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Saturday, September 10, 2005

PA Demands More Land To Prepare Jihad Against Israel

Per EVELYN GORDON, in the Jerusalem Post, unsatisfied with the land ceded by Isreal in the Gaza:

Palestinian Authority Chairman Mahmoud Abbas has demanded land north and east of the Gaza Strip. This land was indeed on the Arab side of the 1949 armistice lines, but Egypt, which controlled Gaza at the time, traded it to Israel in 1950 in exchange for a larger chunk of land that Israel held in eastern Gaza.

I thought there was a treaty that parties sought to honor. I thought that a negotiation required parties to modify their demands and then to fulfill their obligations assumed by agreement. I thought the PA would at least screw up the land they have received in the agreement before asking for more land to destroy.

NYT Tackles Oil Supply Debate

NYT's Joseph Nocera compares the arguments on world oil supplies in "On Oil Supply, Opinion Aren't Scarce". The "peakists" like T. Boone Pickens believe the world's oil supply has peaked or reached the "halfway mark." In general, peakists consist of geologists. The opposite view, that we are nowhere near the halfway mark of oil supplies, is held by economists.

Nocera lays out both sides' arguments.

I side with the economists. What is under the ground is unknown. Incentives to locate and extract it increase as the price makes it profitable to invest in such methods. The Saudis have never allowed its reserves to be estimated. Canada is beginning to pursue the costly extraction of oil from their Alberta oil sands. Other sources are in the Caspian Sea and in Brazil.

On the consumption end, the higher price motivates us to drive less and to consider buying hybrid cars and other alternatives. Government control of pricing does not motivate investors to pursue these developments. If things are allowed to freely develop, many of us will drive our gas guzzlers for years to come with relatively affordable gas. Refineries will be constructed. New fuels will be discovered. The Middle East will become less important and the dictatorships will be starved.

I agree with Nocera:

What I do know - what we all know - is that oil is a finite resource. Surely, the peakists are right about that. What I also know is historically, the economists have generally been right about how the price of oil has wound up fixing the problem.

Frenchies Bite Into McDonalds

This is no advert for the company but I ran across this tidbit in the NYT Business Digest section:

Remember years ago when Euro snobs tried to keep McDonalds out of France and Germany? McD's sales increased this year by 3.6% in Europe mostly in France and Germany. The US sales went up 3.2% this year.

Those ignorant European commoners who voted down the EU Constitution just won't do what they are supposed to do.

Friday, September 09, 2005

China's Goals

The Der Speigel interview with Singapore's prime minister Lee Kuan Yew provides keen observations about the future of the world from China's perspective. Besides the military issues regarding North Korea (China will try to contain it and America intervenes at great cost), the important point is China's claim to employ patience as it converts to a market economy. It all began when:

Deng Xiaoping started this in 1978. He visited Bangkok, Kuala Lumpur and Singapore in November 1978. I think that visit shocked him because he expected three backward cities. Instead he saw three modern cities and he knew that communism -- the politics of the iron rice bowl -- did not work. So, at the end of December, he announced his open door policy. He started free trade zones and from there, they extended it and extended it. Now they have joined the WTO and the whole country is a free trade zone.

However, development requires a secure business climate:

We have to move to areas where they cannot move...[s]uch as where the rule of law, intellectual property and security of production systems are required, because for them [Chinese business] to establish that, it will take 20 to 30 years. We are concentrating on bio medicine, pharmaceuticals and all products requiring protection of intellectual property rights. No pharmaceutical company is going to go have its precious patents disclosed. So that is why they are here in Singapore and not in China.

For so much time to pass, military activity must be kept in check while still protecting themselves defensively through alliances with India and Russia and military buildups to deflect an aggressive America.

The Russian mistake was that they put so much into military expenditure and so little into civilian technology. So their economy collapsed. I believe the Chinese leadership have learnt: If you compete with America in armaments, you will lose. You will bankrupt yourself. So, avoid it, keep your head down, and smile, for 40 or 50 years.


