the current state of affairs in the industry, and customers are being well served with a continuing stream of innovative products and a wide variety of choices.

Some have argued that once a consumer purchases a body of music from one of the proprietary music stores, they are forever locked into only using music players from that one company. Or, if they buy a specific player, they are locked into buying music only from that company’s music store. Is this true? Let’s look at the data for iPods and the iTunes store - they are the industry’s most popular products and we have accurate data for them. Through the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store. On average, that’s 22 songs purchased from the iTunes store for each iPod ever sold.
I hope the Hollywood types listen. Music should be very inexpensive ($0.05/track) and widely, widely used.
Posted by James Zellmer at 3:27 PM

February 5, 2007

"Rights Managed Copy Machines"

John Landwehr:
Ricoh and Adobe are offering users the ability to manage risk at the point-of-capture. Paper documents are scanned at the Ricoh MFP where the security policy is applied. To ensure the information remains safe, the security policy remains with the document through its lifetime, whether it is transferred inside or outside the corporate firewall.
Wow. The Soviets denied ordinary citizens access to duplicating and copy machines....
Posted by James Zellmer at 10:02 AM

February 4, 2007

The Age of Perpetual Conflict

Gabriel Kolko:
Blind men and women have been the motor of modern history and the source of endless misery and destruction. Aspiring leaders of great powers can neither understand nor admit the fact that their strategies are extremely dangerous because statecraft by its very nature always calculates the ability of a nation's military and economic resources to overcome whatever challenges it confronts. To reject such traditional reasoning, and to question the value of conventional wisdom and react to international crises realistically on the basis of past failures would make them unsuited to command. The result is that politicians succeed in terms of their personal careers, states make monumental errors, and people suffer. The great nations of Europe and Japan put such illusions into practice repeatedly before 1945.

At the beginning of the 21st century only the U.S. has the will to maintain a global foreign policy and to intervene everywhere it believes necessary. Today and in the near future, America will make the decisions that will lead to war or peace, and the fate of much of the world is largely in its hands. It thinks it possesses the arms and a spectrum of military strategies all predicated on a triumphant activist role for itself. It believes that its economy can afford interventionism, and that the American public will support whatever actions necessary to set the affairs of some country or region on the political path it deems essential. This grandiose ambition is bipartisan and, details notwithstanding, both parties have always shared a consensus on it.
Posted by James Zellmer at 12:59 PM

February 2, 2007

On Russ Feingold & Iraq

Kimberley Strassel:
The Senate is teeming with courageous souls these days, most of them Republicans who have taken that brave step of following the opinion polls and abandoning their president in a time of war. Meanwhile, one of the few senators showing some backbone in the Iraq debate is being shunned as the skunk at the war critics' party.

Sen. Russ Feingold held a hearing this week on Congress's constitutional power to shut off funds for the Iraq war, and followed it up a day later with legislation that would do just that. The Wisconsin pacifist might not understand the importance of winning in Iraq--or the cost of losing--but at least there's an element of principle to his actions. He's opposed the war from the start and his proposal to cut off money after six months would certainly end it. It also happens to be Congress's one legitimate means of stopping a war.

Mr. Feingold's reward for honesty was to preside over what might have been the least-attended hearing so far in the Iraq debate. And those of his Senate colleagues who did bother to show up looked like they couldn't wait to hit an exit door. "If Congress doesn't stop this war, it's not because it doesn't have the power. It's because it doesn't have the will," declared Mr. Feingold. Ted Kennedy--one of two Democrats who put in an appearance--could be seen shifting uncomfortably in his seat.

That's because Sen. Feingold is coming uncomfortably close to unmasking the political charade playing on the Senate stage. Critics of President Bush want an unhappy public to see them taking action on the war.
Posted by James Zellmer at 11:09 PM

February 1, 2007

Gasoline and the American People

Cambridge Energy Research Associates:
America's "love affair with the automobile" is being transformed -- but not broken up -- by forces that are redrawing the global gasoline and oil market, including higher gasoline prices, tightening environmental requirements, changing demographics, growing world oil demand and expanding fuel options, according to the new 2007 edition of Gasoline and the American People, by Cambridge Energy Research Associates (CERA).

Americans have been driving further -- 40% more than 25 years ago -- and using more gasoline in bigger, more powerful cars and other light duty vehicles. But higher gasoline prices have had a significant impact. The rate of growth in gasoline demand slowed sharply from its 1.6% per year pace (1990-2004) to 0.3% in 2005, and continued to grow slowly in 2006, at 1.0%. And for the first time in 25 years, motorists' average mileage went down. Overall, though, according to the CERA report, improved automotive efficiencies and one of the lowest fuel tax rates among Western countries have kept gasoline and oil's share of average U.S. household budgets at 3.8% in 2006, slightly above the 1960s' 3.4% to 3.6% level despite rising world oil prices.
Media coverage.

Ed Wallace has more.
Posted by James Zellmer at 11:12 AM

January 27, 2007

Ethanol: Very, Very Big Corn

Opinion Journal:
President Bush made a big push for alternative fuels in his State of the Union speech Tuesday night, calling on Americans to reduce gasoline consumption by 20% over 10 years. And as soon as the sun rose on Wednesday, he set out to tour a DuPont facility in Delaware to tout the virtues of "cellulosic ethanol" and propose $2 billion in loans to promote the stuff. For a man who famously hasn't taken a drink for 20 years, that's a considerable intake of alcohol. A bit of sobriety would go a long way in discussing this moonshine of the energy world, however. Cellulosic ethanol--which is derived from plants like switchgrass--will require a big technological breakthrough to have any impact on the fuel supply. That leaves corn- and sugar-based ethanol, which have been around long enough to understand their significant limitations. What we have here is a classic political stampede rooted more in hope and self-interest than science or logic.
Posted by James Zellmer at 6:49 AM

The Sarajevo Moment

The Economist:
A PROPOS the Sarajevo moment, which might bring to an end this latest of age of globalisation.

It wouldn't be a political killing, I imagine, since there is no one figure whose death at the hands of a deranged assassin would turn the great powers against one another. But a terrorist strike against a cluster of essential Saudi oil installations might have the necessary economic and geopolitical repercussions.

Whatever the Sarajevo moment might be, everyone seems to be talking about it. As if we know in our hearts that these asset prices are too good.
Posted by James Zellmer at 6:47 AM

January 26, 2007

I'm Opposed to a $30M Wisconsin Medical Records Subsidy

Sandy Cullen:
A proposal by Gov. Jim Doyle to spend $30 million to help fund electronic medical records systems is just a "drop in the bucket" of what it would take to enable all of the state's health-care providers to access patients' histories at the push of a button, medical experts said.

Doyle said Thursday that he wants to create a $20 million grant program to help nonprofit organizations transition from paper documents to technology he says will reduce medical errors and improve quality.

Another $10 million in tax credits would go to for-profit hospitals and doctors to help cover the cost of their transition.
Cullen's article rightly points out that the "$30M is a drop in the bucket" in a system with billions flowing through it (I don't think they need a subsidy). Creating another layer of tax redistribution (from payroll and income taxes and fees) for state incentives and health care system funding, given the many other state spending priorities, not to mention the $1.6B structural deficit, is misquided. I wonder who is behind this?

Link Hoewing discusses electronic medical records from Verizon's perspective (Verizon is installing Fiber broadband to the home in many markets, unlike AT&T).
Posted by James Zellmer at 8:25 AM

January 22, 2007

Interesting Discussion on China

Janes Pethokoukis:
When will the Chinese middle class push for greater political freedom to match growing economic freedom?

The $64,000 question. The extent of the ideological bankruptcy of the Chinese Communist Party is not widely understood in the U.S. It claims single party rule because it is the trustee of the 1949 Communist revolution governing democratically for China's workers and peasants. Its problem is that communism is in reverse worldwide, and under the doctrine of the "Three Represents" invented by Jiang Zemin, the party now accepts that class war is over and that it must represent all Chinese society. In which case: Why no accountability? Change came in the Soviet Union with the fifth generation of leaders; the fifth generation of leaders succeeds Hu Jintao in 2012. I don't expect any change until after then, but my guess is that sometime in the mid-to-late 2010s, the growing Chinese middle class will want to hold the Chinese official and political class to account for how they spend their taxes and for their political choices.
The Wall Street Journal posted an email interview with Friedman which included a few words on China.
Posted by James Zellmer at 10:18 AM

January 21, 2007

The Etiquette of Bribery

The Economist:
GIVE people power and discretion, and whether they are grand viziers or border guards, some will use their position to enrich themselves. The problem can be big enough to hold back a country's development. One study has shown that bribes account for 8% of the total cost of running a business in Uganda. Another found that corruption boosted the price of hospital supplies in Buenos Aires by 15%. Paul Wolfowitz, the head of the World Bank, is devoting special efforts during his presidency there to a drive against corruption.

For most people in the world, though, the worry is not that corruption may slow down their country's GDP growth. It is that their daily lives are pervaded by endless hassles, big and small. And for all the evidence that some cultures suffer endemic corruption while others are relatively clean, attitudes towards corruption, and even the language describing bribery, is remarkably similar around the world.

Rich Westerners may not think of their societies as plagued by corruption. But the definition of bribery clearly differs from person to person. A New Yorker might pity the third-world businessman who must pay bribes just to keep his shop open. But the same New Yorker would not think twice about slipping the maître d' $50 to sneak into a nice restaurant without a reservation. Poor people the world over are most infuriated by the casual corruption of the elites rather than by the underpaid, “tip”-seeking soldier or functionary.

Indeed, in the world's richest economy, what many see as simple bribery is an integral part of lawmaking. In Washington, DC, it is accepted that a lobbyist's generous campaign contribution to a crucial congressman may help to steer some spending to the lobbyist's client.
And... earmarks?
Posted by James Zellmer at 9:49 PM

January 20, 2007

"Use the Web, Luke" - Presidential Candidates Embrace the Web

Peter Gosselin:
In choosing the Internet to announce she intends to run for the presidency in 2008, Sen. Hillary Rodham Clinton bowed to the burgeoning political power of the medium and offered a preview of how she hopes to harness it to her purposes.

In declaring "I'm in" the White House race in a video clip on her new campaign website, HillaryClinton.com, the New York Democrat did considerably more than simply appear before the cameras; she invited supporters to join an almost Oprah Winfrey-like session of give and take.

"Let's talk. Let's chat. Let's start a dialogue about your ideas and mine.... " she told viewers."With a little help from modern technology, I'll be holding live online video chats ... starting Monday."

By doing this, Clinton signaled her intention of using the Internet to shore up one of her chief political weak points, what independent analyst Charlie Cook called the caricature of her as "this shrill, raving, partisan, liberal lunatic."
Hilary's video is here. Take a look through the window - I wonder when it was shot? Sam Brownback announced on the web as well.

Charles Franklin looks at the polls.
Posted by James Zellmer at 10:33 PM

January 18, 2007

The Utility of Asking Questions

Ed Wallace finds some answers:
It seems to me that we might actually be standing at a crossroads of history, and 50 years from now historians will either be writing about the genius of our current plans or bemoaning our utter foolishness. But one thing is for sure. Hoping that things calm down in Iraq, wondering if they are going to get that oil law on the books and praying that the government holds and favors Western oil firms does not sound like a realistic energy policy for the United States.

Everything could go right for us; and the Chinese and Russians could still get back their Iraqi oil contracts, which were abrogated after we invaded that country.

Or we can develop a new energy policy for America. Raise the fuel efficiency standards for automobiles (mid to long-term positive results). Slow down the traffic on our Interstates (immediate impact on the amount of oil we use). Quit using so much oil for fertilizers and plastics and so trim all the waste those industries produce. Tune up our vehicles to maximize fuel economy. And determine whether General Motors’ series hybrid electric is credible, and figure the odds of Detroit’s inventing the lithium-ion batteries that would make the Chevrolet Volt feasible. The subsequent fall in the price of oil would deprive many who detest us of the funding their anti-American plans would require.

If GM’s 150-mpg Chevrolet Volt were coming to market this spring, would that breakthrough stop the 21,500 troops headed for Iraq? Probably not. But it would stop 500,000 American troops from heading to the Middle East a decade from now.
Posted by James Zellmer at 2:15 PM

January 16, 2007

Buckley on Iraq

William F. Buckley, Jr.:
You are a Republican legislator, retiring after this, your fifth term. Last night, into midnight hours, you composed a questionnaire for yourself. You vowed to submit to it before your committee speech. You'd flower up the language a bit — but not the thought. You wake up this morning and turn to last night's self-quiz.
Posted by James Zellmer at 10:20 PM

January 15, 2007

Wisconsin's GDP = South Africa's

Interesting. A map that equates a US State with a similar Country's GDP.
Posted by James Zellmer at 4:54 PM

January 12, 2007

American Samoa Exempt from Minimum Wage Hike?

Meet the new boss, same as the old boss.

Charles Hurt:
House Republicans yesterday declared "something fishy" about the major tuna company in House Speaker Nancy Pelosi's San Francisco district being exempted from the minimum-wage increase that Democrats approved this week.

"I am shocked," said Rep. Eric Cantor, Virginia Republican and his party's chief deputy whip, noting that Mrs. Pelosi campaigned heavily on promises of honest government. "Now we find out that she is exempting hometown companies from minimum wage. This is exactly the hypocrisy and double talk that we have come to expect from the Democrats."

On Wednesday, the House voted to raise the minimum wage from $5.15 to $7.25 per hour.

The bill also extends for the first time the federal minimum wage to the U.S. territory of the Northern Mariana Islands. However, it exempts American Samoa, another Pacific island territory that would become the only U.S. territory not subject to federal minimum-wage laws.
Meanwhile, some Senators are attempting to water down any sort of earmark reform. A cynical observer might wonder if those in the House knew this would happen in the Senate...
Posted by James Zellmer at 9:20 AM

January 6, 2007

Travel Scenes

A remnant of Kinky Friedman's 2006 run for Texas Governor. Perhaps there is hope for more than our current corrupt two party system.
Posted by James Zellmer at 2:11 PM

January 5, 2007

Hype & the Denver International Airport

I heard the hype while living in Denver nearly 20 years ago. $2.5 billion (turned into $5 billion) was necessary to avoid all of the current airport's problems during snowstorms. Mayer Federico Pena lead the charge with his reward coming later - the highway to the new airport (DIA) is named "Pena Boulevard".

Mike Boyd tells the "rest of the story" in the Grinch Comes Clean:
"All Weather Airport? Oh, That Was Just 'Hype'..." ...Along With Most Of The Other Stuff DIA PromisThis Christmas, it wasn't just chestnuts that got roasted on an open fire. Denver's "all-weather" airport, the one that was built to unclog the Western skies, the one that was going to be the glorious technological beacon for all future airports, got roasted big-time in the national media. Justifiably.

Denver International got cooked on something called "the truth."

For almost two days before Christmas, the airport was shut down due to snow. At most times of the year, and at most other airports, this would have been not much more than a page three human interest story, with interviews of passengers stranded like refugees in a big terminal, being asked really deep questions, like, "How long have you been standing in line?" or "When do you think you'll get home?" Or, "Gee, you gotta lot of luggage there." Anything to fill a 90-second piece that's been done dozens of times before.
But this wasn't just any time of the year. And it wasn't at just any airport. First, it was an event that messed up the Holidays to some degree for perhaps as many as 100,000 people. That meant there were interviews with stranded soldiers from Iraq, their precious leave daysdia2.JPG (13614 bytes) being consumed by a closed airport. Then there were the perfunctory pictures of bewildered young families stuck in the terminal, surrounded by despondent little kids fearful of missing Santa Claus, holding the package containing the ThighMaster they were going to give Grandma for Christmas. High profile, newsworthy stuff.

Second, it took place at an airport that was built on the promise that it would never happen. DIA had repeatedly told the world that it would free mankind once and for all of the scourge of flight delays. Mystical DIA, they promised, would handle any - that's right - any weather. No exceptions. Any weather. And when they said all this, they were dead serious and took condescending shots at any infidel who would question it.

A couple of notable quotes from the days when the City was building DIA. These from 1992, for example:

"It's the world's first all-weather airport. We will be able to operate as well in a in a blizzard as Stapleton does on a sunny day..."

or, how about this:

"...We can still land 90 planes per hour in a blizzard..."

In fact, these wonderous promises were made by DIA officials and City politicians as the foundational reason to build this magic new $2.5 billion - now, over $5 billion - airport for the Mile-High City. "Weather delays will be a thing of the past," one of the breathless promo pieces said. Another, aimed at the bond houses that were to finance this thing, claimed, "An all-weather airport, capable of landing three streams of aircraft, no matter how bad the weather..."

In a blizzard? Since there are no arrest records indicating these people were smokingsnakeoil2.JPG (11535 bytes) funny cigarettes or having Timothy O'Leary parties, it's clear that they were saying this stuff with a straight, sober face in an attempt to claim something that they knew wasn't possible nor true. In English, it's called a lie.

At the time, The Boyd Group and a few others went on record, pointing out that, unless they could get Jesus to be a sub on the engineering contract, the chances of DIA being "all-weather" were zero to none.

Aviation Cognoscenti: The Emperor's New Runways. But this was a billion-dollar project, and there was lot of money to be made. So, virtually nobody else in the aviation industry - not the alphabet groups, not the FAA, not even the aviation media, dared say anything. They wanted to remain politically correct.

They all knew, or should have known, that the "all-weather" claims, as well as many others concocted to support the project, were simply not true. But they said nothing.

Perfect Storm: Snow. No Santa. Four Networks. And A Dumb DIA PR Stunt. Of course, DIA has closed on many occasions due to weather. A couple of times, "officially" closed, and on a lot more occasions, functionally closed when airlines simply couldn't operate, yet the bureaucrats would claim DIA was "open" - it was just those silly airlines who refused to land on runways covered with snow, or where they couldn't taxi to the gates. Or in dangerous wind-shear conditions. Or not operating because of those dumb consumers who couldn't get to the airport because the meandering 12-mile access road was impassible and unplowed.

In those instances, nobody much noticed. But then came The Nightmare Before Christmas. From a public relations standpoint, it was DIA's Perfect Storm.

As would be expected, when DIA shut down, the national media descended to do the usual perfunctory Grandma-got-run-over-by-a-flight-delay stories. But then they noticed three things that didn't make sense.

The first was the actual amount of snow that it took to close the airport in relation to it's all weather, better-than-any-other-airport-in-bad-weather claims. Unlike the rest of the region, which saw in some cases almost four feet of white stuff, DIA got 19 to 22 inches, depending on the source. Even with wind, it was neither a 100-year storm, nor of a size particularly unheard of in Colorado. The second thing that got their attention was DIA's announcement that it would not open for almost 24 hours after the last flake had fallen and the bright Rocky Mountain sun came out. Almost a full day. This at America's supposedly most technologically-advanced airport. Red flags went up.

But the third thing that got the media's investigative juices into hyper-drive was when DIA's PR staff opened their mouths and started spitting absurd excuses in all directions. The reasons for the delay in re-opening, they explained confidently and condescendingly, were the huge snow drifts - at first, claimed to be seven feet high, and later the drifts grew in the press statements like Pinocchio's nose to a whopping 12 feet. With a straight face, they told this to network reporters who had just easily traversed the all-four-lanes-open access road, with little or no evidence of such Himalayan-like snow drifts.

Adding to the intrigue, DIA's PR staff arrogantly claimed that the airport had done everything perfectly - in fact, they said they had no reason to change anything in the future. The PR stunts became more silly when they couldn't answer repeated questions regarding why the 12-mile access freeway was clear and open and free of 12-foot drifts, yet all six of DIA's runways were still closed, its ramp areas were clogged with snow, and it couldn't operate for nearly a day after the weather had cleared.pino2.JPG (26150 bytes)

Looking around the terminal, seeing hundreds of people stranded, soldiers from Iraq spending their holiday leave sitting on the floor in their desert fatigues, and passengers around the country messed up due to 20 inches of snow at a $5 billion facility that was supposedly going to do away with weather delays, and things just didn't add up.

The media smelled a cover-up, which is like waving a t-bone steak in front of a hungry Rottweiler.

If They'd Just Told The Truth Right Off... The truth was that, as humans do sometimes, somebody dropped the ball and DIA found itself without a plan to handle a 20-inch snowstorm. A screw-up. But instead of simply coming out with the hard facts, the airport PR hacks went into their usual tell 'em anything mode, a technique that's worked well in the past, but backfired badly this time. By the time the airport finally opened, DIA's PR department had less credibility than Saddam Hussein as a candidate for term life insurance.

But finally, the intense national coverage led the airport to come clean. They announced at a press conference that indeed, they didn't have an adequate snow-management plan, and - countering their original contentions of operational perfection - they were even going to hire a "snow consultant" to fix things, as opposed to relying on the snow job its PR people were providing.

But the damage was done - Denver was splattered all over the national news as an airport to avoid if there is any chance of bad weather.

A Murder-Suicide Pact In The Works?. And that brings us back to the all-weather claim made by DIA and tacitly supported by a host of financial hangers-on, in order to prove the need for the new airport.

After being repeatedly badgered by reporters on the all-weather claim, including the two quotes above, the Airport's long-time chief spokesperson finally blurted out:

"... I'd like to choke the person who came up with that (all-weather) term..."

Within hours, the Denver media dug up the intended strangle victim. Oops. Guess who was behind those all-encompassing quotes? Put it this way - we now have Denver's first pre-announced murder-suicide. Grab your trachea, guy, and squeeze vigorously.

But it gets better.

All Those Great Promises? Oh, Never Mind. The real story was when this same chief DIA PR official was questioned on a radio talk show on December 28th about the original promises and claims made by the City of Denver, its officials, and DIA supporters in order to "prove" a new airport was needed.

The host asked why DIA and the City had made claims for the airport that they knew not to be within several zip codes of being accurate. The PR guy's response was clear.

Yes, of course, he admitted, the airport and the City used what he termed as "hype" and "hyperbole" to sell the need for a new airport. They did so, he noted, to get public support. Basically, he admitted that DIA put out outlandish projections, including the all-weather jive, to mislead the public.

Cutting to the chase, he admitted that they lied.

When asked why public officials would say things they knew not to be true, he took the Nuremberg defense. The public officials were just following orders. At the time of construction, those would be coming from none other than Federico Pena, who went on to greater heights of hyperbole, being responsible as DOT Secretary for the ValuJet FAA cover-up that killed 110 people.

Lots of "Hype" & "Hyperbole" Behind DIA. We could get into the other jive-lie claims - like how the new airport would win new nonstops to Asia (topographic, operational and demographic issues essentially preclude it) or how it would increase service for smaller airports in the region (ask the smaller communities in the area that lost service from one of two hubbing carriers) or the ridiculous concocted nonsense that DIA would attract new service from points all over Europe. (Today, DIA has nonstops to three European points, far from the dozen or so, with over 50 weekly departures, that the airport was supposed to magically attract by 1993.) Or the "hyperbole" that Stapleton couldn't be expanded to handle future growth. (The airport's 1988 EIS outlined growth potential to over 70 million passengers.) No, it didn't default on its bonds, at least not yet, but it has been re-financed a number of times, and, according to the former head of the SEC, it loses money. And the delay stuff? Check out the first three years of operations. Even since then, it's nothing spectacular. Weather delays are not a thing of the past.

There's lots more, but now, they've admitted that we can't trust any of the claims on which $5 billion's been spent to date.

But It Exists. So They Need To Be Honest Going Forward. DIA is here. It's operating. And it needs to be supported.

But that doesn't change the fact that it was built on lies and doctored data that were obvious at the time, but conveniently ignored by a lot of aviation sectors who knew better. Now that they've come clean, it's a lesson that needs to be learned.

We're proud that The Boyd Group was among the few in the consulting field that pointed out these things from the start. Too bad some of our colleagues in the business were afraid to stand up lest they offend a politician or lose out on some business.

The nation needs more airport capacity. But when snake oil is needed to support a given project, it's a political boondoggle, not a capacity project.

(c) 2007, The Boyd Group/ASRC, Inc. All Rights Reserved
Posted by James Zellmer at 7:00 PM

January 3, 2007

TSA's Latest: Sponsored X-Ray Bins

John Croft:
The US Transportation Security Administration (TSA) is launching a one-year pilot programme to allow companies to place advertisements in bins at passenger screening checkpoints at “select” US airports in return for equipment donations.

The effort follows a 3-month test programme at Los Angeles International Airport (LAX) security checkpoints that started in July.

TSA is looking for commercial advertising companies who will team with an airport to provide divestiture bins (the plastic bins used to transport passenger carry-on items through the X-ray machine); divestiture and composure tables; and bin return carts free-of-charge to the TSA. In return, the companies will be allowed to place airport-approved ads “on the bottom of the inside of the bins,” says a TSA spokeswoman. Airports partnered with ad companies will ultimately be required to screen the materials for “offensive, obtrusive, political or controversial” content, she adds.
Not a bad idea, actually. How about a free bottle of water with the ad?
Posted by James Zellmer at 4:51 PM

December 31, 2006

On Earmarks & Lobbyists

Doonesbury. Much more on earmarks, including local activity, here.
Posted by James Zellmer at 9:03 AM

December 28, 2006

Guns to Caviar Index

Daniel Gross:
Reading the news, it's easy to get the sense that the world is at war: strife in Afghanistan, chaos in Iraq, genocide in Darfur, upheaval in Lebanon, and a variety of insurgencies and border squabbles around the globe. Reading the news, it's also easy to get the sense that the world is in the midst of a golden age of peaceful prosperity. Each year, tens of millions of Indians and Chinese join the middle class. Latin America and South America, previously dominated by authoritarian regimes and civil wars, are now generally democratic and enjoying steady growth.

So, which is it? Is the world more peaceful or more warlike? Since Americans are doing the lion's share of the fighting and military policing, it's difficult for us to answer the question objectively. Fortunately, there is an unbiased global economic indicator that sheds some light on the question: the Guns-to-Caviar Index.
Posted by James Zellmer at 8:20 PM

December 27, 2006

Gerald R. Ford and Presidential Approval

Charles Franklin:

President Gerald R. Ford died last night. Today's initial stories have stressed his role in restoring the country after Watergate, and have emphasized that he was a decent man. They also dwell on his pardon of President Nixon. I thought it might be worthwhile to review President Ford's approval ratings as an alternative way of recalling his presidency. While less easy to judge "good" and "bad", the data are also less sentimental about his time in office.
Posted by James Zellmer at 2:29 PM

December 26, 2006

2006 Foot in Mouth Awards

Tony Long:
Welcome to Wired News' 2006 Foot-in-Mouth Awards program. You, the readers, have sent us your picks for the lamest quotes from or about the world of technology during this eventful year. We have selected the "best" of those and present them to you now.
Posted by James Zellmer at 10:12 PM

December 25, 2006

Earmarks' Declining Political Utility?

Timothy Egan:
Until this year, Richard W. Pombo, the seven-term Republican congressman from the Central Valley, had never caused much fanfare about bringing home earmarks, the special local projects that circumvent the normal budgeting process. He was far better known for his work fighting environmental regulations.

All that changed in the closing months of this year’s surprisingly tight re-election campaign, when Mr. Pombo began trumpeting the money he had directed to his car-bound district — particularly $75 million for highway expansion, a gift for one of the most congested areas of California.

But it was not enough to persuade voters like Alex Aldenhuysen, a self-described independent, just out of the Navy and voting for the first time in two years. He said he was turned off by Mr. Pombo’s earmark talk. And in the end, Mr. Pombo lost his seat to a Democrat in one of the year’s most significant upsets.
Much more on earmarks, including local politicians use and views of them, here.
Posted by James Zellmer at 10:18 PM

December 24, 2006

Meet the New Boss, Same as the Old Boss: Dems to Place Howard Berman in Charge of IP Subcomittee

So is there any hope for such reform from the Democrats? Word from Washington so far: Fat chance. As reported in the LA Times two weeks ago (registration required but hey, it’s LA), the crucial House IP subcommittee will be chaired by Hollywood Howard (Berman) — among the most extreme of the IP warriors. It is this committee that largely determines what reform Congress considers. It is the Chairman who picks what voices get heard. And while Berman is a brilliant man — whose brilliance could really have been used in the problems facing the mid-east — his brilliance has not yet been directed towards working out the problems of IP and the Net with any view beyond the narrowest of special interests.

This is like making a congressman from Detroit head of a Automobile Safety sub-committee, or a senator from Texas head of a Global Warming sub-committee. Are you kidding, Dems? The choice signals clearly the party’s view about the issues, and its view of the “solution”: more of the same. This war — no more successful than President Bush’s war — will continue.

No doubt, there are Net issues beyond copyright — surveillance, net neutrality, etc. But I suggest this choice is an important signal about this party (and I’m afraid, any party). I once asked a senior staffer of a brilliant Senator why the Senator didn’t take a stronger position in favor of Net Neutrality. “No Senator remains a Senator opposing an industry with that much money” was his answer.
Posted by James Zellmer at 10:11 PM

December 23, 2006

Sales Taxes & Online Shopping

Opinion Journal:
But even Christmas stories, from Dickens to Seuss, need a villain. We'd like to nominate your friendly neighborhood state governments, which for years now have been predicting dire declines in state finances because untaxed online shopping would erode the revenue-raising ability of sales taxes.

As usual, the political gloom proved to be overwrought. State tax revenues took a header in 2002 along with the rest of the economy, but they've been growing smartly ever since. The third quarter of this year saw state tax revenues up 4.6% over last year, and that was a deceleration from growth that has bumped along at close to 10% at times in recent years. State sales-tax receipts grew at 4% in the third quarter--and that was the slowest growth in three years. The biggest news about the sales-tax apocalypse is that it isn't happening.

But the strong trend lines for overall tax receipts and sales-tax revenue in particular haven't slowed the move among states to grab a piece of the online-sales pie. In the 14 years since the Supreme Court ruled that the myriad state and local taxes were too complex for mail-order retailers to be expected to master, there's been a movement to obviate that argument by "streamlining" the country's many sales-tax regimes.
Posted by James Zellmer at 8:16 AM

December 20, 2006

Federal Subsidies Turn Farms into Big Business

Gilbert Gaul, Sarah Cohen & Dan Morgan:
The cornerstone of the multibillion-dollar system of federal farm subsidies is an iconic image of the struggling family farmer: small, powerless against Mother Nature, tied to the land by blood.

Without generous government help, farm-state politicians say, thousands of these hardworking families would fail, threatening the nation's abundant food supply.

"In today's fast-paced, interconnected world, there are few industries where sons and daughters can work side-by-side with moms and dads, grandmas and grandpas," Rep. Jerry Moran (R-Kan.) said last year. "But we still find that today in agriculture. . . . It is a celebration of what too many in our country have forgotten, an endangered way of life that we must work each and every day to preserve."

This imagery secures billions annually in what one grower called "empathy payments" for farmers. But it is misleading.
Posted by James Zellmer at 10:11 PM

December 19, 2006

Goodbye VHS, Farewell Fair Use

As VHS tapes and VCRs head the way of Betamax and phonographs, commentator Bill Hammack warns that the right to fair use is in danger of disappearing right along with them.

Back in the 1980s, the Supreme Court ruled VCR makers couldn't be held liable for copyright infringement.

That gave consumers the right to make personal copies of TV shows and movies using a VCR.

The new digital media that are erasing the VHS format are also erasing our rights.

A few years ago, a Judge issued a catch-22 ruling: Yes, she said, we can copy commercial DVDs too. But no one can sell the software to do that.
Posted by James Zellmer at 8:48 PM

December 16, 2006

White House Tightens Publishing Rules for USGS Scientists

John Heilprin:
New rules require screening of all facts and interpretations by agency scientists. The rules apply to all scientific papers and other public documents, even minor reports or prepared talks, according to documents obtained by The Associated Press.

Top officials at the Interior Department's scientific arm say the rules only standardize what scientists must do to ensure the quality of their work and give a heads-up to the agency's public relations staff.

