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Joshua Sharf

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November 30, 2005

It Really Is All One War

You know those new hostages in Iraq? The ones whom the Washington Post describes as working for a "peace" group? You know, the one with lots of experience going into war zones?

Turns out they've got lots of experience in one particular war zone that the AP doesn't bother to mention, and it's earned them a pretty interesting set of friends:

On 30 November 2005 the National and Islamic Forces in Hebron held a press conference to ask for the release of four CPTers being held by an Iraqi armed group. They released a joint statement expressing their "sorrow at the kidnapping of four of the peace advocates from the CPT in Iraq."

The first speaker was Sheikh Najib Al Ja'abri, who hosted the press conference at the Ali Baka'a Mosque in the Haret e-Sheikh neighborhood of Hebron. He spoke of his warm sense of working together with CPTers over the years. The second speaker was Abdul 'Alim Dana of the Popular Front for the Liberation of Palestine, followed by Fahmi Shahin, Coordinator of the National and Islamic Forces in Hebron, representing the Palestine People's Party. (emphasis added -ed.)

Here's the JCPA backgrounder on these charmers.

Look, I hope they alll get back safely, although it's probably too much to expect that they'll have learned anything from the experience. After all, they're not anti-war; they're just on the other side.

Qwest For Hell

Having gone through Deals From Hell, I thought it might be fun to start applying its lessons. And where better to start than with two delightful examples from right here in Denver: the Qwest-US West merger, and Qwest's proposed purchase of MCI.

First, here are the main criteria for failure:

  1. Destruction of Market Value
  2. Financial Instability
  3. Impaired Strategic Position
  4. Organizational Weakness
  5. Damaged Reputation
  6. Violation of Ethical Norms and Laws

For Qwest-US West, we have, let's see, check, check, check, check, check, and, uh, yeah, check. Qwest was very quickly worth less than the two companies had been separately, with large, unmanageable debt, an inability to compete, seen as an undesirable business partner, with fleeing executives, some of them fleeing the law.

Now, let's look at the causes of failure:

  1. Excessive complexity
  2. Limited flexibility
  3. Poor management choices
  4. Cognitive bias leading to overoptimism
  5. Business not as usual
  6. Breakdown in the management team

Once again, they hit for the cycle. Having bought a company at a time of great - ferment - (5), Qwest found itself with limited ability to respond. They completely underestimated the difficulty in reworking US West's famously bad customer service (4), had no idea what was involved in running a local phone network, which is substantially different from a long-distance network (1). They clearly overpaid for US West - take a look at the goodwill writeoff they had to take, leaving them with too few resources on this forced march to integration (2). The company changed direction any number of times (3), and finally, the two cultures never really meshed. Qwest had a reputation as a high-flying, fast-moving risk-taker living on the edge. What do you think a Baby Bell management team looked like? (6)

This deal was a train wreck from Day 1, and the company has never really recovered, even years later.

Now, by applying the list of warning signs, it should be obvious why the Qwest-MCI deal was a bad idea to start with, and be relieved that it didn't come to pass.

First, what they did right. MCI was certainly in a complementary business to Qwest. It wasn't as though they were trying to enter a completely new market or business. They did have a strategic reason for wanting MCI.

Now, what they did wrong. First, the buyer was looking for the seller to transform their own business. Second, they weren't very creative in structuring the deal. And third, the got into a bidding war in a hot market. No, the overall market wasn't hot, but telecom was seeing a whole lot o' mergin' going on, and lots of weaker companies were getting bought.

The three points flow from one to another. Qwest was not a strong company, and was looking to improve itself rather than the seller. Since it didn't have any cash, its offer was entirely in stock, with no earnout, to a set of owners who were clearly looking to exit the business. (Bruner flags all three of these as warning signs.) As it got into a bidding war with Verizon, and its stock price fell, it had nothing to offer but progressively larger slices of itself. That slowly rising precentage eventually approached majority control, which would have governance as well as tax consequences.

Next step: evaluating deals when they're announced, which is only one teeny-weeny baby step away from making predictions.

Book Review

Another book review is up, this one of Deals From Hell, wherein Robert Bruner turns his gimlet eye to the world of M&A.

Haveil Havelim

The Official Carnival of Jewish Blogging is up for the week.

November 29, 2005

Mon Dieu! It's Mark Steyn on the Convergence!

Why the French? Well, because it's Mark Steyn in the Western Standard, his replacement Canadian gig after the National Post got de-Blacked. Since it's the Western Standard, I suppose I should have used Ukranian rather than French, but Babelfish doesn't go there, and in any case, it's the Quebeckers that are still running the joint.

