Thursday, March 23, 2017

Addicted to entitlement programs


Dennis Prager makes the point that entitlement programs are even more addictive, in their own way, than drugs.

All addictions — whether to drugs, alcohol, gambling, sex or cigarettes — are very hard to escape.

There is one addiction, however, that may be more difficult than any other to escape, in part because it is not even regarded as an addiction. It is entitlements addiction, the addiction to getting something for nothing.

One indication as to the power of entitlements addiction is the fact that while great numbers of people have voluntarily given up drugs, alcohol, gambling, etc. — almost always at great pain — few give up an addiction to entitlements. For the majority of able-bodied people who get cash payments, food stamps, subsidized housing, free or subsidized health insurance, and other welfare benefits, the thought of giving up any one of those and beginning to pay for them with their own earned money is as hard as giving up alcohol is for an alcoholic.

Politicians know this, which is why it is close to impossible to ever reduce entitlements. And, of course, the left knows this, which is why the left almost always wins a debate over entitlements. Every American who is the beneficiary of an entitlement backs them, and many who are not beneficiaries of entitlements would like to be.

Aside from ideology, this is why the left constantly seeks to increase entitlements. The more people receiving government benefits, the more people vote left.

There's more at the link.  Recommended reading.

Entitlement programs have another, less commonly considered benefit;  they create thousands of jobs, all of which can be filled with those who support the politicians who enact the programs.  Just look at the size of the bureaucracies needed to administer Social Security, Medicare, food stamps and other welfare programs.  All those jobs depend on entitlements.  Take away the entitlements, and those reliable voters will be out of work - and their votes will no longer be reliable.

If you wanted to know why the vast majority of federal government employees think and vote Democrat, that's a pretty good indicator, right there.  Which party supports the constant expansion of government, and the creation of more and more government jobs - at taxpayer expense?

Makes you think, doesn't it?

Peter

Property: Follow the money (or the lack thereof)


A couple of days ago, I posted an article titled 'The Washington bubble continues to ignore fiscal reality'.  In it, I pointed out:

I already know that every dollar in my pocket today buys about half - sometimes less than half - of what it did in the year 2000.  I can go out right now, and go shopping, and compare what I get for my money today with what I got for it seventeen years ago.  Forget the "official" rate of inflation, and look at actual expenditure.  You'll find the same thing I do - your money today is worth less than half what it was then.  What's going to happen if that continues, and gets worse?

One of the things that's going to happen - is already happening, in fact - is that fewer and fewer people are able to afford to buy their own homes.

Fifty-two of the 100 largest U.S. cities were majority-renter in 2015, according to U.S. Census Bureau data ... Twenty-one of those cities have shifted to renter-domination since 2009. These include such hot housing markets as Denver and San Diego and lukewarm locales, such as Detroit and Baltimore, better known for vacant homes than residential development ... A 2015 report from the Urban Institute predicted that rentership would keep rising through 2030, thanks to demographic trends that include aging baby boomers who downsize into rentals.

. . .

Most low-income families don’t rent by choice, said Nela Richardson, chief economist at Redfin. And plenty of higher-income households rent because they can’t afford to buy. “We don’t have enough affordable supply in either rental or for-sale markets,” said Richardson, adding that cities interested in promoting renter-friendly policies can rethink their zoning policies to encourage more construction.

There's more at the link.

Housing prices are a problem, to be sure, but it's not so much the supply side that's preventing home ownership.  It's that average disposable incomes have declined in purchasing power.  As I said in my earlier article, the money in your pocket buys about half - sometimes less than half - of what it bought in 2000.  Your income hasn't doubled in that period, unless you're exceptionally fortunate.  Since housing costs have to come out of the same money every month that feeds and clothes your family, you simply have less money available to buy a house.  Q.E.D.

Miss D. and I faced this dilemma two years ago.  We wanted to buy a house of our own, but were price-restricted in Nashville, TN, where we lived at the time.  We were in the fortunate position of being able to move anywhere we chose, and we had good friends in a smaller Texas town, so we changed states.  By doing so, we were able to buy a relatively modern three-bedroom house, in very good condition, for approximately half what the same house would have cost us in a similar suburb in Nashville.  What's more, we deliberately bought a smaller home, one we could afford to pay off in a maximum of fifteen years, and took out a mortgage loan for that long only.  God willing, we'll pay it off in less than ten years, because we're making that a priority.  If we succeed in doing so, we'll instantly boost our disposable income - or, to look at it another way, we'll drastically reduce the disposable income we need to pay our bills every month.  It'll take a lot of financial pressure off us.

