Review: The Prînce of Nöthing

About twenty years ago, I was at a used bookstore and I picked up what looked like an interesting medieval spin on James Bond.  It was set during the period of the Crusades, but appeared to be conceived as an action-thriller series rather like The Executioner, Mack Bolan.  I started reading it, but around page 30, when the slave girl sent by Saladin to spy on the Crusaders was in full throat enjoying her third rape at the hands of her captors, I suddenly realized that the book was not a historical novel but rather one of those strange 70's porn novels with a thin veneer of historical fiction.  A little research indicates that the book was probably the fifth book in the Crusader series, Saladin's Spy (1986), written by an author very familiar to Black Gate readers, although he published it under the pen name "John Cleve" rather than Andrew J. Offutt.  I hadn't thought about that book for years, until I was casting about for a way to explain the epic fantasy of R. Scott Bakker's series entitled The Prince of Nothing.

Read the rest at the Black Gate.

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Downgrade and the debt sectors

Daniel Indiviglio makes some relevant points in his article about the downgrade at The Atlantic and he was one of the few who correctly saw it as a real possibility, but I think he ultimately goes off-track when he calls into question S&P's decision to downgrade the U.S. sovereign credit rating:

S&P was not happy with the $2.2 trillion minimum debt reduction plan. That's understandable. A bigger deal would certainly have been preferable from a fiscal soundness standpoint. But does the agency really estimate that the deal is is so dangerously small that there's a realistic chance that the U.S. could now default at some point in the future? In particular, does U.S. debt really look significantly riskier now than it did in, say, April?

The bond market certainly doesn't think so. Treasury yields are near all-time lows, despite all that political nonsense. And remember, the interest the U.S. pays on its debt is far, far smaller than its tax revenues. If the Treasury prioritizes interest payments, then there's no conceivable way the U.S. could default.

I defended S&P's initial decision to put the U.S. rating on negative watch back in May when politics were becoming poisonous. But to actually downgrade the U.S. after Washington managed to avoid its self-created crisis is another story. S&P should have acted like the other agencies and affirmed the U.S. rating, but kept it on negative watch until more deficit reduction plans were put in place over the next couple of years, as I explain here.

In fact, this might not turn out well for S&P. The firm might think it's acting boldly or proactively. Instead, the market may question S&P's reasoning skills. The rating agency is acting here on an assumption not shared by its peers at Moody's and Fitch: that U.S. politics are so screwed up that they could render the nation unable to live up to its debt obligations. That's despite pretty much everyone agreeing that the nation will be financially able to pay for its debt in the short-, medium-, and long-term.

Indiviglio did a great job of demonstrating that the U.S. downgrade was be almost perfectly in line with the historical Japanese downgrade, which took place when its net government debt reached 60% of GDP.  (It is presently around 225%).  However, he reaches the wrong conclusion, as many have, by getting sidetracked over the way in which S&P's analyzed the political situation in the U.S.A. And while there was never any question of short-term default, (despite the scare tactics of both Democrats and Republicans), I very much disagree that the nation will necessarily be able to pay for its debt in the medium- and long-terms.

The real reason that the downgrade was not only inevitable, but correct, and not only correct, but the first in a series of downgrades, can be seen in projections based on the historical patterns in the Z1 debt sector charts. These show the S&P's worst case scenario to be far too optimistic to be credible.

While the debt figures don't match up perfectly, as August "Net debt held by the public" is a little different at $9.78 trillion than Q1-2011 "federal government debt outstanding" at $9.65 trillion, they are close enough for the purposes of comparison. Utilizing the Q1 figure provides a federal debt/GDP of 64.3%, which is much lower than 74% presently estimated by the end of 2011 by S&P's. However, we can see how they reach that number by plugging in the expected growth in the amount of debt at the post-2008 quarterly average of $365 billion. This indicates an end of year federal debt figure of 10.74 trillion and a GDP figure of $14.513 trillion.

In other words, S&P's is probably assuming that either GDP will contract $490 million in the second through fourth quarters or the rate of federal borrowing will slow down.  Either way, the so-called "double-dip recession" already appears to be baked in the S&P's cake, assuming that its analysts are as capable of reading the Federal Reserve reports as Karl Denninger is. But that's not the interesting aspect, from my perspective. What is interesting is the debt/GDP projections under the three future scenarios, Upside, Base Case, and Downside. Consider these projections of future federal debt to GDP ratios:

UPSIDE: 2011 74%, 2015 77%, 2021 78%
BASE CASE: 2011 74%, 2015 79%, 2021 85%
DOWNSIDE: 2011 74%, 2015 90%, 2021 101%

Where I suspect S&P's has gone amiss, (and perhaps it had no choice in the matter due to its professional obligations), is by taking the CBO scoring figures seriously and thereby utilizing GDP estimates as the primary variable. Based on my calculations, it is also possible that S&P's is simply plugging in the 66-year average rate of increase of federal debt, 5.92%, into their spreadsheets.  But it isn't GDP that has changed so drastically over the last three years and significantly modified the debt/GDP ratio, it is the rapid 82.89% increase in the federal debt over the last 11 quarters. If we utilize federal debt as the primary variable and plug them into S&P's GDP estimates, we get some very different results. (I'm going to ignore the inflation and tax estimates in order to reduce the number of variables; these are estimates for the purpose of critical comparison, not predictive projections.)

The S&P's GDP estimates are as follows:

UPSIDE: 3% GDP growth + lapsed tax cuts
BASE CASE: 3% GDP growth
DOWNSIDE: 2.5% GDP growth

However, net GDP growth over the 13 quarters from Q1 2008 to Q2 2011 is $729.9 billion, or 5.1%. That is an annual rate of growth of 1.57% and assumes that overall credit continues to remain flat at $52.6 trillion while federal debt continues to rise at the rate that private debt contracts. Call it the CURRENT CASE. Plugging in 1.57% annual GDP growth and 22.7% annual federal debt growth provides the following debt/GDP ratios if one begins with the firm numbers from the end of year 2010.

CURRENT CASE: 2011 77%, 2015 164%, 2021 509%

And if we substitute actual rates of federal debt growth for the S&P estimates of it that are based on the notoriously unreliable CBO scoring, it becomes very clear that the debt/GDP projections are wildly inaccurate regardless of what rate of GDP growth is assumed and shows that the problem is not one that economic growth can possibly solve.  In fact, the revised UPSIDE case which takes historical debt growth into account is much worse than the Base Case that does not.

