Turning Japanese

Krugman readers know he’s long said “Japan can happen here”, and sometime in the past decade that became a shared consensus among economists. There was nothing uniquely Japanese about their real estate crash and deflationary spiral, and Japan fought mightily to slowly, painfully, turn it around.

We don’t hear much about Japan these days. That’s downright strange – I think Japan is still the world’s 2nd or 3rd largest economy (depending on how you treat the EU).

Time to remember …

Op-Ed Columnist - The Power of De - Op-Ed - NYTimes.com

… The current U.S. financial crisis bears a strong resemblance to the crisis that hit Japan at the end of the 1980s, and led to a decade-long slump that worried many American economists, including both Mr. Bernanke and yours truly. We wondered whether the same thing could take place here — and economists at the Fed devised strategies that were supposed to prevent that from happening. Above all, the response to a Japan-type financial crisis was supposed to involve a very aggressive combination of interest-rate cuts and fiscal stimulus, designed to prevent the crisis from spilling over into a major slump in the real economy.

When the current crisis hit, Mr. Bernanke was indeed very aggressive about cutting interest rates and pushing funds into the private sector. But despite his cuts, credit became tighter, not easier. And the fiscal stimulus was both too small and poorly targeted, largely because the Bush administration refused to consider any measure that couldn’t be labeled a tax cut.

As a result, as I suggested, the effort to contain the financial crisis seems to be failing. Asset prices are still falling, losses are still mounting, and the unemployment rate has just hit a five-year high. With each passing month, America is looking more and more Japanese.

So yes, the Fannie-Freddie rescue was a good thing. But it takes place in the context of a broader economic struggle — a struggle we seem to be losing…

At least we can benefit from the hard lessons Japan learned. I am confident Obama and his team of economists would do the right thing. If a president McCain were true to his current rhetoric, he’d drive the US economy over a cliff.

The interesting Fannie and Freddie question

Robert Reich asks the same question that interests me:

Robert Reich's Blog: Fannie and Freddie, and Why the Accounting Gimmicks Continued

... Accounting gimmicks first came to light at Fannie and Freddie in 2003, at which time Fannie's and Freddie's former CEOs were sacked. Why, then, did they continue for another five years, even under new CEOs, even after policymakers first learned of them?...

I read a persuasive NYT summary of the newest accounting scams. On initial review they weren't technically illegal, but the motive for they key maneuvers was deception. (One of the pair was more honest than the other, unfortunately I can't say which.)

So the interesting question is indeed why the new CEOs, chosen after an accounting scandal, ended up toasting, if not cooking, the books.

I'm open to suggestions, but here are my biases:

1. I suspect most CEOs would play the same games. This is, by and large, how publicly traded companies do business. Legal, but tricksy.
2. With a few luck breaks it might have worked, in which case the CEOs would be lauded for their brilliant leadership, feted in the Harvard Business Review, and the accounting gimmicks would be forever forgotten.
3. If we don't like these games, we could try changing accounting rules. I believe that's supposed to happen sometime in the next decade. I suspect the changes won't work however.
4. We should do more to keep corporations smaller and competion more active -- so when games are played taxpayers don't bear such a great risk. Let the shareholders pay the price for creative accounting.

Dark Crossings: Closing the Strauss gap with the GOP

Four years ago I was offended by the GOP's Strauss strategy - a strategy that assumes most Americans are gullible peasants ...

Gordon's Notes: IHT: The long reach of Leo Strauss (Pfaff 2003)

... Bush and Rove live the Straussian story. The key element is that 'stories' are what the masses need. It's why Bush has absolutely no credibility among anyone who thinks. It's not that Bush is stupid, it's that we know everything he says is a 'story' for the 'masses'....

Gordon's Notes: Rove , Bush and the Swift Boat Veterans. Goering Lives.

... Now we begin to understand where the swift boat fraud is coming from. Kerry's biography portrayed some of them to as incompetent leaders and war criminals. They responded with a frantic barrage of accusations, amplified and encouraged by Bush money and right wing adulation. The more the money, the more the power, the more their memories changed.

There are links to the successful attacks on Dukakis, Clinton, McCain and others. This strategy works, and it works well. The masses can be swayed. Goering perfected these techniques 70 years ago, Rove is merely refining the master's work.

