Thursday, April 29, 2004


This snappy little Flash piece propagandizing the Bush economic record flashed across my desk yesterday. I'm uncertain of its origins, though it does not appear to be connected with the official Bush-Cheney '04 campaign.

A quick survey of right-of-center blogs and other websites shows that Republican-leaners are going ga-ga over this piece as, on its face, it seems to validate what they have long believed, but have never seen substantiated in the public dialogue (most likely because of that pesky liberal media bias): that George W. Bush's economic policies are not a miserable failure and are not a royal screw job for most Americans, but that Bush has done as well as or perhaps better than Clinton.

It's a great, powerful spot. But unfortunately its almost all bunk. The economic "facts" it boasts are either simply not true, disingenuously misleading, or entirely irrelevant. But all of it is disturbing, for it reminds us of the viral characteristics of mis-(or dis-)information. So let me take a crack at it.

This spot claims private sector GDP grew 2.5% in the two years before Bush's tax cut and 5.3% after the tax cut. My first question: Which tax cut? There have been successive rounds of tax cuts in each year of Bush's presidency. I have no idea how this foolio is calculating these numbers (if in fact s/he attempted to calculate anything legitimately at all).

I don't know why you would only be interested in looking a private sector growth rates, rather than the growth of the overall economy, unless perhaps you are some market fundamentalist ideologue who thinks government is bad for the economy, and you believe government spending reduces growth even when it is for such economically important public investments as education, transportation and telecommunications infrastructure, basic science and applied R&D, etc. But I can tell that the numbers are not so kosher--their either using nominal figures, not accounting for compound growth rates, or making some other rookie mistake.

So let's assume s/he means one occuring after the first two years, and before the third year. Since the 2004 Q1 GDP numbers only came out today, we're talking about the growth in the economy (private economy) that occured between Jan 1, 2001 and Dec 31, 2002, compared with growth between Jan 1, 2003 and Dec 31, 2003. In real terms, GDP grew $266 billion in the first period (or $150.7 in the private sector). This is a simple total growth of 2.7% (1.9%) or average annual growth of 1.3% (0.9%). In the latter period, real GDP did grow 3.12% (3.07%). This shouldn't be too aurprising because the economy was in recession for most of 2001.

Dividing the periods like this really tells us nothing about the effects of the Bush tax cuts. More importantly it doesn't tell us why or why not Joe Citizen should vote for George Bush. As the Maestro said, (paraphrasing) zero wage growth and strong productivity growth means huge growth in pre-tax profits. Economic growth does not necessarily mean that people's actual living standards are improving.

Which brings us to Jobs:
I've written a lot about this topic, and Job Watch pretty much has this subject covered and debunked. This particular piece touts "500,000 new jobs created in the first three months of 2004." Of course, it says nothing about the more than 2 million jobs lost even after the end of the recession, nor does it tell us what effect the here lauded tax cuts have had on job creation (which, on balance, is a zero to negative-gain, see Job Watch).

True, after three years the unemployment rate stood at 5.6% in both the Clinton and Bush administrations. Most people get the reason that the unemployment rate is so low under Bush is because so many people have given up looking for work (exiting the labor force) in frustration over the worst job market this country has seen since the Great Depression. Right now there are some 8 million people out of work in this country. If we put back in those phantom unemployed, those who are no longer being counted as unemployed because they are sooo despondent, Bush's unemployment rate jumps up to a whopping 7.1%. YIKES!

Stock Market:
I calculate an increase of 24.7% in the DJIA between April 28, 2003 and April 27, 2004, not the 45% reported in the Flash. Of course, the DJIA only covers 30 out of thousands of stocks. In searching the web for other references to this Flash piece, I found that most postings were dated around March 30, 2004. Fair enough. From March 28, 2003 to March 30, 2004, the DJIA was up 27%.

How about this...Bush came to office as the 1990s stock market bubble was bursting, then 9/11 threw the stock market into a tail spin and the DJIA fell to a way, way low 8,235.81 pts. before climbing back 25% to today's closing price. Then came a wave of corporate accounting scandals beginning with Enron and trickling throughout much of corporate America. The Dow plunged to a low of 7,286.27 on Oct 2, 2002. From this nadir, the DJIA has climbed back 41% to today's price. Now matter how you slice it, the DJIA has not gone up 45% during Bush's presidency.

In any event, I'm wondering why stock prices should be an explicit goal of a president's economic policies rather than, say, the livelihood and living standards of regular Americans...

On that note, I'll wrap up with Poverty:
The average poverty was lower in the Bush reign than under Clinton (9.6 vs 10.5). This is untrue and stupid. It's untrue because the annual poverty numbers are calculated from the March CPS. That means, for example, that the 2001 number is calculated on March 2001, or only a little over a month after Bush took office. It's unreasonable to think that Bush should be responsible for could have influenced the poverty rate in such a short time. So whoever cooked up these numbers is using the wrong endpoints. The Census Bureau only recently released the data for 2002, so there is really only one year of data showing how poverty fared under Bush. If s/he used the right endpoints, the average poverty rate under Clinton would be 9.9% and Bush's would be 9.6%.