I know we're very lucky to have been in a position to do that.  Many people today aren't.  I fear that home ownership will become a pipe dream for them, just as it is for many people living in cities where housing prices are so high they're out of reach for most middle-class couples.  (It's not just US cities, either:  Australia is another good example.)

Another factor is that, with stock and bond market jitters as high as they are, many investors have turned to property as a "safe haven" for their funds.  Consider these headlines:

This institutional, investor-driven wave of purchases has actually prevented housing prices from dropping as far as they should have, following the 2007-08 collapse of the housing market.  That's all very well for investors . . . but it means many people like you and I, already struggling with declining personal purchasing power, can no longer afford the housing they want to buy.  They're reduced to renting it from the investors, instead, sometimes at a monthly cost equal to or even greater than what they might otherwise pay on a mortgage.  (Miss D. and I are paying about the same every month to service our home loan as we were paying to rent a much smaller duplex in Nashville.)

The housing market is going to remain very difficult for the average American until such time as our purchasing power is restored . . . and the odds are against that for the foreseeable future.  Batten down the hatches, hold on to what you've got, and don't buy property at inflated prices, is all I can suggest.  It's going to be a long and bumpy ride.

Peter

The London terror attack: same old, same old


I'm getting very fed up with the stupidity of the mainstream media when it comes to terrorist attacks such as that in London yesterday.  From the screams of alarm in the headlines, you'd think this was something new, unprecedented, a mortal threat to our society.  It's not, of course.  It's merely the latest incident in a long, long parade of them, and there will be many more in future.  Welcome to the reality of fundamentalist terrorism.  It's here to stay.

Another thing about the mainstream media:  why is it that so many of them have some sort of mental or moral block about using the word "terror" or "terrorist"?  For example, consider these headlines gathered at about 4 p.m. (local time) yesterday:

ABC News:  "Suspect shot dead after killing 4, injuring 40 in London"

The Atlantic:  "London Attack: What We Know"

Boston Globe:  "At least 5 dead in London attack, including assailant, and 20 injured"

CBS News:  "5 dead in car rampage, knife attack in London"

Chicago Tribune:  " 5 dead in London vehicle and knife attack, including police officer, attacker; 40 hurt"

CNN:  "London attack: Four killed in British Parliament carnage"

By that time it was as plain as the nose on your face that this was a terrorist attack.  Other media outlets were (correctly) labeling it as such . . . but not those mainstream media "big names".  Their politically correct policies prevent them from calling a spade, a spade, until it's been confirmed by a dozen independent "authorities" that it is, in fact, a human-powered earth-moving implement - and even then, they'd prefer to call it the latter, rather than use the simple, direct term for it.

As for what it means for you and I:  I've said it all before, as have many other commenters.  The advice applies to not just terrorist incidents, but any criminal threat.  Some of my previous articles include (but are not limited to):



All the suggestions and recommendations I made in those articles apply in the wake of the London attack, too.  As I said:  same old, same old.  We'll be reading similar headlines again in the not too distant future, I'm sure - and the same advice will apply yet again.

Be ready for this.  Terrorism is nothing new, and it'll be with us for a long, long time to come.  I daresay our children's children will be fighting it, too.

Peter

Wednesday, March 22, 2017

Globular warming - the real deal


Fellow blogger Borepatch has written an excellent summation of the science behind global warming - the real science, not the fake stuff so many are peddling.

If you're in any doubt about this stuff, or need the information to discredit rumors and scare-mongering, it's a good article to have in your arsenal.  Recommended reading.

Peter

Don't just trim it - kill it!


The Federalist suggests a way for President Trump to deal with the bloated, overgrown bureaucracy of the federal government.

The presidential transition directory, known as the Plum Book, lists more than 4,000 politically appointed positions for a new administration to fill during its term (or terms). Those political appointees are supposed to go into the various departments of government and implement the new president’s agenda. But they leave when the president leaves, and in the case of conservatives, their meager reforms usually go with them.

It’s time for Republicans to have a reality check: do you really think that fewer than 5,000 appointees can win against 2.8 million federal government employees who have a vested interest in absolutely nothing changing? Maybe, if an administration had 20 years, but it doesn’t. It has four, maybe if they’re lucky eight, years, and as history has shown us, the odds of any party getting three straight terms of a single party in the White House are fairly slim. We have already seen bureaucrats at the Environmental Protection Agency, Department of Justice, and State Department not only promise, but also begin to resist any reforms from the Trump administration.

