Absolute Flaming Idiots

Yahoo News:US auto safety group wants to curb gadget use by truckers

Advocates even wants the FMCSA, the DOT agency that oversees commercial trucking, to study whether using Citizens' Band (CB) radios -- which provide short-distance radio communications -- or dashboard-mounted navigational devices should be banned.

CB radios are a lifesaver on the road, both for truckers and other users. You can find out about accidents and hazards ahead and have time to prepare. Advocates are being absolute flaming idiots. Maybe if they could take a break from their railroad funded Jihad against the trucking industry they could, I don't know, do something about AUTO safety.

Reality Bites

Ever wonder why contestants always act so crazy on "reality" shows? They're isolated, buzzed and Sleep deprived. Almost like Gitmo with cameras.

Kucinich cuts through the bull

Bloomberg: Obama Saving GM Needed Dealmaker Team to Break It in Bankruptcy

Obama was taking the wheel out of the hands of a GM veteran who spent his 32-year career with the company that sent him to Harvard University for a master’s in business. The Wall Street restructuring experts were in charge.....

Because, after all, Wall Street has done such a good job lately managing its own affairs lately.

“Who is this auto task force, and who do they represent?” asked Representative Dennis Kucinich, an Ohio Democrat. “They represent various Wall Street interests who have long looked at exporting jobs out of this country.”

Wall Street Blows up the economy, then is handed vast sums of money with no strings attached along with many lucrative opportunities for self dealing at the taxpayer's expense. GM is blown up by the economy we give it to the geniuses who have worked night and day to ensure the collapse of the middle class so they can get a couple more beeps of yield on the deal.

By the Way, why are labor contracts sacred for AIG but not the UAW? How did the titans of Wall Street get to DC for their 4 trillion dollar bailout? How is complaining about a worker making $25 an hour plus benefits populism and complaining about a CEO making $25 million envy?

The Financial Crisis continues apace

Brad Setser takes on the Foreign Bond Vigilantes story. He finds that Foreign Central Banks are not abandoning the treasury market, rather they are moving from longer dated (more than 2 yr) treasuries to shorter dated ones. This has an effect exactly the opposite of Greenspan's paradox, it lowers the cost of borrowing short and raises the cost of borrowing long. The effect is to drive up the costs of borrowing to fund the governments ongoing operations and to strangle the refinance boom (which is both getting Americans out of toxic mortgages and generating fee income for sick banks).

One of these things is not like the other

The Transportation Security Administration is warning truckers that Mexican drug gangs are out of control and may target trucking operations to move their goods. Meanwhile the Obama administration is trying to pitch another program to allow Mexican truckers to roam the country. I appreciate that in the current economic crisis the Obama administration is staying focused on long term objectives. What's sad is those long term objectives are. Not content with the declining real wages of working Americans and widening inequality the Obama administration is anxious to outsource more jobs and enhance corporate profits.

Sacrifice

Daniel Howes: Sacrifice? It's in this state's DNA

More rope to extend the federal lifeline -- now at $17.4 billion for General Motors Corp. and Chrysler LLC, and $5 billion for auto suppliers -- will come with conditions, the president says. He wants more sacrifice from unions and executives, bondholders and suppliers.
Sacrifice? What, exactly, has this town and its investors been experiencing the past three-plus years? Spring break? This notion, aired during the congressional inquisitions late last year, picked up by Team Obama and wielded by whoever's trying to score points, that Detroit Auto hasn't yet "sacrificed" in a (losing?) effort to fix itself is absurd.
The union has helped usher many thousands into retirement, bargained down its wage and benefit scale for new hires and agreed to sharp reductions in company health-care obligations. Brands have been sold, dealers lost, bonuses eliminated, salaries cut, tens of thousands of jobs eliminated in wave after wave after wave of reductions.
Plants are going or gone in communities across the country. Local and state tax revenue started plunging long before home values in Manhattan and the Bay Area did. Michigan's per-capita income, long among the nation's highest, has been dropping like a stone this decade and soon will be lower than Republican Sen. Richard Shelby's Alabama.
Sacrifice? We've seen a few, even if it doesn't look to be "enough" from the condescending heights of New York, Washington and San Francisco. And you know what? It isn't enough, not now anyway, not when technically insolvent companies are petitioning the Treasury Department for aid because their credit ratings are destroyed and car and truck sales are trending at terrifyingly low levels.
I, too, have argued Detroit's business model is hopelessly broken, that its costs were indefensibly high, its brand image tarnished, its culture mired in denial, its management and union leadership too often willing to accept short-term expedience at the expense of long-term success.
But sneering about sacrifice, as if there's been none, is a towering insult to the tens of thousands of families, white-collar and blue-collar, who took buyouts and walked out into a collapsing economy; to the dealers whose businesses have collapsed; to the 7,631 UAW members -- 53 percent of them in Michigan -- who this week accepted comparatively meager packages to walk away from GM.
Sacrifice? If there are two things this state and its bellwether industry understand, it's sacrifice and recession -- and the knowledge that there's more of both to come.

