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Mail 501 January 14 - 20, 2008

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• Harry Erwin's Letter from England
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• Leadership and Unit Cohension
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Dr. Pournelle,

What to do with 1500 obsolete hard drives?

Dominos!

http://www.break.com/index/dominos-with-1500-hard-drives.html 

Sean

=========

Marque and Reprisal, Iraq and Terrorism

Jerry,

I know a lot of traditional conservatives who have serious issues with Dr. Paul's stance on Iraq. Yet, to me there seems to be a vast philosophical difference between those whom some would characterize as the "surrender now left" and those conservatives who would say "enough already, let them stew in their own filth". Perhaps the problem is no one seems to know what we are doing in Iraq. Is it "stability operations, peacekeeping, reconstruction, some of each, something else? As you have repeatedly pointed out, south Vietnam fell to an armored invasion from the North. The difference is, the South had a functioning government. Does Iraq? I don't know. A better parallel seems to be Yugoslavia, with ethnic hatreds that go back for centuries. I'd rather not play the roll of the Red Army.

Iraq is (I think) less of a problem, and more of a symptom. Fundamentally we have to decide how we constitutionally deal with the problem of terrorism. The answer to dealing with a foreign government that actively harbors terrorists is straightforward. WAR. And by war I mean a proper declared war declared by the congress. As I recall, the one member of congress to introduce a declaration of war for Afghanistan was Dr. Paul.

The harder question is and remains, how does one deal with terrorists who are stateless. The Democrats would have us consider them criminals, and would have us use the courts to try them. George W. Bush has been pursuing a policy of congressionally authorized, but undeclared, "Global War on Terrorism" which seems nebulous in goals and execution at best. Dr. Paul is the only person I have heard who has publicly (on the floor of the House) called for the third, constitutional option. Treat stateless purveyors of terrorism like pirates. Issue Letters of Marque and Reprisal for their capture or elimination. I certainly don't know if that would work or not. But it has the virtue of not having been tried. And it's constitutional.

I would not have gone into Iraq. Having done so, I certainly would not have tried to mold Iraq into a Westminster style Parliamentarian system. Perhaps that is because I have always thought that Kipling meant "The White Man's Burden" to be a warning, not a goal. I for one, am willing to put down that burden, and let them stew in their own filth.

Not very charitable of me a suppose. Regardless, I shall be supporting Dr. Paul in the primary, and voting "anyone but Hillary" in the general election.

And for your readers, the obligatory Kipling citation:

Take up the White man's burden --
Send forth the best ye breed --
Go bind your sons to exile
To serve your captives' need;

http://www.poetryloverspage.com/poets/kipling/kipling_ind.html 

Best regards as always, and a sincere hope for a speedy recovery from the palsy.

Mark E. Horning, 

========

Subj: Libertarian vs conservative, clean vs muddled

Recent contributions concerning Iraq and Dr. Ron Paul raise two questions:

1. Is there a difference between libertarian and conservative?

2. Is it rational to expect a clean, simple outcome in the real world (as opposed to the dream-world of an ideology), or should we rather expect a muddled outcome that is neither clean nor simple?

1. It may well be that our polity would be far healthier if our elections were contests between a Libertarian Party and a Constitutionalist Conservative Party. I seem to remember Dr. Pournelle making a comment to that effect.

But in what sense is it accurate to characterize Dr. Paul as a conservative? Senator Thompson is pretty much a traditionalist, non-ideological conservative, I think -- keep what works, move gradually away from what's not working, move generally away from highly centralized Federal action and towards private, local and State action. Dr. Paul seems much more a libertarian ideologue: he has his portfolio of simple solutions, and by God those provide The Way to Solve All Problems, and anyone who thinks otherwise is a fool or worse.

The fusionist political movement Frank Meyer founded forged a political alliance between libertarians and traditionalist conservatives, against the common enemy of Communism. And maybe it still makes some sense to think of conservatism as balanced between traditionalist and libertarian tendencies:

http://article.nationalreview.com/?q=
MGM2ODMzYzY1N2Y0ODA3ZDk3MjE0OTdkNTNiMGQ4ZGQ= 

http://www.aliciapatterson.org/APF0901/Judis/Judis.html 

But please don't let's confuse the two, pretending that one is only a purer or more extreme form of the other.

