Questions and Observations

Free Markets, Free People

To my friends in the oil industry

Almost everyone has heard of the infamous “Blackhawk down” incident in Somalia in which Army Rangers were ambushed while on a mission and 18 brave special operators died.  COL David Hackworth, one of the most decorated and outspoken field commanders during Viet Nam, blamed the fiasco on two of the generals there.  His words are harsh, but they tell the tale:

[The generals] made every basic error in the book, beginning with not understanding the enemy. They had bad intelligence, were overly dependent on firepower and technology and were arrogant. Nor did they bother to put a go-to-hell-plan in place in case the [stuff] hit the fan.

That “go-to-hell” plan Hackworth is talking about is something every operations officer in the military has learned about from history and experience.  Essentially a “go-to-hell” plan envisions the very worst case scenario one can imagine in an operation and that scenario is then planned for, staffed,  equipped and exercised (at least at a sand-table level) in case it has to be executed.  The point, of course, is that plans usually don’t survive first contact and commanders are faced with situations in which they have to modify orders and, in dire cases, enact the “go-to-hell” plan.  With such a plan in place, commanders have the chance of minimizing the losses they may be facing – in territory, casualties and effect -because they have planned for this eventuality.  Without it, however, they’re likely to be left in the situation that Hackworth describes in Somalia – nothing ready to go and trying to improvise everything at a critical moment.  That rarely, if ever works out well.

Anyone watching the situation in the gulf with the oil spill has to believe that they’re witnessing the very worst case scenario that can be imagined in that type of an environment – a cutting edge, deep water platform has an explosion, burns and sinks.  Tragically 11 lives are lost.  The riser to the surface is bent and the blow-out prevention device fails allowing 5,000 barrels of crude oil to escape from the well head daily 5,000 feet below the sea.  A true nightmare.

But seeing the reaction to the situation, I had to ask, where was the “go to hell” plan?

As anyone who reads this blog regularly knows I am a proponent of continued exploration and exploitation of petroleum reserves because the alternative fuels and technologies simply aren’t available yet or can’t be produced cost effectively.  They’re certainly the future, but not for some time to come.  Oil remains, and will remain, a critical component of any future energy plan.

I’ve been able, through trips paid for by the American Petroleum Institute, to educate myself on the petroleum industry and see first hand what they do and how they do it.  I’ve seen their intensive focus – bordering on the obsessive – on safety and the precautions they take to produce oil safely and in an environmentally friendly way.  I’m certainly not an expert, but I do know that this is an industry that deserves our support because they provide a critical product – the lifeblood of our nation – and they care about how they produce it.

Unfortunately, this spill and the inability to cap the well is reflecting on the industry in a way which will be detrimental in the long run to both the industry and our energy future.  Certainly they’ve reacted as well as they can given their resources and their effort has been mammoth in size and scope. But the bottom line is the problem for which they didn’t plan persists.  And each day the problem persists, the public’s confidence in the industry’s ability to produce oil off-shore in an environmentally responsible way wanes.  That’s reality.

That reality drove me to participate in an American Petroleum Institute conference call last week as an invited blogger. I posed the following question to the panel:

My question has more to do with the future, I guess.  My background is military plans and operations, and when we wrote plans and operations, we always had a “go to hell” plan, you know, in which the worst-case scenario was imagined and planned for.

I get the impression that what’s going on out there is definitely the worst-case scenario for the petroleum industry.  And my question is, why wasn’t there a “go to hell” plan, or if there was, did it envision this?  And in the future, will the industry address this type of a scenario and have teams and equipment available to address it more quickly?

Richard Ranger, who is an expert on Upstream/Industry Operations for API fielded the question and replied:

And I think really, the array of vessels, the number of personnel, the amount of equipment being deployed indicates that it is execution of what I think you could call the “go to hell” level of an oil spill contingency plan.  The plans that are developed – BP, other companies in the industry that have them are, you know, routinely re-examined and adjusted based on lessons learned, most usually from drills and exercises.

And the drills and exercise – because, you know, our record, certainly, up until this horrible incident has been a record where there have been very few spills of scale against which to test a plan.  So the drills and exercises themselves are carried out at different scales.  They’re carried out not simply by the companies, but in collaboration with government officials, be it – usually involving, for the OCS, the Coast Guard and Minerals Management Service.  There’s a tremendous transfer of knowledge throughout industry and between industry and government.