Leo Strauss, idol of the neocons, preached the power of stories to guide the masses...

Of course we know how it turned out four years ago. The Strauss strategy worked beautifully.

It still works...

Will the GOP's negativity produce a backlash? - Glenn Greenwald - Salon.com

... there is this Rasmussen Reports poll from today, taken after Palin's speech:

A week ago, most Americans had never heard of Alaska Governor Sarah Palin. Now, following a Vice Presidential acceptance speech viewed live by more than 40 million people, Palin is viewed favorably by 58% of American voters. The latest Rasmussen Reports national telephone survey finds that 37% hold an unfavorable view of the self-described hockey mom.

A CBS poll taken during the GOP Convention shows Obama and McCain tied (after showing Obama with a 6-point lead last week), while the Gallup daily tracking poll continues to show Obama with a 7-point lead...

... But the idea that Americans instinctively recoil from negativity or that there will be some sort of backlash against Republicans generally and Palin specifically because of how "negative" their convention speeches were is pure fantasy. Cultural tribalism and personality attacks of those sort work, especially when they're not aggressively engaged..

Now, four years later after attacking the Strauss strategy of Cheney, Rove and Rumsfeld, I realize I've crossed over to the dark side ...

Gordon's Notes: Daily Show savages the GOP flip-floppers

... Some of my more logically minded friends are having trouble believing that the right wing can be so internally inconsistent. They need to read more Orwell.

The GOP has DoubleSpeak deep in their DNA. They do this stuff because it works; because a very large number of Americans are driven by emotion rather than reason...

Has America really changed, or was it always so? My reading of American history is that that authoritarian power of the Strauss strategy has waxed and waned here, just as it has in many democracies. In our time it's strong. I don't know why the Strauss strategy works so well now. Maybe it's driven by a power shift from less educated males to more educated females, maybe by changes to the economics of the media business, maybe it's due to the aging of the voter pool, maybe it's all of these and more.

Whatever the reason, Strauss rules today.

The problem for the enlightened rationalist is that there's a Strauss Gap between the GOP and the Dems.

In Straussian terms we can divide the GOP voters into the peasants and the masters. The masters know the GOP rhetoric is irrational propaganda, but they're fine with that. They imagine the GOP will serve their interests [1], and they believe that the rhetoric is needed for the masses.

Unfortunately, I can also divide the Dems into two groups -- but they're different groups. We too have voters who feel rather than reason -- though in our case their feelings are in fact aligned with their interests. Unfortunately, we have the Idealistic Rationalists instead of the Straussian Rationalists.

The Idealistic Rationalists are my former tribe. They believe that appeals to reason and noble values will work.

They're almost right. The elections are finely balanced. I fear, however, that American is still in a Straussian cycle -- and we could get worse.

We need to convert our Idealistic Rationalists to the Dark side, to convert them into reluctant Straussians. At the very least, they need to accept a painful truth -- Obama will not be speaking to you. He will say what he must say -- and you won't like it.

Harsh times. I wish they weren't so, but we know where wishful delusions lead.

Join me Luke, join the Dark Side of the Force ...

[1] Jonathon Schwarts explained beautifully why GOP rationalists are wrong to think the GOP serves their interests. They need a world that works as much as the rest of us, and whatever the short term gain the GOP gives them they'll lose big within they and their children's lifespans.

Update 1/19/2009: It's a good think I wasn't running Obama's campaign. Obama didn't need no stinkin' Strauss. I don't understand why Americans weren't fooled again, but, apparently, we weren't.

Coming soon: Palin's pastor problems

It's tough having extremist pastors wandering about ...

Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong

... nominates somebody who takes their children to a church where they teach that suicide bombers in Tel Aviv are righteously executing God's vengeance on Israel for rejecting Jesus Christ...

So Palin's pastor is pro-Terror?

I wonder how much GOP attention that will get ... (joke).

Update 9/6/08: more details

The rich are not like you and I - the McCain's covert adoption

We have adopted 3 children. Our agency interviews would have been rather brief if we tried a "Cindy McCain" ...

Talking Points Memo | What Does This Say About McCain?

