Sunday, November 30, 2008

FDA Decides Melamine Is Safe After All

The U.S. Food and Drug Administration has decided that melamine, the toxic food additive that sickened tens of thousands of consumers in China this fall and killed cats and dogs around the world when it appeared in pet food last year, is safe when it occurs in U.S.-made food. After testing a wide range of food and finding levels up to 2.5 parts per million (ppm) in various kinds of food and up to 1 ppm in infant formula, it issued rulings finding that those levels could be considered safe.

Melamine is not allowed to be added to food anywhere, and scientists have not yet determined how it gets into food. However, melamine is not hard to find in the industrial environment in which food is made. It is found in some kinds of plastic, including food containers, in fertilizer, and in cleaning chemicals, including ones used to clean food containers, so perhaps those are the sources of melamine found in U.S.-made food.

China’s post-Olympics crackdown on the illegal use of melamine as an additive in dairy products led the FDA to look into the chemical, for which it previously had not adopted any safety standards. One has to assume that the tolerance of 1 ppm of melamine in infant formula and 2.5 ppm in other food is little more than a guess that will be further refined after the real scientific work is done.

Saturday, November 29, 2008

Black Friday Shoppers Turn Out

Media reports of Black Friday shopping are consistent with firsthand reports and my own observations. U.S. consumers are shopping in the largest numbers of the year, but without the level of energy seen in years past. (The recession hit around December 5 last year, after Black Friday, so Black Friday shoppers last year were mostly shopping with the expectation of a normal expanding economy. This year almost everyone realizes there is a recession.)

Early retail reports suggest that consumers spent 3 percent more on Black Friday than they did last year because of the deep discounts in retail stores. However, this does not necessarily bode well for a booming holiday shopping season.

Black Friday is rapidly turning into the finale of the Christmas shopping season, rather than its midpoint, as it was just three years ago. The more serious Christmas shoppers try to finish their shopping on Black Friday and may have only a handful of purchases remaining when the day is over. The after-Christmas sale prices seen yesterday made it easier for shoppers to finish their shopping early.

One indication of that is the sharp dropoff in retail traffic and sales volume today compared to yesterday, as stores and parking lots this afternoon looked more like a typical weekend in December than like the continuation of the Black Friday discounts.

Friday, November 28, 2008

This Week in Bank Failures

The instant bank.

That’s the FDIC’s newest concept as it seeks investors to buy out failed banks.

Traditionally, failed banks are taken over by other banks, but that approach is showing signs of strain. Last week, for example, a failed Georgia bank was taken over by a smaller bank from Virginia that had no previous history in Georgia. You can imagine the bankers from Virginia getting out their Georgia road maps to find out where their four new locations were.

Georgia and Michigan were the first two states to be hit by the real estate downturn, so it could be hard to find a bank in those states with enough financial strength to take over a failed bank. If the rest of the country follows the same pattern, it may be hard to find a bank anywhere in the country to take over a failed bank by the end of next year.

And the rest of the country is, so far, following the same pattern. Banks earned $1.7 billion in the third quarter. That sounds like it should be the profit of just one hugely successful bank, but it is not. That is the combined profit of every bank insured by the FDIC. To put it another way, the amount of money banks are making in a month is scarcely more than they would make in one day in a good year.

Banks’ financial strength comes primarily from profits, so when banks stop making a profit, it is a problem for the banking system.

The across-the-board decline in banking can be seem in last weekend’s crisis at Citibank, which in some ways is the largest bank in the country. Citi’s stock had fallen by half last week after it announced some of the cutbacks it would need to stay solvent. Federal officials worked over the weekend and apparently all night Sunday night without coming up with the right way to bail out Citibank, so Monday morning, they essentially just gave Citibank $100 billion, then made the deal complicated enough to let people imagine that there were enough strings attached to make it something other than a gift. Wall Street continues to be skeptical about Citi’s chances, however. Despite the size of the bailout, Citi’s market capitalization was only $37 billion. That means, according to investors, the whole company is worth less than half the amount of money the U.S. government just put into it.

With the whole banking system in decline, the FDIC needs to look for capital outside the banking system. That’s where the instant bank comes in. The FDIC announced on Wednesday “a modified bidder qualification process” that “will allow interested parties that do not currently have a bank charter to participate“ in the resolution of failed banks. In the announcement, the FDIC took pains to emphasize that it is streamlining the paperwork involved in becoming a bank owner. The announcement seemed to be timed to avoid scrutiny by the news media during the holiday weekend.

The new instant bank rules seem to open the door for just about anyone who has money and a businesslike approach. The acquiring institution would get a bank charter when the bank takeover was announced. This allows a bank takeover to be carried out by a bank that didn’t exist a moment before. In the unlikely event that the acquiring institution turned out not to qualify to own a bank, the FDIC could work that out later, perhaps by turning the bank over to yet another acquiring institution.

This move would seem to make it easier for foreign banks, oil companies, perhaps even sovereign wealth funds to buy up failed banks. Oil companies would seem to be the most obvious candidates, since they have money to burn and depend on commercial banks, currently in various degrees of financial distress, for their all-important credit card transaction processing. There are other possibilities too, so we’ll have to wait and see what deals emerge. What will people think if their bank fails and is taken over by BP, Wal-Mart, or the United Arab Emirates?

In Britain, a Royal Bank of Scotland (RBS) stock offering expired today, with investors buying just a few million of ₤20 billion in shares that were offered. The stock will instead be bought by the government, which will own 58 percent of the bank. RBS had been the second largest bank in the U.K. and a significant presence on Wall Street, before it was hit by losses.

Thursday, November 27, 2008

Mindfulness and Gratitude

I had pumpkin pie for breakfast. For me, I don’t need to look for anything more to prove that I’m living the good life.

It’s natural to go through life thinking about problems and obstacles, and that’s part of the reason we in the United States have set aside today as a day to focus on things we can be thankful for. There are always plenty of good and bad things in life, and it’s important to be able to shift your focus from one to the other.

For example, after you’ve identified a problem you want to solve (something bad) you need to shift your focus to your ability to take action (which is something good). That way you can solve the problem. Otherwise, you just have the problem, which isn’t nearly as good.

Gratitude is a matter of focusing on things you can feel good about, but it isn’t just a feel-good exercise. It helps connect you to the possibilities in life. Gratitude is easy if you can develop the habit of mindfulness, of generally noticing what is going on around you. There are always good things around us, but we rush past them to get to wherever we are going. A holiday, when we don’t have to rush (well, at least that’s the theory), is the perfect time to practice mindfulness, and when you notice how many good things there are, that naturally leads into gratitude.

So when you get some pumpkin pie today, or anything else that’s good, don’t just rush past it. Notice it. See how many good things you can notice before the day is over. And see if noticing all those good things doesn’t put you in a state in which you notice more things you can do.

