Posted 10:21 PM by Robert

One, Two, Three

Mr. Bush's aides do not seem especially concerned about the prospect of a veto [in the Security Council]. But they concede they do not know if they have the votes to pass what one official called "a clearly worded resolution." Several officials expressed fear today that the deep divide over Iraq that has already triggered a crisis within the NATO alliance — a formal meeting of NATO ambassadors was called off today — may soon engulf the European Union.

The United Nations, NATO and the EU. The existence of each one threatened by Franco-German meglomania, denialism and obstructionism.

This is not necessarilly a bad thing.

Posted 8:27 PM by Robert

Fabricated?

The reliability of "lie detectors" (polygraphs) is often successfully condemned.

But when an informant reporting that al Qaeda is preparing to set off a "dirty bomb" in New York or Florida fails a polygraph test, to some people it's suddenly "the fabricated report."

Strange it is. Passing strange.

Posted 5:35 PM by Robert

How International Law Evolves

Japan has warned it would launch a pre-emptive military action against North Korea if it had firm evidence Pyongyang was planning a missile attack. Defence Minister Shigeru Ishiba said it would be "a self-defence measure" if North Korea was going to "resort to arms against Japan". Mr Ishiba said it would be too late if a North Korean missile was already on its way.

So "firm evidence Pyongyang was planning a missile attack" is enough for even Japan? Is there no need for firm evidence Pyongyang was planning an imminent missile attack? Isn't the magic word under international law supposed to be "imminent?"

Just an oversight, Mr. Ishiba? Or did the vision of, say, a large number of burning suburban Osaka housewives spur a reconsideration of the legal standard?

And is that a "plan" with or without contingencies, Mr. Ishiba?

Posted 5:10 PM by Robert

All About The Oil ...?

Lynne Kiesling thoroughly and elegantly shows that it is for some, ... but Max Boot shows that does not include the United States.

Posted 2:59 PM by Robert

Confections

This post should not be read in any sense as taking pleasure from Senator Kerry's medical condition, and I wish him a fast recovery. Nor would I wish a condition such as his on him or anyone else.

That being said, I note that the Senator has energetically presented his condition and surgery as minor. On its face, this post abides by the Senator's energetic presentation of his condition. But I admit to disingenuousness here, because the main point of this post is that Senator Kerry's presentation of his condition should not be believed without a great deal of additional proof.

The Senator presents his condition and surgery as posing no substantial impediment to his ability to run or serve as President. His doctor has fulsomely confirmed his patient's politically convenient self diagnosis. But his medical condition is potentially very serious. The same disease demolished Michael Milken's life and that of many other men, and was a major reason why Rudy Giuliani withdrew from his Senate campaign in 2000. The Giuliani precedent in particular indicates that Senator Kerry's current representations - even on their own terms - are manipulative. He is now attempting improperly to harvest public sympathy for his condition and surgery without cultivating the doubts that should inevitably come with that sympathy. The Senator is now publicaly showing insufficient respect for his own medical condition, and there is no good reason he should not be criticized for what he is doing now. There is no need to wait for his recovery - or for a indication that he is having more trouble recovering than he is now saying he expects - to point out fully what he is about. If one is supposed to be inhibited in criticizing him at the time of his surgery, then shouldn't one be all the more inhibited at the time he experiences "unexpected" complications? Is one only allowed to criticize Senator Kerry on this point if it all turns out for the best?

The Senator has established a substantial record of promulgating other energetic confections to advance his Presidential ambitions, including his preposterous claim to have been illuminated from within by a Jewish heritage which he has been concealing for fifteen years - and is now denying he has concealed. That misrepresentation is manipulative and serious, and shows that the Senator is perfectly willing to misrepresent his deepest and most personal characteristics. One should also keep in mind his multi-decade misrepresentation (also now denied) in highly-Irish Catholic Massachusetts that he has Irish Catholic heritage. As noted above, the Senator's medical condition is probably more uncertain than he is saying. But there is good reason to believe that if the Senator simply doesn't know whether his condition will be an impediment, or even if he affirmatively knows that it will be an impediment, he would misrepresent his knowledge to the public.

Given the Senator's record and the nature of his disease, nobody is justified in accepting the representations about his condition or prognosis, or those of his doctor, at face value.

Posted 10:40 AM by Robert

Why Only Audio?

Some people have speculated that, assuming the recent bin Laden tapes are genuine, they are audio rather than video because bin Laden looks bad. Posited injuries are the usual explanation.

But the Evening Standard reports:

US intelligence officials believe Osama bin Laden has altered his appearance as he moves to escape capture in the mountainous region between Afghanistan and Pakistan. This is why he no longer addresses his supporters on videotape.

Posted 7:43 PM by Robert

Mr. Greenspan Reports, Again

The New York Times reports some additional comments from Alan Greenspan:

But where Mr. Greenspan inveighed about the dangers of deficits on Tuesday, he played down those concerns today and asserted that the worst of the budget problems would only arise once the current generation of baby boomers began to retire in 2010.

"Actually, it turns out that we do not really have a fiscal problem of moment until we get beyond the end of this decade," he said.

Mr. Greenspan said the $300 billion deficits projected by the White House for this year and next were "modest" in relation to the size of the economy, and that the country's longer-range budget problems, caused by a projected surge in Social Security and Medicare spending, would occur "with or without the president's program."

