Tag: news

I, for one, celebrate the death of Osama bin Laden. He was a pox, a barnacle, a cancer dragging the national psyche into a continuous cycle of fear and hatred. He was a face of national failure. He hit us, he lead us into two wars, and he was still out there, somewhere, lurking. Now we, as an entire people, get closure.

Closure is for everyone. The Middle East can move on. Instead of bin Laden, the face of the Middle East are kids in Tahrir Square bringing down Mubarak or the hideous struggle for freedom in Syria where more are being mowed down by Bashir al Assad’s thugs. Instead of terrorism and drugs and guns and fundamentalism, it’s Democracy. OBL was a tool for dictators to justify the repression of their people. Now he’s gone.

The US needed it, too. A clean break. A victory that feels like a clean victory. And a US-style testosterone laden victory at that. We didn’t use foreign troops or bombs. We sent in Navy SEALS and shot OBL in the head. Movies, television shows, books, video games to follow. After market crash and terrible recession and crazy stupidity and no one feeling good about anything, we needed this.

I disagree that this will dissipate and fade with the next news cycle, too. This is the stuff of mythology. A bad guy, a detective story, a multi-month hunt, a tense President giving the order, brave guys with guns and helicopters flying in the middle of the night, a dramatic firefight. This isn’t reality, this is narrative. Narrative is sticky. The story presses all the little Man with a Thousand Faces buttons.

What have we learned?

– Human intelligence is crucial. Guys on the ground talking to people are infinitely more useful than hoovering up unlimited data and trying to sift through it. The police state is not very effective in finding a guy living in an Islamabad suburb. Who would have thought?

– Quality security is infinitely better than quantity security.

– Torture doesn’t work. All the information gleaned that lead to Osama bin Laden came from — shock — standard interrogation techniques. Torture as a method for extracting information should be outlawed. Period.

– Terrorism is a police action, and terrorism is a crime. Sure it took the CIA and the Navy SEALS to take OBL out, but most of the run up was hard-core detective work. Maybe next time the US won’t go randomly invading countries.

– Again, terrorism is a crime. OBL was a criminal. He murdered people.

– Barack Obama has nerves of steel. Man. When he said he had better things to do than mess with his long form birth certificate, the man was not kidding.

– Our guys are flat-out awesome. *wave little flag*

– We need to start really talking about the role of the crazy security industrial complex. Want to find things to cut in the budget? I have some interesting ideas!

So yay. Rock. I’m all for moving past OBL forever and ever and seeing what Egypt and Tunisia and the other countries are going to do in a post-OBL world where the world moves on.

I am having difficulty forming a coherent and useful opinion on what the US is doing with the UK and France in Libya. I have purposefully kept myself confined to facts and stayed away from opinion but I still can’t really get my mind around it.

On the one hand, enormous massacres of civilian populations by heavily armed militaries defending insane dictators are generally a bad thing from a human rights perspective. Especially when these massacres are broadcast on TV. This creates pressure to “do something.”

On the other hand, I have two major objections. The first is that this isn’t really clear that bombing Libya does anything to further US interests. I am certain it is important from an oil perspective but it’s unclear it is as important as, say, the mess in Yemen or the Saudis invading Bahrain to stop the protests or the rapid militarization of the Iranian government. Second: I have never believed that freedom can be given. I have always believed that it must be earned, even if it means horrible things happen without outside intervention. Freedom forced upon a people from without is just another word for oligarchy.

So what does the US involving itself in a Civil War between a brutal dictator and a bunch of people holing up in several towns with guns in Northern Africa do? I just don’t have a great answer. I’m not sure what the goal is.

I suspect there is no correct answer to Libya. Either you stand by and do nothing and watch the atrocity and listen as people scream that you do something (that ‘something’ being highly undefined) or you ‘do something’ and everyone screams that doing something isn’t the right thing/isn’t good enough/is too interventionist/isn’t interventionist enough. You half do something like firing missiles off submarines and that’s too much/not enough.

