Archive for the Politics Category

The Kleptocratic States of America

Posted in Democracy, Money, Politics with tags , , , on January 12, 2009 by njmalhq

From many years ago I recall a certain article in Newsweek that labeled Nigeria as Kleptocracy Central. Nigerians the world over were embarrassed, annoyed and up in arms about it. There was some truth to their indignation, although I think what many of them sought was total absolution. The truth is that the country was and is a kleptocracy. Nothing else can explain the gap between where it came from, and where it ended up. But calling it the capital of corruption was a little far fetched, which is what my Nigerian friends should have had issues with.

A few years later I came to the United States, and have since been getting some additional education on the subject. An American friend of mine who travels a lot to the remnants of the USSR recalls a moment of self deprecation when he found himself sharing some vodka with a Ukrainian. The drunk and morose man kept ranting about how corrupt his country was, and how everything was going to hell in a hand basket etc. My American friend ultimately responded by saying that the Ukrainian should consider himself lucky. Here the corruption is only retail. In his country, America, it is wholesale. The last 8 years have taught me the full meaning of this truism. Here is a nice article that sketches a map of contemporary corruption in this once (maybe in distant past, let us not forget Clinton’s Pardongate) great nation of ours:

http://tinyurl.com/9c4xj4

This is the beacon of democracy, freedom, justice, achievement, wealth and other civic goodies? There is a chasm of herculean proportions between where this country came from, and where it is ending up now. Much larger than anything that can be seen in any other country. So, to be fair to Nigeria, in Newsweek style, I propose that we rename USA to KSA, the Kleptocratic States of America (which ironically also stands for Kingdom of Saudi Arabia. Connections, connections, connections. James Burke, eat your heart out!), and Washington DC as Washington KC. The one and only legitimate claimant to the title of Kleptocracy Central.

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Are You Pro Choice?

Posted in Democracy, Politics with tags , , , , , , on October 10, 2008 by njmalhq

A couple of days ago I found myself in a fairly familiar lunch hour confrontation.  Here is how it went.

Him: “You are NOT going to vote for Obama?!” angrily,  “Are you voting for McCain???”
Me: “No, I am not voting for McCain either.”
Him: “What, you are not going to vote at all?”
Me: “No that is not the case either, I am …”
Him: “I’m sorry, but that is just stupid.  Not voting is just stupid …”
Me: “I don’t see any reason why not voting isn’t a valid choice, but anyway I am not saying that I am not going to …”
Him: “No really, not voting is stupid.  Just plain unrealistic and stupid.  Big things are happening in this country and you are saying you are not going to be part of it.  That is complacency.  Complacency is just stupid …”
Me: “HEY!  Take it easy.  I never said I am not going to vote.”
Him: “So then what?  You are going to vote for someone else?”
Me: “Sure.”
Him: “I am sorry, that is stupid too.  That is just like not voting.  You are throwing your vote away.  You are burning it. ”
Me:  “You know, I have wondered about that, about whether that wouldn’t be a more effective and empowering expression of my choice.  A Gandhi style public vote burning …”
Him: “No, see here is how it works.  You have two choice on the menu, Vanilla, or Chocolate.  You are saying you want Strawberry.  You wanna go off the menu.  You have two choices, and you wanna go for one that isn’t there.  That is just plain stupid.”
Me:  “There is a third choice.”
Him: “No there isn’t.”
Me: “Yes there is.”
Him: “No, just two choices.”
Me: “Actually there is a third.  If you slow down a little, I’ll tell you about it.”
Him: “Okay,” impatiently, “what is the third choice?”
Me: “I always have the choice to not eat ice cream at all.”
Him: “That is just plain stupid.  How can you not eat ice cream?  That does not make sense. That is just plain stupid.”
Me: “Well, maybe ice cream is bad for ones health …”
Him: “That is just plain stupid.”

Which is where time ran out.  The lunch hour came to an end, just as my patience with this whole “stupid” thing was running out.  The “conversation” ended.  Yet another self satisfied political party fanatic goes off on his angry little way.  If you are not with him, you are against him.  If you are not in his party, you are a party pooper.  It is his way or the highway.  One finds this character, in overwhelmingly large numbers, in all political factions.  I wish he would slow down a bit and listen. Maybe the complexity of his world will increase for the better.  At least I might have been able to continue the conversation in one of the following two ways:

(1)
Me: “You know, your analogy is a little lame.  I like ice cream.  You like ice cream.  Who doesn’t like ice cream?”
Him: “Exactly!  Who doesn’t like ice cream?”
Me: “Lets try something else.  When was the last time you ate at Mc Donalds?”
Him: “I don’t eat Mc Donalds … ”
Me: “Well, there you go.  They’ve even got more than two choices on the menu, not just McCainuggets vs Oburger, and you still won’t eat there.”

