Promoted from Community News, where Joy posted it after finding it at Hot Air:
That’s essentially the sentiment behind this piece from a British MEP last week, and my language is actually a bit saltier than that, especially for the credit rating agency kabuki that has been going on over the past few days.
Here is the credit rating agency idiocy: and no, I’m not calling the rating agencies idiots (unless they don’t follow through with what they should). The specific details don’t really matter to most reading this, but if you want to get an idea of the background, here:
- The Rating Agencies are Displeased
- S&P Throws the ECB a Lifeline?
- The Greeks are Doomed With or Without a Loan
That’s probably enough of a flavor. All the major credit rating agencies have Greece at the lowest possible rating without being declared in default. Default means something specific for specific bonds – it means you can’t or won’t pay the promised cashflows in the full amount on time. (Yes, it can get more nit-picky than that.) It doesn’t matter if the creditors “voluntarily” “forgive” part of the debt — if you don’t pay the obligations, it’s a default. And it’s pretty important for the credit rating agencies to stick to their definitions on this, because quite a bit does depend on it.
So what the Euro politicians and the ECB (what’s the diff?) have been trying to do is to keep crafting something that won’t totally soak the EU with costs (i.e., they don’t want to pay off all the Greek debts… hell, would you?) but they are trying to rope other groups into putting an imprimatur on it. The ECB/eurozone figures if they’re going to spend their reputation on Greece, they might as well drag some private parties down with them. And there’s nothing in it for the credit rating agencies–their reputation was already badly burned with the structured financial products meltdown. When you try to get them to say a default isn’t a default on something not so esoteric…. then people are not going to trust them at all.
Because there are contracts that depend on credit rating agencies’ announcements of default. Say… oh… credit default swaps. There will be a lot of extremely pissed-off people if they find that the CDSs they have are worthless because the credit rating agencies can be bought off politically. Because some of the most active credit-protection products out there are against debt issued by governmental bodies, whether at the municipal level or the sovereign level.
Anyway, the Euro bigwigs have been monkeying with these deals for over a year, I’d say. They come up with something new, waggle their eyebrows at the credit rating agencies, and the credit rating agencies sniff at the polished dog turd and say “Hmmm, still smells like shit to us.”
Let’s hear from the ever-spicy Financial Times on this brou-ha-ha:
But this is the same Mr Trichet that has placed the fate of Greece–and arguably the entire euro project–in the hands of these rating
agencies. The ECB has said it would not accept Greek collateral in its
liquidity operations if Greece was downgraded by the agencies to
default or selective default. This week, S&P said it would lower
Greece’s rating to selective default if a plan by banks to roll over
their Greek debt holdings were implemented. Analysts believe the
entire Greek banking system, whose borrowings from the ECB were about
€100bn last month, would topple if the central bank stopped accepting
its collateral. But the effects of a Greek banking collapse could be
more far-reaching. Investors fret about the exit of Greece from the
euro and even the break-up of the single currency.
All this puts rating agencies in an uncomfortable position. The agencies themselves support efforts to reduce official use of ratings. But their ratings are hardwired into large parts of the financial system, from bank capital rules to investor mandates on what they can own.
The ECB’s position sums up where we are in the euro crisis. Policymakers are caught in a knotty web of semantics that brings to mind Alice Through The Looking Glass. In that book, Humpty Dumpty remarks: “When I use a word it means just what I choose it to mean–neither more nor less.”
Authorities seem to have lost sight of what they ultimately want to achieve. Investors and some former policymakers that have left the fray are clear on this: a proper default with big haircuts for investors, or some kind of guarantee from the rest of Europe for Greece’s huge debt pile is needed. The end result of this unseemly situation is a near-universal belief among investors that the ECB will have to back down and still accept Greek collateral.
And for an alternate view, I present without quote or comment: Time for Flush Germany to Put Europe First.
Bruce McQuain takes on the sticky subject of just how much basic research should be conducted by the Federal government, and just what Dwight Eisenhower would have thought of the coziness that now exists between academia and Washington, D.C.
Those of you who write grants for a living will want to place your hands over your ears and chant “la la la la la la, I can’t hear you.” The rest of you can read on from Bruce’s entry in Q&O:
If you’re any student of history, you’re aware of the speech President Eisenhower gave upon his leaving the presidency. It is often referred to as the “Military/Industrial complex speech”.