Mr. Greenspan was warmer today than on Tuesday about the president's dividend tax proposal. He said that eliminating taxes on most stock dividends would "almost surely increase the aggregate of economic activity" over the long term and might provide a small immediate boost as well.

"I strongly support it," he told the committee.

Mr. Greenspan predictably continues to cleave to his opinion that no short term stimulus is needed, and the White House predictably begs to differ. But the net effect of the dialogue can only be to reduce the significance of the whole "short term stimulus" necessity - a necessity which the Democrats have made the centerpiece of their criticism of the Bush proposals.

The Times also reports Democrats said Mr. Greenspan had refocused the debate on the implications of Mr. Bush's proposal for the budget deficit in the long run, a shift that they said would help them alter the plan to make it smaller, temporary and focused more on lower and moderate income people who needed the help most. That is a preposterous construction of Mr. Greenspan's comments. Those are the same "short term stimulus" considerations that the Democrats have been hawking - exactly what Mr. Greenspan says we don't need. If the question were put to him with directness, I think he would publicly and with as much directness disabuse tthe nation and the media of the Democrats' silly interpretation of his intent.

Posted 6:25 PM by Robert

Another Economists Letter To Congress ...

... about the proposed tax cuts, but not the letter you have been reading about. This one supports the tax cuts. Three Nobelists signed along with 112 other economists.

Link from Trend Macrolytics

Posted 4:53 PM by Robert

Batty Over Baghdad

Maureen Dowd blathers: "Osama bin Laden came to the rescue of George W. Bush yesterday."

She seems to be ventilating her frustration over Osama bin Laden just blowing away all her good efforts, and the good efforts of those like her, to obscure and deny the willingness of al Qaeda and Iraq to work together even though they don't like each other and don't go to mosque together on Fridays.

The immediate object of Big Mo's venom was bin Laden's tape urging Moslems to do whatever they could to stop and kill Americans, especially the coming American troops, apparently including suicide actions. Big Mo characterizes the Administration's decision to replay the tape this way:

So the Bushies no longer care if Osama sends a coded message to his thugs as long as he stays on message for the White House?

So to this New York Times columnist an exhortation to Iraqis to resist and kill Americans and American troops stays on message for the White House.

God is she sick. Obscene batty blather – and lots of it.

UPDATE:

Batty Big Mo blathers about her concern that:

In the past, Condi Rice has implored the networks not to broadcast the tapes outright, fearing he might be activating sleeper cells in code. But this time the administration flacked the tape. And Fox, the official Bush news agency, rushed the entire tape onto the air.

But buried deep with another New York Times story is the following explanation:

One senior intelligence official said that analysts had determined that it was unlikely that any secret code was on the tape. Instead, the official said that the taped message was in its entirety a "go signal."

That a determination of such sort had been made was already obvious to all but Big Mo. But Big Mo was apparently miffed because the tape was replayed to the American public, thereby undoing all her hard work obscuring and denying the willingness of al Qaeda and Iraq to work together.

Boo Hoo Big Mo!

Posted 4:13 PM by Robert

Mr. Greenspan Reports

The Chairman of the Federal Reserve Board is not hired or employed to be the head of anyone's sale's department. And he is not, and no sensible person has accused him of being, a partisan hack. His advice and opinions have their own policy considerations and agendas, which are only related - but not identical - to those of Congress or any Administration. At least that is the way things are supposed to work. Yesterday, they did.

Just what did Mr. Greenspan say before Congress yesterday? The New York Times reports that his comments ... were a serious blow to the Bush administration, and the Times opinion is reflected in much of the media. Is that correct?

No.

Mr. Greenspan's comments were a serious blow to the Bush administration's economic plans only if one thinks the Administration was counting on Mr. Greenspan to be the head of its sales department - a partisan hack. But Mr. Greenspan did no real harm, and, properly construed, provided considerable cover for the Administration's efforts.

Perhaps the major attack - especially from the Democratic side - on the Bush proposals has been that they do not provide much short-term stimulus. Mr. Greenspan agreed with this. For that matter, Milton Friedman, who is a big supporter of the Bush plan, agrees with this. No sensible person could seriously disagree with this. The Times sees Mr. Greenspan's statement as bad for the Administration. But anyone who thought that Mr. Greenspan was likely to come before Congress and argue that the Bush tax proposals would give the economy a big short term jolt, notwithstanding all the evidence and theory to the contrary, and also notwithstanding that to say such a thing would have eviscerated his credibility, was just being silly. The sillies apparently included one or two Republican Senators. Too bad.

But Mr. Greenspan went two steps further:

First, he argued that the economy doesn't need short term stimulus now. In fact, such stimulus might be counterproductive:

"I am not one of those who is convinced that stimulus is desirable policy at this point. ... My own judgment is that fiscal stimulus is premature."

If Mr. Greenspan is right, and the economy doesn't need short term stimulus, it's not much of a criticism of the Bush plan that it doesn't deliver such stimulus in big doses. So Mr. Greenspan really pulled the rug out from under one of the major arguments being made against the Bush plan. Moreover, the Bush tax plan doesn't exist in a vacuum. The Democrats have proposed their own plan, which they say has much more short term simulative punch than the President's does. That's just the punch Mr. Greenspan says we need to avoid. So is Senator Daschle happy with Mr. Greenspan? I don't think so.