Wednesday, November 26, 2008

Tony Robbins Recommends Massive Action

After I mentioned Tony Robbins yesterday I found that he has a new free audio program for people who might be worrying about the financial crisis. The one-hour program is an introduction to a web site that hasn’t really been put together yet, but it is also a strong, concise introduction to Tony Robbins’ philosophy that may be worth repeated listening even for those who have already read Awaken the Giant Within and listened to Lessons in Mastery. Download it now at:

Power of Crisis (free registration required)

In this program, Tony emphasizes that even the darkest times contain opportunities that aren’t available at other times. That is, there are things you can do in this situation that can benefit you greatly, but only if you take action now.

As I’ve mentioned repeatedly, one of the worst ways you can react to a deep recession is to decide to simply wait it out, to wait for economic conditions to improve before you do anything. Certainly that will be necessary in some areas or for some projects, but that just means you will have more time for other kinds of action that are more important right now.

If I haven’t persuaded you that bad economic times are a good time for massive action, I am certain that Tony will. Tony is fun to listen to anyway, so if you were going to spend an hour worrying about the economy, give Tony a chance to change your perspective instead.

Tuesday, November 25, 2008

Breaking the Situation Comedy Trance

Nothing ever really changes in a situation comedy.

The situation comedy, or sitcom, was the most popular kind of television program from the 1960s into the 1990s. Usually a weekly show, it would start from the exact same situation every week and go on from there to generate situations full of laughs, or at least bad puns.

It’s a strategy borrowed from the factory. The episodes of a situation comedy were interchangeable parts. The writer of one episode did not even need to know the writer of the previous episode. Episodes could be shown in any order without any loss of meaning — because there fundamentally wasn’t any meaning in a situation comedy. The philosophy of a situation comedy could be summed up this way: “Life is one dumb joke after another, and then you get canceled.”

The characters in a situation comedy could change, and they did. They got new jobs, fell in love, fell ill, got rich and famous, went to jail, went to war, cured bad habits, learned new skills. But every change had to be undone before the episode was over. A character who won an election would lose the recount. A family that moved to a new city would move back a day later. Every illness was cured, every conviction overturned, every addiction shrugged off in less than half an hour of viewing time. Every brush with fame lasted just fifteen minutes. In a situation comedy, no matter how big the changes in a person’s life were, they were powerless to change their situation. One week later, the situation would be exactly the same.

Watching these TV shows conditioned three generations of Americans to believe in a view of life that, from the outside, is almost nihilistic. In this view of life, matter how hard you work, you cannot really change yourself or your situation. Every change that occurs turns out to be an illusion. The new house turns out to be the same as the old one. You get a raise, but you don’t have any more money. Fall ill, and the doctors make you feel better again. New job, same old problems. Lose weight, gain it back. It doesn’t matter how much trouble you get yourself into, because it always works out in the end. This kind of thinking has people feeling invulnerable and powerless at the same time. Things can’t get any worse, but they can’t get any better either. “It’s the same sh—, different day,” Rick Springfield sings in “I Don’t Want Anything From You,” echoing the frustration of millions at situations that just don’t seem to change.

In reality, almost everything can change. But while you are in the situation comedy trance, you tend to overlook opportunities to improve your situation. You may also fail to respond to problems that threaten to turn your life upside down.

How powerful and pervasive is the situation comedy trance? Consider this:

  • Drew Pinsky in Cracked describes how people “tempt fate” taking drugs, not believing that the nasty consequences of drugs will happen to them. Drug use has been around forever, but the “drug culture” and the reckless attitude that goes with it belong to the same historical period as the situation comedy.
  • A U.S. president and defense secretary sent the country into a war in Iraq, confident that they would be able to bring the troops home quickly — the way it would happen in a situation comedy.
  • How many U.S. households are clinging to lifestyles they cannot afford, getting deeper and deeper in debt, yet believing it will all work out somehow? Almost half?
  • Two years ago the movie and book The Secret became a sensation — and an instant controversy — with the simple message that change was not only possible, but potentially controllable. Tony Robbins has described the resistance he sees to the idea that anyone can make permanent changes virtually at will, just by deciding to and taking action. Even after seeing examples of such changes up close, most people still believe that change is not really possible for them.
  • U.S. real wages have remained nearly unchanged since the 1960s. Ever since workers started to watch situation comedies in large numbers, their wages have barely kept up with inflation.

If you are in the situation comedy trance — and if you are reading this, there is a very good chance that you are — you can gain more control over the circumstances of your life by breaking out of the trance, and it is not that hard to do. It is just a matter of getting in the habit of change. Here are three easy ways to make permanent changes in a short time:

  • Give away or throw away a possession you no longer use.
  • Learn something new that could help you solve a problem.
  • Move things around in a way that makes it easier for you to do something you’re doing.

The situation comedy trance puts you in a world where changes are occasional, massive, difficult, and fleeting. This makes life frustrating. To change this pattern, create changes that are the exact opposite: frequent, small, easy, and permanent. You probably already make changes like this every day, so become more conscious of the changes you are already making.

Notice how easy it is to change something. Today I moved the macaroni from one cabinet in the kitchen to another. It was so easy. Also notice the finality of the changes. If I check again a year from now, I will find the macaroni in its new location.

My example surely sounds trivial, yet the purpose is just to break out of the situation comedy trance. After you do that, you can change anything. Things really do change.

Monday, November 24, 2008

MySpace Traffic and Consumer Confidence

According to one theory, a time of economic uncertainty should benefit web sites such as MySpace. The free entertainment that it provides could substitute for paid entertainment options as consumers cut back on spending. But another theory says that a site such as MySpace would decline along with consumer confidence. In times of uncertainty, who has time for anything so frivolous? I checked with Google Labs, and it showed U.S. MySpace traffic dropping off significantly in early September, at the same time that the financial crisis was becoming apparent to the general public. This decline appeared to coincide with the September decline in the University of Michigan consumer sentiment index. Both MySpace traffic and consumer confidence have continued to decline in the two months since.

This is not really enough data to draw a conclusion from, but I take it as a positive sign. I would like to think it shows that U.S. consumers are taking the economic turmoil seriously and doing what they can to put themselves in a better position, at the cost of some entertainment time. If people are taking extra time to take care of their own economic conditions, then despite what may happen to the corporate sector, the economy as a whole will not be overwhelmed by the recession.

Sunday, November 23, 2008

It’s Not a Depression, But Like One

I continue to see financial reporters offering harsh criticism of economists for comparing the current recession to the Great Depression. I think these reporters just don’t want people worrying that the current situation could turn into the Great Depression all over again. It couldn’t. But ridiculing economists is not the right way to make that point. Economics, despite its problems, is a science, and when people start saying, “There is no reason to worry, because science is all a bunch of hokum,” it not only does not reassure people, it makes the person offering that assessment look like a moron.

