Archive for December, 2009

Iran may be tottering.

Tuesday, December 29th, 2009

The Iranian regime has now taken to assassination of public figures in its attempts to control the growing rioting.

Seyed Ali Moussavi Habibi was witnessing a 4WD Neissan Patrol car running over a few people in front of his house before being shot and killed with the same people in the car. After running over a few people 5 people get off the car and one of them comes very close to Seyed ali Moussavi and shoots him with a gun in a way that the bullet passes through his chest and comes out from his back. Then all 5 get on the car and run away.

This man was the nephew of opposition leader Hossein Mousavi. MIchael Ledeen makes several good points.

if you study the videos you will see many many women in the front ranks. They have every reason to be there, as the Islamic Republic (as so many Islamic regimes) is built on the sludge of misogyny.

Remember the young woman murdered at a demonstration last summer ? There are lots of women in these demonstrations.

Second, the head of the regime, Kamenei, may be planning to escape to Russia with supporters if the regime collapses. This coming Sunday is Ashura, the greatest holy day in Shiite Islam. I expect a crisis this week. I am not the only one thinking of collapse.

SPIEGEL: Montazeri succeeded in recent months in uniting the religious and secular wings of the opposition. Has his death weakened the dissident movement?
Kadivar: The exact opposite is true. The mourning will actually strengthen the opposition’s determination. The Shiite Ashura (a religious holiday to take place on Sunday), which is symbolically about justice, will provide a further boost for the protest. The authorities are not able to ban this ceremony, which coincides with the seventh day after Montazeri’s death.
SPIEGEL: Do you expect a further escalation of state repression? Will the government dare to arrest the opposition politicians Mir Hossein Mousavi and Mahdi Karroubi?
Kadivar: You cannot rule out the possibility; at the same time, the rulers also fear any kind of escalation — and rightly so. The next level could be open rebellion. But things have not gotten that far yet. There is still a chance for a peaceful reform of the state.

Obama, of course, is clueless.

More from Michael Totten with a powerful analogy.

“The clock began to tick for Ayatollah Khamenei’s fall from today,” said one of Iran’s few former female members of parliament Fatemeh Haghighatjou. “Killing people on Ashura shows how far Mr. Khamenei is willing to go to suppress the protests. People are comparing him more with Yazid because they consider him responsible for the order to use violence against people.”

Ashura is a Shia religious holiday, and it is not joyous. It is a day of lamentation that marks the date when the forces of the Umayyad caliph Yazid killed Hussein, son of Ali and grandson of the Prophet Mohammad, during the Battle of Karbala in the year 680. It’s one of the most infamous episodes in the struggle for power that permanently ruptured the house of Islam into its warring Sunni and Shia halves. The Shia–the partisans of Ali and his lineage–have been at war with the Sunnis–those who took the side of Yazid–for thirteen centuries. That Khamenei’s security people would murder unarmed demonstrators on this day of all days, and that his opponents now denounce him as the Yazid of Iran, may very well set most of the religious conservatives against him for as long as he and his government live.

More Obama diplomacy

Friday, December 25th, 2009

UPDATE #2: More evidence of Obama’s diplomatic priorities as the US releases 100 Iranian backed terrorists for one British hostage.

The US military has freed Qais Qazali, the leader of the Asaib al Haq, or League of the Righteous, as well as his brother Laith, several Qods Force officers, and more than 100 members of the terror group, in exchange for Moore. And that isn’t all. The British also received the corpses of three security contractors who were working to protect Moore when he was kidnapped at the Finance Ministry in Baghdad in May 2007. The three contractors were executed by the Asaib al Haq; another is also thought to have been killed.
Qais Qazli wasn’t just some run of the mill Shia thug; his group is backed by Iran. Qazali’s men were trained by Iranian Qods Force to infiltrate and assault the Provincial Joint Coordination Center in Karbala in January 2007. Five US soldiers were killed during the kidnapping attempt. The US soldiers were executed after US and Iraqi security forces closed in on the assault team.

Iranian civilians try to overthrow the tyranny while Obama supports them.

UPDATE: Fouad Ajami has more to say about Obama’s diplomacy.