And after writing this small blurb on it I realize that there is no answer, it’s a crappy situation, and no matter what happens people who bear no responsibility for the decision are going to sit around and crow and point fingers and scream that so-and-so should do this/not do this/is weak/etc. I find I am personally not crazy about the decision to start bombing the place because either the locals oust Qaddafi or not and find their own way or not. At the end of the day, the locals have to live there tomorrow. It’s their home. And we get to change the channel.

Pension plan management is traditionally a very dull job.  A huge group of people in a big corporation or a union contribute a chunk of their* monthly paychecks into the collected pension fund where a normally 3rd party company manages the contributes and tries to make them grow more than the rate of current inflation to ensure a fund is viable for future retirees. Traditionally, the managing companies put this money into blue chip funds and treasury bills. It was not an exciting job but there are many Big Pools of Money.

But in the 2002, 2003 time frame, this changed. Surely by now you have all gone and listened to the Planet Money archives, you have listened to the Giant Pool of Money show from This American Life and you even read Michael Lewis’s the Big Short. Money manager for pension funds received bonuses for growing pension plans over the rate of inflation and Wall Street had brand, swanky new cannot-fail products to sell for big fees. First they sold mortgage backed securities and when all the mortgages there were disappeared the junk left behind was sliced and diced into Collateralized Debt Obligations (CDOs). Who bought all this crap? State pension fund managers. Obviously someone bought all this garbage — otherwise no one was making any money off sales.

In 2007, the market crashed and the pension fund managers were left with huge amounts of the pension plans being zeroed out. The states were contractually obligated to be on the hook to cover the pension funds mismanaged by their third party fund managers. The Obama Administration swooped in, passed a stimulus, and gave giant block grants to the states to help them meet their obligations. This bought the states a couple of years.

It’s pretty straight forward. State unions entrusted the management of their pension plans to the state to manage. The state outsourced it to a company that bought the Wall Street line of fast, easy money. The market crashed. The money taken from the State unions went *poof*. Now the states have, instead of firing the money managers and pressing the Federal Government to force regulations to protect their future obligations, decided to Union-bust. Which is ridiculous policy.

What galls me most about what is going on in Wisconsin are the lies. The argument is essentially this:

“We have a multi-decade agreement in place with our workers to assist in their retirement that they pay into. We lost it all gambling. But we love gambling on exotic bond instruments we don’t understand so very much we have decided gamble more and fire them all! Aren’t we great civil servants?”

Why not tell people the truth? The state lost the money on a shell game. The money managers were trying to make big bonuses and lost the whole fund investing in crappy developments in Florida. The state has contractual obligations and has to make up the shortfall because that’s how legally these things work. So that means either the unions have to take some kind of cut until the pension plan is repaid in full or the revenue will have to be raised. The holes were somewhat covered by the stimulus but with the Republicans in charge and no second round of stimulus, there’s going to be a change and it will have to come in the form of a raise in gas tax/sin tax/etc. Oh, also, we have new money managers. It’s their fault, they need to own up, and come up with a solution.

But no. “UNIONS ARE EVIL ALL MUST DIE DIE DIE.” In this day in age, our politicians don’t have the balls to tell the simple truth. Instead they grandstand. I would pay good money for a single politician who could be bothered to read a damn newspaper or understand the problem.

It might have helped if the Obama Administration could explain anything they do to people but that is, as they say, another story.

* Yes, theirs.

I am beginning to believe in the Onion headline: “Black Man Takes Nation’s Worst Job.”

Every pundit — right, left, center, on the moon, whatever — is howling for Obama and the Federal Government to do something about the BP Oil Spill. No one has any suggestions what that “something” is, only “something” must be done and it must be done “now.” Would a nice speech plug the hole? Some words keep the horrible pictures of oil covered birds from getting all over the Internet, livelihoods destroyed, and entire states wiped out? We elected a guy who can keep his cool in the face of adversity and here he is, keeping his cool in the face of massive adversity, and we’re flipping out because he is keeping his cool in the face of adversity.

I asked myself the honest question: “What should the Federal Government do?” That lead to the more interesting question: “How did we get here?” And I came up with my friend, the bullet points.