So let me try to explain what’s going on, why it is now necessary to draw Great Depression comparisons. Economists and other serious-minded people are comparing this recession to the Great Depression not because we expect it to be as prolonged or as troublesome as the Great Depression, but because the current recession has much of the dynamic of a depression, and the Great Depression is the most recent depression we have to look back to. There were other depressions before the Great Depression, but many of our modern institutions did not even exist back then, so they don’t offer us the same kind of guidance we can get from the Great Depression.

An ordinary recession ends on its own, and the government can perhaps speed up that process by stimulating the economy so that the recession ends sooner. A depression is different. No amount of economic stimulation will pull a country out of a depression. The current recession is also different. The efforts at economic stimulus to date have been tragically counterproductive. This is reason enough for economists to look at the current recession and say that it is not like the recessions of the past half-century.

There are also multiple technical reasons why it makes good sense to compare the current recession to the Great Depression. By some technical measures, it is already worse. For example, the value of financial assets that have been destroyed this year alone is orders of magnitude greater than anything that got blown up in the Great Depression. In a way, this comparison is a sign of strength. There is so much money in the world today that we can lose an awful lot of it and still keep going. But the loss of such magnitudes of money still has repercussions, and we cannot learn much about that from any of the recent recessions, because nothing of the kind happened during those recessions. We have to look to a depression to see what might happen. And the Great Depression, as I mentioned, is the most relevant depression to study simply because it is the most recent.

At the low point of the Great Depression, Franklin D. Roosevelt famously said, “We have nothing to fear but fear itself.” That is not something that could be said about the current recession. Fear is a problem, but a far greater problem is complacency. The greatest risk comes from corporate executives and others who think we can just keep going along doing what we’ve been doing, and the recession will work itself out in less than a year. It is this stubborn mindset that is behind the note I got from General Motors yesterday, which read, “As a Chevy owner, you know first-hand the strides we’ve made in producing some of the most highly acclaimed vehicles on the road. The 2010 Camaro will be no exception. Camaro is not just a sports car but bold emotion sculpted in sheet metal. Its powerful and efficient projected 300-hp 3.6L V6 engine offers an astonishing available 27 MPG hwy.” I am not a Chevy owner, but that is not the point. A car maker on the brink of bankruptcy who, during the current crisis, still thinks that “bold emotion sculpted in sheet metal” is the solution to the world’s problems or that a fuel efficiency of 27 miles per gallon is “astonishing” is demonstrating the kind of pig-headed obstinance that is adding to the severity of the recession. It is the same thing at faltering banks that resist the bold reshaping their companies need to survive and at homebuilders who have cut back the pace of homebuilding by only half when it was obvious enough a year ago that it would take at least two years to sell off the homes that had already been built. We are fortunate, at least, that very few politicians imagine we can just keep going the way we’ve been and everything will be fine.

Business as usual is a mindset that is useful for a company to weather a run-of-the-mill recession. It will work fine for most companies in the current recession too — but companies in industries that need to change, need to change as quickly as possible to improve their chances of surviving. Many of them are resisting these changes and will fail in the coming year. That is what makes this recession so different from all the recessions I have seen in my lifetime. It is what forces us to draw some comparisons from the Great Depression. And it is long past time for financial reporters who don’t know the first thing about economics to stop criticizing economists for using the resources at hand to try to find a way through the situation we now face.

Saturday, November 22, 2008

Roads, Bridges, and Schools

President-elect Obama this morning laid out a plan to create jobs mainly by building and repairing roads, bridges, and schools. The emphasis on creating jobs in the short run is important, but the focus of the work they do is equally important. There is no economic benefit in having huge numbers of people out of work. Even economists who subscribe to the discredited notion of a natural level of unemployment would hesitate to defend the current 7 percent unemployment rate. But there is not much economic benefit in make-work either. A jobs program does not provide any economic recovery in itself, so it is important that the work it does creates a platform for economic recovery. In other words, it has to be an investment with an immediate return, saving time, reducing costs, reducing risks, or improving productivity.

Building and repairing roads, bridges, and schools does that, assuming the projects are sensibly chosen. In some schools, simple improvements in the walls and lighting can allow students to learn 10 percent faster, just because they can see and hear a little better. That’s the kind of improvement in productivity a good jobs program can make. A bridge-building project that eliminates a 20-minute rush hour delay can give thousands of people an extra four hours a week to do something constructive. Again, it’s an immediate improvement that takes place as soon as the work is done. These are investments we should have been making all along; now, we really need to.

Productivity, or giving people a way to get more done, is what gets a country out of a depression. The current recession has some of the dynamic of a depression, and there is a risk that a depression could occur, so a jobs program ought to be the kind could overcome a depression.

Obama also mentioned solar panels and electric cars. These are also a good choice for a jobs program, and for a different reason. They reduce the United States’ need to import energy. Imports are the main reason the national economy is out of whack, and energy is about half of all imports, so the economy cannot be brought into balance until the energy deficit is reduced. Again, solar panels and electric cars start to pay back as soon as they are built and put into use. There is an immediate return on the investment.

I emphasize this idea of an immediate return on investment because that was one of the failures of the jobs programs of the Great Depression. Many of those programs focused more on long-term rewards because economists at that time thought that the work itself was what would pull the economy out of the depression. The depression did not end until after enough accidental improvements in productivity occurred. Even today, despite the risk of a depression, many people are calling for more stimulus for the economy. But economic stimulus now is like pushing a car because its engine has broken down. Pushing rewards you with a kind of movement, so it seems like it is doing something, but if you are not pushing the car into a repair shop, no one should expect it to get the car running again.

Friday, November 21, 2008

This Week in Bank Failures

It was banks vs. autos this week as a few members of Congress wanted to divert $25 billion from the Wall Street bailout fund to the Big Three automakers. That’s in addition to the $25 billion Congress gave the U.S. auto industry less than two months ago. Really, the money was meant for GM, which says it may go broke before the year is over. The administration objected that money being held to keep the banking system from collapsing shouldn’t be spent on just anything. It was a confusing picture in Washington as no one could come up with a convincing scenario by which the government could subsidize a company just because it was being clobbered by its competition. As soon as the GM team got on their private jet to fly back to Detroit, GMAC applied for bank holding company status.

All eyes were on Citi this week as the banking giant unveiled plans to cut its staff to 300,000 workers, 20 percent less than at its peak of two tears ago. The cuts would seem to be nearly enough to keep Citi solvent, yet Wall Street seemed to respond by considering for the first time the prospect of Citi’s failure. It did not help that two more Citi hedge funds failed during the week. Citi’s stock price ended the week below $4, half the level of a week ago and the lowest since 1994. Last night Citi executives told one newspaper they were seriously considering selling off large parts of the company while telling another newspaper that nothing of the kind was on the table.