“This is not about stifling or suppressing our science, or politicizing our science in any way,'' Barbara Wainman, the agency's director of communications, said Wednesday. “I don't have approval authority. What it was designed to do is to improve our product flow.''

Some agency scientists, who until now have felt free from any political interference, worry that the objectivity of their work could be compromised.
Posted by James Zellmer at 2:42 PM

December 12, 2006

Congressional Staff Size & Salary Database

Posted by James Zellmer at 9:21 AM

December 10, 2006

Dairy Industry Crushes Innovator Who Bested Price-Control System

Fascinating, by Dan Morgan, Sarah Cohen and Gilbert Gaul:
In the summer of 2003, shopers in Southern California began getting a break on the price of milk.

A maverick dairyman named Hein Hettinga started bottling his own milk and selling it for as much as 20 cents a gallon less than the competition, exercising his right to work outside the rigid system that has controlled U.S. milk production for almost 70 years. Soon the effects were rippling through the state, helping to hold down retail prices at supermarkets and warehouse stores.

That was when a coalition of giant milk companies and dairies, along with their congressional allies, decided to crush Hettinga's initiative. For three years, the milk lobby spent millions of dollars on lobbying and campaign contributions and made deals with lawmakers, including incoming Senate Majority Leader Harry M. Reid (D-Nev.).

Last March, Congress passed a law reshaping the Western milk market and essentially ending Hettinga's experiment -- all without a single congressional hearing.

"They wanted to make sure there would be no more Heins," said Mary Keough Ledman, a dairy economist who observed the battle.

At the end, participants said, Reid was plainly exasperated. "I'm not listening to any more of this," he said. "I'm out of here."

Reid made his move on Dec. 16, with the Senate chamber nearly empty. He brought up the milk bill, which passed a few minutes later by "unanimous consent," a procedure that requires no debate or roll call vote if both political parties agree. Reid and Kyl said in recent statements that their goal was to level the playing field for milk producers.
Our elected officials at work.
Posted by James Zellmer at 10:33 PM

December 9, 2006

Iraq Update

"Fabius Maximus":
To some, defeat implies a victor. North Vietnam and its allies in the South defeated us thirty years ago. Nothing like that has occurred in Iraq. The collapse of Iraq has no obvious victors. Even Iran might suffer if the instability spreads across the Middle East’s porous borders.

But there are other ways to lose. We’ve found one.
Posted by James Zellmer at 10:27 PM

December 5, 2006

AT&T: No Fiber to the Home

Well, we Wisconsinites subject to AT&T's new monopoly can pound sand. No fiber for us.... Reuters:
"Our view at this point is that we're not going to have go 'fiber to the home.' We're pleased with the bandwidth that we're seeing over copper," Chief Financial Officer Richard Lindner told a Credit Suisse conference.

"On average, at this point, we're producing about 25 megabits (per second). But in many many locations, we're producing substantially more than that."
Nice to see the status quo - standing still while the rest of the world moves on.
Posted by James Zellmer at 8:31 PM

December 4, 2006

Search Wisconsin Political Blogs

WisOpinion. A good idea.
Posted by James Zellmer at 9:47 PM

December 3, 2006

Revenge of the Garlic Farmers, or More Feeding at the Public Till

Alexei Barrionuevo:
For decades, the fiercely independent fruit and vegetable growers of California, Florida and other states have been the only farmers in America who shunned federal subsidies, delivering produce to the tables of millions of Americans on their own.

But now, in the face of tough new competition primarily from China, even these proud groups are buckling. Produce farmers, their hands newly outstretched, have joined forces for the first time, forming a lobby group intended to pressure politicians over the farm bill to be debated in Congress in January.

Nobody disputes that competitive pressures from abroad are squeezing fruit and vegetable growers, whose garlic, broccoli, lettuce, strawberries and other products are a mainstay of world kitchens. But the issue of whether the United States ought to broaden farm subsidies beyond the commodity crops like corn and cotton, which have historically been protected, is a big flashpoint.
Posted by James Zellmer at 7:10 PM

December 1, 2006

Cringely on VOIP Privacy

Robert X. Cringely:
The Communications Assistance for Law Enforcement Act (CALEA -- I've written about this one before) requires "managed" VoIP operators to provide law enforcement agencies a point of interception so they can tap your VoIP calls. What's a "managed" VoIP service? Packet8, Vonage, Comcast, and AT&T all certainly qualify, but does Skype? Yes, if you think of billing as management, now that there is SkypeOut and SkypeIn. And given the current management at the U.S. Department of Justice, "managed" could mean pretty much anything.

VoIP interception is usually done at the SBC/proxy. The network operator's SBCs perform decryption/encryption on the "secure" packets as they go through the node. It is a matter of "trust," as they say in the industry. If you want to encrypt you must also be willing to trust an SBC/proxy in China, Russia, wherever. That's the attack point.
Posted by James Zellmer at 5:39 PM

Our Lobbyist Friends, the MPAA

A few months back, of course, you'll recall the big scandal over HP's use of "pretexting" to spy on various people to figure out who leaked some information from the board of directors. Pretexting is a nice way of describing a basic form of social engineering identity theft. Basically, you call up a company pretending to be someone in order to get their information. It seems pretty clear it should be illegal, and while Patricia Dunn was eventually charged with crimes over the practice, there were plenty of questions as to whether or not California laws actually made pretexting illegal. This surprised many people, who then started trying to push through such laws, which haven't really gone very far. In fact, there were similar laws that politicians had tried to put in place earlier that had failed as well.

A bunch of folks have submitted this morning that a Wired News investigation found out that the California law to make pretexting illegal had strong (nearly unanimous) support... until the MPAA killed it. Apparently, MPAA lobbyists explained to California politicians that they need to use this identity theft method to spy on file sharers. This isn't an idle threat either.
Posted by James Zellmer at 5:10 PM

Air Travel Liberalization

Randy @ Boeing:
Earlier this year an important study came out, taking a look at the economic impact of liberalization. And I've been meaning to share it with you and talk a bit about what it means for our business.

Over the past 25 years, three main forces have radically changed the airline industry: the regulatory environment, airplane/aerospace capabilities, and airline strategies/business models.

First, changes to government regulations have been critical in shaping the airline industry. Since the deregulation of the U.S. market in 1978, we've seen a dramatic shift in domestic and international markets. And we've also seen increased liberalization - even "open skies" - in international markets. This freer market access has had the effect of intensifying airline competition and causing airlines to focus more on what passengers want.
Posted by James Zellmer at 5:07 PM

November 28, 2006

The End of Risk Pooling

John Robb:
Another sign that we are increasingly on our own. The insurance industry is rapidly (and inexorably) eliminating the idea of risk pooling:

As insurers use the new techniques to get ever-more-refined estimates of what individual policyholders are likely to cost in the future, they may be tempted to charge people closer and closer to full freight for treating an illness or rebuilding a fire-damaged home. Then even those who benefited from the end of cross-subsidies could see their rates go up as they effectively are asked to pay their own way, rather than share the cost by pooling with others.
The Economist has more.
Posted by James Zellmer at 8:50 AM

November 27, 2006

Two Senators Stop Late 2006 Earmark Stuffed Spending Bills

John Fund:
Sens. Tom Coburn of Oklahoma and Jim DeMint of South Carolina have decided to take a stand against overspending by objecting to the nearly 10,000 earmarks, or member-sponsored pork projects, larded throughout the spending bills Congress is currently considering.

Their obstinacy has convinced the leadership of the departing Republican Congress that they probably won't be able to pass spending bills in next month's short lame-duck session. Instead, they are likely to pass a stopgap "continuing resolution," which will continue funding all programs at last year's level until the new Democratic Congress passes its own versions of the funding bills.

ass earmark-stuffed catchall spending bills could save taxpayers a cool $17 billion. All 10,000 earmarks in the pending bills will expire if they aren't passed by the end of the year.

Overall federal spending has gone up by 49% since 2001, but you wouldn't know it from the anguished cries of those who regard ever-higher spending as some sort of birthright.
Useful timing, given the upcoming Treasury/Fed trip to China to talk about exchange rates and China's extensive dollar reserves (movement away from dollar reserves could be a real problem for the United States). Much more on earmarks, including local commentary.
Posted by James Zellmer at 1:27 PM

November 26, 2006

A Few Words With Jerry Brown

Deborah Solomon:
Then how would you describe yourself politically?

I’m very independent. There’s a great line from Friedrich Nietzsche: A thinking man can never be a party man.
Posted by James Zellmer at 9:58 PM

"As Power Shifts in New Congress, Pork May Linger"

David Kirkpatrick:
Mr. Stevens, an 83-year-old Republican, and Mr. Inouye, an 82-year-old Democrat, routinely deliver to their states more money per capita in earmarks — the pet projects lawmakers insert into major spending bills — than any other state gets. This year, Alaska received $1.05 billion in earmarks, or $1,677.27 per resident, while Hawaii got $903.9 million, or $746.05 per resident, according to Taxpayers for Common Sense, a nonpartisan group that tracks such figures.

Representative Nancy Pelosi, the Democratic leader, and many Democratic candidates have railed for months against wasteful “special interest earmarks” inserted into bills “in the dark of night.” Now their party’s electoral victories mean that Mr. Stevens will hand Mr. Inouye the gavel of the Senate defense appropriations subcommittee, which presides over the largest pool of discretionary spending and earmarks. But if the Democratic leaders are talking about “earmark reform,” that may be news to Mr. Inouye.

“I don’t see any monumental changes,” Mr. Inouye said in a recent interview. He plans to continue his subcommittee’s approach to earmarks, he said. “If something is wrong we should clean house,” he said, “but if they can explain it and justify it, I will look at it.”
business as usual.

Much more on earmarks, including significant Wisconsin activity here.

Wikipedia on earmarks.

Wisconsin Senator Herb Kohl and Congressman David Obey (among others) continue to bring home the bacon - cha ching on our kid's charge cards - :
  • 4.7M for military battery technology, mostly for Madison's Rayovac (Kohl).
  • 2.4M for improvements to the Rice Lake Airport (Obey)
  • $260K for UW-Madison agricultural grazing research (Obey).
Wisconsin per capita "pork" spending is $47 (Massachusetts is 45) while Robert Byrd's ongoing efforts to pave over West Virginia requires $327/resident.

Tammy Baldwin's comments regarding earmarks.
Posted by James Zellmer at 7:04 PM

As goes Peoria (Plano?)....

Virginia Postrel:
Plano does represent the New Economy, built on skilled, creative people. But it fits neither Brooks’s emphasis on bohemianism among the professional classes nor Richard Florida’s new industrial policy prescribing groovy uptowns with lots of gays. As Harvard economist Edward Glaeser wrote in a review of Florida’s The Rise of the Creative Class: “I’ve studied a lot of creative people. Most of them like what most well-off people like—big suburban lots with easy commutes by automobile and safe streets and good schools and low taxes. . . . Plano, Texas was the most successful skilled city in the 1990s (measured by population growth)—it’s not exactly a Bohemian paradise.”

In fact, Plano boomed because it’s cheap—the Stein Mart of towns. It allows residents to live a scaled-up, globalized version of the family-centered life of the postwar suburbs, a twenty-first-century Wonder Years. While you can find a $7 million estate in Plano, you can also buy a perfectly reasonable vintage ranch house, possibly with a pool, for less than $200,000. From that address, you can send your kids to excellent public schools. By contrast, on Kaus’s modest street in Venice, a tiny two-bedroom, one-bath bungalow was recently on the market for $754,000, making it one of the cheapest houses in the area (and the schools are lousy).
Plano is the home of Frito-Lay, EDS, JC Penney, Cadbury Schweppes, Ericsson, among others.
Posted by James Zellmer at 1:33 PM

Polar opposite districts top nation in turnout

Craig Gilbert:
Jim Sensenbrenner's (5th) constituents would seem to have little in common with Tammy Baldwin's (3rd) constituents.

Sensenbrenner's heavily suburban U.S. House district is the state's most conservative. Baldwin's, anchored in Madison, may be its most liberal.

But voters in both places have come to share a striking distinction: They flock to the polls in greater numbers than voters almost anywhere else in the country.

More than 314,000 people voted in the Republican Sensenbrenner's 5th District on Nov. 7, and more than 304,000 voted in the Democrat Baldwin's 2nd District.

Only two congressional districts in the nation produced more votes, and both are at-large, statewide seats (Montana and South Dakota) that have a lot more people than other districts.
Posted by James Zellmer at 1:25 PM

November 24, 2006

Ingredients of a 2007 Grand Bargain on Social Security?

The Economist:
So Washington is full of rumours that 2007 will bring a Grand Bargain on social security reform (see Mark Thoma's take here and Vox Baby here). The Bush team's plan is to sound sufficiently conciliatory and open-minded that it becomes impossible for the Democrats not to sit down and talk. That strategy just might succeed. Stonewalling is a plausible political tactic when you are in opposition (though still shamefully shortsighted). It doesn't work so well if you are actually in charge on Capitol Hill, particularly when you announce that retirement security is one of your top legislative priorities.
Posted by James Zellmer at 10:03 PM

November 21, 2006

Reduced Fed Transparency: Inflation on the Way?

Barry Ritholtz:
Last year, we lamented the passing of M3 reporting. This broadest of money supply measures had shown a discomforting increase in liquidity, far greater than what M2 was revealing.

At the time of the M3 announcement, we suspected the Fed was attempting to cover their tracks, disguising an ongoing increase in money supply and an unstated "easing" in Fed bias. Since that time, we have learned: the Treasury Department was also adding liquidity -- a duty they have assumed, in part, in addition to the same performed by the Fed. Indeed, based on the credit growth data Doug Noland published last month (October Credit Review), it appears that the Fed has - despite increasing interest rates - actually eased over the last two years.
Posted by James Zellmer at 7:22 PM

November 19, 2006

Feingold on the Long War

Wisconsin Senator Russ Feingold addressed the Madison Civics Club yesterday. His speech addressed the Long War. Adam Malecek was there:
Feingold said that Africa also presents a number of critical issues related to terrorism, and that it is a growing haven for many terrorist operatives. He noted that terrorists blew up American embassies in Africa, not in Afghanistan or Iraq, and that the culprits went to South Africa to hide.

He said even though he was well-educated and studied abroad, at 39 years old he didn't know anything about Africa -- and he was on the Foreign Relations committee.

"And I spent 15 years since learning about (Africa). But I offer that as a commentary on how prepared this country was on 9/11," he said.

Feingold pointed out the fact that the northern part of Africa is only about 20 miles from the Middle East.

"But we don't think of them that way. We think of them as separate," he said, adding that the United States needs to work on determining the complicated interrelationships between various nations and terrorist groups.
Useful sites on the Long War:Andy Hall has more as does Douglas Schuette.
Posted by James Zellmer at 1:14 PM

A New Take on Net Neutrality

The debate over net neutrality1 has often focused on video as the dominant medium that made the prioritization of packets either crucial or harmful. However, video is not the offering that will suffer the most if net neutrality becomes a wistful memory. Rather, the users that are likely to be most materially disadvantaged are those that utilize the Net for interactive communications – particularly voice over IP (VOIP) and online gaming. Of these two finalists for the dubious title of “innovation most likely to be stifled to the detriment of everyone by loss of net neutrality,” gaming is by far the more irreplaceable and senseless loss.

Unlike video and voice, ISPs are unlikely to have or be able to obtain a viable material stake in the gaming business and have no replacement for the service. As a result, consumers stand not only to lose their choice of the source of this product, but the very value of the gaming service itself.
Posted by James Zellmer at 12:40 PM

November 15, 2006

Peak Oil Theory – “World Running Out of Oil Soon” – Is Faulty; Could Distort Policy & Energy Debate

Cambridge Energy Research Associates:
In contrast to a widely discussed theory that world oil production will soon reach a peak and go into sharp decline, a new analysis of the subject by Cambridge Energy Research Associates (CERA) finds that the remaining global oil resource base is actually 3.74 trillion barrels -- three times as large as the 1.2 trillion barrels estimated by the theory’s proponents -- and that the “peak oil” argument is based on faulty analysis which could, if accepted, distort critical policy and investment decisions and cloud the debate over the energy future.

“The global resource base of conventional and unconventional oils, including historical production of 1.08 trillion barrels and yet-to-be-produced resources, is 4.82 trillion barrels and likely to grow,” CERA Director of Oil Industry Activity Peter M. Jackson writes in Why the Peak Oil Theory Falls Down: Myths, Legends, and the Future of Oil Resources. The CERA projection is based on the firm’s analysis of fields currently in production and those yet-to-be produced or discovered.

“The ‘peak oil’ theory causes confusion and can lead to inappropriate actions and turn attention away from the real issues,” Jackson observes. “Oil is too critical to the global economy to allow fear to replace careful analysis about the very real challenges with delivering liquid fuels to meet the needs of growing economies. This is a very important debate, and as such it deserves a rational and measured discourse.”
Posted by James Zellmer at 10:31 PM

"Meet the New Boss, Same as the Old Boss"

Ed Cone:
WSJ: "After more than a decade of Republican rule in Washington, Democratic lobbyists have a lot to celebrate. Just a week after Election Day, they are getting promotions and signing up new clients."

NYT: "Democratic lobbyists are fielding calls from pharmaceutical companies, the oil and gas industry and military companies, all of which had grown accustomed to patronizing Republicans, as the environment in Washington abruptly shifts."
Posted by James Zellmer at 2:48 PM

More Controversy Over Web Tracking Cookies

Catherine Holahan:
Specifically, the groups want the FTC to require advertisers to alert consumers when tracking cookies and other such files are present on sites, and then let consumers choose whether they are willing to be monitored. "Most consumers have no idea of the extensive system of online data collection and targeted marketing that has evolved," says Chester. "They need to know that data is being collected about their viewing, that data is being sent back to a computer based on their tastes…there needs to be an opt in." Some companies that specialize in behavioral advertising are already getting the message.

The complaint says Microsoft (MSFT) and TACODA, the largest behavioral targeting ad network, are among companies that use behavioral targeting without sufficiently alerting Web surfers. A Microsoft representative didn’t return a call seeking comment. TACODA says it plans to be more upfront about targeting practices.
Posted by James Zellmer at 12:06 PM

Wisconsin 27th in "Entrepreneur Friendliness"

Small Business & Entrepreneurship Council [PDF]:
The Small Business Survival Index ranks the 50 states and District of Columbia according to some of the major government-imposed or government-related costs affecting investment, entrepreneurship, and business.

This eleventh annual Small Business Survival Index ties together 29 major government-imposed or government-related costs impacting small businesses and entrepreneurs across a broad spectrum of industries and types of businesses:
  • Personal Income Tax. State personal income tax rates affect individual economic decision-making in important ways. A high personal income tax rate raises the costs of working, saving, investing, and risk taking. Personal income tax rates vary among states, therefore impacting crucial economic decisions and activities. In fact, the personal income tax impacts business far more than generally assumed because roughly 90 percent of businesses file taxes as individuals (e.g., sole proprietorship, partnerships and S-Corps.), and therefore pay personal income taxes rather than corporate income taxes. Measurement in the Small Business Survival Index: state’s top personal income tax rate.1
  • Capital Gains Tax. One of the biggest obstacles that start-ups or expanding businesses face is access to capital. State capital gains taxes, therefore, affect the economy by directly impacting the rate of return on investment and entrepreneurship. Indeed, capital gains taxes are direct levies on risk taking, or the sources of growth in the economy. High capital gains taxes restrict access to capital, and help to restrain or redirect risk taking. Measurement in the Small Business Survival Index: state’s top capital gains tax rate on individuals.2
Posted by James Zellmer at 7:03 AM

November 13, 2006

Madison #5 in US in % of "Exurban" Population!


Alan Berube, Audrey Singer, Jill H. Wilson, and William H. Frey of [1.5MB PDF] The Brookings Institution:
  • Madison 2000 Census Population: 501,774
  • Total Exurban Population: 110,127
  • Percentage Exurban: 21.9%
Posted by James Zellmer at 10:09 AM

November 10, 2006

AMT Overhaul on the Way?

Lori Montgomery:
The focus on the AMT is hardly surprising, given that victims of the tax have been concentrated in high-cost urban areas such as Washington, New York and San Francisco -- places that tend to vote Democratic. Rangel, Hoyer and Nancy Pelosi (D-Calif.), the presumptive House speaker, all represent states hit hard by the AMT, which is sometimes called the "blue-state tax." To map states with the highest concentrations of AMT taxpayers is to draw bull's-eyes over California and the Northeastern seaboard.
Posted by James Zellmer at 10:45 PM

Kinsley on the Dem's Tax Plans

Michael Kinsley:
Democrats call for ending the "Disabled Veterans Tax" and the "Military Families Tax." The what? There cannot be any such thing as a Disabled Veterans Tax. It is a label dreamed up by people wanting special treatment, like the Republicans' brilliant "Death Tax" for the estate tax. Maybe they deserve it, maybe they don't. But why can't we leave this bullying by terminology to Newt Gingrich?

The problem with tax credits in general is that they never appear in the budget, so they never get the same scrutiny as direct spending, although their impact on the deficit is exactly the same. By definition, they cost more than whatever benefit they are intended to achieve, since no one is going to be induced to spend an extra dollar on, say, dance lessons (because some member of Congress has decided that it would be good for the country if more people knew how to dance) unless the subsidy is worth more than a dollar.
The Economist:
Tax credits are the worst possible tax policy from the standpoint of economic growth. They are distortionary: they cause consumers to divert spending from higher-valued to lower-valued uses. They are a clumsy way to solve externality problems: if you want less of something, tax it. They are not transparent, so people have a very hard time finding out how much the government is spending on, say, dance lessons. And they may actually discourage work.

For almost everyone except rock stars, leisure and work are basically perfect substitutes: a decision to work less is a decision to consume more leisure. The basic intuition of supply-side economics was that if you cut the taxes on people's labour, they would work more, since to them, the tax cut would essentially be the same as a wage increase. This intuition is simple, easy to grasp, and widely accepted. Unfortunately, it is also wrong.
Posted by James Zellmer at 9:19 AM

Interesting Data Mining Article: "I have Nothing to Hide"

Guy Kewney:
But you need to understand the basic principles of data mining to understand why the world of spooks and the world of search engines are about to overlap, and why you should be nervous about this.

The lesson here is one I call "The Sainsbury's Lesson" when doing presentations for technical audiences, because I was taught this by a data miner who worked for the giant British supermarket of that name.

The story, summarised, is that Sainsbury's was spending an absurd amount of money sending people promotional coupons, money-off special offers, and other junk mail to encourage them to swing by the Sainsbury's supermarket next time, rather than Waitrose or Safeway or Asda - and it was pretty hard to be sure it was actually doing any good. The trouble was simple: they were sending girly shampoo promotions to households with six rugby-playing male students, or home improvement promotions to households with one elderly pensioner with osteoporosis, or bulk beer deals to households where they were all strictly teetotal. Not profitable stuff. And their IT staff heard about this and said: "But you don't have to do that!"

Worry about governments who will make "pre-crime" a reality.
Posted by James Zellmer at 9:06 AM

November 9, 2006

Politics & Philly Cheese Steaks

The Economist:
The Philly cheese steak is serious business. Ordering etiquette must be adhered to. Customers must state their preferred type of cheese and whether onions will or will not (“wit” or “witout”) be added. John Kerry, when campaigning for president in 2004 in Philadelphia, botched it badly, asking for Swiss cheese instead of the more traditional Cheez Whiz, a processed cheese spread. Even provolone or American cheese would have been better. George Bush ordered “Whiz wit” like a local.
Posted by James Zellmer at 2:04 PM

November 7, 2006

Election Litigation Website

Peter Swire:
As lawyers look for close races to contest, it is important to remember that just because the result of an election is challenged in court, it does not necessarily mean that the public should view the result as tainted or the electoral process broken. Instead, if the litigation ends with the losing side acknowledging that ultimately the votes weren’t there, then this kind of delayed concession speech should be accepted as evidence of the system working successfully, just as if the concession speech is delivered tonight.
Posted by James Zellmer at 10:54 AM

Election Day Links

I had a conversation with a young 4th grader this morning while queueing up at the poll. We clearly need to improve our civics awareness and interest.

Kristian Knutsen is live blogging today's election.
Posted by James Zellmer at 10:22 AM

November 6, 2006

Dane County Register of Deeds Race

I'm happy that we actually have a choice in tomorrow's Dane County Register of Deeds race. This is unusual. I contacted both candidates recently and asked them for their views on Open Records and the Register of Deeds office.

I've been concerned over the years that some government agencies don't follow (ignore?) the Open Records laws. Rather, they take the opportunity to charge taxpayers twice, once via taxes and a second time via various access fees for public information. There are no shortage of arguments over these questions.

Peter Ellestad responded via email (I've not heard from his opponent, Kristi Chlebowski). Peter's response follows:
Sorry to take so long in responding -- I've been driving around the county a great deal.  Regarding my philosophy about records:  I think priority should be given to maintaining and enhancing free access to all real estate records.  At present, anyone who comes in to the register of deeds office may search all of these records at no charge, and will receive help from staff to find what they are looking for.  I've been startled when I've been helping someone find something to be asked "Is there a charge for that?" and I think they've been surprised to hear "No, anyone can search these records for free."  I think that free access is appropriate and is the responsibility of our office to provide. 
However, the situation regarding online searching, at least now, is somewhat trickier.  Our office currently provides two options for on line searchers: Tapestry and Laredo, which are both provided and maintained by a vendor to whom we pay a fee. (Since I’m not the register, my knowledge of the arrangement is not precise and I’m not aware of the exact contractual arrangement.) In the case of Tapestry, a user pays $3.99 by credit card to do a name search, and for documents recorded after 1993 can view and print an image for 50 cents a page. In the case of Laredo, a user pays a minimum of 50 dollars a month to have access to the same search program used on the public search computers in our office. Beyond a certain time threshold there is an additional charge per minute, and the user is able to print unlimited copies included at no additional payment. I think the overall effect of this is that the county does receive some money over and above its cost for providing this system. (However, these programs are providing copies as well as viewing access, and state statutes mandate charging fees for copies, so it’s hard to calculate what portion of the fees are applied to access and what are applied to copy production.) In any case, there certainly is a cost to providing and maintaining this online access, and I think that as long as this extra cost exists, it’s reasonable and appropriate to charge enough to cover that cost and any depreciation on the equipment used to provide the service. But, I don’t think records should be viewed as a product or commodity, and I don’t think access to them should become a cash cow for government.

Basically, I think one the primary functions of our office is to provide constructive notice, so that people have the information they need to make informed decisions about real estate. Our purpose is to archive and safeguard the records, not to hoard them. (In fact, most original documents do not stay in the office; after they are indexed and scanned they are sent back to whomever the drafter lists as the recipient.)

I suspect over time there will be much more electronic or online access to documents and some of these questions of cost will be moot. Regardless of that, I believe that in person access to records in our office should always be completely open and free, and that’s the view I will maintain as register.
From my perspective, land records should be freely available via the internet, just like local assessment data.
Posted by James Zellmer at 12:31 PM

November 5, 2006

Election Day Essay

Michael Kinsley:
In politics the stakes are not small, except in the sense that the arguments exceed by far any differences in what the two established parties actually do when they have the opportunity to govern. Republicans, as Evelyn Waugh is said to have complained about the British Tories, don’t seem to turn back the clock by a single minute. But Democrats don’t seem to push it forward either.

Recent elections have seen the rise of self-styled militant moderates, following the flag of white-horse candidates starting with the businessman Ross Perot and continuing, so far, through Gen. Wesley K. Clark. Business and the military are two fertile breeders of excessive self-confidence, but the only essential qualification for a white-horse candidate is a total lack of experience in running for or holding elective office. And the only essential requirement for white-horse voters is to be, like Howard Beale in Paddy Chayefsky’s movie “Network,” “mad as hell” and “not going to take this anymore.” It is not essential to know why you are so mad, or what exactly you’re not going to take.
Kinsley is correct on governing practices.
Posted by James Zellmer at 10:26 PM

Franklin's Latest Poll Summaries: "Dem Wave Crested, Advantage Shrinks"

UW's Charles Franklin:
Across the board, in Senate, House and Governor's races, the wave boosting the Democrats crested about 10 days ago. Since then the advantage Democrats have built throughout the year has been reduced by from 1.5 to 3.5 percentage points. While forces are still a net positive to the Democrats, these forces are weaker than they were during the week before Halloween. This implies that the most competitive races will now be harder for Democrats to win and easier for Republicans to hold. This implies that the anticipation of a major surge to Democrats now needs to be reconsidered. While race-by-race estimates still show an 18 seat Democratic gain, and 27 seats as tossups (see our scorecard at Pollster.com here), this reduction in national forces makes it less likely the Democrats sweep the large majority of the tossup seats and could result in total gains in the 20s rather than the 30s or even 40s that looked plausible 10 days ago.
Posted by James Zellmer at 7:21 PM

November 3, 2006

Rhetoric & Reality: Mapping Congress' Voting Records on Technology

Declan McCullough:
Ever since the mid-1990s, politicians have grown fond of peppering their speeches with buzzwords like broadband, innovation and technology.

John Kerry, Al Gore and George W. Bush have made fundraising pilgrimages to Silicon Valley to ritually pledge their support for a digital economy.

But do politicos' voting records match their rhetoric? To rate who's best and who's worst on technology topics before the Nov. 7 election, CNET News.com has compiled a voter's guide, grading how representatives in the U.S. Congress have voted over the last decade.

While many of the scored votes centered on Internet policy, others covered computer export restrictions, H-1B visas, free trade, research and development, electronic passports and class action lawsuits. We excluded the hot-button issue of Net neutrality, which has gone only to a recorded floor vote in the House of Representatives so far, because that legislation has generated sufficient division among high-tech companies and users to render it too difficult to pick a clear winner or loser.

The results were surprisingly mixed: In the Senate, Republicans easily bested Democrats by an average of 10 percent. In the House of Representatives, however, Democrats claimed a narrow but visible advantage on technology-related votes.
John Kerry finished second last in the Senate. Locally, Ron Kind, Mark Green and Tom Petri "scored" above 50%. Senate / House scoring methodology. For example, both Senators Feingold and Kohl voted for the National ID card and linking databases while Representative Baldwin voted against it.
Posted by James Zellmer at 8:55 AM

November 2, 2006

State by State Voting Technology Roundup

State contracted with Accenture in 2004 and launched its database before the September 2006 primary; legality of contract was challenged in court and company was forced to expand state access to proprietary database software. Wisconsin law previously required voter registration only in municipalities with a population over 5,000, which works out to about one-sixth of them; as of January 2006, state law required that all voters register. (Election Day registration is available.) The Century Foundation characterizes Wisconsin's poll-worker training efforts as unsatisfactory [TCF State report PDF]; those working with the system, in turn, say the new software is slower and harder to use than the old software.
Posted by James Zellmer at 9:41 AM

October 31, 2006

This is Baghdad. What Could be Worse?

UW-Madison Grad Anthony Shadid:
It had been almost a year since I was in the Iraqi capital, where I worked as a reporter in the days of Saddam Hussein, the U.S.-led invasion in 2003, and the occupation, guerrilla war and religious resurgence that followed. On my return, it was difficult to grasp how atomized and violent the 1,250-year-old city has become. Even on the worst days, I had always found Baghdad's most redeeming quality to be its resilience, a tenacious refusal among people I met over three years to surrender to the chaos unleashed when the Americans arrived. That resilience is gone, overwhelmed by civil war, anarchy or whatever term could possibly fit. Baghdad now is convulsed by hatred, paralyzed by suspicion; fear has forced many to leave. Carnage its rhythm and despair its mantra, the capital, it seems, no longer embraces life.

"A city of ghosts," a friend told me, her tone almost funereal.
Posted by James Zellmer at 8:57 AM

October 30, 2006

More on Yahoo's Cooperation with the Chinese Government

Tom Foremski:
hi Tao was sentenced to 10 years in prison after "illegally providing state secrets to foreign entities".