It is stupid because who cares what the average poverty rate is over time? The reason we calculate rates is to see the direction of the trend. When Clinton assumed the presidency in 1994, the US poverty rate was 11.6%. After three years, where Bush is now, it had fallen 1.3 percentage points. By the time Clinton left office and Bush usurped the election, the poverty rate had fallen from 11.6% to 9.2%. In the one year of poverty data that is available for the Bush era, the rate increased 0.4 percentage points to 9.6%.

'Nuff said.


Here's a picture you don't get to see too often, thanks to the FT. I knew there was something suspect about this guy: he's a Chinese agent!

Why else would he reject out of hand trade petitions to defend the US economy against China's mercantilist ploys?

BTW, I heard trade apologist Gary Hufbauer being interviewed on the news last night about the Bush administration's decision to back away from these petitions. According to Hufbauer, there was no legal basis for these claims to be made at the WTO.

I'm left to believe that Hufbauer is completely oblivious. The claims are not being made under WTO rules, they are being made under US trade law. The legal briefs devote ample discussion to how US trade law (Section 301 of the Trade Act of 1974, ammended 1988) is written to prevent currency manipulation, to uphold social standards and to prevent human rights and labor abuses.

Even accepting Hufbauer's glaring ignorance of the facts, WTO rules actually do allow for such a suit in Article XX of the GATT. And I quote:

"...nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures...relating to the products of prison labour."

This measure, however, has never been tested before a WTO dispute settlement tribunal. One of the flaws with the WTO, of course, is that only nation-states have the power to levy unfair trade suits in its quasi-judicial tribunal. Without the will of the Bush administration, citizens and civil society are powerless to take this issue further.

Keep in mind that Hufbauer ain't a lawyer (nor am I). He's an economist. Hufbauer should stick to making egregiously ridiculous predictions about job creation from trade. At least he knows how to do that.


Matthew Yglesias points us to a recent CPA Powerpoint briefing on the state of progress in reconstructing Iraq with less than 100 days to go until scheduled "handover."


Electricity Peak Production Goal for June 2004: 6,000 Megawatts; Actual Production, week of March 26: 3,896 Megawatts

Iraqi Police Forces
Required: 75,000; as yet untrained: 54,573; training on the job: 13,286

Dept. of Border Enforcement
Required: 25,727; as yet untrained: 14,070; training on the job: 9,177

Iraqi Armed Forces
Required: 40,000; on duty: 3,005; in training: 2,169

Captured Weapons, March 2004
RPG Launchers: 293; Small Arms: 1,173; WMDs: 0

Jobs created by the CPA for Iraqi's: 395,000; Promised US jobs created by Bush tax cuts: 5.5 million; US private sector jobs created to date under Bush (through March): -1.84 million.

Governance (see p. 29): "Place Holder Place Holder For Governance Notes Page"

Crude Oil Production Output Goal: 2 million barrels per day; actual prodcution: approx 2.45 million barrels per day.

Oh vey. This is just going to get uglier.

Wednesday, April 28, 2004


One month of good job numbers, one month of slight price increases and one quarter of strong growth, while promising, do not an economic recovery make. While the markets may be anticipating a rate hike to stave off a resurgent economy (quick, before we create any more jobs and spark inflation!), looking deeper at the CPI shows that price increases are not coming from wagepush inflation (what with some 8 million people out of work), but from skyrocketing energy prices (we knew it was a war for oil, but we didn't know it was a war to drive up oil prices).

At a seasonally adjusted annual rate, energy prices grew 38.6% in 2004 Q1; petroleum-based energy prices rose 82.5%. In sum, the increase in energy prices accounted for half of the overall increase in the CPI. Also a big price mover was transportation (last I checked, transportation was heavily dependent on petroleum fuels), which grew 15% in the first quarter.

Speaking at CSIS yesterday, the Maestro warned of the threat that oil and other energy prices pose to the US (and the world) economy:

The dramatic rise in six-year forward futures prices for crude oil and natural gas over the past few years has received relatively little attention for an economic event that can significantly affect the long-term path of the U.S. economy. Six years is a period long enough to seek, discover, drill, and lift oil and gas, and hence futures prices at that horizon can be viewed as effective long-term supply prices.

These elevated long-term prices, if sustained, could alter the magnitude of and manner in which the United States consumes energy. Until recently, long-term expectations of oil and gas prices appeared benign. When choosing capital projects, businesses could mostly look through short-run fluctuations in prices to moderate prices over the longer haul. The recent shift in expectations, however, has been substantial enough and persistent enough to influence business investment decisions.

The rise in prices, coupled with the miasma in Iraq, questionable relations with Saudi Arabia, fraudulent reserve estimates from some global oil producers, and ongoing violence and opposition to the United States in much of the oil producing world combine to create conditions of uncertainty that are anathema to financial markets. This market uncertainty, and the US economy's perennial oil dependence, blurs the economic outlook and jeopardizes the budding but not yet crystalized economic recovery.

C'est la guerre.


Trade envoy Robert Zoellick, Agribusiness ambassador Ann Veneman, and general schill Donald Evans returned late last week from a fact finding mission to China (finding out how they can better exploit Chinese workers and screw American ones, no doubt).