Other banks announced mass layoffs this week, or were rumored to be planning them. Most were in the United States, but there were others in every part of the world.

Three banks failed tonight, one in Georgia and two in southern California.

In Georgia, The Community Bank had four branches in Loganville, Georgia, and three other small towns east of Atlanta. All deposits from the four branches have been transferred to Bank of Essex of Tappahannock, Virginia.

Like the two other banks that failed recently in Georgia, The Community Bank suffered from the real estate market in Georgia, which began to decline two years before the rest of the country. The Community Bank had $409 million in construction loans and only about $100 million in other loans. Bank of Essex is a smaller bank, a community bank with 13 offices across Virginia.

The two California banks that failed tonight were considerably larger. Downey Savings and Loan of Newport Beach had $9.7 billion in deposits, and PFF Bank of Pomona had $2.4 billion in deposits. Both banks are being acquired relatively intact by U.S. Bank, one of the largest banks in the country with offices in 27 states. Both banks are relatively old. Downey was founded in 1957 and was one of the first banks to emphasize placing branches in shopping centers. PFF was said to be the oldest bank in Southern California. It was founded in 1892, when the region was dominated by citrus groves.

Downey’s problems were linked to option ARMs, a kind of home mortgage that allows borrowers to decide the size of each monthly payment. PFF’s problems stemmed from real estate development loans. California’s real estate market has fallen the most of any area in the country.

This is the first time this year the FDIC has closed three unrelated banks on the same day. Part of the reason, I have to imagine, is that the FDIC is hoping not to be closing any banks a week from now during a holiday weekend.

Thursday, November 20, 2008

GM’s Personal Crisis

Actual quotes from General Motors’ CEO:

This is all about a lot more than just Detroit. It’s about saving the U.S. economy from a catastrophic collapse. (November 18)

The societal costs would be catastrophic — three million jobs lost within the first year, U.S. personal income reduced by $150 billion and a government tax loss of more than $156 billion over three years. (November 18)

This is an issue of the whole auto industry, if that becomes under severe pressure, the impact on the whole U.S. economy will be devastating. (November 16)

I don’t believe we have the luxury of a lot of time. (November 19)

It is to be expected that anyone seeking help tries to make their predicament seem bigger than just themselves, but GM has gone too far. The truth is, the collapse of GM is mostly behind us, and although it’s been a serious problem, it hasn’t been a catastrophe for the world.

And by so exaggerating their own importance, GM executives have given up not only their own credibility, but that of their company. The more GM executives go around talking about how the sky is falling, the more it seems like a personal crisis rather than a global one.

No one seems to have a workable bailout plan for GM, and as long as GM keeps pointing fingers and trying to avoid responsibility for its own mistakes, that’s a political reality that is not likely to change.

Wednesday, November 19, 2008

Republican States: Smoking and Obesity

I mentioned on Monday the connection between vices and the Republican Party. This association is not news — for many years, the Republican Party was virtually owned by the tobacco industry. Tobacco may have fallen on hard times, but the Republican Party is still the party of tobacco. I verified this today by comparing adult smoking rates (from Good Magazine) to the state-by-state election results (tentative results from today’s map at

The graph below ranks states by smoking rates, increasing from left to right. States at the left have the lowest adult smoking rates; those at the right have the highest adult smoking rates. The color of each bar shows the presidential election result. The blue bars represent the Democratic states, where Obama polled better than McCain and won the state. The red bars represent the Republican states, where McCain polled better. The darker colors represent stronger leaning toward one candidate or the other. The preponderance of blue bars in the left half of the graph indicate that Obama drew overwhelming support from states that have fewer smokers than average. Similarly, the red bars at the right end of the chart show that McCain drew most of his support from the states that have the most smokers.

2008 election results and smoking rates by state

Back in July, I wrote about the strong association between Republican voting and obesity, again looking at it state by state. This association becomes even stronger when graphed with the actual election results. The left half of the graph below is mostly dark blue, indicating that most of the states with below average adult obesity rates voted for Obama over McCain by at least a 10 percent margin. The cluster of red states at the right end of the graph indicates that McCain was the overwhelming choice in states with especially high obesity rates. McCain carried the states with the 10 highest obesity rates, along with only 11 other states. (As before, obesity rates are from from the 2007 survey conducted by the Behavioral Risk Factor Surveillance System of the Centers for Disease Control and Prevention.)

2008 election results and obesity rates by state

The conclusion to draw from this is that the cultural differences between Democratic and Republican voters are real. Smoking and obesity are perhaps the two lifestyle issues with the most compelling effects on the quality of life. They show striking differences between Republican and Democratic states, and similar differences can be found in dozens of other areas. It’s not something made up by the media or by political strategists. At the very least, different lifestyles and attitudes are prevalent in different places, and there is a connection between these cultural factors and the way people vote.

Tuesday, November 18, 2008

Bees Are Dying From Stress

Scientists trying to figure out why so many bees are dying have not been able to find the single agent that would explain the deaths. In the past, widespread declines in bee populations were explained by pesticides, fungi, and parasites. This time, at least from what the scientists can see so far, the cause is simply stress. That is, it is a combination of factors making bees’ lives difficult, weakening their immune systems and making them susceptible to disease.

Researchers conducting autopsies of bees in declining hives are finding every disease known to bees. As one put it, “Their bodies are broken down and every little thing that comes into their system causes them problems.” Efforts to identify a disease that might be the primary cause of stress have been inconclusive. Instead, environmental studies of bees are providing clearer insight — indicating that the mysterious bee problems are largely the result of a stressful environment. For example, bees living near greenhouses are more likely to fall ill, apparently the result of one or more properties of greenhouses or their commercial bee populations.

Efforts to breed bees that are more disease-resistant are in the very early stages, but have not produced anything useful so far, and this also is consistent with the idea that it is not any specific disease, but an accumulation of stress, that is killing bees.

Winter is the toughest time for bees, as weather is unfavorable and there is little food for them for a few months, so it is the time of year when bee colonies are most likely to die off. The problems may be solved only when we can find ways to make things easier for bees, especially commercial bees, which seem to be having the worst problems. But that is the opposite of the way farmers are used to thinking about bees, so it is a change that may not come easily or quickly.

Monday, November 17, 2008

Democrats Become the New Conservative Party

In this month’s national election, Democrats captured the core conservative vote for the first time in nearly a century. Voters who were looking for a safe, non-controversial, all-American choice mostly voted Democratic.

The Republicans were the party of choice for conservatives for a lifetime, and it seemed inconceivable that they would ever give that up, but that’s exactly what they’ve done.