I don't know whether the next generation will stay on this course. After 15 or 20 years they may feel their muscles are very powerful. We know the mind of the leaders but the mood of the people on the ground is another matter. Because there's no more communist ideology to hold the people together, the ground is now galvanised by Chinese patriotism and nationalism. Look at the anti-Japanese demonstrations.

It is heartening to see that economic development, that inevitably goes directly to the benefit of the people, is the driving force of China geopolitics. They have been lucky to witness both the failure of the collective controlled economy and the mistakes made by Russia as it has attempted to convert to a market economy. Additionally, that Lee understands that with economic development comes a demand in the political process mean that those currently in power are willing to make the conversion on matters besides economic.

While the US and China may be competitors in business, the future likely holds that there will closer contacts between the countries. Free marketers preach that you do not go to war against a country you trade with. Unless the politicians get in the way.

Thursday, September 08, 2005

White House Protest

Anonymous reports:

There is going to be a rally today at the White House of Hurricane Katrina victims. Yes, that is correct, not "For" them, but " by" them. They have traveled ( obviously without DNC or Moveon.org's help) to Washington to protest George Bush's handling of the Hurricane Katrina. Or his causing Hurricane Katrina- or perhaps both. We will have to see.

Perhaps Kanye West will be the keynote speaker and clarify it all. In any event, it is indeed gratifying to see that in just one week since this devastating storm passed over them these folks have gotten their lives back together to such an extent that they have the free time and resources to travel on up to the nation's capital to protest the government. I am sure that those tax payer paid for $2,000.00 debit cards came in real handy for road trip/ protest essentials like moon-pies, RC Cola, poster boards, magic markers and American flags to burn. It will indeed be interesting to see what Mr. and Mrs. America's response is as they sit down to a dinner of tuna casserole with their kids and watch this on the T.V. tonight.

The looks across the dinner table from parents who dipped into the family saving for a donation, to the children who held a lemonade sale to help the red cross as these" victims" shout their rage at the injustice of America will change the nature of the way we see this event from this point forward. I doubt that any amount of spin by the news anchors will prevent a righteous rage by the American citizenry who have opened their hearts and wallets only to be called racist. It indeed will be an interesting day.

Environmentalists Spiked A New Orleans Solution

While natural disasters allow those with environmental agendas to take ther stage, it is reported that environmentalists spikedd a projects that would have reduced the devastation caused by Katrina. In New Orleans: A Green Genocide By Michael P. Tremoglie and Ben Johnson we learn:

Decades ago, the Green Left – pursuing its agenda of valuing wetlands and topographical “diversity” over human life – sued to prevent the Army Corps of Engineers from building floodgates that would have prevented significant flooding that resulted from Hurricane Katrina.

In the 1970s, the U.S. Army Corps of Engineers’ Lake Pontchartrain and Vicinity Hurricane Barrier Project planned to build fortifications at two strategic locations, which would keep massive storms on the Gulf of Mexico from causing Lake Pontchartrain to flood the city. An article in the May 28, 2005, New Orleans Times-Picayune stated, “Under the original plan, floodgate-type structures would have been built at the Rigolets and Chef Menteur passes to block storm surges from moving from the Gulf into Lake Pontchartrain.”

“The floodgates would have blocked the flow of water from the Gulf of Mexico, through Lake Borgne, through the Rigolets [and Chef Mentuer] into Lake Pontchartrain,” declared Professor Gregory Stone, the James P. Morgan Distinguished Professor and Director of the Coastal Studies Institute of Louisiana State University. “This would likely have reduced storm surge coming from the Gulf and into the Lake Pontchartrain,” Professor Stone told Michael P. Tremoglie during an interview on September 6. The professor concluded, “[T]hese floodgates would have alleviated the flooding of New Orleans caused by Hurricane Katrina.”