Upon return, the USTR's office released a number of "fact sheets" to dress up the largely one way Sino-American trade relationship. I love reading these fact sheets because they are always so patently propagandistic as to stand up to scrutiny like a double-wide in a tornado.

USTR fact: China entered the World Trade Organization (WTO) in 2001 – opening its large and growing market to American goods and services and committing to a series of sweeping economic reforms. -- The United States did not reduce a single tariff or make any other market-opening
concessions to China as a result of China’s WTO accession.

The US did not reduce a single tariff because China already had been accorded "most favored nation" (MFN) trade status. MFN means that imports from China get treated the same as imports from the countries with the most open access to the US market. WTO entry did not change this. What China's WTO entry did achieve was forcing China into the rules-based trading system and making it subject to dispute settlement, which on balance, given that China already enjoyed unfettered access to the US market, is a good thing. I would hope that the government agency responsible for managing US trade affairs would understand this, in which case the statement above is merely disingenuous.

USTR fact: Opening the motor vehicle financing sector and easing auto import quotas, paving the way for increased sales of U.S.-designed and produced automobiles and parts.

The US runs a substantial trade deficit with China in auto parts (with about $3 of imports for every $1 export). Meanwhile, almost all of the world's automakers have been lavishing China with massive direct investments in plants producing finished autos. While currently, automakers are importing parts into the US for final assembly of cars, soon most production--at least for the Chinese market and probably for the world market--will all take place in China. Opening the financial sector should help stimulate domestic demand for aspiring drivers in China (though the ripples of capital market liberalization may spark other economic problems), but to think that US production will benefit from this is entirely misguided.

USTR fact: In 2003, the United States exported nearly $5 billion in agricultural goods to China...cotton exports reached a record of nearly $740 million.

As we learned earlier this week, the level of cotton exports has been driven by ill-conceived and dammaging US agricultural policy, that has been found in violation of WTO rules. (More on this later: The issue of ag subsidies is much more complex than the cursory treatment it is given by the media and trade punditocracy. While the subsidies are now largely illegal according to the WTO ruling, it is not the subsidies per se, but the failure of overall US agriculture policy which is the main culprit of impoverished farmers around the world. Simply axing subsidies will do little to fix the problem. See this great article for more details). Why is China importing so much cotton? Because it is booming in textile and apparel exports. In other words, America is now exporting (heavily subsidized) raw materials and importing processed, finished manufactured goods in a sort of backwards mercantilism.

USTR fact: Strong U.S. exports of transportation and education services contributed to a $2 billion U.S. services trade surplus with China in 2002.

This means we are training Chinese engineers and scientists in American universities and graduate schools. Educational and cultural exchanges are a good thing for bringing our countries together, but it also means that much of the advanced science and research work once done in the US can now easily be done, and for much less money, in China.

USTR fact: The Bush administration's major US trade concerns with China include protecting the technological monopolies of pharmaceutical manufacturers, opening China to genetically modified crops, and so on. Major priorities of the Bush administration DO NOT include (by absentia) egregious human rights abuses in export industries in violation of the WTO and a number of international treaties, nor do the Bush administration's priorities include China's manipulation of its exchange rate for competitive advantage, also in violation of WTO rules as well as the IMF Articles of Agreement.

Tuesday, April 27, 2004


Sorting through some agriculture trade data today for work and stumbled across one of the many perversities of the globalized food chain.


The United States is a major exporter of bull semen, enjoying a healthy trade surplus of some $30.4 billion ($46.1 X -$15.7 M). Bull semen, of course (I'm hoping), is used to produce more baby cows in order to expand capacity for producing things like meat, hides, and--you guessed it--more bull semen.

While American farmers may be comparatively advantaged at artificially stimulating bull cows, farmers in other countries are comparatively advantaged at raising cows. In 2002, the United States ran a substantial trade deficit in cattle. After buying our bull semen and producing more cows, foreign countries sold us over 2.5 million head of cattle while we exported a mere 243,394 head (for an overall deficit of 2.26 million head of cattle).

This is somewhat puzzling given that the US is also the world's largest producer of most cattle feed (primarily corn and soybeans). In other words, the US is producing all the inputs of cattle, but outsourcing the rearing of cattle.

Meanwhile, once the cattle get back here, we are quite skilled at turning them into the end product: meat. (See the post below). In 2002, the United States ran a $143.5 billion surplus in beef and veal.


Or the common acronym for less pleasantly named Advanced Meat Recovery Systems.

Taste the meaty goodness!

From the USDA: AMR systems remove the attached skeletal muscle and edible tissues from carcasses without breaking or crushing bones. This machinery separates meat by scraping, shaving or pressing the muscle and edible tissue away from the bone. However, unlike traditional mechanical separation, AMR machinery cannot break, grind, crush or pulverize bones to separate muscle tissue. Bones must emerge essentially intact and in natural physical conformation.

