Relevant and even prescient commentary on news, politics and the economy.

The Jester

Jester’s Court update e-mail from Fool.com.

The JC this week focuses on another acronym: PE. According to Slate.com, private equity firms have started buying up their own debt at significantly reduced prices. As the author explained, it works a little like this:

You pay your friend a few dollars so that you can host a small party while she’s out of town. You leave the pool filled with garbage, beer cans, and human waste. The next day you show up dressed as a pool cleaner and charge your friend a few bucks to mop up the mess you made.
Click here to enjoy the full article.

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Chickens and the eggs…a parable or paradox?

The Cato Institute’s James Bovard in 1995 had thoughts on private versus public monies.

ADM’s finagling in Washington may have cost taxpayers and consumers more than $40 billion since 1980, counting the cost of the sugar program ($3 billion in higher prices each year), the ethanol program, and federal food giveaways and export subsidies. Some of those dubious programs probably would have been enacted even if Andreas had not been foisting cash on every politician in sight, but ADM deserves credit for being a decisive force in enacting and perpetuating many of the federal government’s most abusive policies.
ADM’s political strategy has long been based on the ideas that politicians should control prices and markets and that ADM and Andreas should control politicians. Some commentators may conclude that the ADM experience proves the need for campaign finance reform, but that would be the triumph of hope over experience. Campaign finance laws have been repeatedly revised in recent decades, yet politics does not smell any better.(137) As long as the politicians are shoveling out billions of dollars in handouts, some citizens will find a way to reward politicians for “looking after their interests.”
Besides, at a time when Congress is rightfully moving toward removing millions of able-bodied citizens from welfare rolls, there is no excuse to perpetuate handouts for a company like ADM. If a company can afford endless advertisements on national television, it is safe to conclude that it does not need any help from American taxpayers.
The Supreme Court, in Savings and Loan Association v. Topeka (1875), stated, “To lay with one hand the power of the government on the property of the citizen and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes is none the less a robbery because it is done under the forms of law and is called taxation.”(138) Andreas apparently can buy politicians, but that does not mean that ADM has a right to shake down American consumers and taxpayers.
Congress, in the pending farm bill and in legislation to extend the ethanol gasoline fuel tax credit, has an excellent chance to shut down the ADM gravy train. Congress’s action on the ADM agenda will be an appropriate litmus test of the new Republican leadership’s spine. If Congress cannot stand up to ADM, how can they be expected to stand up for American taxpayers and consumers in other, less egregious cases?

Even the WTO GATS pressure will not move this mountain very soon. How do we know who captured whom? And is that a sane way to think? And the Dems passed the Agricultural Bill 2007.

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Private and public feedback and function discussion

It seems there are a few rules that emerged from yesterday’s discussion about private versus public functions and efficiencies.

1. Government functions are inefficient all on their own. There are not enough feedback mechanisms to make government efficient at any point in time, and its functions serve ‘minimal’ or no purpose. With the taxing ability, however, it does not go out of business and just gets bigger.

2. Private market functions have inefficient times called market failures but pricing weeds out winners and losers continuously as they serve buying preferences of customers. Winners and losers are companies only, and not the players so much.

3. 1 and 2 have no moral and ethical considerations as a societal preference, since pricing (and some others?) is the key mechanism that makes sense to sort everything out.

4. Government is the preferred method of coercion because it is more ‘efficient’ in the art of coercion than private companies.

5. Private companies that capture government functions are blameless, since government opportunity costs make it seductively irresistable and coerces companies into such behavior.

6. ‘Eventual’ corrections is a term for private companies (no time given or examples) for not adapting, whereas government is incapable of adapting except when it changes policy.

7.

Please correct any misconceptions I have about yesterday’s discussion.

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Old meaning, new boost for Feb. 14

The headlines read Valentine flowers boost US economy

Wilting flowers

When researchers at Bar-Ilan University in Israel put cut flowers in a weak solution of Viagra — one-fiftieth the amount taken by men for impotence — the flowers survived for two weeks instead of one. They suspect the Viagra works through its effects on nitric oxide, which is also how the drug treats erectile dysfunction.

Actually, off-label uses can be productive.

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Patriots and viewpoints

Alternet reports the following:

The Op-Ed by seven active duty U.S. soldiers in Iraq questioning the war drew international attention just three weeks ago. Now two of the seven are dead.