Gotta love how contracts are sacrosanct for the millionaire bankers at AIG, but when it comes to working people Obama is happy to use them for toilet paper. Obama's been busy this last week patting the poor persecuted bankers on the back and letting them know they are special after a few of them got their feelings hurt last week. The bankers, no doubt, are busy scraping the McCain bumoer stickers off of the back of the Beemer. The Union workers who helped put Obama in office may be allowed to eat the crumbs that fall from the bankers bacchanalian feast if they are suitably penitent and supine to receive what they've got coming.

Pump and Dump

Words just fail me.

Treasury is going to overpay for Bank of America stock. We're going to pay "10% below the bank’s average stock price for the 20 trading days ending Feb 9" ("By the way, Feb 9 was the high point for all of these bank stocks during the month of February. What a coincidence.")

Guess what Bank of America executives were doing on the "20 trading days ending Feb 9"? Manipulating their stock price higher.

Oh, by the way, Obama has quietly signalled his intent to double TARP and give 750 billion more to the bankers (but we only expect to lose $250 billion of that, or over $800 for every man, woman, and child in the U.S.).

This is Zimbabwe worthy.

Freight is "in a free fall"

So says FTR Associates

Truck purchases will continue to drop throughout 2009 due to overcapacity, and the first and second quarter will be incredibly difficult on fleets’ bottom lines, trucking industry analysts said today during an FTR Associates webinar.

“This recession, from a freight standpoint, started almost three years ago,” said Noel Perry, managing director of FTR Consulting. “There is a free fall right now, but it is also the effect of cumulative stress on the industry…We have such low capacity, as low as we’ve had since the 1970s—nobody working in the industry right now has experienced these levels.”

And railroads aren't doing so hot either.

The Multiplier that Matters

John Phipps takes on Greg Mankiw. Here's a taste:

The esoteric world of economists is reveling in the attention the ideas put forth to revive our languishing economy have generated. I have watched with interest as the normally tepid prose of the profession becomes more heated (OK - warmed) as various proposals are offered.

One powerful argument is represented by Greg Mankiw, who offers (to me at least) persuasive reasons why tax cuts at the top and to businesses will give us the biggest bang for the buck. He has also offered reasoned arguments on the issue of growing inequality over the past few years....

Let me suggest it is far more crucial to our economic health to convince more Americans our system still works for them, not just some. Further, doing more of the same, i.e. cutting top tax rates, does little toward that goal, even if the models suggest it is the best of all possible choices. In contrast, everybody gets to use good roads or new schools.

I get proponents' point about multiplier effects and how tax cuts are the fastest, easiest most powerful way to jump-start the economy. But it looks a like a economic sugar high to me. And recent tax cuts produced an awful lot of ephemeral wealth, it seems. Surely a mixture of the two should not be dismissed out of hand by the economic community.

Academia's estrangement from the real world by virtue of tenure allows it a curious detachment from such ideas that engage non-tenured minds, at least until sufficient historical data accrues to make it worth studying. This myopia seems most pronounced the further up the ladder experts ascend. I have begun to weigh opinions from private sector economists with more respect, since they have much more on the line when they put forth proposals.

Our economy is suffering from a crisis of confidence by a large number of people who don't even know what a multiplier is. Or particularly care. And oddly enough, their opinions matter too. Actions that cause them to view the future with less alarm, or make less dysfunctional econiomic decisions are not to be despised.