Notice that while the end of year 2011 figure (actually 76.8%) isn't much worse than S&P's is projecting at 74%, it is considerably worse than the DOWNSIDE in 2015 (164% vs 79%) and more than six times as bad in 2021 (509% vs 85%). But are these astronomical ratios even remotely possible? Could federal debt really rise to $26.1 trillion in 2015 from $9.6 trillion at present? After all, that would amount to 39.4% of all U.S. debt outstanding, assuming that the private sectors shrank at the same rate that the federal government sector expanded, and would indicate a Game Over default sometime in between 2016 and 2018.

This chart, which shows the historical percentage for each of the major debt sectors since 1946, demonstrates that at least the 2015 rate is clearly within the bounds of possibility. The Federal Government sector represented more than 39.4% of total U.S. debt until 1955. Furthermore, it also shows that the decline of Financial sector debt, which has contracted $3 trillion since 2008 and fallen from 32.7% of the total to 26.8%, could conceivably continue to dwindle away to less than one percent of the total, which would amount to an additional $11.2 trillion in debt-deleveraging that would need to be replaced by federal debt in order to prevent concomitant economic contraction. (It also, by the by, shows very clearly the real source of America's current economic woes.) Government spending and borrowing is not the root cause of the problem, it is merely a failed attempt to cure the disease of massive private sector debt expansion and contraction.

Now, I am not making any predictions here, other than a general one that because private sector debt will continue to fall, there will be tremendous pressure to continue to increase federal spending and borrowing at rates more similar to that of the last three years than the historical norm. This is because the alternative is an immediate and sizable contraction of GDP.  As ugly as it appears, the CURRENT CASE scenario I have outlined is not a worst case scenario because it does not account for the economic contraction I expect to finally begin showing up in the GDP numbers later this year and in 2012.  The determining factor will be whether the rate of increase of federal debt is closer to the 22.7% annual rate of 2008-2011 or the 5.9% rate of 1946-2011.  Just out of curiosity, I looked at the latter, which in combination with the 1.57% 2008-2011 GDP growth produces the following scenario:

HISTORICAL CASE: 2011 66.3%, 2015 78.4%, 2021 100.9%.

Which of these five scenarios appears to be playing out should be readily apparent by the time the Q4-2011 debt sector numbers are published in the Federal Reserve's Z1 report.  If the Household and Private sectors continue to decline and end-of-year federal debt/GDP is over 75%, then CURRENT CASE is probably in effect.

UPDATE - More like 3 in 3, I would say: "A Standard & Poor's official says there is a 1 in 3 chance that the U.S. credit rating could be downgraded another notch if conditions erode over the next six to 24 months. The credit rating agency's managing director, John Chambers, tells ABC's "This Week" that if the fiscal position of the U.S. deteriorates further, or if political gridlock tightens even more, a further downgrade is possible."

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So much for those military pretensions

It is always educational to see how quickly the badge gang shows their true colors as soon as citizens start shooting back, regardless of the country:

An entire 20-man police force resigned in a northern Mexican town after a series of attacks that killed the police chief and five officers over the last three months, state officials said Thursday.... The mass resignation appeared to be connected to a Tuesday attack by gunmen that killed three of the town’s officers, Salas said.

American police have abandoned their erstwhile right to be regarded with any particular respect now that they have claimed the right to be able to murder American citizens with impunity. In most cases, police departments steadfastly refuse to prosecute, much less punish, police officers who have fired upon and killed innocent men, women, and even children.

There are the occasional exceptions, but even in such cases, police inevitably escape with a lesser penalty.

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I am officially addicted

I heard Don't Stop the Sandman a few months ago and thought it was hysterical. But the entire CD simply takes it to another level and redefines awesome.


"[T]he sound was achieved when the metal band was stranded on a desert island in 1989 with a CD player, plenty of batteries and the CD collection of a 13 year old girl." I think my favorite part is when they segue into a Hells Bells riff backing the Madonna lyrics.

Rock Sugar is like the bastard love-child of Spinal Tap and Tenacious D. About the only way I can imagine it could ever be topped is if Al Jourgenson, Trent Reznor, and Rob Zombie were to team up and put out a CD covering songs by Britney Spears, the Pussycat Dolls, Girls Aloud, the Spice Girls, and Destiny's Child.

They remind me of how it cracked all of us up when Paul threw in a Loverboy guitar riff after the Technojihad chorus without warning. It was the only time I can remember Mike, who had the freakish robot-like precision required to play live drums along with samples and tightly sequenced electronics, completely missing a beat.

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My five highlight reel NFL players

Q: Randy Moss' retirement made me wonder about the five player-specific NFL career highlight films that would be worth buying. My personal list would be Barry Sanders, Deion Sanders, Moss, Brett Favre and Ronnie Lott. There are players with better career numbers, but for "did you see what he just did" moments, these guys have to be at the top of the list.
— Eric, Ann Arbor

SG: I like this idea — seems like a natural for iTunes. (My five would be Moss, Barry Sanders, Gale Sayers, O.J. Simpson and Earl Campbell.)

Mine would be: Fran Tarkenton, Randy Moss, Barry Sanders, Reggie White, and Sammy Baugh.

Tarkenton for the ridiculously long scrambles, Moss for the deep routes, Sanders for the impossible escapes, White for the sacks, and Baugh just to see the all-around QB/DB/punter performance.

I still remember Reggie White playing against the Vikings. They called an ill-advised roll-out that called for Cris Carter to go in motion, then stay in and block the free defensive end, who happened to be White. White didn't bite on the line feint, but stayed home, then literally threw Carter five yards into Warren Moon with one hand. He was dragging Moon down when the whistle blew and "in the grasp" was called. I was at that game with seats on the 20-yard line, the play was right in front of us, and it was the one of the most physically dominating defensive plays I've ever seen in the NFL; keep in mind that Carter was neither a small wide receiver nor a bad blocker. Even the most hard-core Vikings fans roared after that play.



It's fascinating how one's memory remembers things incorrectly. Until I found the clip, I would have sworn that White a) beat an initial blocker and b) actually knocked Moon down with Carter.

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Downgrade on the way

Or perhaps not, if the administration can convince S&P to accept its fictitious numbers:

Two government officials tell ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value. Official reasons given, one official says, will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited. The official was unsure if the bond rating would be AA+ or AA.

A third official says that S&P made a "serious mistake" in its analysis, "based on flawed math and assumptions," so the Obama administration is pushing back. But even though "S&P has acknowledged its numbers are wrong, it's unclear what they're going to do.," the official said.

But... but... I thought being able to borrow more money made the existing U.S. debt safer! Anyhow, I don't think any government whose agencies have made the historical 2001 recession disappear, and whose unscheduled ex post facto revisions are nearly five times larger than the revised growth are in any position to claim anyone else is using "flawed math and assumptions".

The worrisome thing is these are the agencies that still had Enron at AAA when it was going bankrupt. It boggles the mind to think how bad U.S. finances must be for the ratings agencies to actually notice.