Sgt. Omar Mora and Sgt. Yance Gray died Monday in a vehicle accident in western Baghdad, two of seven U.S. troops killed in the incident which was reported just as Gen. David Petraeus was about to report to Congress on progress in the “surge.” The names have just been released.

The controversial Times column on Aug. 19 was called “The War As We Saw It,” and expressed skepticism about American gains in Iraq. “To believe that Americans, with an occupying force that long ago outlived its reluctant welcome, can win over a recalcitrant local population and win this counterinsurgency is far-fetched,” the group wrote.

One of the other five authors of the Times piece, Staff Sergeant Jeremy Murphy, an Army Ranger and reconnaissance team leader, was shot in the head while the article was being written. He was expected to survive after being flown to a military hospital in the United States.

It closed: “We need not talk about our morale. As committed soldiers, we will see this mission through.”

I offer a few moments silence for these men and their families.

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Too much WAPO? Try an expert.

John Robb on his website states one of his thoughts on the current state of the overall strategy towards terrorisms.

A radical improvement in marketing war.

The US military learned from Vietnam that it needed to be much better at marketing wars to domestic audiences in order to prevent moral collapse. It has gotten better at this, and that information operations/strategic communications capability has reached a new level of effectiveness with General Petraeus. Despite this improvement, the military and its civilian leadership still don’t have the ability to garner wide domestic support for guerrilla wars beyond the initial phases. However, they do have the ability to maintain support within a small but vocal base — as seen in the use of weblogs to generate grass roots support for war — and the capability to trump those that call for withdrawal (by keeping the faintest glimmer of potential success alive and using fear/uncertainty/doubt FUD to magnify the consequences of defeat). In our factional political system, that is sufficient to prevent withdrawal.
The threat that justifies the state and the perpetual war that codifies it.
The ongoing threat of terrorism has become the primary justification for the existence of a strong nation-state (and its greatest instrument of power, the military) at the very moment it finds itself in decline due to globalization (or more accurately: irrelevance). The militarization of “the war against terrorism” reverses this process of dissipation, since it can be used to make the case for the acquisition of new powers, money, and legitimacy (regardless of party affiliation) — for example, everything from increases in conventional military spending to the application of technical reconnaissance on domestic targets. Of course, this desire for war at the political level is complimented by the huge number of contractors (and their phalanxes of lobbyists) attracted by the potential of Midas level profits from the privatization of warfare. The current degree of corporate participation in warfare makes the old “military industrial complex” look tame in comparison.
The privatization of conflict.
This is likely the critical factor that makes perpetual warfare possible. For all intents and purposes, the US isn’t at war. The use of a professional military in combination with corporate partners has pushed warfare to the margins of political/social life. A war’s initiation and continuation is now merely a function of our willingness/ability to finance it. Further, since privatization mutes moral opposition to war (i.e. “our son isn’t forced to go to war to die”) the real damage at the ballot box is more likely to impact those that wish to end its financing. To wit: every major presidential candidate in the field today now gives his/her full support to the continuation of these wars.
(bolding and italics mine, slightly edited to make it fit)

We also know that Admiral Fallon has a different responsibility and viewpoint than General Patreus for overall strategy, although both men have been assigned jobs to do and to succeed. General Patraeus, perhaps rightly, declined to comment today on overall strategy. As a specialist assigned to do a job, you rightly jump in with both feet and follow directives and orders with the war you have.

But we as citizens cannot afford to discuss tactical issues only. It is not our job, nor that of Congress, to limit our concern. Nor should the mantra of ‘Trust me’ be accorded this administration, nor its agents, as convincing evidence.

Update:

ilsm suggested adding the lead in. Here it is.

“The reason is that the moral weaknesses that have traditionally limited the state’s ability to fight long guerrilla wars have dissipated, and modern states may now have the ability and the desire to wage this type of war indefinitely.”

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Ray McGovern at Consortium News had an opinion that got him booted out of the hearings with General Patraeus.

If memory serves, the aforementioned generals and Westmoreland were required to testify under oath. And this was one of the main sticking points when CBS aired a program showing that Westmoreland had deliberately dissembled on the strength of Communist forces and U.S. “progress” in the war.
When Westmoreland sued CBS for libel, several of his subordinates came clean, and Westmoreland quickly dropped the suit. The analogy with Westmoreland—justifying a White House wish to persist in an unwinnable war —is the apt one here.
If Petraeus is so honest and full of integrity, what possible objection could he have to being sworn in?