Second, Mr. Greenspan clearly accepts that the elimination of "double taxation" of dividends will foster growth, which will help every American. This undercuts a second major argument against the Bush tax cuts: that they will not foster growth, but merely benefit a few well-positioned rich people.

It's true that Mr. Greenspan focused more on the potentially adverse effects of deficits (including on long term interest rates) than does the administration, and that his endorsement of the dividend tax cut was coupled with his recommendation that it be "revenue neutral." His position here is probably overly conservative. Given a set level of government spending, until actual solvency risks are encountered, how can it not be better for the government to obtain funding through fully voluntary borrowings than through only taxation, whose voluntariness is limited to the effectiveness of organs of representative democracy not particularly designed for economic efficiency?

But Mr. Greenspan heads the Federal Reserve Bank - and in that capacity he has as one of his main constituencies current long term holders of long term debt. Even if it would be better for the economy as a whole for the government to borrow more at the cost of increasing interest rates, such an increase in long term interest rates would likely disproportionately hurt this constituency, which in large but silent measure counts on Mr. Greenspan to watch out for them. This is one point where the Fed's own agenda and policies are relevant in understanding its representative's positions before Congress. Similarly, the testimony of, say, the undersecretary of veteran affairs before Congress must be construed in light of the fact that he or she in some ways represents veterans.

Further, as support for its assertion that Mr. Greenspan bluntly challenged the administration's contention that big budget deficits pose little danger or that the government can largely offset them through faster economic growth, the Times cites to these remarks:

"We are all too aware that government spending programs and tax preferences can be easy to initiate or expand but extraordinarily difficult to trim or shut down."

and

"Faster economic growth, doubtless, would make deficits easier to contain. But faster economic growth alone is not likely to be the full solution to the currently projected long-term deficits."

But these comments seem best construed as expressing first, that more growth is needed and that eliminating "double taxation" of dividends will deliver some growth, and, second, an imperative to get federal spending under control - no matter how it is financed (including "tax preferences" - which the Times seems to mistakenly believe is a reference to Mr. Bush's tax cut proposals). That's a message very hostile to the traditional Democratic approach. So, again, is Senator Daschle happy with Mr. Greenspan? Again, I don't think so.

In sum, if I were Mr. Bush, I wouldn't be crossing Mr. Greenspan off my Valentine chocolates list just yet.

MORE

Posted 2:47 PM by Robert

Dirt Under The Desert Sheets?

One theory that has gained some currency as to why France and Germany are opposing an Iraq incursion, even to the point of endangering their memberships in NATO, is that an incursion would result in the release of evidence that both countries have unseemly and/or illegal dealings with Iraq not already known.

This theory seems improbable, to say the least, although such dealings might well exist beyond what the public knows.

But it is highly likely that the United States and British intelligence services are already aware of any such dealings - which would have to be recorded in both Iraq and Europe. If the United States already knows of such dealings, then persistent Franco-German intransigence only increases the risk that Washington or London will release the information to the public. Such a move would delegitimize the arguments of both countries and, more importantly, create a high risk that highly placed individuals in French and German governments - including Messrs, Chirac and Schroeder - would be disgraced and/or displaced.

So any relevant clandestine dealings would have to be so secret that neither Washington nor London could know about them. But such dealings are presumed to be commercial in nature, not defense secrets or the like. Maintaining airtight security on a major commercial project to the point of deceiving both the United States and Britian is a fools errand. For example, are all the project's communications supposed to evade monitoring and be kept in strictest code? Iraq couldn't even manage that for the United Nations inspector burlesque. One could go on and on.

In my view, the proponents of such theories should dream a better dream.

Posted 12:44 PM by Robert

Saint Kenneth, Holy Fool II

Tom Maguire asks whether Kenneth Lay and Enron may have legal problems separate from the allegations of insider trading against Mr. Lay from which the New York Times and, apparently, the Justice Department have now backed off.

Of course they could, technically. Even the Times article points out, for example:

None of this means Mr. Lay may not ultimately face criminal charges. Prosecutors may decide that he structured his selling to hide his actions improperly from the market or was aware of nonpublic information that should have led him to halt his trading. They could also conclude that he is criminally liable for some other element of Enron's collapse. But prosecutors are said to be close to a decision on whether to charge Mr. Lay, and there has been no indication that they have pursued other avenues.

The point here is not that Mr. Lay or Enron is now shielded from all possible criminal liability. What the Times is saying is that there is no evidence that Mr. Lay didn't think that Enron was every bit the company he said it was in his public statements. Technically, Enron has its own disclosure obligations under the Exchange Act, as a public company, for example. Enron's Exchange Act reports (including the financial statements with those now notorious footnotes) essentially contain what the public knew about Enron - up to materiality. An "insider trading" charge is nothing more than a charge that Mr. Lay knew material facts that the public didn't know. Mr. Lay read those Exchange Act reports. So in the real world a conclusion that Mr. Lay didn't engage insider trading is practically the same as saying that Mr. Lay thought the facts contained in the Exchange Act reports were materially correct and complete. And, practically, that means that he cannot be charged criminally with causing Enron to lie to the public. Other possible charges against Mr. Lay also fall apart practically in the dame way - even the ones that aren't technically tied to the "insider trading" allegations.