Now, so the question, in terms of scale here, was there access to equipment for an immediate response?  Yes, there was.  Was there access to additional, out-of-region equipment to cascade into the Gulf of Mexico to augment the initial response?  Yes, there was.  Has there been a scaling up of the government or public side of the response across Coast Guard districts and involving additional personnel from both federal and state agencies?  Yes, there has been.

This event has been moving at a very fast pace, but I think it would be mistaken to suggest that there hasn’t been, really, a very complete commitment, certainly, of the resources that BP has available, the resources that the key government agencies have available, and most importantly, the resources, the expertise and the personnel that the response organizations, like MSRC, have available.  So I would argue it’s been demonstrating scalability of the response plan.

While it is clear that the industry has responded as best it can it is also clear, at least to me, that the industry has no answer to the scenario which has unfolded before it with the Deepwater Horizon disaster.  In essence they relied on technology to be the failsafe and it failed them.  And when it failed, there was no real backup plan – a “go to hell” plan – to do what the failed technology hadn’t done.

As to the plan Richard talks about – it is a plan mostly geared toward oil spill containment, as he notes.  But the real problem isn’t just containment.  In fact the need for containment is a result of the real problem.  An unchecked deepwater blowout, albeit one caused by a catastrophic accident.  No planning, apparently, had been made to address a deepwater blowout in which all the technological failsafe devises didn’t do their job.  That was the point I was trying to make.  So I asked a follow-up question:

I guess what I’m getting at, Richard, is the fact that there’s been – it’s been almost a month fabricating this dome that’s going to be placed over the wellhead. And while I appreciate the fact that people have responded and are out there doing the best they can, and that we don’t know whether this dome is going to work or not, that kind of gets to my point. If this dome had been available at the time of the accident, and if it, in some way, had been tested or we knew more about it, wouldn’t that type of a response have been much more, I guess, impressive than what we’re seeing now?

Richard answered and, as you’ll see, eventually acknowledged that perhaps that particular scenario hadn’t been on the industry radar screen as perhaps it should have been:

Well, I guess, Bruce, in response to that, with your military background, I forget how the words go, but you’re probably familiar with the adage that you have a plan and once the gunfire starts, you throw the plan away.  And I think what there has not been before is this type of catastrophic event effecting a failure of the drilling rig.

The sinking of the rig, the consequent bending of the riser and the creation of a situation where you’ve got this, you know, significant leak of oil from below the sea floor and you have to put something over that leak – so this is kind of a serial number one effort that, I think with all of the anticipation and all of the forward planning, this particular scenario, perhaps, hadn’t been envisioned before.

So your question’s a good one.  There are things that are going to be learned about the performance and effectiveness of this particular piece of equipment, but I think it’s a significant achievement that, in the span of a very few days, this idea was conceived, this piece of equipment’s been fabricated and being brought to the location.  So yes, I would agree you’re partly right, but I think the response that BP and others have put together shows the adaptability of people and expertise when confronted with the kind of situation we have here.

Those are the words of an honest man realizing that perhaps, despite the heroic effort that BP and others have made, there was no real “go to hell” plan in place that envisioned this obvious (now) worst case scenario or how to defeat it.  Instead they are pretty much reduced to winging it at the moment.

And, of course, the failure of the first attempt to place the containment dome only strengthens the point.

My desire here isn’t the beat up on the petroleum industry.  As I’ve said I’m a huge supporter of what they do and how they do it.  I’ve also pointed out that another institution – the military – of which I’m a very big supporter has learned this lesson the hard way.  Instead this is intended to point out what I see as a deficiency the industry needs to address and address quickly because the policy implications of not doing so are profound.

We all know what will happen next.  There are obvious political ramifications to this. It will start with Congressional hearings and a battle over the safety of off-shore drilling.  The sides are well known.  Unfortunately, situations like this hand ammunition to those opposed to the oil industry and drilling that they’ll gladly use.  In fact, gleefully use.  This sort of on-going, constantly-in-the-news disaster is a political God send to them.

To begin to win back those who are now wavering about off-shore drilling, the petroleum industry has to be able to show Congress and the public that it understands the gravity of the problem,  accepts the worst case scenario as possible and is developing a plan to deal with it.  It will have the equipment necessary along with trained crews available in the future to cap something like this is days – not weeks or months.  The industry must also have a plan to  successfully manage the situation that develops after containment and until a more permanent solution can be implemented (such as a relief well).