2. It's entirely human to yearn for a clean, simple outcome -- for Iraq or anything else.

Under a totalitarian regime, or even a strong authoritarian regime, the dominant faction of the ruling elite can impose its preferred clean, simple solution by force and violence. The clique around a Saddam Hussein, or a Kim Jong-il, does not hesitate to imprison or exterminate opponents.

We Americans have a regime, and traditions, that make it hard for any party to impose its preferred solution. Do we really want to change that? And if we do, where then will we hide, when our party no longer holds the power?

Recall the exchange between Sir Thomas More and his son-in-law, in _A Man For All Seasons_:

William Roper: So, now you give the Devil the benefit of law!

Sir Thomas More: Yes! What would you do? Cut a great road through the law to get after the Devil?

William Roper: Yes, I'd cut down every law in England to do that!

Sir Thomas More: Oh? And when the last law was down, and the Devil turned 'round on you, where would you hide, Roper, the laws all being flat? This country is planted thick with laws, from coast to coast, Man's laws, not God's! And if you cut them down, and you're just the man to do it, do you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil benefit of law, for my own safety's sake!

http://www.imdb.com/title/tt0060665/quotes 

And if we get our Legions into the habit of imposing clean, simple outcomes overseas -- for example, by abandoning Iraq to whatever combination of chaos and renewed tyranny would follow our clean, simple withdrawal -- how will we then persuade them, when they get home, that they should settle for complicated, muddled, compromise solutions here?

Rod Montgomery==monty@starfief.com

==

The Most Conservative

Let's look at this. For Ron Paul, I'd have to say that even discounting the War on Terror disagreement I have with him, the newsletter issue is good and sufficient reason for me to say that I simply can't vote for him. Either he wrote those less than palatable things, or he let a newsletter bearing his name, which he has claimed to have written, say things which are not acceptable, and were in production for many years. http://www.americanthinker.com/2007/11/the_ron_paul_campaign_and_its.html <http://www.americanthinker.com/2007/11/the_ron_paul_campaign_and_its.html>  is a bit dated, but has plenty of links to follow.

The bloodbath in Iraq is actually not nearly as bad as you might think. Excluding the studies that take media claims at face value, and claims by Iraqi doctors which aren't matched by actual bodies in Iraqi morgues, the loss rate is lower in Iraq than when Saddam was in power. http://confederateyankee.mu.nu/archives/251594.php <http://confederateyankee.mu.nu/archives/251594.php>

 Now if the détente between the factions breaks down irrevocably, then yes, I'd expect things to be far, far worse. For instance, we blithely presume the Shia are a faction. They aren't. There are pro and anti-Iranian Shia, who have already been known to violently dispute the other's right to convert oxygen into carbon dioxide. If we actually went to the civil war long claimed, that fight alone would dwarf what is going on. The one thing those two would cooperate on is killing Sunni, so we can expect that chunk of society to pay a horrible price. No, we aren't seeing the worst it could be, nor has it ever been close to that.

I'm going to presume the claim that we have no Legions is a textual error, rather than a claim. However, I'd have to say that we are doing a bang up job of building Auxiliaries. Anyone notice that most of the fighting is done by the Iraqi Army? Anyone spot the significance of Malik Abdul Ghanem, Asa'ad Hussein Ali and Abdul-Hamza Abdul-Hassan Rissan? Try http://www.michaeltotten.com/archives/2008/01/the-bravery-of.php <http://www.michaeltotten.com/archives/2008/01/the-bravery-of.php>  . For the state of the Iraqi Army, http://www.longwarjournal.org/archives/2008/01/iraqi_security_force_8.php <http://www.longwarjournal.org/archives/2008/01/iraqi_security_force_8.php>  is the one over the world view, well worth looking at as it shows evidence of improvement in logistics, long a weakness. A more warts and all view can be seen at http://www.michaelyon-online.com/wp/moment-of-truth-in-iraq.htm <http://www.michaelyon-online.com/wp/moment-of-truth-in-iraq.htm>  , and is very much worth a complete read. The green alligator mention is one close to my heart. In point of fact, this is precisely what victory looks like. Take a look at the curve.