That's probably why the Times reports: there has been no indication that [prosecutors] have pursued other avenues against Mr. Lay. And it's also probably why John C. Coffee Jr., a securities law expert at Columbia University told the Times that "This would be a case that the government would normally shy away from." That's an understatement. In fact, if the Times story is accurate, further action against Mr. Lay would be evidence of government obsession.

And, speaking of obsession, all those silly Paul Krugman allegations go out the same practical window the same way:

Mr. Lay should be indicted? Really? Why should a man who personally believed that his company's reports to the public were correct be indicted? Is it possible Mr. Lay committed some crime which warrants his indictment? Of course it is. It's also possible that Herr Doktorprofessor Krugman committed some crime which warrants his indictment. But there appears to be no substantial evidence that either of these men committed any such crime. So I will not call for either of them to be indicted.

Enron may have "defrauded" its investors while breaking no law? If so, then its Chairman and Chief Executive Officer got defrauded in the same way - and lost a lot of money because of it. Are new laws necessary to protect the public from public companies employing devices that "fool" their own top management? Please. Life is too short and even angels have to prioritize which pin heads they use for ballrooms.

Enron bought "split dollar" insurance on Mr. Lay, which may protect some of his assets from his creditors now that Enron has gone "belly up" (to use the technical Krugmania term)? The whole point of the Times article was that Mr. Lay believed in his company and didn't think it was anywhere near going "belly up" - so this is highly unlikely to have been a motivating factor in the decision to by the policy, a very common perk. Mr. Lay lives in Texas - which has an unlimited homestead exemption. yet he maintained second homes in Colorado and other places. If he wanted to shelter assets against a possible "belly-upping" of Enron, why didn't he sell those other homes and buy or build a bigger primary home in Texas? Also, Herr Doctktorprofessor doesn't mention any split-dollar insurance on Mr. Fastow. But he would have been the first to know that Enron was at risk of "belly upping" and his assets were and are the most exposed.

But, more centrally, how does Herr Doktorprofessor Krugman justify demonizing a man who believed in his company? Of course, technically the Krugmania charges may be able to survive for the moment. Many of Enron's finanical footnotes and structured finance transactions technically may have complied with disclosure standards.

It is still possible that Mr. Skilling or Mr. Fastow or even other board members or officers may have caused Enron to lie to the public. Mr. Fastow is by far the most exposed. But, as I point out in a prior post, letting Mr. Lay go is probably making Mr. Fastow and his lawyers very happy indeed. For example, if Mr. Fastow caused Enron to defraud its investors and violate its Exchange Act disclosure requirement, then he must have done it in a way that eluded Mr. Lay's knowledge and securities trading pattern. But regardless of whether a Chief Financial Officer thinks his company os going "belly up," it's not usually considered a career-advancing strategy for the Chief Financial Officer of a public company to keep his Chairman in the dark and cost him lots of money while exposing him to potential criminal and civil actions under the securities laws. That's not a conclusive argument, of course. But it probably is "reasonable doubt."

But, as I have pointed out previously, the most significant aspect of current coverage of the Enron matter is that Enron failed. That means there are very few people now with incentives to defend Enron or its operatives. The money in such activities is scarce - so even where good arguments exist, they don't get out very well or quickly. It's a lot easier for most people just to condemn Enron and argue that whatever economic entity or interest that is providing one's incentives isn't like Enron at all.

Posted 10:38 PM by Robert

Sometimes That Light You Feel Inside Isn't What You Think It Is

''I am so excited ... A light has literally turned on within me -- like an epiphany -- and I am proud to share this special measure of connection with you.''

- Senator John Kerry to the American Israel Public Affairs Committee during a dinner last week at Congregation B'nai Israel of Palm Beach. ''


Democratic presidential candidate John Kerry will have his prostate removed Wednesday after being diagnosed with "a very early, curable" form of cancer...

- Associated Press Tuesday, February 11, 2003


In 1555 Mary [of England] announced that she was pregnant and that the baby was due in June 1555. ... We now know that Mary probably had cancer of the womb.

- Bloody Mary - Counter Reformation

Posted 7:38 PM by Robert

So Many Loose Ends

As noted below, even the New York Times has decided that former Enron Chairman Kenneth Lay probably did not engage in insider trading when he sold many of his Enron shares. That means that Mr. Lay probably did not have material inside information when he sold.

But if the Chairman and Chief Executive of Enron didn't have material information not shared by the public, how likely was it that other Enron Board members or even the sad Mr. Duncan knew more? Did Mr. Duncan plead guilty to obstructing an investigation that he never expected to turn up anything material? That would certainly go a long way to justify the Andersen jury's refusal to accept Mr. Duncan's confession. And how likely is it that Arthur Andersen generally knew anything material in connection with the matter for which it was destroyed by the Department of Justice for obstructing its investigation? - and this conviction obtained on the basis of an incorrect construction of the law and jury and court error.

But surely this New York Times article is making Andrew Fastow and his attorneys very, very happy - especially since they now have extra time to incorporate these developments into his defense.

How many juries are going to easily listen to the government admit that there is not enough evidence to charge Mr. Lay - but Mr. Fastow belongs in the slammer? Beyond a reasonable doubt? Really? It could happen.

But would anyone plan to make a buck - or a career - betting on it?