For example, if the containment dome is found to be a workable solution and eventually successfully caps the well, such domes would be prefabricated and available in all areas where off-shore drilling is being done or planned, ready for immediate deployment if necessary.  That sort of plan would point to a proactive industry learning and applying lessons from this situation to prevent it from happening again to the extent this situation has developed.  The industry has already proven that it can deploy containment assets quickly to address a spill.  That’s both noteworthy and praiseworthy.  But everyone also understands that those assets are finite and the probability of continued containment success lessens each day that the spill builds and the surface area grows.

In order to regain the initiative in the policy realm, it is critical at this juncture that the industry begin an immediate analysis of this disaster and the formulation of a critical “go to hell” plan.  It may not answer all the mail when the inevitable political hearings begin, but it will demonstrate an engaged industry that has recognized the reality of the problem and is working proactively (and without Congress mandating solutions or increasing regulation) to provide a workable and timely solution should such a situation ever again occur.  And that may also help allay the fears of some and stiffen the spines of others that are ready to abandon the effort to drill off-shore.

Time is critical and off-shore drilling is vital to our national interest and national security. I’m sure the brilliant minds within the industry can come up with a contingency plan that will make the case for its continuance.

~McQ

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Observations: The Qando Podcast for 09 May 10

In this podcast, Bruce, Michael, and Dale discuss unemployment, Greece, and the BP offshore drilling leak.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

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BlogTalk Radio – 8pm (EST) tonight

Call in number: (718) 664-9614

Yes, friends, it is a call-in show, so do call in.

Subject(s):

Unemployment – we’ll not spend much time on the subject but touch on the numbers – both official and unoffical.

Time’s Square – developments and implications.

Bob Bennett – his ouster as a sitting Senator at the Utah GOP convention is a bit of a stunner. What does it portend in November? Will he pull a Charlie Crist and go indie? Best guesses.

Oil spill – where was the “go to hell” plan? What are the policy implications of this spill?

Nashville flood – how did a story that big get such little coverage?

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Quote of the Day – The Taliban did it edition

Apparently – even after the Taliban of Pakistan claimed responsibility in a video recorded before the bombing attempt in Times Square - the US finally believes they were involved:

“We’ve now developed evidence that shows that the Pakistani Taliban was behind the attack,” [Attorney General Eric] Holder said during an appearance on ABC’s “This Week.”

[…]

“We know that they helped facilitate it,” the attorney general said. “We know that they probably helped finance it. And that he was working at their direction.”

Well there you go.  We also know that they’re either lousy bomb makers or lousy teachers or both, as well — thank goodness.   The other thing to remember is this attempt wasn’t thwarted – it failed.

Just like the “underpants bomber”.

~McQ

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Reporters and politicians in Flatland (with update: Bennett ousted from race)

Suppose you were talking to an architect about a new building. You had an acre of land in an urban area, and you wanted to put up a set of offices.

The architect sketches out a one-floor plan for you, but it doesn’t contain the number of offices you want. So you suggest that he make the building have additional floors.

Then he looks at you as if there’s something wrong with you, and carefully explains that he can’t go any further in any direction because you don’t have enough land. He seems totally oblivous to the idea that there’s another dimension, and it’s possible to go upwards.

You would think he was a brain-damaged architect, and you would be right.

So how about professional media people who do interviews like this CNN one with Bob Bennett?

This woman interviewer seems totally confused about the political spectrum. It’s clear to me that in her mind, it only runs in one dimension, from left/liberal to conservative.

Further, she seems to equate “conservative” with social conservative, bitter clinger types. Bob Bennett has consistently supported the bitter clinger issues, so she’s dumbfounded about why the Tea Party people don’t like him.

However, her mental model of one-dimensional politics and her de-facto conflation of “conservative” with “social conservative” has a big advantage for her. It enables her to completely avoid talking about the real issues.

Her entire piece is slanted to make a member of the Washington political class look good and his opponents look bad. She conveniently never brings up the issues of government size, exploding debt, or high and increasing taxation.