No one seems to swear to the truth anymore.

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Media Matters points to another ‘objective opinion’ in the press. Who is able to follow the money?

Since 2004, Clifford D. May, former Republican National Committee communications director and president of the Foundation for the Defense of Democracies (FDD), has appeared in the media several times to defend the administration’s conduct of the Iraq war — most recently in his September 5 Scripps Howard News Service column, where he listed as “Al Qaeda’s hope[s]” that “Congress will save them by legislating America’s retreat from Iraq” and “that lawmakers in Washington will vote to stop fighting al Qaeda in Iraq and to abandon those Iraqis who have been fighting with us and relying on us.” However, in none of his columns or on-air appearances has May disclosed that FDD has received at least $1.2 million in State Department grants since 2004, or that May himself is a member of Secretary of State Condoleezza Rice’s Advisory Committee on Democracy Promotion.

Who to trust is not a new issue, but shouldn’t this sort of thing stay private market, not privatized market/government? How will we be able to tell the difference if psy-ops itself goes internal?

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The Washington Post carried an article by General Patreaus in 2004. Still the optomist.

Nonetheless, there are reasons for optimism. Today approximately 164,000 Iraqi police and soldiers (of which about 100,000 are trained and equipped) and an additional 74,000 facility protection forces are performing a wide variety of security missions. Equipment is being delivered. Training is on track and increasing in capacity. Infrastructure is being repaired. Command and control structures and institutions are being reestablished.
Most important, Iraqi security forces are in the fight — so much so that they are suffering substantial casualties as they take on more and more of the burdens to achieve security in their country. Since Jan. 1 more than 700 Iraqi security force members have been killed, and hundreds of Iraqis seeking to volunteer for the police and military have been killed as well.

Six battalions of the Iraqi regular army and the Iraqi Intervention Force are now conducting operations. Two of these battalions, along with the Iraqi commando battalion, the counterterrorist force, two Iraqi National Guard battalions and thousands of policemen recently contributed to successful operations in Najaf. Their readiness to enter and clear the Imam Ali shrine was undoubtedly a key factor in enabling Grand Ayatollah Ali Sistani to persuade members of the Mahdi militia to lay down their arms and leave the shrine.

In another highly successful operation several days ago, the Iraqi counterterrorist force conducted early-morning raids in Najaf that resulted in the capture of several senior lieutenants and 40 other members of that militia, and the seizure of enough weapons to fill nearly four 7 1/2-ton dump trucks.

Published right before an election. He is a partisan professional even if smart.

I also thought that the amount of the troop reduction to pre-surge levels would have been necessary by next April 2008 or so unless a lot of successful recruiting had already been done, which has not occurred.

I also thought, like other people, that the battle was not just sectarian violence but more about what kind of country Iraq was to be in relation to boundaries, oil, and Iraqi autonomy.

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Look to the holy for an answer for the sacrifice?

Yahoo news has reported a straight forward comment by David Walker of the GAO on interpretation of the statistics of The Interview forthcoming today. It is like reading oracles to interpret the future. Central information remains unavailable, but feel free to interpret.

Some reports say Petraeus will argue that sectarian violence in Iraq has fallen by up to 75 percent under the surge.
“We could not get comfortable with (the military’s) methodology for determining what’s sectarian versus nonsectarian violence,” Walker told senators.
“You know, it’s extremely difficult to know who did it, what their intent was.”
Walker was unable to go into further details, as the rest of the GAO’s conclusions in the report on sectarian violence have been declared secret by the Pentagon, and urged senators to read the classified version of the study.
Democratic Senator Jack Reed asked why such vital information to assessing the state of US policy in Iraq was such a closely guarded secret.
“This may seem like a dumb question — why is this classified? I mean, who are we trying to keep this information from: the American people?” Reed said.
Democratic committee chairman Carl Levin meanwhile said he would make a request by the end of Friday for relevant portions of the report to be declassified, so senators could discuss them in a public setting.

(italics are mine)

I can think of no reason to keep the results and methodolgy of data a secret. It might depend how detailed the published report is to protect somebody, but a single figure is awfully vague.

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