It's sobering reading. Since 9/11 and the European slide into Islamicism, Steyn has become the leading columnist on political demography, to the point where, if he continues at this rate, by 2010, 78.3% of his columns will be on this subject. This column discusses how demographic trends may lead Canada (and by implication Japan and Europe, and then, by legal logic the US) to embrace some technology that we may end up wishing we hadn't:

So what's the next big thing that's likely to sneak up on us quietly and incrementally? After creeping sharia, I'd bet on creeping creepiness--the sly elisions on humanity's path to a post-human future. Joel Garreau has just written a fascinating book on the subject called Radical Evolution--about the combined effects of the so-called GRIN technologies: genetics, robotics, information systems and nanotechnology. Thus, the Defense Advanced Research Projects Agency in Virginia is currently working on ways to create "better humans"--soldiers who can communicate with each other simply by thought and can regrow damaged body parts.

If you're thinking, "Oh, for God's sake. I've got this month's phone bill to pay and Steyn's boring on about some stuff that's gonna kick in circa 2100," well, not so fast--or, rather, not so slow. As the headline on a National Geographic interview with the author put it, "How Weird? How Soon?" "We're talking about the next 10 or 20 years," says Garreau. "This is going to happen on our watch." DARPA's previous far-fetched ideas include the Arpanet--now known as the Internet--and the Predator, the unmanned drone that tracked and killed a group of al Qaeda bigwigs driving their SUV through the Yemen desert.

Yet it seems to me transformative innovation is not so much technological as social. For example, we have the technology to go to the moon, but nobody wants to, so the space program languishes. By contrast, packaged as part of the broader social context of feminism, the sexual revolution and the consequent upending of traditional perspectives on human reproduction, the gruesome innovation of partial-birth abortion (i.e., infanticide) slid smoothly down the slipway and into our lives. That same route will make GRIN technology part of our world in the next 10 years.

By concentrating on DARPA's spectacular successes rather than their more ignominious - and less well-known - failures, Steyn is moving into more speculative territory than he usually occupies. Still, the consequences of this technology are not even remotely understood, and the appropriate place for any conservative is standing athwart history, yelling "Stop!"

Awash in Cash

The Wall Street Journal has run a couple of articles in recent days about how much cash corporate America is sitting on, and what they're doing with it. The most recent article though, while trying to cover all the bases, I think ends up shedding more heat than light. Still, they raise a number of interesting points.

First, this may mark a return to a normalcy, where dividends are more important than capital, which should prevent a return to a speculative market. In part, this is a result of the tax changes, but since we can't get Congress to make those permanent, watch out for post-2008, when those changes expire. While the Republicans are displaying political illiteracy, the economic illiteracy here is on the side of the Democrats, who can't figure out the difference between static revenue and incentives.

Now, when I was growing up, there was something called the "business cycle," and one indicator of the top of the "business cycle" was when companies had lots of extra cash. This may or may not have corresponded to "a vote of no-confidence in U.S. economic prospects," but that's a long way from eating your seed corn:

Some economists call the payouts this year an ominous development that may be stealing from future economic growth, since they suggest companies are having trouble spotting new products, projects or services they think will boost their growth. "These payments keep the economy growing more slowly because that money isn't flowing into capital spending," says Milton Ezrati, chief economist at Lord Abbett Funds in Jersey City, N.J. "If businesses are giving up on innovation, we have problems."

"Giving up on innovation?" That's a stretch. And remember, we're also talking about S&P 500 companies here, the larger ones, the ones that have a harder time innovating in the first place.

My worry is that the buybacks and dividends will leave these companies less able to weather the long-predicted recession. While the profits are at least partly a result of operational efficiency, the other half of survival is deep pockets, and those companies that don't have cash on hand may find 1) they've pushed up their stock prices above their real value, and 2) there's little room for more immediate efficiency gains.

This may be great for hedge funds and other short-term investors, who seem to be behind some of the payouts. But it's not such good news for long-term investors, now is it? It's a fine example of how shareholder interests are rarely aligned with each other, and why Stephen Bainbridge, who's been skeptical of both the existence and desireability of sharehold activism, has a point.

I'd be a lot happier with a company that declared a new (or larger) quarterly dividend, rather than a one-time payout, since it indicates some confidence in their operations. It also indicates an understanding that growth in economic value is more important than growth in any one revenue metric.

