When the facts change, I change my mind. What do you do? -- John Maynard Keynes

Wednesday, February 29, 2012

How to Remove Your Google and YouTube Search History Before Google's New Privacy Policy Takes Effect March 1

Google-Preview: Privacy Policy – Policies & Principles: "This Privacy Policy will be effective March 1, 2012, and will replace the existing Privacy Policy."

Google--Policies & Principles: "Notice of change--March 1, 2012 is when the new Privacy Policy and Google Terms of Service will come into effect. If you choose to keep using Google once the change occurs, you will be doing so under the new Privacy Policy and Terms of Service." http://www.google.com/policies/

For detailed instructions on how to remove your Google search history and your YouTube viewing and search history, go to the following 2 websites:

How to Remove Your Google Search History Before Google's New Privacy Policy Takes Effect | Electronic Frontier Foundation: This will guide you through the steps necessary at "https://www.google.com/history."

How to Remove Your YouTube Viewing and Search History Before Google's New Privacy Policy Takes Effect | Electronic Frontier Foundation: This will guide you through the steps necessary at "https://www.youtube.com."

Romney Rolls - "Super Tuesday" Next Week

Despite the efforts of the Obama Democrats' organized campaign to turn out and vote for Santorum in Michigan, Romney rolled to victory last night in Michigan and overwhelmingly won in Arizona.  According to the exit polls of CNN, Santorum would have received less than 33% the Michigan vote without the "help" of the Obama Democrats voting for him. Romney received 41% of the Michigan vote. It's now obvious that Romney is determined to "slug it out" and has the money and organization to run a 50-states campaign--something that neither Santorum, Gingrich, nor Paul can do.  This is not good news for the crazy wingnuts, Rush Limbaughs, etc., in the GOP.  But it is good news for the educated, thinking, moderate, rational, and reasonable voters, AND good news for the USA as a Romney nomination will give Obama a "competitive" campaign instead of the landslide Obama would enjoy with Santorum, Gingrich, or Paul as the GOP nominee.

Finally, last night again showed that Romney's key strength is among women voters.  Women are giving Romney the decisive edge in every state he wins.  Michigan vote by gender according to CNN exit polls:

Men:      Romney 39%   Santorum 38%
Women: Romney 43%   Santorum 38%

Next week, "Super Tuesday"--GOP primaries in Georgia, Massachusetts, Ohio, Oklahoma, Tennessee, Vermont, and Virginia; plus GOP caucuses in Alaska, Idaho, and North Dakota.

   

Tuesday, February 28, 2012

To Die like a Doctor: a Graceful Death

Great article in the Wall Street Journal on life and death and why most physicians forego "futile 'lifesaving' care:"

A Doctor on How Physicians Face the End of Life - WSJ.com: "Years ago, Charlie, a highly respected orthopedist and a mentor of mine, found a lump in his stomach. It was diagnosed as pancreatic cancer by one of the best surgeons in the country, who had developed a procedure that could triple a patient's five-year-survival odds—from 5% to 15%—albeit with a poor quality of life. Charlie, 68 years old, was uninterested. He went home the next day, closed his practice and never set foot in a hospital again. He focused on spending time with his family. Several months later, he died at home. He got no chemotherapy, radiation or surgical treatment. Medicare didn't spend much on him. . . . . Unlike previous eras, when doctors simply did what they thought was best, our system is now based on what patients choose. . . . The result is that more people receive futile "lifesaving" care, and fewer people die at home than did, say, 60 years ago. Nursing professor Karen Kehl, in an article called "Moving Toward Peace: An Analysis of the Concept of a Good Death," ranked the attributes of a graceful death, among them: being comfortable and in control, having a sense of closure, making the most of relationships and having family involved in care. Hospitals today provide few of these qualities. Written directives can give patients far more control over how their lives end. But while most of us accept that taxes are inescapable, death is a much harder pill to swallow, which keeps the vast majority of Americans from making proper arrangements. It doesn't have to be that way. . . ."  (Read the full article here.)

If only we were more like physicians--not only would we die graceful deaths of peace--but our exploding medical care costs could be more wisely allocated for the young and the living.

For those interested in dying with grace--one result from my Google search for "health care directive."

    

GOP: a Cup of Crazy

Ghastly Outdated Party - NYTimes.com: ". . . After a speech in Dallas on Thursday, Jeb Bush also recoiled: “I used to be a conservative, and I watch these debates and I’m wondering, I don’t think I’ve changed, but it’s a little troubling sometimes when people are appealing to people’s fears and emotion rather than trying to get them to look over the horizon for a broader perspective.” Alan Simpson, the former Republican senator from Wyoming, recently called Santorum “rigid and homophobic.” Arlen Specter, who quit the Republicans to become a Democrat three years ago before Pennsylvania voters sent him home from the Senate, told MSNBC: “Where you have Senator Santorum’s views, so far to the right, with his attitude on women in the workplace and gays and the bestiality comments and birth control, I do not think it is realistic for Rick Santorum to represent America.” That from the man who accused Anita Hill of perjury. Republicans have a growing panic at the thought of going down the drain with a loser, missing their chance at capturing the Senate and giving back all those House seats won in 2010. . . . "

    

Monday, February 27, 2012

Ed Koch: 'Santorum is nuts'

Just a few days ago I wrote of Rick Santorum that he "actually believes some of the crazy stuff he espouses--which is kind of scary." Now former New York City mayor Ed Koch in an interview on Aaron Klein's WABC Radio Show said:

Ed Koch: 'Santorum is nuts' - POLITICO.com: ""Santorum is nuts," Koch told Klein. "And I say that in a loving way. He is someone who is of the belief that religious obligations that he has can be imposed on other people. Now I don’t mind his imposing on himself the business of no pre-natal care, no abortion. That’s okay from his point of view. But in my judgement it’s nuts to try to impose that on other people of other religions who don’t agree with you.". . . "what Santorum has said in affect is he would like to see states go back to criminalizing the sale of contraception. I think that’s crazy."

Rupert Murdoch has said that if  Santorum wins Michigan, "game over."  Yeah, "game over" in that not only will Obama easily win a second term, but probably with a landslide that gives Democrats control of the Senate and House of Representatives!