His crime was to have e-mailed details of the Chinese government's plans to handle news coverage of the 15th anniversary of the Tiananmen Square massacre in 2004. Yahoo! provided crucial information in the case, linking the message and e-mail account with Shi 's computer. Reporters Without Borders accused Yahoo! of acting as a "police informant".
Posted by James Zellmer at 1:26 PM

October 27, 2006

Schwarzenegger's campaign Combines Shopping & Voting Databases

Gin or vodka? Ford or BMW? Perrier or Fiji water? Does the car you buy or what's in your fridge say anything about how you'll vote?

Gov. Arnold Schwarzenegger's campaign thinks so.

Employing technology honed in President Bush's 2004 victory, the Republican governor's re-election team has created a vast computer storehouse of data on personal buying habits and voter records to identify likely supporters. Campaign officials say the operation is the largest of its kind in any state, at any time.

Some strategists believe consumer information can reveal a voter's politics even better than a party label can.

"It's not where they live, it's how they live," said Josh Ginsberg, the Schwarzenegger campaign's deputy political director.
Posted by James Zellmer at 9:21 PM

SAIC'S Robert Hirsch on Peak Oil

Defense & The National Interest:
10/24/06 Peaking of world oil production, an update by Robert Hirsch, Senior Energy Advisor, SAIC:
Posted by James Zellmer at 9:09 PM

Political MoneyLine: Congressional & Senator's Private Gifts of Travel

Interesting data compiled by Congressional Quarterly's Political Moneyline. As always, paper heir Jim Sensenbrenner is #1 in these goodies receiving $203,175 in travel over the past six years. David Obey escaped Wisconsin Winters a number of times, coming in 70th at $79,153. Tammy Baldwin was #147 @ $48,173 while Paul Ryan was #142 @ $48,866. Ryan and Baldwin both travelled to Israel and Jordan courtesy of the American Israel Education Foundation. Russ Feingold was #597 @ $1,078. Scot Paltrow has more.
Posted by James Zellmer at 7:45 AM

October 25, 2006

Tammy Baldwin on Earmarks

I received an email recently from Tammy Baldwin regarding my post on the excesses of congressional earmarks - using our checkbooks:
Dear Mr. Zellmer,

Thank you for contacting me regarding earmark reform. It is good to hear from you, and I apologize for the delay in my response.

Like you, I am concerned about unnecessary government spending. In recent years, government spending has increased dramatically, creating unprecedented national debt. Continued, large-scale deficit spending is unquestionably poor public policy. Many have suggested that one of the ways to cut spending is to reform the practice of "earmarks", which are appropriation amendments that fund specific projects. In the current climate of excessive spending, reforming this amendment process will not go far enough. The government is spending billions of dollars a day on the Iraq War while simultaneously lowering tax revenue by cutting taxes for corporations and wealthy individuals. This shifts the burden onto the middle and lower-income earners who are unable to support such extensive spending.

At the current rate, the United States is adding one trillion dollars to our national debt every eighteen months. According to the Congressional Budget Office (CBO), if the President's current tax and spending polices are continued over the next ten years, the yearly deficit will increase to $439 billion as soon as 2014. The national debt will skyrocket to $14.5 trillion, almost double today's level. Clearly, this course of fiscal irresponsibility cannot be sustained. I believe Congress must return to fiscal discipline, such as in the late 1990s when we turned annual federal deficits into surpluses. Rest assured that I will keep your views in mind regarding earmark reform as the debate over fiscal responsibility and the federal budget continues.

Again, thank you for sharing your views. Your opinion matters to me. If I can be of service to you in any other way, please do not hesitate to let me know. As a result of the anthrax incidents, all mail sent to Congress is first irradiated. This process causes significant delays. To ensure the fastest response, I encourage all constituents who have access to the internet to contact me through my website at http://tammybaldwin.house.gov.


Tammy Baldwin
Member of Congress
I appreciate the email. Baldwin gets points (or her office) for emailing responses whereas our Senators continue to send dead tree responses to electronic inquiries. Tammy's House & Campaign websites. Her opponent in this falls race is Dave Magnum.
Posted by James Zellmer at 4:08 PM

October 23, 2006

Find Out of Congress is a Family Business

The ever useful Sunlight Foundation:
Rep. Richard Pombo ☼ did it with his wife and his brother. In his 2004 presidential campaign, Sen. Joseph Lieberman ☼ did it with his children. Former Majority Leader Tom DeLay did it with his wife and daughter. All have hired relatives to work on their campaigns, paying them salaries out of special interest contributions. Our system of campaign finance is often called "legalized bribery," in which special interests donate tens of thousands of dollars to a member's campaign committee in the hopes of advancing their own issues. Some members of Congress, by hiring their spouses, in effect use their campaign treasury to supplement their own bank accounts. The practice is legal, disclosed in obscure corners of campaign finance reports, and rarely mentioned by those who cover campaigns. And now citizen journalists can investigate it!

I'm proud to announce that the Sunlight Foundation is launching a new distributed research and reporting project that will enable citizen journalists to find out how many members of the House of Representatives have their spouses on the payroll. Our simple, user-friendly six step tool (developed by our ultra-cool Sunlight Labs division) lets users investigate and record their results in just three minutes.
Posted by James Zellmer at 3:36 PM

October 22, 2006

Doonesbury's War

Gene Weingarten:
It's hard to know what to say to a grievously injured person, and it's easy to be wrong . You could do what I did, for example. Scrounging for the positive, I cheerfully informed a young man who had lost both legs and his left forearm that at least he's lucky he's a righty. Then he wordlessly showed me his right hand, which is missing fingertips and has limited motion -- an articulated claw. That shut things right up, for both of us, and it would have stayed that way, except the cartoonist showed up.

Garry Trudeau, the creator of "Doonesbury," hunkered right down in front of the soldier, eye to eye, introduced himself and proceeded to ignore every single diplomatic nicety.

"So, when were you hit?" he asked.

"October 23."

Trudeau pivoted his body. "So you took the blast on, what . . . this side?"
Posted by James Zellmer at 11:51 PM

October 18, 2006

A Lesson from Europe on Healthcare

David Leonhardt:
A few weeks ago, I wrote a column arguing that this country’s increased medical spending over the last half-century has, on the whole, been overwhelmingly worth it. Thanks to new treatments for everything from premature births to heart attacks, human life has continued to lengthen — defying expectations — even without major improvements in public health. Yet, strangely, we talk about medical spending as if it were nothing more than a drag on the economy, rather than an investment in the most important thing of all: our well-being.

I received about 500 e-mail responses from readers, and the most common reaction was a version of a simple question. “Why do Americans spend so much more than folks in most other developed countries while getting worse results?” as Sumati Eberstadt of East Greenwich, R.I., wrote.

In Greece, the government and individuals combine to spend about $2,300 per capita on health care each year, and the average life expectancy is 79 years. Canada, where the hospitals are probably cleaner, spends about $3,300, and people live to about 80. Here in the United States, we spend more than $6,000, yet life expectancy is just below 78.
Posted by James Zellmer at 9:52 AM

October 17, 2006

The Politics of Electronic Rights

echWorld (a UK publication) has an article about a “leaked” letter from the Initiative for Software Choice (ISC) (apparently MSFT funded) about, as the article puts it, the “potentially dire effects if too much encouragement was given to open source software development.”

Nothing weird there. What is weird is, first, that such a letter has to be “leaked” (aren’t submissions to the EC a matter of public record?), and, second, the way in which the letter is made available on the TechWorld website. TechWorld gives you a link to the letter. The link states: “You can view the entire letter here.” And indeed, the link means what it says. You can ONLY view the letter. The PDF is locked so that it can’t be printed.
Posted by James Zellmer at 11:23 AM

October 16, 2006

Words With Jerry Brown

Jill Stewart:
The most enduring and intriguing California politician of our generation is sitting in a sidewalk café, enjoying a balmy offshore breeze in this city's upscale Belmont Shore district. Yet not a single passerby knows it's him.

Laid-back shoppers stream past in linen sundresses and camouflage shorts. This decidedly un-hip man is slightly out of place in his conservative gray suit, fussy dress shirt and white Carroll O'Connor eyebrows. He's not Arnold, instant traffic-stopper. Yet if anyone peered closely, they'd probably recognize the burning eyes of Oakland Mayor Jerry Brown, the darkly handsome upstart governor of the 1970s, now a gray and balding 68-year-old.

He's just emerged from a nearly invisible summer to launch a blatantly negative TV ad against his rival for attorney general of California, and he's finally granting interviews -- including one to me. Barring a brilliant turnaround by his lesser-known but respected competitor, Republican state Sen. Charles Poochigian of Fresno, Mr. Brown will be the next California attorney general.
I voted for Jerry once, in the 1992 Presidential Primary.
Posted by James Zellmer at 10:18 PM

October 15, 2006

Website Tracks 911 Calls

John Cook & Scott Guitierrez:
ohn Eberly wasn't looking for controversy. The 31-year-old Ballard resident just wanted a better way to track the whereabouts of fire trucks and emergency vehicles in the city, a service he said could help people avoid traffic bottlenecks, protests or dangerous situations such as gas leaks.

For the past year, Eberly has operated Seattle911.com, a Web site that until this week took real-time feeds of 911 calls from the Seattle Fire Department and plotted them on Google Maps. The site developed a cult following, with up to 200 unique visitors per day. The Seattle P-I incorporated the service into its Web site.


Schneier, the security expert, says the Seattle Fire Department's decision raises an interesting social question about the use of public information. He said it is the same issue as posting political donations or property records on Web sites.

"What the Fire Department is saying, which is interesting if you think about it, is that we are going to rely on the inconvenience of automating this to give you privacy," Schneier said. "The government is not saying, 'Hey, this data needs to be secret,' they are saying, 'This data needs to be inconvenient to get to.' "
Posted by James Zellmer at 10:31 PM

October 14, 2006


Ed Lowe:
State Rep. Steve Wieckert says he will push to rewrite state laws to enable visiting National Football League teams to continue their pre-game stays in Appleton.

First, however, Wieckert, R-Appleton, said he will request a state attorney general's opinion on whether existing statutes allow police to restrict traffic while ushering visiting-team caravans from Appleton to Lambeau Field.

A legal opinion offered by Nancy Peterson-Bekx, a former prosecutor and current criminal justice instructor at Fox Valley Technical College, has thrown into question police escort practices in place since NFL teams began staying in downtown Appleton in the early 1980s.

Peterson-Bekx said state police agencies cannot disregard traffic laws except when responding to emergencies, or during specifically exempted duties.
Posted by James Zellmer at 3:32 PM

British Gentry, Fiddling While the Abyss Looms

Charles Isherwood:
The time will soon be ripe for fresh political leadership. With a presidential election just a couple of years away, we need to start looking for viable new candidates, fellows with those outside-the-Beltway views voters are said to cherish.

I’d like to suggest the American electorate consider the merits of Captain Shotover, the straight-talking old salt currently and eternally presiding over “Heartbreak House,” George Bernard Shaw’s comedy about British gentry waltzing toward the apocalypse.

Qualifications? He has military experience and fresh ideas. And he’s not beholden to big business types, whom he colorfully refers to as “those hogs to whom the universe is nothing but a machine for greasing their bristles and filling their snouts.” Which reminds me: He already has a crack speechwriter on staff.

True, the candidate has a few glaring liabilities. The rumors about his alcohol consumption are well founded. But there’s always rehab. The attention span is a little short, but is that such a problem in politics these days? Of course he’s a fictional character too. Considered from all angles, though, that may not be a drawback. Imaginary people can’t send instant messages.
A timely, well done presentation of George Bernard Shaw's Heartbreak House. Free ebook. Now playing at New York's Roundabout Theatre. Thanks to the Rep's Rick Corley for suggesting this play.
Posted by James Zellmer at 3:04 PM

October 13, 2006

"Tagging" Air Passengers

Electronically tagging passengers at airports could help the fight against terrorism, scientists say.
The Register has more.
Posted by James Zellmer at 12:28 PM

Philanthropy from the Heart of America

David Leonhardt:
In the last five years, though, something utterly unexpected has happened. The decline has stopped. More people are moving to Ord, the county seat, than leaving, and the county’s population is likely to show its first increase this decade since the 1920’s.

The economics of rural America have not really changed. If anything, the advantages that Chicago, Dallas, New York and other big cities have over Nebraska have only continued to grow. But Ord has finally figured out how to fight back.

It has hired a “business coach” to help teach local stores how to sell their goods over the Internet and to match up retiring shop owners with aspiring ones. Schoolchildren learn how to start their own little businesses — like the sixth-grade girl who made a video of the town’s history and sells it at school reunions — so they will not grow up to think the only job opportunities are at big companies in Omaha or St. Louis. Graduates of Ord High School who have moved elsewhere receive mailings telling them about job opportunities back in town.
Posted by James Zellmer at 9:56 AM

October 11, 2006

Bringing it Home: Earmarks

John Wilke:
Charles Taylor, wealthy businessman and banker, owns at least 14,000 acres of prime land in western North Carolina. He's also the local congressman. So when he steers federal dollars to his district, sometimes he helps himself, too.

Last year, Mr. Taylor added $11.4 million to a big federal transportation bill to widen U.S. Highway 19, the main road through Maggie Valley, a rural resort town in the Great Smoky Mountains. His companies own thousands of acres near the highway there and had already developed a subdivision called Maggie Valley Leisure Estates.

Mr. Taylor also got $3.8 million in federal funds for a park now being built in downtown Asheville with fountains, tree-shaded terraces and an open-air stage. It's directly in front of the Blue Ridge Savings Bank, flagship of his financial empire. He is among the richest congressmen with assets of at least $72 million, records show.

The Republican lawmaker is one of at least a half-dozen House members whose public actions in directing special-interest spending known as earmarks have also benefited their private interests or those of business partners, according to congressional, corporate and real-estate records. Among them is a senior Democrat, Rep. Alan Mollohan of West Virginia.
More on earmarks.
Posted by James Zellmer at 10:31 PM

October 10, 2006

Tammy Baldwin Ranks #22 (out of 435) in Congressional District "Grants"

$28.8B over the past 6 years.

Fedspending.org. Recipient Details:I never heard from Tammy's office regarding her Dane County earmarks.

Kudos to the "Sunlight Foundation" for making this information available to taxpayers. I'm wondering if some of these are SBA or other government loans/grants?
Posted by James Zellmer at 7:56 PM

October 7, 2006

Our Federal Tax Dollars (and politicians) at Work: Intrastate Internet Gambling OK, but other Internet Gambling is Not

Last Saturday the United States Congress passed a port security bill that carried an amendment banning Internet gambling. This was a huge mistake, not because Internet gambling is a good thing (it was already illegal, in fact), but because the new law is either unenforceable or -- if it can be enforced -- will tear away the last shreds of financial privacy enjoyed by U.S. citizens. The stocks of Internet gambling companies, primarily traded in the UK, went into free-fall as their largest market was effectively taken away. I don't own any of those shares, but I guarantee you they will fully recover, which is part of what makes this situation so pathetically stupid.

Ironically, many of the senators who voted for this legislation may not have even known the gambling bill was attached, since it didn't appear in the officially published version of the port bill. But such ignorance is common in Congress, along with a smug confidence that people and institutions can be compelled to comply with laws, no matter how complex and arcane. The amendment was a surprise late addition, pushed by Senate Majority Leader Bill Frist, who has presidential ambitions and reportedly sees this battle against Internet gambling as part of his eventual campaign platform.

Only the new law isn't really against Internet gambling at all, since it specifically authorizes intrastate Internet gambling, imposing on the net the artificial constraint of state boundaries. So the law that is supposed to end Internet gambling for good will actually make the practice more common, though evidently out of the hands of foreigners, which in this case includes not just operators from the UK but, if you live in South Carolina as I do, it also includes people from Florida and New York. Let a million local poker hands be dealt.

What the new law actually tries to control is the payment of gambling debts through the U.S. banking system, making such practices illegal (except, of course, for intrastate gambling, which probably means your state lottery). Once President Bush signs the bill, your bank and credit card companies will have 270 days to come up with a way to prohibit you from using your own money to pay for gambling debts or -- though far less likely-- to keep you from receiving your gambling profits. The law covers not just credit card payments but also checks and electronic funds transfers.
Congressional and Senate votes here. Tammy Baldwin voted yes as did Russ Feingold and Herb Kohl. It would be interesting to know if any of them were aware of what was in this bill.
Posted by James Zellmer at 6:37 AM

Miller Park Economics, or Your Tax Dollars at Work

Tom Haudricourt and Don Walker:
In the three years after moving into Miller Park in 2001, the Milwaukee Brewers made a yearly economic impact of $327.3 million on the five-county area that was taxed to build the ballpark, according to a study by the Institute for Survey and Policy Research at the University of Wisconsin-Milwaukee.

The director of the UWM Center for Economic Development offered a different view, saying the study was a "standard nonsensical sports study that inflates the impact of spending on baseball."

The study, which local public relations firm Mueller Communications Inc. commissioned on behalf of Major League Baseball and the Brewers, was completed in January 2005. It is to be made public for the first time Monday, when baseball Commissioner Bud Selig addresses a meeting of the Greater Milwaukee Committee at Miller Park.
Much more on Miller Park and Bud Selig here. The mosting interesting link is a June, 2004 article in the Washington Post of all places where Bud Selig's hardball tactics were discussed and we learned that former Wisconsin Governor Tommy Thompson won't set foot in the place. Clearly, the opportunity to place the park downtown was a major miss.
Posted by James Zellmer at 6:29 AM

October 6, 2006

60 Minutes has a copy of the No Fly List

Bruce Schneier:
60 Minutes, in collaboration with the National Security News Service, has obtained the secret list used to screen airline passengers for terrorists and discovered it includes names of people not likely to cause terror, including the president of Bolivia, people who are dead and names so common, they are shared by thousands of innocent fliers.
Posted by James Zellmer at 9:16 PM

October 4, 2006


“Life consists with wildness....The most alive is the wildest...In Wildness is the preservation of the World." Henry David Thoreau

“There are certain things that cannot be enjoyed by everybody. If everybody tries to enjoy them, nobody gets any pleasure out of them.” Robert Marshall

“Hunting partakes directly in Nature’s sacrament --- transcending a vacuous voyeur to a guiding guardian.” James A. Schneider

“Everybody knows, for example, that the autumn landscape in the north woods is the land, plus a red maple, plus a ruffed grouse. In terms of conventional physics, the grouse represents only a millionth of either the mass or the energy of an acre. Yet subtract the grouse and the whole thing is dead. An enormous amount of some kind of motive power has been lost.” Aldo Leopold

“The sweetest hunts are stolen. To steal a hunt, either go far into the wilderness where no one has been, or else find some undiscovered place under everybody’s nose.” A Sand County Almanac by Aldo Leopold

“Remember that with large corporations and rich individuals gobbling up property to keep everyone out and conservancies, big government and its agencies devouring land through purchase and eminent domain condemnations to let everyone or no one in, there must be places preserved for "everyman/everywoman" plus one human companion to use unbothered by his/her brethren.” James A. Schneider

“Perhaps the hunter is the greatest friend of animals hunted, not excepting the Humane Society.” Henry David Thoreau
Jim Schneider, a UW Grad and Drexel Burnham Lambert alum is behind MaHunt intellectually and financially.
Posted by James Zellmer at 9:06 AM

October 2, 2006

Fools to the Farm

Daniel Griswold:
A hearing in the House Agricultural Committee last week highlighted everything wrong with U.S. farm policy. In preparation for writing the 2007 farm bill, House members heard from 17 witnesses representing every possible farm lobby —from cotton to corn, sugar to potatoes, rice to eggs, and sorghum — but not a single spokesperson for the interests of the American people as a whole.

Fewer than two percent of Americans farm for a living, and only a third of those farmers receive subsidies. Yet the interests of subsidized and protected farmers dominate every farm bill discussion in Washington. The broader interests of the United States and the other 98 percent of Americans are systematically ignored.

The biggest losers from U.S. farm policy are taxpayers. From 2000 to 2005, Congress spent an average of $17 billion a year in direct payments to farmers. That's real money, even in Washington. Most of those payments did not go to small "family farms," but to large operations and agribusinesses, including some Fortune 500 companies. Indeed, according to the Environmental Working Group, the top 10 percent of recipients collected two-thirds of the payments on offer, and the top 5 percent collected 55 percent.

Trade barriers and domestic price supports also force tens of millions of families to pay higher food prices. According to the Organization for Economic Cooperation and Development, U.S. farm programs transferred an average of $10.5 billion a year from U.S. food consumers to producers from 2003 through 2005. That amounts to an annual food tax of $140 for a family of four — a regressive tax that falls most heavily on poor families that spend a larger share of their budgets on foo
Posted by James Zellmer at 10:34 PM

September 30, 2006

Milwaukee Passenger Detained over "idiot" barb

A Wisconsin man who wrote "Kip Hawley is an Idiot" on a plastic bag containing toiletries said he was detained at an airport security checkpoint for about 25 minutes before authorities concluded the statement was not a threat.

Ryan Bird, 31, said he wrote the comment about Hawley -- head of the Transportation Security Administration -- as a political statement. He said he feels the TSA is imposing unreasonable rules on passengers while ignoring bigger threats.
Posted by James Zellmer at 9:16 PM

September 25, 2006

How Useful Are Oil Projections?

Edward Tufte:
n 1974 the Federal Energy Administration asked 4 statisticians to provide independent estimates of the amount of oil still underground. The four groups worked completely independently; I found out the names of the other three groups long after the reports were filed. The results, as I recall, were one very low forecast, one very high forecast, and two skeptical reports (including mine) in effect saying the error bound around the forecasts covered all reasonable policy alternatives. Thus the collective result confirmed the views of the two skeptical reports!

Here is my analysis. Perhaps this should have appeared as a short case study in Beautiful Evidence, but the idea never occurred to me.

What about now, 31 years later? My skepticism about resource forecasts might be confirmed or might not by a fresh analysis, which would reveal what a fresh analysis of the evidence would reveal. In policy relevant studies of evidence, there is too often a rage to conclude.
Posted by James Zellmer at 10:15 PM

September 24, 2006

Chicago's Wireless RFP

Esme Vos:
Chicago has finally released its RFP for a citywide Wi-Fi network. In May 2006, Mayor Richard M Daley had announced a plan to provide affordable broadband Internet service to all Chicagoans and to make computers more widely available to low-income residents. The Mayor also offered $250,000 in grants to help community groups come up with innovative ways to help close the digital divide, and he appointed an advisory panel to make further recommendations on the issue.

The City of Chicago’s Department of Business and Information Services (BIS) introduced a Draft RFP for comments on May 30, 2006. The City received many meaningful comments and suggestions, which are incorporated in the Final RFP, which it issued today.
Full RFP [pdf]
Posted by James Zellmer at 4:30 PM

Techniques of Environmental Action in Small Towns

Edward Tufte:
For many years, I've been occasionally involved in local political action to maintain and extend open space land in Connecticut. Here are a few things I've learned. 1. In land development, money doesn't talk, it screams. There is enormous money to be made in building and land development; developers are focused, persistent, experienced, and well-financed. In the long run, the best way to save open space is to buy the land and turn it over to the Town or perhaps a land trust (with extremely detailed and thorough legal restrictions on permitted activities). It is possible to tie projects up with legalities, hearings, and politics--but even if you win one year, there might well be some other developer with a bright idea for the land next year. Thus try to start an open-space acquisition program by the town; in my experience, voters tend to favor funding for open-space acquisition (often exceeding approval rates for school budgets, roads, sewers,and narrow interest-group proposals such as skateparks, tax benefits for malls and sports teams, etc.).

2. Many towns (that is, their taxpayers) provide substantial subsidies, direct and indirect, for land development by funding the necessary infrastructure (water, roads, sewers, loans, tax subsidies). Pro-development politicians can it "investment;" others might call it "welfare socialism for rich developers." At any rate, it is funded by taxpayers. Priorities can be challenged, and development subsidies can be diverted to open space acquisition. It may well be that the local politicians are pro-development but often the voters are less so; thus try to move decisions about priorities to the electorate (and the taxpayers). In general, the broader the decision-making arena, the more likely pro-environmental campaigns will succeed. A slogan for open-space acquisition might be "They're not making any more land; let's save it now." Why not use tax dollars for open space rather than taxpayer-subsidized real estate development? Should all those tax dollars help out needy developers?
Interesting read.
Posted by James Zellmer at 2:51 PM

September 21, 2006

Pelli's $200M Orange County Work

Overture's architect, Cesar Pelli recently completed the $200M Renee and Henry Segerstrom Concert Hall. Christopher Hawthorne:
At age 79, the Argentine-born, Connecticut-based architect Cesar Pelli is inevitably described in newspaper and magazine profiles these days as diplomatic and genteel. In his design for the $200-million Renée and Henry Segerstrom Concert Hall in Costa Mesa, which opens Friday night, he and his firm have produced a building that brings the very same adjectives to mind. In other words, if you are optimistic enough to believe that classical music — or architecture, for that matter — is an evolving art form with the capacity to provoke as well as merely soothe, you will likely find it enormously disappointing.

The 250,000-square-foot building, which work crews have been racing to prepare for Friday night's performance by the Pacific Symphony, resembles a high-end hotel lobby or a luxury-car showroom, spaces in which every visible surface is used to promote a buttery handsomeness. Its undulating glass façade wraps gently around a foyer lined with white Spanish granite floors and rich yellow-beige carpeting, and topped with a glimmering silver-leaf ceiling. Beyond that is the auditorium, a stately, old-world and surprisingly tall room with 2,000 seats upholstered in deep red velvet.
Lots of similarities to our State Street building. More photos here.
Posted by James Zellmer at 11:06 PM

September 14, 2006

Earmark Reform: Baldwin Votes No

Interesting spin on this vote:
We are blowing away the fog of anonymity," said Rep. David Dreier (R-Calif.), chairman of the House Rules Committee. "The goal is to pull back the curtain on earmarks to the public."

The rule change shelves a wider ethics bill, however, at least until next year. That bill became bogged down amid disagreements between the House and the Senate, and the reluctance of lawmakers from both parties to limit their interactions with lobbyists. The earmarks measure was brought up as a passable way to address voter unrest over the scandals, aides said.

"This bill represents the death of lobby reform," said Rep. David R. Obey (D-Wis.), a former chairman of the House Appropriations Committee.
Madison's representative Tammy Baldwin voted No. Obey's comments are ironic, given his prolific use of earmarks. Lots more on earmarks here.

I don't think there's much to be proud of from either party's perspective. Applying some "sunshine" to the earmark process is a good thing.
Posted by James Zellmer at 11:54 PM

September 13, 2006

AT&T - More Marketing, No Fiber to the Home

Rick Romell:
Opening a new front in its battle with cable companies for the country's Internet, telephone and television customers, AT&T Inc. on Tuesday started selling Web-based TV service.

For $19.99 a month, the telecommunications firm is offering about 20 channels over the Internet, with the promise of more soon. The service is available to anyone with a high-speed, or broadband, Internet connection - wired or wireless.

The rollout is "an example of how we're trying to evolve into an entertainment company," said Sarah Silva, Milwaukee-area spokeswoman for AT&T.
Posted by James Zellmer at 9:28 PM

Drunk on Earmarks: Obey's $6.9M in ONE Bill!

Wall Street Journal:
A case in point is the HHS-Education spending bill, which so far contains 1,867 earmarks at a cost of just under $500 million. Members tell us the bill has caused a mini-rebellion because two of the three largest earmarkers are Democrat Nancy Pelosi, who walks away with $7.9 million worth of goodies, and David Obey, the ranking Democrat on Appropriations who receives $6.8 million for his Wisconsin district. This is the same Ms. Pelosi who earlier this session pledged to give up her pork to help balance the budget.

The House GOP leadership finally seems to comprehend the stakes in this pre-election budget fight. Majority Leader John Boehner calls the anti-earmarking bill "must-pass legislation," and has agreed to separate it from a bottled-up lobbying-reform bill. All that can block this from passing now are the spend-happy Republicans on Appropriations. If they succeed, they will have inflicted a far greater wound on their majority than the Democrats ever could.
I've not heard back from Tammy Baldwin regarding her views on earmarks [see "Spreading the Love"].

Robert Reich says earmarks must go:
The number of registered lobbyists in Washington has ballooned to the point there are over 60 of them for every single member of Congress. And they spent $2.4 billion last year. What do you think the lobbyists bought with that money?

A lot of it's called "earmarks" — special spending that's stuck into pieces of legislation to benefit particular constituents, like that Alaskan bridge to nowhere in last year's highway bill, and the special casino licenses that got lobbyist Jack Abramoff into trouble.

Ten years ago there were about 3,000 earmarks. Last year there were over 14,000, costing taxpayers over $47 billion according to the Congressional Research Service.

Last January, after the Jack Abramoff scandal had spread to staffers of former House Whip Tom DeLay and Ohio Republican Bob Ney, and after FBI agents found an unexplained $90,000 cash in the freezer of Louisiana Democrat William Jefferson, and after former California Republican Duke Cunningham pleaded guilty to bribery — after all that — it seemed like the House was so embarrassed it would clean itself up. At least that's what Speaker Dennis Hastert promised.
Posted by James Zellmer at 10:10 AM

My Day at the Polls - Maryland Primary '06

Avi Rubin:
I don't know where to start. This primary today is the third election that I have worked as an election judge. The last two elections were in 2004, and I was in a small precinct in Timonium, MD. This time, I was in my home precinct about 1/2 a mile from my house. We had 12 machines, over 1,000 voters and 16 judges. I woke up at 5:30 in the morning and was at the precinct before 6:00. It is now 10:18 pm, and I just got home a few minutes ago. As I have made it my custom, I sat down right away to write about my experience while everything was still fresh. In anticipation of this, I took some careful notes throughout the day.

The biggest change over the 2004 election was the introduction of electronic poll books that we used to check in voters. I was introduced to these in election judge training a few weeks ago. These are basically little touchscreen computers that are connected to an Ethernet hub. They each contain a full database of the registered voters in the county, and information about whether or not each voter has already voted, in addition to all of the voter registration information. The system is designed so that the machines constantly sync with each other so that if a voter signs in on one of them and then goes to another one, that voter will already be flagged as having voted. That was the theory anyway. These poll books turned out to be a disaster, but more on that later.
Madison could use more poll workers. Contact the City Clerk for more information.
Posted by James Zellmer at 9:33 AM

September 12, 2006

A Discussion of Madison & Milwaukee

Marc Eisen:
adison and Milwaukee are two distinct cities with radically different histories. Yet there are telltale signs that the same trends -- economic, social, political and educational -- that have rocked and weakened Milwaukee over the past 50 years are beginning to show themselves in Madison.

That's the topic of discussion at the Isthmus "Pint and Policy" Forum scheduled for Thursday evening, Sept. 14, at the Club Majestic: Can Madison Avoid Milwaukee's Problems?
Posted by James Zellmer at 11:47 AM

September 11, 2006

9/11 Legacy: Five Years, still Fears?

Flight International:
Almost five years after the World's single most bloody act of terrorism - when hijacked aircraft were flown into the World Trade Center and the Pentagon building - aviation was again last month at the centre of another terrorism scare.

This time, UK security services foiled an alleged plot to bomb transatlantic airliners. 9/11 changed history, prompting the invasion of Afghanistan and the continuing US 'War on Terror' that led to the ousting of Iraq's Saddam Hussain.

But what has the lasting legacy of the 2001 attacks been on aviation? The industry has recovered strongly after a two-year nadir, but US airlines are still feeling the effects. And what of aviation security? Are we ever going to be able to terror-proof air travel?
Mike Boyd has more:
This, we would submit is only the tip of a very obvious and well-known corrupt iceberg. Five years after 9/11, there are more holes in aviation security than an Arkansas stop sign during hunting season.