... Karl Rove this morning told yet another variation on the story of the McCains' adoption of their daughter Bridget. In his version, like the others I've heard, Cindy didn't tell John in advance that she was bringing this child back with her from abroad. She just did it, a fact which usually gets a hardy-har-har from friendly audiences.

In Rove's version today, Cindy specifically told someone else not to tell John in advance. The point of Rove's story was that John McCain needs to reveal more of himself publicly so that voters can see the kind of character he has...

Holy cow. Did Child Protective services in her state know what the $%!#$ Cindy McCain was doing? In Minneapolis the animal shelters don't allow this kind of "surprise" adoption (seriously - they interview).

Cindy McCain is astoundingly wealthy. She doesn't have to follow the laws we mortals face.

Tell me again about Obama's elitism. I seem to be having some kind of hearing problem ...

Daily Show savages the GOP flip-floppers

In a brilliantly savage video the Daily Show contrasts right winger's responses to Palin to ... well ... everything they've ever said before. John Stewart looks like he's about to explode. You can't blame Dick Morris though, because, as Stewart says, "he's a lying sack of ****".

Some of my more logically minded friends are having trouble believing that the right wing can be so internally inconsistent. They need to read more Orwell.

The GOP has DoubleSpeak deep in their DNA. They do this stuff because it works; because a very large number of Americans are driven by emotion rather than reason.

I fear it's not enough, but John Stewart is a certified guardian of the enlightenment.

Update 8/5/08: Krugman connects GOP DoubleSpeak to their successful exploitation of a culture of resentment. Of course by stating the obvious, that Americans are easily exploited this way, we expose our skepticism of the wisdom of the average American, which makes them resentful, which serves the GOP agenda ...

They're really good at this game.

Curse of the cookie

Jeff (Coding Horror) Atwood falls prey to an XSS cookie exploit.

His writeup is relatively readable. I think it's worth a look, to understand how frail our net security is.

We can only hope Chrome will move things forward a bit.

Singularity alert: Picasa web album face tagging

Gack!

Picasa Web Albums Adds People Tagging

... CNet reports that Picasa Web Albums will add some interesting features today. After implementing face detection in the image search engine, Google adds face recognition in Picasa Web Albums to facilitate photo tagging...

Yeah, we all knew it was coming, but it's creepy-cool anyway. Not quite goose bumps, but a grade 2 singularity event. (Grade 7 is when the Great God Google refers you to your soylent green processing station, Grade 1 is personalized search.)

So will Google link the faces to the appropriate Google Profile? You just know they've got that one on their social networking strategy. (So how do kids get their profiles? Is it like Confirmation?)

I love it. Now if there were only some way to sync the tags back to iPhoto ...

I'll report on my tech blog after I try it. I'm sure the servers will be smoking tonight, so it'll take a few days. (Update: yeah, it's pegged. Stuck at 44% of faces.)

McCain on science: you knew it would be bad

A self-styled "independent" (ahh, to be young) has reviewed the Obama and McCain positions on science.

Needless to say, Obama does pretty well. True, he's no more of a scientist than Bill Clinton was, but they both hang out with real scientists.

Obviously, McCain/Palin are a disaster.

Cocktail Party Physics: physics politico

... Even more damning points against McCain: he notoriously flip-flopped on the abortion issue, and now is opposed to stem cell research. Obama supports stem cell research. Plus, McCain's shiny new VP pick, Sarah Palin, is a far-right social conservative, global warming denialist, anti-abortion advocate, is anti-stem cell research, plus she supports teaching creationism in public schools (via the "teach the controversy" strategy).

... With Palin at his side, and a party platform filled with ideological rhetoric so stale it's developing icky green moldy bits around the edges, he's offering a change, all right -- all the way back to the late 1980s. (Cue chorus: "And that's not change we can believe in!")

Honestly? Regardless of how McCain answers (if he answers) the questions from Science Debate 2008, his selection of Palin pretty much makes it impossible for anyone who values the science and technology enterprise to vote for him...

Alas, I know this knowledge won't make any difference to faux-rationalist Republicans. Denial is strong.

Incidentally, I'd like to join a "Democrats for Palin" group. We'd all right glowing letters defending her to media outlets, join up with supportive demonstrations, etc. Of course we'd need to be incognito ...