She glosses over the healthcare debate by mentioning that the fair-minded (in her obvious opinion) Bennett introduced a watered down healthcare bill with a Democrat, and the Tea Partiers don’t forgive him for that. She obviously thinks that’s crazy (as does Bennett), but neither of them are going to go anywhere near examining why the Tea Partiers hate the way the healthcare debate turned out so much, or that they are eager to repeal that bill.

These members of the political class (both the reporter and Bennett) are supposed to be professionals, which ought to imply that they understand the additional dimensions of political philosophy, including the difference between social conservatism and libertarian/conservative. They obviously don’t. The prefer to live in a Flatland version of politics, and pretend that the other dimensions don’t exist.

They blather on about how there’s some kind of strange, out-of-nowhere animus to everyone in Washington, as if this irrational urge just suddenly appeared for no logical reason.

They both seem singularly uninterested in getting to the heart of what the Tea Partiers actually believe. Far easier to just shake their heads more-in-sorrow-than-in-anger at such irrational beings, who clearly just don’t understand what paragons such as Bob Bennett have done for us. The idea that such paragons have pushed us, and the rest of the world, to the edge of an economic meltdown that could easily dwarf the Great Depression is apparently not something that impinges on their consciousness.

Well, d@mmit, they’re professionals in the field of politics! Why don’t they understand more about the dimensions of political theory that exist out there? Why do they have to cling to a one-dimensional mental model that has shown itself inadequate to explaining what’s going on?

We all know the reason, don’t we. The media is merely a part of the political class, and is more interested in defending that class than in understanding what’s going on and reporting on it. They prefer to be ignorant of other options. That makes it easy for their internal rationalizations that everyone opposed to the political class is just whacked. They can believe themselves to be fair-minded and objective, by denying the very existence of a logical, consistent philosophy that opposes what they believe.

That’s why I detest them so much. They are worse than the marchers at an ANSWER rally, who at least are honest about what they believe in. The vast majority of journalists are lying to both themselves and us by pretending to be objective reporters and analysts on what’s happening in the world, while they are actually heavily biased, abysmally ignorant about the subjects they cover, and motivated primarily by a desire to legitimize the political class and de-legitimize everyone who seriously opposes it.

*** Update 5:45 PM CST ***
The AP reports that Bob Bennett did not make it through the state GOP convention. He finished a distant third.

The reporting is a somewhat better than the CNN effort I slammed earlier:

Bennett is the first incumbent to lose his seat in Washington this year, the victim of a conservative movement angered by rising taxes and the growth of government.

Bennett was targeted by tea party activists and other groups for supporting a massive bailout of the financial industry, securing earmarks for his state and for co-sponsoring a bipartisan bill to mandate health insurance coverage.

I’d still like to see some mention of the general driving issues of the Tea Party, particularly out-of-control debt and spending, but at least this doesn’t take the CNN reporter’s line, which was basically “Those darn extremist Tea Partiers… there’s just no pleasing them.” I’m betting that some of the the Monday-morning quarterbacks we’ll see later analyzing the convention loss will join her in that assessment.

*** Update 5:55 PM CST ***

Looks like I spoke too soon; the AP article does have something about spending, taxes, and overall government size:

Bennett could become the first sitting U.S. senator to be voted out office this year amid a growing conservative movement that insists on cutting taxes, federal spending and the reach of government.

So kudos to the AP reporter for doing a much better job than the airhead from CNN.

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Why is it so important that we believe the Times Square bomber acted alone?

Or perhaps a more precise questions is, “why does it appear the government would prefer we believe the Times Square bomber acted alone?”

Does it somehow make this all much less threatening? Frankly, if true, it makes it even more threatening to me. Or is it because if they deny connections to other terrorists and insist on the “lone wolf” scenario (see Ft. Hood, see Arkansas, etc) they can deny “global terrorism” and not have to face questions about Islmaic jihad?

On the one hand we have:

No credible evidence has been found so far that the Pakistani-American man accused in the Times Square bombing plot received any serious terrorist training from the Pakistani Taliban or another radical Islamic group, six U.S. officials said Thursday.

“There is nothing that confirms that any groups have been found involved in this for certain,” one U.S. official told McClatchy. “It’s a lot of speculation at this point.”

Faisal Shahzad may have, at the most, had “incidental contact” with a terrorist organization, and he may have been encouraged to act, said one of the officials, who declined to elaborate further.