Truth Doesn't Really Matter, Apparently. We covered it in detail last week (go there), so there's no point in trying to review the range of really stupid news stories we'll see today - the ones generally with the headlines that imply, "Security Much Improved Since 9/11" or "Passengers Adjusting To New Security Measures" or a range of other examples of slapdash journalism.

As you're regaled today by push-piece media stories, outlining the great "improvements" in aviation security, just ask yourself the following:
as does IAG along with Jeevan Vasagar.
Posted by James Zellmer at 9:53 AM

September 10, 2006

"Ban Carry-on Luggage"

NYT Editorial:
In a directive whose logic is not always apparent, the Transportation Security Administration has spelled out what airline passengers can carry on board with them, what must be placed in checked luggage, and what can’t go on the plane at all. Knives must be checked but knitting needles and corkscrews are allowed in the cabin. Up to four ounces of eye drops can be carried aboard, with fingers crossed that multiple terrorists won’t combine their allotments to exceed the limit. Laptops, digital cameras, mobile phones and other electronic devices are permitted, so never mind any warnings you’ve heard that they could be used to trigger a bomb. The bomb ingredients themselves, notably liquid explosives, will be kept out of the cabin by a ban on liquids, gels and lotions, except for small amounts of baby formula and medications.
Posted by James Zellmer at 9:45 PM

September 6, 2006

Ethanol, Ethanol Everywhere, Time to Stop and Think

Elon Musk:
Ethanol (a.k.a. alcohol) will certainly grow as a business and serve as a partial solution to our energy problem, particularly given that it is now taking the place of the gasoline additive MTBE. However, even if large-scale cellulosic ethanol technology is perfected, I don’t believe it can become the primary solution to the world’s energy needs.

The often-used example of Brazil does not apply to most parts of the world and may not even apply to Brazil if they see high economic growth with its attendant energy demands. Brazil is in the tropics with an all year round growing season and an enormous amount of arable land relative to its population food requirements and the number of cars on the road.

In contrast, domestic ethanol as the primary solution will definitely not work for the world’s most populous countries, such as Japan, China, India, Pakistan, Indonesia, etc. Those countries are either breaking even on domestic food production or are net importers. If you argue that ethanol is to be grown elsewhere and shipped, where are the vast tracts of unused arable land? And, bear in mind, the calories burned by two ton cars are much greater than those burned by 170 pound humans.
Posted by James Zellmer at 7:53 PM

September 4, 2006

World's Largest Oil Field in.... Colorado

Robert Collier:
Underneath the high, scrub-covered rangeland of northwest Colorado is the world's biggest oil field. Getting the oil out of the ground, however, is one of the world's biggest headaches.

The area's deposits of oil shale are believed to be larger than all the oil reserves of the Middle East. But past attempts to get at this oil locked in tarry rock have cost billions of dollars and raised the prospect of strip-mining large areas of the Rocky Mountain West.

Now, as the federal government makes another push to develop oil shale, Shell and other companies say they have developed techniques that may extract this treasure with much less environmental impact.
What goes around, comes around. The Western Slope oil shale project collapsed in the mid 1980's - creating a deep Colorado recession.
Posted by James Zellmer at 3:43 PM

September 3, 2006

UW's Charles Franklin Launches Pollster.com

Pollster.com is the new home of Mystery Pollster, the blog that has labored to demystify the art and science of political polling for the last two years, but it is also much more. Our Polls feature will take you to pages with complete listings of all the public polls available for the most competitive races for Senate and Governor with an important bonus: Interactive charts that show you how the poll results compare to each other as well as trends over time.

Before you dive into the data pages, let me tell you about the incredible team behind Pollster.com. Regular MP readers will notice a similarity between our charts and the stellar graphics produced by our friend Charles Franklin, professor of Political Science at the University of Wisconsin and creator of the blog PoliticalArithmetik. Franklin is a central part of the Pollster team and will also provide frequent commentary here on the Pollster blog as well as lead in the development of new ways to visualize results graphically.

By the way, today also marks the debut of our strategic partnership with Slate Magazine. We have worked with Slate to create an Election Scorecard that will track the daily trends in the race to control the U.S. Senate, the House of Representatives and key Governorships in 2006. With the help of Charles Franklin, I will write a daily update for Slate through Election Day on where those races stand. Links to that update will also appear here daily.
RSS Feed.

More about Franklin:
Charles Franklin is the co-developer of Pollster.com. He will provide frequent commentary and lead in the development of new ways to visualze polling results graphically. Franklin is the creator of PoliticalArithmetik ("Where numbers and politics meet") and a professor of political science at the University of Wisconsin, Madison. He specializes in the statistical analysis of polling and election results.
Posted by James Zellmer at 3:17 PM

Byrd / Stevens Guilty of the "Hold" on S.2590

Jeff Jarvis adds some useful comments to the outing of Robert Byrd and Ted Stevens regarding Senate Bill S.2590:Federal Funding Accountability and Transparency Act of 2006 introduced by Mr. COBURN (for himself, Mr. OBAMA, Mr. CARPER, and Mr. MCCAIN).
Posted by James Zellmer at 12:22 PM

"Military power can gain us time...but that is about it,"

Fascinating look at General John Abizaid, Chief of Centcom, by Greg Jaffe:
In the fall of 2002, the U.S. military set up a task force here on the Horn of Africa to kill any al Qaeda fighters seeking refuge in the region. The base was crawling with elite special-operations teams, and an unmanned Predator plane armed with Hellfire missiles sat ready on the runway.

Today, the base houses 1,800 troops whose mission is to build health clinics, wells and schools in areas where Islamic extremists are active. The idea is to ease some of the suffering that leaves the locals susceptible to the radicals' message, thus bolstering local governments, which will run the new facilities and get credit for the improvements.
David Hackworth spoke well of Abizaid. Other sites worth checking out include Defense and the National Interest and Tom Barnett's blog. Barnett posted a few words on Jaffe's article (more). John Robb is also worth a visit. Centcom website and RSS feed.
Posted by James Zellmer at 9:12 AM

August 31, 2006

Warner Second Life Interview

David Weinberger:
Mark Warner, an unannounced candidate for the presidency, is going to be interviewed in Second Life on Thursday at 3:30pm (eastern time, I think).
Warner is someone to watch. He's also played the NASCAR card.
Posted by James Zellmer at 9:11 AM

August 30, 2006

Oil Prices this Fall

Ed Wallace:
“[R]umors inside the industry suggest that Iran is being forced to charter 20 huge oil tankers to hold 40 million barrels of its crude; apparently, Iran has run out of space to store all the oil it has pumped but not yet sold.”
Posted by James Zellmer at 7:50 PM

Dependency Ratios

Malcolm Gladwell:
This relation between the number of people who aren’t of working age and the number of people who are is captured in the dependency ratio. In Ireland during the sixties, when contraception was illegal, there were ten people who were too old or too young to work for every fourteen people in a position to earn a paycheck. That meant that the country was spending a large percentage of its resources on caring for the young and the old. Last year, Ireland’s dependency ratio hit an all-time low: for every ten dependents, it had twenty-two people of working age. That change coincides precisely with the country’s extraordinary economic surge.
Posted by James Zellmer at 9:29 AM

August 29, 2006

Cordless VOIP Phone

While most VoIP phones require you to be connected to your PC via a USB cable our Cordless VoIP phone uses a wireless signal that allows you to roam your house or office while using Skype. You may use the phone for both PC-to-PC and PC-to-Phone calling.
Posted by James Zellmer at 9:41 AM

S.2590 - A great Idea: Which Senator is Standing in the Way?

Federal Funding Accountability and Transparency Act of 2006 introduced by Mr. COBURN (for himself, Mr. OBAMA, Mr. CARPER, and Mr. MCCAIN) shall:


(a) In General-

(1) WEBSITE- Effective beginning January 1, 2007 and subject to paragraphs (2) and (3), the Office of Management and Budget shall ensure the existence and operation of a single updated searchable database website accessible by the public at no cost that includes for each entity receiving Federal funding--

(A) the name of the entity;

(B) the amount of any Federal funds that the entity has received in each of the last 10 fiscal years;

(C) an itemized breakdown of each transaction, including funding agency, program source, and a description of the purpose of each funding action;

(D) the location of the entity and primary location of performance, including the city, State, congressional district, and country;

(E) a unique identifier for each such entity and parent entity, should the entity be owned by another entity; and

(F) any other relevant information.

(2) INITIAL DATA- Effective January 1, 2007, the website shall include data for fiscal years 2006 and 2007.

(3) PREVIOUS FISCAL YEARS- Not later than January 1, 2009, information required by this section shall be posted on the website for fiscal years 1999 through 2005.

Evidently, this quite useful initiative has been "put on hold" by a single senator. Here's a tally of Senators who said that they did not place the hold (a single Senator can evidently place a hold on legislation...). Senator Feingold, to his credit has apparently announced that he was not responsible for the hold. I phoned Senator Kohl's DC office this morning. A staffer said that she "does not have a statement on this issue".

I hope all government entities publish a searchable database as envisioned by S.2590. Earmarks, another gross abuse of our system - are just now getting some sunshine.

UPDATE: Paul Kiel says that a Kohl staffer says that he did not place a hold on S.2590.

Posted by James Zellmer at 7:52 AM

August 27, 2006

Public Test of the City's New Voting Equipment

Madison City Clerk Maribeth Witzel-Behl:
This is to give notice that the Office of the Madison City Clerk will conduct a public test of the electronic voting equipment (including the AutoMark Voter Assist Terminals) in accordance with Section 5.84(1) Wisconsin State Statutes:

August 28 – September 1, 2006 8 a.m.-Noon and 2-4 p.m. (or until complete) Room 104 of the City-County Building 210 Martin Luther King, Jr., Blvd., Madison [Map]

Maribeth Witzel-Behl, Interim City Clerk
Check it out!
Posted by James Zellmer at 6:06 PM

August 24, 2006

Where do Your Tax Dollars Go?

National Priorities Project:
The median income family in Madison, Wisconsin paid $6,020 in federal income taxes in 2005. Here is how that amount was spent:
Related: Local congressional earmark data.
Posted by James Zellmer at 8:53 PM

August 17, 2006

Spreading the Love (Pork): Local Federal Earmark Map - Our Politician's Deficit Spending (and Payback?)

Sunlight Labs:
There are over 1,800 earmarks in the upcoming Labor HHS Bill, and we don't know where they came from. Help figure it out, by researching and posting in the comment section on this blog post.

1) Who secured the earmark? What district is it in? Call the office of the congressperson you think might have secured the earmark and ask them if they are indeed responsible for it. Record whatever answer they give.
Check out Wisconsin's earmarks from this single congressional bill here. (Enter Wisconsin in the search field and click go). St. Mary's Hospital will receive $350,000 for "facilities and equipment" while Baraboo's St. Claire Health Care Foundation will also receive $350,000.00 for "facilities and equipment". The Boscobel Area Health Center will receive $455,000.00 for facilities and equipment. The Beloit Regional Hospice will receive $100,000 for computerization of medical records while the UW-Whitewater will receive $150,000 for "equipment and technology" for its Living and Learning Center. David Obey's Wausau area Aspirus Wausau Hospital gets $1.2M for for facilities and equipment.

There are many more. Tammy Baldwin represents the Madison area. Earmarks are a heck of a way to increase deficit spending. I hope we see more "sunlight" on this matter. Sunlight's National Director is Zephyr Teachout - who directed online organizing for Howard Dean in 2004. Judy Sarasohn has more.

It would be interesting to compare earmarks over time with contributions. Finally, I sent an email to Tammy Baldwin and Dave Magnum seeking comments on earmarks generally and these items specifically.

UPDATE: Michael Byrne (Research Director - Magnum for Congress) responded:
Our view here exactly. Especially things tacked on in the shadows which is why we liked Paul Ryan's efforts to force this stuff out in the open. Dave will be speaking about pork through the coming days and will be referencing the record of his opponent who has quite a string of earmarks she's walked through Congress. Some were completely unnecessary and certainly not well publicized. Others were just vote trolling things that won't help our district keep itself competitive economically... Thanks for checking in and keep coming back. Mike ============= Michael E. Byrne Research Director, Magnum for Congress www.davemagnum.com email: byrnex4 _at_ tds.net Cell: 608.712.5340 FAX: 608.767.2187e On Aug 17, 2006, at 9:22 AM, Jim Zellmer wrote: I'm surprised and disappointed in the number and amount of earmarks: http://www.zmetro.com/archives/005931.php The projects may or may not have merit, but earmarks are clearly an abuse of the system and simply add to the debt we burden our children with.... Any comments? I've sent the same email to Tammy Baldwin Best wishes, Jim
I'll post Tammy's response as soon as I receive it.

Marketplace (now wonderfully available on Wisconsin Public Radio - Finally!) has more.

Keep in mind this is "one" bill!
Posted by James Zellmer at 7:00 AM

August 10, 2006

Where You Vote Matters

"Subtle environmental cues can influence decisions on issues of real consequence,” write Jonah Berger and Marc Meredith, two doctoral students at Stanford's Graduate School of Business, and S. Christian Wheeler, a Stanford marketing professor, in a paper (summary) reported in July's SER. The “environmental cues” are surprising indeed: according to the authors, the polling places used by voters may influence their choices. One study showed voters in Arizona in 2000 were more likely to support a measure to increase the state sales tax, with the proceeds going to public education, if they voted in a school.
Posted by James Zellmer at 10:57 AM

August 8, 2006

The Politics of High Fructose Corn Syrup and Does it Make You Fat?

Alex Tabarrok:
I don't know whether High Fructose Corn Syrup (HFCS) acts more like fat than does sugar (compare here and here) but it's worthwhile pointing out that HFCS is a child of the sugar quota. The import quotas raise the US price of sugar well above the world price (~24 cents per pound compared to ~9 cents per pound) and encourage consumption of HFCS. Reflecting this fact, the main defenders of the sugar quota are no longer Florida sugar growers but rather mid-West corn growers.
The HFCS business is a cartel - prices are the same, change quarterly on the same day and enjoy, as Tabarrok points out, subsidies. Years ago, working in the water and juice industry, I sent a letter to the anti-trust division complaining about this. A lawyer deep in the bowels of the justice department phoned me and said that "as long as Bob Dole is active on this issue, nothing will change". I assume someone has replaced Dole as a friend to the corn processors.
Posted by James Zellmer at 8:47 AM

August 3, 2006


New Perspectives Quarterly:

Milken: A number of countries around the world -- the United Arab Emirates, Singapore, Norway, Taiwan -- have built up tremendous reserves relative to the size of their country. Most of them have not made the mistake of Japan, where deploying that surplus within the country through, for example superfluous road or bridge construction, caused massive increases in prices in the 1980s.

All in all, there is at least $25 trillion worth of surpluses in the world today that is invested short-term. It is pretty hard to find anything to put a trillion dollars into except U.S. government and private bonds or mortgage-backed securities.

Where do you see this capital being deployed? Do you see it just compounding away, or do you see them following the mode maybe of Singapore where the government is creating its own industrial companies?
Posted by James Zellmer at 8:28 AM

August 2, 2006


Living in the "Metroplex" years ago, I enjoyed (and still do) reading Texas Monthly. Senior Executive Editor (where do the titles come from?) now has a useful blog that is worth checking out and subscribing to [RSS].
Posted by James Zellmer at 9:42 AM

August 1, 2006

Back to the Future: The Suez Crisis

The Economist publishes a timely look back at the Suez Crisis:
The Suez crisis, as the events of the following months came to be called, marked the humiliating end of imperial influence for two European countries, Britain and France. It cost the British prime minister, Anthony Eden, his job and, by showing up the shortcomings of the Fourth Republic in France, hastened the arrival of the Fifth Republic under Charles de Gaulle. It made unambiguous, even to the most nostalgic blimps, America's supremacy over its Western allies. It thereby strengthened the resolve of many Europeans to create what is now the European Union. It promoted pan-Arab nationalism and completed the transformation of the Israeli-Palestinian dispute into an Israeli-Arab one. And it provided a distraction that encouraged the Soviet Union to put down an uprising in Hungary in the same year.
Posted by James Zellmer at 1:54 PM

July 27, 2006

What Does $7 Billion in Telco Subsidies Buy?

Thomas Hazlett:
The “universal service” regime ostensibly extends local phone service to consumers who could not otherwise afford it. To achieve this goal, some $7 billion annually is raised – up from less than $4 billion in 1998 – by taxing telecommunications users. Yet, benefits are largely distributed to shareholders of rural telephone companies, not consumers, and fail – on net – to extend network access. Rather, the incentives created by these subsidies encourage widespread inefficiency and block adoption of advanced technologies – such as wireless, satellite, and Internet-based services – that could provide superior voice and data links at a fraction of the cost of traditional fixed-line networks. Ironically, subsidy payments are rising even as fixed-line phone subscribership falls, and as the emergence of competitive wireless and broadband networks make traditional universal service concepts obsolete. Unless policies are reformed to reflect current market realities, tax increases will continue to undermine the very goals “universal service” is said to advance.
Alex Tabarrok adds:
Guess how much would it cost a farmer to get telephone service in a small rural county far from a major city? Let's say $800 for satellite service.

Now guess how much the government subsidizes rural phone carriers to provide this service. The answer? As much as $13,000 per line per year.
Posted by James Zellmer at 8:28 AM

July 23, 2006

How Big is the Federal Deficit - Really?

Citizens for Tax Justice:
n July, the Bush administration estimated that the fiscal 2006 budget deficit, including $174 billion borrowed from the Social Security Trust Fund, will be $470 billion. That will bring total federal borrowing over the past five years to $2,449 billion.

That $2.4 trillion in borrowing means that from fiscal 2002 through fiscal 2006, a quarter of non-Social Security federal spending will be financed with borrowed money. In contrast, in fiscal 1999 through 2001, the federal government did not borrow a penny from the Social Security Trust Fund.

Indeed, the government saved all of Social Security’s $434 billion in surpluses, and actually ran surpluses in its regular budget, too, thus paying down the national debt by $120 billion.
Posted by James Zellmer at 9:53 AM

July 21, 2006

Judge Rules a Tax Shelter in KPMG Case Is Legitimate

Lynnley Browning:
The heart of Judge Ward’s ruling was that the I.R.S.’s retroactive use of tougher Treasury Department rules in 2003 on liabilities like those in Blips was “ineffective” and “not enforceable” because it was retroactive. The Internal Revenue Code generally prohibits retroactive regulations. The I.R.S. said in 2000 that it would formally challenge Blips deductions claimed by taxpayers.

Jerrold Cohen, a lawyer in Atlanta for Mr. Nix and Mr. Patterson, said yesterday that Judge Ward’s ruling showed that “the government isn’t allowed to change the rules just because it doesn’t like the result.”
Great example of the mess that is our tax system. The Opinion (PDF).
Posted by James Zellmer at 9:09 AM

July 19, 2006

Teletruth Letter to the Judge Regarding the SBC/AT&T and Verizon/MCI Mergers

Teletruth believes there exists an inherent contradiction in representations of the SBC-AT&T and Verizon-MCI mergers in the complaints and consent decrees filed by the DOJ October 27, 2005.

The complaints note broad competition. For example - "SBC and AT&T compete in the sale of wireline telecommunications services to retail and wholesale customers in the United States." The complaints note particular concern about Local Private Lines. For example – "the proposed merger is likely to substantially reduce competition for Local Private Lines and telecommunications services that rely on Local Private Lines to those buildings." The DOJ believes the magnitude of these concerns provides sufficient justification to block the mergers. For example – "that Defendants be permanently enjoined and restrained from carrying out the Agreement and Plan of Merger dated January 30, 2005."
Posted by James Zellmer at 8:37 AM

July 18, 2006

A Look at the UW's "Broad" Stem Cell Patents

Antonio Regalado & David Hamilton:
The broadly worded patents, which cover nearly any use of human embryonic stem cells, are held by the Wisconsin Alumni Research Foundation, a nonprofit group that handles the school's intellectual-property estate, managing a $1.5 billion endowment amassed during 80 years of marketing inventions.

John Simpson, an official at the foundation bringing the challenge, says WARF's efforts to enforce its patents are "damaging, impeding the free flow of ideas and creating a problem." Mr. Simpson's group got involved in the dispute earlier this year after Wisconsin officials said they would demand a share of state revenue from California's voter-approved stem-cell initiative.

WARF doesn't charge academics to study stem cells, but it does ask commercial users to pay fees ranging from $75,000 to more than $250,000, plus annual payments and royalties. So far, 12 companies have licensed rights from WARF to use the cells, and more than 300 academic laboratories have agreements to use the technology without charge. WARF spokesman Andy Cohn declined to say how much the organization has earned from the patents so far but says it is less than what it has spent funding stem-cell research and paying legal costs.
Posted by James Zellmer at 9:32 AM

July 17, 2006

The Future of America Forecasts, Part 2

"Fabius Maximus":
orecast #3: the death of the US Constitution.

The Constitution was originally designed to specify the duties for each of America’s three branches and to limit their powers. Its ability to do the latter function has faded rapidly since the New Deal. Already most of the Bill of Rights remain de jure in force but are de facto void, as can be seen by a Lexis search of successful attempts to use them in litigation – you’ll find almost none.

At some point soon the Constitution will become a purely procedural document, much like that of the former Soviet Union, and equally effective at preserving our liberties. Our rights will exist only on the sufferance of our government and our ruling elites. This is already true in the UK, as the “unwritten constitution” protecting the “rights of Englishmen” has blown away like smoke in the wind.
Posted by James Zellmer at 10:20 PM

July 14, 2006

The Friday Line: Top 10 2006 Governor's Races

Chris Cillizza:
7. Wisconsin: Yes, we know about this poll, which showed Gov. Jim Doyle (D) ahead of Rep. Mark Green (R) by 13 points. But the numbers were greeted with skepticism, even by many Democrats. (The poll should be taken with a grain of salt for several methodological reason -- it was in the field for an unusually long time and tested adults rather than registered or likely voters.) Ethics questions continue to hover around Doyle's administration, and typically reliable Democratic base groups -- the labor community and black voters to name two -- are not terribly excited about helping the incumbent win a second term. Make sure to read Post politics dean David Broder's take on this race. (Previous ranking: 5)
Posted by James Zellmer at 2:02 PM

July 10, 2006

Sensenbrenner on Immigration

Mark Leibovich:
In recent weeks, Mr. Sensenbrenner has refused to yield on anything, derided what he calls the “amnesty” of the Senate bill and warned that he is willing to walk away without a compromise. He says his views have been influenced by the flood of immigration-related cases coming through his office and what he sees as the failure of previous immigration reform efforts he has worked on.

He is known as one of the toughest negotiators in Congress, which invites another canine metaphor from a colleague. “Sensenbrenner is a pit bull,” says Representative Ric Keller, a Florida Republican on the Judiciary Committee. “And the Senate negotiators he’s up against are wearing Milk-Bone underwear.”
Sensenbrenner has been a powerful friend of many Non-Wisconsin special interests such as the recording industry.
Posted by James Zellmer at 11:08 PM

Hilary Rosen Gets DRM Religion?

Eliot Van Buskirk:
Obviously, Apple has a business strategy that says "proprietary" works for them. The record companies, I think, have tried to convince Apple to open up their system. I don't think that's been successful. The choice now is to either go unprotected so everybody has the same shot and the market expands, or to continue down what I think is an unfriendly path for consumers and the industry, because I don't think it's growing as fast as it can.

I understand there's a rabid philosophy on both sides of this to protect or not to protect … and I actually am not that black and white about it. I think if people want to protect their content, and want to have a DRM or a business model that limits its distribution, that's okay. If others don't want to, that's okay too. That's why I like Creative Commons. It's all about choice. What I have focused on is what will most dramatically expand the music market at a time when device choices feel so limited and the service side is so underutilized.
Posted by James Zellmer at 9:46 PM

July 9, 2006

Save The Internet: Where Kohl & Feingold Stand

Check it out.
Posted by James Zellmer at 4:06 PM

July 3, 2006

Freedom to Farm: Program Pays $1.3B to People Who Don't Farm

Dan Morgan, Gilbert Gaul and Sarah Cohen:
Even though Donald R. Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years.

Yet under a federal agriculture program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual "direct payments," because years ago the land was used to grow rice.

Matthews is not alone. Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post.

Some of them collect hundreds of thousands of dollars without planting a seed. Mary Anna Hudson, 87, from the River Oaks neighborhood in Houston, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709.
Posted by James Zellmer at 9:27 AM

July 1, 2006

On Lake Michigan, A Global Village

Steve Lohr:
As Racine has changed, so have its politics. Once, a ritual antagonism for business was a sure vote-getter among Democrats. But Mr. Becker was elected three years ago with a pro-development message, pledging to trim jobs from the public payroll to free resources to attract new residents and businesses.

Racine's future, Mr. Becker believes, lies in forging stronger links with the regional economy and global markets. Reinvention can be unnerving, he acknowledges, but he says it is his hometown's best shot at prosperity and progress. "In the past, Racine was a self-contained economy," he said. "But that is not an option anymore."

No local economy truly mirrors the nation. But for Racine and its surrounding suburbs, the last few years have been marked by gradually rising prosperity, in step with the national trend. And the recent history of Racine, like that of the nation as a whole, is also the story of how a community comes to grips with the larger forces of globalization and technological change.
Posted by James Zellmer at 6:41 PM

June 29, 2006

North Carolina Daily Paper to Provide Free Local WiFi

I’ve seen a lot of WiFi models lately but this appears to be the first from a local newspaper. (You’ll let me know if I’m wrong, I’m sure.) The Pilot, which covers Pinehurst and several other communities in North Carolina, will provide free WiFi across Moore County. Publisher David Woronoff explains: “The Pilot’s mission is to serve Moore County and we think the technology has advanced to the point that we can help bind the community together in a dynamic and compelling way with The Pilot’s products and Internet service.” They’ve acquired WiFi equipment, hired a GM and will start the rollout with a transmitter on their own building in Southern Pines. This isn’t a value add for print subscribers — it will be accessible to readers and non-readers. The Pilot plans to launch a fee-based WiMax network later this year.
Posted by James Zellmer at 5:13 PM

Verizon's 100mbps Broadband service

This would be funny if it weren't so sad - at least those of us stuck with very slow telco service:
The Actiontec router's 100 Mbps capability allows Verizon to continue to provide higher data speeds to the customer, as they become available in the future, without having to install a new router or other equipment in the customer's home. Verizon's FTTP network is capable of providing such speeds. In addition, the new router allows Verizon to remotely assist customers in configuring it to meet specific needs within the home. Verizon also provides customers a business-class Internet firewall on the router.

"The ability to remotely diagnose problems and help the customer configure the router was a key goal for us," Wimsatt said. "In-home networking can be complex, but we have the right people -- and now the right equipment -- to help the customer."

Verizon is the only major telecom company building fiber-optics directly into customers' homes, paving the way for an array of advanced and reliable voice, data and video services. The company is currently building the network in parts of 16 states. By the end of last year, Verizon had passed some 3 million homes with the new technology and expects to pass 3 million more this year. The company began building the network in 2004.
Where's SBC/AT&T in all of this? They don't seem to be spending their money on infrastructure....
Posted by James Zellmer at 9:23 AM

June 28, 2006

DCStat: Data for Digital Democracy

Jon Udell:
Starting in mid-June, [the city of Washington] DC began releasing operational data from a variety of city agencies to the Internet, in several XML formats including RSS and Atom.
Posted by James Zellmer at 10:15 AM

June 27, 2006

Judge Rules That Prosecutors Violated the rights of 16 KPMG Partners

Peter Lattman:
Those who commit crimes - regardless of whether they wear white or blue collars - must be brought to justice. The government, however, has let its zeal get in the way of its judgment. It has violated the Constitution it is sworn to defend.

That’s the money quote in Judge Kaplan’s stunning 88-page opinion, in which he found that prosecutors violated the constitutional rights of a group of former KPMG partners by pressuring the firm not to pay their legal bills. We’re going to take the liberty of reprinting the opinion’s entire preamble, which contains remarkably clear, riveting writing:
More here, here and here.

Lattman further posts his views on the winners and losers via this ruling along with a roundup of other commentary.

Law Professor Linda Beale has a few words as well.
Posted by James Zellmer at 10:46 AM

June 26, 2006

Pelli's Minneapolis Public Library

Photo by Sopheava

Overture Center Architect Cesar Pelli's Minneapolis Public Library recently opened. Check out the Flickr photo set for a number of perspectives. More on the Library:
The new Central Library features 25 community meeting and study rooms, a state-of-the-art auditorium, an updated children's library, a center for new Americans, a space especially for teens, and 353,000 square feet of additional access to knowledge-enhancing resources.

With one-of-a-kind architecture, design and resources, the new Central Library is a destination spot for residents, the downtown workforce and visitors interested in experiencing the library's extensive collection; attending special events, performances and author readings; or simply relaxing with a cup of coffee in a warm, welcoming place.
Well worth checking out as Madison considers a new downtown library (please keep Kenton Peter's metallic designs away...)
Posted by James Zellmer at 9:15 AM

June 22, 2006

Buy American & Build in Mexico - Ford's Mark Fields

Frank Williams:
So a Mexican-built car is Ford’s hedge in the American market against Japanese-branded cars built on US soil. This is getting more and more confusing. But wait – there’s more.

Fields bragged that Ford’s new hybrids are “posting record sales of late” and their “innovations led to more than 130 patents,” with more pending. The Ford exec conveniently omitted the fact that Ford’s hybrid technology depends on technology licensed from Toyota. Nor did he mention the Japanese-made transaxles and battery packs and German-built regenerative braking systems which make Ford’s hybrids possible.
Posted by James Zellmer at 8:22 AM

June 20, 2006

Net Neutrality

Larry Lessig:
Apparent there are now allegations that SBC and Verizon forced the deals through DoJ when the designee for head of antitrust was on Senatorial hold for too activist an enforcement bent. DoJ cleared the deals and the hold was lifted. DoJ then ignored the amended Tunney Act and let the companies close the deals even before the judge did the Tunney Act review.

This is sleazy stuff, and it forms the real basis for being concerned about the games the network owners would play if free to play games. The really striking part of this (to me, a constitutionalist) is how the legislative branch keeps passing laws that the executive branch just ignores. And why ignore the laws? Corporate influence. That’s what this case reeks of.
Posted by James Zellmer at 10:25 PM

Cities Shop for Free WiFi Services

Bobby White:
Under the agreement, Sacramento residents would pay monthly subscription fees of about $20 to use MobilePro's wireless service, local businesses would pay $90 to $250, and Sacramento's city agencies would be able to use the service free. The agreement resembled that of many other municipal wireless deals across the country. For MobilePro, based in Bethesda, Md., a full year of service would bring in $2 million to $4 million in revenue, analysts estimate.

But earlier this month, the deal fell apart. The reason: Sacramento city officials had noticed new municipal wireless deals inked in San Francisco and Portland, Ore. The Portland rollout, sponsored by Silicon Valley startup MetroFi Inc., and the San Francisco deployment from Google Inc. and Earthlink Inc., both offered wireless service to those cities with expanded free access for some businesses and residents. Instead of relying on user subscription fees, MetroFi, Google and Earthlink planned to make money off local advertising that would be embedded in their wireless service.
Posted by James Zellmer at 6:44 AM

June 19, 2006

If It's Good for Philip Morris, Can It Also Be Good for Public Health?

