Still in Canada

Haven't posted for a week because I've been driving around in Canada with a subset of the family. Favorite new town discovered --- Kingston, Ontario. Loved Kingston, particularly the people. Very very friendly kind people. And almost West Coast laid backness. The sentiment was virtually unanimous, except for the littlest member of the family, who just wants to go home.

Stock Market is Going to Crash

The simple fact is that, no matter what b.s. the analysts are peddling these days, equity is never really worth more than the intrinsic value of the companies they represent and that worth is dependent upon the cash flow generating ability of the firms and the relative riskiness of those cash flows, as well as the alternative uses to which shareholders could put their money. When dollar interest rates rise, the net present value of the dollar cash flows that companies generate falls. Thus, the intrinsic value is lower as interest rates rise. In addition, higher interest rates eventually impact spending (even if most consumers are clueless about the usurious interest rates they often pay for credit card debt). This is particularly the case as many consumers have borrowed close to the edge of their capacity to repay these loans (leaving little wiggle room for higher payments due to rising interest rates). Higher crude oil prices raises the cost of doing business for most companies (more for some than others). The higher cost of doing business puts downward pressure on long term cash flows and intrinsic value. And at some point the higher oil prices will put further pressure on consumer budgets, forcing some reduction in spending on non-energy related products and services. All of these effects are already present and likely to worsen. The U.S. economy is being propped up by the Chinese right now, who are helping to cushion the rise in interest rates, buying lots of our stuff, and generating global demand, in general, for goods and services. The Chinese government continues to buy U.S. treasuries, slowing the rate of increase in inerest rates and helping to keep the real estate bubble from deflating too quickly. Of course, Chinese economic growth is also fueling the rise in oil and other commodity prices. However, none of this means that U.S. firms are looking at sufficient growth in cash flows to justify current valuations, which have become quite optimistic (although in most cases, Google excluded, not speculative terrain, as yet). This is all the more the case if Chinese growth should slow. But even if it doesn't, there is plenty of reason to anticipate that U.S. participation in the China show will diminish over time, thus reducing future cash flows (upon which these stock valuations are based). Add to that the risk of a slowdown in U.S. domestic spending --- debts are too high, particularly in a rising interest rate environment, housing, in some parts of the country (like where I am), are starting to inflate to bubble levels, jobs are leaving the U.S. in large numbers (yet consumers have not yet "got it"), we're spending far too much $$$ on wasteful police state measures and military adventurism with little expectation of a payoff in either cash flow (cheap oil?) or heightened security (probably just the opposite), and I could go on, but the point is that valuations in the stock market are quite probably well above that intrinsic valuation bar. If I'm right, a correction of severe magnitude is in our not too distant future. The summer rally has been fun (it almost always is) but something more than leaves may fall this autumn.

John Roberts will be Confirmed

Roberts is the poster boy for pro-corporate lawyers in an age of globalization and deepening corporate (over individual) rights. Nevertheless, he has the academic and judicial credentials to be nominated and confirmed. Any empirical analysis of previous Supreme Court nominees shows that candidates with strong judicial credentials are very likely to be confirmed, particularly when they are not controversial nominees intended to spark an ideological battle (such as Robert Bork). Unless there is something hidden that is damaging, he will be confirmed. Based on what I know as of this moment, I can see no reason he would not be confirmed.

People's Choice Award for World's Greatest Philosopher?

BBC decided we needed a democratic poll to decide the world's greatest philosopher:

World's Greatest Philosopher

Land of the Free, Home of the Brave by Dale Tozier

Since January 2000, roughly 65,000 Americans have died as a result of firearm homicides. We are Americans, proud of our unparalleled freedoms and as brave as can be. We fervently defend our supposed 2nd Amendment right to own firearms. We have decided as a nation that 14,000 homicides per year is a reasonable price to pay to preserve this right which many believe is laid out in the Constituion.

Since January 2000, approximately 190,000 Americans have died on our highways. Roughly 80,000 of those deaths involved drunk driving. We maintain our perspective on the cost of freedom, so we don't take this transgression very seriously. We have a president who was arrested for DUI after crashing his car while drunk. We have a vice president with two DUI convictions. We have a congress and Senate loaded with members who have DUI convictions. Americans value our freedoms, and we are loathe to seriously crack down on this behavior by imposing long prison sentences, heavy fines, and license revocations. We are willing to pay the price at the rate of about 18,000 deaths per year rather than end our freedom to have a few drinks before getting behind the wheel of a car.