UPDATE - The administration's whining didn't work:

– We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating....

– The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

Notice that nothing is said about the need to raise taxes. S&P knows as well as the American public that more taxes will only lead to more spending. And there will almost surely be less reduction in spending than agreed to, given that this has been the case following practically every budget deal of the last 31 years.

As I wrote several times prior to the hike in the debt ceiling, increasing the amount of debt doesn't make default less likely, it makes it MORE likely.

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Guess the Race

The Milwaukee News offers its readers a new round of the American media's favorite game:

Police Investigating Multiple Beatings Near State Fair Park

Local law enforcement agencies are investigating several incidents near State Fair Park late Thursday night.

Milwaukee police said that around 11:10 p.m., squads were sent to the area for reports of battery, fighting and property damage being caused by an unruly crowd of "hundreds" of people. One officer described it as a "mob beating."

Police said the group of young people attacked fairgoers who were leaving the fair grounds. Police said that some victims were attacked while walking. They said others were pulled out of cars and off of motorcycles before being beaten.

Milwaukee police said at least seven people were taken to area hospitals with non-life-threatening injuries. They said that number could go up as other responding agencies release information.

Who were these young people exhibiting their vibrancy so exuberantly? Were they Amish? Turkish immigrants? Native Americans? Ecuadorans? Who could possibly say? Since it's Milwaukee, I'm going to guess it must be Norwegians run amok in light of the recent events in Oslo.

Wait a minute, this is interesting... apparently local TV wasn't aware that its viewers enjoy playing the guessing game:

Witnesses tell Newsradio 620 WTMJ and TODAY'S TMJ4 of a mob of young people attacking innocent fair-goers at the end of the opening night of State Fair, with some callers claiming a racially-charged scene. Milwaukee Police confirmed there were assaults outside the fair. Witnesses' accounts claim everything from dozens to hundreds of young black people beating white people as they left State Fair Thursday night....

"It was 100% racial," claimed Eric, an Iraq war veteran from St. Francis who says young people beat on his car. "I had a black couple on my right side, and these black kids were running in between all the cars, and they were pounding on my doors and trying to open up doors on my car, and they didn't do one thing to this black couple that was in this car next to us. They just kept walking right past their car. They were looking in everybody's windshield as they were running by, seeing who was white and who was black. Guarantee it."

Eric, a war veteran, said that the scene he saw Thursday outside State Fair compares to what he saw in combat.

"That rated right up there with it. When I saw the amount of kids coming down the road, all I kept thinking was, 'There's not enough cops to handle this.' There's no way. It would have taken the National Guard to control the number of kids that were coming off the road.

Drat, wrong again. I'm a little surprised to see that no one in the vicinity appeared to be carrying. I wonder what will happen this summer the first time a gang of "youfs" encounter an armed individual who isn't inclined to take a beating.

Unsurprisingly, it's the multicultis who are primarily to blame: "The incidents Thursday night come as the State Fair board over the last decade has worked to increase diversity at the annual fair, expanding its entertainment lineup and marketing to appeal to a younger, more multicultural audience. Diversity was a priority for State Fair Park Chairman Martin Greenberg, who spoke often of making it "truly the people's park" - a "place of inclusion, not exclusion."

Hey, mission accomplished! Nice job, guys.

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Payrolls

Seldom has a payrolls report been awaited with more bated breath than this morning. Here's what is anticipated:

U.S. payrolls probably rose by 85,000, according to a Reuters survey, after a measly 18,000 gain in June. The unemployment rate is expected to hold steady at 9.2 percent.

I have little doubt that Ben Bernanke was on the phone to the BLS last night, informing them that the number had damn well better be north of 100,000.

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Mailvox: in search of raciss

Holla has a few questions:

1. Is there a superior race? What groups represent it?

2. Is that race superior because of some sort of divine intervention or plan?

3. Does miscegenation "better" "lower" races?

4. Does Christianity allow for or encourage racialism?

5. Does God prefer whites to non-whites?

6. Why would God create races of people who were inferior to others? If you believe in some sort of evolution, is it a process guided by the/a devil, or did God purposefully create inferior races?

7. If groups of people are genetically pre-programmed to inferiority / violence, do you support genocide? I'll use the legal definition of genocide here, but limit it to extermination, segregation, and limiting births in a specific population. Why or why not?

1. Superiority entirely depends upon the metric chosen. This question cannot be answered until you provide your favored metric. However, there are without question racial differences ergo the various races - and, for that matter, human sub-species - will presumably be superior to the others at some things and worse at other things.

2. Again, provide the metric by which "superiority" can be determined. "The quality or condition of being superior" requires a means of comparison by which that superiority can be ascertained.

3. I should think so. A half-African, half-Asian child will likely be more athletic than the average Asian and more intelligent than the average African. On the other hand, it will probably be less intelligent than the average Asian and less athletic than the average African. Hence Arthur C. Clarke's dream of one mocha-colored, post-racial, bisexual humanity.

4. This is like asking if Christianity "permits" gravity. Christianity certainly acknowledges that the different races exist and expects Christians to surmount racial differences within the Church. But it doesn't require or expect them to pretend such differences don't exist outside them.

5. I see no reason to believe so. He does appear to be partial to Jews.

6. Perhaps for the same reason a game designer creates non-player characters that are not all as powerful as the protagonist. If there is to be variety, one individual must be superior to another in various ways, and therefore some groups will be superior in various ways.

7. No, I think containment is sufficient. The ancient German example and the modern Ottoman example indicate this to be the case. Violent people are usually content to fight amongst themselves if deprived of the ability to seek easier prey. Of course, the Mongol invasions would tend to argue that this strategy won't always work. The violent breakups of Yugoslavia and the Soviet Union demonstrate that even forced "unity" maintained for decades will collapse as soon as the force imposing it weakens.

Now, in light of this Federal lawsuit, I have three questions in return for Holla:

For at least two years, dozens of students at a Minnesota high school caricatured African-Americans in a homecoming week dress-up day by wearing low-slung pants, oversized sports jerseys and flashing gang signs, according to a federal lawsuit. The lawsuit filed last week claims officials at Red Wing High School knew of the activity and had a duty to stop it because it created a racially hostile environment. It follows a state investigation that found school officials did not fulfill their obligation "to provide an educational atmosphere free of illegal racial discrimination."

"Acting ghetto, young white men seem to think that is the funniest thing in the world," she said. "They don't understand that kind of joke is the worst kind of stereotype."

1. Did the school create a racially hostile environment by permitting whites to dress like blacks?

2. Should whites be permitted to sue for damages in Federal court when blacks caricature their culture by wearing suits and ties?