Joe Nocera:
"We don't make widgets," Steve Parrish likes to say, and that acknowledgment strikes me as a good place to start this story. Parrish, whose title is senior vice president for corporate affairs, is a highly paid executive at Altria Group, a New York-based holding company that is the 10th-most-profitable corporation in America. If the name of the company doesn't strike you as terribly familiar, that's because a few years ago the company changed its name. It used to be called Philip Morris, a name that still attaches to two of its holdings, Philip Morris USA and Philip Morris International. (Altria also owns Kraft Foods.) So, yes, let's stipulate right up front: Steve Parrish represents the country's leading tobacco company, whose best-known brand, Marlboro, is so dominant it accounts for 4 out of every 10 cigarettes smoked in the United States. Last year, Philip Morris USA alone made $4.6 billion in profits. What was it that Warren Buffett once said? "You make a product for a penny, you sell it for a dollar and you sell it to addicts." They most certainly don't make widgets.
Kraft is parent of Madison based Oscar Meyer Foods.
Posted by James Zellmer at 9:34 AM

June 17, 2006

Border Security

Bruce Schneier:
Surreal story about a person coming into the U.S. from Iraq who is held up at the border because he used to sell copyrighted images on T-shirt
Posted by James Zellmer at 3:33 PM

June 13, 2006

FBI's Preliminary 2005 US "Uniform Crime Report"

The FBI: PDF File. Madison's results:

Violent Crime, 2004: 841 2005: 839

Murder, 2004: 2 2005: 2

Forcible Rape, 2004: 94 2005: 80

Robbery, 2004: 292 2005: 329

Aggravated Assault, 2004: 453 2005: 428

Property Crime, 2004: 7,279 2005: 7,739

Burglary, 2004: 1450 2005: 1449

Larceny-theft, 2004: 5268 2005: 5682

Motor Vehicle theft, 2004: 561 2005: 606

Arson, 2004: 83 2005: 65

I had the opportunity to speak with Madison Police Lt. Joe Balles a month or so ago regarding local crime data. He mentioned that the City of Madison Police department responds to 157,000 calls annually and that 1 out of every 3 has additional data ("crime"). The data is generally stored and reported following the FBI's Uniform Crime Reporting standards.

Joe mentioned that the community does not report simple theft to them as they did in the past; bike thefts are an example of this. Finally, Joe noted that the FBI's data model does not include some types, such as ID or credit card data theft.
Posted by James Zellmer at 1:29 PM

June 12, 2006

Aviation Security Perspectives

Mike Boyd:
CHICAGO -- A U.S. air marshal removed himself from a Southwest Airlines flight Thursday after dropping a clip of bullets on the floor just before the plane was to take off, an airline spokeswoman said..."Since he was no longer traveling incognito, he decided not to continue on the flight, ... He picked the bullets up immediately."
Posted by James Zellmer at 1:21 PM

June 7, 2006

Government Wants Internet Firms to Keep Online Activity Records for Two Years

Joseph Menn:
Gonzales and Mueller asked Google Inc., Time Warner Inc.'s AOL and other companies to preserve the data at a May 26 meeting, citing their value to investigations into child-pornography distribution and terrorism. Internet companies typically keep customer histories for only a few days or weeks.

The Justice Department said Thursday that it was not seeking to have e-mail content archived, just information about the websites people visit and those with whom they correspond.

Beyond law enforcement, though, the trove also could be available to lawyers arguing civil lawsuits — including divorce cases and suits against people suspected of swapping copyrighted movie and music files online. Privacy advocates fear the user histories could be exploited by criminal investigators conducting inappropriate exploration or pursuing minor cases.

"This is not simply limited to kiddie porn or terrorism. It's a real break with precedent," said Marc Rotenberg, executive director of the nonprofit Electronic Privacy Information Center. "Data retention is open-ended. The government is saying, 'Keep everything about everyone and we'll sort it out later.' "
Posted by James Zellmer at 11:29 AM

June 6, 2006

Eyes in the West Are on Federal Land Sale

Julie Cart:
Its mild climate, stunning scenery and proximity to several national parks have helped make Washington County one of the five fastest-growing counties in the nation. But like many rural Western counties, it has little room to expand: 87% of its land is owned by the federal government.

Now, Utah's congressional delegation has a plan to remedy the problem, one that is being closely watched by nearly a dozen Western counties with similar growing pains. The plan is also being scrutinized by conservationists who warn that it would set a dangerous precedent, making thousands of acres of public land available for private development as well as offering a windfall for local agencies and special deals for politically influential officials and property owners.
Posted by James Zellmer at 10:25 PM

June 2, 2006

The Key Ingredients for a "Great City"

Paul Graham ruminates on the essence of a technology hub:
I think you only need two kinds of people to create a technology hub: rich people and nerds. They're the limiting reagents in the reaction that produces startups, because they're the only ones present when startups get started. Everyone else will move.

Do you really need the rich people? Wouldn't it work to have the government invest in the nerds? No, it would not. Startup investors are a distinct type of rich people. They tend to have a lot of experience themselves in the technology business. This (a) helps them pick the right startups, and (b) means they can supply advice and connections as well as money. And the fact that they have a personal stake in the outcome makes them really pay attention.

Bureaucrats by their nature are the exact opposite sort of people from startup investors. The idea of them making startup investments is comic. It would be like mathematicians running Vogue-- or perhaps more accurately, Vogue editors running a math journal.
Grahams words are a must read for local politicians. Madison's (Wisconsin) biggest challenge with respect to new business development is it's parochialism. Living in San Francisco years ago, I was impressed by the general willingness to try new things and take risks. We have a world class University, lots of bright citizens but not so many people willing to take financial and career risks.
Posted by James Zellmer at 8:35 AM

May 30, 2006

Emerging Airline Industry Trends 2006 - 2011

The Boyd Group [pdf]:
Airline Industry Trends Updat Presentation To Regional Airline Association May 24, 2006
Posted by James Zellmer at 10:59 AM

State Business Filing Data

Larry Ribstein has posted some fascinating state-by-state business filing data from the International Association of Commercial Administrators. Of the 35 states with filing data for the past four years, 32 reported increases in LLC filings and 21 reported decreases in corporation filings. In the six largest states. the growth in LLC filings from 2002 to 2005 ranged from 60.3% to 237.9%, while three of the states experienced declines in the number of corporate filings ranging from (11.4%) to (27.3%) and the three states with growth in the number of corporate filings ranged from 4.6% to 23.7%:
Wisconsin's data:
  • Business & Professional Corporations: 12/31/2004: 5,571 ($1,8M); 12/31/2005: 5,104
  • Nonprofits: 12/31/2004: 1,927 ($73K)
  • Limited Liability Copmanies (LLC): 12/31/2004: 25,268 ($3,484,515); 12/31/2005: 26,653
  • Limited Partnerships: 12/31/2004: 203 ($20K); 12/31/2005: 203
Minnesota had more than twice as many corporate filings and about 1/3 less LLC formations than Wisconsin. Illinois has a significantly larger annual number of corporate filings than Minnesota or Wisconsin.

It would be interesting to see what the numbers look like over time, attrition rates and the correlation to taxes and jobs.
Posted by James Zellmer at 10:54 AM

May 22, 2006

On the Pentagon

Milt Rosenberg:
Dwight Eisenhower once said, “The problem in defense is how far you can go without destroying from within what you are trying to defend from without.” Some argue that the Pentagon (the epicenter of America’s defense) has evolved from a protective to a pernicious influence on the country’s international relations. After tonight’s 6:05 p.m. Cubs game, we will examine the role of the Pentagon in American history and in current American foreign policy—both positive and negative—with two experts: JOHN ALLEN WILLIAMS, professor of political science at Loyola University Chicago and an expert on the American military and national security, and National Book Award-winning author JAMES CARROLL, who tackles this very subject in his new book House of War: The Pentagon and the Disastrous Rise of American Power.
Posted by James Zellmer at 10:52 PM

Is There an End Game Plan?

Ed Wallace:
“During the run-up to the 2004 presidential election, much was made of the fact that 2.4 million new jobs had been created that year. Omitted was the fact that close to 800,000 of those jobs went to Hispanics who had been here less than a year.”

We live in a world of obfuscation.

Yes, there are problems presented to our nation each and every day, but no real answers are provided and every interested party is blaming the other for what is wrong at the moment.

So, instead of offering another in-depth news story on Britney Spears’ latest pregnancy or Michael Jackson’s Bahrain hideaway, it might be more valuable to focus on the many issues that have not been resolved, the kind that impact and worry the average American.
Posted by James Zellmer at 7:58 PM

2006 Political & Economic Risk Map

Political, economic and social environments can shift at a moment’s notice, disrupting business operations for anyone involved in international commerce. Companies can be subjected to discriminatory action – or inaction – of foreign governments and third parties, potentially leading to forced shutdowns, relocations and other unforeseen expenses.

The impact of these political and economic exposures is examined by Aon Trade Credit in its 2006 Political & Economic Risk Map, created in conjunction with Oxford Analytica, an international, independent consulting firm of more than 1,000 senior faculty members at Oxford and other major universities and research institutions around the world.
Posted by James Zellmer at 5:40 PM

Whistle-Blower's Evidence, Uncut

Former AT&T technician Mark Klein is the key witness in the Electronic Frontier Foundation's class-action lawsuit against the telecommunications company, which alleges that AT&T cooperated in an illegal National Security Agency domestic surveillance program.

In a public statement Klein issued last month, he described the NSA's visit to an AT&T office. In an older, less-public statement recently acquired by Wired News, Klein goes into additional details of his discovery of an alleged surveillance operation in an AT&T building in San Francisco.

Klein supports his claim by attaching excerpts of three internal company documents: a Dec. 10, 2002, manual titled "Study Group 3, LGX/Splitter Wiring, San Francisco," a Jan. 13, 2003, document titled "SIMS, Splitter Cut-In and Test Procedure" and a second "Cut-In and Test Procedure" dated Jan. 24, 2003.
Posted by James Zellmer at 3:43 PM

May 17, 2006

More Madison Water Problems?

Untreated groundwater from two of three Madison wells sampled for the study... turned up five different viruses, that one public health director says ***could*** cause serious illness.

There are differing opinions about how serious this is.

Madison's Director of Public Health says we are all exposed to viruses and bacteria every day so there is no reason to be concerned. But the Board of Water commissioners questioned the director of public health from the Marshfield Clinic, who did the water study, he had a very different answer.
Posted by James Zellmer at 5:44 AM

Madison Common Council Paid Sick Leave Summary

Kristian Knutsen summarizes last night's vote (filed at 3:22a.m.):
In what might be its most highly anticipated meeting of 2006, the Madison Common Council will be hearing testimony, deliberating, and voting upon the proposed ordinance to require employers in the City of Madison to provide mandatory sick leave for their employees.

The coalition that organized the proposal held a rally on the steps of the City-County Building immediately preceding the meeting, in large part to attract public registrants to speak in favor of the proposal at the meeting. Following four hours of public testimony and one hour of debate among the alders, it fails with a vote of 9 ayes and 10 nos.
Posted by James Zellmer at 5:28 AM

May 16, 2006

La Femme: French Politics = Madison's Political Climate?

James Traub:
There's a reason that the leaders of France's Socialist Party are called "elephants": They live forever. Among the elephants now vying to become the party's candidate for president in next year's election are Laurent Fabius, who served as prime minister 22 years ago, and Lionel Jospin, who served as Socialist Party leader a quarter-century ago and suffered a defeat in the last presidential election so devastating, both for himself and for the party, that you would have thought prudence alone would dictate political retirement. But in France, politics is a profession; once you arrive, you stay.

No one has thought to call Ségolène Royal an elephant. For one thing, it would be unbecoming, since she is a woman — and a woman who, when she works her smile up into her eyes, bears a passing resemblance to Audrey Hepburn. Royal is, remarkably enough, the first truly présidentiable woman in French history. But what is most striking about her candidacy, which so far consists of a highly orchestrated media seduction, is not the fact that she is a woman but rather that she has positioned herself as a nonelephant, indeed, almost an antielephant. She is, in effect, running against France's political culture, which is to say against remoteness and abstraction, ideological entrenchment and male domination itself. And that culture, which is embodied by her own party, has struck back, ridiculing her as a soap bubble borne aloft by a momentary gust of public infatuation.
I was struck by the similarities between the French "Establishment" and the local political establishment vis a vis newcomers/challengers.
Posted by James Zellmer at 12:17 PM

May 14, 2006

Follow the Money: How Advertising Dollars Encourage Nuisance and Harmful Adware and What Can be Done to Reverse the Trend

The Center for Democracy & Technology [pdf]:
Unwanted advertising software or "adware" has evolved from an annoyance into a serious threat to the future of Internet communication. Every day, thousands of Internet users are duped into downloading adware programs they neither want nor need. Once installed, the programs bog down computers’ normal functions, deluging users with pop-up advertisements, creating privacy and security risks, and generally diminishing the quality of the online experience. Some users simply give up on the Internet altogether after their computers are rendered useless by the installation of dozens of unwanted programs.

One of the most troubling aspects of this phenomenon is that the companies fueling it are some of the largest, best-known companies in the world. In the following pages, the Center for Democracy & Technology (CDT) details how advertising dollars from major, legitimate companies are fueling the spread of nuisance and harmful adware1 and how those companies can help to combat the online scourge by adopting and enforcing good advertising placement policies.
Posted by James Zellmer at 9:58 PM

Short Term Fix for the AMT

David Lazarus updates us on the most recent tax bill, including its short term fix for the very large AMT (Alternative Minimum Tax) problem.

Meanwhile, the Nashville Songwriters Association International lobbied for and won a special tax break that will give songwriters a lower rate when they sell their catalog, or body of work. "Our lawyers here in town wrote the legislation," says Debi Cochran, the association's legislative director.

Perhaps we should organize some sort of parents or bloggers special tax break initiative.
Posted by James Zellmer at 9:15 AM

Red Bank, NJ: More Telco Fun

Redbanktv Blog:
Verizon infamously hired an ‘astroturfing’ company to send faxes to the mayor of Red Bank proclaiming to be from local residents. Mayor McKenna sensing something afoot with these faxes did a little research and called Verizon out. Verizon wanted it to appear that there was a real grass roots effort in support of them being undertaken by the residents of our small town; but there wasn’t. It was all made up and it backfired miserably.
Posted by James Zellmer at 9:12 AM

NSA and the Greek mobile phone tapping scandal

John Ioannidis:
Let me ask you first of all, there has been a lot of discussion here in Greece about this lawful interception software, explain to me what it is, and whether the US put pressure on worldwide companies to install that after 9/11 especially?

JB: Well the software is basically used to attach to commercial communication facilities, like the AT&T in the US, or whatever commercial company it is, and anything that goes over these communication facilities gets picked up, whether it is e-mail, or telephone calls and divert it to the US Government, whoever attached the equipment.

-- Is it your understanding that most of the hardware companies around the world, that provide mobile telephone companies with equipment, had this installed at some point?

JB: Well in the US there was a lot of requiring that US companies do it, but around the world I think there was pressure by the US for a lot of the friendly countries to the US, allied countries to do as much as they can in terms of domestic eavesdropping and this type of equipment is most useful for that.
Posted by James Zellmer at 8:54 AM

Colbert's White House Correspondent's Speech

An excerpt from the annual White House Correspondents Association dinner. Comedian Stephen Colbert made humorous ... all » remarks about various current events and the relationship between the press and the White House. He also presented a video of a mock press conference which ended in a chase scene featuring long-time correspondent Helen Thomas.
More on Colbert.
Posted by James Zellmer at 8:43 AM

May 12, 2006

William Gibson on the NSA Domestic Wiretapping

Cory Doctorow:
I can't explain it to you, but it has a powerful deja vu. When I got up this morning and read the USA Today headline, I thought the future had been a little more evenly distributed. Now we've all got some...

The interesting thing about meta-projects in the sense in which I used them [in the NYT editorial] is that I don't think species know what they're about. I don't think humanity knows why we do any of this stuff. A couple hundred years down the road, when people look back at what the NSA has done, the significance of it won't be about terrorism or Iraq or the Bush administration or the American Constitution, it will be about how we're driven by emerging technologies and how we struggle to keep up with them...
Posted by James Zellmer at 7:38 AM

Large Telco Liability based on USA Today Facts?

Peter Swire:
This morning, USA Today reported that three telecommunications companies - AT&T, Verizon and BellSouth - provided "phone call records of tens of millions of Americans" to the National Security Agency. Such conduct appears to be illegal and could make the telco firms liable for tens of billions of dollars. Here's why:
Posted by James Zellmer at 7:13 AM

May 9, 2006

The Patent Trolls

Judy Newman takes a very useful look at the numerous and growing problems with our patent system.
Posted by James Zellmer at 8:35 AM

May 7, 2006

WiFi at Madison's Airport

Waiting for a flight recently at MSN, I popped open my laptop and, for the first time (for me) ever, a WiFi signal was available. Unfortunately, Madison is years behind other airports in offering wireless internet access. Worse, many flyers now have other types of high speed access, such as Verizon's EVDO, which means given a choice between paid WiFi access (which Madison's airport offers - $6.95/day) or a service that can be used in many places, the pool of paying users is likely not all that large. In my case, I fired up my EVDO access and avoided the 6.95 fee.

Albuquerque's enlightened Sunport, along with many others, offers free WiFi. Madison would do well to simply make it free, perhaps supported by an advertising based splash screen when users logon.
Posted by James Zellmer at 4:02 PM

May 6, 2006

Economic Impacts of Liquid Fuel Mitigation

Roger Bezdek & Robert Wendling:
Our objective was to better elucidate the implications of the mitigation programs, e.g., the time required to save and produce significant quantities of liquid fuel, related costs, and economic, fiscal, and jobs impacts. We studied crash program implementation of all options simultaneously because the results provide an upper limit on what might be accomplished under the best of circumstances. No one knows if and when such a program might be undertaken, so our calculations were based on an unspecified starting date, designated as t0
Posted by James Zellmer at 5:01 PM

May 3, 2006

Why You Should Care About Net Neutrality

Tim Wu:
The Internet is largely meritocratic in its design. If people like instapundit.com better than cnn.com, that's where they'll go. If they like the search engine A9 better than Google, they vote with their clicks. Is it a problem, then, if the gatekeepers of the Internet (in most places, a duopoly of the local phone and cable companies) discriminate between favored and disfavored uses of the Internet? To take a strong example, would it be a problem if AT&T makes it slower and harder to reach Gmail and quicker and easier to reach Yahoo! mail?

Welcome to the fight over "network neutrality," Washington's current obsession. The debate centers on whether it is more "neutral" to let consumers reach all Internet content equally or to let providers discriminate if they think they'll make more money that way.
Posted by James Zellmer at 1:56 PM

May 2, 2006

TBL on Net Neutrality

Tim Berners-Lee:
This is an international issue. In some countries it is addressed better than others. (In France, for example, I understand that the layers are separated, and my colleague in Paris attributes getting 24Mb/s net, a phone with free international dialing and digital TV for 30euros/month to the resulting competition.) In the US, there have been threats to the concept, and a wide discussion about what to do. That is why, though I have written and spoken on this many times, I blog about it now.

Twenty-seven years ago, the inventors of the Internet[1] designed an architecture[2] which was simple and general. Any computer could send a packet to any other computer. The network did not look inside packets. It is the cleanness of that design, and the strict independence of the layers, which allowed the Internet to grow and be useful. It allowed the hardware and transmission technology supporting the Internet to evolve through a thousandfold increase in speed, yet still run the same applications. It allowed new Internet applications to be introduced and to evolve independently.
Posted by James Zellmer at 10:09 PM

Water Worries

Ron Seely digs deep into Madison's water woes:
Students at East High School were among the roughly 9,000 people who, for a short time at least, were drinking city water contaminated with high levels of an industrial pollutant that can cause liver, kidney or lung damage.

Nobody would have known that by reading the Madison Water Utility's consumer confidence report data for that year.

The federal health standard for the chemical, carbon tetrachloride, is 5 parts per billion. In October 2000, the level in the city's well No. 3 tested at 8.3 parts per billion.

But the utility's annual drinking water quality report listed the maximum level found at only 2.9 parts per billion. Utility officials say it was a typo.
Posted by James Zellmer at 8:01 PM

Modern Joint Operating Agreements

Dan Gillmor looks at Hearst's deal with MediaNews Group to acquire four newspapers. Madison has had one of these for years - a $120M annual arrangement that has kept the Cap Times going despite its very small circulation. Joint operating agreements were protected by congress years ago, as a way to "preserve daily newspapers". The time has long since arrived to eliminate this relic.

Dave Zweifel passes along his experience at the American Society of Newspaper Editors' convention recently.
Posted by James Zellmer at 7:00 AM

May 1, 2006

A Word for Governor Doyle on the Broadband Expansion Tax Credit

Gov. Jim Doyle plans to sign the broadband bill passed by both the state Senate and Assembly on Tuesday, a top aide said Wednesday afternoon.

“The governor supports it,” said spokesman Matthew Canter. “In fact, he helped lead the way for it. It’s part of his Grow Wisconsin plan.”

The legislation will give telecommunications companies tax exemptions if they provide high-speed Internet service to parts of Wisconsin that lack it or are underserved – mostly in the rural and northern areas of the state.
I hope that Governor Doyle will insert some language into this bill that requires the recipients of this subsidy - local Telco's - to provide symmetrical internet access, not the odd services they largely provide today where the downstream and upstream services run at different speeds. The internet is not TV. Our generally poor broadband service significantly limits the opportunities for emerging home based internet businesses and services. This is a trivial change and should be a no brainer for the Governor. Learn much more on these issues, including why the US is so far behind countries like Japan and Korea in true broadband (100mbps symmetrical speeds), here. Om Malik tells us why this is important.
Posted by James Zellmer at 12:57 PM

April 30, 2006

1500 Square Mile Silicon Valley Wireless RFP

802.11b Networking News:
The Joint Venture Silicon Valley public/private partnership has issued its RFP: The group of cities, counties, governmental bodies, and corporations want a wireless network of some kind--technology isn't decided and could be a broad mix--that would cover Silicon Valley. Winning vendor(s) will be selected from the respondents to their RFP by September, and recommended to the 16 cities, San Mateo County, and 16 other jurisdictions that have signed on. I wrote in January about the scope and nature of this 1,500-square-mile potential project....
Posted by James Zellmer at 10:19 PM

April 29, 2006

Your License Plate Photo, Please

Dan Gilmor experiences our growing surveillance society first hand at SFO.
Posted by James Zellmer at 10:45 AM

April 28, 2006

Marina Del Rey Gets 45Mbit Internet Service

Poking along with 2mbps service in Madison (and far less than that upstream), Multiband announced that they will begin providing 45mbit/second service to Marina Del Rey fro $24.95 to 34.95/month.
Posted by James Zellmer at 10:22 PM

More on Photos Verboten

Kristian Knutsen probes the "limits" of public space (or perhaps quasi public space) photography. Nearly two years ago, I was advised the photos were prohibited at Philadelphia's National Constitution Center.
Posted by James Zellmer at 10:00 PM

Reckoning on the "Right"

Ed Wallace:
Worse, ethanol is not being sold to us because it will make America energy independent. It is being forced on the nation, even with all the problems that have already become apparent, because the party in power is locking in the lobbyist monies and farm state votes. And that’s not just my opinion; it’s also the opinion of David G. Victor, director of the Program on Energy and Sustainable Development at Stanford and an adjunct senior fellow of the Council on Foreign Relations, as published in the Houston Chronicle on April 15 of this year.

In fact, the corruption of our legislative body is so pervasive that, when Reuters Business discussed how we could immediately get more ethanol just by dropping the 54-cents-per-gallon import tax on Brazil’s ethanol, the person quoted as saying that “Congress has a backlog of important bills” and “won’t have time in this legislative year to deal with controversial legislation” (such as reducing tariffs on ethanol from Brazil), was nobody we elected. No, it was Jon Doggett, vice president of the National Corn Growers Association. Now tell me: Who is really calling the shots?
Posted by James Zellmer at 9:45 PM

The Price Opens at the Madison Rep

Kenneth Burns:
But Corley says the play is both personal and political, and that the current political climate makes The Price as relevant as ever.

In The Price, one of the brothers, Victor (played by Roderick Peeples), is a retired policeman who gave up a budding scientific career to care for his ailing father. The other brother, Walter (Richard Henzel), is a wealthy surgeon who has given their father only token support.

The play's political themes emerge, Corley says, as the brothers try to make sense of their past and of their choices -- and of the prices they have paid. "When Miller wrote the play, he wanted to write about the ideology that created the Vietnam War," Corley says, "and the belief that the end of war could make things better. Both fallacies are based on a misunderstanding of the past."
Posted by James Zellmer at 3:03 PM

April 26, 2006

Head of Visitor Tracking Program Wants Global ID System

Jonathan Marino:
Williams said he wants to join forces with several DHS agencies to develop a global identification system that would cut wait times, reduce government fees for travelers, fight illegal immigration and, perhaps paramount, better defend nations from terrorists.
Posted by James Zellmer at 10:40 PM

April 24, 2006

Microjets: Eclipse 500 Certification

Joseph Anselmo:
an a former copy machine repairman who happens to be friends with Bill Gates reinvigorate the general aviation industry by adopting the low-cost, mass production model used for personal computers? The world is about to find out.

Not long ago, it appeared the answer was a resounding "no." Eclipse Aviation founder Vern Raburn gathered his team on a dismal Saturday morning in November 2002 to figure out whether the company had a future. Raburn, a pioneer in the personal computer revolution, was aiming to develop a six-seat jet that would sell for less than $1 million, bringing jet ownership within reach of thousands of new customers. But his penchant for risk had put Eclipse in big trouble.

The Albuquerque company, with funding support from NASA, had bet big on the development of an advanced, radically cheaper turbine engine. The technology wasn't panning out in time, however, and there was no Plan B. Investors, lured by Raburn's earlier successes at Microsoft, Lotus and Symantec, were running out of patience. Eclipse had two options: stick with the balky engine and pray for a miracle, or delay launch of the aircraft by several years and try to hang on while it found a new engine.
Posted by James Zellmer at 10:21 AM


Bob Gritzinger:
E85 is the designation for a fuel that combines 85 percent ethanol with 15 percent gasoline. E85-compatible—or flex-fuel—vehicles can run on E85 or regular unleaded gasoline. Because the alcohol in E85 can break down rubbers and plastics used in typical internal-combustion engine fuel systems, vehicles must be specially modified to allow its use. And to obtain maximum power from higher-octane E85, engines must be tuned to run on it, or be able to adjust timing and the air-to-fuel ratio when running on E85.

Supporters say the alternative fuel is environmentally friendly, reduces dependence on fossil fuels and imported oil, and takes advantage of America’s surplus of agricultural crops, like corn, that can be readily converted to ethanol for use in E85.

Critics note insufficient ethanol production facilities exist to significantly offset the nation’s appetite for fuel, that refineries aren’t adapted to producing E85, and that E85 is harder to transport because its corrosiveness means it cannot flow through existing gasoline pipelines. In addition, in most states E85 costs about the same as unleaded regular while costing the driver up to 15 percent in fuel-economy penalties because it does not pack the same explosive punch as gasoline.
Posted by James Zellmer at 8:31 AM

April 23, 2006

Cleaning Up Lawn Mower Emissions - Briggs & Stratton

Felicity Barringer:
Gallon for gallon — or, given the size of lawnmower tanks, quart for quart — the 2006 lawn mower engines contribute 93 times more smog-forming emissions than 2006 cars, according to the California Air Resources Board. In California, lawn mowers provided more than 2 percent of the smog-forming pollution from all engines.

But as soon as air pollution regulators suggested adding a golf-ball-size catalytic converter to the lawn mower, they found themselves in one of their fiercest political battles of the past decade.

On one side, the federal Environmental Protection Agency and state regulators in California. On the other, the largest lawn and garden equipment maker in the country and a powerful Republican senator. And in the middle, the six million or so lawn mowers shipped to retailers every year.

For older regulators, it is a replay of Detroit's initial resistance to those who wanted clean up car exhaust by installing catalytic converters, which pull smog-forming chemicals and carbon monoxide out of the exhaust.

"I think it's very analogous to what happened in the 70's," said Robert Cross, chief of the California air agency's Mobile Source Control Division. "The arguments are all the same."
Posted by James Zellmer at 10:42 PM

April 21, 2006

Zyprexa for the Phone Companies

Ben McConnell states the obvious with respect to the yellow pages and monopoly telcos:
unsoundness of mind or lack of understanding as prevents one from having the mental capacity required by law to enter into a particular relationship, status, or transaction or as removes one from criminal or civil responsibility
Which leads me to the phone companies.

Here's an update to last week's post about AT&T's practice of leaving unwanted 8-pound phone directories scattered in doorways around the nation...
Posted by James Zellmer at 9:51 PM

Earth Dinner

The Earth Dinner:
To the extent that's possible, try to find foods that are locally produced, seasonal, fresh and flavorful! If they are organically grown—that's even better! If it's not local, that's okay. It's a chance to celebrate the farmers from other regions or countries. If your having a potluck dinner, remember to ask your guests to do their best to find out about the origins of food they bring to share and how it was grown.
via Kristian Knutsen.
Posted by James Zellmer at 11:46 AM

April 19, 2006

The Ghost of Tax Day Future

R. Glenn Hubbard:
Closing the spending gap shown us by the Ghost of Tax Day Future with tax increases would eventually require all taxes on average to increase by more than 50%. Such a tax increase is not simply a larger check made out to "U.S. Treasury." Economic research suggests that larger governments are associated, all else equal, with slower economic growth because of the tax and regulatory burdens associated with a larger state. Using the estimate of Eric Engen of the Federal Reserve Board and Jonathan Skinner of Dartmouth College, meeting our entitlement spending wave through tax increases would ultimately depress our annual rate of economic growth by about a full percentage point.

That such tax increases would build up over many years does not dull the observation that tax increases of this magnitude would carry serious consequences for our future living standards. Their sheer size would restrain incentives for innovation and flexibility, and the entrepreneurship and productivity growth that have characterized relatively strong U.S. economic performance. Indeed, the "tax increase" shadow could ultimately crowd out about as much of the rate of growth as the productivity growth boom of the past decade has contributed.
Posted by James Zellmer at 8:30 PM

April 18, 2006

Judge Presses Companies that Cut Off Legal Fees

Lynnley Browning:
Federal judges are beginning to question why companies are cutting off legal fees to their executives when they become caught up in criminal investigations.

The judge in the tax-shelter trial of former tax professionals at KPMG last week ordered a hearing to determine whether prosecutors had improperly put pressure on the accounting firm to stop paying the defendants' legal bills. Last month, a federal judge in New Hampshire granted five former executives of Enterasys Networks a three-month reprieve in their trial after he questioned whether there was undue influence to cut off their legal payments. (The company has since restored them.)

The questions have emerged as other companies, including Symbol Technologies and HealthSouth, have stopped paying former executives' bills for lawyers.
Posted by James Zellmer at 9:48 PM

April 13, 2006

The AMT Shell Game: Why Bush's Tax "Cuts" Aren't

Scott Rosenberg:
Over at Slate, Daniel Gross is explaining, once more, the role the Alternative Minimum Tax continues to play in the Bush administration's deceptive tax policies.

The AMT is a bizarre parallel-universe of taxation with its own set of complex rules that differ from the normal IRS system. It was passed decades ago as an effort to prevent gazillionaires from using elaborate tax shelters to reduce their tax bills to zero. For many years it was easily ignored by the vast majority of Americans, and as recently as a few years ago the only non-super-rich people who worried about it were tech-industry types who'd hit the stock-option jackpot but played their cards wrong.

But the AMT was designed with its very own time-bomb: It was never indexed for inflation, and so each year the rising tide of inflation -- even the slow, relatively benign inflation the U.S. has experienced in the last decade -- lifts more and more middle-class Americans into its maw. The obvious answer is to fix it, either by repeal or by indexing it for inflation so it continues to apply only to the gazillionaires who were its original target. Shouldn't be so hard, right?
Posted by James Zellmer at 4:37 PM

AT&T Seeks to Hide Spy Docs

Ryan Singel:
AT&T is seeking the return of technical documents presented in a lawsuit that allegedly detail how the telecom giant helped the government set up a massive internet wiretap operation in its San Francisco facilities.