But certainly the stoom itself is due to global warming. As Michael Fumento asks:

Isn't global warming supposed to affect the, uh, globe?

If cyclones are more intense or frequent off U.S. shores, they should also be so elsewhere as in the east Pacific, west Pacific, and Indian Ocean. “This has not occurred,” a June 2005 report from the Tropical Meteorological Project stated flatly. “When tropical cyclones worldwide are summed, there has actually been a slight decrease since 1995.”

OK. That is 10 years ago. Given the "history is the day before yesterday" crowd, everything is Geroge Bush's fault. And decreasing global temperatures by .2 degrees Centigrade over the next 50 years through draconian reduction of development is the answer.

Writes Fumento, besides scaremongers like RFK Jr:

MIT climatologist Kerry Emanuel IS a scientist and stirred up a Category Five controversy with his recent letter in Nature claiming there’s no trend in the frequency of hurricanes but “future warming may lead to an upward trend in tropical cyclone [hurricane] destructive potential.”

Yet even Emanuel stops short of blaming Katrina or other recent hurricane strikes on global warming. "What we see in the Atlantic is mostly the natural swing," he told the Times. That hardly supports the overheated rhetoric of those exploiting his Nature letter.

Recovery Of New Orleans Is No Option. It Is A Must

While our focus has been on the human toll of Katrina, how the disaster occurred and how it could have been averted and what emergency responses were possible (and by whom?), George Freidman provides an analysis of the value of the Port of New Orleans to the U.S. and world economy in Stratfor . The port's loss can only be temporary due to the its importance in the shipping of imports and exports.

Friedman explains in "New Orleans: A Geopolitical Prize" that:

[T]he Port of South Louisiana is the largest port in the United States by tonnage and the fifth-largest in the world. It exports more than 52 million tons a year, of which more than half are agricultural products -- corn, soybeans and so on. A larger proportion of U.S. agriculture flows out of the port. Almost as much cargo, nearly 57 million tons, comes in through the port -- including not only crude oil, but chemicals and fertilizers, coal, concrete and so on.

A simple way to think about the New Orleans port complex is that it is where the bulk commodities of agriculture go out to the world and the bulk commodities of industrialism come in. The commodity chain of the global food industry starts here, as does that of American industrialism. If these facilities are gone, more than the price of goods shifts: The very physical structure of the global economy would have to be reshaped. Consider the impact to the U.S. auto industry if steel doesn't come up the river, or the effect on global food supplies if U.S. corn and soybeans don't get to the markets.

The reason is it is located at the mouth of the Mississippi where large goods and crops can reach it on barges from the rest of America.

Friedman writes:

Katrina has taken out the port -- not by destroying the facilities, but by rendering the area uninhabited and potentially uninhabitable. That means that even if the Mississippi remains navigable, the absence of a port near the mouth of the river makes the Mississippi enormously less useful than it was. For these reasons, the United States has lost not only its biggest port complex, but also the utility of its river transport system -- the foundation of the entire American transport system. There are some substitutes, but none with sufficient capacity to solve the problem.

It follows from this that the port will have to be revived and, one would assume, the city as well. The ports around New Orleans are located as far north as they can be and still be accessed by ocean-going vessels. The need for ships to be able to pass each other in the waterways, which narrow to the north, adds to the problem. Besides, the Highway 190 bridge in Baton Rouge blocks the river going north. New Orleans is where it is for a reason: The United States needs a city right there.

The comeback requires people to return to work and live. Port workers may have jobs but they cannot live in New Orleans without supermarkets, gas stations and department stores. All of these necessities will come at a premium. Supply and demand will place human services at greater value than ever before. Will the prices charged for these necessities be deemed "gouging"? This concept is made most apparent in this situation.

Friedman concludes:

New Orleans is not optional for the United States' commercial infrastructure. It is a terrible place for a city to be located, but exactly the place where a city must exist. With that as a given, a city will return there because the alternatives are too devastating. The harvest is coming, and that means that the port will have to be opened soon. As in Iraq, premiums will be paid to people prepared to endure the hardships of working in New Orleans. But in the end, the city will return because it has to.