3. Is "acting white" also the worst kind of stereotype?

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Vibrant England

Apparently black-on-white racial violence isn't the legacy of slavery:

Shaking hands in celebration, these two youths appear to have something to be happy about. But this sickening gesture is actually two murderers triumphantly celebrating their killing of a 16-year-old schoolboy. The footage was captured on CCTV of a London bus as killers Lamarr Gordon and Dale Green fled the scene of the stabbing of Nicholas Pearton in south London.

Today, a judge described the killers as a 'pack of animals' as he jailed Gordon, Green and five others for a total of 74 years. The youths were all found guilty of killing Nicholas, who they chased across a park before stabbing him outside a shop doorway in Sydenham.

It is educational to see the repentant "youfs" doing their best thug impressions in the mug shots. The primary lesson is one from the Old West: it is better to be judged by twelve than carried by six. The economic downturn is not going to help, so if you aren't carrying yet, it's time to get to a range and start. You may not be able to save your culture or your country, but you can still save yourself.

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Proving the opposite case

Jane Ziegelman inadvertently manages to present an effective case against immigration in the New York Times:

TENSIONS over immigration in Europe are flaring this summer, along with questions about what — whether language, dress or diet — makes a foreigner a citizen. Of course, these questions also have a long history in America.

One of the biggest battles over assimilation occurred a century ago in New York City, and the battleground was food. Politicians, public health experts and social reformers were alarmed by what they saw as immigrants’ penchant for highly seasoned cooking.... No immigrant food was more reviled than the garlicky, vinegary pickle. Pungent beyond all civilized standards, toxic to both the stomach and the psyche, the pickle was seen as morally suspect....

Of course, New Yorkers didn’t give up the pickle. By the mid-1920s, immigration quotas had restricted entry to newcomers from Eastern and Southern Europe. Americans became less worried about the “alien hordes,” as they were known, and diet reform efforts subsided. Today, New Yorkers can proudly claim the pickle as a regional specialty. If this footnote from our culinary past can be read for a moral, it might be this: Our powers of assimilation are greater than we know. We can speak Spanish, eat sushi and still be American. The proof is in the pickle.

Ms Ziegelman obviously thinks that the fact Americans who once shunned the pickle as depraved ethnic food now happily eat them is an indication of immigrant assimilation and therefore evidence that immigration is desirable. In fact, it proves the exact opposite and underlines the very anti-mass immigration point I have repeatedly made here.

This is perhaps easier to see if we illustrate the fundamental flaw in her logic utilizing the reductio ad absurdum approach. Suppose that instead of pickles, we consider the traditional Indian custom of suttee, which involves burning a widow to death on the pyre of her deceased husband. This is not an American practice, indeed, it is abhorrent to Americans, particularly when it is involuntary.

But suppose 30 million Indian Hindus immigrated to America and brought their vibrant funeral tradition with them. And suppose that after a few decades of protesting suttee as a particularly vicious form of murder, Americans gradually became accustomed to the practice. After all, burning all those useless widows reduced Social Security costs, permitted a more orderly transfer of familial assets to the next generation, and freed up some desirable housing stock that was largely being wasted on elderly women. It might even help increase the money supply, as elderly, unemployed women tend to neither spend nor invest their money, but prefer to hoard it.

So, after 100 years, in which a sustained campaign led by third-generation Indian Americans took place, imagine the various legal impositions have been removed. Many, if not most non-Indian Americans are now cheerfully burning their widowed mothers and grandmothers on pyres; it has become a popular new American funeral tradition. Now let us revisit the question previously posed. Is an America where Americans burn widows to death, speak Spanish, and eat pickles and sushi not still America? To this, the sane and rational mind can only answer: "No, it is not, unless America refers to nothing more than a geographic location."

When ethnic and cultural differences survive the immigration process and impose themselves on the broader American population, this is not assimilation, it is the exact opposite of assimilation. It is transformation. While some transformations are admittedly more significant than others, Ziegelman's article is nevertheless a powerful reminder of why mass immigration should not be permitted by any healthy, self-respecting society and why it will destroy the traditional way of life to the extent that the customs and ideologies of those those permitted to immigrate depart from indigenous traditions.

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Bank runs in Europe

Still, it's only Greece... for now:

Worried about whether the banks will stay in business, Greeks have been taking their life savings out of accounts and sticking them in metal slits in basement vaults. The boxes are so popular that the bank has doubled the rent on them in the past year – and still every day between five and 10 customers request one. This bank ran out of spares months ago. The clerk leans over: "I've been working in a bank for 31 years, and I've never seen a panic like this."

Official figures back him up. In May alone, almost €5bn (£4.4bn) was pulled out of Greek deposits, as part of what analysts describe as a "silent bank run".

Considering the size of the Greek economy, that's a sizable amount.  Sarah Palin's comments about the U.S.A. turning into Greece aside, I haven't seen many signs of imminent U.S. bank runs, but then, it's never a bad idea to keep an amount of ready cash and coin available. Especially of Ron Paul's bill somehow manages to pass the House.

Rep. Ron Paul on Monday introduced legislation that would lower the federal government's debt by canceling the roughly $1.6 trillion in debt held by the Federal Reserve.

And why not go ahead and cancel it? If the total amount of debt doesn't matter because one person's asset is another's liability, then obviously canceling those debts can't possibly matter any more than amassing them did. Since we are assured that the government's growing debt to itself is not inflationary, then surely canceling that debt could not be deflationary.

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For those who missed it

NATE: Acceptable Man Behavior.

If your daddy, or grand-daddy dies, you get to cry.  Crying at any other time for any other reason is unacceptable....

BANE: I'll cry any damn time I want to. I am very sensitive. I will probably cry while I am whipping your invincible ass. I cry where appropriate in movies. And then I blow my nose in the hair of the girl in front of me, and cry while I whip her boyfriend's un-understanding ass. Your post makes me sniffle a little. God gave yuh tear ducts for more than clearing gunsmoke from your bloodshot eyes. Dammit.

NATE: Great. This is what I have to look forward to. When the shit hits the fan... No doubt I'll end up stuck in a foxhole with Bane... I'll be cold... tired... and sittin' there listenin' to him cry.

***NOTE TO SELF***
Add suicide pill to bug-out-bag.

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These charts are scarier

Derek Thompson of the Atlantic considered these four charts from Calculated Risk to the be scariest economic charts he's seen all year. I can only conclude that he has not seen the following chart, which shows the "credit gap" between where the U.S. economy would be if credit growth had simply proceeded at its 50-year post-WWII average and where it actually stands after Q1-2011.  The chart shows, in no uncertain terms, how completely unprecedented the situation is, and also demonstrates that the scale of the problem is much, much larger than is presently indicated by the various employment, production and consumption statistics.