But it’s worse than simply having millions of federal government employees trying to outlast a Republican administration. The overwhelming majority of those federal employees who donated to a presidential campaign, more than 95 percent, gave money to Hillary Clinton. Ninety-nine percent of contributions from State Department employees went to Clinton in the 2016 elections. You can be sure they aren’t excited to be working for Trump.

. . .

If Trump wants to devolve power out of DC, he has to shut departments down. Take the Department of Energy and put the nuclear weapons management under Department of Defense (or even Commerce, as Reagan wanted, to keep nuclear protection in civilian hands), split energy issues between Federal Energy Regulatory Commission and Interior, then shut its doors. Roll any necessary parts of Department of Education into Labor and send other responsibilities back to the states, then shut its doors.

Once departments are shut down, bulldoze the buildings to the ground. Shatter them, plow them under, then build beautiful parks, Liberty Parks, over where the departments used to stand. Trump should also then consider “farming” some departments out to states, further breaking the leviathan apart.

. . .

President Trump and the GOP have a chance to conserve the original principles of the country, that government is limited to protect the rights of the people, not provide them everything they want or need. If Trump can change the rules, he’ll change history.

There's more at the link.

I can't argue with any of that.  The federal bureaucracy has grown to the point where it's essentially self-supporting and self-governing, illustrating the truth of Pournelle's Iron Law of Bureaucracy.

In any bureaucratic organization there will be two kinds of people:

First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

The only way to break that iron control of the federal bureaucracy is to get rid of it - controllers, bureaucrats, the lot.  Obviously, we can't do that to the whole thing;  but a few sacrificial departments, cut to ribbons and then destroyed entirely, will do much to concentrate the minds of those who remain.  Hopefully, they'll be reminded that they are public servants, not public masters.

Peter

The Two Fairies


Clint Smith of Thunder Ranch has another amusing and instructional video on shooting fast, and/or straight, to defend yourself.  PROFANITY ALERT:  Clint's a former Marine, and speaks like one, but he's very much to the point.





Clint has spoken of a third kind of fairy in the past, as those of us who trained under him at Thunder Ranch's previous premises in Texas will recall:

"If pointing an empty gun at your opponent makes him duck, you may live for an extra two seconds - and who knows? I may find another gun, the bad guy may give up, or the ammo fairy may drop me a magazine."




Peter

Is the "Deep State" at war with itself?


Charles Hugh Smith argues that it is.

I have long suggested that the tectonic plates of the Deep State are shifting as the ruling consensus has eroded. Some elements of the Deep State--what I call the progressive wing, which is (ironically to some) anchored in the military services-- now view the neocon-CIA (Security State)-Wall Street elements as profoundly dangerous to America's long-term interests, both domestically and globally.

I have suggested that this "rogue Deep State" quietly aided Donald Trump (by subtly undermining Hillary Clinton's campaign) as the last best chance to save the nation from the neocon's over-reach that the Establishment's Wall Street-funded leadership (Bush, Clinton, Obama, et al.) has overseen--including granting the CIA and its allies virtually unlimited powers unhindered by any effective oversight.

This profound split in the Deep State has now broken into open warfare. The first salvo was the absurd propaganda campaign led by Establishment mouthpieces The New York Times and The Washington Post claiming Russian agents had "hacked" the U.S. election to favor Trump.

This fact-free propaganda campaign failed--having no evidence didn't work quite as well as the NYT and Wapo expected-- and so the propaganda machine launched the second salvo, accusing Trump of being a Russian patsy.

The evidence for this claim was equally laughable, and that campaign has only made the Establishment, its propaganda mouthpieces and the neocon Deep State look desperate and foolish on the global and domestic stages.

The desperate neocon Deep State and its Democratic Party allies went to absurd lengths to undermine Trump via the "Boris and Natasha" strategy of accusing Trump of collaborating with the Evil Russkies, even going so far as to briefly exhume former President G.W. Bush from deep-freeze to make a fool of himself, saying the Trump-Evil Russkies connection should be "investigated."

Now the rogue elements have launched a counterstrike--Vault 7.

. . .

Vault 7 is not just political theater--it highlights the core questions facing the nation: what is left to defend if civil liberties and democratically elected oversight have been reduced to Potemkin-village travesties?

If there are no limits on CIA powers and surveillance, then what is left of civil liberties and democracy? Answer: nothing.