So he went broke here, let his house go into foreclosure, rounded up the family and headed back to Pakistan where he stayed 5 months, came back loaded with money and decided, on a whim to blow up Times Square. But we’re pretty sure that when this guy was hanging out in an area of Pakistan infested with Taliban and other terrorists, he had, at best “incidental contact” with a terrorist organization.

Now to be fair, the bomb he built says if he did indeed get training, whoever trained him wasn’t so great or he was one hell of a bad student – or both. But why did he come back alone and how did he make all that money it is reported he had?

And what about this report?

Investigators of the failed car bombing in Times Square are looking for a money courier they say helped funnel cash from overseas to finance a Pakistani-American’s preparations to blow up the crude gasoline-and-propane bomb in the heart of New York, a law-enforcement official told the Associated Press.

Investigators have the name of the courier who they believe helped Faisal Shahzad pay for the used sport utility vehicle and other materials to rig up a car bomb that would have caused a huge fireball in Times Square if it had gone off, the official told the AP. The official didn’t know how much money may have changed hands.

The official spoke on the condition of anonymity because of the sensitivity of the investigation.

So if he acted alone, is a “lone wolf” and only had “incidental contact” with a terrorist organization, whose name to investigators have and why are they trying to find him?

If you’re getting the feeling you’re not getting the whole picture (and there may be security reasons for that – we may be seeing a little disinformation going on here while they pursue other links. Or maybe not and what you’re seeing is how authorities would prefer to have it all spun) you’re probably right.

~McQ

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Clean, green and expensive as hell

Well, well, well – “green energy” costs strike again.  You remember the controversial off-shore wind turbine project that was proposed for an area off the coast of Cape Cod in Massachusetts?  Well it finally got approved.  And surprise – it’s revised costs has the project in “Big Dig” territory:

The controversial Cape Wind project will cost taxpayers and ratepayers more than $2 billion to build – three times its original estimate.

That colossal cost is the driving force behind the sky-high electric rates it plans to charge Massachusetts customers in coming years.

Cape Wind, which wants to build 130 wind turbines off the coast of Cape Cod, and National Grid announced yesterday that they’ve reached an agreement to start charging customers 20.7 cents per kilowatt hour in 2013 – more than double the current rate of electricity from conventional power plants and land-based wind farms.

Under the 15-year National Grid contract, the price of Cape Wind’s electricity would increase 3.5 percent each year, pushing the kilowatt price to about 34.7 cents by the time the contract ends.

The current price of National Grid’s non-wind electricity is now about 9 cents per kilowatt. That means the cost of fossil-fuel generated electricity would have to increase nearly four-fold just to keep pace with Cape Wind’s prices over the next 15 years.

This little doozy is now on the planning boards – another, in a long line of costly projects backed by government that will cost consumers more than it’s worth and not deliver that much in terms of increased energy – certainly not that much if  you look at the price.

“I’m glad it’s your electric bills and not mine,” said Robert McCullough, president of McCullough Research, an Oregon energy consulting firm, referring to Cape Wind’s prices.

He said Massachusetts would have been better off going with less costly land-based wind farms.

“Why are you spending billions (on offshore wind) when you can pay half that with traditional wind?” he asked.

You tell me?  And, by the way, how did the costs of building the system suddenly triple?  This was only discovered after approval had been granted?  Oh – wait a minute:

Three sources familiar with the Cape Wind-National Grid negotiations confirmed yesterday that Cape Wind’s final price tag will be above $2 billion.

Because of available federal tax credits, Cape Wind could reap about $600 million in taxpayer subsidies if the final cost is $2 billion, in addition to its higher power rates.

So the incentives are provided by government?  Does this make Cape Wind a “greedy utility?”

Oh, and I love this:

Cape Wind president Jim Gordon yesterday again refused to say how much construction will cost, citing competitive talks he’s now in with construction companies.

Cape Wind and National Grid, which is planning to buy half the energy the wind farm will produce, said their rate deal will add about $1.59 a month, or about 5 cents a day, to the current ratepayer’s bill in 2013.

“The question is whether folks are prepared to pay five cents a day for a better energy future,” said Gordon.

The answer should be “no, they’re not.  Either build the project at the original price, bring it on shore if that isn’t possible or forget it.”

The pricing has to be approved by Massachusetts Department of Public Utilities, but I don’t think there’s much of a question as to how that will go:

Ian Bowles, Gov.Deval Patrick’s secretary of energy and environmental affairs, said the National Grid prices are competitive if renewable energy credits are deducted.