Nor, I presume, has he seen the chart that accompanied it in last week's column, which shows how the composition of that stagnant debt has been shifting since 2008.

This chart explains the reason behind the determination of both political parties to raise the debt ceiling, as federal debt HAS to continue to increase, and increase significantly, in order to make up for the ongoing contractions in the private debt sectors, which so far has amounted to $600 billion in the Household sector and $3 trillion in the Financial sector.  The truly frightening thing is that it is perfectly possible for the Financial sector debt to contract much more severely; it grew from 0.85% of total debt in 1946 to 32.7% in 2008 and presently stands at 25.23%.  Considering what $3 trillion in debt-deleveraging has done to date, imagine how much more economic pain would be involved in an additional $13.8 trillion contraction.

As Steve Keen has chronicled since 2005, the mainstream economists are still paying absolutely no attention to these apocalyptic signs because they consider debt to be "exogenous" to their system models.  Paul Krugman's words in his latest paper are straight out of Paul Samuelson's 1948 textbook.

"Ignoring the foreign component, or looking at the world as a whole, the overall level of debt makes no difference to aggregate net worth — one person’s liability is another person’s asset."
 - (Paul Krugman and Gauti B. Eggertsson, 2010, pp. 2-3)

Of course, this gives us a clear warning with regards to how The Masters of the Universe are going to try to fix the problem.  Big it up and centralize it.  Since the U.S. inability to pay back its foreign debt is becoming increasingly obvious, the answer will be to "look at the world as a whole", or convert a national economy into a global one in which the national debt no longer counts because "one person's liability is another person's asset".  As long as the macro accounting all balances, how could there possibly be any problem?  And since the European Union has shown that the stresses of monetary union cannot survive without political union to enforce austerity programs and forced transnational redistributions, this means global governance will be a necessary, indeed integral, part of the mainstream economic program.

Because, after all, forcibly installing a one-world government makes so much more sense than simply replacing your inoperative and outdated economic model with one that actually works!

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A Metaphor for Vibrant America

VDH on a murder that is not only a snapshot of a sick society, but serves as a cogent metaphor for Vibrant America:

A woman found slain at a Hanford car wash this week was killed randomly when a 17-year-old gang member happened to see her while taking a walk, Hanford police said Thursday. Denise McVay was washing her car — something she did several times a week — early Tuesday morning before work.

The teen was wandering the streets after leaving a party when he saw McVay at the Royal Car Wash on Garner Avenue at about 5 a.m. and decided to kill her, police said. The teen “simply wanted to kill somebody that night” and McVay, 49, was “in the wrong place at the wrong time,” Capt. Parker Sever said. “It was a purely random act.”

The teen stabbed McVay several times and slit her throat.

The teen took McVay’s money and her car, Sever said, and drove to the home of a fellow gang member, Mauricio Ortiz, 18, of Hanford.

Consider the societal changes that have taken place in order for this incident to have taken place. McVay was likely unmarried, otherwise she wouldn't have been washing her car, her husband probably would have done it for her. In pre-Vibrant America, there is a two-thirds chance she wouldn't have been working at all, but would have been supported by her husband. In neither case would she have been at the car wash at 5 AM.

Prior to LBJ's Great Society, the "teen" would likely have not been free to wander around at 5 AM, as he would have been sleeping or getting ready to go to his own job, as the various levels of government were far less likely to providing funds for unemployed youth to spend their days and nights in aimless partying.

And, of course, without the efforts of Senators Kennedy and Hart, and Rep. Celler, it is far less likely that either the murderous teen - who is almost certainly Hispanic - or his fellow gang member, Mr. Ortiz, would be in the country to commit the murders that Americans would not commit.

The picture of the future Vibrant America is becoming increasingly clear. It is shaping up to be a place where childless and unmarried white women will be expected to fend for their interests against the perceived interests of the growing third world underclasses. Somehow, I don't think this was quite the gloriously liberated future that the feminists had in mind.

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Tea Party team players

It is impressive how quickly the Republican Establishment - for whom you know I am said to be the Voice - managed to flip most of the Congressional class of 2010. Remember this when you're urged to vote Republican in support of small government next fall. Remember this when the Tea Party stalwart tells you that he's going to Washington to change how things are done there and represent the interests of those who elected him:

The House GOP freshmen were sent to Washington with a mandate from their constituents to rein in spending and put an end to the practice of the federal government borrowing far more than it takes in. But at the end of a furious spending battle that gripped Washington, most of the second coming of the Republican revolution voted for a bipartisan deal that increases the debt ceiling and cuts the deficit, raising the specter of disenchantment and possibly retribution from the activists who propelled them into office last fall.

Some of the tea-party driven supporters will undoubtedly conclude that their freshmen were bought out by the Republican establishment. All told, 59 freshmen voted for the debt bill - two-thirds of the rookie class - and 28 voted against it.

But the freshmen tell a different story of how they came to support the bill, one born out of listening sessions with leadership, an evolution in understanding the economic consequences of a default and opportunities to vote their priorities on the House floor. And, they say, their leadership was able to make them feel enough like valued members that when the time for tough votes came, they were ready to be team players in lending their support.

The Republican establishment has at least 30 years of experience in breaking the freshmen to heel. They did it en masse in 1994 and they've done it again now. This is why it is not merely stupid, but by Einstein's metric, insane, to attempt to change anything by electing Republicans. The Tea Party has to break away and go third party if it is to have any chance at all at reducing government spending.

It probably won't work that way either, given the changed demographics of the American electorate, but it should be obvious that it is mathematically impossible to effect any meaningful change over time if two-thirds of the "elected revolutionaries" can be successfully suborned within the first year of their taking office.

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Bloomberg discovers debt/GDP

It's the debt, not the debt ceiling. Moody's announces a negative outlook for U.S. credit:

The U.S., rated Aaa since 1917, was placed on negative outlook, Moody’s said in a statement today as it confirmed the rating after President Barack Obama signed into law a plan to lift the nation’s borrowing limit and cut spending. A decision on the rating may be made within two years, or “considerably sooner,” according to Moody’s Steven Hess.

The debt-limit compromise “is a positive step toward reducing the future path of the deficit and the debt levels,” Hess, senior credit officer at Moody’s in New York, said in a telephone interview. “We do think more needs to be done to ensure a reduction in the debt to GDP ratio, for example, going forward.”

When I published RGD in 2009, I don't remember anyone being concerned about debt levels except Credit Suisse and a few Austrian economists talking about Debt/GDP. It is a subject that few Neo-Keynesian or Monetarist economists are equipped to understand because it simply doesn't factor into their models. Even those few prognosticators who are recognized for anticipating the 2008 crash, like Nouriel Roubini, didn't start talking much about it, (except occasionally for the Japanese situation), until the middle of 2010. So, it's interesting to see that it's now being actively discussed in mainstream financial media outlets such as Bloomberg.