The battle raging in the Deep State isn't just a bureaucratic battle--it's a war for the soul, identity and direction of the nation. Citizens who define America's interests as civil liberties and democracy should be deeply troubled by the Establishment's surrender of these in favor of a National Security State with essentially no limits.

There's more at the link.

That's not a bad summation of the situation, IMHO.  My yardstick is always that openness encourages honesty;  secrecy encourages - or, at least, conceals - dishonesty.  That applies in almost any area of life, from relationships, through finances, through politics.  If it's out in the open, where it can be seen, weighed, assessed, examined, tested, evaluated, it's unlikely to pose a serious threat.  If it's not, then all sorts of things can go on in secret that shouldn't be happening.

I've used this approach a lot when it comes to counseling couples.  As a retired pastor, you'll understand that I base this on Scripture.  The first letter of St. John notes:

This is the message which we have heard from Him and declare to you, that God is light and in Him is no darkness at all.  If we say that we have fellowship with Him, and walk in darkness, we lie and do not practice the truth.  But if we walk in the light as He is in the light, we have fellowship with one another, and the blood of Jesus Christ His Son cleanses us from all sin.

That last sentence above is the recipe for success in relationships - and note that it's a logical progression, a sequence of events.  We first "walk in light" - i.e. in honesty, openness and communication.  If we get that right, the second step follows;  we "have fellowship with one another" - implying that if we don't do the first, we won't achieve the second.  Finally, if we get both of those steps right, the third step follows;  we are in a position to be cleansed from sin - meaning that if we don't get the foundational steps right, we can't be cleansed of sin, probably because we can't even recognize it well enough to confess it!

That's a very simple lesson, but it works almost every time (in my experience) on the personal level.  If we scale it up to our national political level, it works pretty well too.  Of course, there are legitimate national secrets that should be safeguarded, for the good of the nation and the security of its citizens.  However, those things are - or should be - relatively small in comparison to the whole of the body politic.  If excessive secrecy or secretiveness becomes a way of life, the body politic gets screwed by those who do so.  (Who can forget Nancy Pelosi's infamous comment, "We have to pass the [health care] bill so that you can find out what’s in it"?  Well, they did pass it - and boy, did we find out!  Look how Obamacare has screwed us, ever since!)

The argument over the massive, seemingly ever-expanding 'security state' is basically one over civil rights, civil liberties, and personal freedom.  I, for one, believe the 'security state' is largely ineffectual, a rogue bureaucracy out of control, trying to arrogate ever greater power and authority to itself while ignoring the constitution.  I think Mr. Smith has the right of it.  It has to be stopped.  One hopes the dissent within the 'Deep State' will go at least some way towards doing that . . . but it can't do it all.  The American people have to stand up for themselves as well.  If they don't, if they just let this sort of thing slide, then the faceless bureaucrats of the 'Deep State' will win.  That would lead to an Orwellian nightmare.

Peter

Tuesday, March 21, 2017

Heh - European bureaucrat edition


It seems even European Union bureaucrats can have a sense of humor - of a sort.  This adaptation of a Tintin cartoon has appeared on notice-boards at EU headquarters in Brussels:




It's an adaptation of this original:




Why is it, do you suppose, that a drunken, out-of-control Captain Haddock seems such an appropriate avatar for European Union bureaucrats, drunk on power?

Peter

The problem of raising expectations . . .


. . . is that, if you don't fulfil them, people are going to be disappointed.  Very.  Glenn Greenwald (the left-leaning journalist who helped publicize the Snowden revelations) makes the point.

The principal problem for Democrats is that so many media figures and online charlatans are personally benefiting from feeding the base increasingly unhinged, fact-free conspiracies ... that there are now millions of partisan soldiers absolutely convinced of a Trump/Russia conspiracy for which, at least as of now, there is no evidence. And they are all waiting for the day, which they regard as inevitable and imminent, when this theory will be proven and Trump will be removed.

Key Democratic officials are clearly worried about the expectations that have been purposely stoked and are now trying to tamp them down. Many of them have tried to signal that the beliefs the base has been led to adopt have no basis in reason or evidence.

The latest official to throw cold water on the MSNBC-led circus is President Obama’s former acting CIA chief Michael Morell ... on Wednesday night, Morell appeared at an intelligence community forum to “cast doubt” on “allegations that members of the Trump campaign colluded with Russia.” “On the question of the Trump campaign conspiring with the Russians here, there is smoke, but there is no fire at all,” he said, adding, “There’s no little campfire, there’s no little candle, there’s no spark. And there’s a lot of people looking for it.”

. . .