Those who aren’t politicians interested in building a green energy legacy this say otherwise:

But energy experts said the proposed National Grid rates, especially with the annual inflation adjustments, add up to a very high price.

“This would seem to me to be a most unwelcome additional energy tax” on customers, said Peter Beutel, an energy analyst at Cameron Hanover in Connecticut.

And that’s precisely what this ends up being – a energy tax to build something that could be build cheaper on shore and which, in reality, won’t add that much energy to the national grid. A rather dubious recommendation for its continuance. I don’t know about you but if I were a citizen of Massachusetts, I’d be raising hell about this and demanding the project be shelved until it can be shown to deliver the promised “clean, green, renewable and cheaper energy” Greenies are always telling everyone these sorts of projects will deliver.

~McQ

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Three reactions in the Arab press to the Times Square bombing attempt

First from “our friend” Egypt’s Al-Masaa which is the evening edition of the Egyptian government Al-Gumhouriyya.  They want to know what all the fuss is about:

“The huge fuss that the U.S. has been making since it announced the exposure of the attempted car bombing in Times Square… is truly outrageous. The U.S. has brought many charges against [the suspected perpetrator], including [involvement in] global terrorism and use of weapons of mass destruction.

“The U.S. seems to have forgotten that it is the world’s number one terrorist. If a couple of propane tanks, some fertilizer, and some fireworks count as WMDs, what do we call the terrible weapons employed by the U.S. in its attacks on the peoples of the world? …Since the Americans occupied the Iraqi city of Falluja in 2004 using phosphorus and depleted uranium bombs, there have been frequent cases of [women who] miscarry [because] their baby is  deformed…”

Yeah, so there, we deserve it, by George.  And by the way:

“And of course it was some country other [than the U.S.] that used WMDs against the Vietnamese people during the years of [its] occupation [there]. Three million Vietnamese are still suffering from the effects of those weapons, and deformed children are still being born there…”

Of course.  As an aside, Arab journalism isn’t noted particularly for having any foundation in truth telling, but it sure can be inflammatory.  Suffice it to say, though, this “journalist” is a bit obsessed with deformed babies and children.  Unless, of course, they might be walking through Times Square at the wrong time.  Then – no biggie.

Saudi Arabia may surprise you just a little.  This is from an editorial the Saudi daily Al-Riyadh:

“Even if the investigations have not yet uncovered which [group] Shahzad, who tried to explode a car [bomb] in Times Square, belonged to, this New York incident is one instance of insane delirium. Even if the [police] never get a lead on this attack, its ramifications for the entire Muslim world are deadly. This is because we are incapable of restraining the emotion of the [Western] peoples when they see sights that harm them – even if the U.S. administration headed by [U.S. President Barack] Obama is closer and more open to the Muslim world [than the previous U.S. administration]. Moreover, this attack has become a motive for criticizing Obama for his efforts at rapprochement with the Muslims.

“Another problem is that the ramifications of this affair will ignite enmity towards the Muslims and Islam worldwide…

So Obama is our friend, Western people are reactionaries and stuff like this will “ignite enmity towards Muslims and Islam worldwide.”  Well duh.  How often do you have to be attacked by people of a particular religion who cite their religion as the reason for the attack (among others) before you begin holding a little enmity toward those who are a part of it?

The editorial then offers a little bit of reality for the terrorists:

“Terrorism will exist as long as it has repositories of human and material supplies, and as long as there are forces, and perhaps even countries and organizations, that support [it]. [These elements should know] that even if [their] adversary is harmed [by terrorists,] he is [still] stronger and has greater capabilities to hunt them down and to start a war [against them]. This happens whenever a superpower [targeted by terrorism] needs to defend its national security.”

And, of course, that will happen as long as terrorists continue to attack it and its interests.  Human Nature 101.  But nice to see the point acknowledged.  Then perhaps the best paragraph in the editorial:

The Muslim world, including all its governments, institutions, and regimes, must condemn this [Times Square] incident – not out of sycophancy towards the U.S., but because our religion vehemently opposes such actions. Furthermore, if we deal with these events wisely and in accordance with our own interests, in order to protect the reputation of our religion and our collective conduct, this will prove to others that we are a society that hunts down terrorism of any kind whatsoever. It is not enough to reject terror on the grounds that the terrorists harm more Muslims than non-Muslims – because the principle [of opposing terror] is the same, whether [the target is] a foreign country, an Islamic country, or members of other religions.