Bobby Jindal, the Republican governor of Louisiana, appearing on CBS, spelled out some of the ways the party gave up its conservative appeal:

As Republicans, we need to do three things to get back on track. Number one, we have got to stop defending the kind of spending and out-of-control spending that we would never tolerate in the other side. You know, when voters tell us that they trust Democrats more to cut their taxes, control spending, that tells you something is wrong with the Republican Party. We’ve got to match our actions with our rhetoric.

Number two, we’ve got to stop defending the kinds of corruption we would rightfully criticize in the other party. The week before the election, our most senior senator is convicted on federal charges — and that’s only the latest example.

Number three, we have got to be the party that offers real solutions to the problems that American voters, American families are worried about. We don’t need to abandon our conservative principles; we can’t just be the “party of no.” We need to offer real solutions on making health care more affordable, on the economic challenges facing families, on the international threats.

To be more blunt about it, the Republican party became the party of out-of-control deficit spending, economic troubles, foreign military adventures, official corruption, sex scandals, corporate giveaways, vices, voter suppression, controversy, and general lawlessness — nothing that a conservative could easily support. The Republicans in Washington have spent the last ten years trying to drag their feet on any work that needed to be done. That’s the opposite of the hard work that conservatives believe in. Nationally, Republicans have set out on a crusade, a war of sorts to overthrow many of the core principles of American culture and replace them with a cultish kind of religious extremism. To a conservative, that sounds like trouble that would be better avoided.

For their part, the Democrats — at least the core of the party — have come to see conservatives as a constructive part of a ruling coalition. And so it should be no surprise if the Democrats continue to carry the conservative vote for decades to come.

Jindal’s instructions to the Republican Party couldn’t be more clear, and others have sounded the same alarms, but to no avail. Most Republicans do not even realize that Jindal is a member of their party. When you talk about integrity, restraint, and priorities, you do not exactly sound Republican. Why, you sound more like President-elect Barack Obama — a Democrat. And so the call for the Republican Party to get back to basics seems destined to be lost in the cacophony of recriminations and strategizing.

Instead, the Republican Party seems to be preparing to embrace religious extremism and an all-out culture war over the next five years. The thought of converting American by force to a wacko version of Christian principles (that’s not the most charitable way of describing the plan, but that’s essentially what it’s about) might play well in a few states, but across most of the country, it is likely to cement the Republicans’ image as controversial and dangerous — exactly the wrong thing if they want to appeal to conservatives.

So what will become of the Republican Party? That is up to the Republicans, of course. But no political party has ever thrived by trying to overthrow American culture, and the Republicans will not either. If the Republicans continue down the road they are on, they will soon become a regional party, and in a few years, a third party, shut out of the debates, struggling to get on the ballot.

Sunday, November 16, 2008

World Leaders Don’t Make an Effective Task Force

About 20 world leaders met in Washington this weekend to try to sort out the global financial crisis. It’s a bold move meant to show how serious they are at addressing the problems. They were focusing mainly on regulatory reform that could eliminate some of the most troublesome transactions and improved transparency that will allow phantom investments to be spotted more easily. That makes perfect sense. It’s an area where they can do some good. The recommendations they came out with, though, are about further study on harmonizing accounting rules, with the possibility of further action before the end of 2009. That is like a bad committee meeting.

There isn’t much they can do because there isn’t any one country that can lay out solutions it has already put into effect, for the others to imitate. As long as no one has a solution to offer, the meeting can scarcely get beyond speculation about what solutions might look like and where they might be found.

If a meeting of world leaders is just for show, then who is really working on the problem? Worse, does the goofing off at the summit meeting set a bad example? The fear is that no one is really working on solving the world’s financial problems, and the people who might be working on it get the impression that it isn’t all that urgent. In truth, of course, there are many people working to keep the world afloat financially, so the question is whether those efforts are enough to overcome the indifference at the top.

Saturday, November 15, 2008

Neil Young on Saving Detroit

I didn’t realize how much rock musician Neil Young knew about making cars until I saw his suggestions on “How To Save A Major Automobile Company.” By the time I finished it, I realized that Young knows more about running an automaker than any of the people who are actually running GM and Chrysler, at least. It makes a case for replacing the management teams with people from outside the Detroit school of thought.

It is the Detroit way of thinking that is bankrupt here. A Citibank executive yesterday commented that Wall Street has already written off General Motors, but as of right now, GM is not bankrupt, and there is no reason it has to be, if it could just stop moping and return its focus to its customers’ needs.

Neil Young wrote, in part:

The big three must reduce models to basics[:] a truck, an SUV, a large family sedan, an economy sedan, and a sports car. Use existing tooling.

Keep building these models to keep the workforce employed but build them without engines and transmissions. These new vehicles, called Transition Rollers, are ready for a re-power. No new tooling is required at this stage. . . .

Auto manufacturers taking advantage of a government bailout must only sell clean and green vehicles that do not contribute to global warming. No more internal combustion engines that run exclusively on fossil fuels can be sold period. . . .

Detroit has had a long time to adapt to the new world and now the failure of Detroit’s actions is costing us all. We pay the bailout. Let’s make a good deal for the future of America and the Planet. Companies like UQM (Colorado) and others build great electric motors right here in the USA. Use these domestic electric motors. Put these people to work now.

The reason this week’s House move to bail out Detroit ground to a halt is that no one had a plan to make the companies profitable again, not in three years, not in ten years. If there has to be a bailout, it can’t be just to give some dying companies more cash to burn through for a few more weeks. Yet making a profit from making and selling cars is no great mystery. The major automobile manufacturers have to start thinking like startups, because that is essentially what they are at this point.

Friday, November 14, 2008

This Week in Bank Failures

The emphasis of the U.S. Treasury’s $700 billion economic stabilization fund shifted yesterday from adding liquidity to merely maintaining the status quo and preventing large banks from failing.

With such a large fund as a backstop, the banking industry has already become complacent about the possibility of more failures. “There’s the perception that the government will not allow another bank to fail,” said Marc Heimowitz of Citigroup Global Markets at a conference in New York today (quoted in a Reuters story about possible failures at hedge funds and GM).

Of course, when Wall Street says there won’t be any more bank failures, they are not counting banks like the three that failed in the last two weeks. Nevertheless, no bank failures were announced tonight, so those who want to believe the run of bank failures is over can continue to believe that, at least for today.

Thursday, November 13, 2008

Paulson Calls off the Wall Street Bailout

Treasury Secretary Henry Paulson announced yesterday that he won’t be going forward with the Wall Street bailout plan after all. It’s a stunning about-face. President Bush two months ago scared the world half to death about how civilization would come to an end if the program wasn’t authorized immediately, and Paulson went to Capitol Hill to explain patiently how fundamentally necessary it was. And now it won’t be happening at all.