Morell’s comments echo the categorical remarks by Obama’s top national security official, James Clapper, who told Meet the Press last week that during the time he was Obama’s DNI, he saw no evidence to support claims of a Trump/Russia conspiracy. “We had no evidence of such collusion,” Clapper stated unequivocally. Unlike Morell, who left his official CIA position in 2013 but remains very integrated into the intelligence community, Clapper was Obama’s DNI until just seven weeks ago, leaving on January 20.

Perhaps most revealing of all are the Democrats on the Senate Intelligence Committee — charged with investigating these matters — who recently told BuzzFeed how petrified they are of what the Democratic base will do if they do not find evidence of collusion, as they now suspect will likely be the case.

. . .

What makes all of this most significant is that officials like Clapper and Morell are trained disinformation agents; Clapper in particular has proven he will lie to advance his interests. Yet even with all the incentive to do so, they are refusing to claim there is evidence of such collusion; in fact, they are expressly urging people to stop thinking it exists. As even the law recognizes, statements that otherwise lack credibility become more believable when they are ones made “against interest.” 

There's more at the link.  Recommended reading.

This dilemma isn't limited to Democrats, of course.  Republicans have a number of similar issues;  for example, alleged wire-taps of Trump Tower, or the repeal of Obamacare (long promised to the party's base but now being resisted by those who want to replace it, rather than merely get rid of it).  In every case, vociferous arguments are made to get the base aroused and involved;  but if those arguments don't result in action, or produce an unsatisfactory result, the base is going to get angry.  Very angry.

There's a reason for the old proverb, "Let sleeping dogs lie".  I suspect some politicians and their surrogates are about to be reminded of it.

Peter

The Washington bubble continues to ignore fiscal reality


The most depressing thing about the partisan political gridlock in Washington D.C. at present isn't the one-upmanship being practiced by both parties against each other.  It isn't the competing policies and positions.  It isn't the posturing for the news media, or the intolerance of others' opinions, or the openly voiced contempt so many politicians display towards each other.

It's the avoidance of reality.

There is one single issue confronting the USA today that dwarfs all others.  Unless and until it is solved, all other issues will be essentially sideshows, because this one issue can bring them all down and destroy them all in a heartbeat.

That issue is our national debt - federal, state, local, corporate and private.

Consider:
  1. At the time of writing, according to the US Treasury, the federal government debt - money it's borrowed to pay for its programs and policies, but not yet repaid - stands at $19,846,009,616,285.34.
  2. At the time of writing, according to the National Debt Clock, the total debt of the fifty US states - what state governments have borrowed to pay for their programs and policies - amounts to $1,206,071,409,000.
  3. At the time of writing, according to the National Debt Clock, the total debt of US cities and towns - what local governments have borrowed to pay for their programs and policies - amounts to $1,925,789,975,000.
  4. At the time of writing, according to the National Debt Clock, total US debt - which "includes Household, Business, State and Local Governments, Financial Institutions, and the Federal Government" - amounts to $68,392,662,000,000.  That averages out to over $210,000 per citizen.  That's what every single one of us - you and I - owes, per capita, to repay this sum.
  5. It's not just government or commercial debt that's the problem.  At the time of writing, according to the National Debt Clock, total personal debt in the USA - which "includes all personal obligations:  Mortgage Debt and (Consumer Debt), which includes Car Loans and short term revolving Credit Card Debt" - amounts to $18,204,074,000,000.  That averages out to over $56,000 per citizen.

Let those numbers sink in for a moment.  The big ones are in trillions of dollars.  That's a big 'T'.  Add to them the unfunded liabilities of the US government.  "Unfunded" means that there is currently no money available to pay for these future financial commitments.  At the time of writing, according to the National Debt Clock, total US unfunded liability - including "Social Security, Medicare Parts A, B and D, Federal Debt held by the Public, plus Federal Employee and Veteran Benefits" - amounts to approximately $105,513,454,000,000.  That averages out to over $879,000 per taxpayer.

What's more, every one of those numbers is increasing, second by second, minute by minute, hour by hour, day by day.  Go to the National Debt Clock and watch the numbers grow.

It doesn't matter what policies, proposals, budgets, etc. are worked out in Washington if they don't begin by taking into account this fiscal disaster in the making.  It's all very well for President Trump to say he wants an additional $54 billion in defense spending, which he'll pay for by cutting other federal expenditure by the same amount.  That's chump change.  The real problem is the federal government debt as a whole, which is approximately 367 times greater than the proposed increase in defense spending.  Unless the latter is addressed, it will eventually swamp any and all federal programs.  It's simply unsustainable.

