A simple explanation of the significance of the current account deficit

This is how you sell a nation.

Brad DeLong's Semi-Daily Journal

Economic growth produces about $1.3 trillion of new net wealth in America every year, and at a current account deficit of $1 trillion only $300 billion of that is an addition to the wealth of Americans--the $1 trillion that matches the current-account deficit is an addition to the wealth of foreigners.

William of Nassau, Prince of Orange, called the Silent

DeLong's permalink is broken, but he has a lovely quote today from a book about William of Orange. I want to learn more about this man. We can only pray a leader of half this caliber might emerge in America.

Brad DeLong's Semi-Daily Journal
The end of C.V. Wedgwood's William the Silent:

... There have been politicians more successful, or more subtle; there have been none more tenacious or more tolerant. 'The wisest, gentlest and bravest man who ever led a nation', he is one of that small band of statesmen whose service to humanity is greater than their service to their time or their people. In spite of the differences of speech or political theory, the conventions and complexities which make one age incomprehensible to another, some men have a quality of greatness which gives their lives universal significance. Such men, in whatever walk of life, in whatever chapter of fame, mystic or saint, scientist or doctor, poet or philosopher, and even--but how rarely--soldier or statesman, exist to shame the cynic, and to renew the faith of humanity in itself.

Of this number was William of Nassau, Prince of Orange, called the Silent.

The people understand the need for a strong leader

Jim Hoagland of the Washington Post experiences an unpleasant bit of synchronicity:

Two Leaders' Power Failures

... "The powers of the presidency have been eroded and usurped to the breaking point. We are engaged in a new kind of war that cannot be fought by old methods. It can only be directed by a strong executive who alone is not subject to the conflicting pressures that legislators or judges face. The public understands and supports that unpleasant reality, whatever the media and intellectuals say."

These words came from a White House aide defending U.S. policies on Guantanamo Bay prisoners, secret renditions and warrantless eavesdropping in a conversation with me. A few days later, I heard a Russian official use nearly identical terms to defend his country's coercive merging of private energy and media companies under state control...

Ahh yes, the "media" and the "intellectuals" are the problem. The people understand the need for the strong leader.

Gee, there's something familiar about that phrasing. I'm sure I've heard it somewhere before ....

The falling cost of havoc - some numbers

I've long claimed that what we need to worry about is not al Qaeda in particular, but rather the falling cost of havoc. The Christian Science Monitor gives us some real world numbers, in an article explaining the limits of tracking financing:

Why terror financing is so tough to track down | csmonitor.com

This, experts say, is partly a result of the vigorous multinational effort since 9/11 to break up the Al Qaeda network and stanch the cash flows that sustained terror attacks. But it's also due to the reduced cost of mounting terror attacks, they say.

Estimates suggest that the 9/11 attacks may have cost as much as $500,000 to stage. By contrast, the Madrid bombings of 2004 are believed to have cost no more than $15,000, and last year's London attacks perhaps $2,000.Four bombs, four rucksacks, some train tickets, a little gasoline, and a few phone calls.

"Terrorist financing is very different today," says Loretta Napoleoni, author of "Modern Jihad: Tracing the Dollars Behind the Terror Networks." "Five years ago, we had large movement of funds which went through the international financial system.

"Now we are just talking about four friends who raise £1,000 to stage an attack," she adds. "The unit cost of terrorist financing has crashed to the floor. They [terrorists] don't need another 9/11. They can do a small thing and create the same hysteria."

American Gulag

In a just world, we'd all pay for this.

They Came for the Chicken Farmer - New York Times

... Because Mr. Bush does not recognize that American law or international treaties apply to his decisions as commander in chief, these prisoners were initially not given hearings. The transcripts are from proceedings that were begun under a court order. They started years after the prisoners were originally captured — a clear violation of the Geneva Conventions. And they were conducted under rules that mock any notion of democratic justice.

Prisoners do not see the evidence against them and barely have access to legal counsel. Now, thanks to a horrible law sponsored by Senators Lindsey Graham, a Republican, and Carl Levin, a Democrat, they have virtually no right of appeal. The law even permits the use of evidence obtained by torture.