[…]

In order to persuade the other nations [not to equate] Islam with the actions of the terrorists, we must prove that we are share the responsibility [for fighting terrorism], along with all the countries of the world and their peoples.”

Well said – and a welcome change.

Meanwhile, perhaps the most strange of the three comes from an Iraqi columnist living in the US and writing for www.elaph.com. He explains that most Muslims in the US have no feeling of loyalty to it and actually harbor feelings of hostility toward it instead.  He makes the argument that the US is too easy on suspected and potential terrorists and that in order to avoid future attack, the US needs to do a little “infringing” on Muslim human rights:

“America is home to about seven million Muslims. Most of them, even if they are not terrorists, do harbor hostility towards the U.S. and feel no loyalty to it. As an Arab and Muslim, [I tell you] that it is difficult to find a Muslim who loves America; those [who do] constitute a tiny minority among all those millions.

“The rationale and need to defend American security and protect [American] lives make it necessary to make sacrifices and infringe on the [existing] laws and charters of human rights. The Muslims must be subjected to the principle of collective suspicion. Individuals whose presence [in the country] causes concern or who have a potential to cause problems must be monitored, pursued and placed in preventive detention, which is not subject to time restrictions or require [the presentation of] evidence. They must [even] be stripped of their citizenship and deported.

He obviously supports profiling and Joe Lieberman’s “strip them of their citizenship” approach.  I know a lot of folks that share his vision of how to treat those like himself.

So there it is – a look at how some Arabs in the press view the Times Square bombing – the good, the bad and the ugly.

~McQ

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Unemployment: And the good news is ….

We added jobs last month.  In fact, according to Reuters we added more to US nonfarm payrolls than we have in 4 years.

290,000 jobs were added in April (66,000 government and the rest private sector).   What this points to is a number that is higher than that which is necessary to keep the unemployment percentage stable (around 140,000 a month) because of the natural turbulence within the jobs market.

On the other hand, with some adjustments, the unemployment rate itself went up .02 percentage points to 9.9% (Reuters mistakenly claims it stayed at 9.7%).

Now this is unquestionably good news.  However, given that 8.2 million jobs have been lost in the recession, a few thousand a month increase isn’t going to change the unemployment rate drastically any time soon.  Most see that rate coming down very slowly over years.  And, as the bad news in Europe continues to grow and markets for American goods there decline,  it is entirely possible that it will flatten out again or even spike a bit before it heads back down.

~McQ

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Sizzling in their own Greece (update)

Greece is a financial basket case.  And Greeks are mad as hell about it.  I can understand both their anger and their concern.  But despite the pundits on the left who say otherwise, their condition can be explained fairly easily:

But the beauty of Greece’s looming default is that it is a totally straightforward story of uncontrolled public spending and the determination of governments to run up impossible debts.

That’s it.  That’s all.  What has made Greeks so mad is government has lied about it all along.

*Gasp*!

No really.  And not just one, but many of all stripes and persuaions.  Cheap accounting tricks, double books, whatever you want to call it, Greek governments have been playing fast and loose with the truth:

Since getting on the euro in 2001, the Greek government has apparently been fudging its budget statistics, a practice countenanced by both conservative and socialist governments. To its credit, the current government kicked the current crisis into high gear when it released a deficit-to-GDP number of 12.7 percent — double the previously announced figure, and by far the highest in Europe.

And the truth will make you go bust – which is precisely where the country is headed without a bailout.  Upon learning that their government has been running two sets of books as well as running up exorbitant debt – debt it can’t afford or pay back – and that big changes and cuts were coming under an austerity program, millions of Greeks took to the street:

“All of us are angry, very, very angry,” bellowed Stella Stamou, a civil servant standing on a street corner, screaming herself hoarse, a block away from where the bank had been set alight.

“You write that – angry, angry, angry, angry,” she said, after participating in one of the biggest ever rallies to rock the capital since the return of democracy in 1974. “Angry with our own politicians, angry with the IMF, angry with the EU, angry that we have lost income, angry that we have never been told the truth.”