Sad news for us Dems

Yes, there's sad news for we Obama/Biden supporters.

It now looks like Palin will break the 18 day Eagleton record.

We were really hoping she'd last at least a month.

So did McCain do it because he was really, really, mad at the religious right?

Even the anarcho-republicans rioting in St. Paul can't kill the Palin buzz, but all good things must end.

Google mocks the idiotic security question

Even as some Google engineers succumb to security question idiocy, others openly mock the madness.

At least, that what I assume is going on. My (113) Google Profile now asks me many of typical security questions (nickname, etc) -- so my answers can be indexed and added to Google's public knowledge base.

This is either crude commercialism (set up the victims, then sell the lockpicks) or cruel mockery.

I'm betting on the latter. Google shares are a bit down, but Chrome will boost them. Google's not that desperate for revenue. The Profile engineers are making fun of their colleagues.

(via Google Operating System)

Why Google Chrome?

Google has lots of good reasons to build Chrome. Certainly embedding Gears in the browser is a good reason, that ought to also make former Netscape Constellation engineers smile. Dissing Flash is a always a good reason.

But what's the best reason?

Well, Google is still primarily a search and discovery company. So maybe the best reason to build Chrome is to deeply embed Google search throughout the browser.

I'm 70% through the Chrome comic, and I'm excited. This is a big event, and it's a big event that will benefit the entire user community.

All open source, and they mean open. Any competitor can take anything, thank you not required.

Thanks Google!

PS. See Andy, Google's not done yet ...

Update 9/5/08: Nice story on how Chrome was created.

JavaScript slide show app from 1997 still works

Today I ran across a noteworthy example of technological continuity. I was surprised!

A recent transition in hosting and registrar services caused me to review ancient web pages largely created in the mid to late 90s -- during the heyday of the personal web site. Among the dusty collection were a set of Internet Tutorials for my fellow family physicians.

The tutorials used a home grown JavaScript slide show applet that let me draw ordered sets from a collection of (spartan) "slides" -- a feature that was killed off by PowerPoint's dull dominance. I wanted to have a dynamic cross-platform (IE 2/3 and Netscape 3) resource.

Today I tried the applet. I had to enable pop-ups but, incredibly, it still works in Firefox 3 (I didn't try Safari or IE 7, no need to push my luck).

There's more continuity on the net than we typically assume.

iPhone push pulled: was it the revenue hit?

Apple pulled a highly desirable feature from the September 2.1 iPhone update:

Apple Seeds 4th Beta of iPhone firmware 2.1; Pulls Out Push Notification Service - iPhone Hacks

Apple has seeded developers of its iPhone Developer program with the fourth beta version of iPhone firmware 2.1. The latest update again consists of more bug fixes.

However, Apple has strangely pulled out the Push Notification Service APIs in this release for "further development".

The Push Notification APIs is Apple's solution for one of the features that we have been asking for, ability for native iPhone apps to run in the background especially for applications like Instant Messenger, Facebook etc...

The most likely explanation is that there are a lot of major bug fixes being packed into 2.1, and it's entirely reasonable to push features out to 2.2.

On the other hand, Push Notification will also kill a lot of 40 cent SMS transactions. I've used Google Talk on my iPhone, and if were able to use push notification I'd use it all the time.

Those SMS transactions are a significant piece of AT&T and Apple's iPhone revenue. A $30/month tethering solution would make up for some of the loss, but not all.

So if I were Apple, all things being equal, I'd pull the Push and push the Tether.

Happy day: Palin

It could have been our Governor Pawlenty -- a smarter, smoother version of George Bush with an evil gift of copiously and covertly rewarding his base.

Instead McCain picks someone with a built-in scandal:

Talking Points Memo | Palin's the One

... So now we've learned that Sarah Palin is McCain's choice for vice presidential nominee. I have to say, it's a daring pick but I think a very weak one. I'm perfectly happy with it. Palin is in the midst of a reasonably serious scandal in her home state. Her brother-in-law is a state trooper who is in the midst of an ugly custody battle with her sister. And she's accused of getting the state police to fire him. Recently she was forced to admit that one of her aides had done this, though she insists she didn't know...

Maybe McCain decided Pawlenty couldn't deliver Minnesota? Was Alaska ever in play?