Austin Bay. ‘Nuff said.
What keeps the US economy afloat in these troubled waters? Robert Samuelson says it’s easy credit and aging Boomers:
To some extent the life cycle defeated the economic cycle, Sterne says. Families wanted bigger homes. Their children, flooding high schools and colleges, demanded computers, CDs and cars. From March 2001 to March 2003, says Sterne, several dozen product categories experienced “remarkable” double-digit increases, including cell phones, motorcycles, toys, jewelry and hardware.
One reason Americans could spend freely is that they went deeper into debt. Indeed, the democratization of debt is a great story of the late 20th century. In 1946, just after World War II, consumer debt amounted to 22 percent of household after-tax income, reports the Federal Reserve. (That is, for every $10,000 of income, there was $2,200 of debt.) Now debt is almost 110 percent of income. More families borrow, and debtors have more debt in relation to income.
But like any debt binge, it has to end someday:
The bad news is that all the good news won’t last forever. Spending demographics will deteriorate slightly in the next decade, says Sterne. Younger households — relatively poorer — will grow rapidly. An aging baby boom will slowly lose purchasing power. The larger and iffier issue involves the inevitable, though undetermined, end of America’s 60-year credit binge. Interest rates have risen from recent lows, and greater threats loom.
Household debt can’t permanently grow faster than household income, though it has for decades. Sooner or later families will decide they’ve borrowed enough, or too much. Sooner or later baby boomers will pay down lifetime debts. Sooner or later lenders will exhaust good credit risks. Indeed, whether the aggressive lending of recent years has gone too far remains unsettled. Higher delinquency and personal bankruptcy rates are causes for concern.
Then there’s another factor Samuelson leaves out, one that might be a cause for even greater concern.
The Baby Boomers will start to retire in 2011. And what do retirees do? They begin to sell their equities to pay for their retirements. My generation, the so-called Gen X, has too few people to keep stock prices up at the levels where boomer investments kept them. And Gen Y will still be too young (and therefore poor) to make up the rest of the difference.
The economic boom of the ’90s (and the economy’s resilience during the Current Mess) was more due to a happy confluence of events than it was to any policy from Washington. That’s not to say that our balanced budgets didn’t help, but they were less a cause than they were an effect.
Depressed equities markets, increased Social Security and Medicare payouts, higher interest rates, and tougher credit are all in store for us just a little down the road.
Hope you didn’t get too used to the good times.
Zogby claims Howard Dean leads John Kerry 2-1 in New Hampshire. Dave Cullen has the full story.
You can’t make this stuff up:
Spurred to action by last week’s bombing of the U.N. headquarters in Baghdad, the Security Council today unanimously approved a resolution aimed at protecting U.N. staff and humanitarian workers.
I know the story is beyond satire, but I’m about half a martini before bedtime — so let’s give it a shot.
Hey, Ba’ath Party murdering bastards, remember the organization that passed all those resolutions against you, then did everything it could to prevent those resolutions from being enforced? Well, now they got another one, and this time they still don’t mean it.
World peace to follow shortly.
Which of the following headlines deserves the coveted Duh! Award?
Do you vote for:
It’s a tough call, I know. But — damnit, people — we get paid to make the tough calls!
Here is one of the sickest suggestions I’ve yet to read on how to settle the Israeli-Arab conflict:
The most effective way to force a reduction of the violence on both sides is to take punitive economic measures. The United States finances about $4 billion a year, on average, of Israel’s national budget. The continuing effort to defend, support and increase settlements in the West Bank and Gaza costs at least $1 billion a year. The money spent annually in directly subsidizing the existing settlements was estimated in 2001 at $400 million.
An American government that was resolved to stop expansion of the settlements would not need to keep sending the secretary of state to Jerusalem to repeat that we really mean what we say. We could prove it by deducting the total cost of the settlements each year from the United States’ annual allocation to Israel. To show that we were not being unfeelingly mean, the United States should add that we would hold $1 billion a year in escrow to help those settlers who would peacefully move back into Israel’s pre-1967 borders.
That’s from Arthur Hertzberg in today’s (you guessed it) New York Times. But don’t worry, Israel! Mr. Hertzberg would take the same harsh measures against the Palestinians:
But the United States can do more. It is within our power to insist that other countriesComments Off
Yes, I’ve usually posted something by now, but that doesn’t mean I’m taking yet another day off.
I’m working on a post, and I’m very, very angry about it.
White-hot clarity to follow shortly.