We've spoken of this problem many times before, so I won't go into all the sad, sordid details yet again.  Suffice it to say that if we had to pay a realistic rate of interest on our national debt, instead of the artificially low rates imposed by the Federal Reserve through its monetary policy, our current annual budget would be simply wiped out by interest costs.  Non-discretionary spending would be entirely consumed by interest on our national debt, and entitlement programs - including Social Security and Medicare - would be next on the list.  There would be no alternative.  It's all very well to say that "We paid into Social Security, and we want our money back!"  The money is gone.  There is no such thing as a Social Security trust fund.  That money was invested in US government bonds, and spent by previous generations of politicians.  All that's left is a handful of IOU's, payable by the US government - which will be bankrupt by the time it has to pay them.

There are only four ways in which this situation can be resolved.
  1. We can stagger along, ignoring the problem, until it overwhelms us during the next financial crisis, and all our government programs collapse into bankruptcy.
  2. We can "print money" to pay for all the programs we want - but that will destabilize and undermine the US dollar, and inflation will rapidly erode its purchasing power until it's no more than a shadow of what it is now.  The latter is, of course, already no more than a shadow of what it was, thanks to past inflation and other factors, as this graphic illustrates, courtesy of visual.ly.  (Click the image for a larger view.)


    This is how we've been coping with the situation up until now. I fear we'll continue to do so, because no-one in authority appears to be willing to consider any other alternative.
  3. We can declare bankruptcy;  effectively, refuse to honor our debts (i.e. US Treasury bonds and other instruments that have been sold to other countries, corporations and individual investors to fund our national debt).  However, this would utterly trash the USA's credit rating, and result in other nations refusing to extend credit to us for trade and other purposes.
  4. We can cut our coat according to our cloth;  in other words, set aside money in our annual budget to pay down the debt, and use what's left over to fund government programs we can actually afford.  This is the fiscally responsible thing to do, just as most families must do in similar circumstances, but it's the least likely to happen.  That's because politicians have made promises to the American people that they can no longer afford to keep;  but, if they break those promises, they'll be voted out of office by their aggrieved electorate.  Rather than risk that, they'll 'kick the can down the road', hoping they'll be out of office by the time someone else has to deal with it.

As Peggy Noonan noted in a 2005 article:

Do people fear the wheels are coming off the trolley? Is this fear widespread? A few weeks ago I was reading Christopher Lawford's lovely, candid and affectionate remembrance of growing up in a particular time and place with a particular family, the Kennedys, circa roughly 1950-2000. It's called "Symptoms of Withdrawal". At the end he quotes his Uncle Teddy. Christopher, Ted Kennedy and a few family members had gathered one night and were having a drink in Mr. Lawford's mother's apartment in Manhattan. Teddy was expansive. If he hadn't gone into politics he would have been an opera singer, he told them, and visited small Italian villages and had pasta every day for lunch. "Singing at la Scala in front of three thousand people throwing flowers at you. Then going out for dinner and having more pasta." Everyone was laughing. Then, writes Mr. Lawford, Teddy "took a long, slow gulp of his vodka and tonic, thought for a moment, and changed tack. 'I'm glad I'm not going to be around when you guys are my age.' I asked him why, and he said, 'Because when you guys are my age, the whole thing is going to fall apart.' "

Mr. Lawford continued, "The statement hung there, suspended in the realm of 'maybe we shouldn't go there.' Nobody wanted to touch it. After a few moments of heavy silence, my uncle moved on."

Lawford thought his uncle might be referring to their family--that it might "fall apart." But reading, one gets the strong impression Teddy Kennedy was not talking about his family but about . . . the whole ball of wax, the impossible nature of everything, the realities so daunting it seems the very system is off the tracks.

There's more at the link.

I continue to fear that, thanks to the fecklessness of our politicians and the refusal of US voters to elect better ones, "the whole thing is going to fall apart," just as Teddy Kennedy suggested.  I don't believe anyone in Washington can see a practical, feasible way out of this mess.  There are undoubtedly those who recognize the danger - President Trump not least among them - but their hands are tied by the far greater number of politicians who are living for the moment, not for the future, and who won't dare do anything constructive for the long term for fear that their careers will suffer in the short term.