As for the comment that only officers care about Iraq, the troops don't, we must agree to disagree. However, even if that were true, it is extremely significant. I'd suggest that rather than referring to officers, we should properly refer to those soldiers who are in or intend a career. Those are the ones who will do that odd thing, leading the young boys who join for a few years and then go home. Those are the ones who will teach them how to play the game, how to live the Army values, what it takes to succeed and survive, and how to go on with life. I can't believe anyone really wants to convince those men, like myself, who teach and train and lead the whole of our armed forces that our honor is worthless, that those we tell they can count on us, can't, that we can't be trusted, and that it really is better to just leave a place broken once we've been there. Osama Bin Laden wrote that he decided that the US was vulnerable to defeat when we withdrew from Mogadishu. Is it really in our best interests to allow our foes the momentum of victory?

There are those, many led by Ron Paul, who believe that the animosity in the Islamic world towards the US is our fault. It is, they say, due to our horrible foreign policy. They don't explain why our foes have also attacked Britain, Spain, France, Germany, Morocco, Algeria, Indonesia… It is true that our foes claim to be seeking vengeance against the evils of Western Civilization. They claim to be fighting for the Palestinians, against the US, against Israel, for acceptance, for tolerance, to liberate former Islamic land, such as Spain, and many other things. Many of their press releases read as if they were written in DC. Take a look, instead, at what they tell each other is the reason to fight. You'll find this topic speaks of abominations like democracy, freedom of speech, religion, equal rights for women, the sort of thing we pride ourselves on. I'm afraid there really isn't a way to ignore our way out of this, even if we were to magically become energy independent and confiscate everything owned by those who might donate to the terrorists, unless somehow we could enforce that same solution on Europe and Asia.

=========

Subject: What the future holds - 

Dr Pournelle

I enjoyed Matt Kirchner's letter. (Chaos Manor Mail, Monday, Janurary 14, 2008). It got me to thinking about what the future might bring. And what it won't.

As for the economy, things will get worse. I thought the 1980s debacle brought on by the collapse of the Savings&Loans and restructuring depreciation from double-declining to straight-line for tax purposes was bad, but the economy recovered. But that was back when the US still made things. From where I sit, it looks like all the players in the current economy raise the pot at every play, scared to death to quit the game. I wonder what is going to happen when a player with hot hand (China) calls and everybody has to show his cards.

As for Iraq, I don't think it makes much difference who wins the Oval Office. Red or blue, the US will withdraw from Iraq. The question is how fast. Will we keep a base in Iraq? Maybe, but other venues in the Middle East serve us better and welcome us.

As for national honor, I recently read West of Honor (again) and had the pleasure of reading this line: Men may have honor but governments can have none. I recall that that line struck me with such force that I memorized it. I have quoted it many times. Will the US abandon Iraqi comrades? Bet on it.

Who will win the presidential election? Dunno. I doubt that either Clinton or Obama can win, but I did not think that Georgia peanut farmer had a chance either. I campaigned for Jerry Ford, so I know what it feels like to work hard for a cause that loses. The question is not 'who will win'; the question is 'will who wins make any difference'. I say a difference of 1% in the gradient of descent into disorder.

Whoever wins, there will not be rioting in the streets or shoot-on-sight curfews. That happened after the presidential election in Kenya last month (27Dec2007). Mwai Kibaki, the sitting president, suspended election results reporting when he looked like he was losing to Raila Odinga. Kibaki later announced he had won. Odinga's supporters took to the streets. Kibaki proclaimed a curfew and sent the army out to enforce it. 120 dead.

That won't happen in the US. So the US ain't that bad. Yet.

Although I disagree with Greg Cochran on piracy (I guess, no, it ain't significant -- not in Utah), I am in full agreement that al Qaeda and the Taliban and their brothers, cousins, aunts, and uncles do not constitute a significant threat to the US. What about 9/11? They got lucky. Once. But let's get real.