US diplomatic cars are refusing to identify the occupants at Israeli checkpoints in the West Bank. They have been caught transporting a Palestinian without identification or permission between Israel and the West Bank. The most recent incident was when they attempted to run over an Israeli guard.

A dispute is rumbling between Israel and the US Consulate in Jerusalem after a US diplomatic car allegedly tried running over a Defense Ministry security guard recently at an IDF checkpoint in the West Bank. The car had been stopped after the occupants refused to present identification papers.

Israel is also furious that one of the consulate cars was found to have transported a Palestinian without permits between Jerusalem and the West Bank.

The identification of American diplomats from the consulate at IDF checkpoints has been a major sticking point for several years.

In January 2008, the Civil Administration of Judea and Samaria filed complaints with the Foreign Ministry after both US Security Coordinator Lt.-Gen. Keith Dayton and then-consul-general Jacob Walles refused to roll down their windows or open their car doors and show identification papers at a checkpoint.

However, Israel’s ire reached a new level after an incident on November 13 in which a five-car convoy of consulate vehicles with diplomatic plates arrived at the Gilboa crossing.

According to a detailed official Israel Police description of the incident obtained exclusively by The Jerusalem Post, the drivers refused to identify themselves or open a window or door. The drivers, according to the report, purposely blocked the crossing, tried running over one of the Israeli security guards stationed there and made indecent gestures at female guards.

The entire incident was documented by cameras at the crossing.

Maybe Obama plans to ally himself with Iran and declare war on Israel. He seems to have allied himself with Venezuela in the Honduras incident. More and more, he is going out on a limb with the American people. Of course, the Arabist State Department was doing this before he was elected but I expect them to be emboldened now.

More results from Obama’s foreign policy. Sickening.

Lebanese Prime Minster Saad Hariri just spent two days with Syrian strongman Bashar Assad in Damascus, and you’d think from reading the wire reports that Lebanon and Syria had re-established normal relations after a rough patch. That’s how it’s being reported, but it’s nonsense. Hariri went to Damascus with Hezbollah’s bayonet in his back.
Assad’s regime assassinated Saad Hariri’s father, Rafik, in 2005 for just gingerly opposing Syria’s occupation of Lebanon. There is no alternate universe where Saad Hariri is OK with this or where his generically “positive” statements at a press conference were anything other than forced.

And the reason ?

No one has Hariri’s or Lebanon’s back, not anymore. He and his allies in the “March 14” coalition have sensed this for some time, which is why Druze leader Walid Jumblatt has grudgingly softened his opposition to Assad and Hezbollah lately. When Hariri went to Damascus, everyone in the country, aside from useless newswire reporters, understood it meant Syria has re-emerged as the strong horse in Lebanon.

How many more of Bush’s wins can this president reverse ?

It’s not a bug; it’s a feature.

Wednesday, December 23rd, 2009

Richard Epstein, prominent University of Chicago law professor, agrees with my conclusion that the Senate health care bill will kill private health insurance. I have concluded that the “guaranteed issue” and the “community rating” provisions of the Reid bill are a poison pill to end health insurance as we know it. The result would be a situation in which government single payer would be the only alternative.

Lost in the shuffle has been its intensely coercive requirements on health insurance issuers, especially in the individual and small group markets. Taken together, these restrictions are likely to drive them out of business and run afoul of the constitutional guarantee that all regulated industries have to a reasonable, risk-adjusted, rate of return on their invested capital.

The perils of the Reid bill are made evident in a recent Congressional Budget Office (CBO) report that focused on the bill’s rebate program, which holds that once an insurance company spends more than 10% of its revenues on administrative expenses, its customers are entitled to an indefinite statutory rebate determined by state regulatory authorities subject to oversight by the Secretary of Health and Human Services. Defining these administrative costs is a royal headache, but everyone agrees that they are heaviest in the small group and individual markets, where they typically range between 25% and 30%, without the new regulatory hassles.

I don’t believe that this is an unforeseen outcome, a “bug.” I think it is a feature. A feature added by leftist staff members of Reid’s office who hold the same antipathy to private insurance that is typical of the left. They have also larded up the most basic mandated benefits with options of little appeal to most purchasers of health insurance. Look at the list.