In papers filed late Monday, AT&T argued that confidential technical documents provided by an ex-AT&T technician to the Electronic Frontier Foundation shouldn't be used as evidence in the case and should be returned.

The documents, which the EFF filed under a temporary seal last Wednesday, purportedly detail how AT&T diverts internet traffic to the National Security Agency via a secret room in San Francisco and allege that such rooms exist in other AT&T switching centers.
Posted by James Zellmer at 11:27 AM

April 10, 2006

Whitepaper on Telco Promises

David Isenberg:
Here's a very well-written report of the Bell's trail of Rate Relief and Broken Promises. It is funded by Broadband Everywhere, a consortium that's openly funded by small cablecos and the NCTA, who are fighting back against the Bell-flavored franchise reform law moving through Congress. It relies heavily on the work of Bruce Kushnick, but it also cites many relevant local press stories from, e.g., Enid OK (where a promise of 500 jobs led to rate relief and a net loss of jobs), Austin TX (where a new Texas law that assumed "competition" would lead to lower prices and granted rate relief actually led to rate caps), etc., etc., etc.

Really good stuff on a bad story that demands more attention! Mainstream reporters, attention please!
Posted by James Zellmer at 9:18 AM

April 8, 2006

AT&T Forwards ALL Internet Traffic to the NSA

Via Dave Farber; Ryan Singel:
AT&T provided National Security Agency eavesdroppers with full access to its customers' phone calls, and shunted its customers' internet traffic to data-mining equipment installed in a secret room in its San Francisco switching center, according to a former AT&T worker cooperating in the Electronic Frontier Foundation's lawsuit against the company.

Mark Klein, a retired AT&T communications technician, submitted an affidavit in support of the EFF's lawsuit this week. That class action lawsuit, filed in federal court in San Francisco last January, alleges that AT&T violated federal and state laws by surreptitiously allowing the government to monitor phone and internet communications of AT&T customers without warrants.
Posted by James Zellmer at 10:39 AM

April 5, 2006

When the Little Guy Helped the Wealthy Keep Their Tax Secret

Cynthia Crossen:
The problem came to light during a Senate investigation of the 1929 stock-market crash: Some of America's wealthiest citizens, including the banker J.P. Morgan and his partners, were legally paying nothing in federal income taxes.

The solution, endorsed by majorities of both parties in Congress: Make individuals' income-tax information public, and shame the evaders into paying their fair share.

Under the Revenue Act of 1934, anyone who filed a federal tax return would also complete another -- pink -- form, with his or her name, address, income, deductions and total taxes paid. Everything on the pink slips was public information, available to reporters, nosy neighbors or former spouses alike.
Posted by James Zellmer at 10:18 PM

April 4, 2006

Long Term Rates Creep Higher

Mark Whitehouse and Serena Ng:
After stubbornly resisting nearly two years of prodding by the Federal Reserve, long-term interest rates are on the rise, a trend that could eventually slow the nation's expansion.

Yesterday, the yield on the 10-year U.S. Treasury note -- the foundation for long-term interest rates -- rose as high as 4.905%, matching a two-year peak set in May 2004. Some analysts believe the yield is on a run that will take it above 5%.

The upturn, spurred by deepening economic growth in the U.S. and abroad, is pushing up the cost of a widening range of consumer and business loans -- including 30-year mortgages and corporate bonds -- from extraordinarily low levels.
Posted by James Zellmer at 8:07 AM

April 2, 2006

Paradox of the Worse Network - AT&T: "15Mbps Internet Connections Irrelevant"

Nate Anderson:
At this week's Media, Entertainment and Telecommunications conference, AT&T COO Randall Stephenson told his listeners that increased bandwidth was no longer of great importance to consumers.

"In the foreseeable future, having a 15 Mbps Internet capability is irrelevant because the backbone doesn't transport at those speeds," he told the conference attendees. Stephenson said that AT&T's field tests have shown "no discernable difference" between AT&T's 1.5 Mbps service and Comcast's 6 Mbps because the problem is not in the last mile but in the backbone.
AT&T, formerly SBC is the dominant internet provider in Wisconsin...... Stephenson completely misses the point that bidirectional fast networks to the home will open up many, many small business opportunities.
Posted by James Zellmer at 4:46 PM

Internet Injects Sweeping Change into Politics

Adam Nagourney:
The transformation of American politics by the Internet is accelerating with the approach of the 2006 Congressional and 2008 White House elections, prompting the rewriting of rules on advertising, fund-raising, mobilizing supporters and even the spreading of negative information.

Democrats and Republicans are sharply increasing their use of e-mail, interactive Web sites, candidate and party blogs, and text-messaging to raise money, organize get-out-the-vote efforts and assemble crowds for a rallies. The Internet, they said, appears to be far more efficient, and less costly, than the traditional tools of politics, notably door knocking and telephone banks.

Analysts say the campaign television advertisement, already diminishing in influence with the proliferation of cable stations, faces new challenges as campaigns experiment with technology that allows direct messaging to more specific audiences, and through unconventional means.

Those include Podcasts featuring a daily downloaded message from a candidate and so-called viral attack videos, designed to trigger peer-to-peer distribution by e-mail chains, without being associated with any candidate or campaign. Campaigns are now studying popular Internet social networks, like Friendster and Facebook, as ways to reaching groups of potential supporters with similar political views or cultural interests.
No Doubt.
Posted by James Zellmer at 2:27 PM

March 31, 2006

French Protest VR Scenes

Gilles Vidal has posted some great panoramic news scenes.
Posted by James Zellmer at 2:13 PM

Blanchard on the Jensen Prosecution

Bill Lueders:
cBride, in her post, goes on to challenge the Jensen prosecution on grounds of cost: "I’d be willing to bet that the prosecution cost the taxpayers more money than the supposedly illegal campaigning did. That would be a great question for the media to ask the Dane County DA: Mr. Blanchard, what was the bill?"

Well, as Woody Allen says in Annie Hall, it so happens that we have Marshall McLuhan right here.

"Ms. McBride is wrong on the comparison of costs," writes Blanchard in response to an e-mail from Isthmus. (Hmm, why didn’t McBride, a former reporter, think to try this?) "Easily many millions of dollars in public money are not currently being spent – and will not be spent in the foreseeable future – on anything resembling the large partisan caucus offices that Republican and Democratic legislators alike used in recent years to run private campaigns.
Posted by James Zellmer at 9:53 AM

KPMG Tax Shelters: Judge Criticizes Prosecutors Case

Yesterday's hearing in the complex KPMG tax shelter case brought about some interesting discussions:
  • Reuters:
    A federal judge accused prosecutors Thursday of overreaching in their attempt to show that former KPMG executives sold questionable tax shelters to wealthy clients.

    Lawyers involved in the case expect U.S. District Judge Lewis Kaplan to reject defendants' calls to dismiss the case.

    The New York judge, however, faulted what he called the government's "shameful" activity that led the accounting firm not to pay defendants' legal bills, contrary to past practice. He also suggested that prosecutors drop some lesser counts.
  • Lynnley Browning:
    A federal judge raised questions yesterday about the prosecution of 16 former KPMG employees over aggressive tax shelters, criticizing prosecutors for what he called murky definitions of fraud and evasion.

    The judge, Lewis A. Kaplan of Federal District Court in Manhattan, said he was confused by what prosecutors said was a conspiracy by the defendants to make and sell aggressive shelters that allowed hundreds of wealthy investors to evade $2.5 billion in taxes from 1996 to 2002.

    "Frankly, I'm very bothered by it," the judge said, saying the document "puts the government's thumb on the scales" and raises questions about the Sixth Amendment constitutional right to legal representation.

    No court has ruled the shelters illegal, but the I.R.S. has never considered them valid for deductions.

    Nonetheless, Steven Bauer, a lawyer who represents John Larson, a former KPMG partner who is one of the 18 defendants, said prosecutors had withheld important information detailing, among other things, debate inside the I.R.S. over whether the shelters were legitimate.

    Judge Kaplan ordered the prosecution to turn over any withheld information.
Posted by James Zellmer at 9:25 AM

March 29, 2006

The Real US Broadband Problem

Maynard Handley writes:
The issue of importance is not the cost of broadband; that is higher than it should be in the US, but it will fall. Neither is the issue of importance the speed. Higher speed is nice, but what's available in the US is adequate for now.

What is important is the extent to which home users on the internet are empowered: Do their terms of service allow them to run their own web pages off their home machines? Can they run personal blogs and wikis for their friends to visit? Can they log into their home machines from somewhere else? And so on.

The common place TOS in the US prevent such activities; the powers that be in the US are interested in making the US an alternative form of television, and very much a one-way medium. Not only is this profoundly immoral, it is profoundly undemocratic, and profoundly stupid (since it is yet one more attempt to freeze an existing business model rather than looking at the big picture of how to take advantage of new, as yet undreamed of possibilities); but of course, this sort of trifecta is about what one expects from US business these days.

The point of my writing is to express my disappointment that these issues were not raised; either in the context of the US or in the context of France. I would like to hope that French companies are being better citizens about this than their US counterparts, but I have no reason to believe so. I would, however, hope that a newspaper article would include at least some nod to issues more important than saving a few bucks on one's cable bill.

Yours sincerely,

Maynard Handley
Handley is correct. www.schoolinfosystem.org is a very small attempt to address some of these issues.
Posted by James Zellmer at 11:05 PM

Yahoo's China Problem

Rebecca Mackinnon:
Companies can and do make choices. You can engage in China and choose not to do certain kinds of business. Yahoo! has placed user e-mail data within legal jurisdiction of the People's Republic of China. Google and Microsoft have both chosen not to do so. Why did Yahoo! chose to do this?
Posted by James Zellmer at 11:00 PM

March 21, 2006

"Trusting the Marketplace"

Billmon takes on political/business hypocrisy.
Posted by James Zellmer at 10:18 PM

March 20, 2006

What's the Biggest Change Facing Business in the Next 10 Years?

Fast Company:
In Fast Company's first decade, we introduced readers to a lot of amazingly smart people. To launch our second, we asked 10 of our favorite brains what's next--and how to get ready for it.
I think Malcolm Gladwell nails it, business will become much more active in political issues:
"Business has to find its national voice. It has to be engaged in the politics of this country in a way it's not accustomed to. Right now, executives are very good at saying, 'Cut our taxes, cut our regulations.' And they're really terrible at making far more important and substantive arguments about social policy. It's time they stopped banging this one-note drum and started saying that a lot of the things that have been relegated to ideology are, in fact, matters of fundamental international competitiveness for this country.

Take, for example, health care. We are ceding manufacturing jobs to the rest of the world because we can't get around to providing some kind of basic, uniform health insurance. Because of our strange ideological problem with nationalized health insurance, we're basically driving Detroit out of business--which strikes me as a very counterintuitive, nonsensical policy. The simple fact is that GM and Ford and Chrysler cannot compete in the world market if they're asked to bear the pension and health-care costs of their retirees. Can't be done. It's that simple.
Posted by James Zellmer at 12:57 PM

March 19, 2006

Grow Your Own Oil, US

Sean Captain:
Researchers hoping to ease America's oil addiction are turning sawdust and wood chips into bio-oil, a thick black liquid that could become a green substitute for many petroleum products.

Bio-oil can be made from almost any organic material, including agricultural and forest waste like corn stalks and scraps of bark. Converting the raw biomass into bio-oil yields a product that is easy to transport and can be processed into higher-value fuels and chemicals.

"It is technically feasible to use biomass for the production of all the materials that we currently produce from petroleum," said professor Robert C. Brown, director of the Office of Biorenewables Programs at Iowa State University.
Posted by James Zellmer at 9:26 PM

New Rand Healthcare Study

Tyler Cowen:
1. We get only 55 percent of recommended medical attention [TC: hey, didn't an earlier Rand study show us that more care doesn't translate into better health care outcomes?]

2. "Those with annual family incomes over $50,000 had quality scores that were just 3.5 percentage points higher than those with incomes less than $15,000....insurance status had no real effect on quality."

This should make everyone uncomfortable, but most of all those who think that access to health insurance is a panacea. Here is the press release, the piece is in The New England Journal of Medicine. Am I supposed to believe the following?:
Posted by James Zellmer at 8:47 AM

March 18, 2006

Fight Against Farm Subsidies

Scott Kilman and Roger Thurow:
A movement to uproot crop subsidies, which have been worth nearly $600 billion to U.S. farmers over the decades, is gaining ground in some unlikely places -- including down on the farm.

In Iowa, one of the most heavily subsidized states, a Republican running to be state agriculture secretary is telling big farmers they should get smaller checks. Mark W. Leonard, who collects subsidies himself and campaigns in a white cowboy hat, told a room full of farmers recently that federal payments spur overproduction, which depresses prices for poor growers overseas.

"From a Christian standpoint, what it is doing to Africa tugs at your heartstrings," Mr. Leonard told them. Last year, he helped humanitarian group Oxfam International in its anti-subsidy campaign by escorting a cotton farmer from Mali to church gatherings near his farm in Holstein.
Posted by James Zellmer at 8:37 AM

March 10, 2006

Lawmaker's Use of Corporate Jets

Sheryl Gay Stolberg:
Senator Barack Obama flew at least nine times on corporate jets last year, traveling to fund-raisers in New York and San Francisco, home to Chicago and to Rosa Parks's funeral in Detroit. Each time, he reimbursed the plane's owners at first-class rates, as Senate rules require.

But Mr. Obama, freshman Democrat from Illinois, felt queasy about this perk of Senate life, so he said he gave it up.

"It's not only a perk," Senator Russell D. Feingold, Democrat of Wisconsin, said, "but a serious abuse that should be stopped."

Mr. Feingold said he always flew on commercial planes.
Details on Wisconsin's federal delegation are available here. Standing on top of the corporate travel list is Wisconsin's own Jim Sensenbrenner. Others flying via corporate jet include:
  • David Obey #73: $73,299
  • Paul Ryan: #136 $48,295
  • Tammy Baldwin #137 $48,173
  • Ron Kind: #249 $27,906
Posted by James Zellmer at 7:18 PM

March 5, 2006

Pricing Politicians

Alex Tabarrok:
Prosecutors call it a corruption case with no parallel in the long history of the U.S. Congress. And it keeps getting worse. Convicted Rep. Randall "Duke" Cunningham actually priced the illegal services he provided.

Prices came in the form of a "bribe menu" that detailed how much it would cost contractors to essentially order multimillion-dollar government contracts...the California Republican's "bribery menu"... shows an escalating scale for bribes, starting at $140,000 and a luxury yacht for a $16 million Defense Department contract. Each additional $1 million in contract value required a $50,000 bribe.

The rate dropped to $25,000 per additional million once the contract went above $20 million.
Posted by James Zellmer at 3:44 PM

Bad News: AT&T / BellSouth Proposed Merger

Via Dave Farber:
It will be interesting to see what happens when the FCC begins reviewing thereported and alleged merger of the AT&T/BellSouth deal. As it may be a much different Commission body with the hopes of Robert McDowell's confirmation by the Senate.

Mr. McDowell is a telecom lawyer who currently serves as assistant general counsel at Comptel and opponent of the AT&T and Verizon mergers last year. Mr. McDowell is scheduled to appear before a Senate committee on Thursday for his confirmation and is likely to be asked about the merger.
I can't imagine this will be, in any way positive for our lagging broadband services. Read "We thought you said spend the $200 billion on dark fiber" for more on this mess.
Posted by James Zellmer at 8:29 AM

March 3, 2006

America's Most Dangerous Enemies

Fabius Maximus:
Chapter three in a series of articles about Grand Strategy in a 4GW Era

Threat definition is the key phase when developing a grand strategy. Especially today, as America faces many dangerous enemies.
Posted by James Zellmer at 5:16 PM

March 2, 2006

Apathy, The Downside of Everything

Ed Wallace:
No, instead I’m concerned about our country’s lack of vision for the future and the can-do attitude that we seem somehow to have lost — at least, it’s missing from most discussions on issues facing us today. In a nutshell, I’m lamenting the apparent mortal illness of optimism and ingenuity — the kind of spirit and drive that ignores all the negative issues in the news, the naysayers and the partisans and simply presses forward, driving toward solutions that benefit all of society.

I know we had that once, because the car industry as we know it today was not the invention of large and well-funded corporations. It was created and delivered by men who, though they often worked against the most incredible odds, never lost sight of their dreams and visions. With that focus — which often earned them scorn and insults — they changed the world for the better in a way that centuries of innovation hadn’t. And they did it in mere decades.
Posted by James Zellmer at 9:47 PM

February 24, 2006

Tauke but no Action on Network Neutrality

David Isenberg:
The principle seems to be, "If it helps the Bells, leave it in. If it hurts them, take it out."
Posted by James Zellmer at 8:56 AM

February 22, 2006

Local Primary & The Tunnel

Wow, what a disturbingly sad turnout. This is what democracy looks like?
Meanwhile, I watched "The Tunnel" last night, which is must see for anyone living in a free society. Well done, with a few Hollywood additions apparently.
Posted by James Zellmer at 9:31 AM

February 20, 2006

Political Observations From Michael Powell

via David Isenberg:
The Washington DC political process is more broken now than at any other time I've seen in my life. It has collapsed in on itself. I went home and asked my father [Colin Powell] if I was missing something, and he agreed with me that the process has collapsed into pure partisanship. The power of the incumbency has grown. People are not concerned with what's right or what's in the nations interest, they are purely interested in killing their opponents.
Posted by James Zellmer at 10:16 PM

February 19, 2006

DRM Based Trusted Computing - Why We Should Care...

"We've always know that Trusted Computing is really about DRM, but computer makers always denied it. Now that their Trusted Computing chips are standard on most new PCs, they've decided to come clean. According to Information Week, Lenovo has demonstrated a Thinkpad with built-in Microsoft and Adobe DRM that uses a Trusted Computing chip with a fingerprint sensor. Even worse: 'The system is also aimed at tracking who reads a document and when, because the chip can report back every access attempt. If you access the file, your fingerprint is recorded.'"
Posted by James Zellmer at 7:32 AM

February 18, 2006

Muni WiFi Updates

Kristian Knutsen notes that Madison's embryonic wifi service is planning to include a "walled garden" of free sites. I'd rather they not do this. The service should either be on or off, frankly. Rone Sege argues that we should not tax municipal wifi.
Posted by James Zellmer at 6:46 AM

February 17, 2006

Congressman Quizzes Net Companies on Shame

Declan McCullagh:
Rep. Tom Lantos: Can you say in English that you're ashamed of what your company and what the other companies have done?

Google: Congressman, I actually can't, I don't think it's fair for us to say that we're ashamed.

Lantos: You have nothing to be ashamed of?

Google: I am not ashamed of it, and I am not proud of it...We have taken a path, we have begun on a path, we have done a path that...will ultimately benefit all the users in China. If we determined, congressman, as a result of changing circumstances or as a result of the implementation of the Google.cn program that we are not achieving those results then we will assess our performance, our ability to achieve those goals, and whether to remain in the market.
Posted by James Zellmer at 9:52 AM

February 16, 2006

Will: No Checks, Many Imbalances

George F. Will:
But, then, perhaps no future president will ask for such congressional involvement in the gravest decision government makes -- going to war. Why would future presidents ask, if the present administration successfully asserts its current doctrine? It is that whenever the nation is at war, the other two branches of government have a radically diminished pertinence to governance, and the president determines what that pertinence shall be. This monarchical doctrine emerges from the administration's stance that warrantless surveillance by the National Security Agency targeting American citizens on American soil is a legal exercise of the president's inherent powers as commander in chief, even though it violates the clear language of the 1978 Foreign Intelligence Surveillance Act, which was written to regulate wartime surveillance.
Posted by James Zellmer at 10:30 AM

February 15, 2006

Is Energy's Future Sustainable?

Michael Simmons:
In his Harvard Lecture, Simmons explores the ramifications of peak energy (not just oil). The potential for world conflict is there, but it doesn't have to be inevitable. (5 MB PDF - republished with permission)
Posted by James Zellmer at 9:12 AM

February 12, 2006

Freedom To Connect

Via Frank Paynter:
The need to communicate is primary, like the need to breathe, eat, sleep, reproduce, socialize and learn. Better connections make for better communication. Better connections drive economic growth through better access to suppliers, customers and ideas. Better connections provide for development and testing of ideas in science and the arts. Better connections improve the quality of everyday life. Better connections build stronger democracies. Strong democracies build strong networks.

F2C:Freedom to Connect begins with two assumptions. First, if some connectivity is good, then more connectivity is better. Second, if a connection that does one thing is good, then a connection that can do many things is better.

F2C:Freedom to Connect belongs with Freedom of Speech, Press, Religion and Assembly. Each of these freedoms is related to the others and depends on the others, but stands distinct. Freedom to Connect, too, depends on the other four but carries its own meaning. Unlike the others, it does not yet have a body of law and practice surrounding it. There is no Digital Bill of Rights. Freedom to Connect is the place to start.
Posted by James Zellmer at 11:07 PM

"We Thought You Said Spend the $200 Billion on Dark Fiber"

John Paczkowski:

The United States is the 19th ranked nation in household broadband connectivity rate, just ahead of Slovenia.' Want to know why? Because, contends telecom analyst Bruce Kushnick, the Bell Companies never delivered symmetrical fiber-optic connectivity to millions of Americans though they were paid more than $200 billion to do it. According to Kushnick's book, "$200 Billion Broadband Scandal", during the buildup to the 1996 Telecommunications Reform Act, the major U.S. telcos promised to deliver fiber to 86 million households by 2006 (we're talking about fiber to the home, here). They asked for, and were given, some $200 billion in tax cuts and other incentives to pay for it.' But the Bells didn't spend that money on fiber upgrades -- they spent it on long distance, wireless and' inferior DSL services.' Some headlines from Kushnick's work:

  • By 2006, 86 million households should have been rewired with a fiber optic wire, capable of 45 Mbps, in both directions.
  • The public subsidies for infrastructure were pocketed. The phone companies collected over $200 billion in higher phone rates and tax perks, about $2000 per household.
  • The World is Laughing at US. Korea and Japan have 100 Mbps services as standard, and America could have been Number One had the phone companies actually delivered. Instead, we are 16th in broadband and falling in technology dominance.
Wonderful... More here.
Posted by James Zellmer at 8:25 PM

February 10, 2006

Lessig on Network Neutrality

Larry Lessig, testifying before the Senate Commerce Committee this week [pdf]:
To answer that question, this Committee must keep in view a fundamental fact about the Internet: as scholars and network theorists have extensively documented, the innovation and explosive growth of the Internet is directly linked to its particular architectural design. It was in large part because the network respected what Saltzer, Clark and Reed called “the ‘end-to-end’ principle” that the explosive growth of the Internet happened. If this Committee wants to preserve that growth and innovation, it should take steps to protect this fundamental design.
Lessig makes sense, while the incumbent telcos do not. Cringely has more.
Posted by James Zellmer at 7:43 PM

February 9, 2006

Net Neutrality: Rick Boucher Makes Sense

Rep Rick Boucher:
Recently, executives at some telephone companies have indicated that their business models for providing broadband service include not only charging their end-user customers for an Internet connection but also assessing a fee on websites for users to reach them more quickly. They claim that to offer advanced content such as multiple video-programming channels in competition with cable they need to prioritize their bits to deliver quality programs. They then propose that they will give the same priority access to other companies that pay them for it.

Essentially, what these executives are proposing is the creation of a two-lane Internet where larger, more established websites with financial resources could squeeze out smaller, emerging websites. One clear victim will be the innovation that has thrived on the open Internet. Startups simply could not afford to pay for fast-lane treatment nationwide. One must ask where the next Google or Yahoo will come from if new innovative companies can receive only inferior, slow-lane Internet access...

In countries such as Japan and Korea, network speeds over the last mile of 100 megabits per second (mbps) are common. In the United States, our typical speed is less than 1 mbps. If broadband providers would increase their network speeds to approximate those in other countries, all content would reach consumers with assured quality. No prioritization of bits would be needed.
Posted by James Zellmer at 10:02 PM

EFF: Don't Install Google Desktop

The Electronic Frontier Foundation:
The EFF is asking users not to use the new version of Google Desktop that has a 'search across computers' option. The option will store copies of documents on you hard drive on Google servers, where the goverment or anyone who wants to may subpoena (i.e. no search warrents) the information. Google says it is not yet scanning the files for advertising, but it hasn't ruled out the possibility."
slashdot discussion. John Paczkowski has more.
Posted by James Zellmer at 9:34 PM

February 8, 2006

Another Cyberdissident Imprisoned Because of Data Provided by Yahoo

Rebecca McKinnon:
Reporters Without Borders today condemned the US firm Yahoo! for handing over data on one of its users in China which enabled the authorities there to send him to prison for eight years, the second such case that has come to light in recent months.

It called on Yahoo! to supply a list of all cyberdissidents it has provided data on, beginning with 81 people in China whose release the worldwide press freedom organization is currently campaigning for.

It said it had discovered that Yahoo! customer and cyberdissident Li Zhi had been given his eight-year prison sentence in December 2003 based on electronic records provided by Yahoo. “How many more cases are we going to find?” it asked.
Posted by James Zellmer at 7:55 PM

February 6, 2006

Shared WiFi: FON

What is FON?:
FON is a Global Community of people who share WiFi. Share your WiFi broadband access at home/work and enjoy WiFi all over the world! FON: small cost, great benefit!

To become a Fonero, all you need to do is register with us on our website, have broadband connection, and download the FON Software onto your WiFi router. It’s that simple. Just share your connection and the rest of the Community shares back with you. Join FON and enjoy connecting from anywhere within the WiFi World.

To start sharing, set up your access point where you can receive the most coverage, generally close to the window or outside your home. The rest of the Community will be thankful.
Posted by James Zellmer at 8:48 AM

February 2, 2006

Small Dairyman Shakes Up Milk Industry

Ilan Brat:
The milk fight, which is being watched in the industry from coast to coast, started because Mr. Hettinga runs a rare hybrid operation. Most dairy businesses either only produce milk, or only process it. He does both. As a result, he falls into a protected class that isn't bound by an arcane system of Depression-era federal rules. Under it, milk processors selling into specific geographical areas, which cover most of the country, must all pay into that area's pool for subsidizing milk prices. But so-called producer-distributors have always been exempt.
Posted by James Zellmer at 10:18 PM

The Role of Civil Disobedience Today

PBS NewsHour:
Students examine civil disobedience's history and explore whether it is a viable form of protest in today's world
Posted by James Zellmer at 10:14 PM

The End of the Internet?

Jeff Chester:
The nation's largest telephone and cable companies are crafting an alarming set of strategies that would transform the free, open and nondiscriminatory Internet of today to a privately run and branded service that would charge a fee for virtually everything we do online.

Verizon, Comcast, Bell South and other communications giants are developing strategies that would track and store information on our every move in cyberspace in a vast data-collection and marketing system, the scope of which could rival the National Security Agency. According to white papers now being circulated in the cable, telephone and telecommunications industries, those with the deepest pockets--corporations, special-interest groups and major advertisers--would get preferred treatment. Content from these providers would have first priority on our computer and television screens, while information seen as undesirable, such as peer-to-peer communications, could be relegated to a slow lane or simply shut out.
Posted by James Zellmer at 9:40 PM

January 31, 2006

The $200B Broadband Scandal

David Isenberg:
My friend Bruce Kushnick is a man on a mission. In The $200 Billion Broadband Scandal, he writes:
. . . in the early 1990's . . . every Bell company . . . made commitments to rewire America, state by state. Fiber optic wires would replace the 100-year old copper wiring. The push caused techno-frenzy of major proportions. By 2006, 86 million households should have had a service capable of 45 Mbps in both directions . . . In order to pay for these upgrades, in state after state, the public service commissions and state legislatures acquiesced to the Bells' promises by removing the constraints on the Bells' profits as well as gave other financial perks . . . The phone companies collected over $200 billion in higher phone rates and tax perks, about $2000 per household.
The manipulations, deceptions and broken promises are documented in detail in New Jersey, Texas, Pennsylvania, California and Massachusetts. Book synopsis here.
More here.
Posted by James Zellmer at 10:35 PM

Shopping in 1975

Alex Tabarrok via a Sears Catalog:
Sears’ lowest-priced 10-inch table saw: 52.35 hours of work required in 1975; 7.34 hours of work required in 2006.

Sears’ lowest-priced gasoline-powered lawn mower: 13.14 hours of work required in 1975 (to buy a lawn-mower that cuts a 20-inch swathe); 8.56 hours of work required in 2006 (to buy a lawn-mower that cuts a 22-inch swathe. Sears no longer sells a power mower that cuts a swathe smaller than 22 inches.)
Posted by James Zellmer at 9:40 AM

January 30, 2006

Could Blogs Get Tangled in Web of Ethics Rules?

Lisa Sink:
That's because state elections law says that anyone who spends more than $25 a year to advocate for the election or defeat of a candidate - without that candidate's knowledge or control - must register with the state as an independent committee and disclose the sources of the money spent and how it was expended.

Should bloggers be regarded as a part of the news media, exempt from such rules, or should they be seen as partisan actors in a campaign who must register? Few bloggers draw the line where Berg did.
Posted by James Zellmer at 10:00 PM

Did an iPod Scuttle the (Broadcast) Flag?

Wes Phillips takes an interesting look at the Senate Commerce Committee's recent sausage making discussion regarding the "Broadcast Flags" - or "Audio Flag's. These are essentially "takings" of our fair use rights via Hollywood special interests:
John Sununu (R-NH), an MIT graduate, questioned the necessity of the restriction. He said that advocates of the restriction maintained that its absence would "stifle creativity." He demurred. "We have now an unprecedented wave of creativity and product and content development…new business models, and new methodologies for distributing this content. The history of government mandates is that it always restricts innovation…why would we think that this one special time, we're going to impose a statutory government mandate on technology, and it will actually encourage innovation?"
Posted by James Zellmer at 2:51 PM

January 27, 2006

State Electronic Surveillance Laws

National Conference of State Legislatures:
Electronic surveillance is also examined in a brief that is part of NCSL's series, "States Respond to Terrorism," which surveys states' efforts to protect democracy from future terrorist attacks.

Electronic Surveillance involves the traditional laws on wiretapping--any interception of a telephone transmission by accessing the telephone signal itself--and eavesdropping--listening in on conversations without the consent of the parties.

Following the tragedies of September 11, there is growing support to give law enforcement agencies more power to tap into private communications to thwart further acts of terrorism by monitoring private electronic communications. State and federal policymakers face the challenge of balancing security needs via electronic surveillance against the potential erosion of individual privacy.

Posted by James Zellmer at 12:07 PM

Zawodny: Has Google Lost its Soul?

Yahoo's Jeremy Zawodny:
We all knew it was a matter of "when" not "if", but it's surprising to see that it had to happen this way. Over on Google Blogscoped, I see that Google Removes Its Help Entry on Censorship: The page which used to say: Google does not censor results for any search term. The order and content of our results are completely automated; we do not manipulate our search results by hand. We believe strongly in allowing the democracy of the web to determine the inclusion and ranking of sites in our search results.

Now simply 404s. It's gone. Well, except for the cached copy in Google itself.

Rather than using that page to explain how and why they've compromised their corporate philosophy in China, they've removed it entirely with no e
Read the comments for a rather troubling look at Google's censorship.
Posted by James Zellmer at 11:00 AM

January 25, 2006

Google in China

Rebecca MacKinnon:

So it has happened. Google has caved in. It has agreed to actively censor a new Chinese-language search service that will be housed on computer servers inside the PRC.

Obviously this contradicts its stated desire to make information freely available to everybody on the planet, and it contradicts its mission statement: "don't be evil."  As Mike Langberg at the San Jose Mercury News puts it: their revised motto should now read "don't be evil more than necessary."