    

Sunday, February 26, 2012

Federal money driving up the cost of college for students

Great story in the New York Times exposing the fact that federal aid to for-profit colleges through grants and loans, drives up the cost of college for students--

Judith Scott-Clayton: The Hidden Majority of for-Profit Colleges - NYTimes.com: "Whether you support or oppose the growing role of the for-profit sector in postsecondary education, you probably don’t know the half of it. Literally. . . Given that many for-profit colleges rely on Title IV aid for 80 percent or more of their revenue . . . it previously seemed implausible that so many other institutions could survive without it. But Professors Cellini and Goldin shatter this perception by compiling administrative data from postsecondary regulatory agencies in five states . . . .  there is significant overlap in the types of non-degree programs offered at non-Title IV and Title IV for-profit institutions. Most strikingly, the authors find that similar non-degree programs cost about 75 percent more when offered at Title IV institutions – with the difference in tuition roughly approximating the size of a Pell Grant. This lends support to the so-called Bennett Hypothesis that federal student aid simply enables institutions to increase prices, at least when those institutions are profit-seeking. . . .  While the Title IV cosmetology programs charged nearly 70 percent more than their non-Title IV counterparts, their students’ pass rates were virtually identical. . .  . An alternative argument is that Title IV for-profit institutions spend more on recruitment and marketing – which account for 31 percent of their overall expenses, according to some estimates – and then pocket the remaining federal subsidy as profit. . . . "

Saturday, February 25, 2012

The Greek Sustainability Report and Reaction & Analysis

Greek Sustainability Report

Greek debt sustainability analysis Report in full above--reaction and analysis of the Report below:

UPDATE 2-Greek debt could easily derail again - EU/IMF report | Reuters: "Greece's second bailout programme could easily go off the rails and send the nation's debt rocketing back to today's unmanageable levels, a confidential study by its international lenders shows. The 9-page debt sustainability analysis, on which euro zone finance ministers based their decision on Tuesday to approve a 130-billion-euro rescue programme, is anything but a vote of confidence in Athens' ability to put its public finances back on a sound footing. Indeed the report, dated Feb. 15 and first obtained by Reuters on Monday, describes in the disembodied prose of economic bureaucrats how uncertain Greece's recovery will remain for many years, and how Athens will likely need international aid for an indefinite period. Experts from the European Commission, the European Central Bank and the International Monetary Fund highlighted the risks and questioned the assumption that Greece will be able to return to capital markets in the coming years."

Eurozone finance ministers agree second bailout for Greece; Troika sustainability report says outlook is grim: "The FT says the troika report explains why European countries were so opposed to the new financing programme for Greece. In an article headlined "Greek debt nightmare laid bare", it said: A German-led group of creditor countries – including the Netherlands and Finland – has expressed extreme reluctance to go through with the deal since they received the report." 

Greek accounting cannot hide the urgency for growth - FT.com: "“The troika have had to do some arithmetic gymnastics in order to make the numbers add up but their optimistic assumptions are unlikely to hold,” said Sony Kapoor, managing director of Re-Define, an economic consultancy that has advised European officials. . . . the confidential debt sustainability report points out that even if Greece’s budget reaches a surplus of 2.5 per cent every year, not including debt interest payments, getting “stuck” at that level could prove disastrous: “Debt would be on an ever-increasing trajectory,” the report found. The urgency for growth comes even though European Union officials acknowledged on Tuesday that they would seek significant further austerity measures from Athens throughout the bail-out programme."

Eurozone's shocking prescription for Greece – Telegraph Blogs: "A "strictly confidential" 10-page debt sustainability report commissioned for yesterday's meeting of eurozone ministers concludes that the austerity measures being foisted on Greece as a quid pro quo for a second, €130bn bailout, are quite likely to prove self-defeating, in that the austerity, by further weakening the economy, may well cause the debt to GDP ratio to rise further. Furthermore, the debt "haircut" being required of private investors may prevent Greece from ever returning to private markets for borrowing, making the country indefinitely reliant on official support. After the bailouts, so much of Greek's debt will be held by official repositories, all of who will have preferential treatment as creditors, that no private sector investor would go anywhere near it, knowing he'd be last in the queue of creditors"

The Future Is Not What It Used To Be - NYTimes.com:
The Future Is Not What It Used To Be by Paul Krugman
I’ve been comparing the original IMF projections for Greece with the secret recent sustainability analysis that everyone has. . . . Of course, everyone thinks the latest is wildly overoptimistic."

   

Friday, February 24, 2012

Eurozone: dead end zone?

Despite the second "bailout deal" for Greece, things still look dismal for the Eurozone

German showdown with IMF looms as Bundestag blocks rescue funds - Telegraph: "Europe can’t find a solution because there isn’t one."

So, what would your plan for Greece be? — Crooked Timber: "I don’t have a solution myself – the more I end up discussing this with people, the more I am reminded of the London Business School proverb taught on some of the gnarlier case studies, which is “Not All Business Problems Have Solutions”."

Euro Agonistes - NYTimes.com by Paul Krugman: "Euro exit would allow a quick devaluation, solving the competitiveness problem — but it would be hugely disruptive and would generate vast ill-will, so it’s hard to see any government taking that step until there really are no alternatives (which may soon be true for Greece, but not the others). So there’s a kind of trap. If you imagine yourself as the Prime Minister of such a country, what can you do? For the most part, I’m afraid, you plead with the troika to make the austerity demands less severe, you do what you can to accelerate improving competitiveness (which isn’t much), and you wait for things either to get gradually better via “internal devaluation” or to get worse and provide the economic and political environment in which euro exit becomes a real possibility. It’s a hell of a way to make economic policy, but I don’t see any magic bullets."

Ann Coulter takes Republicans to the woodshed

I may not agree with her often--but she is smart and on this subject definitely "on point," and obviously has "had it" with the "delusional" people who now (apparently) comprise the Republican party:

Ann Coulter - February 22, 2012 - WHAT'S THEIR PROBLEM WITH ROMNEY?: " . . . . The obsession with sticking it to the Establishment (which includes Christine O'Donnell, but excludes Bill Kristol) by voting for a loose cannon demagogue or a crusading Catholic who can't seem to move the conversation past contraception is as pie-in-the-sky delusional as anything dished by Democrats . . .  if reducing contraception use, lobbying for Freddie Mac and promoting huge government programs such as moon colonies and No Child Left Behind are the best ways to create jobs, then it could be true that Newt Gingrich and Rick Santorum are our strongest candidates in a general election. Of course, it might also be true that dousing yourself in fairy dust does not guarantee that you will find the perfect mate and get the perfect job. We're being asked to hand Obama another four years in the White House in order to "send a message." To whom? And what message? That we're morons? Message received! . . . "

On this one, I'm with you Ann!