If the stories of the chicken farmer and the men with the wrong watches are new, the broad outlines of this disaster have long been visible. It is shocking in itself, and in the fact that average citizens have not risen up to demand that these abuses come to an end. The founding fathers knew that when you dispensed with the rule of law, the inevitable outcome was injustice. Now America is becoming the thing they sought to end.

There are so many, many, reasons to take power away from the GOP. I have no faith, however, that Americans will do the right thing.

A ranting madman takes on the Tungsten E2

This gentleman clearly has a "thing" about his PDA: Gordon's Tech: The Tungsten E2: Brain transplant report.

Brazil 2.0: A mandatory movie review

Everyone needs to study the Director's Cut of Terry Gilliam's Brazil:

Capitol Hill Blue - Warning! Financial responsibility can lead to terrorism

... They paid down some debt. The balance on their JCPenney Platinum MasterCard had gotten to an unhealthy level. So they sent in a large payment, a check for $6,522.

And an alarm went off. A red flag went up. The Soehnges' behavior was found questionable...

... They were told, as they moved up the managerial ladder at the call center, that the amount they had sent in was much larger than their normal monthly payment. And if the increase hits a certain percentage higher than that normal payment, Homeland Security has to be notified. And the money doesn't move until the threat alert is lifted.

Walter called television stations, the American Civil Liberties Union and me. And he went on the Internet to see what he could learn. He learned about changes in something called the Bank Privacy Act.

"The more I'm on, the scarier it gets," he said. "It's scary how easily someone in Homeland Security can get permission to spy."

Eventually, his and his wife's money was freed up. The Soehnges were apparently found not to be promoting global terrorism under the guise of paying a credit-card bill. They never did learn how a large credit card payment can pose a security threat.

I wonder if Walter Soehnge has tried boarding an airplane since this misadventure. I would not be shocked if he experiences a rather thorough search ...

The Economist provides a primer on the Shia and Sunni sects of Islam

The Economist, surprisingly, has a rather good article this week. Ten years ago good writing was common at The Economist, but nowadays in must be applauded. They've provided a primer on the Sunni and Shia sects of Islam. Some interesting fragments (emphases mine):

Sunnis and Shias: Does it have to be war?:

Mar 2nd 2006 | CAIRO, From The Economist print edition

... Iraq's experience may be unique, yet it is far from being the only example of tension between Sunnis, who make up 85% of the world's 1.5 billion Muslims, and the multiple sects of the Shia minority...

... In fact, throughout most of Islam's 14 centuries, the Shia-Sunni divide has been peaceful. Geography, for one thing, largely separates the sects. Both the far west and east of the Muslim world are solidly Sunni. Moroccans or Indonesians hardly know what a Shia is. Egyptians or Bangladeshis have little knowledge of what Shias believe. Shias have tended to cluster in small, often isolated communities in the centre of the Muslim world—in the Levant, the Indian subcontinent, Yemen and the Gulf—and on the Arabic-, Turkish- and Urdu-speaking fringes of historic Persia.

In terms of basic rituals, such as prayer and fasting, the two are not radically different. Before the modern era, the practice of Sunni Islam in many places was imbued with folk beliefs, such as veneration of Sufi saints, that softened the contrast with Shia customs. In mixed cities such as Baghdad and Beirut, the sects often intermarried. Some Iraqi tribes include clans from both. And while at times Shias have thrived under Sunni rule, in Mughal India for example, Sunnis fared well during the reign of the Fatimids, an illustrious and tolerant Ismaili Shia dynasty that ruled Egypt, the Levant and the heart of what is now Saudi Arabia from the 10th to the 12th centuries.

... the danger of conflict has always existed, ever since the murder, 29 years after Muhammad's death in 632AD, of the Caliph Ali, who was the Prophet's son-in law and the father of his grandchildren, Hassan and Hussein. The word shia derives from the Arabic shi'at Ali or the partisans of Ali, and referred at first to the political faction that believed leadership of the Muslim community should remain in the hands of the Prophet's family. When the caliphate passed instead to a rival branch of Muhammad's tribe, other disgruntled groups, including many non-Arabs recently converted to Islam, joined the Shia cause, which drew further emotive strength following the martyrdom of Hussein at the hands of a Sunni army.