How We Got Here:

1. We are approaching a condition called Peak Oil. The easy to reach oil fields are tapped out so oil companies, to keep up with the insatiable demand for dead plant pumped out of the ground in the form of fuel and profits, must venture further and further afield.

2. While venturing further afield, oil companies must take on great amount of risk.*

3. Mitigating risk is extremely expensive. It requires stricter regulation, third party validation and audits, expensive engineering solutions to ensure safety. Knowing a little bit about Six Sigma is helpful to understanding what BP was attempting to avoid. Mitigating great amounts of risk to drill safely costs great amounts of money.

4. Risk analysis, risk mitigation, business continuity and disaster recovery are all basic business processes that BP should have undertaken, and likely did, but decided instead to socialize the risk to privatize the profits.** They had two major disasters prior to this one: a major Alaska oil spill and a Texas refinery explosion. Neither caused the slightest hardship for BP, so “big dangerous risks” meant “the Government will cover the costs of cleanup so we’re good.”

5. Third party audit and validation through licensing is one of the few ways to force dirty companies to be good citizens. Otherwise, see #3, above. Mitigating risk meeting requirements is very expensive.

6. It was cheaper, during the Bush Administration and into the Obama Administration, to simply bribe auditors and staff Interior’s audit and compliance department with lobbyists than it was to mitigate the risk on the rigs.

7. Certainly it was on the Obama Administration’s list to audit and reform the Department of Interior, but it was somewhere below the Euro imploding, the Financial Crisis, 10% unemployment, North Korea, Iran… he is not a bored man.

Big risks + no risk mitigation + cutting corners + socialized penalty for failure + no third party oversight == BOOM.

This brings us to “the Federal Government needs to DO SOMETHING.” So far the Government has:

1. Provided extensive financial assistance. (This was reported in the Economist at length but not in the US papers, which was weird.)
2. Deployed the Coast Guard.
3. Deployed the Navy.
4. Fired people in the Department of Interior.
5. Provided all the scientific and engineering logistic support they can.
6. Opened up civil and criminal cases against BP which may or may not be helpful.

The Federal Government does not have petroleum engineers or the equipment to go undersea and plug the leak. Nor do they own the rig, the equipment, or the wreck on the bottom of the Gulf of Mexico. They must rely on BP, who has the equipment on the scene, to cap the leak before the Federal Government can unleash assistance to start the unbelievably massive cleanup. The Government can make some suggestions and keep people away while BP tries to work, but reality is that they cannot actually do anything.

And this is deeply frustrating because BP is incompetent.

This brings us to: What should Obama Do Now? I cannot see anything he can do right now. Walking along the Louisiana Coast looking frowny might make for some okay media coverage but the reality is, until the well is capped and the oil stops spewing, he can not do anything except provide some optics.

What do I think the Government should do once the well is capped and cleanup has begun? Here are my suggestions, and take them or leave them, but this is all I have:

1. Reform the Department of Interior from top-down. Fund and mandate all third party government regulations and audits. Put the screws down on licensing. Force the oil companies to pay to mitigate risk.

2. Pull BP US’s leases until they go through a complete safety audit. Yes, it will spike oil prices but we can no longer afford to socialize the end result of ignored risk. Force the company to have a hand their own risk and force them to pay enormous financial penalties.

3. Start a Manhatten Project/Apollo Space Program for getting off oil. Make it the #1 National Priority. Make it a point of National Pride. Run commercials. Run op eds. Show dead birds 24/7 on TV. Run anything to get the public turned in that direction. If Congress cannot figure out a way to pass funding, find it in the already allocated Defense Budget. God knows, that Defense Budget is mammoth. Do anything, anything at all, for funding a massive initiative to get us away from the death by dead plants. And do it now. We should have done it 10 years ago.

This is it. This is the last great warning we will get. We must change.

* BP keeps using this excuse that this enormous risk was “too remote to be quantifiable.” This is bullshit.
** Sound familiar? There’s a trend…