    

Thursday, February 23, 2012

Romney's right: Spending cuts, without pro-growth tax policies, will slow down the economy

Some so-called "conservative" pundits think Romney misspoke--

First Read - Romney: Spending cuts slow economic growth: ". . . Speaking in Shelby Township, MI, the former Massachusetts governor took a question about the Simpson-Bowles fiscal commission empaneled by President Obama to address the nation's deficit and debt issues. In his response, he said that addressing taxes and spending issues are essential. "If you just cut, if all you're thinking about doing is cutting spending, as you cut spending you'll slow down the economy," he said in part of his response. "So you have to, at the same time, create pro-growth tax policies.""

Mitt's right, and just about any economist worth his or her salt would agree--even Nobel economist Paul Krugman agrees (at least with the first part): "slashing spending in a depressed economy depresses the economy even more,"--just look at what "austerity" has done to Europe

Tuesday, February 21, 2012

For Republicans, it's "self-destruct" time

Poor old GOP, apparently determined to "crash and burn"--Santorum's lead growing even while a majority of Republicans know he has no chance of beating Barack Obama!--

Poll: Rick Santorum opens 10-point lead - Tim Mak - POLITICO.com:
"Rick Santorum’s national lead over Mitt Romney has ballooned 10 percentage points, even as Romney maintained his reputation as the most likely Republican candidate to beat President Barack Obama, two new surveys show. . . . in a USA Today/Gallup poll conducted Feb. 16-19, Romney remained ahead among both Democrats and Republicans as the one seen as most electable in November. Asked who was more likely to beat President Barack Obama, Romney was chosen over Santorum, 54 percent to 29 percent, among all national adults. Republicans and Republican leaners gave Romney slightly higher results, 58 percent to Santorum’s 32 percent. . . ." Read more: http://www.politico.com/news/stories/0212/73102.html#ixzz1n1eVQCJz

At this rate, not only will President Obama cruise easily into a second term, but it looks like the Democrats will re-take both houses of Congress!

    

Monday, February 20, 2012

Greece: a return to the drachma?

Better title for article below: "Only a return to the drachma can save Greece as unemployment soars"--

Can a return to the drachma save Greece as unemployment soars? - Telegraph: ". . . . Mr Papademos warns that default and EMU-exit would lead to "uncontrollable economic chaos". But is that not already the case? No Greek bank has been able to issue a letter of credit accepted anywhere in the world since November. Large Greek companies are having to relocate their headquarters to Bulgaria in order to conduct basic trade. The "drachma risk" has already killed investment. Greece is suffering the anticipated consequences of EMU exit without the benefits, so it might as well lance the boil, impose capital controls, and create a new banking system (as Iceland did). Such catharsis might start to unlock €60bn of cash savings in gold, dollars, German euro notes (letter `X’, Greece `Y’), and such-like, sitting in the proverbial mattress. Foreign investors might start to nibble again, once the Greek exchange rate reflects reality at around seven Chinese yuan. . . . "

And yet, Greek leaders "fiddle" with a "sentimentality" for the euro (flawed currency that it is) while Greece continues to spiral down. And the French and Germans?

The European project is splitting apart at the very core - Telegraph: " . . . . On one hand, the defenders of the orthodoxy, led by the Commission and supported by France (which is exposed to a Greek default more than any other country), is battling to hold the line with another massive bail-out. . . On the other hand, it becomes increasingly clear that Germany, supported by Holland and Finland, has had enough. They see no point in throwing colossal sums of money into what Germany’s finance minister, Wolfgang Schäuble, calls “the bottomless pit” of Greek debt. It is they who have wanted to pile ever more impossible demands on Greece to hurry on a default. If other debtor countries such as Portugal, Italy and Spain follow suit and leave the euro that they should never have been allowed to join – so be it. . . .   However the chips fall in coming days and months, the eurozone will disintegrate. The European dream has entered a nightmare stage from which there is no rational escape and the consequences will be horrendous, for Europe and the world."

    

Sunday, February 19, 2012

Germany's plan for Greece to leave the euro

Thankfully, Wolfgang Schäuble, Germany's Finance Minister, has taken the lead to try to solve the Greek problem and help them get a "fresh start:"

Germany drawing up plans for Greece to leave the euro - Telegraph: "The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets. . . . the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them." His pessimism has been tipped into despair with a secret European Commission, Central and IMF report that even if Greece made good on its promises, it would not be enough to reach the target of bringing total debt to 120 per cent of GDP by 2020. . . . the Greek government should officially declare itself bankrupt and begin negotiating an even bigger cut with its creditors. For Schäuble, it is more a question of when, not if. . . .  it has support from Austria and Finland - holding the prospect that a eurozone meeting tomorrow will fail to agree the next set of EU-IMF payments for Greece. . . . Rumours are already circulating in Wall Street that banks are preparing for a "credit event" - a technical term used by credit agencies to mean a default - in the days immediately following March 20, as Greece looks likely to be unable to meet its debts. . . . Mr Schäuble maintains that since Greece is already regarded by the financial world as bankrupt, a formal bankruptcy would have no negative consequences for other euro members."

Why even corporate loopholes have to go

Why everyone should pay a fair share of taxes (including corporations) and why we need comprehensive tax reform:

Playboy Interview: Paul Krugman : Playboy.com: PLAYBOY: "Companies can’t be successful in this country without the roads, the bridges, the educational system—all the things that government builds for them."

KRUGMAN: "Even some very wealthy people, like Warren Buffett, are more or less saying that. Bill Gates Sr. used to say this: Suppose you were given the choice of being born in America or in Ethiopia. What proportion of your eventual fortune would you be willing to give to be born in America? Given the great good fortune of getting to live and run a business in this country that has all the advantages an advanced country with a decent system provides, how can you think it’s all you? And then, how can you feel you don’t have any obligation to pay it back?"

    

Friday, February 17, 2012

2012: The election is over - Obama won!

A few weeks ago, I thought the Republicans stood a good chance to win the White House with Mitt Romney. Today, it's obvious it's over. Obama has won.  Oh, I know the election is months away, and the formalities have yet to really begin, but for all intents and purposes, it's over. Congrats to the President and Axelrod and Company!