In January 1995, USDA’s definition of meat was amended to include product from advanced meat/bone separation systems. Meat derived from this method is comparable in texture and composition to meat trimmings and similar to hand-deboned products so it does not require special labeling. AMR product is labeled as “meat” on product labeling (i.e., “beef,” “pork,” “beef trimmings,” etc.). Since spinal cord tissue falls outside the definition of “meat,” product produced using AMR systems cannot contain spinal cord tissue.

...Except that inspections indicate that AMR prepared meat too often does contain spinal cord tissue and other nervous system components, the parts which harbor BSE. Such automation obviously reduces the need for crippling repetitive motion labor (not to mention those pesky Teamsters and UFW union members), not to mention eliminating the need for this cheery little tool. However, the use of AMRs does increase the risk to the public of a mad cow disease epidemic.

Beef brains, it's what's for dinner.

Monday, April 26, 2004


According to the clips and blurbs amalgamatted by Flagrancy to Reason.


Place your vote. Might I suggest for A World Connected.


To those who believe free markets create democracy, behold the future of China. At its 1997 handover to the Reds, Hong Kong was one of the most economically liberal countries in the world. Hong Kong is nothing if not a political-economic harbinger of what is to come as mainland China develops. Beijing continues to push Hong Kong backwards on the path to democracy. Despite middle class citizens burgeoning aspirations for electoral democracy, Beijing will not let Hong Kong directly elect its next leader in 2007, some ten years later.

As a rule, governments resist democracy for the threat it presents to entrenched powers, no matter what the political system (witness Florida 2000). Economic actors often have no incentive or interest in ceding powers they hold under undemocratic political systems or other power structures. In Hong Kong, for example, the Chief Executive of the "semi-autonomous region," Tung Chee-Hwa, a former international shipping tycoon, was hand picked by Beijing to advance the interests of the Reds in China's Politburo. When economic actors in a free market, undemocratic society already enjoy access to the political influence they need to conduct their economic affairs, democratice reform is elusive.

Thursday, April 22, 2004


Travelling the Golden State for a few days. See you soon.

Monday, April 19, 2004


Thank g-d we have Robert Zoellick looking out for our best interests, because unions are too ignornat to know what's good for them.

Unions should embrace free trade agreements, because these are the best way to improve workers rights, Zoellick argues. Here is how well Zoellick is doing with improving labor standards in China, the country with whom the US continues to have record high trade deficits.

Zoellick writes: Partners in our free-trade agreements must commit to effectively enforce their labor and environmental laws. This requirement is backed by an innovative process to review disputes and impose fines on countries that fail to abide by their obligations. The fines are not just penalties: Funds are to be channeled back into fixing labor or environmental problems. The United States is the only country pushing for these kinds of enforceable trade provisions.

Isn't that nice? Zoellick often points to the US-Jordan FTA--the first to include any mention of labor laws within the agreement proper--to prove this point that the US is tough on labor standards in trade agreements. Unfortunately, the agreement only admonishes Jordan to enforce the labor laws it has on its books (should those laws change or be gutted, c'est la vie). But Jordan shouldn't worry because--wink, wink--Robert Zoellick has no intention of enforcing those labor provisions in the Jordan FTA.

Here is what Zoellick wrote to the Jordanian ambassador back in July 2001:

His Excellency Marwan Muasher
of the Hashemite Kingdom of Jordan to the United States

Dear Mr. Ambassador:

I wish to share my Government's views on implementation of the dispute settlement provisions included in the Agreement between the United States of America and the Hashemite Kingdom of Jordan on the Establishment of a Free Trade Area, signed on October 24, 2000.

Given the close working relationship between our two governments, the volume of trade between our two countries, and the clear rules of the Agreement, I would expect few if any differences to arise between our two Governments over the interpretation or application of the Agreement.

Should any differences arise under the Agreement, my Government will make every effort to resolve them without recourse to formal dispute settlement procedures.

In particular, my Government would not expect or intend to apply the Agreement's dispute settlement enforcement procedures to secure its rights under the Agreement in a manner that results in blocking trade.

In light of the wide range of our bilateral ties and the spirit of collaboration that characterizes our relations, my Government considers that appropriate measures for resolving any differences that may arise regarding the Agreement would be bilateral consultations and other procedures, particularly alternative mechanisms, that will help to secure compliance without recourse to traditional trade sanctions.


Robert B. Zoellick
United States Trade Representative
United States of America

(Emphasis added).


It's about radical social re-egineering that empowers international investors with unprecedented powers that usurp national sovereignty and privilege the rights of investors over the rights of workers, consumers, and citizens who wish to set high public health or environmental standards.

Take NAFTA's Chapter 11. Yesterday'sNew York Times describes how Chapter 11 threatens to undo the most basic principles of our legal system: the sanctity of trial by jury and the ultimate authority of the US Supreme Court on legal rulings:

Abner Mikva, a former chief judge of the federal appeals court in Washington and a former congressman, is one of the three Nafta judges considering the Mississippi case. He declined to discuss it but did offer his perspective on Chapter 11... "If Congress had known that there was anything like this in Nafta," he said, "they would never have voted for it."