Well I can understand the anger, but unfortunately Ms. Stamou is part of the problem. Fully one-third of all Greeks work for government. And I’ve never seen government produce anything except more government – which is precisely what has happened. The government sector has grown while the productive sector has been taxed. The problem is there wasn’t enough money – ever – to pay for the lifestyle to which Greek workers had grown accustomed.

So:

“For 30 years the Greek people have been held hostage,” said Periandros Athanassakis, 48, a garbage collector in Piraeus, the port near Athens. “Those who stole the money should pay.”

It’s not clear who the protesters think “should pay” but they know someone should and it isn’t them.

Unfortunately even if they protest from now until doomsday, it is them – those protesting their innocence – who will pay because they are the ones stuck with the bill. All the screaming, shouting, rock-trowing and fire-bombing in the world won’t change that.

What’s to come? Well, reality. And with reality, some pretty tough conditions with which Greece gets a loan:

The new measures include an increase of two percentage points in the value-added sales tax, which is now 19 percent; a further increase in the fuel tax; increases of 20 percent for alcohol taxes and 6 percent for cigarette taxes; a new tax on luxury goods; and a 12 percent cut in supplements to wages for civil servants, Mr. Petalotis said.

They also include a 30 percent reduction in the bonuses given to civil servants as holiday pay, which amount to two additional monthly wages, he said.

Now you read through that description of the measures that have to be taken and tell me who has benefited from government’s shady accounting and profligate spending. No wonder Ms. Stamu and Mr. Athanassakis are in the streets and angry. They should only be paid for 12 months work instead of 14? Their supplements to wages are going to go down 12%? Whose idea is that?

Those that are going to bail them out, of course – and they don’t like it one bit.

Additionally it appears their jobs are on the line as well as government considers divesting itself of some properties:

The government will accelerate privatizations (€ 2.5 bill. budgeted for 2010) and may change its mind regarding majority ownership by strategic (foreign/EU) investors of types of assets / industries that have been protected under the existing social /political model, including utility/infrastructure, transport or special state (monopoly) assets. Examples might include the railway company, water distribution companies, the electricity grid or the power company (PPC), as well as the soccer betting company (OPAP), gambling Casinos and the remaining stake in Hellenic Telecom (OTE), which will probably be sold to Deutsche Telekom. Other interesting candidates for privatization might include airports and seaports and enhanced PPP/PFI models will be considered for infrastructure investments.

In other words, state run industries will be privatized and my guess is this means competitive wages – matched to private industry.  Not government wages pegged to, well, nothing.

All of this is just too much for Jeff Kaye at FireDogLake who cries:

So goodbye living wages, goodbye state-run utilities, transport, and telecom.

Yeah, “goodbye”. They’ve worked out real well in government hands so far haven’t they?

Oh, and when is a “living wage” not a “living wage”?

When you can’t freakin’ afford it!

Next? A rousing rendition of “California, here I come”.

UPDATE: It should be kept in mind that Greece is simply the tip of the European insolvency iceberg:

Virtually every country in the EU spends more than it takes in and has made long-term fiscal promises to an aging work force that it can’t keep. A little over a year ago, economist Jagadeesh Gokhale, writing for the National Center for Policy Analysis, produced a pithy – and scary – summation of the fiscal challenges faced by Europe. Don’t read it if you have trouble sleeping.

“The average EU country,” he concluded, “would need to have more than four times (434%) its current annual gross domestic product in the bank today, earning interest at the government’s borrowing rate, in order to fund current policies indefinitely.”

In other words, Europe would have to have the equivalent of roughly $60 trillion in the bank today to fund its very general welfare benefits in the future. Of course, it doesn’t.

Things haven’t changed much since that study was done. So suppose they don’t put aside all that money. What then? By 2035, Gokhale reckons, the EU will need an average tax rate of 57% to pay for its lavish welfare state.

Today, Greece is only the tip of a very large iceberg. Portugal, Spain, Italy and Ireland together owe $3.9 trillion in short- and medium-term debts, an amount larger than their combined GDP, estimated last year at $3.3 trillion.

California would need half a trillion in the bank to cover it’s state pension promises right now and of course we know about the trillions upon trillions necessary to fund the future promises of Social Security and Medicare which aren’t even close to being available. Europe will most likely get to its end much more quickly than we will, but not by much, unless drastic changes in entitlements are made and made soon.

~McQ

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