How have I come to this conclusion? Well first of all, let's look at the GOP field:
Gingrich: unfit for the Presidency--even the majority of Republicans now realize this;
Paul: principled, authentic, but never had a chance of being nominated, much less elected;
Santorum: current "flavor of the month" actually believes some of the crazy stuff he espouses--which is kind of scary; he's also a Beltway insider who has made his money off "special interests;" this guy would be Mr."Crony Capitalist" if he ever got the chance to be President (which he won't). If you want a clue about Santorum just ask Pennsylvanians who voted against him in a landslide the last time he ran for public office--"in the November 7, 2006 election, Santorum lost by over 700,000 votes, receiving 41% of the vote to Casey's 59%, the largest margin of defeat for an incumbent senator since 1980 and the largest losing margin for an incumbent Republican senator ever" (source: Wikipedia).
Romney: I don't have a clue whether Mitt is a "Massachusetts moderate" or "severely conservative" (as he claims to be). I think he is probably a decent guy with good leadership skills, has a great wife and family, made a ton of money (to his credit) at Bain Capital, and did a good job with the Olympics and as Governor of Massachusetts. I said before that Romney stood a good chance of becoming President if he ran a "smart campaign." He hasn't and isn't running a "smart campaign." He's running a "lame campaign" and there's no indication that will ever change.

And then there's the coup de grâce which I will refer to as "crategate." This story has gone viral. Americans tolerate a lot of things they shouldn't--like an over-intrusive TSA, an incarceration rate and prisons that most civilized countries find shameful, and legislation with serious constitutional infringements--but most Americans have about as much tolerance for any kind of perceived animal cruelty as they do for any politician who claims to have been "brainwashed." And, if you haven't noticed, dogs and cats dominate American life.

So while most Americans personally like President Obama and his family, and yet may have some reservations about his first term (and to his credit he has admitted some shortcomings himself),
come election day, the voters will ensure that Bo resides in the White House and rides inside the Presidential limo for another four years:
President Obama and Bo
President Obama and Bo in the Limo










(photo source)


and somewhere in heaven above, Ted Kennedy (who gave Bo to the Obamas) must be having a really good laugh about all of this!

   

Vote for Santorum and elect Obama!

Daily Kos: Announcing Operation Hilarity: Let's keep the GOP clown show going!: "It's time for us to take an active role in the GOP nomination process. That's right, it's time for those of us who live in open primary and caucus states—Michigan, North Dakota, Vermont and Tennessee in the next three weeks—to head out and cast a vote for Rick Santorum. Why would we do such a crazy thing? Lots of great reasons! Republican turnout has sucked, and appears to be getting worse by the contest. Unlike the 2008 Democratic primaries, which helped President Barack Obama and the Democrats to build a national organization, the GOP is an organizational disaster, with waning voter interest. That means that it takes fewer votes to have an impact than if Republican turnout was maxed out. Several of the contests have produced razor-thin margins of victory. Rick Santorum won Iowa by 34 votes, Mitt Romney "won" Maine by 194 votes. It won't take many of us to swing contests the way we want them to swing. . . . "

OK, I get it--vote for Santorum and elect Obama!

    

Thursday, February 16, 2012

Greek Drama

Greek rhetoric turns into battle of wills - FT.com: "There were signs a group of triple A-rated governments, including Germany, Finland and the Netherlands, were hardening their stance towards Athens. During a conference call among eurozone finance minsters, the three countries suggested they may want additional letters from other smaller Greek parties and openly discussed the possibility of postponing Greek elections. Ahead of the call, Wolfgang Schäuble, the German finance minister, said in a radio interview Greece might delay its polls and install a technocratic government that does not include politicians like Mr Venizelos and Mr Samaras, similar to the model currently in place in Italy.

"Karolos Papoulias, the Greek president, fired back during a visit to military chiefs at the defence ministry: “We are all obliged to work hard to get through this crisis, but we cannot accept insults from Mr Schäuble. Who is Mr Schäuble to insult Greece? “Who are these Dutchmen, who are these Finns? We have always defended not only the freedom of our own country, but the freedom of Europe,” Mr Papoulias added."

Wednesday, February 15, 2012

Greece: the euro has always been a flawed currency

Greece and the return of the economic 'death spiral' | David Blanchflower | Comment is free | guardian.co.uk: " . . . For all the deals being signed in Athens and Brussels, the Greek people have worked out that they have no hope; protest and social unrest now looks a rational option to the ordinary people who are bearing the cost to bail out European banks. Cuts in the minimum wage right now are probably not very smart politics. Greece does still have a card to play – which is "one down, all down". An exit from the euro would result in a depreciated drachma, which would potentially give a much needed boost to tourism. And that sounds better than all other alternatives currently on offer. There is still time for Germany's Angela Merkel to get out her cheque book; but otherwise, it's all over – and quite possibly very quickly. This really is what a death spiral looks like. . . . "

Don't feel bad Greece, the euro has always been a flawed currency--

Euro doomed from start, says Jacques Delors - Telegraph: "In an interview with The Daily Telegraph, Jacques Delors, the former president of the European Commission, claims that errors made when the euro was created had effectively doomed the single currency to the current debt crisis. He also accuses today’s leaders of doing “too little, too late,” to support the single currency. . . . Mr Delors claims that the current crisis stems from “a fault in execution” by the political leaders who oversaw the euro in its early days. Leaders chose to turn a blind eye to the fundamental weaknesses and imbalances of member states’ economies, he says. “The finance ministers did not want to see anything disagreeable which they would be forced to deal with,” he says. The euro came into existence without strong central powers to stop members running up unsustainable debts, an omission that led to the current crisis. Now that the excessive borrowing of countries such as Greece and Italy has brought the eurozone to the brink of disaster, Mr Delors insists that all European countries must share the blame for the crisis. “Everyone must examine their consciences,” he says.". . . Mr Delors says that he shares some of the concerns that were expressed by British politicians and economists about the euro before its creation. When “Anglo-Saxons” said that a single central bank and currency without a single state would be inherently unstable, “they had a point”, he admits. . . ."

In other words, the sooner everyone in the Eurozone gets honest, the better. And the sooner Greece can leave the euro and start rebuilding, the better for the Greeks.

    

Tuesday, February 14, 2012

Living in an Age of Digital Espionage

Traveling to China or Russia? Better go lean and light--leave your cellphone and laptop at home and instead bring “loaner” devices, which you erase before you leave and wipe clean the minute you return. Disable Bluetooth and Wi-Fi, never let your phone out of sight and, in meetings, not only turn off the phone but also remove the battery (the microphone could be turned on remotely). Connect to the Internet only through an encrypted, password-protected channel, and copy and paste passwords from a USB thumb drive (never type in a password directly).