In it he warned against the future problems we’d encounter by the establishment of a permanent “military/industrial complex” (something we’d never had prior to WWII).
But are you also aware he warned against the establishment of something else that it took WWII to create (think Manhattan Project)? You’ll recognize it immediately:
Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.
In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.
Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.
The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.
Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific technological elite.
It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system — ever aiming toward the supreme goals of our free society.
. . . [I]t is something which has indeed come true and is alive and well in the current “science” of global warming.
Then add this – because this hasn’t been changed or disproven. From S. Fred Singer’s book, “Unstoppable Global Warming – every 1500 years” (2007, 2008):
…[T]he Antarctic ice cores tell us that the earth’s temperatures and CO2 levels have tracked closely together through the last three ice ages and global warnings. However, CO2 has been a lagging indicator, its concentrations rising about 600 to 800 years after the temperatures warm. Oregon State climatologist George Taylor explains the significance of this fact:
Early Vostok analysis looked at samples centuries apart and concluded correctly that there is a very strong relationship between temperatures and CO2 concentrations. The conclusion for many was obvious: when CO2 goes up, temperatures go up, and vice versa. This became the basis for a number of scary looking graphs in books by scientist Stephen Schneider, former VP Al Gore, and others, predicting a much warmer future (since most scientists agree that CO2 will continue to go up for sometime). Well, it’s not as simple as that. When the Vostok data were analyzed for much shorter time periods (decades at a time rather than centuries), something quite different emerged. Huburtus Fischer and his research team from the Scripps Institute of Oceanography reported: “the time lag of the rise in CO2 concentrations with respect to temperature change is on the order of 400 to 1000 years”. In other words, CO2 changes are caused by temperature changes.
Yet somehow the science has been perverted over the years to now characterize CO2 as not only a current indicator of warming but a cause of warming. As far as I’ve been able to determine, what is written above has yet to be disproven or disputed.
So here we are with a government which is interested in increasing revenue by literally creating a tax out of thin air, and we have a well funded government “science” – a $103 billion dollar “gravy train” (that figure was quoted quite often at ICCC6) and we wonder why we’re getting the conclusions we’re getting from those scientists?
Ike was a pretty smart guy. He saw all of this coming from way off. Whenever government takes control of science (or any other field) to serve its purposes by providing huge incentives to do so, it’s going to get what it wants. And it has, at least to a point. What it hasn’t gotten, however, is indisputable truth concerning its theories concerning CO2. That means its taxation scheme is dead.
However, as long as it continues to fund science and scientists with massive amounts of money, it will provide tremendous incentive to get at least a portion of those who call themselves scientists to serve government’s policy aims. That’s incredibly dangerous. . . .
We need to get government out of science. Wasn’t this the administration which said it was going to “restore” science to its proper place? That proper place is without government subsidy or, as we’ve experienced through the AGW fiasco, “[t]he prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money …”, perverts science and makes it a servant to political policy. That, friends is infinitely more dangerous to our freedoms than the military/industrial complex.
I have mixed feelings about this, because there are some areas where one can at least argue that government-subsidized research has done humanity an awful lot of good–the biological sciences come to mind, and I think this despite the fact that I know the Center for Disease Control (to cite the obvious example) is not above making policy proposals that are informed by a progressive mindset. And yet, when there is an outbreak of highly infectious disease, we trust the CDC to recommend appropriate quarantines, and we know that although they are paid by the people of the U.S., they track diseases all over the world.
And they have to: when it comes to certain viruses and bacteria, this is a pretty dimunitive planet.
I also want to know how the human brain works, and how much of what we are is determined by genetics. I’m cool with the government chipping in to figure out the cerebral cortex and the coding of DNA.
But climate science is so flagrantly politicized that researchers’ bread is only buttered on one side: the side of apocalyptic scenarios, and malevolent carbon dioxide hiding under our collective beds in the dark. The whole thing has become completely absurd, and there is no reason that a government as broke as ours should be supporting the nomenclatura merely because they possess Ph.Ds.
And you’ll recall that the costs of wrong-headed policies based on a misreading of global warming are very, very high, particularly in developing countries. Attitudes that simply lead us to recycle silly things a bit compulsively here in the richer countries cause death and starvation elsewhere in the world.