Keep your eye on the fiscal ball.  It's almost lost its ability to bounce.  When that finally happens, we're all going to feel it.  I already know that every dollar in my pocket today buys about half - sometimes less than half - of what it did in the year 2000.  I can go out right now, and go shopping, and compare what I get for my money today with what I got for it seventeen years ago.  Forget the "official" rate of inflation, and look at actual expenditure.  You'll find the same thing I do - your money today is worth less than half what it was then.  What's going to happen if that continues, and gets worse?

It's going to be very, very painful, folks.  That's the reality we're all facing.  I can only hope and pray we'll be able to withstand the pain, and survive it, and come out on the other side of this crisis with renewed hope for the future.

Peter

Monday, March 20, 2017

China's economy - caught in a debt trap?


As part of a wider analysis of Chinese-North Korean relations, Strategy Page looks at the impact of debt on China's economy.  It appears to be a far larger danger at present than military pressure from other states.

The most urgent threats to the government are economic. This is mainly about too much debt and how much of that debt is uncollectable (“bad” debt). To make matters worse Chinese banks are suspected of using the same deceptive banking methods (trying to repackage bad debt as good debt) that brought on the 2008 financial crises in the United States. That economic crisis went worldwide and the Chinese government was forced to use a lot of debt to keep the economy moving. But if too much of that debt is bad there is increased risk of an economic crises that would halt economic growth and take years to fix.

The government has made this worse by allowing economic data reporting to be “adjusted” to suit the needs of local (provincial) officials. That was bad enough (and is now being fixed) but during several decades of rapid economic growth this flawed data allowed the state owned banks (which still dominate the economy) to lend too much money. Thus debt in China keeps rising. It went from 254 percent of GDP (nearly three times what it was before 2008) in 2015 to 277 percent in 2016 and unless the government can develop some solutions it will be over 300 percent by the end of the decade.

What makes this pile of debt trap so toxic is that, much, if not most of this debt consists of loans that the borrower cannot repay, or not repay in a timely fashion. This is reflected in the rising (54 percent more in 2016) incidence of bankruptcy. The government would prefer to avoid the bankruptcy process because it is embarrassing, turns bad debt into losses and exposes details of how the bad debt mess works.

The growing bad debt problem, more than the South China Sea dispute, is what keeps Chinese leaders up at night. GDP growth is slowing, it was down to 6.7 percent in 2016 and the new American government is openly discussing economic retaliation against China. That is scarier than the American military because it can be more safely used by the Americans and the Chinese government refuses to discuss this vulnerability for obvious reasons. It is believed that nearly $600 billion worth of these loans are uncollectable. Chinese banks are trying to avoid writing off these bad loans (which hurts bank profits and puts some of them out of business). Many banks are repackaging the bad loans in an attempt to sell them off for far more than they are worth. Chinese banks call these new items WMPs (wealth management products) and assure buyers they are legitimate but offer these bond-like securities with much higher interest rates than other corporate or bank bonds.

There's more at the link.

China certainly faces huge problems in its relations with North Korea, and with other nations involved in that problem;  but if its economy hits a brick wall, all the others will pale into insignificance.  The question is, will China deal with its economic problems responsibly?  Or will it try to mobilize public opinion against an alleged external threat, such as the USA, to divert attention from them?  In the past, it's chosen the latter option too often for comfort.

Peter

About that Hawaii judgment against President Trump's executive order . . .


According to The Astute Bloggers, US District Court judge Derrick K. Watson had lunch on March 15th, in Hawaii, with former President Obama.  Their rendezvous was documented in a photograph on the restaurant's Facebook page.




Later that same afternoon, Judge Watson ruled against President Trump's latest executive order concerning immigration.

I'm not saying that former President Obama had anything to do with Judge Watson's ruling . . . but we can't rule that out, can we?  Their meeting appears to have been at least as ill-advised as the notorious encounter between former President Clinton and the Attorney-General last year, of which a CBS reporter said that "the appearance of impropriety is just stunning".

Under the circumstances, their lunch date was, at the very least, breathtakingly poor judgment on the part of both the former President and the Judge.  It certainly appears to contravene Hawaii's Revised Code of Judicial Conduct, and therefore calls into question the propriety of Judge Watson's ruling.  He should, at the very least, have recused himself from the case, in the light of his meeting with the former President.  At worst, the situation might even be construed as an impeachable offense by the judge.

Why has the mainstream media not picked up this story?