There's another, possibly darker side to this tucked away in the article, as well:

The outpouring of cash from corporate coffers in the U.S. is just one aspect of a world-wide phenomenon. With interest rates low, unprecedented amounts of capital are sloshing around the globe, in search of better returns. Pension funds, mutual funds and insurance-company accounts, for example, have some $46 trillion in assets, up almost a third from five years ago.

This is exactly the kind of dynamic that led to 1929. While we haven't seen (and aren't likely to see) anything like the speculative boom-and-bust from 1928-29, too much money in search of too few goods is a good sign that interest rates need to come up. Since right now, the US is the only place raising rates, we're in better shape than the rest of the world if credit does start to dry up - we have more room to lower rates. Still, that much extra money supply floating around has never been a good thing.

Indeed, the Journal itself noted this possibility several weeks ago:

If the world's central banks boost short-term interest rates more sharply than expected to ward off inflation, investors might start selling some of their riskier assets in favor of newly attractive short-term instruments. The Fed has recently stepped up its anti-inflation rhetoric, and the European and Japanese central banks have indicated they may raise interest rates in the coming year.

At the same time, corporations might revive expansion plans and become big borrowers again, pushing up long-term interest rates. Rising risk premiums, and thus falling asset prices, could then become self-reinforcing as leveraged investors unwind their positions to limit losses, driving asset prices down further and triggering still more selling.

...although the article went on to claim that a soft landing was a greater likelihood.

Still, we've been down this road before - many times - and historically, it hasn't ended well.

November 28, 2005

Strange Bedfellows

One idee fixe of the Left, presented not only without evidence, but in the face of established fact, is that Saddam Hussein would never have cooperated with religious zealots like Bin Laden because of ideology.

In my copious free time, I've been reading Paul Johnson's magisterial Modern Times, which contains some fascinating echo for our own time on just about every page. The Versailles Treaty imposed severe military restrictions on Germany, which the Prussian-led military worked hard - through several constitutions - to evade. Including the following:

The help [by Germany to Bolshevik Russia] took the immediate form of Freikorps officers, munitions and in due course, industrial expertise in building new war factories. The last point was vital to the Germans, who under the Versailles Treaty had to dismantle their armaments industry. By secretly coaching the Bolsheviks in arms technology and developing new weapons in Russia they were maintaining a continuity of skills which, when the time was ripe, could onve more be openly exploited back at home. Thus a strange, covert alliance was formed, which occasionally broke surface...a working relationship of generals, arms experts, later of secret police, which was to continue in one form or another until 22 June 1941...The deeper irony is that this was a marriage of class enemies: what could be further apart than Prussian generals and Bolsheviks? Yet in the final crisis and aftermath of the war, both groups saw themselves, and certainly were seen, as outlaws. There was a spirit of gangster fraternization in their arrangements...

Of course, the 9/11 Committee found exactly such a relationship, and the Weekly Standard's Stephen Hayes has been documenting it for years. Now, it appears that the religious zealots running Iran have been cooperating with the self-consciously godless Communists running North Korea.

So now, there's a Spectrum of Fraternization, where entites that are really far apart, like Iran and North Korea, can cooperate, and entities that are really close together, like Iran and Al Qaeda, can cooperate, but somewhere in-between, corresponding exactly to whatever foreign policy threat we're facing at the moment, is a zone of non-cooperation.

Makes you kind of question the whole thesis, doesn't it?

Carnival of the Capitlists

This week, hosted by Gill Blog, with an emphasis on the business and economics of Katrina.

November 27, 2005

Local ADL No Better

Sometimes, when a national organization goes off the rails, there's hope that sanity will bubble up from the local chapters. If that's going to happen with the ADL, sadly, it's not going to start from Denver. The local ADL chapter has decided to adopt a local imam's absolutist line when it comes to Islam and terrorism, deciding that it's more important to try to isolate Tom Tancredo than to isolate terrorists:

What began as a search for common ground between Congressman Tom Tancredo and Colorado interfaith leaders has disintegrated, with the two sides unable to agree on a joint statement about religion, terrorism and retaliation.

For more than two months, the Colorado Republican and a group of Muslim, Christian and Jewish representatives tried to broker peace after Tancredo suggested it was acceptable to bomb Muslim holy sites in response to terrorist attacks.

Not only did the envisioned statement crumble over a few words but the religious leaders came away even more upset over Tancredo's comments linking Islam to the French riots and to a Sept. 11 memorial.