Somebody over at the White House has his political nose a little stuffed up:
The Bush administration is opposing efforts by hundreds of Americans held by Saddam Hussein before the first Gulf War to collect damages that would be paid from frozen Iraqi assets.
The administration did not oppose a different group of 179 former hostages and their spouses who sued and were awarded $94 million in damages from the $1.7 billion in frozen assets, but that was before a U.S.-led coalition ousted Saddam earlier this year.
With Saddam now gone, the Justice Department on Monday has asked a federal judge in Washington to dismiss a second suit from 210 former hostages. A hearing is scheduled for Sept. 4.
This is yet another one of those bits of tiny idiocy — like the Pentagon trial-balloon to cut hazardous-duty pay in Iraq — that, cumulatively, can sink a reelection effort.
Jane Galt has a fine (and typically fun) analysis of why the Democrats are suffering electorally — and why things might get worse for them. Here’s the important bit:
The Democrats, on the other hand, are a veritable festival of interest groups: unions, teachers, minorities, feminists, gay groups, environmentalists, etc. Each of these groups has a litmus test without which they will not ratify a candidate: unfettered support for abortion, against vouchers, against ANWAR drilling, whatever. A lot of groups means a lot of litmus tests, because with the possible exception of the teachers, no one group is powerful enough to swing an election by themselves.
This causes two problems. First, it drags the party platform marginally farther to the left than the Republican platform is to the right, which in a 50/50 nation is bad news, and it narrows the well of political talent. At the local level this doesn’t matter, since districts go reliably for one party or another, but nationally it’s a problem, which is why the Democrats are struggling to hold onto the senate and the presidency. It took a politician of the skill and charm of Bill Clinton to make it work.
Left unsaid is that by 1992, Democrats would have nominated “a small bag of live ferrets,” if they thought it could end the 12-year Republican hold on the White House.
That’s not to say that Bush has the 2004 election in the, uh, bag. But Democrats should pay close attention to what Megan/Jane has to say.
And so should you.
For example, last Saturday the Philadelphia Inquirer ran a front-page story about my appointment in which I am quoted saying: “Conflict without violence is the goal. We have differences with all our allies, but there is no possibility of resorting to force with them, and that is the goal which we all hope for. But that is not where we find ourselves now, as we found in Iraq and Afghanistan. We cannot always rely on nonviolent methods.”
Not understanding my argument, the headline writer paraphrased this analysis as “Pipes says Muslim war might be needed.” In fact, it should have been “Pipes says war on militant Islam might be needed.”
I believe this distinction – between Islam and militant Islam – stands at the heart of the War on Terror and urgently needs to be clarified for non-specialists. The most effective way to do so, I expect, is by giving voice to the Muslim victims of Islamist totalitarianism.
Come to think of it, that sounds like the sort of activity that the U.S. Institute of Peace might wish to consider undertaking as part of its mission to “promote the prevention, management and peaceful resolution of international conflicts.”
Read the whole thing.
This should make a few people happy:
“[Lord of the] Rings” distributor New Line Cinema recently announced it is planning a special screening series leading up the release of the final film in the epic trilogy.
“Fellowship of the Ring” and “Two Towers” will roll into theaters across the U.S. in sequential order before the December 17 release of the “The Return of the King,” so die-hard fans can catch all three films on the big screen in the same month.
What, no all-day marathon?
More on North Korea, this time from Reuters:
An international consortium building a multi-billion-dollar light-water nuclear power project in North Korea is expected to decide next month to formally suspend the venture, U.S. officials said Tuesday, the eve of crucial talks with Pyongyang.
Momentum has been building for some time to suspend the project, which the United States and its allies in the Korean Peninsula Energy Development Organization agreed to fund as part of a 1994 nuclear agreement with the isolated communist regime.
But taking a formal decision now could affect six-party talks that open Wednesday in Beijing in an effort to persuade Pyongyang to abandon its nuclear ambitions.
Damn right it could — and that’s the whole point. Negotiations require a carrot and stick. This public musing about whether to scrap the North’s promised light-water reactor (for which Kim promised to scrap his nuclear weapons program) is just one of the many small sticks.
Read the previous post to see what a great big stick looks like.
I love it when a plan comes together. Read this from Kuwait’s Arab Times:
Washington is trying to convince Beijing to set up camps for North Korean refugees and has offered to help finance them in hopes of applying pressure on Pyongyang, an expert on North Korea said Tuesday. Such a move could create an exodus of North Koreans that, as happened in the former East Germany more than a decade ago, could lead to the collapse of the government, activist Norbert Vollertsen told AFP.