Electronic Security a Worry in an Age of Digital Espionage - NYTimes.com: . . . What might have once sounded like the behavior of a paranoid is now standard operating procedure for officials at American government agencies, research groups and companies that do business in China and Russia — like Google, the State Department and the Internet security giant McAfee. Digital espionage in these countries, security experts say, is a real and growing threat — whether in pursuit of confidential government information or corporate trade secrets. “If a company has significant intellectual property that the Chinese and Russians are interested in, and you go over there with mobile devices, your devices will get penetrated,” said Joel F. Brenner, formerly the top counterintelligence official in the office of the director of national intelligence.". . . . "The implication, said Jacob Olcott, a cybersecurity expert at Good Harbor Consulting, was that devices brought into China were hacked. “Everybody knows that if you are doing business in China, in the 21st century, you don’t bring anything with you. That’s ‘Business 101’ — at least it should be.” Neither the Chinese nor Russian embassies in Washington responded to several requests for comment. . . . " (emphasis added)

Greece faces death by a thousand cuts

More on Greece, and its unnecessary and now prolonged suffering:

Greece faces death by a thousand cuts unless it leaves the euro - Telegraph: "Repeated rounds of austerity are proving self defeating, which makes it virtually certain that Greece will eventually have to come back for more. What are Europe's paymasters to demand then? . . . What is more, experience in Argentina and other countries that have both devalued and defaulted suggest that the economic shock of exiting a fixed exchange rate is relatively short lived. Once competitiveness has been restored by devaluation and default, growth prospects improve dramatically. The short sharp shock of exit is very likely better than the death by a thousand cuts implied by continued membership. . . . Consider now what this grim choice of death by a thousand cuts involves. What Greece has in essence committed itself to is an internal devaluation lasting years, if not decades into the future. There is no discernible end to the austerity; year after year, it grinds remorselessly on. Even if everything goes according to plan, which seems deeply unlikely on the record so far, it takes until 2020 to reduce the national debt to 120pc of GDP, a level still far too high to be remotely sustainable. In addition to having to run big primary surpluses into the indefinite future, Greece also faces a massive hit to nominal wages and living standards . . . There is not a hope of Greece growing its way back to debt sustainability while still in the euro. As things stand, capital is leaving the country by whatever means available . . . ."

    

Monday, February 13, 2012

Privacy: Something Lost, Nothing Gained?

You already have zero privacy. Get over it. - Scott G. McNealy CEO of Sun Microsystems Inc (1999)

Worth reading--

They Know You're Reading This - Forbes: "Pennsylvania professor Joseph Turow explains how you’re tracked in the modern world. 'Websites, advertisers, and a panoply of other companies are continuously assessing the activities, intentions, and backgrounds of virtually everyone online; even our social relationships and comments are being carefully and continuously analyzed. In broader and broader ways, computer-generated conclusions about who we are affect the media content — the streams of commercial messages, discount offers, information, news, and entertainment — each of us confronts. Over the next few decades the business logic that drives these tailored activities will transform the ways we see ourselves, those around us, and the world at large. Governments too may be able to use marketers’ technology and data to influence what we see and hear.'

"They are watching. 

"And they know you’re reading this right now. And it’s not like you can just go offline and avoid the tracking. If you get a postcard advertising a lung cancer screening from your local hospital, it’s not by coincidence. Everything about the offline you is being shared across corporations as well. In the age of data mining, it just takes a few clicks to piece together enough information about your age, address, income, and insurance status to figure out if you’re a likely smoker and therefore a good target for a lung screening pitch."

    

Greek lawmakers approve austerity bill as Athens burns

This is all so . . . unnecessary, and unfortunately the Greek politicians are just digging a deeper hole from which Greece will have to climb once it leaves the Eurozone and re-adopts the drachma--

Greek lawmakers approve austerity bill as Athens burns | Reuters: "The Greek parliament approved a deeply unpopular austerity bill to secure a second EU/IMF bailout and avoid national bankruptcy, as buildings burned across central Athens and violence spread around the country. Cinemas, cafes, shops and banks were set ablaze in central Athens as black-masked protesters fought riot police outside parliament. State television reported the violence spread to the tourist islands of Corfu and Crete, the northern city of Thessaloniki and towns in central Greece. Shops were looted in the capital where police said 34 buildings were ablaze. Prime Minister Lucas Papademos denounced the worst breakdown of order since 2008 when violence gripped Greece for weeks after police shot a 15-year-old schoolboy."

I guess never underestimate the egos of the Eurocrats!

    

Sunday, February 12, 2012

Iowa’s joke on all of us

Glad to see the following as there is no justification for having the Iowa Caucus before the Primary States have voted. Iowa should justifiably lose its place in the voting order. Too much is riding on the results of early states, and Iowa is not "up to it" as far as running a reliable election via caucus. In fact, while they are reforming the system--why have any non-binding primary or non-binding caucus elections at all?

Caucus system under fire - Emily Schultheis - POLITICO.com: "The presidential caucus system is under attack after embarrassing contests in Iowa and Nevada put on national display missing ballots, endless counting delays and lots of confusion. The result is Republican activists calling for big change to the antiquated system, particularly to the first-in-the-nation Iowa caucuses. “All the candidates are out there slogging around at Christmastime and New Year’s, and then they produce a non-result result and they can’t even get the count right,” said David Norcross, a former Republican National Committee general counsel and New Jersey GOP committeeman. Norcross told POLITICO that Iowa’s Jan. 3 caucuses were “numbingly stupid.” “How foolish is it for everyone to go to Iowa the first week in January when there are no delegates selected and they can’t even get the vote right? It’s just a joke, it’s Iowa’s joke on you and all of us.”"

    

Obama's biggest vulnerability is not Obamacare

Having listened to about as much of CPAC 2012 as I could stand, I can see why Obama stands a good chance of re-election. That's not to say the President's re-election is assured. He definitely has some problems, but his biggest vulnerabilities have nothing to do with Obamacare or the Catholic Church, but instead issues that are being raised mainly on the left:

Dear Andrew Sullivan: Why Focus on Obama's Dumbest Critics? - Conor Friedersdorf - Politics - The Atlantic: "After reading Andrew Sullivan's Newsweek essay about President Obama, his critics, and his re-election bid, I implore him to ponder just one question. How would you have reacted in 2008 if any Republican ran promising to do the following?