Next, it’s the government that requires extensive coverage including “ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, prescription drugs, rehabilitative and habilitative [sic!] services and devices, laboratory services, preventive and wellness services and chronic disease management, pediatric services, including oral and vision care.” The price squeeze gets even tighter because in every required area of care a collection of government standards will help set the minimum level of required services.

This is what the “gold plated plans” that are to be taxed out of existence contain. Medicare does not offer these services.

The whole intent is to destroy the private insurance market. It’s not a bug; it’s a feature.

Did the Republicans do the right thing ?

Monday, December 21st, 2009

UPDATE: Obama has changed his mind and will put off health care until February. Wow ! If that’s true, there are some Senators who will plucking flak out of their asses for weeks over this and now they get blindsided. Way to go, big guy !

There are lots of post mortems going on this morning. Did the Republicans do the best they could to stop this bill in the Senate ? I think they had a terrible problem and probably did the best they could. They did delay passage until a lot of the public got a good view of the sausage factory. There is another question. Did the Republicans leave the door open by failing to produce an alternative the past 15 years since Clinton failed ?

The choices that they made, or didn’t make, across the last fifteen years are what made all the difference. Between the defeat of Clintoncare and the election of Barack Obama, the Republicans had plenty of chances to take ownership of the health care issue and pass a significant reform along more free-market, cost-effective lines. They didn’t. The system deteriorated on their watch instead. And now they’re suffering the consequences.

There are others who think the bill may still fail in the House but let’s look at the question about the past 15 years. The left, of course, thinks they made a huge blunder. I don’t accept his premise.

At the outset of this debate, moderate Democrats were desperate for a bipartisan bill. They were willing to do almost anything to get it, including negotiate fruitlessly for months on end. We can’t know for sure, but Democrats appeared willing to make enormous substantive concessions to win the assent of even a few Republicans. A few GOP defectors could have lured a chunk of Democrats to sign something far more limited than what President Obama is going to sign.

What ??? I don’t see that at all.

What about Douthat’s charge the Republicans missed a chance for an alternative ?

I think he is wrong. The Republican alternative was always The HMO. In 1973, Nixon signed a bill making HMOs mandatory as an option for all businesses with more than 25 employees.

In more recent years, “managed competition” was the model with other alternatives to HMOs created, like PPOs. These organizations enlist doctors and hospitals who agree to follow rules, chiefly rules about utilization. They may also, especially recently, include discounted prices for services. Those discounts have gotten quite large in recent years so that, in California, a state with heavy managed care, most medical groups were insolvent in 2008. It wasn’t just California as predatory practices left many doctors high and dry.

Managed competition was an aggressive strategy to control costs. It didn’t work. Why ?

The basic failure of all medical insurance the past 30 years is the inclusion of routine care making “health insurance” into “prepaid care.” People would know better than to buy auto insurance that included routine maintenance in the policy benefits. Why ? Because, instinctively, they understand moral hazard. They know that, if your insurance covered oil changes and the damage that might be incurred for failing to change oil, people would be less likely to take good care of the oil in their cars. Not everyone. But enough. Why doesn’t everyone buy one of those home maintenance policies ? Have you tried to get anything fixed under one ?

Now, it looks as though we may get a chance to see if the Democrats’ way is any more effective than the Republican way. I don’t think it will be but it does provide lots of jobs for Democrat functionaries. At least until the money runs out.

Tonight, Sunday, at 7 PM (Pacific) on Climategate.

Sunday, December 20th, 2009

There is a special tonight on Fox News at 7 PM Pacific time with Steve McIntyre on Climategate and the CRU disclosures. Hannity will be preempted.

UPDATE: The Fox special is now posted in you tube clips on Climate Audit. Anyone who missed it can see it here in its entirety.

Can the Obama Democrats keep the coalition together ?

Saturday, December 19th, 2009

A book came out in 2002 that was based on Bill Clinton’s experience in electoral politics. It was called The Emerging Democratic Majority and its premise was that Clinton had created a new coalition of interest groups that would keep the Democrats the majority for years to come.