We, as Americans, obviously value our individual freedoms and rights above all. Not even 32,000 deaths per year caused by firearm homicides and drunk driving are enough to make us freedom-loving Americans give up our inalienable rights. We recognize that "freedom isn't free", as the saying goes. We will willingly pay any price to preserve what it means to live free.

Well, ALMOST any price.

Since January 2000, approximately 3,000 Americans have lost their lives in terrorist attacks here. As a result, American citizens have been rounded up and carted off to an offshore prison where they can be held incommunicado indefinitely, without any charges ever being filed. The public has no right to even know who is being held, how many are being held, or why they are being held. These prisoners have no right to counsel, a hearing, trials, visitors, or communication with family or friends. By numerous reports, some have been subjected to torture. The government is not obligated to tell anyone anything about these prisoners and refuses to do so. We are just to trust that our government takes such actions only with great wisdom and restraint.

The congress also rushed through the Patriot Act. Among other things, the government now has the right to monitor which books and magazines we are reading at our local library or buying at bookstores. The government assures us that it really isn't using this broad right of surveillance, but we cannot verify this claim because it is a felony under the act for any library or bookstore employee to tell anyone if any records have been requested by the government. The government also has a secret court it can go to to request secret permission for wiretaps and other surveillance of citizens. The public does not even have the right to know the extent to which this court is being used.

So, I guess we now know which rights we value most: The rights to own a personal arsenal and have a few drinks before driving? … those rights we hold to be inviolate. The rights to due process of law or to read what we choose without being placed on a secret government surveillance list? ... those rights we can do without. As Americans, we know which of our freedoms have real value.

We now also know the price which Americans regard as too high to pay ... the price for which we are willing to scrap the Bill of Rights and the U.S. Constitution:

65,000 firearm homicides since 2000 is a small price to pay to preserve our right to bear arms.

80,000 deaths caused by drunk driving since 2000 is a small price to pay to preserve our freedom to choose to have a few drinks and get behind the wheel of our cars.

But, 3000 deaths caused by terrorists? Well, that is just too much carnage ... time to trash the Constitution and admit that there is a price too high to pay for our freedoms. In a world where our President tells us that we have enemies who hate us for our freedoms, we just can't afford so many freedoms anymore.

As unbending Americans, we'll be damned if we'll ever let terrorists take our freedom from us! We'll just quietly surrender it to our own secret government. Sure makes me proud to live in the land of the free and the home of the brave. How about you?

Dale Tozier

The Challenge of President Ahmadinejad of Iran: Can Romanticism be Reconciled with Modernism?

Newly elected Iranian President Mahmoud Ahmadinejad took office on a platform that called for both reinforcing the conservative measures supported by Iran's more fundamentalist religious leadership, some of which had been moderated of late, and seeking a path of rapid modernization and economic development. This odd combination of romanticism (religious fundamentalism) and modernism has some resonance of the rise of George W. Bush in the United States, who has found it politically expendient to embrace the romanticism of religious fundamentalism (even evoking the Crusades in his pursuit of very explicitly modernist objectives in the Middle East) and at other times, such as his call for the development of hydrogen energy sources or advancing globalization in trade agreements, embraced modernism. President Ahmadinejad could learn a good deal (both in terms of what works and what to avoid) by observing and analyzing the Bush presidency in the U.S.A.

In any event, this is an important conjuncture for Iranian society. The population of the country is predominantly below the age of 21 and yearning for a better life, in both economic terms and in terms of the freedom to express themselves (although some of the expression may be quite consistent with President Ahmadinejad, since there remains many very religious young people, some of whom worked for his election and support a more conservative moral climate). Iran is also on the verge of the development of nuclear weapons (modernity's dark force), which the West may or may not be able to short-circuit. Nuclear power would make Iran less insecure and might actually result in more moderation in the political arena, although nothing is guaranteed. It has had that effect on Pakistan and India, but Israel's government has clearly not moderated (although this may have more to do with the rise of far right elements within the Eastern European immigrant population as a key force behind Likud than it does with the technological capabilities of the Israeli military). At the end of the day, nuclear power won't solve the underlying economic problems in Iran and this is critical if the theocracy is to survive.