Over time this political division deepened into doctrinal splits, with each branch elaborating its own interpretations of sharia, or religious law. Sunni Muslims preserved their unity by coming to accept four rival, but equally valid legal schools of varying rigour. Shia Islam followed a different course. It continued to split into subsects over questions of whom to recognise as the imam, a leader whose blood links to the Prophet were held to render him an infallible interpreter of God's will.

Whereas the Zaydis in Yemen recognised only five succeeding imams, Ismailis recognised seven, and Jaafaris 12, before the line of the imamate passed into occlusion, meaning that the imam is hidden but will one day return. The Jaafari, or Twelver branch now predominates among Shias, while most Ismaili communities are small and scattered, although esoteric offshoots of Ismailism, such as the Druze and Syria's Alawites, remain concentrated in the mountain redoubts of the Levant, their historic refuges from persecution.

While often remote from each other in beliefs, all these Shia sects retain relatively defined clerical hierarchies. The Jaafaris, who make up around nine in ten Shias, sustain a loosely church-like clergy through the application of a tax. The faithful are expected to pay one-fifth of their personal profits every year to whichever of several rival ayatollahs they choose as a marja, or source of authority. This tax base has given the Jaafari clergy both power and independence, while the pressure of constituents' choice has pushed them towards relatively innovative interpretations of scripture.

... The Shia clergy themselves are hardly united, and seldom have been. Throughout much of the 19th century gangs backing rival ayatollahs clashed in the holy city of Najaf. Bitter debate has persisted in modern times over the crucial issue of relations with the state. Ayatollah Khomeini, the father of the Iranian revolution, aroused fierce opposition from other marjas with his declaration of Velayet al Faqih, or the rule of the jurisprudent, which was, in effect, a ruling that only learned religious scholars were qualified for worldly power...

... there is a rising sense in both communities, and not only in Iraq, of some kind of impending historical showdown.

One obvious factor is the upsetting of old balances by the intrusion of western power, not only in Iraq, but in Afghanistan and more widely, through the global campaign against Islamist terrorism. But this intrusion was in turn largely provoked by something else, the radicalisation of large numbers of Sunni Muslims, fired by ideas of a return to “pure” Islam and of uniting Muslims into a single nation modelled on the early caliphate.

The most famous proponent of such ideas, Osama bin Laden, has always carefully refrained from any reference to the Shias. Yet he and many fellow-travellers adhere to a school of thought, influenced by Saudi Wahhabism among other currents, which holds the rival sect to be an elemental threat to Islam as a whole.

Before their overthrow, Mr bin Laden's protectors in Afghanistan, the Taliban, mounted merciless pogroms against that country's Shia minority, the Hazara, on purely doctrinal grounds. It is the parties in Pakistan most closely aligned to al-Qaeda that have bombed Shia mosques and torched Shia villages, simply because they hold the Shia to be infidels. Mr bin Laden's lieutenant in Iraq, Abu Musab al-Zarqawi, refers to Shias as al-Rafida, a Wahhabist slur meaning rejectionists or turncoats. They are the near enemy, as opposed to the American far enemy, he says, “and far more destructive”...

Knowledge workers and executive compensation: a surprise ahead?

This was posted on Marginal Revolution: The best paragraph and a half I read yesterday. (some typos corrected and edits applied)

About that executive compensation you mentioned as an aside. I'm hoping you'll write about an aspect of this that I've not seen discussed.

Knowledge workers are usually said to be relatively unmotivated by money. So the creative types that power innovation are "willing serfs" -- happy to churn away given interesting problems, a decent wage, an occasional bit of praise and a good work environmnet.

I think there's truth to that belief, and probably even data. But what about the innate human response to unfairness? How will the knowledge worker react when they learn that their leaders, who they may or may not respect, are earning 20 times their salary? Will they continue to be happy as "willing serfs", or will our hard-wired response to unfairness kick in? Will they then be prone to sacrifice income or work perks to join a less unfair environment?

In the short term I agree that revealing executive compensation will increase that compensation, but I think the slightly longer term results are less predictable.

Bird flu: much harder to stop than thought

When you cross industrial agriculture with world trade with migratory birds, you get some unexpected results:

Recent Spread of Bird Flu Confounds Experts - New York Times

... In Croatia, for example, Mr. Kaat said, fertilizer made of manure from infected poultry probably spread A(H5N1). The manure is commonly used to fertilize fish ponds, which are frequent stopover points for migrating birds that probably contracted the virus there, he said. The virus persists in water for weeks.