It seems Paulson came to realize that the critics of the plan were right. The Treasury was going to buy sheets of paper from banks for arbitrary sums of money — and when you get right down to it, how does that make any sense? How do you separate the banks that deserve help from the ones that are doing fine and the others that deserve to fail? How do you set prices for assets that no one seems to know very much about?

Most of all, how do you separate the very abstract assets that banks are built on from the phantom assets that really aren’t worth anything? The conventional answer, of course, is that you would have to have underwriters who go over the underlying assets one by one, making sure, for example, that the real estate really does exist, really is worth something, really is owned by the people who claim to own it, and so on. The Treasury would need enough underwriters to fill up the old WaMu headquarters, and it would take forever for them to sort through all the papers. And if the Treasury didn’t do this work, it would essentially be pulling values out of thin air. Folks would take advantage. I think this is what Paulson was getting at when he said yesterday that the process of buying distressed assets was too slow and would take too long to work.

Nearly half of the $700 billion fund authorized by Congress has already been spent building up the capital of banks (and AIG). The rest, apparently, will be reserved to shore up banks at risk of failure. It is an awkward position for the Treasury to be in, owning a share in more than half of the banking system in what is supposed to be a free-market economy, but if it can help prevent otherwise solid banks from failing, that will help to stabilize the economy, which is more than you can say for the now-abandoned Wall Street bailout. It is also not nearly as inflationary as the Wall Street bailout plan. The U.S. dollar won’t collapse, but it will still be hurt. With the deficit spending approved already, it wouldn’t be surprising at all to see inflation running around 20 percent for much of next year. On the other hand, there are deflationary forces at work too, and there is no historical model that tells us where the economy is going from here, so if inflation runs at just 10 percent, that won’t be surprising either.

When Congress approved the Wall Street bailout, it seemed that we had lost the chance to rescue the U.S. economy. It turns out we won after all. The tremendous reluctance with which Congress passed the bailout bill put equally tremendous pressure on Paulson to deliver a program that would succeed. But it couldn’t be done, for all the reasons that everyone said back in September, and Paulson’s only chance for a successful program was to do something different. No one is entirely happy with Paulson’s new plan, but at least it’s a plan, and it’s a tremendous improvement over the original proposal. Look at it this way. Paulson originally suggested that he would spend the entire $700 billion in a matter of a few days, with no controls or oversight at all and not really knowing anything about the assets he was buying. If he had done that, most of that money would have been offshore by the end of the day, and it is fair to say that the U.S. economy would be collapsing around now.

Wednesday, November 12, 2008

The After-Christmas Sales Start Early

Retailers ordered their winter merchandise in July and August and had it in the store early in September — way back before President Bush went on television to warn us all that the economy was on the brink of collapse. Now, with consumer confidence near record lows, the stores still have to sell all this merchandise somehow. That’s why you are seeing sales that look a lot like after-Christmas discounts. Retailers bracing for the worst holiday season ever are more than willing to take the risk of selling out of some items well before Christmas if it means they’re not stuck with a lot of excess inventory in January.

It is not a good situation for the retailers to be in: “This holiday season is shaping up to be the battle of the better deal — and it’s a bloody battle indeed,” is the way Business Week put it. Stores such as The Gap that were more cautious about what they bought for winter may sell a lot less, but with a chance at making a real markup, they’ll come out a lot better.

As for the consumers, if times are tight, you’re still better off trying your luck in secondhand shops. The selection isn’t what it was last year, with merchandise selling 10 percent faster than a year ago, but it’s still much better than what you might remember from 10 or 20 years ago. And the prices — still typically $3–5 — will be hard for the department stores to beat.

The unmistakeable trend, though, is for people to wear clothes they already have. I wrote about political activists forgetting to buy fall clothing, but that’s a trend that seems to be affecting everyone. Clothing lasts longer than ever now, and fashion trends are weaker than they have been since the early Renaissance, so you really can’t tell who is wearing new clothing, and who is wearing clothing from five years ago.

Tuesday, November 11, 2008

For Political Junkies, 5 Steps Toward a Normal Life

For me, the end of the political season came as a relief, letting me return my attention to my own life and work. For “political junkies” such as Joel Schwartzberg, though, it can be a difficult transition back to a normal life. It can be as challenging, Joel says, as the end of a season of American Idol.

For anyone who is still wondering what to do with themselves now that the election is, like, so last week, here are five places to start:

  • Dirty laundry. You watched plenty of dirty laundry during the campaign, but who’s airing your dirty laundry? Go wash it all, and they won’t have a chance to! While you’re at it, wash the dishes and make the bed too.
  • Is it time to pay the bills? Did you pay the rent at the end of the month? It’s easy to forget a bill or two the weekend before an election, so go ahead and double-check all the bills, and make sure they’re all paid.
  • Do you know what’s in the refrigerator? If you’re missing some of the muck and mud of politics, chances are, you can find a hint of it somewhere near the back of the refrigerator. Rule of thumb: if you wouldn’t vote for it, throw it away.
  • Yes we can. Did you notice it’s harvest season? A great time to can some fresh fruits and vegetables! How about some blueberries and some red ripe tomatoes to give your pantry the colorful look you love?
  • The change you need. Was the last time you stepped on a scale a day or two before the first debate? What personal initiatives that you were so dedicated to in August fell by the wayside in September? Now’s the time to get back on the exercise bike, or whatever action will give you the change you need personally. Think of what good shape you’ll be in when the next election rolls around.

Monday, November 10, 2008

Eight Bubbles

The news media and a few self-serving corporate executives continue to describe the current financial crisis as a result of a collapse in real estate values or, even more narrowly, a collapse of subprime U.S. mortgages. I have been saying for some time, though, that the problem is much larger than that, and may more accurately be described as a credit bubble, with credit card debt and business operating loans soon to be a greater problem, in money terms, than mortgages.

Saying “credit bubble” is a bit simplistic, though. For those who want to read a technical view of it, D.K. Matal has made a list of eight bubbles that are at risk, along with an attempt to quantify them. No one really knows how large these financial pools are, because so much is secret, and because not everything that could be outstanding is actually outstanding when you put all the pieces together. Still, a cursory look at the list will tell you that the $15 trillion in losses that are projected from mortgages going bad is the tip of the iceberg, if the world financial system really starts to come apart. And Matal did not even mention the problem of insurance, another bubble that could easily fall to pieces if two or three things go wrong at once.

The main thing to understand is that all the financial arrangements out there are worth many times more than all the money in the world. The world has been relying too much on financial arrangements in general, and as we try to bring that house of cards down gently, it should be no surprise if the turbulence makes some of us feel seasick at times.

Sunday, November 9, 2008

It Could Be Worse

I can’t fault any American who wants to say the current state of the economy is a mess. But in truth, it could be a lot worse than it is. Although there are lots of trouble spots, the economy as a whole is moving along reasonably well, its capacity diminished only about 2 percent from its recent peak. The United States can solve its economic crisis just by solving each breakdown one at a time, and I hope that is what happens.