We have the means to fund more research privately; when it comes to more controversial issues, we ought to make this happen, rather than letting middle-class taxpayers be the pawns in the great debate over greenhouse gasses.
Mexican officials and legislators are starting to get very very angry about Operation Fast and Furious, which after all killed a lot more Mexican citizens than it did Americans.
U.S. Officials Behind ‘Fast and Furious’ Gun Sales Should Be Tried in Mexico, Lawmaker Says
While the investigation continues into the U.S. operation that helped send thousands of guns south of the border, Mexican lawmakers say they’ll press for extradition and prosecution in Mexico of American officials who authorized and ran the operation.
“I obviously feel violated. I feel my country’s sovereignty was violated,” Mexico Sen. Rene Arce Islas told Fox News. “They should be tried in the United States and the Mexican government should also demand that they also be tried in Mexico since the incidents took place here. There should be trials in both places.”
Arce is chairman of Mexico’s Commission for National Security, a congressional panel similar to the U.S. Senate Judiciary Committee.
His point of view is shared by many Mexican politicians, including Sen. Santiago Creel, a former Interior Minister and the likely presidential nominee next year of the National Action Party to succeed Felipe Calderone, also of PAN.
“I think we should at least try to prove that what happened in Mexico must be sanctioned by Mexican laws and under our sovereignty,” Creel told us. “What can’t happen is that this now ends on an administrative sanction, or a resignation. No, no, no. Human lives were lost here. A decision was made to carry out an operation that brought very high risk to human lives.”
Also, we’ve learned from Jake Tapper and the crowd at Sipsey Street that while the President isn’t angry about the loss of life in Operation Fast and Furious, he takes it seriously. So, the dead have that going for them . . .
TAPPER: About the Fast and Furious program, I know that there is this investigation going on internally. Weapons from the Fast and Furious program are now showing up in the United States attached to criminal transactions. The ABC station in Phoenix last week reported on several of these weapons from Fast and Furious turning up in crimes. How come we know so little — the public knows so little — about this program? And what is the administration doing to get to the bottom of these weapons, which are now showing up in crimes in the United States?
CARNEY: I think there’s an investigation going on precisely to get to the bottom of this. And I can’t comment further on it because there is an investigation going on.
TAPPER: Can the acting head of the BATF be permitted to go to Capitol Hill to testify? My understanding is that the — that he’s not been allowed by the administration to go there and explain what’s going on.
CARNEY: I’ll have to refer you to Justice on that. I’m not — I don’t have any information on that.
TAPPER: It’s not something that you guys are worried about and incensed about? This is something that —
CARNEY: Well, Jake, I think it’s being investigated for a reason. And obviously, it’s a matter of concern, and that’s why there’s an investigation. But it would be a mistake for me to comment further on — or to characterize further what happened or — you know, how — to rate our unhappiness about it from here. So I think that I have to refer you to the Justice Department for that.
TAPPER: It — lastly, I mean, we have heard at times, you know, when the president was upset about something — “plug the damn hole” is one such anecdote that was shared exclusively with every single person in this room by the White House. Did you — is this president upset about this? I mean, this is a government operation where now weapons — I mean, the Mexicans are upset that guns are now turning up –
CARNEY: I think you could assume that the president takes this very seriously.
TAPPER: No one’s lost their job.
CARNEY: And we don’t — there’s an investigation going on, so to comment on people’s jobs and that sort of thing is inappropriate. But the president takes it very seriously. I think he made clear when the — during the Mexican state visit and the press conference he had then that he found out about this through news reports. And he takes it very seriously.
BTW, the Sipsey Street Irregulars should be your daily stop for news about the Gunwalker Scandal; they are all over this story.
It’s a startling, counter-intuitive thought for conservatives. But let’s at least look at the idea.
Steven Hayward makes the case; be sure to hear him out:
I think taxes should be raised sharply on the middle class and the poor, many of whom currently pay almost no federal income tax at all, while cutting the capital gains tax, the corporate income tax, and the highest marginal income tax rates. Feel a little better? I thought not.