Peter

The real danger of very large airliners


I knew that wake turbulence could pose a hazard to aircraft in their approach to airports before landing.  However, courtesy of a link over at Earthbound Misfit's place, I was surprised to learn that it's also a danger during flight along air corridors.  The Aviation Herald reports:

The business jet, a ... Challenger 604 ... performing flight MHV-604 from Male (Maldives) to Abu Dhabi (United Arab Emirates) with 9 people on board, was enroute over the Arabian Sea when an Airbus A380-800 was observed by the crew passing 1000 feet above. After passing underneath the A380 at about 08:40Z the crew lost control of the aircraft as result of wake turbulence from the A380 and was able to regain control of the aircraft only after losing about 10,000 feet. The airframe experienced very high G-Loads during the upset, a number of occupants received injuries during the upset. After the crew managed to stabilize the aircraft the crew decided to divert to Muscat (Oman), entered Omani Airspace at 14:10L (10:10Z) declaring emergency and reporting injuries on board and continued for a landing in Muscat at 15:14L (11:14Z) without further incident. A number of occupants were taken to a hospital, one occupant was reported with serious injuries. The aircraft received damage beyond repair and was written off.

. . .

According to information The Aviation Herald received on March 4th 2017 the CL-604 ... encountered wake turbulence sending the aircraft in uncontrolled roll turning the aircraft around at least 3 times (possibly even 5 times), both engines flamed out, the Ram Air Turbine could not deploy possibly as result of G-forces and structural stress, the aircraft lost about 10,000 feet until the crew was able to recover the aircraft exercising raw muscle force, restart the engines and divert to Muscat.

There's much more information at the link.

What's more, the article lists at least six other encounters where wake turbulence affected (and sometimes damaged) other aircraft.  A seventh was reported by the pilot of a Boeing 777 over the Atlantic in 2013, again caused by an Airbus A380, the largest airliner in service today.  The two aircraft were much further apart, so the effect was less (and much less damaging), but it was still enough to be alarming.

I trotted into the first-class galley. As I began to pour, the airplane experienced a rapid succession of intense turbulence. We began a pronounced roll to the left. The very pleasant and seasoned flight attendant I had engaged in conversation grabbed the nearest stationary piece of galley equipment for support. Her smile was replaced by a wide-eyed expression.

The seatbelt sign soon illuminated. Within moments, the intercom phone chimed. The flight attendant reached for the handset. My copilot was calling. He was commanding all flight attendants to be seated. Imagine that.

By the sharpness of the bumps and the definitive bank of the airplane, I had a good idea that we had not encountered your garden-variety clear-air turbulence. I stumbled my way to the interphone and called my copilot, indicating an urgent desire to return to the cockpit.

I hopped back into the left seat only to be greeted by another bout of turbulence. Suspecting foul play, I glanced at the traffic symbol on the TCAS display. Sure enough, another airplane cruised directly ahead of us at FL 400. I immediately pushed the heading select button on the eyebrow of the glareshield and turned us 30 degrees to the right.

In spectacular fashion, I watched as a wispy spiraling circle rocketed back toward us. It was a wingtip vortex. Never in my career had I actually seen one in its entirety at cruise altitude. The vortex once again appeared, buffeting the airplane. I instructed my copilot to ask Gander Center for an immediate altitude change to FL 400. I pressed the vertical-speed button on the glareshield eyebrow and rotated the dial to a 500 fpm rate of climb. I wasn’t going to wait for the next encounter. Within moments, another wispy spiral sped its way back toward our position. Only this time, we missed its wrath.

Again, more at the link.

I think the passengers and crew of that business jet over the Indian Ocean were extremely lucky to survive the encounter, considering that their aircraft was less than one-twentieth the size and mass of the huge A380.  The difference between them in wake vortex strength and duration is so great as to be almost unimaginable.  I'm surprised this incident hasn't been more widely reported.  It's a hazard confronting almost every aircraft in the sky, so I'd imagine every pilot would be interested in learning how to minimize such dangers.

Aviation Herald concludes its article with the draft of a proposed EASA safety bulletin, advocating greater vertical and horizontal separation between aircraft on air routes.  I hope they promulgate it soon!




Peter

Sunday, March 19, 2017

Sunday morning music


Here are a couple of songs from a Newfoundland folk group, Figgy Duff.  They only put out five albums during their time together, but their music remains as haunting as ever.  I chose both of these from their album 'After the Tempest'.

First, the opening number, 'Honor, Riches', which segues into a dance, 'Breakwater Boys Breakdown'.





Next, a lovely ballad, 'A Sailor Courted a Farmer's Daughter'.





I highly recommend Figgy Duff to lovers of folk and folk-rock music.  You'll find a lot of their songs on YouTube, and all their recordings are available on Amazon.com.

Peter