In support of their thesis they argue that the electorate is becoming increasingly diverse, with growing Asian, Hispanic and African-American populations-all groups that tend to vote Democratic. On the other hand, the number of white Americans, the voting population most likely to favor Republicans, remains static. Further, according to the authors, America’s transition from an industrial to a postindustrial economy is also producing voters who trend strongly Democratic. Judis and Teixeira coin the word “ideopolis” for the geographic areas where the postindustrial economy thrives. They also argue that other changes, specifically the growing educated professional class and the continuing “gender gap,” will benefit Democrats, whose political ideology is more consonant with the needs and beliefs of women and professionals.

This was a reasonable premise and Clinton had done well with it. Now, there is an analysis of the Obama election on this party coalition. The two off year governor elections are analyzed, especially that in Virginia.

But this group remained at least in play for the Democrats. Clinton inherited a coalition consisting of minorities, liberals, urban voters, and a decent remnant of Jacksonian voters in the Ohio River Valley and the South, who still preferred a moderate-to-conservative Democrat to a Republican. This coalition became a majority coalition when Clinton used a combination of fiscal conservatism and social moderation to bring suburban voters on board. This was a huge innovation for Democrats; suburbs like Nassau County, NY, Orange County, CA and Fairfax County, VA had fueled the rise of the Republican parties in those states. Clinton moved them substantially toward his side. This coalition allowed him to win by eight points in 1996; absent Perot and a last-minute fundraising scandal, he probably would have won by more.

Clinton intuited that suburban voters are, generally speaking, culturally cosmopolitan – they don’t like it when you call someone “macaca,” and aren’t crazy about the religious right. But they’re generally not particularly socially liberal either, and are fans of “law and order.” They like taxes low and appreciate economic growth, but like good schools and a clean environment. Having to balance a bunch of spending priorities with somewhat limited income in their daily lives, balanced budgets are the ultimate “good government” indicator for these voters.

I think this is true and, had the Democrats continued with Clinton’s example, they might well be looking at a long period of ascendency. Instead, they chose the progressive route and it is affecting the political future.

By 2008, Democrats held most of the suburban districts around major metropolitan areas, and were threatening in the exurbs. The right Democratic candidate probably could have put together a massive 2008 Presidential majority, combining minorities, liberals, Jacksonians, Catholics, and suburbanites. The mood of the country was certainly right for a 1920/1932/1952/1980 result.

But the Democrats nominated Barack Obama. The party’s grip among Jacksonians had weakened since Clinton left the stage, but they abandoned Obama completely. Jay Cost and I have detailed this here. This movement is why Obama received 53% of the vote, instead of the 60% or so we might expect given the voters’ attitude toward Bush’s Presidency.

Of course, the left will call this evidence of racism. I think it is ideology but we will see what the result is.

You only get to elect the first black President once, and governing a coalition of suburbanites, poor blacks, and upper class liberals isn’t easy. It is hard to keep that enthusiasm up. And with the Jacksonian wing of the party gone, if that enthusiasm dissipates, or if one of the coalition groups becomes disgruntled and starts to shuffle out the door, the party isn’t left with much.

I think this is correct and he hasn’t even mentioned the union problems that Democrats will have to face as pensions bankrupt municipalities all over the country. His premise is that the “Emerging Majority” of 2002 is looking already in decline. There is considerable detail on the politics of the two states in the article and it is worth reading in full. He has a discussion of the effects of the health care bills that I have linked in another post.

The Democrats seem to be on several precipices at the same time.

The healthcare precipice

Friday, December 18th, 2009

A few days ago, President Obama said the Democrats stand on the precipice of a health reform bill. Truer words were never spoken, at least by him. What is Harry Reid doing ? The theory seems to be to pass something, no matter what it is, so that Democrats can claim success.At one time we had two bills, the Senate version and the House version. Now, no one knows what is in this bill. It is simply amazing. His hurry to pass something may come from his realization that, as time to understand the bill passes, the public likes it less and less. No one knows what it will cost because the CBO has been given false data to analyze.

For some time, I’ve suspected the answer is that congressional Democrats have very carefully tailored their individual and employer mandates to avoid CBO’s definition of what shall be counted in the federal budget. Democrats are still smarting over the CBO’s decision in 1994. By revealing the full cost of the Clinton plan, the CBO helped to kill the bill.