To see how much worse an economy can get, you only need to look halfway across the Atlantic at what is going on in Iceland. Imagine being in a country so close to bankrupt that it is hard for it to buy coffee from other countries. Imagine what it would be like to have to pay back a mortgage in a foreign currency that you no longer have access to. Imagine bank accounts frozen, 16 percent inflation, restaurants empty, workers fleeing the country. Sarah Lyall opens her New York Times story on Iceland this way:

The collapse came so fast it seemed unreal, impossible. One woman here compared it to being hit by a train. Another said she felt as if she were watching it through a window. Another said, “It feels like you’ve been put in a prison, and you don’t know what you did wrong.”

This country, as modern and sophisticated as it is geographically isolated, still seems to be in shock. But if the events of last month — the failure of Iceland’s banks; the plummeting of its currency; the first wave of layoffs; the loss of reputation abroad — felt like a bad dream, Iceland has now awakened to find that it is all coming true.

Iceland’s problems are larger than the United States’ because banking was such a large part of Iceland’s economy, and the banking industry had so distorted the value of Iceland’s currency. The United States faces the same difficulties, but in lesser degrees. So far, everyone seems to agree that Iceland will be fine in the end. Unless enormous mistakes are made, the United States will be as well.

Saturday, November 8, 2008

One More Hurricane

Don’t look now, but there is another major hurricane in the Caribbean, heading in the general direction of Miami.

Actually, it is Cuba, already torn up by Hurricanes Ike and Gustav earlier this season, that is likely to suffer the worst damage from Hurricane Paloma. It is a Category 4 hurricane, comparable in wind speeds, if not in size or strength, to Ike and Gustav. But it will weaken so much when it crosses Cuba that forecasters give it only a 6 percent chance of reaching Florida.

This is probably the last Atlantic hurricane this year, but history reminds us it is possible for hurricane season to continue right on into January.

Friday, November 7, 2008

This Week in Bank Failures

The FDIC has extended the deadline for banks to decide whether they want to participate in its new senior unsecured debt guarantee program. The new deadline is December 5. The debt guarantees are supposed to make it easier for banks to borrow money.

National leaders continue to meet in Europe to try to find a way forward in dealing with the international banking crisis. France came out of the latest meeting saying that leaders had agreed to a common framework for dealing with the problems, but other nations made statements that emphasized the differences in points of view.

Tonight in the United States, two midsized banks failed, the first in Texas, the second in California.

There had been rumblings about Franklin Bank of Houston, Texas, whose stock had fallen from $20 at the beginning of last year to $1 by May after a series of “wholesale” loan deals reportedly went bad. The stock continued to fall, hitting 23¢ at one point this morning, giving the bank a market capitalization of just $6 million. Franklin Bank had been growing aggressively in 2005 and 2006, and that posture apparently is what got it into trouble. Accounting failures related to real estate loans had prevented it from filing a 2007 annual statement or any subsequent financial statements.

Franklin Bank, which had operated for just 7 years, had 46 offices across Texas and $3.7 billion in deposits. The deposits and a few assets of Franklin Bank are being acquired by Prosperity Bank, also located in Houston. Franklin Bank’s offices will temporarily be operated by Prosperity Bank until it can transfer the accounts to its own systems, a process that is likely to take at least until January. Prosperity Bank has 129 offices all in the eastern half of Texas, half of them in the Houston area. Acquisitions are nothing new to Prosperity Bank; half of its offices were added in acquisitions of the past 10 years. Prosperity Bank was similar in scale to Franklin Bank, with around $5 billion in deposits, before its acquisition of the Franklin Bank deposits.

In Los Angeles, the deposits and branches of Security Pacific Bank have been acquired by Pacific Western Bank. Pacific Western will reopen the branches on Monday and integrate the accounts into its own operations in the coming months. Security Pacific had four offices and deposits of just $450 million, but was a larger presence in California commercial banking than its footprint suggested. Much of its business involved real estate development loans in the southern half of California, an area where real estate values have plummeted since last year.

Pacific Western is a much larger bank with 60 offices in southern California.

The FDIC is retaining most of the assets of these two failed banks and will dispose of them later at an estimated cost around $1.6 billion.

One week ago, my thought that no bank would be closed during the pre-election weekend was mistaken. Freedom Bank of Bradenton, Florida, had been trying for months to raise capital, but ultimately fell short. Its $254 million in deposits and four branches were acquired by Fifth Third, a large Michigan bank holding company. Freedom Bank was already considered to have dangerously low levels of capital, then reported a loss of $18 million. It had opened for business in May 2005, just at the time when the real estate loan problems were starting to hit nationally, though they wouldn’t become obvious until two years later. By then, though, Freedom Bank had a troubled loan portfolio and was having trouble raising additional capital.

Fifth Third already had a small presence in the west coast of Florida, and substantially expands its presence in the area with the Freedom acquisition.

The bank closure might have been on voters’ minds during Tuesday’s election, but the timing of the closure did not affect voters’ decisions in any obvious way. Election results for Manatee County, where the closure took place, were similar to those of the surrounding counties.

Thursday, November 6, 2008

Why Consumer Confidence Is Down

Today’s retail sales reports show a slowing economy. Same-store sales were typically down 5 percent from last year. JCPenney has effectively already begun its year-end clearance sales, after loading up on a little too much winter merchandise in September, and it is a similar story in some high-end department stores. In a boom year, these markdowns might not happen until a few days before Christmas. Sales at Gap are down 16 percent from a year ago, though Gap says its sales are in line with its forecasts and it has appropriate inventory levels.

If you want to see why U.S. consumers are not in a spending mood, you don’t have to look any farther than the employment statistics. Nearly half a million workers are filing for unemployment benefits every week. A month ago, we could blame many of those job losses on the hurricane season. Now there are no hurricanes to blame. Roughly ten million workers have been unemployed so far this year, some of them multiple times. It is no wonder if consumers are feeling cautious.

Not all the people who lose their jobs can go on to get other jobs quickly, so the economy is shedding jobs at a rate that must be at least half a million jobs a month. Evidence of this is the number of people receiving unemployment benefits: approaching 4 million, a number we haven’t seen since the Reagan recession.

The cliché is that consumer confidence is down because workers are “worried.” That’s why you so often see politicians trying to make people feel better about the strength of the economy. But when friends and family members are losing their jobs, it’s not just a feeling. People know they have to cut back.

Wednesday, November 5, 2008

Auto Sales Off by 1/3

This morning marks the end of the biggest news hole in U.S. history. Since August, most legitimage news stories have been buried by the news media’s focus on the Olympics, major party nominating conventions, hurricane season, general election campaign, and banking system collapse.