Hungary’s decision to open its border with East Germany, following US pressure, led to a flood of refugees that helped bring down the German government. “(US) State Department people told me this,” Vollertsen said of the proposal. Vollertsen, a German doctor, has helped hundreds of North Korean refugees in China seek asylum at foreign embassies and said he has been in contact with ranking US officials.
If any of this sounds familiar, it’s because you read it here almost four weeks ago.
I’ve certainly never seen one of these before — it’s a fisking/intervention.
Of our beloved Lileks.
Here’s the story from India, as reported by the Taipai Times:
At least 42 people were killed and more than a hundred wounded yesterday when two bombs exploded in the heart of India’s financial capital Mumbai, police said.
It was not immediately clear who planted the bombs. One exploded near the historic Gateway of India, a crowded monument in the tourist heart of the city, while the other exploded in a congested bullion market near a Hindu temple.
“There were legs and hands lying on top and inside my taxi. I had a miraculous escape,” said taxi driver Lal Sahib Singh, whose clothes were soaked in blood. He had been driving past the bullion market when the bomb exploded.
How long, I wonder, before our punditry asks what India did to deserve this, and why they’re so hated?
Oh, right — it’s all America’s fault.
Serious Ayn Rand fans, take note: Scholar and author Chris Sciabarra is presenting an online seminar on “Dialectics and Liberty.”
Screw the excess bandwidth charges — I just have to share this.
(Courtesy of my friend Ed Lambert. And it’s almost entirely safe for work.)
A brief history of North Korea’s nuclear intentions:
A little over a decade ago, South Korea’s president at the time, Roh Tae Woo, after two years of intensive diplomacy, managed to hammer out the 1992 North-South Joint Declaration on the Denuclearization of the Korean Peninsula. Soon afterward it became clear the North was cheating on the agreement. At that point the United States set about doing its own probe of North Korea’s nuclear intentions through a diplomatic foray that was capped by the 1994 Washington-Pyongyang Agreed Framework. When that framework first began to wobble back in 1998 — under suspicion of renewed North Korean nuclear cheating — the Clinton administration resolved to look into North Korea’s nuclear intentions once again, this time through a process designed by William J. Perry, the former secretary of defense. Then, for five straight years, from early 1998 to early 2003, South Korea’s President Kim Dae Jung probed North Korea’s nuclear intentions through his diplomacy-intensive “Sunshine Policy.” During Nobel Peace laureate Kim’s final months in office, Pyongyang was caught once again cheating on its nuclear deals. Instead of scrapping the offending program, North Korea admitted the violation, declared the Agreed Framework dead and pushed its nuclear weapons program into overdrive.
Are we to believe that a deep mystery about North Korea’s true nuclear intentions lies buried within this story line, yet to be unearthed through further diplomatic exploration? The record suggests otherwise. Pyongyang has made it clear it will push its nuclear weapons project overtly when it can — and covertly when it must. With the right enticements, Pyongyang can be persuaded to promise to give up its nuke program. It just can’t be persuaded to actually keep the promise.
Those two grafs are from a Nicholas Eberstadt column in today’s Washington Post. The whole thing is today’s Required Reading.
This David Ignatius column is the most interesting thing I’ve yet seen on our problems in Iraq. Ignatius brings back some words of William Colby — and another (but helpful) Vietnam analogy:
“American troops only rarely could find the enemy; since it proved almost impossible to fix him, fighting him generally consisted of fighting off attacks, not finishing him according to the best military tradition,” Colby wrote in his book, “Lost Victory,” published in 1989, seven years before his death. A far better strategy, he argued, would have concentrated on providing security to Vietnamese villages through aggressive “pacification” operations such as the controversial Phoenix program, which Colby ran from 1968 to 1971.
If you aren’t familiar with Phoenix, it was one of the few things we tried in Vietnam that actually worked. Soldiers — mostly Marines, actually — worked closely, and in small numbers, with village chiefs and militia. Their goal was to make the South Vietnamese safe from the Viet Cong, one hamlet at a time. They did so by training up the locals in a non-condescending manner, helping establish a non-corrupt local government, and turning each town into a mini fortress, then slowly expanding the security zone.
Imagine a war won, not by advancing the front, but by scattered, spreading ink blots slowly merging together.
Phoenix wasn’t glamorous, but it was working. Unfortunately, it was only tried in a small area — and the loss of public support for the war doomed Phoenix, along with the Republic of Vietnam.