(1) Codify indefinite detention into law; (2) draw up a secret kill list of people, including American citizens, to assassinate without due process; (3) proceed with warrantless spying on American citizens; (4) prosecute Bush-era whistleblowers for violating state secrets; (5) reinterpret the War Powers Resolution such that entering a war of choice without a Congressional declaration is permissible; (6) enter and prosecute such a war; (7) institutionalize naked scanners and intrusive full body pat-downs in major American airports; (8) oversee a planned expansion of TSA so that its agents are already beginning to patrol American highways, train stations, and bus depots; . . . . President Obama has done all of the aforementioned things. . . . . It isn't that I object to Sullivan backing Obama's reelection if his GOP opponent runs on bringing back torture. Is he the lesser of two evils? Maybe so. But lauding him as a president who has governed "with grace and calm" and "who as yet has not had a single significant scandal to his name"? If indefinite detention, secret kill lists, warrantless spying, a war on whistleblowers, violating the War Powers Resolution, and abuse of the state secrets privilege don't fit one's definition of "scandal," what does? If they're peripheral flaws rather than central, unacceptable transgressions, America is doomed to these radical, illiberal policies for the foreseeable future." (emphasis added)

And this is David Seaman, http://www.twitter.com/d_seaman ; Google+: http://profiles.google.com/dseaman, on the same issues: "What if we voted for Barack Obama, a rational moderate, and instead got one of the most irrational, secretive, and authoritarian presidential administrations of the past 100 years? What if Ron Paul and Buddy Roemer are right about the election process and about the erosion of our core civil rights? And what if Barack Obama truly DOES think the Constitution is an outdated joke?"


(David Seaman video)

If conservatives, and others, ever truly woke up to this, Obama might have a real problem being re-elected.

   

Saturday, February 11, 2012

Greek Default is not End of the World

Climax nears in Greek drama | Reuters: "Tortuous negotiations over a second bailout for Greece are set to come to a head on Wednesday, putting fragile market confidence to the test on the same day data is tipped to show the euro zone is entering a mild recession.

While the crazy Europeans continue their state of denial, let's pause for a little reality check. Greece is in default--it is insolvent and cannot pay its creditors. The question is whether the Greeks will continue to agree to the Eurozone's (Germany et al) funding of Greece's payments to its creditors (Eurozone banks et al) and in return submit to further punishment ("austerity") of the Greek people. Hopefully, the Greeks will soon come to their senses--

Krugman Says Greece Will Default on Its Debt, May Leave Euro - Bloomberg: "Greece will default on its debt and will probably quit the European monetary union, Nobel economics laureate Paul Krugman said. “The Greek situation is essentially impossible,” Krugman said at a conference in Moscow today. “They will default on their debt. In fact they already have. The question is whether they will also leave the euro, which I think at this point is more likely than not.”"

Note: leaving the euro doesn't mean leaving the European Union, just the Eurozone.

And the sooner Greece defaults and leaves the euro, the better off the Greeks will be in the long term.

A euro exit is the only way out for Greece - FT.com: "The Greeks will have to leave the euro, recreate the drachma and re-enter the still-existing exchange rate mechanism of the European Monetary System, the so-called ERM-II, which they departed in 2001."

Oh, and who owns the Greek debt? Go here and here. Biggest losers outside of Greece: Germany and France--surprised?

    

Friday, February 10, 2012

Obama’s greatest vulnerability as a leader

Well worth reading--

Noam Scheiber: Obama’s Brush With Political Disaster: The Inside Story Of His Worst Year | The New Republic: ". . . Obama’s greatest vulnerability as a leader. . . . For voters contemplating whether he deserves a second term, the question is less and less one of policy or even worldview than of basic disposition. Throughout his political career, Obama has displayed an uncanny knack for responding to existential threats. He sharpened his message against Hillary Clinton in late November 2007, just in time to salvage the Iowa caucuses and block her coronation. He condemned his longtime pastor, Jeremiah Wright, just before Wright’s racialist comments could doom his presidential hopes. Once in office, Obama led two last-minute counteroffensives to save health care reform. But, in every case, the adjustments didn’t come until the crisis was already at hand. His initial approach was too passive and too accommodating, and he stuck with it far too long. Given the booby traps that await the next president—Iranian nukes, global financial turmoil—this habit seems dangerously risky. Sooner or later, Obama may encounter a crisis that can’t be reversed at the eleventh hour. Is Obama’s newfound boldness on the economy yet another last-minute course-correction? Or has he finally learned a deeper lesson? More than just a presidency may hinge on the answer."

Thursday, February 9, 2012

Romney and Tax Policy: hardly bold enough

Somebody needs to level with the American people. Obama, from his State of the Union speech, is not going to do it. The voice crying in the wilderness, Ron Paul, is ignored by the majority of voters (Democrat, Independent and Republican), but Bowles Simpson and the credit downgrade and Ben Bernanke's warnings are consistent--U.S. fiscal policy is unsustainable and on a disastrous path. Here's the whole truth neither Democrats nor Republicans want to admit: spending is too high and revenue is too low. The recommendations of Bowles Simpson is comprehensive reform of both entitlements and the tax code (fairer, simpler, etc.).  When I go to mittromney.com and look for his position on tax policy this is what I get:

“The best course in the near term is to overhaul and to dramatically simplify the current tax code, eliminate taxes on savings for the middle class, and recognize that because we tax investment at both the corporate and individual level, we should align our combined rates with those of competing nations. Lower taxes and a simpler tax code will help families and create jobs.”
(Mitt Romney, No Apology )

OK, but when I drill down to his policy statement (see below)--"a flatter, fairer, simpler structure" is, unfortunately, only a "long-term goal" not "near term" as stated above.  Memo to the Romney campaign: "long-term goal" means to the average voter "it's never going to happen." Romney's campaign better re-tool if they are serious. Reality: whoever is elected President would probably only be able to accomplish comprehensive reforms of entitlements and the tax code in the first twelve months of his term. (Suggestion: my recommendation on fiscal reform which provides for the complete elimination of payroll and self-employment taxes.) (Also note: Romney offers no specifics on "entitlements reform" other than "block grant Medicaid and pursue further entitlement reform."--whatever that means.)