Airline hijacking ended 11 September 2001. Flight 93 served as the model. Later, over the Atlantic when a passenger tried to light his shoe, passengers jumped him -- unplanned and uncoordinated. Since 9/11, every airline passenger knows that when the crazy stands up and says, "We are taking over the plane!", that sitting back quietly and waiting for the nightmare to end is not an option.

Meanwhile, the people who brought us FEMA and TSA have told the states what information to gather for ID cards. And pass along to them. Gee, I guess my reading of the Constitution was in error: we have not a government of enumerated powers; we are a people of enumerated rights.

What al Qaeda could never do to us, we will do to ourselves.

Walt Kelly was right -- We have met the enemy and he is us.

So was Voltaire: This is the best of all possible worlds; therefore, let us cultivate our garden. ('Cause, as you say, despair is a sin. In the Air Force, we had a similar saying: Don't despair; but if you do, work on in despair.)

Respectfully h lynn keith

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Oath of Fealty

Just read the re-issue and liked it as much as I did the first edition. Thats a bonus for being superannuated- re reading things from decades ago becomes a new experience. I also reread Inferno a while back. Passages from both of those books (and the other Niven/Pournelles) stick in your mind forever.

Mike

========

Dear Jerry,

You may find this book interesting, or abominable. I just thought you would like to know that it's out and people in DC may be talking about it.

REgards,

Tom Donlan

http://www.independent.org/publications/
books/book_summary.asp?bookID=71

=========

The Vindolanda Tablets

The item about the old Roman letters reminds me of some Babylonian tablets that I read mumble years ago. (Translated, natch.)

One was from Khamurapi himself to one of his toadies and ran something like this: "Captain so-and-so tells me he cannot set sail for Meluhha yet because you haven't assigned the men for his ships. Send me a list of the sailors assigned and their next of kin or send me your head. It doesn't matter which." Khamurapi was what we now call a "Theory X" manager dropping a gentle hint.

Another was a letter a man wrote to a woman, praising her beauty, her generosity, and so on before he gets to the point: "About that money I owe you...." He promised to pay the money back Real Soon Now. Apparently, the check was already in the mail 4000 years ago.

A letter from an Assyrian king [Shamsi Adad, I think] to his younger son points out that "while your brother wins great battles in the north, you lie about on cushions with the women" and concludes: "Why can't you be more like your big brother?"

My favorite was one written by the prime minister of the city-state of Mari, who noted that the young men of the city had lately taken up the new-fangled two-wheeled chariot of the northern hill barbarians and would race them up and down the main drag of Mari. He concluded that he did not understand the obsession of youth with speed. Drag racing in the Old Near East.

Plus ca change, and all that.

Mike Flynn

=========

Subject: When teachers need to cheat on their exams...

http://www.rd.com/content/caught-cheating-on-tests/ 

"Cheating among teachers has become epidemic in America's schools, with cases from New York to California, Florida to South Dakota, Tennessee to Maryland. "It's more prevalent than anyone wants to admit," says UNC-Chapel Hill professor Gregory Cizek, an expert on cheating in schools. "Teachers are paid to be role models. It sends a really destructive message to kids."

Many experts say this disgraceful behavior has surged due to the 2001 No Child Left Behind law, which annually tests academic performance and can punish struggling schools that don't show improvement. Feeling this heat, some teachers resort to showing students test questions in advance or—if you can believe it—changing their answers after the fact."

As I sit here typing this, I'm giving an open note, open internet essay exam that I created myself. While this is especially true in a collegiate setting, I see no reason why this doesn't hold true down the grades: how does anyone else know what I taught? Oh sure, when topics are required, a certain amount of similarity occurs. Even so, both teaching style and the students play a large part: factors that are impossible to code for in a multiple guess exam.

More later, -Brian

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Subject: Way beyond the Lake Wobegon limit...

Jerry,

NYT web site, front page:

"There’s a growing sense of urgency among educators that every student should be on a college track."