MORE: One might ask why the Times finds religion now. The only big, public, active aspect of the Enron matter now that I know about is Mr. Fastow's trial. That trial is probably going to be a government disaster, in my opinion. (The Times says, for example: "The sides agreed to establish a room where all lawyers could have access to the paperwork, which ... numbers in the hundreds of thousands of pages." If one need hundreds of thousands of pages to make a case against an individual, there's almost certainly a reasonable doubt.) If that is true, my guess is that both sides can already feel it coming. The Times may be picking up leaks out of that. That would explain why the story runs now. But, of course, that's just speculation. [Thanks to Don Luskin for raising this point.]

Posted 3:40 PM by Robert

Saint Kenneth, Holy Fool

The New York Times runs what seems to be a big "never mind" about the very same Kenneth Lay malfeasance about which the Times, especially, has hyperventilated so much. The new Times absolution says that Kenneth Lay actually believed in his company right up to the end:

IT has become an indelible moment of the recent corporate scandals: Kenneth L. Lay, then chairman and chief executive of Enron, encouraging employees in the summer of 2001 to buy company stock, even as he was secretly unloading much of his own stake. ...

Enron employees accused him of betrayal. Members of Congress demanded his indictment on insider trading charges. The event even figured in a recent television movie about Enron as evidence of corruption at the company's very top.

But this story of a hypocrite unmasked suffers from one significant flaw: it appears to be untrue.

A review of previously undisclosed personal records... as well as interviews with Mr. Lay's financial advisers and other witnesses in the government's investigation indicates that Mr. Lay retained his faith in the company virtually until its collapse. .... "This would be a case that the government would normally shy away from," said John C. Coffee Jr., a securities law expert at Columbia University. .... [P]rosecutors are said to be close to a decision on whether to charge Mr. Lay, and there has been no indication that they have pursued other avenues. .... Mr. Lay ... structured [his] finances with an apparent view that [his] compan[y] would never stumble. .... Mr. Lay ... would be able to marshal reams of records to provide proof that he was caught unaware by his company's downfall. ....

That differs sharply from the story put forward early last year, after many news organizations, including The New York Times, reported that Mr. Lay had sold large numbers of shares as he urged others to buy. Many people seized on those facts as evidence of duplicity, not accounting for other possible explanations.

Fancy that.

Regular readers of the Man Without Qualities may be aware that a certain skepticism is expressed here from time to time regarding the general media coverage of the Enron matter. Of course, this skepticism has incurred the displeasure of certain rather overwrought commentators, especially those unburdened by substantial familiarity with finance or management.

But it was Paul Krugman who, in a series of brilliant columns, first proved by algebra that Mr. Lay obviously must have known that Enron was headed for disaster, and, in fact, that the former Enron Chairman is the incarnation of evil itself - columns which, by the way, eventually served as the basis of a particularly effective subplot on "Buffy the Vampire Slayer." There was this:

Time magazine's persons of the year are three whistle-blowers: Sherron Watkins of Enron, Cynthia Cooper of WorldCom and Coleen Rowley of the F.B.I. They deserve to be celebrated. After all, thanks to Ms. Watkins ... Ken Lay .... ha[s] been indicted.... Oh, I'm sorry. None of that actually happened. ... Time seems to be celebrating what should have been, not what was.

And this:

Enron executives may have deluded and defrauded their shareholders without actually breaking the law. ... [T]he absence of Enron indictments, demonstrates just how much self-enrichment corporate insiders can get away with while staying within the letter of the law."

And, of course, this:

[T]he use of "split-premium" life insurance policies ... give[s] executives largely tax-free compensation (you don't want to know the details) — is an even sweeter deal for executives of companies that go belly up: it shields their wealth from creditors, and even from lawsuits. Sure enough, reports The Wall Street Journal, former Enron C.E.O.'s Kenneth Lay and Jeffrey Skilling both had large split-premium policies.

Does the Times know that Herr Docktorprofessor Krugman has been dividing by zero in his algebra exercises again? It won't be the first time the Times has had to withdraw some anti-Enron Krugmania.

Link thanks to Dr. Manhattan

MORE: Don Luskin has more.

NOTE: To avoid confusion, the Buffy reference above is a tounge in cheek reference to Krugman's demonization of Lay. There is no real connection between Krugman's column and any Buffy subplot - not even the one in which the Mayor turns out to be a demon worshipper who turns into a huge snake demon, although that's the one I had in mind.

STILL MORE: And, of course, it's hard to see how this infamous Krugmaniacal ranting squares with Mr. Lay acting in good faith:

The Enron scandal, on the other hand, clearly was about us. It told us things about ourselves that we probably should have known, but had managed not to see. I predict that in the years ahead Enron, not Sept. 11, will come to be seen as the greater turning point in U.S. society.

All that from an honest mistake? Gee.

Posted 9:58 AM by Robert

About That Shay

The Blogoshere's own God of the Machine, Aaron Haspel casts interesting Olympian lightning bolts against the Brahmin from Olympus, Oliver Wendell Holmes Jr. - who would, no doubt, have welcomed every electron volt in the Haspel essay. Well worth reading, even if one doesn't end in agreement on a single point.

One quibble. In a literal parenthetical, Aaron - clearly no one-trick pony - notes:

The son is lionized, the father is neglected. Oliver Wendell Holmes Sr. was a physician, poet and essayist, professor of anatomy and physiology at Harvard Medical School, a pioneer of the bacterial theory of disease, author of the still-entertaining miscellany The Autocrat of the Breakfast Table and the greatest poem ever written about engineering, "The Wonderful One-Hoss Shay," in which more wisdom can be found than in his son's complete works.