Romney's tax policy statement from his website:
Romney Tax Policy























   

Wednesday, February 8, 2012

Romney needs to get serious and credible

Yes the 3 primaries last night may have been almost meaningless in terms of delegates awarded, but I think Rick Santorum may have done Newt Gingrich in and shown Ron Paul, despite his loyal following, can not win even one primary or caucus: (source http://www.google.com/elections/ed/us/results)

Colorado Caucus Results
Colorado Caucus Results

Minnesota Caucus Results
Minnesota Caucus Results

Missouri Primary Results
Missouri Primary Results























All delegates awarded through today:
Romney: 107
Santorum: 45
Gingrich: 32
Paul: 9
(Total needed to nominate: 1,144)

Yes, even after last night, Romney has more delegates than the next 3 candidates combined!  Nonetheless, last night showed its time for Romney to get serious and credible, and make his best case why people should vote for him.  I've summarized this with the following 3 excerpts (note: the 3rd excerpt below dates from the McCain--Obama campaign):

What the Republican "Establishment" wants-- WSJ.com by Peggy Noonan: "They want to reform the tax system and begin reining in the entitlement spending that is bankrupting us. They don't read him (Romney) as the guy who can perform those two Herculean jobs, each of which will demand first-rate political talent. And shrewdness. And guts. Mr. Romney doesn't have the establishment in his pocket. He needs to win it. All the more reason for him to get serious now. If he is serious."

The Crisis Facing Mitt Romney - Forbes: "Romney needs to do what he has yet to do so far: outline a clear, unambiguous program on why he should be President, what he would do differently, and how he would get America going again. This means he needs to outline four things. He needs to explain how he would create jobs, how he would revitalize the economy, how he would balance the budget, and how he would restore America’s leadership in the world. Romney cannot simply attack President Obama, and in increasingly strident language, talk about how our country has fallen back. The American people, while certainly very unhappy with how the country has been governed, give the President at least some credit, and give President George W. Bush some blame to this day. Rather, the American people are looking for Romney to offer something he hasn’t yet: an alternative vision of how he would govern America and a clear sense of what leadership would and should look like under current circumstances. The likely Republican standard bearer needs to articulate a clear sense of ideas, directions and policies about what America needs to get moving again."

"What is your vision for AmericaCalling Obama a Socialist proves nothing germane to most voters while allowing the Obama camp to claim they're the victims of a smear campaign or are being targeted by ignorant racists. The truth is that voters don't care about political labels. They want to know two things about a candidate: 1. Can I trust this person to make good decisions that protect my interests? 2. How will the vote I cast on election day directly impact my life?"

It's clear Obama does not intend to exercise leadership and try to fix the long-term fiscal problems of the U.S. which can only be done by comprehensive entitlements reform and comprehensive tax reform (see my reform proposal). I've yet to hear or read how Romney (or for that matter any of the Republican candidates) propose specifically to do that.  I will say that Romney (and the rest of the Republicans, excepting Ron Paul) are wrong if they think we can continue to support a bloated Department of Defense and Obama deserves credit for his streamlining thus far of DOD.

So Romney (and Santorum et al), the clock is running--it's time to put up or shut up!

Tuesday, February 7, 2012

Punk Economics: Lesson 1 [video]


What's wrong with Merkozy's plan for the Eurozone?
David McWilliams, Irish economist, gives us our first lesson in punk economics.

     

"That’s what people elected you to do"

Federal Reserve Chairman Ben Bernanke, Feb. 7, 2012
Federal Reserve Chairman Ben Bernanke











"Although historical experience and economic theory do not indicate the exact threshold at which the perceived risks associated with the U.S. public debt would increase markedly, we can be sure that, without corrective action, our fiscal trajectory will move the nation ever closer to that point. To achieve economic and financial stability, U.S. fiscal policy must be placed on a sustainable path that ensures that debt relative to national income is at least stable or, preferably, declining over time. Attaining this goal should be a top priority." (Bernanke testimony before Congress) http://www.federalreserve.gov/newsevents/testimony/bernanke20120202a.htm

Ben Bernanke may be the last honest public servant in Washington. Although only monetary policy is the domain of the Federal Reserve, the Chairman nonetheless has, more than once, warned Congress and the President that they need to take action as soon as possible to correct U.S. fiscal policy:

Bernanke Defends Fed’s Approach - NYTimes.com: "Republicans sought Mr. Bernanke’s affirmation that the jobs market remains very bad and that the economy remains in poor shape. Mr. Bernanke gave his assent. Democrats asked Mr. Bernanke to acknowledge that economic conditions are improving, and he did this, too. Mr. Bernanke also continued to emphasize the need for Congress to set a long-term plan for deficit reduction, saying that this should be done “as soon as possible.” “We clearly need some major changes in our fiscal planning, in our fiscal path going forward,” he said. Both parties were stymied in their efforts to extract his support for their approach to creating such a plan. Republicans want to balance the federal budget primarily through spending cuts, while Democrats say the government must increase tax collections too. Mr. Bernanke, pressed repeatedly, was blunt in response: “That’s what people elected you to do,” he said."

    

Monday, February 6, 2012

Caveat Romney: Obama Campaign on Lookout

As I've said before, the Republicans will either nominate Mitt Romney and have a chance of winning the White House or nominate someone else and ensure the re-election of Barack Obama.  The Obama campaign knows this--

Obama Campaign on Lookout for Romney Flubs - NYTimes.com: "In the rarefied world that is dedicated to getting Mr. Obama re-elected, the battle has never been viewed through the prism of how to beat Newt Gingrich or Rick Santorum or Ron Paul. It has always been about Mitt Romney. . . "

A Republican nomination of Gingrich, Santorum, or Paul would be a gift to the Democrats and Obama campaign.

However, as I've also said before, "If nominated, Romney's election would not be guaranteed--he would have to run a "smart" campaign." What I should have said is the general campaign, in the eyes of the Obama campaign, has already begun, so Romney's recent flubs, while not determinative of the outcome, hardly rate as "smart campaigning." Romney and Obama have miles and miles yet to go. May the best man win.