Since then, keeping the cost of their private-sector mandates out of the federal budget has been Job One for Democratic health wonks. While head of the CBO, Obama’s budget director Peter Orszag altered the CBO’s orientation to make it more open and collaborative. One of the things about which the CBO has been more open is the criteria it uses to determine whether to include mandated private-sector spending in the federal budget.

Why is this being done ?

Our federalist system, the separation of powers, our bicameral national legislature, six-year terms for senators, staggered Senate elections, and the Senate’s procedural rules all exist precisely to prevent what Reid is trying to do: ram a sweeping piece of legislation through Congress without due consideration.

This is the fascist way.

Jonah Goldberg’s book, Liberal Fascism enraged the left well before the election of Barack Obama. It might be time to read it again. If you doubt these people are fascists, here is their suggestion for political opponents. If you are a Congressman who does not vote for the favored bill, you should be expelled from Congress. One party rule.

The problem is that it won’t work. The Democrats would be even worse off if they pass it than if it fails.

If Democrats need to appeal to Independents and moderates to hold their majorities, then passing this bill is a terrible idea. The most recent polling shows that 81% of Republicans and 69% of Independents oppose the healthcare plan (with 74% of Republicans and 57% of Independents strongly opposing it). With majorities of Independents strongly opposed to the bill, it’s really hard to imagine any boost in Democratic turnout from passing the plan being enough to surpass the ensuing backlash from Republicans and Independents.

It isn’t even clear that there will be a boost in Democratic turnout. The latest version of the Senate bill holds little appeal for progressives.

Maybe this will teach them that we are not ready for fascism yet.

The hockey stick

Tuesday, December 15th, 2009

Watch this video to see the magnitude of the Mann “hockey stick” when compared to the past using Greenland ice cores.

Well ?

The danger of models

Monday, December 14th, 2009

There is a very pertinent article today on the dangers of putting too much faith in models, based on inadequate information.

We’ve now lived through the same new disaster twice. Computer simulations, more or less universally adopted as the solution to a major problem, turned out to have been based on flawed assumptions and faulty data. As a result policy or markets became heavily skewed in an inappropriate direction. Wall Street’s risk managers and climate change scientists both acted as super-salesmen for a paradigm that turned out to be flawed. After two examples of the same error have each cost the world a substantial percentage of a year’s GDP, we’d better figure out how to avoid further examples of this syndrome.

I have previously linked to an article that compared Obama to Mikhail Gorbachev. I think this comparison is also valid and interesting.

As the credit crisis of 2008 recedes into history, the part in it played by misguided computer models, particularly in the risk management area, is becoming generally agreed. Rating agencies made assumptions about the probabilistic independence of different home mortgages that were unfounded. As a result many of their AAA ratings proved to be completely spurious, particularly in the subprime area where the loans’ vulnerability to a house price downturn was especially extreme.

Investment banks managed their risks based on the “Value-at-Risk” risk management paradigm, which assumed that the distribution of securities’ returns was approximately Gaussian (normally distributed), with a very low probability of high losses. The “Basel II” system of global capital adequacy standards for banks, which came into effect in 2008, just in time for the crash, was so impressed with these models that it ruled that any bank using such obviously sophisticated and superior modeling techniques could calculate risks on its own, without reference to the crude guidelines deemed appropriate for smaller, less mathematically attuned houses. The Securities and Exchange Commission (SEC) essentially agreed with the Basel Committee; from 2004, it allowed the largest U.S. investment banks to manage their own leverage, under the theory that no mere regulator could match the exquisite precision of a modern VaR-based risk management system.

The model and the confidence placed in it by financial managers who should know better resembles and old paradigm, confidence in machines that we don’t understand. The “black box” is an example. It had happened before. Programs were written by physics PhDs who did not understand finance for financial experts who did not understand programming.

It’s not as if Wall Street had no warning; mathematical models based on modern financial theory had caused huge losses as far back as 1987, and had caused the collapse of Long Term Capital Management in 1998. Yet the world’s best remunerated people went on using the mathematical models that had caused moderate sized disasters before, only to watch them cause a truly impressive disaster in 2008. It must have been some kind of compulsion.

Then we come to global warming and the cap and trade legislation that relies on the theory.