Posted by James Zellmer at 3:19 PM

January 23, 2006

Democracy in America, Then and Now, a Struggle Against Majority Tyranny

Adam Cohen:
During the War of 1812, an angry mob smashed the printing presses of a Baltimore newspaper that dared to come out against the war. When the mob surrounded the paper's editors, and the state militia refused to protect them, the journalists were taken to prison for their own protection. That night, the mob broke into the prison, killed one journalist and left the others for dead. When the mob leaders were brought before a jury, they were acquitted. Alexis de Tocqueville tells this chilling story in "Democracy in America," and warns that the greatest threat the United States faces is the tyranny of the majority, a phrase he is credited with coining.
Posted by James Zellmer at 9:57 PM

January 20, 2006

TSA to Offer Pre-Approved Security Passes

Airline passengers who buy a preapproved security pass could have their credit histories and property records examined as part of the government's plan to turn over the Registered Traveler program to private companies, federal officials say.
Posted by James Zellmer at 5:13 PM

January 17, 2006

Governor Doyle's State of the State Coverage

WisPolitics has a useful roundup of Doyle's speech and reaction around the state.
Posted by James Zellmer at 9:41 PM

January 16, 2006

"The Origins of the Great War of 2007"

Niall Ferguson:
With every passing year after the turn of the century, the instability of the Gulf region grew. By the beginning of 2006, nearly all the combustible ingredients for a conflict - far bigger in its scale and scope than the wars of 1991 or 2003 - were in place.

The first underlying cause of the war was the increase in the region's relative importance as a source of petroleum. On the one hand, the rest of the world's oil reserves were being rapidly exhausted. On the other, the breakneck growth of the Asian economies had caused a huge surge in global demand for energy. It is hard to believe today, but for most of the 1990s the price of oil had averaged less than $20 a barrel.
Sort of a bolt of lightning as I've been reading Shirer's the Rise and Fall of the Third Reich. I'm now entering 1939 in this amazing 1960 work. The look back with respect to opportunities missed is simply astonishing. I hope Ferguson is dead wrong, but one can see the seeds of war...
Posted by James Zellmer at 11:30 AM

January 14, 2006

The Fiction Zone that DC Has Become

Lessig explains why we're (the US) so far behind in terms of broadband performance and economics:
How did France get it so good? By following the rules the US passed in 1996, but that telecoms never really followed (and cable companies didn’t have to follow): “strict unbundling.” That’s the same in Japan — fierce competition induced by “heavy handed” regulation producing a faster, cheaper Internet. Now of course, no one is pushing “open access” anymore. Net neutrality is a thin and light substitute for the strategy that has worked in France and Japan.
It will be interesting to see where our Wisconsin politicians land on this matter.
Posted by James Zellmer at 6:50 AM

January 13, 2006

More on the KPMG Tax Shelter Case

Yet more examples of the spaghetti that is our tax law:
  • Lynnley Browning:
    Former KPMG tax professionals who are facing criminal charges over questionable tax shelters challenged the government yesterday to prove that they had broken the law.

    The defendants filed more than two dozen motions in United States District Court in Manhattan yesterday, asking among other things that charges be dropped because no court had ever ruled the shelters in question illegal.
  • David Reilly and Paul Davies:
    One defense filing, submitted to the U.S. District Court in New York, accused prosecutors of "distorting" the facts and "obfuscating the truth-finding process" in order to win the case. By threatening KPMG with criminal indictment, the motion said, the government forced the firm to accept a "draconian" deferred prosecution agreement in which it admitted the tax strategies were fraudulent and agreed to waive attorney-client privilege.

    "The goal is obviously not justice, nor truth, but instead the unsavory desire to tack another skin to the wall," the filing said.
Posted by James Zellmer at 2:34 PM

January 9, 2006

IRS Sued on Failure to Release Tax Data

David Cay Johnston:

Records showing how thoroughly the Internal Revenue Service audits big corporations and the rich, and how much it discounts the additional taxes assessed after audits, are being withheld from the public despite a 1976 court order requiring their disclosure, according to a legal motion filed last week in federal court in Seattle.

For decades, the information was given at no charge to a professor at Syracuse University, Susan B. Long, who made it available on the Internet at trac.syr.edu, with tools for people to conduct their own analyses.

Among other findings, Professor Long's information has shown that in 1999 the poor were more likely than the rich to be audited.

David Burnham, co-director with Professor Long of the Transactional Records Access Clearinghouse, which collects raw government data, said the withheld information made it impossible to evaluate the intensity of audits. Mr. Burnham noted that the withheld data included figures that indicated how much auditors say is owed in extra taxes, but that the tax agency lets taxpayers negotiate down.

"It is simply impossible to evaluate the I.R.S. without this data," Mr. Burnham said, "and they know it."
Posted by James Zellmer at 9:18 PM

January 7, 2006

Congress Hands Caught in the Cookie Jar

Declan McCullagh and Anne Broache:
All House members who use cookies either acknowledge it or have privacy policies that are silent on the topic. Of the 23 senators who pledged not to employ cookies but do anyway, 18 are Republicans and five are Democrats.

"It shows their lack of understanding of technology," said Sonia Arrison, director of technology studies at the Pacific Research Institute, a nonprofit group in San Francisco. "It's willful ignorance. They're complete hypocrites. How can they accuse companies of poor data management when they're not doing it on their own Web sites?"

No rule prohibits the use of Web monitoring techniques by Congress. But such a restriction does apply to executive branch agencies. The Pentagon and others scrambled this week to eliminate so-called Web bugs and cookies after inquiries from CNET News.com.
Posted by James Zellmer at 9:41 AM

January 6, 2006

What Worries Bill Gross

PIMCO's Bill Gross:
This recovery is different because it was spawned and subsequently nurtured on the back of asset appreciation alone. Greenspan and company have high hopes that investment and then employment will ultimately kick in and work their self-sustaining magic one more time, but jobs and investment these days go to Asia at the margin, and domestic animal spirits have been squelched by the looming inevitability of reduced returns on risk capital in a low interest rate world. I’ll leave the Asian story for another day or let you turn on CNN at 11:00pm EST to get your fill of Lou Dobbs - the Dobbsian spectre of foreign competition on the march is undeniably real. My point in this Outlook will be an extension of the thoughts expressed over the past few months that this recovery is on fragile legs because it is asset-appreciation-based and that future asset appreciation is vulnerable based on the weakening stimulative power of interest rates. Therein lies the potential for a white hot speculative blaze turning into a destructive recessionary fire. Such an analogy inevitably suggests that in future years, Rome, Georgia, may not be on fire, but burning.
Posted by James Zellmer at 5:39 PM

January 5, 2006

Northwest's Pilot Scope Clause Contract Negotiations

Sort of an abstract issue, but relevant for Madison, particularly with the growth of 50 to 100 seat aircraft in and out of Madison


Interesting look at labor issues for Madison's #1 air carrier:

Northwest's scope clause is, in fact, particularly onerous relative to scope clauses at other major airlines. United, Delta, American & US Airways can outsource (to regional airlines) aircraft up to at least 70 seats (US Airways can even outsource some aircraft of 86 seats). Continental's limit is 59 seats, but can do a virtually unlimited number of those.

The issue at Northwest is particularly acute because Northwest flies smaller mainline aircraft than any other major airline. Northwest itself flies over 100 DC-9s (photo above). These geriatric aircraft (many of them over 30 years old or more) have just over 100 seats. Click here for further DC-9 data.

Posted by James Zellmer at 9:30 AM

January 3, 2006

Microsoft Takes Down Chinese Blogger

Rebecca McKinnon:

Microsoft’s MSN Spaces continues to censor its Chinese language blogs, and has become more aggressive and thorough at censorship since I first checked out MSN’s censorship system last summer.  On New Years Eve, MSN Spaces took down the popular blog written by Zhao Jing, aka Michael Anti. Now all you get when you attempt to visit his blog at: http://spaces.msn.com/members/mranti/ is the error message pictured above. (You can see the Google cache of his blog up until Dec.22nd here.)

Note, this blog was TAKEN DOWN by MSN people. Not blocked by the Chinese government.

Posted by James Zellmer at 7:27 PM

2006 Governor's Race: Interview with Scott Walker

Colin Benedict interviews Republican Candidate for Governor Scott Walker:
He won by promising to be frugal and restoring ethics, a blueprint he's following again. "As Governor, right off the bat, that first day in office, I would call a special session to pass a true property tax freeze on all four years I'm in office," said Walker. "On all levels of government." Walker admits Gov.Doyle's plan has helped some people but calls it a phony freeze because on average tax bills went up. He criticizes Doyle saying the governor essentially borrowed the money to pay for it instead of cutting programs.
Posted by James Zellmer at 10:02 AM

January 1, 2006

Pay to Play at the Capitol

Steven Walters and Patrick Marley:
Asked why he made sure the Democratic senator from Madison personally got a $40,000 check from what was then called SBC/Ameritech for a shadowy campaign fund Chvala secretly controlled, Broydrick said: "It was very clear to me that, if you played ball, you got what you wanted."

The regional phone company, one of Broydrick's many clients, got what it wanted in the summer of 2001.

Before the $40,000 corporate check was written, the state budget contained a tax-code change that would have cost the telecommunications industry money. After the check was delivered, the provision was removed from the budget, which Chvala and Assembly Republicans wrote over the next two weeks.
Filling up my car recently, I stood next to a woman doing the same to her 3-Series. The trunk and bumper were filled with anti-national political figure stickers. I told her that I agreed with many of her concerns but simply asked that she put some energy into local issues such as public schools or city/county government.

I feel the same way about Paul Soglin's daily national political blasts. In my view, the local scene could use much more attention. There's no shortage of national political commentary and criticism.

I hope Paul turns his considerable talents back toward Madison.
Posted by James Zellmer at 3:50 PM

Internet Gatekeepers

Dustin Staiger:
Like I said, this isn't about having/not having a tiered Internet. It already is tiered. This is a battle over whether or not we have an OPEN Internet. The Ed Whitacre's of the industry want it to be a RESTRICTED Internet. A restricted Internet where they not only hold the keys, but where they're free to swing their swords as well.
I have many more posts and links on this issue here.
Posted by James Zellmer at 1:25 PM

December 29, 2005

Lessons Learned from the American Expedition to Iraq

Fabius Maximus:

For what?

To establish some form of Kurdish state? The Turkish Government, among our stronger allies, will not thank us for this.

To establish Islamic State(s) in the Arab regions of Iraq? Probably difficult to sell this to the American people as “victory.” Certainly an odd aspect of our “War on Terror.”

To establish a Shiite State in southern Iraq? Good news for Iran, a charter member of the “Axis of Evil.” Bad news for Iraq’s southern neighbor, Saudi Arabia, most of whose oil fields lie in Shiite tribal areas.

Perhaps we can redeem ourselves by learning lessons of sufficient value.
Posted by James Zellmer at 7:58 PM

December 27, 2005

Conyers & Sensenbrenner's World: Sticking it to us

David Berlind nicely summarizes the DRM (Digital Restrictions Morass) that plagues mainstream electronic media supported by big money politics and the likes of our own Jim Sensenbrenner and Michigan's John Conyers.
Posted by James Zellmer at 9:39 AM

Internet, Weblogs and Local Politics

Two articles on the rising influence of the net and blogs on local politics:
  • Ron Fournier:
    Frustrated by government and empowered by technology, Americans are filling needs and fighting causes through grass-roots organizations they built themselves - some sophisticated, others quaintly ad hoc. This is the era of people-driven politics.

    People are just beginning to realize how much power they have," said Chris Kofinis, a Democratic consultant who specializes in grass-roots organizing via the Internet.
  • Greg Borowski:
    Now, with Wisconsin on the eve of a major campaign year, state candidates will be confronted for the first time with a growing network of political blogs, many on the feisty side. Even avid bloggers acknowledge that when it comes to reaching voters, particularly undecided ones, their power pales in comparison to newspapers and the rest of the mainstream media (The MSM in bloghand).
I think Borowski overstate's the MSM's influence. One must keep in mind the general population's views of mainstream media (typically, not great, largely, I think due to the often cozy relationship between big media and big politics) and the small number of people who actually vote.

Change will occur, but it will be local and net driven. Perhaps in future decades, the grassroots activism will make a difference on the state and national scene.
Posted by James Zellmer at 9:03 AM

December 17, 2005

Shaking Hands with Bill Proxmire

My one fleeting contact with Bill Proxmire occured many, many years ago (I was perhaps 10 years old). I recall walking around the Dodge County Fair (Beaver Dam) and my hand suddenly swung away. I looked up and a tall lanky guy shook it and said "Hi, I'm Bill Proxmire". He was on the campaign trail, one handshake at a time.

We could use his "Golden Fleece Awards" today.

Richard Severo:

Another Golden Fleece Award went to the National Institute for Mental Health, which spent $97,000 to study, among other things, what went on in a Peruvian brothel. The researchers said they made repeated visits in the interests of accuracy.

The Federal Aviation Administration also felt Mr. Proxmire's wrath, for spending $57,800 on a study of the physical measurements of 432 airline stewardesses, paying special attention to the "length of the buttocks" and how their knees were arranged when they were seated. Other Fleece recipients were the Justice Department, for spending $27,000 to determine why prisoners wanted to get out of jail, and the Pentagon, for a $3,000 study to determine if people in the military should carry umbrellas in the rain.

He returned to Harvard, earned a second master's degree - this one in public administration - and moved to Wisconsin to be a reporter for The Capital Times in Madison.

"They fired me after I'd been there seven months, for labor activities and impertinence," he once said, conceding that his dismissal was merited.

Posted by James Zellmer at 7:46 AM

December 14, 2005

City of Madison Comprehensive Plan

Kristian Knutsen:
A couple of hours before the council meeting in the same room, they attended a presentation about the City of Madison Comprehensive Plan. This plan, mandated by state law, and a work in progress over the last couple of years, will serve as a long-term roadmap for the city's infrastructural future. It is also up for a vote on Tuesday, Dec. 13 by the full council, though it is likely to be referred to a subsequent meeting in early January.
Posted by James Zellmer at 9:01 AM

Ag Subsidies Revealed

Daniel Drezner:

For now, however, these subsidies are here -- but who, exactly, gets them?

For that answer, I encourage you to check out the Environmental Working Group's Farm Subsidy Database. Through many, many FOIA requests, they have produced. an interactive website chock full of interesting facts. For example:

  • Half of all subsidies go to only 5% of Congressional districts.

  • Four commodities —corn, wheat, rice and cotton— account for 78 percent of all ag subsidies.
  • EWG also has an interesting proposal to reallocate the ag money away from subsidies but towards rural areas where farmers actually generate high value-added goods already.

    Posted by James Zellmer at 8:04 AM

    December 10, 2005

    "Internet Aids Civic Action

    Julie Felt:

    A new study suggests the Internet is used as a resource for influencing participation in civic affairs more often than general media and face-to-face communication.

    Conducted by University of Wisconsin journalism and mass communication professor Dhavan Shah, the study tested the change in media exposure over time. Shah’s work analyzed various forms of data conducted before, during and after the 2000 presidential election.

    Posted by James Zellmer at 12:01 AM

    December 9, 2005

    US Delegation Votes via RSS

    Very slick, by the Washington Post:

    This site offers an RSS feed for every current member of Congress, so you can get notified each time your elected officials vote. Each member-specific feed includes the member's position in the latest 10 votes.
    Tammy Baldwin's RSS voting feed is here

    Posted by James Zellmer at 12:01 AM

    December 8, 2005

    Air Travel: The Battle over the Wright Amendment

    Virginia Postrel nicely summarizes the battle over the Wright Amendment which limits air travel from Dallas's Love field:
    Schnurman's tough-minded coverage of the issue demonstrates the great virtues of distant newspaper owners. His paper is owned by Knight Ridder, which isn't entangled in local crony capitalism. The Dallas Morning News by contrast seems terrified to even voice an opinion on the issue. (And I'm not just annoyed that they turned down this piece on the grounds that they'd already run too much on the topic. In fact, I'm delighted. D Magazine paid me twice the DMN's rate, and I like them better anyway.)

    Viewed up close, the whole Wright discussion demonstrates the wisdom of my old boss Bob Poole, who has spent at least two decades arguing for airport privatization. Locally, the only thing any politico seems to care about is what's good for DFW Airport and, secondarily, for the airlines. The traveling public doesn't count--either in the political equation (too diffuse) or, apparently, in airport management. Anyone who's had the misfortune of traveling through DFW knows that, with the exception of its new Terminal D, it's hardly a comfortable or accommodating place. Neither does it seem to maximize revenue. No mall developer would use space so pathetically.
    The article is also an interesting look at the "devils bargain" that sometimes occurs between politicians and the mainstream media.
    Posted by James Zellmer at 7:46 PM

    City Casino?

    Bill Lueders:

    Two weeks back, Isthmus reported that the Ho-Chunk tribe may be expanding its De Jope bingo hall on Madison's southeast side, adding new machines as well as poker and blackjack tables.

    Ho-Chunk spokesperson CaraLe Murphy confirmed the new gaming tables and machines are under consideration, but insisted no decisions have been made. "We're looking to expand that because we want to bring in a younger crowd," she said, specifically citing the tribe's desire to attract more college students.

    Posted by James Zellmer at 12:01 AM

    December 7, 2005

    Barnett: Is the Military - Industrial Complex Winning?

    Thomas P.M. Barnett:

    I want to agree with both sides of this argument, but I won't. Given the aging of our population and the competitive pressures of Friedman's "flat world," I think we need to make some choices in this Global War on Terrorism. I think that if we're going to shrink the Gap, we'll need a lot of manpower help, so moving toward strategic alliance with China kills two birds with one stone: takes great power war off the table and frees up resources within the Pentagon for more intensive focus on postconflict (which does cost, buddy, no matter what anyone tells you) while giving us historic access to allied troops we'll need for the "long war" effort that will be shrinking the Gap.

    Posted by James Zellmer at 8:49 AM

    December 5, 2005

    Rice on Internet Governance

    Condoleezza Rice:
    The Internet will reach its full potential as a medium and facilitator for global economic expansion and development in an environment free from burdensome intergovernmental oversight and control. The success of the Internet lies in its inherently decentralized nature, with the most significant growth taking place at the outer edges of the network through innovative new applications and services. Burdensome, bureaucratic oversight is out of place in an Internet structure that has worked so well for many around the globe. We regret the recent positions on Internet governance (i.e., the "new cooperation model") offered by the European Union, the Presidency of which is currently held by the United Kingdom, seems to propose just that - a new structure of intergovernmental control over the Internet.
    Posted by James Zellmer at 8:56 AM

    GM's New Janesville Assembled SUV's

    Thomas Content:
    There's a lot riding on those SUVs, including the jobs of nearly 4,000 workers who assemble Suburbans, Tahoes and Yukons at General Motors' Janesville factory.

    The plant was spared from GM's massive restructuring last month, when the company announced it would shutter five factories and scale back a host of others - moves designed to cut 30,000 manufacturing jobs.

    The Janesville factory still faces a risk, particularly if oil and gasoline prices spike again, industry observers say.
    Posted by James Zellmer at 8:18 AM

    December 4, 2005

    Automakers Lining Up for Aid

    Jeffrey H. Birnbaum and Sholnn Freeman:

    Troubled U.S. automakers and their allies on Capitol Hill are seeking billions of dollars in aid from the federal government ranging from health coverage for their workers to extra tax write-offs for themselves.

    They're also asking for one rhetorical favor: Please don't call the requests a bailout.

    I don't view it as a bailout," Sen. Carl M. Levin (D-Mich.) said.

    "We're not looking for a bailout," agreed William C. Ford Jr., chairman of Ford Motor Co.

    Posted by James Zellmer at 1:52 PM

    November 30, 2005

    GM, Janesville and Where do We Go From here?

    Tom Still offers commentary on why Janesville survived GM's recent cutbacks. Unfortunately, as he notes in closing, the auto industry will continue to shed jobs. Peter DeLorenzo summarizes Detroit's challenges here.
    Posted by James Zellmer at 8:47 AM

    Falk vs. Lautenschalger Really All About Doyle vs. Green

    Interesting and likely correct insight into why Kathleen Falk is running against Peg Lautenschlager (I've mentioned to Kathleen that I'd rather see her run against Herb Kohl!).
    Posted by James Zellmer at 8:43 AM

    Feingold on Bush

    I don't often link or comment on national politics as there's no shortage of such words online. Steve Inskeep talks with Senator Feingold on Bush's recent speech. Defense and the National Interest has two useful articles on this subject:

    Posted by James Zellmer at 12:01 AM

    November 29, 2005

    Mayor Dave's Schedule

    Jason Joyce takes a humorous look at Mayor Dave's weekly schedule.

    Posted by James Zellmer at 12:01 AM

    November 23, 2005

    Local Taxes: Accounting Rule Changes on Retiree Health Care Costs

    Deborah Solomon:
    A looming accounting change is forcing state and local governments to fess up to something that's been lurking on their books for years: Many have made costly retirement health-care promises without planning how to pay for them.

    Under a new accounting rule, governments soon must start recognizing their long-term obligations to pay for retirees' health benefits -- and, for the first time, publicly disclose what it would cost each year to fund that liability.

    For many governments, the promised amount is likely to be sizeable enough to prompt big changes such as cutting retiree benefits, borrowing money and diverting tax dollars from other spending priorities -- or risk a credit-rating downgrade that could significantly boost borrowing costs. Estimates of obligations for some states range from $500 million to as much as $40 billion.
    Posted by James Zellmer at 7:42 AM

    November 20, 2005

    The EFF and Google's AutoLink (AdLink)

    There are many positive aspects to the EFF's work.

    However and unfortunately, they have been silent (or apparently supportive) on Google's land grab as Dave Winer points out this morning. More from Dave on the Google Toolbar

    Google's toolbar places their links on top of the original author's hyperlinks ("Autolink").

    I've not been a financial supporter since the EFF remained silent on the AutoLink "feature". Ironically, as Google Watch points out, the guy behind Microsoft's similar scheme "Smart Tags" now works for Google.

    I wonder how far Google will push the envelope when they have to support their sky high 117B market valuation (P/E of 88.6!)?
    Posted by James Zellmer at 9:31 AM

    November 18, 2005

    City Spending up 5.5%, Property Taxes to Rise 4.35%

    Two interesting perspectives on Wednesday night's Madison City Council Budget votes:

    • Kristian Knutsen (Posted Thursday @ 10:52p.m.):
      Coming from another perspective, Brandon urges a no vote against this budget since it has a 4.35% increase, stating that no cuts were made "This isn't the mayor's budget. The mayor set a clear challenge to us, 4.1," Brandon states. "We are playing into the state government's perception, what they portray about us, is that we are big spenders," he continues. "All we are doing is inviting more levy limits, and at worst, TABOR."

      Konkel says "we could have done this if we really wanted to," referring to the failure of the hotel room tax hike, which she states would have brought the levy down to 4.03, also lamenting the failure of several amendments to provide services to the indigent. "I know how I'm going to vote," Webber says, while Bruer commends the council for the tenor of this year's budget process. "This administration unlike others in the past did more truth in budgeting," he says of the mayors role, continuing by pointing out cost-cutting measures undertaken by city departments in his defense of the budget and its process. "To go through all those hours and all that energy," Bruer says, "I have no problem going out to my constituency and defending this increase" due to its "balance" of attention.

      Knutsen also live-blogged the meetings (which is fabulous)
    • Dean Mosiman (posted 01:10 a.m. 11/18/2005)
      The tax hike, Cieslewicz said, is the third lowest in the past two decades.

      It's now time for the state to back away from tax caps, let cities make budget decisions based on their own values, and for the state to try to fix how it funds municipalities, the mayor said.

      Ald. Zach Brandon, 7th District, who led the group that made the 4.1 percent tax cap pledge, offered the lone harsh words about the budget.

      "Do you know what this is saying to the rest of the state?" he said, adding that Madison will become a "poster child" for its inability to contain spending and taxes."

    Posted by James Zellmer at 8:47 AM

    November 16, 2005

    Searls: Saving the Net: How to Keep Carriers from Flushing the Net Down the Tubes

    Doc Searls:
    The subjects covered here are no less enormous than the Net and its future. Even optimists agree that the Net's future as a free and open environment for business and culture is facing many threats. We can't begin to cover them all or cover all the ways we can fight them. I believe, however, that there is one sure way to fight all of these threats at once, and without doing it the bad guys will win. That's what this essay is about.

    Here's a brief outline of the article. If you want to go straight to the solution, skip to the third section:
    • Scenario I: The Carriers Win
    • Scenario II: The Public Workaround
    • Scenario III: Fight with Words and Not Just Deeds
    More here.
    Posted by James Zellmer at 9:35 AM

    November 11, 2005


    CIVITAS will host 10 monthly luncheon forums focused on local finance, public education services and finances, and an analysis of local government services. (See Forum Calender for schedule of topics). Each luncheon will include presentations by past and current local officials, academic experts and representatives from community, business, professional and civic organizations. Presentations will be followed by questions from a panel of civitas members who have studied the monthly topic and audience questions.

    All presentations will be recorded and posted on a civitas web site and media coverage of the information presented in the forums will be encouraged.

    Civitas graduates will receive a certificate of attendance and a complete set of the presentations. Appointing authorities will receive an annual list of civitas graduates and will be encouraged to consider these individuals for appointments to boards, commissions and committees.

    In addition, any civitas graduate who decides to become a candidate for local public office will be eligible to attend an annual civitas Candidate Training Program and an annual civitas Seminar on the Public Agenda which will examine the results of a county-wide public opinion survey of local issues.
    Civitas is a joint undertaking of the Greater Madison Chamber of Commerce and Wood Communications, according to a letter sent to chamber members by chairman Gary Wolter.
    Posted by James Zellmer at 6:57 PM

    Lueders Makes Sense

    Bill Lueders on the Falk / Lautenschlager race:

    I only asked because no one else did. When Kathleen Falk announced her candidacy for attorney general against fellow Democrat Peg Lautenschlager at the City-County Building on Monday, I thought it would be one of first things that came up. But while several reporters quizzed Falk about Lautenschlager's 2004 arrest for drunk driving (Falk deftly evaded the question, saying voters would have to reach their own conclusions), none asked her directly about her own record in this area. And so I raised my hand, waited until Falk called on me, and popped the question.

    Posted by James Zellmer at 12:01 AM

    November 9, 2005

    Knutsen's City Council Coverage

    Kristian Knutsen continues to impress with his City Council commentary and live blogging.
    Posted by James Zellmer at 6:24 AM

    November 7, 2005

    Microsoft's Irish Tax Shelter

    Glenn Simpson:
    The citizens of other nations where Microsoft sells its products are less fortunate. Round Island One provides a structure for Microsoft to radically reduce its corporate taxes in much of Europe, and similarly shields billions of dollars from U.S. taxation.

    Giant U.S. companies whose products are heavily based on their innovations, such as technology and pharmaceutical firms, increasingly are setting up units in Ireland that route intellectual property and its financial fruits to the low-tax haven -- at the expense of the U.S. Treasury.

    Much of Round Island's income is licensing fees from copyrighted software code that originates in the U.S. Some of the rights to these lucrative assets end up in Ireland via complex accounting rules on intellectual property that the Treasury is now seeking to overhaul. The Internal Revenue Service said it is also looking closely at how companies account for such transactions.

    In a statement, Microsoft said its European units "report and pay significant amounts of taxes" and that Microsoft "is fully compliant with the tax laws of the United States and all other countries."

    Through a key holding, dubbed Flat Island Co., Round Island licenses rights to Microsoft software throughout Europe, the Middle East and Africa. Thus, Microsoft routes the license sales through Ireland and Round Island pays a total of just under $17 million in taxes to about 20 other governments that represent more than 300 million people.
    Microosft is not unique. Many firms route their IP through tax havens such as Ireland, Puerto Rico, Cyprus and others.

    This tax saving process occurs in everyday products (for some) as well, such as Pepsi & Coke. Both beverage giants locate their flavor facilities in tax havens.
    Posted by James Zellmer at 6:41 AM

    November 3, 2005

    Baldwin Votes Against Internet Free Speech

    Tammy Baldwin voted against internet free speech yesterday [The House voted 225 to 182 on the Online Freedom of Speech Act (H.R. 1606) -- a majority but less than the two-thirds required for a "suspension" bill to clear the House. via instapundit]. An explanation would be useful. Jim Abrams has more. There's certainly growing activism online. Adding complexity via more and more laws will be a loss for everyone (which is, perhaps one perspective of Baldwin and others who voted against H.R. 1606). Google News has more. As is typical, the small players get screwed in these deals, while the special interests on both sides spend money to get around the legal spaghetti, as we saw in the last national elections.

    Ed Cone says "Email your congressman and tell him you want to blog without Federal regulation."

    Wisconsin's House delegation voted as follows: Mark Green (R) voted Yes along with Ron Kind (D), Jim Sensenbrenner (R) - (I agree on something with Sensenbrenner???) and Mark Ryan (R).

    Voting No with Baldwin (D) were Petri (R), Obey (D) and Moore (D).

    Send Tammy Baldwin a note with your views on this important, local issue.

    California Democrat Zoe Lofgren's supportive comments on this bill. Slashdot and Declan have more.
    Posted by James Zellmer at 6:59 AM

    November 2, 2005

    Gingrich on WWII vs the Four Years since 9/11

    Newt Gingrich raises some useful points in comparing WWII's four years vs. the four since 9/11 [pdf]:
    I appreciate the opportunity to testify today about the nation’s intelligence system and the absolute imperative for effective ongoing reform.

    It is now four years and one month since the 9/11 attack on America.

    The comparable date for World War II would have been January 19, 1946. By that point the United States was largely demobilizing its forces after a victorious global war. During the comparable length of time that we have been responding to the 9/11 attacks on America, the World War II generation of Americans had rebounded from the attack on Pearl Harbor and defeated Germany, Japan and Italy, built a worldwide military and intelligence capability, built the atomic bomb, massed and organized industrial power, and laid the foundation for the worldwide network of alliances that has stabilized the world for the last sixty years.

    This difference in energy, intensity, and resolve should worry all of us.
    This is a fascinating topic. One thing that strikes me is how different our national awareness of the globe must have been in 1946, given millions of Americans stationed overseas. This is much different, today, I think.
    Posted by James Zellmer at 10:04 AM

    Madison Should Embrace Halloween

    Marc Eisen:
    Her return home, besides occasioning a visit to her favorite Japanese restaurant on State Street, sparked a radical thought on my part: Why doesn't Madison embrace Halloween? Turn a perceived sow's ear into a silk purse? I mean, why doesn't Madison throw a Halloween festival to end all festivals?
    I agree.
    Posted by James Zellmer at 8:42 AM

    Our Tax Dollars at Work: Hollywood Lobbyists' Halloween Work

    BoingBoing has an interesting article about a joint RIAA/MPAA move started yesterday on Capitol Hill. From the article: 'Hollywood has fielded a shockingly ambitious piece of Analog Hole legislation while everyone was out partying in costume. Under a new proposed Analog Hole bill, it will be illegal to make anything capable of digitizing video unless it either has all its outputs approved by the Hollywood studios, or is closed-source, proprietary and tamper-resistant. The idea is to make it impossible to create an MPEG from a video signal unless Hollywood approves it.
    Posted by James Zellmer at 8:37 AM

    November 1, 2005

    Fabius Maximus on Plame and the Decline of the State

    Fascinating stuff.

    Posted by James Zellmer at 12:00 AM

    October 30, 2005

    SBC's Whitacre on "His Pipes"

    SBC, Wisconsin's largest incumbent telco, evidently does not believe in the open internet. Chairman Ed Whitacre expects internet firms to pay to send content to local customer's homes (that TV thinking again). Perhaps I'm missing something, but I've not seen any SBC Fibre deployed to the home. We're still using the copper networks, paid for by all of us, during the regulated telecommunications era. Fortunately, I think by the time SBC gets around to fibre (will they?), wireless will perhaps, be pervasive.