Geopolitics is the stuff of permanent geographical realities and the way they interact with political life. Geopolitics created New Orleans. Geopolitics caused American presidents to obsess over its safety. And geopolitics will force the city's resurrection, even if it is in the worst imaginable place.

Thanks to Bill Suda for providing us this article.

Tuesday, September 06, 2005

Katrina Commission Demanded

Never one to pile on, Senator Clinton is calling for a Katrina Commission. Will it be as non-partisan and thorough in its investigaton as the 9-11 Commission? And how did China develop its spy technology so quickly? Maybe she'll call for another commission to look into that one.

I suggest we have as commissioners Mayor Nagin and Chief of Police Billy Bob Whatshisname.

Katrina- A Man-Made Disaster?

In my post "Katrina and Bush Bashers" I touched upon the issue of personal responsibility and the need for locals to step us and protect themselves. For people with a view towards the ferderal government expanding evermore, we see its inability to meet all needs in such a crisis. Robert Tacinski in An Unnatural Disaster: A Hurricane Exposes the Man-Made Disaster of the Welfare State discusses this pojnt in more detail.

Tacinski writes:

Public officials did not expect that the first thing they would have to do is to send thousands of armed troops in armored vehicle, as if they are suppressing an enemy insurgency. And journalists—myself included—did not expect that the story would not be about rain, wind, and flooding, but about rape, murder, and looting.

But this is not a natural disaster. It is a man-made disaster.

The man-made disaster is not an inadequate or incompetent response by federal relief agencies, and it was not directly caused by Hurricane Katrina. This is where just about every newspaper and television channel has gotten the story wrong.

The man-made disaster we are now witnessing in New Orleans did not happen over four days last week. It happened over the past four decades. Hurricane Katrina merely exposed it to public view.

The man-made disaster is the welfare state.

The blame goes to the welfare state because the government-entitlements create a neediness of the public upon government help instead of self-reliance or local governance. meanwhile, the government's system of patronage awards jobs, not to the competent but to the party loyals. Public jobs go to those who support the Ins. Later, when the Outs become Ins, they reward their helpers. Nothing is exposed until a Katrina comes along.

As to government incompetence, writes Tracinski:

No one has really reported this story, as far as I can tell. In fact, some are already actively distorting it, blaming President Bush, for example, for failing to personally ensure that the Mayor of New Orleans had drafted an adequate evacuation plan. The worst example is an execrable piece from the Toronto Globe and Mail, by a supercilious Canadian who blames the chaos on American "individualism." But the truth is precisely the opposite: the chaos was caused by a system that was the exact opposite of individualism.

What Hurricane Katrina exposed was the psychological consequences of the welfare state. What we consider "normal" behavior in an emergency is behavior that is normal for people who have values and take the responsibility to pursue and protect them. People with values respond to a disaster by fighting against it and doing whatever it takes to overcome the difficulties they face. They don't sit around and complain that the government hasn't taken care of them. And they don't use the chaos of a disaster as an opportunity to prey on their fellow men.

It has been reported that the local jails were unlocked so the criminals could escape. Certainly, many were taken over in prison riots. They did not board buses for Texas or other safe zones. The failure of a below sea level town located between 2 massive bodies of water to prepare for this is an indictment of the concept of delegating personal and local responsibities to those who's interests are elsewhere. And now their police force is down to 1/3 of its normal size due to abandonment.

It's All Garbage To Us

The NYT Magazine cover story features Leslie Moonves, chairman of CBS, the most successful of the networks. The title is "Giving Them What They Want". Per writer Lynn Hirschberg:

One key to running a successful broadcast network is understanding just this kind of thing: what the audience wants -- sometimes even before it knows that it wants it. Like a candidate seeking election, a network and its shows are voted into prominence by the public. The people either tune in or they don't.