Turning now to my other example, that of global warming: the possibility that excess carbon dioxide, through a “greenhouse effect” might cause a global rise in temperature is based on well-established chemistry and physics. Deniers of the possibility of global warming are thus being as irrational as the extreme eco-alarmists; global warming is indeed possible because of physical and chemical processes that are perfectly well understood, indeed fairly elementary.

The difficulty arises in estimating whether it is actually happening. The rise in temperatures so far observed is well within the level of “noise” in global temperatures over a period of a century or so, let alone the more extreme fluctuations that have taken place when the observation period is extended to millennia. It is thus necessary to match the very limited temperature data we have, stretching back no more than a century on a worldwide basis, with secondary observations of such things as tree rings and ice cores, synthesizing the result with a computer model of what is believed to be the carbon forcing process in order to predict the range of possible future warming effects.

This is of course a very similar process to that undertaken by Wall Street’s rating agencies and risk managers. Assumptions and simplifications are made, without which it would be impossible to construct a model. Then the model is matched up against a few years’ observations in real time, being “tweaked” as real data comes in that does not quite fit with it. By the time this has been done, careers have been invested in the model, institutions have been built around its predictions and eminent people have become enthralled by its results. It thus takes on the appearance of a scientific reality as solid as Newtonian mechanics.

The economic effects of this model are even greater than the effects of the financial models.

The political left continues to lie about the causes of these recurrent crises, even Nobel Prize winners.

The first big wave of deregulation took place under Ronald Reagan — and quickly led to disaster, in the form of the savings-and-loan crisis of the 1980s. Taxpayers ended up paying more than 2 percent of G.D.P., the equivalent of around $300 billion today, to clean up the mess.

I’m sure that Paul Krugman knows the story of Fernand St Germain and the midnight amendment that brought down the S&Ls.

By the time Ronald Reagan took office in 1981, two-thirds of the nation’s S&Ls were losing money and many were broke. If all the problem thrifts had been shut down right then, the government’s insurance fund would have covered their debts.

Instead, the government delayed an average of two years-and, in some cases, as many as seven years-thus allowing bankrupt S&Ls to go on losing billions of dollars. This delay also gave S&Ls a chance to gamble on questionable investments, in an attempt to regain solvency. But first they had to convince Congress to deregulate them.

One night in 1980, Representative Fernand St Germain (D-Rhode Island), whose $10,000-to-$20,000-a-year restaurant and bar tab was paid for by the S&L industry’s chief lobbyist, proposed raising federal insurance on S&L savings accounts from $40,000 to $100,000- even though the average size of an S&L account was $6,000. He waited until after midnight, when only eleven representatives were still on the floor of the House; they approved his proposal unanimously.

But St Germain was just getting warmed up. In 1982, he cosponsored a bill that removed all controls on what S&Ls could charge for interest and released them from their century-old reliance on home mortgages.

That was Regulation Q.

Around the same time, the Reagan administration ended the requirement that S&Ls lend money only in their own communities, allowed them to offer 100% financing (i.e. no down payments), let real estate developers own their own S&Ls, and permitted S&L owners to lend money to themselves.

These changes were like taping a sign to the S&Ls’ backs that read, “Defraud me.

This has little to do with models but I ran across that Krugman column which is so duplicitous that I had to add a comment.

Steve McIntyre

Monday, December 14th, 2009

Here is a very nice biography of Steve McIntyre, the man who got interested in climate science and precipitated the CRU scandal.

Until 2003, nothing in McIntyre’s life suggested that he would assume a central role in one of history’s great scientific debates—yet that life, in retrospect, seems to have been equipping him for the role. The son of a surgeon, McIntyre had an impressive record of performance in math competitions as a young student attending the University of Toronto Schools. He is still proud of having once beaten older classmate Michael Spence—“he was a bit of a hero of mine”—who would eventually snag the Nobel memorial prize in economics (2001). McIntyre went on to obtain a math degree at the University of Toronto, where his social circle overlapped with that of Michael Ignatieff and Bob Rae. Graduating in 1969, he moved on to the philosophy, politics, and economics program at Corpus Christi College, Oxford.

Read the whole thing.

Here is another very damning piece by a professor of climate science pointing out fraud. Also, the data that has been available to the public is now disappearing from the CRU web site.