However, they're still only looking at Federal debt to GDP rather than the more important figure of total debt to GDP. Keep in mind that it would be highly unusual for Moody's to actually do any serious downgrading until it is already completely apparent in the credit markets. The ratings agencies are usually three days late and millions, if not billions, of dollars short.

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PZ runned away again

This time, it's from Scienceblogs and National Geographic. But at least he'll have that noted scientist, Ed Brayton, to keep him company.

The scienceblogs “science blogs” gotten somewhat better over the years with some silly blockheads leaving, but one of the worst, PZ Meyers, known for tiny little snippets of vitriol of pseudo-progressive populism that panders to the stupid “skeptics” crowd (the self-righteous feel superior about bashing morons with silly non-arguments type), seemed to never want to go away, giving science blogging a very bad reputation.

Now finally, they are at least splitting the vitriol from the science they at times still throw in here and there. As you can read on Facebook:

Freethoughtblogs.com will be THE central gathering place for atheists, humanists, skeptics and freethinkers in the blogosphere.

This is of course ridiculous since the main blogs are more about republican bashing than about anything else and there is very little reasonable skepticism ever on those blogs, but it is nevertheless good news for science blogging generally if those that give science blogging a bad name finally go and blog under a different category. “Freethought” (free of what actually – reason?) sounds as kooky as any crackpottery and is a much better heading than “science”.

Wait a minute, you mean to say that posting about Matt Damon and one's dislike of libertarians isn't science? Bloody butterfly collectors, I should have known better than to major in biology at a community college!

What about Ben Affleck? Ben Affleck and Republican-hating is still science, isn't it? And Pope-bashing and Biblethumper-thrashing and stimulus-defending, how can that possibly be considered anything but science? Science is what scientists do!

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The scales fall from the eyes

Mr. Farah now recognizes the reality of the bi-factional ruling party:

[W]e don't have two competing parties in Washington. We have one-party governance, totally unresponsive to the will of the people and the rule of law. Republicans and Democrats represent two wings of the same party – both of which, at the end of the day, don't really covet a return to constitutionally limited government.

Disaster?

Catastrophe?

Outrage?

Yes, but none of these words even comes close to adequately characterizing the betrayal perpetrated by the Republican establishment in Washington over the last few days.

The era of big government is back with a vengeance – and apparently here to stay.

There are no limits. There are no restraints. There is no accountability. There is no end to red ink as far as the eye can see.

As I have been telling you for ten years, voting Republican will NEVER be a panacea for the cornucopia of ills that have rendered America a revenant. There probably is no panacea, as it is hard to envision any workable solution that does not involve the division of the country into at least three parts. There simply aren't the votes to "take back America" because too many nominal Americans dislike historical America, disvalue its freedoms and despise its Constitutional values.

And, thanks to the post-1965 influx of third-world immigrants, there will never be the votes. No Hispanic nation, no African nation, no Arabic nation, and very few European nations have EVER placed any value on "the rights of Englishmen" that were asserted in the Declaration of Independence. One need only read the aberrant parodies of the Declaration in the various UN and EU versions or national constitutions to see this is the case. Mere change of geographic location has not sufficed to significantly modify the core philosophies or ideologies, or in many cases, even the national identities of those immigrants.

It is time to pull out of the Republican Party altogether. This may mean that Obama will win a second term if he is not put out to pasture by the Democratic Party elders during the nomination process. This will almost surely mean that there will be no meaningful opposition in Washington to the bi-factional ruling party in 2012 and possibly 2014.

But the complete inability of the Republican Party to do anything of substance, to cut so much as a single dollar from the current amount of spending, means that the "realistic" forty-year strategy of "elect more conservative Republicans" has completely failed. It failed when Reagan was elected. It failed in 1994. It failed when Republicans held the White House and both houses of Congress. It has failed after the 2010 success of the Tea Party. Because it is clear that it is no longer even possible to prevent the bi-factional swan dive from the economic Tarpeian Rock, it is time to shift focus and to begin preparing for the post-mortem rebuilding.

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Mailvox: A poem by Little Dick

Every now and then, people ask me why I bother engaging with evangelical atheists. I trust this email, quoted verbatim and in its entirety, should suffice to answer that question. It would appear that Little Dick Harris is attempting to convert the world to atheism with poetry. His magnum opus is entitled "Woo".

Woo

The Christian’s Jehovah, the Almighty God,
is a capricious and cantankerous sod;
he’s a jealous, vain, and incompetent fraud,
with the morals of a sadistic tribal war lord.

For homophobia, misogyny, and genocide too,
that old Bible Bogey is the god for you.
He’s his own father, and his son, and a ghost too,
but there’s even more ridiculous woo.

Christians claim their god, in his Empyrean lair,
is omniscient, omnipotent, beneficent and fair;
but, with the problem of theodicy,
that dogma is Christian idiocy.

The Jew’s Yahweh, a wrathful old jerk,
set Jews strict rules on when to work,
how to dress, and what to sup or sip,
and giving baby boys the snip.

Myths of Bronze Age, goat-herding nomads,
metaphorically have them, by the gonads.
The Moslem’s Allah, a fierce great djinn,
demands under ‘Islam’, literally, ‘Submission’.

Apostasy is treated just like a crime;
they’ll threaten to kill you, to keep you in line,
and if you dare draw Mohammad in a comic cartoon,
there’ll be riots and killings from here to Khartoum.

Hindu, Sikh, Jain, and Buddhist,
Zoroastrian, Baha’i, Mormon, and Scientologist,
Confucianist, Shintoist, and Taoist too,
Spiritualist, Wiccan, and the New Ager into woo.

Yea, verily, those of each and every religion,
are mired in the miasma of superstition.
So, why should yours be the one true faith,
in the magic of a phantasmagorical wraith?

Belief, without evidence, is just plain crazy,
ignorant, stupid, or thoughtlessly lazy.
Life derives no purpose, at a theistic god’s direction;
evolution really happens, due to Natural Selection.

I have sent you this poem in the hope that you will read it and realize that some people find your religious beliefs to be unwarranted and absurd. When I was a small boy, still in short pants, I understood that there was no supporting evidence for religious beliefs, and therefore, such beliefs had no basis in fact. Later, I realized that religion was a tool for controlling people. Religion should be a private matter, because when it gains political power, as with any ideology, it becomes a tool for oppression. Please consider the benefits of rational thought over superstition and wishful thinking.