Apparently, the NYT has yet to discover that providing consumers "what they want" is the "key" to successful entrepreneurship in general.

Note the title. Does the elitism scream out from the use of "Them" and "They". And how far has circulation dropped at the Times lately?

It Takes A Village To Do Not Enough

Mark Steyn is shocked at how wrong his prediction that New Orleans would respond to Katrina by rising to the occasion. Now Steyn's issues his explanation in "The Big Easy rocked, but didn't roll":

What the hell was I thinking? I should be fired for that. Well, someone should be fired. I say that in the spirit of the Mayor of New Orleans, Ray Nagin, the Anti-Giuliani, a Mayor Culpa who always knows where to point the finger.

For some reason, I failed to consider the possibility that the panickers would include Hizzoner the Mayor and the looters would include significant numbers of the police department, though in fairness I wasn't the only one. As General Blum said at Saturday's Defence Department briefing: "No one anticipated the disintegration or the erosion of the civilian police force in New Orleans."

Indeed, they eroded faster than the levees. Several hundred cops are reported to have walked off the job. To give the city credit, it has a lovely "Comprehensive Emergency Management Plan" for hurricanes. The only flaw in the plan is that the person charged with putting it into effect is the mayor. And he didn't.

But I don't want to blame any single figure: the anti-Bush crowd have that act pretty much sewn up. I'd say New Orleans's political failure is symptomatic of a broader failure.

We will learn how extraordinary Rudy Guliani and the NYC cops and firefighters were opn 9-11 and the aftermath. We will learn how resources and plans were ignored. However, in the wake of governmental failure and cowardice, we will learn of individual acts of heroism. Our belief in the individual will be buoyed upon such reports.

We need these to be reported. I know they must exist. Will our media find them or will they saty at the Superdome, the government's answer to inertia.

Sunday, September 04, 2005

NYT Kicks The Economy In The Shins Again

While the world is focused on Katrina's aftermath, the NYT kicked free market capitalism in the shins in the first page of the Metro Section in an editorial parading as a news report. Sam Roberts writes in "In Manhattan, Poor Make 2¢ for Each Dollar to the Rich":

The top fifth of earners in Manhattan now make 52 times what the lowest fifth make - $365,826 compared with $7,047 - which is roughly comparable to the income disparity in Namibia, according to the Times analysis of 2000 census data. Put another way, for every dollar made by households in the top fifth of Manhattan earners, households in the bottom fifth made about 2 cents.

They never tire of comparing the bottom fifth of income earners with the upper fifth. But that disparity will always grows when the economy is booming. The lower fifth always has a floor of zero income while the upper fifth (or tenth, twentieth or one one hundredth of a percent) has no ceiling. That means that the bottom quintile is likely to remain relatively constant in income while the Oprahs have no limit.

Roberts then writes:

The loss of good-paying jobs, especially in manufacturing, "has meant that the 'hollowing out' of the middle of the income distribution continued at a rapid pace," the institute, a union-backed research group, concluded. It said the number of families earning between $35,000 and $150,000 declined by 50,000 from 2000 to 2003 while the number that earned above $150,000 and below $35,000 increased.

While lower paying manufacturing jobs are dwindling in NYC, I wonder if construction regulations, labor regulations and a dearth of competent workers have a hand in that matter. And I wonder if those families who earned above $150,000 are happy about that.

The income disparity will drop if the economy tanks. Who wants that? That is not a rhetorical question. The newspaper that never tires of trotting out false economic articles.

The NYT Blame Game Fails In The Facts

The NYT blame-game has now settled on the issue that the U.S. government failed to ensure that pre-flood evacuation orders were issued, military policing and needed supplies were not readily available. But, as computer models changed their predictions of timing and location of Katrina's landfall, the series of evacuation orders and other preparations may have created more chaos than it would have prevented.

Thanks to EU Rota for laying out the timeline of what was known as the storm developed.