In the theatrical version, the conversation would have concluded with Tribe Called Quest’s Ham n Eggs song trailing into the background.

(2)
Me: “I know you just love democracy, because it is all about choice right?”
Him: “Right!”
Me: “So, you need to decide if I as a voter have a choice or not.  You can’t have it both ways.”
Him: “What do you mean?”
Me: “I can’t have a choice, and have someone else make it for me.”
Him: “I still don’t get it.”
Me: “Well, I either have a choice or I don’t.  If I don’t have a choice, then voting is pointless, and possibly immoral.  It is pointless because it does not change the outcome.  At best it is a ceremonial, for-show endorsement.  Kinda like those one-choice elections in those banana republics like Zimbabwe.  And immorality may result from endorsing something reprehensible, even though it may be co-packaged with some good things.”
Him: “Okay.”
Me: “On the other hand, if I do have a choice, then my choice is my choice, not yours or anybody else’s.  You can’t frame it for me, nobody else can frame it for me, only I get to decide.  It is my choice.”
Him: “I see.”
Me: “Oh, by the way, you never gave me even two choices.  You are giving me only one.  Just one piddly choice.”
Him:”How’s that?”
Me: “You know I’d never opt for one of those two choices, not in a million years.  One of those two characters is absolutely the wrong choice, on the grounds of his specific lip-service record alone.  The other is the only possible choice you are giving me.  That is pathetic.  That is not democracy, that is more like monarchy. ”

(I did not have a good musical score to set this version of the conversation to.  I thought silence would be best, until my friend JG sent me a link to Devo’s Freedom of Choice .  Thanks JG!)

Unfortunately, such conversations will have to be relegated to immaginary corners of the lonely dark alleys of the net.  Simplistic tribalistic pre-framed discourse in the real world never leaves room for dialectics of even this level of complexity.

Re-evaluating Value

Posted in Money, Politics with tags , , , , , , , , , , on October 9, 2008 by njmalhq

The mystery of these times : massive monetary evaporation. Where did all that cash elope to? No one is ready to tell the tale. We can’t tell where it went, maybe we can tell where it came from. That might give us a clue. Paul Grignon made a documentary on that subject, a video titled Money As Debt. The video has been around for a while, but I thought it might be pertinent to revisit it here.

Additional related material on the subject is available in wikipedia under the topics Money Creation, and Fractional-reserve Banking.

To me, the most disturbing aspect of all this is the degree to which popular conception differs from what is stated in the sources above. Except for graduates of Economics, who by-the-way often confessed only fuzzy understanding of the Multiplier Effect and Fractional-reserve Banking, everyone I shared this video with expressed complete and utter surprise at its contents. This is the way the guts of our world works, and we barely know it.

Subsequently I find my mind reeling at the idea that the primary repository of value in the gargantuan global financial system is debt. Debt backed by debt, backed by debt backed by nothing much. Extending a loan is ultimately a statement of faith, in the debtor’s future ability to fulfill obligations. Using this faith as the foundation of the entire monetary system rests upon the belief that an interest bearing debt is more valuable than the money used to create it. But what happens when that faith is misplaced? What happens when money is lent for ends of dubious economic value? Like gambling with random variables (see Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb, 2005). Or waging wars which — even if they had a point or were necessary — are destroyers not creators of value. What happens when good loans go bad?

Supposedly the Central Bank (in the case of the USA, it is the Federal Reserve System) would step in, and save the day. But the reserve rate is usually much smaller than 100%. For example, in the case of the USA, the reserve rate is 10%. Which means that every dollar lent out is backed by a mere dime. So, if enough debts go bad, the reserve can’t cover it. District of Columbia, we have a problem.

Someone sent me a very thought provoking 1875 print by Currier & Ives, pictured below. Apparently the current state of affairs is a near century old dejavu. There is hope in this picture. Maybe the so-called crisis will teach this generation a lesson in age-old basics of true economic values.

Unconventional Conception of Wealth

Unconventional Conception of Wealth

The Big Picture

Posted in Politics with tags , , , , , on October 2, 2008 by njmalhq

My last post, titled Quadrillions and Quadrillions, grapled with the magnitudes of the extremely large amounts of money that is dominating the pre-election buz.  Continuing my attempt to put humongous quantities of cash in proper perspective, I have created a couple of to-scale google earth images.  The first one shows a gigantic green bubble against the Portland, Oregon skyline, representing a pile of half a quadrillion 1 dollar bills.  This, readers will recall, is the reported amount of the dangerous and unstable money bubble at risk in the global financial scam that is the derivatives market.   The second image shows a red dome of 1 trillion dollars, the amount of the so called bailout, contrasted against the half quadrillion.  For the full glory of the images, click on them to enlarge to a higher resolution.  And, please, feel free to freak out.