I agree that "The Wonderful One-Hoss Shay" is a wonderful poem. However, I do not agree that it is "about engineering." Indeed, The Wonderful One-Hoss Shay has a very specific reference: it is about the utter perceived collapse of American Calvinist New England Protestantism almost exactly one hundred years after the Lisbon earthquake of Seventeen hundred and fifty-five. Lisbon was widely considered to be the most Godly city in the world, even by Protestants (it didn't hurt that England and Portugal had a close relationship dating back hundreds of years, a relationship which, among other things, helped each against the Spanish - but that's a different story).

In 1755 Lisbon and most of the rest of Portugal was essentially leveled by one of the worst earthquakes in history. This fact resonated through the West. Voltaire said that as a reasonable humanist he "refused to accept" the earthquake. Other people had other reactions - many of them quite interesting, intense and colorful. As the poem puts it:

Seventeen hundred and fifty-five.
Georgius Secundus was then alive, --
Snuffy old drone from the German hive.
That was the year when Lisbon-town
Saw the earth open and gulp her down,

In America, the New England Protestants had their own interpretation of the earthquake: God was showing the world that what the world thought was "Godly" just didn't measure up to divine standards at all. So the New England Protestants set about redesigning their Calvinist faith:

It was on the terrible Earthquake-day
That the Deacon finished the one-hoss shay.

By extension, they redesigned their society (the "shay"), methodically:

Have you heard of the wonderful one-hoss shay,
That was built in such a logical way

But a curious thing happened, New England got rich and increasingly sophisticated after the 19th century got going, and the shay began to wear out:

EIGHTEEN HUNDRED; -- it came and found
The Deacon's masterpiece strong and sound.
Eighteen hundred increased by ten; --
"Hahnsum kerridge" they called it then.
Eighteen hundred and twenty came; --
Running as usual; much the same.
Thirty and forty at last arrive,
And then come fifty, and FIFTY-FIVE.

By widespread perception and agreement, the 1755 reforms all fell apart about 100 years after they were initiated:

It ran a hundred years to a day,
And then, of a sudden, it -- ah, but stay,
I'll tell you what happened without delay,
Scaring the parson into fits,
Frightening people out of their wits, --
Have you ever heard of that, I say?

American Protestantism has never been the same since the middle of the 19th Century (Holmes exaggerates the precision of the date of collapse). Seventh Day Adventists, Mormonism, Unitarianism and many, many other new or revitalized religions emerged from that mid-19th-century religious "Big Bang."

And the religious universe is still expanding.

Others may have their own reactions, but reading such a clever poem makes me feel as dumb as a hoss.

MORE: Oliver Wendell Holmes, Sr. fans may enjoy this new book.

Posted 8:56 PM by Robert

Estrada Follies

There are reports that many Democrats are concerned that obstruction of Miguel Estrada's appointment to the United States Court of Appeals for the District of Columbia is playing right into the Administration's strategy to pull Hispanics to the Republican side.

Given widespread public hostility to Senate filabusters, it's not hard to see how the Republican leadership has become so comfortable with the Democrats using that dubious and highly public device in what is bound to be an ultimately unsuccessful attempt to block the nomination.

Posted 4:22 PM by Robert

Build More Nuclear Plants

That's what a new Royalty Society paper says, especially if one accepts that "global warming" is being triggered by human carbon dioxide emissions:

Britain's national academy of sciences is urging the Government to end its self-imposed moratorium on the building of nuclear power stations when it publishes its Energy White Paper later this year.

The Royal Society, the UK's leading scientific body, says in a statement issued today that doing nothing on nuclear power is not an option if the Government wants to cut emissions of carbon dioxide, the main greenhouse gas. A failure to end its silence over nuclear power and commit itself to replacing Britain's ageing power stations will leave the Government with only two options: either it can boost fossil fuel consumption, which will result in a rise in greenhouse gases, or it can abandon nuclear power for good and opt for a massiveinvestment in renewable sources of "green" energy, the Royal Society says.

....

The UK could do better in terms of using renewable sources of energy, such as wind, solar and tidal power, as well as cutting down on waste by improving energy efficiency. "However, most experts agree that the UK target of generating 10 per cent of electricity from renewable sources by 2010 is already very ambitious," the Royal Society says.

Current moratoria on the building of nuclear power plants are on a collision course with expanding worldwide power needs and the aging of now existing plants. This pending crisis is concealed from the public consciousness largely because existing plants continue to function. That will cease to be the case within the next ten to twenty years.

At which point the main effect of the moritoria will be that we will all get to see just how fast a large number of new nuclear power plants can be built.

Link from Mike Daley.

UPDATE: While the Royal Society is expressing its skepticism at Britain producing 10% of its electricity from renewable sources, Senator Kerry has dropped from his enironmental boilerplate his preposterous assertion that 20% of the United State's electricity could be generated from alternative and renewable energy sources by the year 2020. Perhaps one of Senator Kerry's aides pointed out to him that when one is running for president one's preposterous claims get more attention.

Posted 1:52 PM by Robert

Some Economists And The Bush Tax Plan

Reuters reports:

Economists led by 10 Nobel laureates on Monday attacked President Bush's $695 million tax-cut proposal, arguing that the cuts fail to address the problems facing the U.S. economy and will add to long-term budget deficits. Their signed statement, [will] run this week as a full-page advertisement in the New York Times ....