The satandard blind-faith globalization rhetoric focuses purposely distracts from such issues that are necessarily at the core of international trade liberalization by fixating on (1) trade agreements increase trade (incidentally, this may not be so true accoring to an article in the latest American Economic Review); and (2) trade is an economic panacea. If you are anti-globalization, you are a luddite, you are impoverishing the world's yearning multitudes, and you hate puppies.

Step off the economic reservation, and you are labeled "anti-globalization," as I wrongly have been by some in the past. I think this is rather silly. You can stop globalization of trade about as effectively as you can stop the moon revolving around the Earth. What NAFTA's Chapter 11 (and its manifestation in a plethora of subsequent trade agreeements) teaches us, though, is that it is the rules of globalization--set in secret, closed door negotiations, without democratic accountability--which is the real issue with global trade liberalization, not trade itself.

There is no such thing as a free market. Markets are social constructions (see Maxspeak's favorite Franklin quote): the nexus of cultural custom and legal rights and regulations, which define how economic forces interact. Control the rules, and you control the economic outcomes: who wins, who loses; who is empowered with rights and who has rights stripped out from underneath them...and how the priviliges and adjustment costs are distributed between and also within countries.

Friday, April 16, 2004


If only I were a cop...

AP (via CNN): Terry O'Brien of the Town of Geneva Police Department in Lake Geneva, Wisconsin, said he was destined to win Wednesday's contest because law enforcement runs in his family.

I'm guessing heart disease and plumber's butt run in his family, too.

I just gotta know what the "handsome trophy designed specially for this event" looks like.

Thursday, April 15, 2004


"...during the week of April 3 the number of workers drawing benefits for more than a week fell below the three million mark, to 2,980,000, for the first time since July 2001. Economists say that's a sign of an improving job market."

Or maybe the reason UI claims fell is because Bush and the Republican-led Congress refuse to extend unemployment benefits to the millions of long-term unemployed who have exhausted their UI benefits and hold precious little hope of finding work when the President's economic policies have helped create a paltry 766,000 private sector jobs in the past 8 months (for a whopping average of 95,750 per month).


This would suggest that OBL is neither already dead--as some in the Bush administration previously suggested--nor secretly in US captivity--as the Kerry '04 camp despearately fears.

Wednesday, April 14, 2004


Let him know about his mistakes before and after 9/11 here so that he can make America--and the world--a safer place.


Charles Murray, author of one of the worst racist screeds since Mein Kempf, leads us on a thought experiement on the utility of government in this morning's NYT.

His logic is as contorted and misleading as any Platonic dialogue.

Murray asks, what if rational utility-maximizing taxpayers--as consumers of public goods--could shop from a menu of government services with their tax dollars? (In order to proceed in this dialectic, we need to ignore for a moment the fact that many consumers of government services do not pay taxes--particularly the young, the old, and the feeble--and many regular taxpayers have no voice in government--resident aliens).

He admits there is great public support for core government services that provide public goods (defense, fire departments, environmental protection, roads, etc.), which otherwise would not be provided in government's absence. And he contends, correctly, that given the choice "ordinary people, making sensible judgments...would put large segments of local, state and federal government out of business."

This is precisely the point of government. Government is a response to the failure of micro-incentives to individuals to yield desirable outcomes in macro-behavior. We need government because individuals cannot on their own make all the decisions (and do not individually command sufficient resources) to produce all that is needed for society to function. We need someone and something with the vantage to coordinate all the various activities and needs associate with producing public goods and services. Moreover, most people don't want to be burdened with these choices (hell, we can barely get people to vote every four years), which is why we have a professional government.

Could government resources be better allocated? Almost certainly. Murray derides government task forces on things like "diversity" (no surprise there). Others may lambast the corrupt government relations of the petro-military-industrial complex and ginormous transfers of wealth from working people to those making more than $300k a year.

How do we decide which government programs are truly worthy of our tax dollars? Murray suggests that government agencies should engage in marketing their utility to taxpayer-consumers, who would then be persuaded to vote for these hitherto obscure agencies with their tax dollars. This is, of course, patently absurd. It is plain to see why we would not want the majority of government offices to be engaged in active marketing (witness the HHS/Bush campaign television ads on the Medicare reform abomination).

Anyone who has walked down the aisles at Wal-Mart knows that consumers are perplexed enough with choice of a few dozen brands of shampoo, let alone the inumerable services provided by government in all its forms. Take away the packaging and the marketing glitz, and all the shampoo bottles contain essentially the same ingredients, and do essentially the same thing: clean your hair. Invariably, many, many, many people are going to reach for the unadvertised generic store brands.

A psychologist, like Murray, should know better than this. But alas, Murray, time and again, has shown he will travel to great lengths of intellectual dishonesty in order to advance his acrid social agenda.

Tuesday, April 13, 2004


Regular Iraqis may not have freedom from the fear of violent warfare in their neighborhoods. They may no longer have sanitation, running water, hospitals, schools, or electricity. But fear not, because the Iraqi's have a new Olympic logo:

American taxpayers have ponied up $10 million so that the Iraqis can have an Olympic sports program. The Iraqi governing council siad that "the unveiling signifies the completion of the regime change for the Iraqi Olympic Movement."

At least they have completed some kind of regime change, I guess.