And Iran's leaders, especially President Ahmadinejad, recognize that the longevity of their experiment in theocracy depends critically upon the ability to foster economic development, generate higher incomes for the young workers in the society, and serve as a positive example for other Islamic societies. But there are no role models for this unique romanticist-modernist path (or, at least, I'm unable to think of any). Iran would be the example. President Ahmadinejad argued, during his campaign, that strict adherence to Islamic principles can serve as the foundation for a thriving economy and polity, but he did not lay out the path. It will be interesting to see how he proceeds. He is a young president, charismatic and certainly has strong support. In other words, he has a foundation to build upon, although the West, particularly the United States, may not give him a lot of time to get his act together. Indeed, he's been accused of having been a participant in the Iran hostage taking during the end (it was the reason for the end) of Carter's presidency. He denies this, but it is already a distraction that may cost his administration in international relations and thus make it all the more difficult for President Ahmadinejad to reach his objectives.

The new Iranian president also must figure out how to pursue modernization without threatening the 'traditional' economy, which remains large and important. This traditional economy is made up of millions of self-employed artisans and merchants, who were collectively an important interest group that opposed and helped to depose the former Shah. (see my paper, Class Analysis of the Iranian Revolution that was published in Re/presenting Class, edited by Gibson-Graham, Resnick, and Wolff, 2001, Duke University Press) He needs to find a means to get technology into the hands of the traditional sector, such that he can promote higher levels of productivity there and lower cost. At the same time, he needs to pursue both industrialization (in a manner that can match the vibrance of what is happening in China and India) and post-industrial development, recognizing the need to develop services, media, and other non-industrial areas that help to make people's lives richer.

Shame on You CBS News

I just heard the most disgusting bit of hate mongering propaganda parading as news on the CBS Evening News. Whoever wrote the piece trying to draw a correlation between "liberal immigration policies" and today's bombings in London should be summarily fired. It is the sort of b.s. that should be reserved for Fox News. You would think that the number of Muslim immigrants to Britain is directly correlated to the number of bombings in Britain. In fact, the British did have a problem with bombings in the past, but it was not from Muslim immigrants, but from the Irish Republican Army, which is itself a product of Britain's racist and colonial treatment of the Irish (and the divide and conquer strategy that created strife in Northern Ireland, as well as in many other parts of the globe). Where is Dan Rather when you need him? Shame on you CBS News.

Why No Cost-Benefit Analysis of Police State Measures?

In the wake of the bombings in London, there will certainly be calls for even more spending on police state measures in transportation, border crossings, etc. However, I know of no cost-benefit studies of existing measures, such as the huge budget for the new Transportation Security Administration, a new federal bureaucracy. Conservatives have for years decried spending on social welfare and services and called for cost-benefit analysis of such spending, as well as on spending for health and safety measures for workers and other citizens (a citizen is no less dead if the cause is related to unsafe working conditions or poisons in the water, air, or soil). Is this hypocrisy? Why are there no calls for similar cost-benefit analysis for every dollar spent on police state measures? Other nations that have decided to solve "security" problems by throwing money at the problem have simply ended up with a seriously wounded economy (even Israel has had serious economic difficulties that are only mitigated by huge subsidies from the United States government). Are we going down the Soviet and South African road, in this regard? Is this the correct strategy? Perhaps even more fundamentally, do these measures, costly as they are, actually move our society away from the ideals of freedom and democracy that most Americans believe are the real basis of this nation's greatness?

U.S. Government Has Responsibility to Accept Hmong Refugees

The Thai government has made a decision, after consultation with the U.S. government, to force Hmong refugees in their country to return to Laos. The Hmong (whose distant ancestors are from China) are most closely associated with U.S. (Central Intelligence Agency) insurgency campaigns in Laos during the Viet Nam War and face retribution for their role in this campaign. Thailand's decision to force the Hmong back into Laos seems to be motivated by a desire to improve relations with Laos and Viet Nam. The latter nation has been undergoing a China-like economic boom, as a result of the Doi Moi reforms. Both Thailand and the United States are doing business with their old enemies. U.S. businesses see $$$ in Viet Nam and the U.S. government sees the Hmong as a nuisance. But should the Hmong suffer because of changing geo-economic-politics? They fought for the United States and because the U.S. lost the Viet Nam War, the Hmong are now homeless. It is the U.S. government's responsibility to open our doors for the Hmong. Anything less is dishonorable.