Half Quadrillion Dollar Bubble

Half Quadrillion Dollar Bubble

Half Quarillion and Trillion

Half Quadrillion (in green) vs One Trillion (in red)

Quadrillions and Quadrillions

Posted in Politics with tags , , , , , , , , on October 2, 2008 by njmalhq

This blog post is dedicated to the memory of Carl Sagan.  It appears that the last month before the next election will be dominated by talks of some very large numbers.  Within weeks numerical magnitudes in public discourse have grown from billions, to trillions to quadrillions.  I was reminded of Sagan’s last book,  Billions & Billions: Thoughts on Life and Death at the Brink of the Millennium, which opened with contemplations on very large numbers, and the big questions that come with them.  I am sure if he was still around and saw the enormous digits being plastered across the news channels, he would have had something intelligent to say about them.

He might have criticized the lack of any attempt to clarify the magnitude of these numbers.  The biggest number that has been thrown around so far is half a quadrillion ($513 trillion to be precise).  Apparently it is the size of the speculative-economy hole dug by the private financial system, which the administration and congress are trying to fill with another very large but much smaller number, the so called $700 billion bailout (or is it $1.2 trillion?).  But how big are these numbers really?  By the way they are written, with their zeroes stripped off, one could mistake them for something much smaller.  Like the monthly wages of an under-the-table immigrant worker in some unknown currency.

What does half a quadrillion really look like?  Let us write it in its un-abbreviated form, the way the numbers we usually deal with in our daily lives are written down:

500,000,000,000,000

Looks bigger than half quadrillion, or even 500 trillion.  But the gut response is still a little weak. Is that a soul sapping number, or merely a foot flattening one?  Sure enough the zeroes have made it appear larger, but by only a little.  Visually it seems only about 5 times bigger than 500 trillion.  There is an illusion here that results from exponential increase rendered linearly.  Adding a zero to a number makes its visual appearance grow by a unit, while its magnitude grows by a factor of 10.

To better appreciate the enormity of this number, it will have to be unfolded further.  Maybe into something more concrete, so we can visualize it.  I am writing this on a computer screen, so what better rendition than the smallest elements that make up the screen?  The tiny point of light that is called the pixel.  How big would a screen with half a quadrillion pixels be?

Without the bezel, my screen is 13.5 inches wide.  There are 1024 pixels across.  I’ll keep the calculations simple, and assume the pixels are square.  Dividing 13.5 by 1024 gives 0.013 inches.  So each pixel is about 0.013 pixels high and wide, or 0.00017 square inches, or 0.0000012 square feet.  So the screen would have an area of 500,000,000,000,000 * 0.0000012 , which is 600,000,000 square feet.

That is one huge screen.  How huge?  About 24,495 feet wide by 24,495 feet tall.  I went up Kilimanjaro, took me 6 days to get up there, and that gigantic mountain is just over 19,000 feet high.  The tallest building in Portland, one that is ironically named after a financial institution, is only 546 feet tall.  And remember, these are pixels, not dollars.

Dollars are thinner than the height of our pixel, but are much bigger on the sides.  I’ll avoid writing down the calculations.  Assuming the sources on the physical size of the dollar bill are accurate, the side of a cube of half a quadrillion dollars would be about 3000 feet.  That would be 6 times taller than the Wells Fargo Center, Portland’s tallest building, and little over half a mile wide and deep.  Laid out in a single row, it would circumscribe the entire planet to a height of about 10,000 feet. Now that is a veritable mountain of cash!

500 trillion dollars.  Enough to line the pockets of every living human being with about 100,000 dollars each.  The end of poverty as we know it.  There are after all only 5 billion of us.  Or, how about establishing human settlement on mars?  My guess is an entire martian nation can be erected with ease with that much money.  I won’t do the calculations on that.  Interstellar space travel is a little easier to estimate.  In his TV series Cosmos, Sagan mentioned  Project Orion and Project Daedalus.  I haven’t been able to find cost estimate numbers on the latter, but the former has a an upper estimate of $24 billion somewhere.  That would be a fleet of 21,000 Orion spaceships dispatched in every direction.

So who’s got them, all those quadrillions and quadrillions of dollars?  I am sure there is a thing or two we can do with them.