Thanks to Tapped for piloting the way back machine to August 2001, when President Bush took charge of the impending threat of Al Qaeda attacks by...going taking the longest presidential vacation in history:

"Maybe he's lazy, maybe he's not determined. It feeds into the impression that he's not in charge."


They even have cute Japanime logos for their customs service. Compare that with the US logo:

Monday, April 12, 2004


According to Bush, quoted in the WaPo, the controversial and now famous PDB security breifing, "said nothing about an attack on America."

The briefing reveals that in 1998, US intelligence learned that Bin Laden wanted to hijack a US aircraft. "FBI information since that time [and, as we have learned from elsewhere, strong signals in the summer of 2001] indicates patterns of suspicious activity in this country consistent with preparations for hijackings."

I'm wondering what is the value--in terms of this information--of being more specific? It seems that the government would focus its preventative actions on stopping a hijacking of a US aircraft irrespective of what analysts thought terrorists might intend to do once they hijacked a plane. It makes no difference whether terrorists want to hijack a plane to use as a bargaining chip against their imprisoned compatriots or to use to crash into really big buildings in New York and Washington. Either way, we would want to stop them from wresting control of the planes.

How would specific knowledge that planes were to be used as missiles change the government's response? Would Bush have installed bumpers on the Trade Center towers? Would he have pressed to speed up the development of his National Missile Defense system?


The NYT Magazine had this good piece on Sunday:

The real value of diversity is not primarily in the contribution it makes to students' self-esteem. Its real value is in the contribution it makes to the collective fantasy that institutions ranging from U.I.C. to Harvard are meritocracies that reward individuals for their own efforts and abilities -- as opposed to rewarding them for the advantages of their birth. For if we find that the students at an elite university like Harvard or Yale are almost as diverse as the students at U.I.C., then we know that no student is being kept from a Harvard because of his or her culture. And white students can understand themselves to be there on merit because they didn't get there at the expense of black people...In the end, we like policies like affirmative action not so much because they solve the problem of racism but because they tell us that racism is the problem we need to solve. And the reason we like the problem of racism is that solving it just requires us to give up our prejudices, whereas solving the problem of economic inequality might require something more -- it might require us to give up our money. It's not surprising that universities of the upper middle class should want their students to feel comfortable. What is surprising is that diversity should have become the hallmark of liberalism.

Saturday, April 10, 2004


Or do we?

Cheney: "you can't negotiate with them, there's no treaty at the end of the day here."

Ari Fleischer: "the United States government does not and will not negotiate."

Bush: "It's hard to negotiate -- stop terror. You either stop terror or you don't stop terror. It's not -- oh, yes, they understand, they know our feelings, they do, yes. "

Bush: "You can't talk to them, you can't negotiate with them."

Bush: "No nation can negotiate with terrorists."

Al Jazeera: "Talks are under way with Shia leader Muqtada al-Sadr, whose militiamen and supporters have taken up arms against occupation forces in Iraq."

(Just browsing AJ this evening, trying to see past the US reporting and find out more about the Iraq uprising).

BBC: "The US declared a truce in Falluja."

Gee, that sounds like negotiating to me.

**UPDATE: To be clear, it is not always wrong to negotiate with terrorists, as Roger Fisher and William Ury will attest. It depends on the costs and benefits of our next best alternative to a negotiated settlement. The rhetoric of "we do not negotiate with terrorists" is valuable to the Bush administration as tough talk, but if taken to heart could create a whole host of new problems in ending the violence in Iraq and ending generic terrorist aggression against the US.

Friday, April 09, 2004


Let the seeds of democracy sprout forth.

Wednesday, April 07, 2004


Today I want to let you know about an innovative nonprofit organization in Washington, DC: Shaw EcoVillage.

Since 1998, SEV has trained hundreds of at-risk kids to be leaders in improving their neighborhoods through environmentally sustainable economic development. SEV is helping the environment and helping build strong communities by helping kids.

Through its Chain Reaction Youth Bike Shop and Eco-Design Corps programs, SEV is making a substantial impact on the youth and the urban environment in Washington, DC.

Chain Reaction promotes alternative transportation and youth development while adding to the economic base of underserved communities in DC. Through Chain Reaction, SEV provides a constructive outlet for kids through its after-school Earn-A-Bike and Going Places summer camp programs, and through employment and skills training in the youth-run bike shop. Chain Reaction is also recycling bikes—to keep waste out of landfills and incinerators, and to keep people moving on affordable transportation. The bike shop helps thousands of customers each year keep on pedaling, all while kids gain the confidence and self esteem earned through hard work and enterprise.

Eco-Design Corps empowers high school students to take charge and participate in the development of urban space. Working in teams, these youths receive micro-grants to develop and implement urban design projects in central DC. Past and ongoing EDC projects include building green roofs and installing rain barrels around the city that recycle water, increase green space, and reduce pollution from storm run-off; building community gardens to grow fresh fruits and vegetables for homeless shelters; building pedestrian bridges to help commuters link up human-powered and public transportation; and helping preserve historical landmarks and developing a cultural history tour of the Shaw neighborhood, once the “Harlem of Washington, DC.”