Bombs Bursting in Air -- A Very Short History of Western Civ

These Chinese guys were enjoying some fireworks when along came this group of guys from clear on the other side of the planet. These other guys were all grins watching the fireworks display. "Nice," one of the other side of the planet guys said to the Chinese guys, who smiled and nodded. What the other side of the planet guys were actually thinking, when they were smiling, was "You can blow people up with that stuff. Neat!" They found a way to get their hands on some of the firecrackers and the rest is history.

Democrats Lost the Election, By the Way --- Bush Supreme Court

OK, listening to all the rhetoric around the retirement of Sandra O'Connor one would think the Democrats have some power. Well, I'm sorry to be the one to say this but they don't. They not only lost the presidential election to a very crafty Karl Rove, but they are in the minority in both houses of Congress and don't even have much weight in the court system, which is packed with rightist judges. The Supreme Court essentially appointed Bush in 2000 (setting a precedence by ignoring massive and racist vote fraud in Florida), setting the stage for the past 4 plus year assault on civil liberties, reinforcement of the power of corporate interests over individuals, resurgence and ligitimation of bigotry, and the promotion of a war economy (not to mention to virtual selling of the government to benefit Halliburton and other friends of G.W. and Dick). Now it is time for Bush to start packing the court with the most rightist justices he can find, people who recognize that individual rights are just a nuisance that corporations shouldn't have to deal with, and who use the so-called "conservative social issues" as a smokescreen. In any event, if Bush can criminalize abortion (I see parallels to the struggle over marijuana, with states fighting to keep abortion legal against a hostile federal government) and get rid of affirmative action then this would go a long way to freeing the Democrats of these pesky "social issues" and making it easier to struggle on the economic front. Perhaps. In any event, the U.S. economy is headed for a sharp decline and it will probably be the Democrats who will be asked by the American people to clean up the mess, although they will not have a supportive judicial system when they next see the inside of the West Wing (as anything other than visitors).

Why China's Leaders Should Embrace Dalai Lama

A kung-an:

A communist party official asks his driver to stop so he may chat with a farmer who is struggling to get his ox unstuck from a muddy field. "Can I be of any help?" The official asked. The farmer turns and looks at the official as if he did not understand his words. The official gets out of his car and walks closer to the farmer. "Can I help you with this problem?" The official asks, speaking louder this time. The farmer smiles. The official walks even closer, now in the field, thinking the man is hard of hearing. "I can have my driver come and help you," the official says. The man sort of cocks his head but says nothing. The official moves even closer, but is now in the mud and realizes he can't get his foot unstuck. "Can I help you?" the farmer asks the official.

The Dalai Lama and Chinese leaders have actually been engaged in a long distance dialogue. The possibility that China's leadership might embrace a return of the Dalai Lama to Lhasa and more religious freedom for Tibetans (and others in China) is probably much higher today than it was ten years ago, given their willingness to dialogue and a general relaxing of regulation of religious activities. It might actually be in the interest of the Zhongnanhai leadership to find common ground with the Dalai Lama, who has argued that Beijing's guidance of economic and political development is not in question, but rather that the religious leadership should guide spiritual development. The Dalai Lama has no ties to foreign powers (despite the support and protection he has received from the Indian government) and his position at the apex of Tibetan Buddhism has none of the bureaucratic trappings of, say, a pope or even the leaders of protestant sects within Christianity. To the extent that people need spirituality to enrich their lives (or just deal with mortality), Buddhism provides an answer that is far less threatening to Chinese sovereignty than either Christianity or Islam, both of which have become dominated by hardline fundamentalism, which has become a tool for very narrow economic and political interests. So perhaps Beijing's leadership should recognize that if religion is needed by a significant subset of the population, then better to promote an independent and less ideologically extreme religion than to run the risk that religions dominated by foreigners, who are often hostile to "socialism," would fill the void.