    The telcos should be investing in personal web services to use these pipes.

    Bob Berger has more.
    Posted by James Zellmer at 2:41 PM

    Ireland's John Bruton Interview

    SF Chronicle:
    Q: Last week, we had as our guest Stanford Professor Michael Boskin, chairman of the Council of Economic Advisors to the first President Bush. Boskin invoked an image of Europe of high taxes, high spending, overly generous social welfare networks, high unemployment and stagnant growth as something the United States must avoid at all costs. What is the European view of that critique?

    A: If you took each of the 50 states in the U.S., you would find quite different economic performance as between Mississippi and California or as between Washington state or West Virginia. There are varieties in Europe, just as there are varieties here in the United States.

    On average, productivity per hour worked is as high in Europe as it is in the United States, right across the board. In some countries like Ireland and the Netherlands, it is higher. However, Europeans work fewer hours. They work fewer hours per year, per week and per lifetime. They retire earlier.
    Bruton was formerly Prime Minister of Ireland in the 1990's.
    Posted by James Zellmer at 7:35 AM

    October 25, 2005

    Monroe's Ethanol (E85) for $1.96/Gallon

    he price won't stay under a dollar, but even at $1.96 a gallon, drivers will be smiling. Cory said the corn-based fuel gives him fewer miles per gallon, but he figures he's still 4 to 5 cents per gallon ahead with the savings at the pump. He also likes the fact that he's helping local farmers. "I think anything we can do to help our own markets and build up our own economy is a lot better off and this is really clean burning fuel," he said.
    Posted by James Zellmer at 6:57 AM

    October 24, 2005

    A Basic Right to Broadband?

    Charles Cooper:
    We won't stop until every San Franciscan has broadband access," says Chris Vein, the senior technology advisor to San Francisco's Mayor Gavin Newsom. It's not only rhetoric. His boss is one of the nation's most visible proponents of so-called muni Wi-Fi. Because he runs San Francisco, Newsom probably gets more than his fair share of ink. Some think that he also harbors ambitions to one day run for U.S. president--and nothing would look better on his resume than a line about how the city extended affordable broadband access to all its residents.

    But Newsom is only picking up on a theme increasingly sounded by politicians elsewhere. The city of Philadelphia has also announced a high-profile plan to provide Internet access to its citizens. From its point of view, broadband is a necessity, not a luxury. With the United States' ranking for broadband penetration plummeting from third place to 16th in just four years, this is more than an academic concern. The fear is this will translate into massive job losses to other nations.
    Posted by James Zellmer at 9:58 PM

    October 23, 2005

    Number of Pork Projects in Federal Spending Bills

    Andrew Roth:
    From Chris Edwards’ new book, Downsizing the Federal Government (which cited CAGW):

    2005 - 13,997
    2004 - 10,656
    2003 - 9,362
    2002 - 8,341
    2001 - 6,333
    2000 - 4,326
    1999 - 2,838
    1998 - 2100
    1997 - 1,596
    1996 - 958
    1995 - 1439

    Using 2005 numbers, by voting down the “Bridges” amendment, the Senate let the country know that it was unwilling to defund 2 out of 13,997 pork projects today. That’s 0.0142887762 percent.
    Posted by James Zellmer at 12:43 PM

    Our Tax Dollars at Work: Congress's $3B TV Subsidy!

    Jennifer Kerr:
    Lawmakers want to spend $3 billion to make sure millions of Americans won't wake up to blank TV screens when the country makes the switch to all-digital broadcasts.

    The subsidy was approved Thursday by the Senate Commerce Committee as part of legislation that would set April 7, 2009, as the firm date for television broadcasters to end their traditional analog transmissions and send their broadcasts via digital signals.
    Meanwhile, we lag behind the world in deploying the future, broadband internet.
    Posted by James Zellmer at 8:54 AM

    October 21, 2005

    T.E. Lawrence's Middle East Vision

    Deborah Amos:
    One of the most popular books among American military officers serving in Iraq is Seven Pillars of Wisdom -- the accounts of T. E. Lawrence, the British colonel who rallied Arab tribal leaders during World War I. Lawrence wrote about unconventional warfare and the people of the region.

    A new exhibition at London's Imperial War Museum features a long-lost map of the Middle East drafted by Lawrence and presented to the British cabinet in 1918. It provides an alternative to present-day borders in the region, taking into account local Arab sensibilities rather than the European colonial considerations that were dominant at the time.
    Fascinating stuff, particularly his map. More photos later.
    Posted by James Zellmer at 8:03 AM

    October 19, 2005

    Overture Refinancing Coverage

    Kristian Knutsen and Marc Eisen provide extensive coverage of Tuesday night's Madison City Council vote to support refinancing the Overture Center. Knutsen live blogs the meeting while Eisen talks with former mayor Paul Soglin and obtains his views on the matter.

    Posted by James Zellmer at 3:24 AM

    October 13, 2005

    Milwaukee negotiating for citywide wireless network - 2005-10-12

    Milwaukee working on citywide wireless network - 2005-10-12

    The city of Milwaukee is in negotiations with Midwest Fiber Networks, Milwaukee, to have the company install a citywide wireless network at a cost of $20 million to $25 million.
    Posted by James Zellmer at 7:36 AM

    October 12, 2005

    KPMG Tax Shelters: A Very Strange Indictment

    Robert Weisberg and David Mills:
    The recent indictment of some KPMG partners makes for very interesting reading. In the months leading up to it (and the now-rumored indictment of other tax advisors on similar grounds), numerous news stories suggested the KPMG accountants had somehow knowingly participated in tax fraud by creating fake losses for wealthy clients. Whether or not this proves true, the indictment makes no such allegation. While the accountants and their clients may have done some bad things, the notion that their behavior is criminal, and even sufficiently criminal to threaten the very existence of this major firm and its thousands of jobs, casts doubt on the fairness and judgment with which the federal prosecutors have exercised their discretion.

    Why did they do so in this case? Probably for the simple reason that they are -- quite properly -- offended by the proliferation of newfangled and economically questionable tax shelters, yet at the same time exasperated that Congress shows no interest in legislating these shelters out of existence or enacting a clear "business purpose" requirement, in spite of repeated requests from the Internal Revenue Service. The prosecutors seem to be venting their frustration over this failure to act by fashioning felony charges out of ethereal legal material.
    Posted by James Zellmer at 8:23 AM

    October 11, 2005

    Northern Opportunities

    Fascinating article on plans to open polar shipping routes. Reminds me of 15th century opportunism:
    With major companies and nations large and small adopting similar logic, the Arctic is undergoing nothing less than a great rush for virgin territory and natural resources worth hundreds of billions of dollars. Even before the polar ice began shrinking more each summer, countries were pushing into the frigid Barents Sea, lured by undersea oil and gas fields and emboldened by advances in technology. But now, as thinning ice stands to simplify construction of drilling rigs, exploration is likely to move even farther north.
    Posted by James Zellmer at 3:58 PM

    October 10, 2005

    Wading Toward Home

    Michael Lewis (with his better half, Tabitha Soren riding shotgun taking pictures) visits post flood New Orleans:
    Immediately he had a problem: a small generator that powered one tiny window air-conditioning unit. It cooled just one small room, his office. But the thing made such a racket that, as he put it, "they could have busted down the front door and be storming inside and I wouldn't have heard them. There could have been 20 natives outside screaming, 'I'm gonna burn your house down,' and I'd a never heard it." Fearing he might nod off and be taken in his sleep, he jammed a rack filled with insurance-industry magazines against the door. (Haywood sells life insurance.) In his little office, he sat all night - as far as he knew, the last white person left in New Orleans. He tried to sleep, he said, but "I kept dreaming all night long someone was coming through the door." He didn't leave his air-conditioned office until first light, when he crept out and squinted through his mail slot. In that moment, he was what Uptown New Orleans had become, even before the storm: a white man, alone, peering out through a slot in search of what might kill him. All he needed was the answer.
    Posted by James Zellmer at 8:41 AM

    Konkel on Madison's Open Government

    Brenda Konkel:

    When you combine all of the above with other disturbing trends I’m seeing in City Hall of removing or threatening to remove people from committees if they don’t vote how the Mayor wants them to or even worse, the Mayor recently, in his own words, “holding a gun” to the TPC to get them to vote to increase the bus fares, one begins to wonder about how open and transparent our government is and if the public opinion matters.

    Posted by James Zellmer at 12:01 AM

    October 6, 2005

    Our Tax System's "Wonderland"

    The Wall Street Journal:

    Contrary to what has been reported in the media, however, the IRS does not "ban" tax shelters. Whether a shelter qualifies as a tax deduction is, like any other point of law, adjudicated in court. But BLIPS, FLIP, OPIS and the other tax shelters in this case have never been brought before a judge, so their legality and legitimacy has never been settled as a point of law.

    Never. The way tax law has usually developed in this country is that the IRS issues its point of view on a shelter, putting taxpayers who use it on notice. If the IRS then takes the taxpayer to court over the shelter, he has the chance to respond before a judge, who makes a ruling and precedents are thus established. In this case, the IRS has called in the prosecutors first.

    This in itself is striking. Despite some recent legal setbacks, the IRS has an excellent track record of obtaining favorable rulings on tax shelters it dislikes. Yet no taxpayer has been brought to court over these shelters, and no judge has ruled on whether they "work," in the jargon of the tax-shelter business. In America, last we checked, the accused are innocent until proven guilty. That gives this KPMG trial an Alice-in-Wonderland quality; the accused are on trial for promoting a fraudulent tax shelter that has never been proved to be fraudulent in the first place.

    This is not the first time the Justice Department has taken this route, and recent history suggests it may have a tough road ahead. Last November, Justice froze $500 million in assets at Xelan, a charitable trust set up for doctors in California, alleging that the trust was a vehicle for tax fraud. Six weeks later, the Federal Court for the Southern District of California threw out the case, noting, among other shortcomings, that the prosecutors could not show that any court had ever ruled that Xelan's activities were illegal under the tax code.

    Posted by James Zellmer at 6:50 AM

    October 5, 2005

    Dane101: National Delegation Feed

    Quite useful - great job, Shane.

    Posted by James Zellmer at 12:48 AM

    September 30, 2005

    Tammy Baldwin: Telco Influence?

    Public Integrity's site has some very useful lobbying data. This link shows the organizations that have contributed to Tammy Baldwin along with the amounts. Perhaps this lobbying is why we are stuck in the mud on true broadband?

    Posted by James Zellmer at 12:02 AM

    September 28, 2005

    Our Senators at Work - Hollywood's Broadcast Flag via a Senate Commerce Committee Reconciliation Bill

    Our good Senators may soon try to force Hollywood's broadcast flag on us, via "piggybacking on a Commerce Committee reconciliation" bill, due 10/26/2005. I wonder if our Senators, Russ Feingold and Herb Kohl will do the right thing for Wisconsin residents, or simply slide up to the bar with the Hollywood types? Click on the links above and tell our Senators to stop supporting Hollywood power grabs to the detriment of our fair use rights.

    Posted by James Zellmer at 12:01 AM

    September 25, 2005

    Senators Continue to Beat the Stock Market - And Us

    Professor Bainbridge on Senator Bill Frist's HCA stock sale - two weeks before a disappointing earnings announcement which caused the stock to fall 15%. I've noted before that a recent study demonstrated that Senators beat the market 12%, while corporate insiders are 5% better than the market and the typical US household underperforms. Unsurprisingly, the SEC is NOT investigating this interesting fact.

    Posted by James Zellmer at 10:43 AM

    September 24, 2005

    Bush Tax Cuts = Tax Increase for Some

    David Cay Johnston:
    Over the next 10 years, Americans will not receive nearly $750 billion in tax cuts sponsored by President Bush because the cuts will be offset by the alternative minimum tax, a new report by Congressional tax specialists shows. The report, prepared by the staff of the Congressional Joint Committee on Taxation, said that from 2006 to 2015, Americans would pay as much as $1.1 trillion more under the alternative minimum tax, partly as a result of the Bush tax cuts. The Bush tax cuts reduced the bill for millions of taxpayers to a level that will subject them to the alternative minimum tax instead of the standard tax rate. As a result, the report said, their tax savings would be reduced by a total of $739.2 billion over the 10 years. Congress has passed a modest adjustment to the alternative minimum tax to allow more taxpayers to take advantage of the Bush tax cuts, but that expires at the year-end. Even if it is extended, the report said, the alternative minimum tax would take away $628.5 million in tax savings, with $416.5 billion of that attributable to the Bush tax cuts over the 10 years. George K. Yin, the joint committee's chief of staff, wrote that the Bush tax cuts of 2001 and 2003 account for just under two-thirds of the increase in collections under the alternative tax. The report was prepared in response to a request from John Buckley, chief tax lawyer for Democrats on the House Ways and Means Committee. Families with children who own their homes will be hit hardest by the increased alternative tax.
    Posted by James Zellmer at 1:03 PM

    September 21, 2005

    Jennifer Alexander on the Madison Common Council's Updated Lobbying Ordinance

    Jennifer Alexander:

    The Greater Madison Chamber of Commerce and its partners were successful last night in gaining the council’s approval of a fair and workable lobbying ordinance. With a vote of 15-4, a new lobbying ordinance was passed into law by the Madison Common Council. After months of hard work on this issue, the ordinance that passed was supported and endorsed by the GMCC and will have minimal impact on the business community’s access to local government. Thanks to all of our partners that worked so hard over the past months: Downtown Madison, Inc., the Small Business Advisory Council, Smart Growth Madison, and the Realtors Association.

    This compromise ordinance creates wide-reaching exemptions for Madison business owners and employees, allowing them expanded access to local government officials. It allows business owners and employees to speak with city officials about their needs and concerns without the burden of going through a registration process. We believe that this ordinance will promote open government and encourage civic involvement and participation in the public process. Voting in favor of the compromise ordinance were: Alders Sanborn, Cnare, Verveer, Brandon, Skidmore, Gruber, Olson, Knox, Bruer, Palm, Compton, Rosas, Van Rooy, Radomski, and Thomas. Voting against this compromise were: Alders Konkel, King, Benford, and Webber. Alder Golden was absent. Thanks to all of you that attended public meetings, wrote letters, and talked to your elected officials, helping us fight for business rights to open access to government. Please feel free to contact us with any additional questions. Thank You, Jennifer Alexander President, Greater Madison Chamber of Commerce
    Posted by James Zellmer at 4:30 PM

    September 20, 2005

    Knutsen Raises the Local Media Coverage Bar - Quite a Bit!

    Kristian Knutsen Live Blogs tonight's Madison City Council Meeting on Isthmus' The Daily Page:
    Tonight's Madison City Council meeting is likely biggest of the season, as they will take up several items regarding the tavern smoking ban that was enacted on July 1. Since that time, various tavern owners and their political and media allies have inveighed against that ordinance, making it into the hottest and most divisive issue in the city at least since the casino referendum last year. In fact, the amount of interest this has generated probably surpasses that, generating more media heat and public interest in any city policy in years. In addition, the city's lobbying regs are on the table as well, an issue that has also been a subject of considerable discussion.
    An amazing example of sausage making at its finest.
    Posted by James Zellmer at 9:46 PM

    September 19, 2005

    Vikings to Announce a New Stadium Deal

    Brandt Williams:
    On Tuesday officials from the Minnesota Vikings and Anoka County will formally announce that they have reached an agreement for a new football stadium. The $675 million, retractable-roof stadium would be built on a 700-acre site in Blaine. The total cost of the project, with roads and other infrastructure, could be as much as $790 million. The Vikings are expected to contribute up to $280 million with the rest of the funding to come from Anoka County and state taxpayers.
    I wonder if any NFC North team actually needs a new stadium, given the dreadful outlook this fall. Perhaps they will all finish 3-13? Beyond that, I'm sure we can use this money in much better ways, than by subsidizing the rich.
    Posted by James Zellmer at 8:15 PM

    It's About Time!. Isthmus Tallies our Federal Representative's Voting Records

    Kudos to Isthmus. They've started to tally Rep. Tammy Baldwin, Senator Herb Kohl and Senator Russ Feingold's voting record (not committees - unfortunately!). Some of our elected official's votes make me wonder just who they are working for.

    Posted by James Zellmer at 7:33 PM

    September 18, 2005

    "Obeying Orders" More on Yahoo Helping the Chinese Government Put a Reporter in Jail

    Washington Post Editorial Page:
    This is not merely an abstract business ethics issue: Yahoo's behavior in China could have real consequences for U.S. foreign policy. Over the past two decades, many have argued -- ourselves included -- that despite China's authoritarian and sometimes openly hostile government, it is nevertheless right to encourage American companies to work there. Their very presence has been thought to make the society more open, if not necessarily more democratic. If that is no longer the case -- if, in fact, American companies are helping China become more authoritarian, more hostile and more of an obstacle to U.S. goals of democracy promotion around the world -- then it is time to rethink the rules under which they operate.
    Posted by James Zellmer at 4:09 PM

    Changing US Foreign Policy in the Pacifc

    Edward Cody surveys US policy in the Western Pacific:
    The rise of China as a regional force has shaken assumptions that had governed this vast region since the end of World War II, including that of uncontested U.S. naval and air power from California to the Chinese coast. With those days soon to end, senior officers said, the U.S. military in Asia is retooling to reflect new war-making technology, better prepare for military crises and counter any future threat from the emergent Chinese navy and air force.
    Posted by James Zellmer at 3:17 PM

    Water Wars: The State of the San Joaquin River

    As the water wars arrive in Wisconsin, it's useful to take a look at what has happened in other parts of the United States. Juliana Barbassa does just that in California's Ansel Adams Wilderness Area:
    It begins as fresh snowmelt, streaming from Mount Ritter's gray granite faces into Thousand Island Lake, a bouldered mirror. The clear blue water spills out through a narrow canyon, and the San Joaquin River is born.

    When conservationist and mountaineer John Muir first explored these upper reaches, the narrow gorge barely contained the power of the living river, which carried the continent's southernmost salmon run, sustained Indian tribes and set the rhythm of life in the valley below with floods and droughts.

    "Certainly this Joaquin Canyon is the most remarkable in many ways of all I have entered," Muir wrote in 1873.
    Posted by James Zellmer at 2:47 PM

    Dutch Treat: Personal Database from Cradle to Grave

    The Dutch government will begin tracking every citizen from cradle to grave in a single database, opening a personal electronic dossier for every child at birth with health and family data, and eventually adding school and police records.

    As a privacy safeguard, no single person will be able to access someone's entire file. And each agency that contributes to the records will maintain its own files as well.

    But organizations can raise "red flags" in the dossier to caution other agencies of potential problems with children, said ministry spokesman Jan Brouwer. Until now, schools and police have been unable to communicate with each other about truancy records and criminality, which are often linked.
    Posted by James Zellmer at 1:59 PM

    September 17, 2005

    Farmers Market Activism

    Nancy suggested that I summarize some of the activists present at this morning's Dane County Farmer's Market. The observation of those leafletting the Market's four corners provides an interesting glimpse into the City's political thinking. Today's leaflets included:
    • Uncompromising Courage, an exhibit of Falun Gong Art at the State Capitol Rotunda through 10/9/2005. The backside included a link to the Epoch Times and a wish that the Chinese Communist Party might collapse soon.
    • The Madison Rep was actively promoting their New Play Festival which runs from 9.17 to 9.25.
    • A Pro Madison Bar Smoking Ban Group was active across from L'etoile
    Posted by James Zellmer at 4:05 PM

    The Changing Value of Shakespeare

    Tyler Cowen takes a quick look at William St. Clair's new book: The Reading Nation in the Romantic Period. This book, so interesting on many levels looks at:
    During the four centuries when printed paper was the only means by which texts could be carried across time and distance, everyone engaged in politics, education, religion, and literature believed that reading helped to shape the minds, opinions, attitudes, and ultimately the actions, of readers. William St Clair investigates how the national culture can be understood through a quantitative study of the books that were actually read. Centred on the romantic period in the English-speaking world, but ranging across the whole print era, it reaches startling conclusions about the forces that determined how ideas were carried, through print, into wider society. St Clair provides an in-depth investigation of information, made available here for the first time, on prices, print runs, intellectual property, and readerships gathered from over fifty publishing and printing archives. He offers a picture of the past very different from those presented by traditional approaches. Indispensable to students, English literature, book history, and the history of ideas, the study’s conclusions and explanatory models are highly relevant to the issues we face in the age of the internet.
    • The first study of actual reading using quantification and economic analysis
    • Sheds new light on aspects of reading and its effect on the nation
    • An indispensable resource for scholars working on literature, reading, and the history of publishing and printing
    Posted by James Zellmer at 7:31 AM

    LAB: Wisconsin Voter Registration Evaluation

    Wisconsin Legislative Audit Bureau [PDF]:
    We found that statutory requirements are not consistently followed. Among our survey respondents:
    • only 85.3 percent of municipalities removed the names of inactive voters from their voter registration lists;
    • only 71.4 percent sometimes or always notified registered voters before removing their names; and
    • only 54.0 percent reported removing the names of ineligible felons.
    Because of such inconsistencies, registration lists contain duplicate records and the names of ineligible individuals. For example, when we reviewed more than 348,000 electronic voter registration records from eight municipalities, we identified 3,116 records that appear to show individuals who are registered more than once in the same municipality.
    Greg Borowski and Stacy Forster have more:
    Among the 348,000 electronic voter registration records checked were 105 potentially improper or fraudulent votes including:
    • Ballots cast by 98 ineligible felons, including 57 in Madison.
    • Two people who appear to have voted twice.
    • Four cases of voters whose absentee ballots were included in official election results even though they died in the two weeks before the election.
    • One instance of a 17-year-old in Madison who apparently voted.
    Posted by James Zellmer at 7:05 AM

    September 14, 2005

    Marotta Moves On and Leaves a Few Comments Behind

    Governor Doyle's top aide, Marc Marotta offered up a few comments as he left that post for private law practice (and help raise money for Doyle's re-election campaign).

    *Although Marotta said he found "a lot of good, dedicated" employees in state government, he said the most frustrating part of his job was the "tremendous inertia" that buries every decision -- large and small -- in bureaucratic quicksand. "Every little issue has its own political world," he added.

    Posted by James Zellmer at 8:54 AM

    September 13, 2005

    Konkel on the City's Capital Budget

    Brenda Konkel posts some useful information on the City of Madison's growing appetite for debt.

    Posted by James Zellmer at 8:33 PM

    Handy US Government RSS Feed Index

    Very handy US Government RSS Feed Index Page. NetNewsWire is the best RSS newsreader.

    Posted by James Zellmer at 7:56 PM

    September 10, 2005

    A Bit of Cold War Reading from the CIA: Tolkachev

    Barry G. Royden:
    On 20 September 1985, international wire service reports carried a statement distributed by the official Soviet news agency TASS that one A. G. Tolkachev, whom it described as a staff member at one of Moscow’s research institutes, had been arrested the previous June trying to pass secret materials of a defensive nature to the United States. Subsequent news stories said Tolkachev was an electronics expert at a military aviation institute in Moscow who was compromised by former CIA officer Edward Lee Howard.

    In October 1985, The Washington Post ran a story that described Tolkachev as “one of CIA’s most valuable human assets in the Soviet Union.” According to FBI affidavits related to the Howard espionage case that were made public, Tolkachev had provided information on Soviet avionics, cruise missiles, and other technologies. The Soviets subsequently publicly confirmed that they had executed Tolkachev in 1986 for “high treason.”
    Fascinating and well worth reading.
    Posted by James Zellmer at 7:00 PM

    September 8, 2005

    The Squeezing of Lawyer/Client Privilege

    Jonathan D. Glater:

    Prosecutors say that they usually do not seek to learn what advice a lawyer provides to a client, but are trying only to learn the facts. In an interview in 2003, James B. Comey, a former United States attorney, said, "They are just seeking the facts, including factual attorney work product." Lawyers for former KPMG partners have already excoriated the firm's cooperation and, in particular, its acknowledgment of wrongdoing, contending that the firm did not undertake a thorough internal investigation to justify such a statement. (The statement is unlikely to be admitted in evidence in the criminal case against the former partners, though, lawyers said, and, in any event, it does not identify specific wrongdoers.)

    Posted by James Zellmer at 12:01 AM

    September 1, 2005

    Inside the Tax Shelter Mess

    Some very useful questions and answers from Business Week:
    Are the deals illegal?
    The IRS says so, but the courts have not yet ruled on the matter. The IRS has a mixed record in shuttering such transactions. Under what is known as the economic-substance test, the IRS has claimed that shelter deals done solely to reduce taxes are improper. But federal courts have sometimes ruled that such transactions are O.K., even if they carry no economic risk or opportunity for reward beyond their tax savings.
    Posted by James Zellmer at 1:26 PM

    Shadid: Night Draws Near: Iraq's People in the Shadow of America's War

    The Economist reviews UW Madison grad and Pulitzer Prize winner Anthony Shadid's ("who speaks Arabic like a native and writes English like an angel") new book: Night Draws Near: Iraq's People in the Shadow of America's War

    Much more than these bold facts, however, the average western newspaper reader will not know. It is not easy to understand fully what is going on; still less so to make any accurate predictions about how it will end. Targeted by head-chopping Muslim fanatics, most foreign journalists do not leave the generous, if inevitably jaundiced, embrace of American and British troops. And even those who do must rely heavily on official sources—mostly Americans who are out of touch with the complex and changing world outside their fortress compounds, and who, like their government, have tended also to invent good news where there is none.

    Thank goodness, then, for those reporters, both western and Iraqi, who are prepared to take risks in search of a more nuanced reality, among them Anthony Shadid, a correspondent for the Washington Post, whose words begin this article. Mr Shadid, an American of Lebanese descent, who speaks Arabic like a native and writes English like an angel, has put his best reporting into this book. Even-handed and keenly observed, containing just enough (and no more) of the author to suggest a decent man worthy of our trust, it is written for the inexpert but has fresh material for scholars. Mr Shadid calls his work story-telling rather than serious criticism, and so it is. But stories this insightful—of dead Iraqi insurgents and their motivations; of a 14-year-old Iraqi Anne Frank, with extracts from her wartime diary—are more than journalism; they are valuable chronicles.

    More on Shadid.

    Posted by James Zellmer at 11:06 AM

    States Expand Push for Internet Taxes

    In yet another example of our confused tax system:
    Going online to buy the latest bestseller or those photos from summer vacation may be tax free for most people today, but it won't last forever. Come this fall, 13 states will start encouraging - though not demanding - that online businesses collect sales taxes just as Main Street stores are required to do, and more states are considering joining the effort
    Posted by James Zellmer at 7:09 AM

    August 31, 2005

    Lind: Swiss Model of Defense

    William S. Lind publishes some interesting thinking on the next model of US Defense Forces:

    Two readers, Marion and Herbert, asked whether the Swiss militia model might be relevant. The answer is clearly yes. Switzerland’s defense has been based on a militia for a very long time, and it has enabled Switzerland to preserve its neutrality, maintain its liberties and decentralized political system (real power lies at the cantonal, not the federal level of government) and keep its defense expenditures down. The Swiss militia is an ideal basis for defending Switzerland from 4GW. In fact, Switzerland already has an arrangement other countries will need to move to in a 4GW world: the regular armed services support the militia, instead of the other way around.

    Posted by James Zellmer at 10:41 PM

    August 30, 2005

    More on the Tax System Mess: KPMG Indictments

    Quite a bit of news Monday on the ongoing US Government Tax Shelter Investigations:

    • TaxProf links to statements, resolutions and indictments.
    • Jonathan D. Glater discusses the Southern District of New York's Indictments and notes that:
      As part of its agreement with the government, KPMG issued a strongly worded acknowledgment of wrongdoing, which can be used by prosecutors in their criminal case against the individual partners, as well as against the firm in the event it violates the terms of the deferred- prosecution agreement. Lawyers for the former partners criticized the firm's statement as meaningless.

      "The government held a gun to KPMG's head and said, 'Say what we want or we will put you out of business," said Robert H. Hotz Jr., a lawyer at Akin Gump Strauss Hauer & Feld who is representing Mr. Lanning. "KPMG's statements in court were the product of extreme duress and are not worth the paper they are printed on."

      So far, no court has ruled that the shelter transactions themselves were improper - a fact that lawyers for the accused former KPMG partners were quick to emphasize.

    • Carrie Johnson on the Indictments
    • Attorney General Alberto Gonzales' statement
    • Michigan's Senator Carl Levin commented:
      Senator Carl Levin of Michigan, the senior Democrat on that committee, said in a statement that KPMG's agreement and the indictments "send a powerful message to the promoters, aiders and abettors of abusive tax shelters that they can no longer expect to be let off the hook.''
      I find Levin's statement somewhat ironic, given the recent evidently unintended huge SUV tax subsidies that provided a significant benefit to Michigan manufacturers at the cost of national fuel efficiency and lost tax income.
    Ironically, the Supreme Court overturned the US Department of Justice's indictment of Andersen, which cost thousands of people their jobs:
    While hearing arguments in Andersen’s appeal, Justice Antonin Scalia at one point described the government's theory of the case as "weird," according to The New York Times.

    What’s more, the justices "were so clearly sympathetic" to the former Big Five accounting firm, that the only question remaining at the end of the session was how quickly the Court would overturn the conviction, the paper added.

    Of course, even if the conviction is overturned, it would not be much help to the thousands of former employees who lost their jobs and the former partners who lost their equity.

    Real tax reform is long overdue. Will we see it from our politicians? Unlikely, when both Feingold and Kohl are supporting bills like this very large, multinational corporation tax giveaway.

    I've known Bob Pfaff, indicted today, for 20 years and have always found him to be a great friend and honorable man. I've posted a few items on this previously here. The recent Kelo Case is also worth watching in this context.

    Posted by James Zellmer at 12:01 AM

    August 29, 2005

    Identity Thief Steals House

    James Cook left on a business trip to Florida, and his wife Paula went to Oklahoma to care for her sick mother. When the two returned to Frisco, Texas, several days later, their keys didn't work. The locks on the house had been changed.

    They spent their first night back sleeping in a walk-in closet, with a steel pipe ready to cold-cock any intruders. The next day, they met the man who thought he owned their house, because he had put a US$12,000 down payment to someone named Carlos Ramirez. The Cooks went to the Denton County Courthouse and checked their title. Someone had forged Paula Cook's maiden name, Paula Smart, and transferred the deed to Carlos Ramirez. Paula's identity was not only stolen, but the thief also stole her house. Even the police said they've never seen a case like this one, but suspect the criminal was able to steal the identity and the house with just Mrs. Cook's Social Security number, driver's license number and a copy of her signature.
    Via Bruce Schneier who points out that the National ID card (supported by our good Senators Feingold & Kohl) won't solve this problem:
    This is a perfect example of the sort of fraud issue that a national ID card won't solve. The problem is not that identity credentials are too easy to forge. The problem is that the criminal needed nothing more than "Mrs. Cook's Social Security number, driver's license number and a copy of her signature." And the solution isn't a harder-to-forge card; the solution is to make the procedure for transferring real-estate ownership more onerous. If the Denton County Courthouse had better transaction authentication procedures, the particulars of identity authentication -- a national ID, a state driver's license, biometrics, or whatever -- wouldn't matter.
    If we are ever going to solve identity theft, we need to think about it properly. The problem isn't misused identity information; the problem is fraudulent transactions.
    Posted by James Zellmer at 8:38 AM

    August 28, 2005

    Small Town USA may be an alternative to Offshore Outsourcing

    ABC News:
    The rural town of Sebeka, population 710, is not exactly Silicon Valley. It's hardly the place computer programmer Dave La Reau expected to find employment.

    La Reau, who had been job hunting for years, answered a help wanted ad from CrossUSA — one of a half dozen companies actively recruiting workers to small towns in at least eight states.

    He traded his suburban home for a 7-acre farm at a fraction of the price. But La Reau is making half of what he earned in Chicago — before outsourcing put his small compan