The NYT article is a lesson in why governments should fund basic research. The economic importance of research into the ecology and migration of birds has increased dramatically in the past few months. We can't go back 10 years and fund the research we need today. This is where the market breaks down, and where government needs to play a role.

Propaganda works: the belief that Saddam was behind 9/11

A polling group surveyed US troops. It was widely reported that a large majority feel the US should leave within a year. The parts that weren't widely reported are more interesting (emphases mine):

Zogby International

The troops have drawn different conclusions about fellow citizens back home. Asked why they think some Americans favor rapid U.S. troop withdrawal from Iraq, 37% of troops serving there said those Americans are unpatriotic, while 20% believe people back home don’t believe a continued occupation will work. Another 16% said they believe those favoring a quick withdrawal do so because they oppose the use of the military in a pre-emptive war, while 15% said they do not believe those Americans understand the need for the U.S. troops in Iraq.

The wide-ranging poll also shows that 58% of those serving in country say the U.S. mission in Iraq is clear in their minds, while 42% said it is either somewhat or very unclear to them, that they have no understanding of it at all, or are unsure. While 85% said the U.S. mission is mainly “to retaliate for Saddam’s role in the 9-11 attacks,” 77% said they also believe the main or a major reason for the war was “to stop Saddam from protecting al Qaeda in Iraq.”

“Ninety-three percent said that removing weapons of mass destruction is not a reason for U.S. troops being there” said Pollster John Zogby, President and CEO of Zogby International. “Instead, that initial rationale went by the wayside and, in the minds of 68% of the troops, the real mission became to remove Saddam Hussein.” Just 24% said that “establishing a democracy that can be a model for the Arab World" was the main or a major reason for the war. Only small percentages see the mission there as securing oil supplies (11%) or to provide long-term bases for US troops in the region (6%).

If there's one thing that all rationalists seem to agree upon, it's that there's no evidence Saddam played any role in the 9/11 attack and there's some evidence that he was no ally of al Qaeda prior to the invasion. So why do the vast majority of the troops believe in Cheney's propaganda? I'd guess it's partly that propaganda works very well, especially in a population selected for trust in their superiors. It's also probably partly 'cognitive dissonanance', the common behavior of reconciling oneself to an irrational situation by adopting a belief that makes the situation rational. Most of us would do the same thing in their place.

It's reasuring, however, that only 1/3 consider opposition to the war to be "unpatriotic". Considering the situation our troops are in, that's a sign of their wisdom.

Why has Iran been so slow to build its nuclear bombs?

The NYT addresses an interesting question - why didn't Iran have a nuclear weapon ten years ago? The answer seems to be a mixture of a theocratic/revolutionary dislike of scientists and intelligentsia, a wavering commitment to the program, and a lot of "bad luck".

The "bad luck" is unlikely to have been entirely chance. The Atlantic recently wrote of Khan's (Pakistan) nuclear dissemination program; it was surprisingly well understood by everyone from intelligence agencies to industry journalists. Many of the key technologies came from European companies, and some of those were thought to have been "turned". It would be surprising if both Iran and North Korea had not experienced a substantial amount of sabotage.

The PDA is dead. Long live the PDA.

What would you call a device that's about 2.5" x 3.5", has a 4" diagonal screen and 2/3 the horizontal resolution of a VGA dispaly, has handwriting recognition, and runs a wide variety of software?

I'd call it a PDA. But that market is dead, really dead. Try looking for a Tungsten E2 stylus sold directly by Amazon (vs. vendor partners). Ok, try some other big vendor. You may find some Tungsten E styli (I think, mirablu dictu, that the E2 uses the E stylus), but you probably won't find any marketed for the E2. That's an ex-parrot of a market.

So what can one make of this?

Next Version of Tablet PC's Said to Be Lighter and Smaller - New York Times
March 3, 2006
By STEVE LOHR

Microsoft and Intel plan to announce next week that several industry partners will make small, light versions of a tablet personal computer, people close to the two companies said yesterday.