    

Romney Country

Full and Final Results from Nevada (source: politico.com)

2012 Nevada Republican Caucus Results














   

Sunday, February 5, 2012

Nevada: different state, same issues, same winner

Nevada, a different state than Florida in many ways, yet the issues and outcome were the same last night:

New York Times: ". . . Mr. Romney was hoping that a strong victory in Nevada, four days after a commanding finish in the Florida primary, would strengthen his hand among Republicans who remain skeptical of his candidacy and his conservative foundation. And there were some encouraging signs for him in polls of Nevadans entering caucus sites on Saturday, conducted by Edison Research for the National Election Pool of television networks and The Associated Press. He won with a broad coalition of voters that included groups that he has struggled with in previous contests, including very conservative voters, strong Tea Party supporters and evangelical Christians. The state has the largest share of voters who call themselves strong Tea Party supporters of any of the states that have participated in the Republican nominating contest so far. These voters are considered a vital part of Mr. Gingrich's coalition, yet Mr. Romney won a higher percentage of them than did Mr. Gingrich, according to the entrance poll. More than 4 in 10 of the caucusgoers surveyed on Saturday said the quality that mattered most to them in a candidate was his ability to beat Mr. Obama in the fall; nearly three-quarters of those voters said they backed Mr. Romney. The top issue on the minds of caucusgoers on Saturday was the economy, and 6 in 10 of those who listed it as their leading concern voted for Mr. Romney, potentially bolstering him in his argument that his experience as a businessman makes him the best candidate to improve the employment rate quickly. . . ." 

I would also note that Romney is overwhelmingly winning women voters--reportedly 60% of women voters in Nevada voted for Romney.

Gingrich is having a hard time facing the truth. His "news conference" was a sad commentary on a "has-been" politician on his way to becoming a vindictive, bitter old man. If he's half the politician and "historian" he claims to be, he ought to take a long, sober look at the results in Florida and Nevada.

   

Saturday, February 4, 2012

More on the Obama "Fudge" Jobs Report

More on the Obama Administration's "Fudge" Jobs Report:
US jobless rate falls to lowest level for three years - Telegraph: " . . . there was, inevitably, plenty in the report that offered support for those taking a more cautious stance. The Bureau of Labor Statistics had its annual revision of the total size of the potential working population, which helped flatter Friday's numbers. Another less encouraging indicator was that average hourly earnings edged up only 0.2pc on the month, a pace that economists say is not strong enough to do much for consumer spending. . . "

Comment to the above article:
The only reason the official UE rate "fell" to 8.3% is because 1.2 million workers were removed by BLS from the availalble labor pool during the month. This is the largest single-month drop in history. The Labor Force Participation Rate is now at a 30-year low of 63.7%. That is ABYSMAL!

This was NOT a good report. Far from it. Other measures of unemployment suggest that the actual UE rate increased to 11.5% while measures used prior to 1995 suggest an actual UE rate greater than 22%. (See:http://www.shadowstats.com/alt... )

As one analyst put it, "In fact other than January 2009 there has never been a single month in my table, which dates back to 1999, that put up a worse combined number. This "performance" rates a literal "second from utter despair and disaster", and the employment rate shows it:... This is not a strong report folks, and in fact documents an actual and ongoing collapse in the US labor force, despite the crooning on the mainstream media disinformation channels!" See: http://market-ticker.org/akcs-...


Even the liberal economist Paul Krugman knows it's "fudge"- Better - NYTimes.com:  "The usual caveats apply: it could be a blip, it might be an artifact of seasonal adjustment, etc.. Also, the gap remains huge. Suppose that we need 100,000 jobs a month to keep up with population growth, and that we’re 10 million jobs in the hole — both conservative estimates. Then we need about 7 years of growth at this rate to restore full employment."

   

Friday, February 3, 2012

The "Obama Fudge Jobs Report"

As a follow-up to my "Washington Fudge" post on the "January Jobs Report" (they're "fudging" the numbers):

Santelli on the "shrinkage"

Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low | ZeroHedge: "Submitted by Tyler Durden on 02/03/2012 08:51 -0500: A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million."

If you want the truth about the "Obama Fudge Jobs Report," look at the charts posted at Zero Hedge or here or read this.

    

January jobs report--"Washington Fudge"

You think the January jobs report is good news? You better think again--they're "fudging" the numbers in Washington--no surprise since this is an election year.  My source? How about Floyd Norris in the New York Times--

Wow. But Is the Number Real? - NYTimes.com: "How many jobs did the American economy add in January?

The Labor Department estimated on Friday that the economy gained 243,000 jobs.

The department also estimated that the economy lost 2,689,000 jobs in the month.

The difference in the two numbers is in seasonal adjustment. Employment always falls in January, as temporary Christmas jobs end. So the government applies seasonal adjustment factors in an effort to discern the real trend of the economy apart from seasonal fluctuations. The actual survey showed the big loss in jobs. The seasonal adjustments produced the reported gain of 243,000 jobs.

A reason to doubt the number is that there has been a tendency in this cycle for the seasonal factors to overstate moves, in both directions. Labor mobility is down, as fewer workers quit to seek better jobs and employers both hire and fire fewer people than they used to do. If the seasonal adjustment was too large, then the gain should be smaller."

In other words, the economy lost jobs last month. But the Obama administration creates a "positive report" by using unreliable "seasonal adjustment factors." Well, at least Floyd Norris in the New York Times isn't fooled. How about you?

    

Why the Early U.S. Didn't Go the Way of the Eurozone

Great article in Bloomberg on early U.S. history and how the Europeans failed in designing their currency--excerpt below:

Why the Early U.S. Didn't Go the Way of the Euro: Echoes - Bloomberg: "We usually don't think of the U.S. as a monetary union, but early in its history it essentially was. Unlike the crisis-wracked euro zone, the dollar zone survived its first few decades without a major crisis, providing the fragile young republic with a period of relative stability during which it began to congeal culturally, economically, politically and militarily. European policy makers hoped that the euro would serve as the unifying and integrating force of the European Union much as, they believed, the dollar had for the early U.S. What the Europeans failed to appreciate was that early America's real glue was not its dollar union but its fiscal one." . . . "So what kept the new nation together? First-rate economic statesmanship, not a shared unit of account. In the early 1790s, Treasury Secretary Alexander Hamilton defined the dollar in terms of gold and silver, but more significantly he established the taxes and institutions (collection system, central bank) that made it possible for the national government to service its own debts and those of the states. Assumption of state debts, as it was called, was positioned not as a bailout but rather as a way of ensuring that each state shouldered the burden of the Revolutionary War equally. Just as importantly, assumption made bondholders beholden to the national government, cementing the union together as Hamilton predicted it would. The U.S. Constitution effectively prevented state governments from endangering the monetary union by prohibiting them from issuing money or making anything other than gold or silver a legal tender. The Constitution didn't enjoin the states from incurring debt but -- with the exception of assuming war burdens -- the early national government refused all responsibility for state debts. . . "

    

The Big Picture

Financial Crisis - The Telegraph

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