So what does this have to do with Iraq? Read on:
Colby’s critique of “overmilitarization” in Vietnam is worth reviewing now, at a time when many analysts are urging President Bush to send more troops to Iraq. The latest call came over the weekend from Sen. John McCain. “We need a lot more military, and I’m convinced we need to spend a lot more money,” said the Arizona Republican after visiting Baghdad.
Sending more troops always sounds like the right answer when the going gets tough on the battlefield. But as Vietnam showed, deploying a bigger, heavier force isn’t necessarily a wise choice. The large U.S. garrison, with all its attendant logistical needs, might simply reinforce the impression that it’s America’s war — making the enemy more aggressive, our local allies more passive and U.S. troops more vulnerable.
Could something like Phoenix work in Iraq?
Already, the Kurdish north is mostly at peace, and the Shia south is manageably tense. The “Sunni triangle” is our main problem area, and one that, if you look at the map, seems well-suited to the ink blot test.
Just take it one town at a time, and save Tikrit for last.
UPDATE: If you’re interested in Cold War might-have-beens, check out Cold War Hot: Alternate Decisions of the Third World War. One of the stories looks at what might have happened had we focused our entire Vietnam effort on a Phoenix-type program.
ANOTHER UPDATE: Here’s a related story from James Joyner.
U.S. intelligence suspects Iraq’s weapons of mass destruction have finally been located.
Unfortunately, getting to them will be nearly impossible for the United States and its allies, because the containers with the strategic materials are not in Iraq.
Instead they are located in Lebanon’s heavily-fortified Bekaa Valley, swarming with Iranian and Syrian forces, and Hizbullah and ex-Iraqi agents, Geostrategy-Direct.com will report in Wednesday’s new weekly edition.
Then there’s the next graf. . .
U.S. intelligence first identified a stream of tractor-trailer trucks moving from Iraq to Syria to Lebaon in January 2003. The significance of this sighting did not register on the CIA at the time.
. . .which leaves unexplained why CIA chief George Tenet still has his job. Then again, I’ve been wondering about that for 17 months.
This most recent January, you’ll recall, is when the hand-wringers were wringing their hands most solemnly about giving inspections yet another chance to work. Meanwhile, CENTCOM was gearing up for war. At the same time, an entire convoy of big rigs was detected by one of our intelligence agencies, but somehow the CIA was unable to come up with almost the only reasonable explanation for it.
And now we’re faced with the prospect of chemical and/or biological weapons in the hands of Syrian, Iranian, and Lebanese terrorists — and a CIA that’s asleep at the wheel.
Heads must roll.
Glenn Reynolds on the health benefits of red wine: “Yes, I know — some wines purportedly have more good stuff in them than others. My advice: just drink more to make up the difference.”
Jim Dunnigan reports that the Saudi front in the Terror War is as confusing as ever. Read:
Saudi ArabiaComments Off
Today it’s Fred Kaplan, and why the upcoming talks with North Korea will be Washington’s Excedrin Headache #238. Here’s a little taste to get you started:
His negotiating strategy, like his political rule in general, is built around generating an air of perpetual crisis and brinkmanship, constantly probing for divisions among the diplomats on the other side of the table, and ceaselessly demanding further concessions until he is convinced that there’s nothing more to be wrung.
There is a pattern to this set piece, as revealed in a series of negotiations in the mid-’90sComments Off
This story took away one of my childhood (and grownup) dreams:
NASA’s Mars Global Surveyor spacecraft, in orbit around Mars, has been measuring the glow of infrared light from the rocks below, looking for patterns of colors that identify different minerals. In particular, scientists have been interested in minerals known as carbonates, which form only in the presence of liquid water. On Earth, the white cliffs of Dover in England are a notable example of carbonates.
In today’s issue of the journal Science, the researchers who run the infrared instrument report that Global Surveyor has detected small concentrations of carbonates in Martian dust, 2 percent to 5 percent by weight, but none of the large deposits that would probably form at the bottom of a lake or an ocean.
“I would say it’s extremely unlikely Mars had large bodies of warm, standing water that were exposed to the atmosphere for a long period of time,” said Dr. Philip R. Christensen, a professor of geological sciences at Arizona State University and senior author of the article. “It’s reasonably unlikely that massive carbonates exist and we haven’t seen them.”
Then again, it’s not like we weren’t going to have to terraform the place before establishing permanent settlements. But finding the water to do so just got that much harder.