I have been volunteering with Shaw EcoVillage for the past three years, and am continually amazed watching the organization grow and the kids transforming the neighborhood before our very eyes. While youth, staff and volunteers working with Shaw EcoVillage have made a huge impact to date, the demand for SEV’s programs and services is strong and outpacing our capacity to provide them.

We have the potential to do much, much more, and today I want to ask you to join our team by making a contribution toward our goal of raising $50,000 to move into a new, bigger facility where we can have the space to serve more kids, to expand our programming, and to keep growing in our work of helping build strong, sustainable communities by helping kids. Your support is essential to our mission:

$150 provides one youth all the resources to participate in our Earn-A-Bike program (including the bicycle and a helmet)

$100 provides the opportunity for one kid to participate in our Going Places summer camp

$75 buys seedlings for three planting beds in our community garden

$50 builds and installs one rain barrel

$25 provides snacks for one week of after school programs

Please contribute online here or contact Noel Petrie:

Thank you.

Tuesday, April 06, 2004


The stock market reacted positively to Friday's strong jobs report, especially growth-sensitive Nasdaq...The explanation for the stock rally after the jobs report is twofold. Despite its many flaws, the jobs report has become a key election issue -- the stronger the report, the better the chances for President Bush's re-election -- and this election will likely determine the taxation of equities, high or low, for years to come.

Show Wall Street what you want, and what America needs.


John Dean, overheard this morning on Democracy Now!: "The Bush administration is redefining the word hypocrtical."

Dean is plugging his new book: "Worse Than Watergate: The Secret Presidency of George W. Bush."


Rather than facing the serious issues raised by offshore outsourcing, Republicans have opted to muddy the waters of the debate with a quizzical new addition to the trade lexicon: 'insourcing.'

According to GOP spin doctors, "insourcing is the movement of foreign jobs to the United States" through foreign direct investment.

While FDI in the US really has little to do with the offshoring debate, it also has little to do with creating American jobs.

It turns out, most FDI in the US is used by foreigners to acquire already existing establishments in the US (thus reclassifying previously existing jobs as 'insourced'), often in the form of a change in ownership in stock. In this sense, 'insourcing' is the flip side of the coin to persistent and mounting US current account deficits, which requires foreigners to purchase more and more American assets to finance our appetite for imports.

Rob Scott hasthe low down on jobs from 'insourcing':

Between 1991 and 2001, foreign multinationals acquired firms employing 4.1 million workers. However, only 274,000 workers were employed in the newly established U.S. companies owned by foreign firms, for an average of 25,000 jobs per year over this period.

Monday, April 05, 2004


AUTOMOTIVE NEWS: China goal: $100 billion in auto exports by 2010
Reuters / April 05, 2004

BEIJING -- China aims to export as much as $100 billion in cars and automobile components a year by 2010, more than 20 times last year's figure, state media said Monday.

"Our short-term goal is to increase automobile and component exports to $15 billion to $20 billion next year," the China Daily quoted Vice Minister of Commerce Wei Jianguo as saying.

China's automotive exports rose more than a third last year to $4.7 billion, with $400 million of that coming from sales of whole vehicles, the newspaper said.

By 2010, China would export $70 billion to $100 billion worth of cars and components, Wei said.

"China is likely to become the component supply center for international auto manufacturers in the future," Wei said.

The government would encourage the development of as many as 10 large-scale "automobile and component exporting bases" and allow mergers and acquisitions to create big multinational companies, Wei said without elaborating.

Foreign car and component companies have poured into China, tapping both a booming domestic market for autos as well as a vast pool of cheap labor that has helped companies cut manufacturing costs.

Delphi Corp. has invested about $500 million in more than a dozen factories in China that supply joint ventures for Volkswagen AG and General Motors.

Other foreign players include Delphi chief rival Visteon Corp, Honeywell International and Siemens AG, among others.


Wonder where those $100 billion in auto exports will be going...


Safire writes: Doves opposed to the overthrow of Saddam — who had earlier argued that attacking Al Qaeda and the Taliban in Afghanistan would lead to quagmire — have found a bellicose rationale for their antiwar stance.

First off, Bill, no one in the world, Mother Jones reader or otherwise, believed it was wrong to go after Al Qaeda--the terrorist perpetrators of the 9/11 attacks on NYC and WDC--anywhere they may brood in the world.

The problem is Saddam Hussein had jack to do with 9/11. So when Bush decided to lead America into a war in Iraq, a pre-condition of which was to so contort and manipulate public sentiment over 9/11 so as to displace America's collective anger from Al Qaeda to Saddam, reasonable-minded people everywhere were left shaking their heads in bewilderment. After all, Saddam's threat had bee mollified for the good part of a decade. (Thanks to almost continual bombing and enforcement of no fly zones by the USAF and the RAF).

Hawks, Safire tells us, replied, "You never understood it's all one war." In their self-deluded world, I'm willing to concede they probably believe this. However, back in the real world, Bush's excursion in Iraq really has distracted us from the war against terrorism. Witnesses before the 9/11 commission testified that the Pentagon pulled out special forces troops from Afghanistan (elite operatives previously employed in hunting Bin Laden) and deployed them to Iraq. Now more than 150,000 troops, billions of dollars of expenditures, and who knows how much military hardware was diverted to the Persian Gulf; Bush has lost OBL, and American troops and their private sector counterparts are being slaughtered and publicly mutilated in Iraq by the very same general population Bush told us would welcome americans with outstretched arms as liberators.