Oh, I read it twice, as a matter of fact. The first time in disbelief, the second time in awe. My first coherent thought was that the poem doesn't scan well, commits six rhyming infelicities, reveals the usual ignorance of actual Christian theology, repeats numerous talking points that have been repeatedly shown to be false, and consists of crude doggerel that is never going to be mistaken for Dante or Yeats. My second thought was that we have a real candidate for the 2012 Richard Dawkins Award on our hands! Science can inspire art after all!

My third thought, of course, was that the poet is not one who would recognize a "rational thought" if he spent the next ten years having Aristotle, Aquinas, and Descartes read to him before bedtime. And then, only then, I began to laugh....

One of the many amusing things about this email is the way that Little Dick openly admits his lack of faith is quite literally childish. "When I was a small boy, still in short pants, I understood that there was no supporting evidence for religious beliefs, and therefore, such beliefs had no basis in fact." I don't know about you, but I tend to find this assertion to be just a little less than credible. What are the chances that, "as a small boy still in short pants", Little Dick Harris had been able to peruse all of the available evidence that tended to support religious beliefs, whether one uses the term "evidence" properly or not?

Of course, his poem is a colorful piece of evidence demonstrating, that like every other evangelical atheist, Little Dick is still an emotional and intellectual child throwing a non-stop temper tantrum because the adults simply will not pretend to believe in his imaginary world.

UPDATE - But wait, there's more! A follow-up email has arrived:

Vox, you ask, "What are the chances that, "as a small boy still in short pants", Little Dick Harris had been able to peruse all of the available evidence that tended to support religious beliefs, whether one uses the term "evidence" properly or not?"

Zero, of course. What a stupid question. It isn't necessary to read all of it, or, as I've subsequently discovered, any of it. Other than, that is, to find out that it’s empty, eristic hermeneutics, & sciolistic casuistry.

Little Dick noticed that the sort of miracles documented by Bede, clearly, were no longer taking place. Occasional claims for somewhat more mundane miracles, usually involving apparitions or healing, were obviously without good supporting evidence. As Hume demanded, extraordinary claims require extraordinary evidence, & it was always lacking. By the age of twelve, it was plain to me that everything that I was aware of that happened in the world, & the universe, was potentially explicable in terms of natural processes.

Half a century later, I've never once doubted that, except for the realization that we may never be able to explain everything. Supernatural explanations add nothing of real value to our understanding. All that they can do is satisfy the wishful thinking of credulous individuals.

There you have it, from the mouth of the Poet Laureate of Rational Atheism. You don't need to examine ANY evidence at all in order to reach a rational conclusion that satisfies the self-styled materialist. And thus the Worm Ourobos devours his own tail and we finally reach the glorious conclusion of rational materialist epistemology.

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So doomed it isn't funny

And you thought Greece, Spain, and Ireland were in desperate straits... consider poor Seattle:

"I think to make it the most competitive for our team, Tarvaris needs to be our starter right now. Tarvaris brings so much continuity to us.''
-- Seattle coach Pete Carroll, after naming Tarvaris Jackson the team's starting quarterback on Saturday.

Ye cats!

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Overprepared

If I sounded a little less than fluid in the interview with CTV yesterday, the reason is, ironically enough, that the two Canadian producers prepared me extraordinarily well for it. I was very impressed with their thoroughness and the quality of their questions; I've been on a number of national news shows before and I've never seen anything like it. After a 30-minute pre-interview going over the debt ceiling debate and how it related to some of the concepts in RGD with one of the producers the day before, I produced two charts that we both thought would be useful as well as nicely visual, after which I was sent me the six questions I was to anticipate.

However, there was just a bit of a curve ball in the interview itself. Not only did they use a different picture than the one I provided, (understandably, since they must have wanted color), and they didn't make use of the charts I made, (which was fine, I used them in today's column), but some of the questions asked by the anchor were somewhat different than the ones I'd been provided. Her questions weren't bad ones, by any means, but they were just far enough afield so I didn't have the statistics on things like "historical tax revenue as a percentage of GDP" immediately to hand.

Note that I'm not complaining here, merely observing how the process was very different than my experience with American TV and radio.

Anyhow, I found that I was thinking "wait, what?" the entire time I was trying to answer the anchor's questions. "Did I mishear that? Am I even answering the right question?" Anyhow, since I thought the producer's questions were pretty good ones and I prepared for them, I thought I might as well post my notes for the interview here.

You recently wrote in an article that the issue is not so much the debt ceiling, but the debt itself. Can you explain exactly why?

The U.S. federal government has spent three years keeping the economy artificially propped up by substituting $4.1 trillion in new government debt for $3.6 trillion in household and financial sector debt-deleveraging.  Washington cannot keep playing ostrich without raising the debt ceiling.  The reason you've seen the number $2.4 trillion bandied about is because that buys them another six quarters at the current rate of $365 billion in new debt per quarter, enough to get them past the 2012 elections. But all this accomplishes is to delay the day of reckoning and increase the eventual cost.  Since the housing market and employment numbers have actually gotten worse during this period of extend-and-pretend, it should be clear that raising the debt ceiling isn't even a potential fix for the problem.
 
In your book you look at the patterns that led to the Great Depression, and the Heisei boom In Japan that led to it’s famous ‘lost decade”- and you believe it will happen again, only this time it will be worse. What leads you to believe this?

First, the debt-to-GDP ratio is worse than it was in the Great Depression or Japan in 1999.  It was 2.6 in 1933, it peaked at 3.7 in 2008 and it is 3.5 now.  Second, in the 1930s, it was only the USA that attempted to fight the post-1929 economic contraction with Keynesian stimulus policies and only the USA suffered a Great Depression.  In England, the contraction stopped in 1932, France never saw double-digit unemployment, and the Japanese economy was actually enjoying significant growth.(1)  This time, Europe, China, and Japan all followed the US lead and applied their own stimulus plans in 2009, which we are already seeing is now in the process of backfiring on everyone.
 
In a chapter of your book entitled “No one knows anything” you explain that many of the governments calculations for GDP are misleading that they contain wide margins for error and cannot be trusted- why is that?
 
Because they're verifiably wrong.  Look at the recent first quarter.  All three reports, from Advance to Final, had U.S. GDP growth at 1.8 to 1.9%.  Then, in the second quarter report, there is an inexplicable revision from 1.9% to 0.4%.  That's a $225 billion mistake, which is almost five times more than the $60 billion growth now being reported.  These revisions are so out of control that if you bother to look back at the 2001 numbers, you'll see that the 2001 recession has been revised out of existence.  It's complete fiction.  On the employment side, the game is to not count people who don't have jobs as unemployed.  That's why they claim the unemployment rate is only 9.2% when it's really closer to 20%.