Economic growth that is not sufficient to generate jobs, corporate scandals, business overcapacity and uncertainty continue to weigh on the U.S. economy, the statement said.

"The tax plan proposed by President Bush is not the answer to these problems. Regardless of how one views the specifics of the Bush plan, there is wide agreement that its purpose is a permanent change in the tax structure and not the creation of jobs and growth in the near term. The permanent dividend tax cut, in particular, is not credible as a short-term stimulus, said the statement, signed by more than 400 economists.

This seems an odd comment. It seems pretty clear that the permanent dividend tax cut is not a credible short-term stimulus. In fact, very good arguments are made often that fiscal policy is almost never a good short term stimulus. If the tax plan proposed by President Bush is not the answer to these problems, then what do these 400 worthies want Mr. Bush to do? Odd that the Reuters summary omits any constructive suggestions.

But the proposed tax cut is probably good long term structural reform directed at long term growth. So it is curious that the Reuters summary also omits any statement on that point. And one wonders what the evidence is that corporate scandals continue to weigh on the U.S. economy.

It will be interesting to see if the actual statement is as incoherent as the Reuters summary suggests. It is not auspicious that the Nobel laureates include Joseph Stiglitz (a Bill Clinton adviser) or that the statement is sponsored by the Economic Policy Institute, a liberal Washington think tank.

UPDATE:

Here is the full text of the statement and here are the signers (Nobel Laureates come first). Not all Nobel Laureates are created equal. One should keep in mind that the Prize is handed out by a bunch of collectivist Scandanavians and reportedly further skewed by the influence of past Laureates - so the selection is seriously politically biased to the left. That's why Milton Friedman's Prize is worth vastly more than, say, Robert Solow's. The Laureates who signed this statement are not so interesting in this context - although, obviously, each of them is very talented in his own corner of economics - but most of those fields do not focus on taxes. It is actually more interesting to consider the Nobel Laureates and other prominent economists who apparently refused to sign. There is, for example, exactly one signature from a University of Chicago faculty member (Sidney Davidson - who does not appear to be a member of the Chicago Economics Department Faculty, although he is an emeritus professor of accounting of the Chicago Business School).

But perhaps the most curious aspect of the expressed opposition to the elimination of the "double tax" on dividends is this:

As tax reform, the dividend tax cut is misdirected in that it targets individuals rather than corporations, is overly complex, and could be, but is not, part of a revenue-neutral tax reform effort.

It would certainly be better, simpler and more tax efficient to eliminate the corporate income tax. The problem is that if that were proposed, the Democrats would go hog-wild accusing the cuts of targeting corporations rather than individuals. Congressional Democrats should seize on the insights reflected in this statement and themselves propose the repeal of the corporate income tax - even as part of a "revenue-neutral tax reform effort." Senator Kerry, for example, already wants to repeal "double taxation" of dividends - and this statement says he should do it by targeting corporations, not individuals.

The statement provides no support for this highly politicized assertion:

Passing these tax cuts will worsen the long-term budget outlook, adding to the nation’s projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further inequalities in after-tax income.

In sum, my guess is that this silly statement will be having very little practical effect.

FURTHER UPDATE: Don Luskin has more.

Posted 10:22 AM by Robert

Cause of Disney Decline Discovered At Last?

The Man Without Qualities has suggested that the root cause of the decline of the Walt Disney Company may be "pump head."

Now, an astute reader points out that the cause of "pump head" may have been found!

Specifically, a report by Duke University Medical Center claims that gastrointestinal bacteria are the culprit for cognitive impairment following bypass surgery. Bypass surgery requires use of a heart-lung machine. Gut bacteria release endo-toxins that cause an increase in inflammatory response associated with the heart-lung machine which leads to greater cognitive dysfunction.

So it comes to this: bacteria intended by nature to influence only the processes that result in the production of human feces are having a profound effect on the products of Michael Eisner's brain.

As astute reader notes: Who says doctors don't do science? Exactly so.

Posted 8:33 AM by Robert

More On That Zany New Franco-German Proposal

The Franco-German laugh riot continues!

Hans Blix rejected European suggestions that more inspectors would help him. "The principal problem is not the number of inspectors but rather the active cooperation of the Iraqi side," he said.

I wonder if Messrs. Chirac and Schroeder would get the message if three of the lead inspectors chanted this message over Franco-German radio in unison.

Posted 9:04 PM by Robert

Mickey Can Relax

Mickey Kaus has more than once expressed concern that the President has not completely persuaded Peggy Noonan with respect to Iraq. ["President Bush may or may not have won the Peggy Noonan Primary on Iraq. (Sorry, Lucianne! -- Noonan still seems not-yet-quite-on-board regarding the need for war to me, which would trouble me if I were Bush.)"]

Well, now it seems that Mickey can relax a bit.

Posted 10:23 AM by Robert

Medical Science

The Man Without Qualities recalls when one of his brighter friends - at the time a biochemistry doctoral student at Rockefeller University in New York, from which he eventually obtained his degree and went on to great things and another story - expostulated in frustration: "Medical doctors just don't do science ... they don't do scientific research. They say they do it ... but they just don't." He had just returned from a joint project team meeting between his group and some University medical researchers. It took several margaritas and some excellent duck at Zarella's, then our favorite Mexican restaurant, to calm him down. In the process he emitted many unflattering words in the direction of what he termed "so-called medical research." "Cargo cult" and "Potemkin village" and the like were heard frequently that evening.