Computer models would have caused evacuations orders to then be rescinded in 5 different places over the week preceding the storm's landfall each time requiring moving supplies to new locations for their immediate deployment. On 8/25 it was predicted Katrina would hit northern Florida. On 8/26 it was predicted to hit the Florida panhandle. On the 27th the storm was headed over the Louisiana-Mississippi border. By 8/28 computer models showed the path headed for New Orleans.

Then on 8/29 landfall:

Per to EU Rota:

30-31 August, per the NYT all relief supplies simultaneously reach the coasts of Mississippi and Alabama, as well as New Orleans. This despite the decimation of communication lines, the destruction of transportation infrastructures, levee failures, no electricity, rising flood waters, and a still raging hurricane throughout Mississippi and Louisiana.

1 September, per the NYT all hospitals are functioning, police and fire departments are operating, and relief supplies are still flowing despite the decimation of communication lines, the destruction of transportation infrastructures, levee failures, no electricity, and rising flood waters.

The number of editorials run by the NYT prior to 29 August regarding what should be done in regards to evacuations and relief efforts for Hurricane Katrina: 0. This lack of response from the NYT is surprising. Afterall, everyone knew the storm was coming.

Beautiful job EU Rota.

The reports have dwelled on those poor people who did not receive what they needed fast enough. In any catastrophe, as in life in general, you cannot provide for the needs of 100% of the people 100% of the time. That is a fact of reality. Time frames follow what can be done. While there are losers in such a stark assessment, and we pray for their ultimate well-being, there have been plenty of people saved by the efforts of government. The facts will be rehashed for years to come and with any government bureaucracy response to a calamity of this size, errors were likely made. But memorization of the above time-line will allow us to recognize the real-life actions that were doable in our world called reality.

Capitalism R' Us

Capitalism starts early.

My daughter is 7 (almost 8) and about to start 2nd grade. Somewhat precocious, she has been consumed since she was 5 with building and managing a mall when she gets older. The mall’s focus will be to cater to the wants of children. In many ways, that is the target of most malls anyway. I will not provide the mall’s name but it is part of a brilliant marketing plan.

Her enthusiasm has infected her friends. Each child has been assigned jobs (even I have a position in the Karaoke section of the music store-not a bad job and a pretty good idea). She and the other kids are under the impression that the mall creates all of the stores. I have tried to explain that the mall owners lease out space to people with stores. In their view, this mall will create and own and stock every store. Thus, every unit sold goes into their pockets.

I love this idea for reasons that go beyond have a billionaire child someday (and do not think that this dream does not enter my fantasies every now and then). The greater value is that as she has grown older, some of the real-life business lessons that arise in this context are starting to sink in. Though she still does not accept the idea of a mall as just being space for independent vendors, she is beginning to understand that no matter how much she saves for it (every penny she makes from birthday gifts to tooth-fairy rewards); the property purchase and mall construction will need financing.

This morning she told me that all of her friends will get equal shares of the money they make. I explained that they should not get equal shares as she will be the one to have to pay back the bank should the mall fail. Since she is procuring the bank loan and servicing it (yes, she did get this concept!), she should get most of the profits. She understood that if the bank failed, her friends would not have to pay back the loan. She would. As she grasped the concept, she told me she would create a fund each month that she would have on hand in case things did not go well.

These rudimentary concepts about business and capitalism become part of our common discussions as she is so single-minded in this venture. She understands more about the mechanics of business than I understood after graduating college with my B.A. in journalism (and maybe even with my J.D.). While I may be dense, I do not doubt that many of these concepts are lost on millions of adults with voting privileges.

She and her friend set up a lemonade stand last week and they made $3. One mother suggested they send it to the Katrina victims. They both declined. They told her the money is for the mall. No social consciences? They will employ hundreds of people if this project works. Her plan is a major contribution to society. I’ll have her reading Hayek once we finish the Harry Potter series.

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