You say that a boom fuelled by easy credit must be followed by a bust of equal size and duration. Instead, it has been FED policy to re-inflate bubbles and they collapse, which only creates bigger bubbles- You say we are currently in the biggest bubble yet- what could pop it?
 
What will pop it is a reduction in the rate of growth of government spending, an increase in interest rates, or a major sovereign investor's refusal to continue buying Treasury bonds.  Any of the three will suffice to put the USA into a debt-deleveraging spiral.  The problem with depending upon debt-based economic growth is that eventually, you run out of people who are willing and able to borrow money. And that's when the contraction starts.

There is a large backlog of home foreclosures in the United States- what would happen if that backlog were to suddenly be cleared? Are there other potential triggers out there?
 
Clearing the backlog would put the economy into the equivalent of heart failure because it would instantly kill a lot of banks.  The $600 billion decline in household sector debt is deceptively small because over 7.5% of all mortgages have been delinquent for more than 90 days.  The banks aren't writing those bad loans off yet because to do so would bankrupt them.  Based on the FDIC statistics, I estimate that about $3 trillion of the $7.5 trillion in assets presently claimed by the big four, Bank of America, Citi, Wells Fargo, and JP Morgan Chase, are worthless.
 
What are the options for the global economy- what are the best and worst case scenarios?
 
Pay a high price now, or pay a higher price later.  Deflation, default, and economic contraction aren't fun, but they are perfectly survivable.  The best case scenario is we go through the global equivalent of the Great Depression, what I've called Great Depression 2.0.  It will be very difficult for a lot of people, but the basic governmental structures will survive and there won't be cannibalism in the streets or anything like that.  The worst case is that the politicians keep kicking the can down the road until the entire global financial system finally collapses overnight.  In that case, we're probably going to see wars, civil wars, and fundamental change of the sort most of us find impossible to imagine.


(1)thanks to the invasion of Manchuria, of course, but the GDP statistics are what they are.

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"When I'm wrong it proves I'm right"

Those who make ridiculous assertions that amount to this line of logic should not find it terribly hard to understand why those of us who actually possess working memories tend to be just a little bit skeptical about the reliability of whatever their current positions happen to be. I know you are probably as shocked as I am that the Fowl Atheist is claiming that the "reevaluation" of Archaeopteryx, the fossil that has been hailed as literally rock-solid proof of evolution since I was being subjected to evolutionary propaganda back in elementary school, doesn't mean that the legitimacy of either archeological science or TE(p)NSBMGDaGF should be called into question:

We all knew this was coming. Xiaotingia, the newly described feathered dinosaur, suggests a reevaluation of the taxonomic status of Archaeopteryx, so the creationists are stumbling all over each other to crow about the failure of science…which doesn't make any sense, since reconsidering hypotheses in the light of new evidence is exactly what science is supposed to do.

That's an interesting claim. Precisely when has any evolutionist reconsidered either a) the basic hypothesis that species evolve into different species through natural selection or b) the corollary and requisite hypothesis that life evolved from non-life, as a result of the falsity of one, ten, or even a hundred predictions that relied upon one or both of them? If it weren't for DNA, which was not discovered or developed with any assistance from evolutionary theory, evolutionary biology would already be openly recognized by every intelligent, rational, science-literate individual as being about as useful as phrenology and astrology.

Darwinian biologists are very much like Keynesian economists. It doesn't matter how many times their predictions fail. It doesn't matter how often their models are proven to be wildly wrong. It doesn't matter how many times they have been wrong in the past even with the benefit of margins of error consisting of millions of years. They continue to insist that their position is based on evidence even when the evidence demonstrates precisely the opposite of what they have been claiming.

An evolutionist is one who is continually convinced, despite past experience, that adding just one more series of magic evolutionary epicycles will somehow make the whole system finally begin to function in a coherent and reliably predictive manner.

In other, somewhat tangential news, we have discovered that the New Atheist Circle Jerk continues unabated. Seriously, you can't even parody these charlatans without them one-upping you.

The 2011 Richard Dawkins Award goes to…
Category: Godlessness

Who else but Christopher Hitchens?

What a beautiful, beautiful thing. If I had dared to invent the idea, no one would have believed me. Out of nearly seven billion people on the planet, Richard Dawkins chose to give out his eponymous award to the third-most amusing recipient. Second, you understand, would have been awarding it to himself. But to maximize our collective utility on the happiness-suffering metric, though, he would have had to present the award to Rebecca Watson.

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WND column

Bailing Out Obama

"At the White House and in talks in congressional offices and corridors, most of the attention was focused on finding a way to define the precise conditions under which the president could get a second increase in the debt limit that would be needed early in 2012 under both Republican and Democratic proposals."
– "Amid New Talks, Some Optimism on Debt Crisis," The New York Times, July 30, 2011

It's not hard to understand why the leaders of both political parties are vehemently opposed to the possibility of U.S. default. But as many commentators, including myself, have pointed out for weeks, a failure to raise the debt ceiling has absolutely nothing to do with the possibility of a sovereign U.S. default! In fact, raising the debt ceiling will make a default much more likely in the future. So why are the politicians, particularly Barack Obama, so desperate to see some sort of deal struck that will permit the raising of the $14.3 trillion federal debt ceiling?


NB - This column was written prior to the announcement of the "compromise" plan, which Karl Denninger summarized as below. Nothing in it changes anything substantive regarding the column.

1. Lie once again about "cutting spending." It does no such thing. It increases spending - every year. Bogus and outright-fraudulent "baseline budgeting" means that if they intended to boost spending $300 billion but only increase it $200, that's a $100 billion "cut." If you ran your household like this you'd be broke in a week. For the US, it will take a bit longer.

2. No tax increases. That's nice, but let's not forget that while the Democrats scream about the "Bush Tax Cuts" the FICA tax cut was theirs. Obama signed it. You cannot keep reducing income and increasing spending forever.

3. The cuts, fraudulent though they are, aren't even real anyway - and not binding either. There's nothing before 2013, which means a downgrade is almost certain. Further, raising the debt ceiling now for the whole among but allegedly finding the "cuts" over 10 years is an outright fraud by a ratio of 10:1.

4. A 2013 timeline for actual changes means nothing, since the next Congress is not bound by what this one does. Period.

5. Sequesterization didn't work in 1997. It won't work in 2011 either.

6. We failed to get to $4 trillion. That's what S&P said they needed, and they said they needed to see that within the next three years. Now we find out if S&P has any balls.

NRO reports: "According to sources, Boehner said the deal was “the best that we could get.”" And that is perhaps the most shameful thing about this whole bipartisan charade. The scriptwriters couldn't even bother to write new dialogue for Republicans Cave on the Budget XXXI.

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