But here’s the case: one problem with our current tax policy is that at the moment the American people as a whole are receiving a dollar of government for the price of only 60 cents. (I don’t say a “dollar’s worth of government,” but let’s leave that snark for another time.) Any time you can get a dollar of something at a 40 percent discount, you are going to demand more of it. My theory is simple: if the broad middle class of Americans are made to pay for all of the government they get, they may well start to demand less of it, quickly.
There’s corollary point to this. Back in the Reagan years, there was a vigorous internal debate about whether to resist tax increases because “starving the beast” would hold down spending. But evidence is now in: this strategy doesn’t work. My witness on this point is the Cato Institute’s chairman, William Niskanen (who was chairman of Reagan’s Council of Economic Advisers at one point, and a person whose libertarian credentials are hard to beat). Niskanen noted this striking finding in a Cato Policy Report a while ago:
In a professional paper published in 2002, I presented evidence that the relative level of federal spending over the period 1981 through 2000 was coincident with the relative level of the federal tax burden in the opposite direction; in other words, there was a strong negative relation between the relative level of federal spending and tax revenues. Controlling for the unemployment rate, federal spending increased by about one-half percent of GDP for each one percentage point decline in the relative level of federal tax revenues. . . One implication of this relation is that a tax increase may be the most effective policy to reduce the relative level of federal spending.
Other economists have reached the same conclusion. In other words, if you want to limit government spending, instead of starving the beast, serve the check. . . . Right now the anti-tax bias of the right has the effect of shifting costs onto future generations who do not vote in today’s elections, and enables liberals to defend against spending restraints very cheaply. Time to end the free ride.
A debate on how to raise taxes might actually be fun to have with liberals, because their only idea—
eattax the rich—doesn’t produce anywhere near enough revenue to fund their programs. Of course, the “tax the rich” slogan is just a cover so they can raise taxes on everyone, but why not smoke them out on this by agreeing?
Read the whole thing; it’s not long, but there’s more that you need to see there.
UPDATE: Megan McArdle worries about the negotiations, and the possibility of a default on the national debt.
Ed Morrissey reports:
“Is GM falling into old, bad habits?” asked one industry analyst when the backlog data for General Motors was made public yesterday. The bailed-out automaker now has a growing inventory in its truck lines of 122 days worth of sales, nearly twice that of its non-bailout domestic competitor Ford Motors for similar lines. With sales flattening in the auto market, GM has now returned to the high inventory of its pre-bailout condition . . .
“It’s unbelievable that after this huge taxpayer bailout and the bankruptcy that we’re right back to where we were,” Nesvold, who has a “hold” rating on the stock, said in a telephone interview. “There’s no credibility.” In a research note he asked: “Is GM falling into old, bad habits?”
GM says that the answer to the question is “no,” but there are other similarities noted by Bloomberg in this analysis. A former chief sales analyst calls GM’s line “dated,” and now predicts that GM will have to heavily discount in the fall to move the moribund inventory. The pickup line hasn’t changed since 2006. Ford, in contrast, began offering a V-6 engine on its trucks as an option and has been rewarded with significant movement in inventory.
The federal bailout of GM only made sense if the automaker’s difficulties entirely sprang from the financial collapse (caused mainly by government intervention in housing and financial markets through Fannie and Freddie junk bonds), and had been both competitive and profitable without it. That was obviously not the case; GM had struggled for years against foreign and domestic competition. The bailout forced GM to make some long-needed changes, such as consolidation of its product lines, as well as allowed the company to benefit from a politically-engineered bankruptcy that left the legacy benefit issues largely on the backs of taxpayers.
However, the basic management issues remained and apparently still do.
Read the whole thing.
There was a story in the Washington Post this weekend by David A. Farenthold about the House GOP’s decision to do away with votes on symbolic resolutions like this one:
“The resolution, as offered, acknowledges how vital bees and other pollinators are to our ecosystem,” said Rep. Alcee L. Hastings (D-Fla.), advocating for the resolution on National Pollinator Week last July. He spoke for three minutes and 51 seconds.
“I urge all of my colleagues to become members of the Congressional Pollinator Protection Caucus,” Hastings said.
All members of the House were summoned for a vote, which came out 412 to 0 in favor of the pollinators.
Now, to be clear, I honor and esteem pollinators as much as the next girl, but this is a bit silly, isn’t it?