"In Chattanooga, Tenn., the schools have abolished their multitrack curriculum, which pointed only a fraction of students toward college. Every student is now on a college track."

http://www.nytimes.com/2008/01/17/education/17college.html?hp 

The results can be predicted. The "college track" will need to be vastly simplified for all the new students who shouldn't be there. Teachers will spend more and more time with those students, and the school district will devote more and more resources to fix the embarrassingly low success rates that become prevalent in the "college track". The students who really need and want that level of instruction will either be sub-grouped within the classes or they'll leave for private schools.

Or, I may be wrong. Perhaps a miracle will occur that defies all previous knowledge and practice. But I wouldn't bet on it.

Chuck

I do not believe that we can sustain a First World economy given the sorry state of the public schools. Worse, since the public schools are so awful, access to good technical education (or good education of any kind) is open only to those who go to private schools; which makes for a class system that the public school system was supposed to prevent. The only thing you can leave your children now (if you are middle class) is a decent education.

Education has become a caucus race. All will win and all must have prizes. =========

Augustus - Wikipedia, the free encyclopedia

Doctor Pournelle,

For those who have wondered lately just WHY we care what "the legions" think about our Republic's Iraq policy, a lesson from history:

"Aware of his deteriorating relationship with Octavian, Antony left Cleopatra; he sailed to Italy in 40 BC with a large force to oppose Octavian, laying siege to Brundisium. However, this new conflict proved untenable for both Octavian and Antony. Their centurions, who had become important figures politically, refused to fight due to their Caesarian cause, while the legions under their command followed suit."

http://en.wikipedia.org/wiki/Augustus#_note-ccaa_19 

Centurions in this case being roughly equivalent to modern day field grade officers (Lieutenants, Captains, Majors and Lieutenant Colonels) as well as some career senior NCO's and Warrant Officers. The people at "the sharp end". The ones who make the military machine "go". Keep in mind that both Mark Antony and Octavian Caesar were extraordinarily capable and ruthless men. Yet their centurions, after years of being ordered to carry out policies they increasingly considered unwise, finally put their caligae down and said "No more!", and Caesar and Antony came to an agreement for five more years.

The lesson: Break faith with enough allies and "friends", and eventually your own troops will say "Enough!" and force you to stop. Also keep in mind Rome had at that time been a rather (!) successful republic for about twice as long as we've managed to this point.They thought "it can't happen here" too. Of course about five years after the legions said "No way!", Octavian finally figured out that he could not let the system go on as it was, and bridled the wild horse that was Rome.

He executed some three hundred senators in a single day when he came to that pass.

I'm sure the correspondents who wrote wondering why we care what the legions think have heard of Santayana, one hopes?

Petronius

See also http://www.nationalreview.com/
derbyshire/derbyshire200603090820.asp

=========

Subj: ARTILLERY: Direct Fire Makes a Comeback

http://www.strategypage.com/htmw/htart/articles/20080115.aspx 

>>Israel and the United States have been using artillery for direct fire (shooting at something the gun crew can see, using a sight similar to a sniper scope) more frequently of late. ...<<

Rod Montgomery==monty@starfief.com

=========

A response to Dr. Cochran 

Jerry,

For what it's worth, one response to Dr. Cochran:

http://www.townhall.com/columnists/CliffMay/2008/01/10/
wishful_thinking_a_lethal_habit_
when_it_comes_to_islamist_terrorists 

(After the Bhutto assassination), America is now adrift in a nuclear-armed and therefore critical corner of the world. At least part of the reason may be wishful thinking – the still widely held belief that militant Islamists – in Pakistan, Afghanistan, Iran, Syria, Lebanon, Gaza and elsewhere -- can be frightened by words, appeased with money, and defeated by subpoenas and good intentions.

I must also admit that, over and above our past disagreements on interpretation, I was distressed that his latest missive appears to dismiss witness reports and expert testimony on the issue of piracy in favor of his own opinion, my respect for which is diminished.

Anon

==========

This is an apt description of Paul Bremer's performance in Iraq, even though it describes a British general from the Afghan war of yon.