Expect a flurry of product announcements and other initiatives over the next 21 days as people who want attention for the things they are doing try to squeeze their stories into this brief window of opportunity before hard news is again drowned out by the Thanksgiving holiday weekend and Christmas carols.

Meanwhile, people who want their announcements to be overlooked have been rushing to get them out before lunch time today.

The continuing bad news for the auto industry has gone largely overlooked this week, and the latest news is grim indeed. October automobile sales are down by a third from a year ago. Sales for the month were the worst since the energy crisis days of 1975, and no one seems to think the trend has hit bottom yet. If consumers are content to drive the cars they already have for an extra two, five, or ten years, there is not much the marketing team can do about that.

For General Motors (GM), the news is worse. Sales are down 45 percent from last year, with per-capita sales at Great Depression levels. Its finance company continues to lose $30 million a day, and shareholders are bracing for another huge loss when GM reports its financial results on Friday. One GM executive called the current sales levels “unsustainable.” Outsiders have been offering that assessment of GM’s business model for years now, but it is another thing entirely to hear that word coming from someone inside the company.

The pain the auto industry is going through is the result of a lack of scalability in its business plans. A business is supposed to be ready to scale back and cut costs when demand softens. Yet many auto workers are still working overtime. It is as if the auto companies can’t quite believe the world doesn’t want as many trucks this year.

In a properly run business, a sales decline of only a third, which was forecast more than two years in advance, should not be a crisis. For companies like Ford, which has moved aggressively to cut capacity, and Toyota, which is particularly cautious in its capacity planning, it probably will not be. But for the companies that have tried to swim against the current in order to increase their market presence during the slowdown, the sting of customer indifference is twice as painful.

Tuesday, November 4, 2008

Discover Your Own Reason to Vote

If you are a U.S. registered voter, today is the day — the day to vote. I know the candidates, the pundits, your friends, and even robots have been giving you the dumbest reasons imaginable to vote for one candidate or another all year long. But none of that matters now. This is your best chance all year to express an intention for the larger world around you. That is what is really at stake here.

I mean, look, the biggest reason why politics is so dark and ugly is that some of the powerful people out there want to discourage you. They spend millions of dollars to manipulate the media and the political process just to keep you from getting involved. It’s not that they want to keep your candidate or your party from winning. It’s that they want to keep you, and the majority of people, from having any say in what goes on in the world. If you have any kind of active intention about the world, that could interfere with their intention about what should happen in your life — so they make sure politics is filled with infuriating illogic and nonissues.

You don’t have to play that game to be a voter. You don’t have to be serious about it or take a stand on the issues that other people say are important. Just decide something and put it on the ballot. And the world will take note.

Monday, November 3, 2008

Freedom of Speech vs. Freedom to Vote

You protect yourself by making choices, by deciding that one thing is more important than another. If you insist that everything you want is a top priority, you end up being manipulated and possibly not getting anything on your list.

It might seem paradoxical to have to choose between two things that we can’t do without, but we have to do it. You can see an example of this tomorrow on Election Day. As important as freedom of speech is, we have to set it aside in order to protect the freedom to vote.

The rule in Pennsylvania is that political speech is prohibited inside a polling places and for a few steps outside the entrance. It is easy to see why some kind of line has to be drawn. Imagine what could happen if a candidate were allowed to hire goons who would come up to you while you were in the voting booth to tell you, “You’d better vote for our candidate or we’ll be very unhappy with you.” Or even if they were to stand, arms folded, looking surly, directly in front of the entrance to the polling place. To have a high-quality vote, that kind of behavior has to be prevented.

And in order to protect the voting process, the rules have to apply to everyone. That’s why, after you are inside the polling place, you can’t encourage the other voters waiting in line to vote in any particular way.

The way I explain it to people is this. We have freedom of speech all year long so that we can have freedom to vote on Election Day. When there is a conflict between freedom of speech and freedom to vote, freedom to vote has to come first. But it is not that we give up our freedom of speech for the day. You can carry a candidate’s sign around with you all day long if you wish. Just leave it outside when you go into the polling place to vote.

Sunday, November 2, 2008

I’m Calling With a Message From the Robotican National Committee

I’ve received an unprecedented number of political phone calls in the last 10 days, and there is an unmistakable trend in the calls. All the calls on behalf of Republican candidates have been placed by machine. For these calls, someone set up a telephone server to place the calls with a recorded message, but there is no actual person there seeing that the calls are made. All the calls for all other parties and candidates were made by volunteers. They were actual people, concerned citizens, who were calling me.

This election, then, is shaping up as the battle of humans against robots. If the robocalls turn out to be more persuasive than the human callers, we can be assured of a political future that is largely controlled by robots. But if candidates who have human supporters win, it may say that humans still control the political process.

The Republican Party is taking a significant risk in turning itself into the Robotican Party. It could alienate voters who decide they don’t like having machines tell them what to do. And if enough people come to the conclusion that it is all part of some big conspiracy of robots and corporate lobbyists to take over the world, it could even be the end of the Robotican Party as a significant political force. Will the Roboticans find themselves frozen out of the debates and competing with the Green Party for air time and attention?

Personally, I think they will give up the robocalls before it gets to that point. Surely the results of this election will get them to finally look for the kind of politics that draws favor from humans rather than robots. Then again, the lessons of the 2004 and 2006 elections did not seem to sink in. So maybe the results of this election will not mean anything to them either.

This is, after all, the party of Arnold Schwarzenegger. I don’t expect that he will be running for office again, but perhaps the party could put together a new recorded message that sounds like him saying, “I’ll call baaack.”

Saturday, November 1, 2008

Looking for Something That’s Too Simple

One of the improvements I had to make when I moved into my house involved cutting a hole in the concrete foundation. What is the right way to cut a hole in concrete? I wondered. Was there a special tool for this? My reference books did not say, and the answers I found online were vague and inconclusive, so I wondered about it for weeks.

It turns out that while there are various ways of cutting holes in concrete, the standard approach I would want to use involved bashing away with a hammer and chisel (wearing safety glasses, of course). As soon as I tried this I realized it would take only a matter of minutes to cut the hole I wanted. The obvious brute force method worked in less time than I had taken researching the question.

The answers we are looking for the hardest are simpler than we expect them to be. We often miss the answer we want the most just because when we see it, it seems too simple. I knew about chisels, but for some reason that I can’t explain now, a chisel didn’t seem like it had enough firepower to take on the foundation of a house. Holding that belief about the limits of chisels, I didn’t think to try one, even though that was all the answer I needed.

In whatever you are trying to do or wish you could do, look at the obstacles that seem to be stopping you. Imagine that you have learned that an amazingly simple solution exists. What could that solution be? Who else would know about it? When you expect simple solutions, there are not quite so many obstacles to interrupt your progress.