The machines, which have been the subject of considerable speculation, will be tailored more for consumer entertainment than the larger tablet machines running Microsoft's Windows that were introduced in 2002. The larger tablets, typically with 12-inch screens, sell for about $1,500 and are used mostly by doctors, lawyers, architects and other professionals in office settings. A tablet PC has a touch-sensitive screen that allows input with a pen.

The new models — a category called ultramobile personal computers — will have smaller screens, seven or eight inches, and sell for $1,000 or less, depending on options.

The machines will have the handwriting recognition software of the standard Windows tablet personal computers, and include wireless technology for browsing the Internet. But the new tablets will also have multimedia capabilities for playing music, movies and games in some models.

Intel will supply the chip technology for the ultramobile PC's, and they will run a version of Windows Tablet PC software....

They will be hefty, at about two pounds, and have a limited battery life of three hours or so between charges, the Microsoft consultant said. A new generation of low-power chips, extending battery life to six hours, will come next year. Later models, he added, will come with screens of four inches or so.

... A Web site set up by Microsoft, www.origamiproject.com, stirred interest with vague assertions that a coming mobile technology "will change your life." Then, bloggers found and posted a video advertisement for Microsoft Origami mobile technology.

Intel has its own Web site, www.umpc.com, suggesting the ultramobile PC's will be able to handle movies, music, games, television and the Internet.

The rumored video iPod is supposed to deliver than 4" diagonal (about 2.5" x 3/5" square with a 16:9 aspect ratio). Sounds a lot like what Microsoft is promising for ... late 2007. It's hard to believe they could be that far behind. To me it sounds like what they're promising is a PDA that runs XP. Wow. I'm so impressed by the radical evolution from the PalmPilot. Except, of course this device will play movies.

As to what's promised this year, I am so utterly unimpressed. The big news is that the much celebrated large slates have failed miserably. A vertical physician/architect market is not going to delight Dell. It's time to declare failure and kill those suckers. Ever try to read with one at the breakfast table? I rest my case. A laptop makes far more sense. So this year, instead, we get something that's still too big for a pocket or purse and has a when-new battery life of 3 hours?! Wow, that's such a dud.

If this story is true Apple is about to make a zillion dollars with a one year headstart on the 4" diagonal platform. I suspect, though, that Microsoft and their partners can't possibly be in such an utterly dismal situation.

Horror in France

A group of at least 19 French men and women collude to abduct a young jewish man and torture him for about 3 weeks. Somehow, before dying, he crawls from the woods where his body was dumped, and the murder is discovered. His murderers prove to be as incompetent as they are evil; many have been caught.

Craig Smith of the NYT tells the story in an understated manner. He fully captures the horror of this crime, not the least the number of neighbors who knew of it and did nothing. I cannot think of a comparable [1] crime in the history of the modern western world; even the brutal murders of gay men in the US are not quite in this league.

France is now in a Hell of its own making.

[1] I mean that in a precise sense. There have been worse crimes perpetrated by states, but they were crimes of states, not individuals. There have been vile mass murders and torturers aplenty, but they have acted alone or with a single accomplice. Maybe the KKK did something like this in their day.

Doonesbury is a guardian of the enlightenment

Doonesbury's latest features a potential new character - Dr. Nathan Null.

Doonesbury: March 5, 2006

" ... I always teach the controversy! Like the evolution controversy, or the global warming controversy ... not to mention the tobacco controversy, the mercury controversy, the pesticides controversy, the coal slurry controversy, the dioxin controversy, the everglades controversy and the acid rain controversy ..."

Dr. Null is presumably inspired by Bush's current advisor, John Marburger

... John Marburger, science advisor to the president, responded that the computer models used to make predictions about climate change and public health were both ambiguous and prone to group-think errors by scientists.

Advising Bush on science must be a bit like advising Genghis Khan on etiquette; it's hilarious to see GWB reinventing himself as some friend of science education. I imagine Marburger was first among those willing to consider the job.

Trudeau provides quite a list of attacks, but he left out lots of bipartisan whackiness, such as the claim that "natural" therapies are magically safer than "artificial" therapies or RFK Jr's autism by immunization campaign. I think that over the past 40 years the right has been a greater enemy of the Enlightenment than the left, but really Reason is an uncomfortable companion for any politician. GWB is simply the worst of an often bad bunch.