This comes from an online Wall Street Journal [Jan. 17, 2008] description of the Flashman books. The author, Robert Messenger, is quoting George MacDonald Fraser

For instance, you'd be hard pressed to find a pithier description of what went wrong in Kabul in 1841 than Flashy's appraisal of Gen. William Elphinstone:

"Only he could have permitted the First Afghan War and let it develop to such a ruinous defeat. It was not easy: he started with a good army, a secure position, some excellent officers, a disorganised enemy, and repeated opportunities to save the situation. But Elphy, with a touch of true genius, swept aside these obstacles with unerring precision, and out of order wrought complete chaos. We shall not, with luck, look upon his like again."

Pete Nofel

=========

From another conference:

This morning, Citicorp, previously America's largest bank, wrote down the value of its security holdings by an additional $22B, following massive multi-billion-dollar write-downs in previous quarters. The total market value of Citicorp has now been cut in half. Merrill Lynch, America's largest brokerage firm, has followed a similar financial trajectory. Well over $150B of market value has thus disappeared in just these two firms alone.

A week or so ago, Brad DeLong, a mainstream Berkeley economist and blogger, crudely estimated that the total decline of the value of American mortgage securities over the next couple of years might total around $500B. So far, approximately $100B of this write-down has occurred and been recognized by various financial institutions holding the securities.

If one-fifth of the total projected write-down has cut the market value of America's largest bank by half, the further projections become "interesting" to say the least.

It appears that the main remaining prop of the American consumer economy and much of the advertising industry has been the continued strong spending by the ultra-wealthy, with the spending of everyone else, including the merely wealthy having recently plummeted.

One special characteristic of the ultra-wealthy is that a disproportionate share of their wealth in invested in the endless array of secretive hedge-funds.

One special characteristic of these secretive hedge-funds is that tend to invest in high-risk, high-return strategies, such as the mortgage/derivative securities whose value has sharply declined or vanished completely. Another special characteristic of these secretive hedge-funds is that since they are secretive and non-public, they can much more easily hind any decline in their assets for an extended period of time, in contrast to the strict reporting requirements of publicly-traded banks and brokerage firms.

Several large hedge-funds run by highly sophisticated trading firms such as Goldman Sachs and Bear Stearns have announced that nearly their entire value has disappeared. One wonders how many large hedge-funds will gradually start to admit that they, too, no longer exist in financial terms.

It seems to me that over the next year or so, quite a large number of ultra-wealthy individuals in America will discover that their wealth has declined by 90% or 99% or more. $500B in lost value can swamp quite a number of people.

If a truly vicious cycle of consumer spending collapse and economic decline gets started, I'd suspect that the projected $500B of financial losses would begin to seem very, very conservative.

I've recently been digitizing quite a number of periodicals from the 1929-1931 period. Many of their headlines have an uncanny ring.

And this comment:

One Fifth? Don't these companies employ smart guys to predict the future? What's the problem? They don't seem any smarter than me.

Or is the the future fundamentally uncomputable?

Steve

I have been examining some of the decisions of the smart people who run our major institutions. I would not consider them either smart or well educated. Crafty, perhaps, and good at negotiating deals that leave them immune to the consequences of bad decisions. But not smart.

==

The reply:

Well, Paul Krugman, a Nobel-quality economist and also America's only good columnist in the mainstream-media, has been extraordinarily gloomy about economic trends for quite some years now.

Conservatives like all the morons at NRO have endlessly ridiculed him for this economic gloom. Similarly, back in 1997 or so, Warren Buffett explained that he just couldn't figure out why the Tech Bubble stocks had any significant value, since their companies had no profits and almost no revenue. Then the Tech Bubble kept growing bigger and bigger, Buffett's financial performance suffered by comparison, and many people like the Dow 36,000 guy laughed at Buffett, saying he "just didn't get it", and that "the Internet had changed everything." Silly, silly Warren Buffett.

Three or four years ago, Krugman wrote a particular column about how in the past, Americans had earned their living mostly by producing goods and services that other people bought, but these days they mostly earned their livings by selling each other houses, using money borrowed from the Chinese. He didn't think this made a lot of sense in the long run. But for years afterward, the housing/mortgage/finance boom kept growning and growing, and all the people at NRO kept laughing and laughing at the old-fashioned thinking of Paul Krugman.