Right now everyone, including the rich, is unnerved by the economy. The money being sent to the banks by the Feds is not being lent. Some of it is being blown on bonuses, dividends and acquisitions—but a lot of it is being stuffed in the vaults. Tax cuts without a change in social psychology will just lead to more money being "stuffed into mattresses".

Moreover, as Mr. Phipps points out, infrastructure has tremendous multiplier effects on the future productivity of the economy. America has suffered through years of underinvestment in the public and private sector. We plunged into debt to fund consumption, not investment. Now we have a fairly massive infrastructure deficit along with an enormous financial debt. The ribbons of steel, concrete and fiber that our economy flows across are worn out and overloaded. Rebuilding them will not only put people to work (and in the process inspire confidence) but also lays the groundwork for future growth and prosperity.

Military Budget Crisis looming

The Big Picture: US Military Force Structure

My takeaways:
Massive Defense Budget cuts are coming due to competing Civilian Demands.
Military budgets are already inadequate for stated plans.
The Military is not structured for the missions it is taking on (Iraq, Afghanistan)
"....you can NOT train a force to do both kinetic war and win “Hearts and Minds” the psychological imbalance not only precludes a force from doing both, but when you try, you fail at both."
Procurement is utterly broken.
"....our current direction of recapitalization cannot be sustained in the face of fiscal realities, and it is probably the wrong direction anyway. Give the delays in new programs and the “LULL” that will exist in delivering them, there is about a 5 year gap in the 2013-2018 timeframe when our current readiness will drop below operational levels. Our current inventory was built on non-wartime metrics.
The 5 years of combat we have had has aged equipment 16-20 years and acquisition programs cannot keep pace and they are unfunded at even that level. For example HUMVEES were programmed for 8000 miles per year. The current inventory in the past 5 years has surpassed the 20 year life of the vehicle (i.e. the average is in excess of 150,000 miles). The vehicles replacement is due in 2014, but is expected to slip to 2018."

Opinion:
Either we need to transition to a full war footing or we need to disengage from Iraq and Afghanistan. No matter what we do we are going to be un-breaking the military for years, possibly a decade or more. We need a military that can "kill people and break things" a lot more than we need one for peacekeeping and that should be the basis for allocating resources.

Our one defining victory of the 20th Century was won on the China model. The "arsenal of democracy ' and the Russian war machine produced vast quantities of adequate weapons swamped the small number of fussy wonder weapons the Germans had. Like a bronze age king though we brought the vanquished enemy's fallen idols into our temple and bowed down before them. We became the ones counting on our wonder weapons that we could never afford to produce in quantity. Our resources are much larger than the German state so it took longer for us to hit a wall but we have. Moore's law does not apply to defense. If anything, it seems to be inverted.

The Death of Perspective

Michael Lewis, writing about the financial crisis, offers this bon mot:

OUR financial catastrophe, like Bernard Madoff’s pyramid scheme, required all sorts of important, plugged-in people to sacrifice our collective long-term interests for short-term gain. The pressure to do this in today’s financial markets is immense. Obviously the greater the market pressure to excel in the short term, the greater the need for pressure from outside the market to consider the longer term. But that’s the problem: there is no longer any serious pressure from outside the market. The tyranny of the short term has extended itself with frightening ease into the entities that were meant to, one way or another, discipline Wall Street, and force it to consider its enlightened self-interest.

This is the essence of the crises we face politically and economically: the short term has utterly eclipsed the long term in the consciousness of our leaders. We have sold our inheritance for a bowl of Porridge. Whether it is the Congressman handing the bill writing over to the Lobbyist or the Rating Agencies selling AAA ratings to Investment Banks. Credibility earned over decades is being pissed away for short term advantage.

Economically, it is even worse, as Angry Bear guest writer "Edward Charles Ponzi Jr" writes:

In time, our current society will be seen as one that ate all the food in fridge, all the food in the pantry, sent out for pizza, maxed out the credit cards and then burned the furniture while proclaiming that we are really very warm and well-fed. Financial historians in the future will say, "what were they thinking?" about our era.

We are seeing the inevitable conclusion of the World's dumbest pyramid scheme wherein those at the top of the pyramid have sought to destroy those at the bottom. Demand, kept on life support by the pawning of America, has finally collapsed.