“I do not suspect,” House Majority Leader Eric Cantor (R-Va.) wrote to other legislators, “that Jefferson or Madison ever envisioned Congress honoring the 2,560th anniversary of the birth of Confucius or supporting the designation of national ‘Pi’ day.”
In the previous two years, the House had honored both–and a great deal more. In 2010, the roughly 260 commemorative resolutions accounted for 36 percent of all the bills the House passed. That was a sharp difference from the 1960s, when they accounted for less than 10 percent of legislation.
One can easily imagine how these novelty votes might provide our public servants with a welcome respite from the grueling, day-in, day-out work of power-grabbing and pocket-picking, but 36 percent seems like a bit much. It’s not only a waste of time and “resources” (if you can use that term for some of our congressional reps’ time), but it doesn’t even keep them out of trouble.
And even when they’re just legislating commemoratively, they’re getting it wrong:
For other recipients, the lack of a House resolution was less of a blow. “We never got it in time anyway,” said John Janik, the president of the National Flag Day Foundation in Waubeka, Wis. In past years, Janik said, Congress usually worked so slowly that its official resolution would arrive after the ceremonies for the June 14 holiday were over.
But the real punch line is that the House has merely ended the voting on symbolic resolutions; members continue to spend their time and our money on the House floor expatiating upon the virtues of backcountry airstrips, college dance marathons, and square hamburgers. And the Senate–that world-class center of bloviation where no one has ever tired of the sound of his own voice–is still resolving away:
This year, the Democratic-controlled Senate has gone on passing resolutions. On Thursday, it declared July 23 “The Day of the American Cowboy.”
What chumps we are for tolerating these people. The Legislative Branch is a joke, and it’s on us.
Cross-posted at P&P.
The Ronald Reagan Presidential Foundation has been doing stellar work in reminding us about the most important thing President Reagan accomplished: defeating the slavery of Eastern European-style communism. That is, as some might suggest, a big effing deal. In some ways, it was the deal: the pivotal deal.
Over the past week, Reagan statues went up in Hungary, the Czech Republic, Poland, and Hungary. And now, one went up in the gardens outside the American Embassy in London (the embassy will be moving soon, though not the statue of Reagan, nor the ones of FDR and Dwight Eisenhower).
Passers-by at the American Embassy, in the heart of London’s upscale Mayfair district, were greeted Monday morning by the disembodied voice of Ronald Reagan drifting through the air from large speakers — a prelude to the unveiling of a $1 million bronze statue of the former president here to commemorate the 100th anniversary of his birth.
In defiance of the usual Fourth of July sentiments, American and British flags were intertwined and placed into perfectly trimmed hedges in leafy Grosvenor Square. Hundreds of guests demonstrated the much-vaunted special relationship by lining up patiently, in the accepted British style, for American cuisine in the form of Fresh ’n’ Tasty Jumbo Hot Dogs and Dippin’ Donuts.
As the brass band of the United States Army Europe struck up “America the Beautiful,” an assembly of grandees — most of them conservatives like Reagan’s former speechwriter, Peggy Noonan, and former Secretary of State Condoleezza Rice — as well as a Congressional delegation led by the House majority whip, Kevin McCarthy, a California Republican, mingled with leaders of Britain’s governing Conservative Party.
Among those representing the British government were the chancellor of the exchequer, George Osborne; the minister of defense, Liam Fox; and the foreign secretary, William Hague.
The statue of a smiling Reagan, dressed in a crisp suit, was paid for by the Ronald Reagan Presidential Foundation as part of a worldwide effort to promote his legacy, according to the organization’s executive director. . . .
Inscribed on the statue is a quote from his friend Margaret Thatcher, the former British prime minister. “Ronald Reagan ended the Cold War,” it reads, “without firing a single shot.” (Some British commentators suggested that ignores the contributions of Eastern European dissidents.)
Though Mrs. Thatcher is in poor health and did not attend, she provided a statement that was read by Mr. Hague. “Through his strength and conviction,” she wrote, “he brought millions of people to freedom as the Iron Curtain finally came down.”
That is, she snubbed President Reagan! Why would she do a thing like that?
The Brits should put a statue of Churchill up there, as well . . . I hear there’s an extra one rattling around Washington, D.C.
The Examiner is also covering the statue-unveiling.
UPDATE: “Smart diplomacy.”