Safire is right about one thing. Who did what prior to 9/11--whether the administration was too slow to develop and implement a terrorism strategy--is really a non-issue, politically speaking. (Excepting of course if we find evidence of deliberate attempts to hide impending attacks). What is the issue is how Bush pulled the Iraq bait and switch, manipulated America's emotional reaction to 9/11, and used the war as a foil to achieve a laundry list of conservative objectives unrelated to the war on terror. For this, Bush should be drawn and quartered--POLITICALLY SPEAKING.

Friday, April 02, 2004


Consider: the assault by manufactured imports on American mass-production manufacturing in the 1970s and 1980s was something done to American workers and firms standing together. The process of outsourcing will look very different: it will be something done by internationalized American firms to American workers. The politics of GM, Ford, and UAW asking for help together to deal with foreign competition will be very different from the politics produced by workers vs. CEOs.


FT: The IMF shakes from within.


Good news from the BLS this morning: the economy added 308,000 jobs in March. (Cautionary note: this number is a preliminary estimate and is often revised in subsequent releases).

The unemployment rate ticked up a notch to 5.7%, likely because people stopped fleeing the labor force for the first time in a while. In fact, the labor force grew by 179,000 peopple. This is a small first step in bringing back the 2.63 million or so people who gave up even trying to look for jobs in the Bush economy:

In other good news of sorts, the manufacturing sector stopped hemmorhaging jobs after 71 straight months of declines. Manufacturing jobs were unchanged.

We can be certain that the Bush administration will be trumpeting today's employment numbers (Get ready for a few days of Texas-sized Bush smirks--ugh) for the next month. Their operative three words: tax cuts work.

Not so fast. The Bush administration's economic forecasters sold the euphamistically named "Jobs and Growth" tax giveaway to the rich on the prediction that it would generate 306,000 jobs each month. This is the first month that they have ever reached their target. Overall, they are still 2.152 million jobs behind their prediction. According to the administration's forecast, if we had done nothing (i.e. no tax cut), the economy would have produced 2.283 million jobs all by itself with no need to hand ginormous tax breaks to the $300,000+ a year crowd.

In order to get back to the same level of private sector employment at the start of the Bush presidency, the economy will need sustained job growth of 369,000 every month through the end of October 2004. In order for the manufacturing sector to recover its level of employment, we'll need 398,000 manufacturing jobs every month.

**UPDATE: Journalists are already whiffing on the jobs report. The AP writes: "companies added 308,000 new jobs -- the most in four years." This is simply not true. If one looks at the numbers not even very closely, the private sector added 277,000 jobs and government added 31,000 jobs. A little arithmetic goes a long way.

***UPDATE: Maxspeak observes that the household survey recently lauded (until this morning) by the Bush administration as a better indicator of job growth than the widely accepted establishment survey actually shows a loss of 3,000 jobs.

Thursday, April 01, 2004


Overheard last night on PBS's Newshour:

ANTHONY CORDESMAN: I think Mr. Orr made a very important point. We saw some horrifying images. There are now, if you count killed and wounded, close to 4,000 coalition personnel. There have been roughly two deaths a day of people in uniform. And these images are simply deliberate efforts psychologically to manipulate opinion.

We also need to remember because we may focus on the fact these are Americans that equally if not more violent actions have been conducted during Shiite religious ceremonies where hundreds of innocent people have been killed in bombings. The Kurds in the North were the target of these groups. We are dealing approximately with 150 and 180 incidents a week, attacks a week. The casualties relative to the number of attacks still are relatively low.

4,000 casualties? 150-180 incidents a week? But when you consider that its all relative tot he relative...Gee, that hardly seems bad at all. Way to spin it, Tony!


Surprise, the WaPo didn't run my letter to the editor lambasting Robert Samuelson's abysmal apologia for China's human rights record. So I'll run it here instead:

To the Editor:

Robert Samuelson belittles the plight of Chinese citizens suffering human rights violations (“China: The New America?” March 31).

The working conditions of late-19th century American industrialization provide no excuse for human rights violations in this day and age. Samuelson’s reference, as such, merely obscures the full extent of labor abuses in China’s export economy—including forced prison labor prohibited by WTO rules.

According to the State Department, China imprisons without judicial review more than 250,000 “dissidents” (i.e. activists for religious freedom, democratic reform, women’s rights, etc.) in “re-education-through-labor” camps. There, inmates are contracted to private enterprise or forced to work in prison-owned factories. Due to China’s continued non-cooperation, the United States is unable to ensure products of prison labor do not wind up on shelves in American stores.

The AFL-CIO is right to speak up for Chinese workers and workers everywhere who have little voice of their own. For whom does Robert Samuelson speak?


Globalize This!

HA! Take that, Washington Post.


Stuck on jury duty today down at DC Superior Court. I guess the April fool is on me...