The striking thing about the headlines from 1929-31 was now extremely non-alarmist they were. The stories were mostly a cycle of stocks decline---stocks bounce back---banks shore up their balance sheets---Congress considers new trade proposals. Considering that America's largest bank has lost half its market value over the last ninety days or so, our current headlines are also pretty non-alarmist.

One "funny" thing about the world's current economic/financial problems is that they seem almost entirely concentrated within the U.S. (and to some extent England). Basically, many of America's financial securities are suddenly being discovered to be worthless, and everyone holding them---mostly American but also some European investors---are taking a gigantic hit. This has led some of America's largest financial institutions to desperately seek capital from "Third World" countries, and sell off huge slices of themselves in the process.

People have thought America was still America, when it had actually become Argentina over the last decade or so.

Given today's "American Empire," it's a little like Victorian England's financial securities becoming worthless in 1900 and its leading banking houses having to desperately beg Venezuela and Colombia for capital infusions in order to stay out of bankruptcy. Pretty peculiar...

Long time readers my recall my columns about the lack of value and profits in the Dot Boom companies. And the laughter...

When we went into Iraq I truly thought that the Administration understood. We would secure the oil fields, pump the holy hell out of oil, use that money to keep Iraq running through bribes to the Iraqi generals -- and keep world oil prices at about $20/bbl. The Dow would go to 16,000, and the Republicans would be in office until 2040.  Instead we sent in Bremer.

==

More commentary

One way to characterize the subprime meltdown is that it is simply a replay of the summer of 1983, when America's financial institutions lost all their equity capital and more "recycling" petrodollars as "sovereign risk" loans to countries like Argentina who "don't go out of business", but, as it happened, did not ever repay their loans either. In his NYT best-seller THE BLACK SWAN, Nassim Nicholas Taleb describes the particular "black swan" that 1983 was, and why it could happen again. (Peter Schaeffer cynically says that the difference between 1983 and late 2007 is that in the former America's banks lost everything lending to the Third World outside our borders, while the current crisis stems from lending to the "Third World" *inside* our borders. (Reference is to the high percentage of subprime borrowers who are members of permanently disadvantaged minority groups.)

Mr. Taleb argues in his book that all the important events that shape human history for good or ill are "Black Swans"--happenings so improbable that any good prognosticator would estimate their likelihood as zero. This is the root cause of Yogi Berra's being right ("Prediction is very difficult, especially about the future"). Mr. Taleb counsels eschewing efforts at "prediction" and focus instead on "preparedness".

Mr. Taleb's web site is:

http://www.fooledbyrandomness.com/ 

Jim

Of course, it was obvious that the housing bubble was a replay of the tech stock bubble, with the main difference is that Americans were not living in their 401Ks. Both bubbles were the consequence of catastrophic regulatory failure--allowing the use of borrowed money to bid up the price of *existing* assets is always bad policy. The Fed would have needed no additional delegation of authority from Congress to restrict the loan value of existing homes from going up by more than, say, 1% per year. Phony appraisals would then have been impossible/irrelevant.

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The day was devoured by locusts.

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The current page will always have the name currentmail.html and may be bookmarked. For previous weeks, go to the MAIL HOME PAGE.

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IF YOU SEND MAIL it may be published; if you want it private SAY SO AT THE TOP of the mail. I try to respect confidences, but there is only me, and this is Chaos Manor. If you want a mail address other than the one from which you sent the mail to appear, PUT THAT AT THE END OF THE LETTER as a signature. In general, put the name you want at the end of the letter: if you put no address there none will be posted, but I do want some kind of name, or explicitly to say (name withheld).

Note that if you don't put a name in the bottom of the letter I have to get one from the header. This takes time I don't have, and may end up with a name and address you didn't want on the letter. Do us both a favor: sign your letters to me with the name and address (or no address) as you want them posted. Also, repeat the subject as the first line of the mail. That also saves me time.

I try to answer mail, but mostly I can't get to all of it. I read it all, although not always the instant it comes in. I do have books to write too...  I am reminded of H. P. Lovecraft who slowly starved to death while answering fan mail. 

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