Since that dinner I have listened to more than a few biochemists, biologists and even physicists complain that medical doctors and medical researchers don't do or really understand science. This contempt is usually heaped up along with the counsel: "But don't ever say that to them - it just enrages them!" Yes, I am told, medical doctors and medical researchers use science, but so do municipal engineers - but engineers don't annoyingly claim to be scientists. And, yes, I am also told, medical doctors and medical researchers sometimes get repeatable results - but so do political consultants. And while they claim a lot of absurd things, Dick Morris (for example) does not claim that his craft is "science." So by this analysis, both engineers and political consultants are more bearable than medical doctors and medical researchers.

Having listened to so many such complaints over many years, it is really pretty funny to read the web site of the now notorious Professor Dini (who, by the way, is not a medical doctor but a biology Ph.D., according to his website), which includes the following passage:

The central, unifying principle of biology is the theory of evolution, which includes both micro- and macro-evolution, and which extends to ALL species. How can someone who does not accept the most important theory in biology expect to properly practice in a field that is so heavily based on biology? How can someone who does not accept the most important theory in biology expect to properly practice in a field that is so heavily based on biology? It is hard to imagine how this can be so, but it is easy to imagine how physicians who ignore or neglect the Darwinian aspects of medicine or the evolutionary origin of humans can make bad clinical decisions. The current crisis in antibiotic resistance is the result of such decisions.

It is certainly true that most modern evolution theories are "synthetic" - meaning that they attempt to integrate micro-evolution and macro-evolution.

But Professor Dini's comments are odd, because it doesn't seem to be necessary to appeal to evolutionary forces to explain the ongoing creation of antibiotic-resistant bacterial strains ("superbugs"). Whatever other necessary components there may or may not be to "evolution," both natural selection and mutation are clearly central today. But the "superbug" bacteria that medicine is dealing with (or, worse, not dealing with) today are the results of only natural selection. Pre-existing resistent minority strains and bacterial conjugation seem to be what most experts think is going on. Mutations (and "evolution") is not needed. That is not the same as saying that mutations cannot occur - or be induced by radiation or chemical mutagens - which cause bacteria to become resistant to antibiotics. But such mutations are not widely believed to be the source of the "superbugs."

Further, it's worth noting that many of the "superbugs" seem to be arising out of massive, deliberate, almost continuous, knowing overuse of antibiotics - most notoriously among the prostitutes in Bangkok, which has been the source of several of the recent "superbugs." That is, while it is true that "the current crisis in antibiotic resistance is the result of ... decisions" to disregard natural selection effects in administering antibiotics, it is also true that those decisions are largely made by people who fully believe in evolution and know perfectly well what they are doing is creating "superbugs" - and don't care.

The HIV virus and other viruses do mutate a great deal, creating major natural selection effects. Those facts are widely viewed as essential to understanding how viruses work. So by some definitions of "evolution" understanding some fairly basic concepts about viruses does require accepting "evolution" as some people define it.

But it does not seem to require accepting "evolution" as other people define it. For example, some people who are very serious skeptics about "evolution" think that "evolution" (as they define it as the object to their skepticism) is more than just mutation plus natural selection - they define it in terms of complexity and information content. Such people don't agree that the HIV virus or other viruses "evolve" when they just mutate because they don't think mutation (even mutation that brings propagation success to the organism) alone means that that the virus becomes more "complex" or contains more "information". Personally, I haven't found many biologists (although there certainly are some) or any medical doctors who have a clear understanding of information theory. [Steve Verdon points out to me by e-mail that some 'intelligent design" proponents have a nasty habit of moving the goal in this area, which seems almost inevitable given the informal defintions that seem to proliferate in this set of arguments.]

In the above discussion I have linked to two articles written by a fairly serious skeptic of evolution. I do not mean to suggest that I agree with those articles - certainly not that I agree with everything in those articles. My point here is to note what seems to be a recurring feature of the "evolution" debate: absence of rigorous, agreed upon definitions.

It constantly surprises me how intense this body of arguments routinely becomes without the principals seeing the need to rigorously define their terms.

MORE: It is worth noting that the wonderful "Pitfalls of Information Theory" web page maintained by Thomas D. Schneider, a research biologist (apparently not an MD) who runs a lab focusing on Molecular Information Theory within the National Cancer Institute Laboratory of Experimental and Computational Biology, points out (among an almost unbelievable selection of other fantastic things):

Information theory and molecular biology touch on a huge number of topics... As a result there are many ways that one can get into intellectual trouble and many of these are widely repeated in the literature. ... Not everything that is in the literature is correct!

The very first "pitfall" listed by Doctor Schneider - is using ambiguous or poor terminology - and one of his first examples of poor terminology is the term "complexity," a term used extensively in the "intelligent design" debates. Dr. Schneider also describes some fairly serious technical mistakes made by William Dembski - a chief proponent of "intelligent design" theory - in the book No Free Lunch.

Dr. Schneider also points out that his computer simulation does suggest that "information" as mathematically defined by Claude Shannon can be generated by Darwinian evolution (that is, replication plus mutation plus selection). Here's more.

Steve Verdon has a very interesting list of related materials.