"To me, the problem is not where the statement broke down," said Joyce Rubin of the Denver office of the Anti-Defamation League (ADL), part of the interfaith group.

"The problem is that Congressman Tancredo continues to characterize and blame a whole religion and a whole group of people based on the actions of a few extremists and hasn't apologized for it," Rubin said.

The interfaith group included Shiite Imam Ibrahim Kazerooni, Rima Sinclair of Muslims Intent on Learning and Activism, and Methodist minister Chuck Mowry of the Interfaith Alliance of Colorado.


Tancredo and the group agreed on several points, including:

a whole religion, race or group should not be condemned "for the actions of a few misguided individuals"; all religions deserve respect; violence against innocent people in the name of advancing religion is unacceptable; and the security of America is everyone's responsibility.

The rift opened over Tancredo's insistence on a section stating: "Places of worship which do not offer refuge or financial or political support to persons conducting or planning acts of violence deserve both respect and protection in any conflict that might erupt in combating terrorism."


"He was adamant bringing in concepts that are abstract and you could not define," Kazerooni said. "He is using these few words as a way of preventing an agreement."

First of all, look at who the ADL's in bed with here. Imam Kazerooni, who can barely speak the word "Israel" without descending in paroxysms of rage, has never publicly lent his name to any ADL effort to condemn Muslim or Christian anti-Semitism. A Google search for his name and the ADL, absent the Tancredo negotiations, turns up nothing relevant.

As for the Interfaith Alliance of Colorado, a quick search of their policy statements reveals support for C&D, support for gay marriage, support for gay partners' names on birth certificates, support for gun control, and fans of Jim Wallis. None of this is surprising; it merely indicates that the Christian leg of this trio is typical of the deracinated, content-free religion-as-social-work that the mainstream churches have become. (Appropriately, the site's only section devoted to religion, something called the "Religious Foundations Project," currently has no postings.)

Undefinable and abstract concepts are the essence of diplomacy. They let both sides declare victory and save face, because each side knows that the other will be around for a while, and may come in useful some time in the future. The fact that Kazerooni is using these as a reason to walk away speaks volumes about what he's really after - Tancredo's admission to a thought crime.

In fact, though, it's not the abstraction and lack of definition that has Kazerooni worried. It's that banning political and financial support to terrorists actually adds definition to "responsibility" and "security," requiring something - anything - on his part. I don't for a minute think that Kazerooni is personally writing checks to Hamas. But it doesn't sound like he's very interested in catching those who are.

This is further bolstered by the shock and horror at connecting Islam to the riots in France. This, despite considerable | evidence of Islamist interference and opportunism surrounding them.

That the ADL is participating in this charade, designed to humiliate the Congressman rather than produce a productive statement, is shameful and a betrayal of its actual mission. Don't they have better things to do?

November 26, 2005


Having decided to give thanks in Aspen this year, in part for having such a beautiful state to give thanks in, I also thought it would be nice to take a little drive around the area, before the snow came in earnets, and 4WD vehicles and owls became the most reliable methods of communication.

There's a little town, just northwest of Aspen called Basalt, and off of that, a road follows the Frying Pan River for about 30 miles. (The road is imaginatively named Frying Pan Road, for those of you headed off to Mapquest.)

In late November, here's what you get for your trouble (as always, for all pictures, click to enlarge):


Now there's also an underused and unpaved road through the backcountry to Eagle. I thought that perhaps, it wasn't too late to take it, and see some country that most people, either flying in on the private jet besotted with champagne, or driving in on 82 to hit the slopes, never see.

It was just about as I was taking the second picture up there that I realized that wasn't going to happen. The snow sure looked plenty packed, but as I kept going, it was clear that 1) that wasn't getting better, and 2) there wasn't going to be any good place to turn around. So I had better take what was available, and rock myself out if need be.

Need be. Which of course, all taking place in low gear, overheated the engine and blew off about half the reservoir of coolant. I was able to stagger back into Basalt with a judicious mix of high gears and coasting, but it was clear that that wasn't going to work on 82, with its speed "limits" of 55 and up. So it was off to the only garage open on Black Friday, and an hour long cool-off to see What Was To Be Done.

Now Basalt is one of those old, small towns that you always say, "Gee, wouldn't it be fun to just stop there and walk around for an hour or so." Except that you always end up telling yourself, "no, the real goal in Disney World, and it's probably just like every other small town along the way, and I had us pencilled in for 500 miles today."

Well, I actually had the hour you've been denying yourself all those years, so here, as a public service, is Basalt as you've never seen it before. And if it really is like every other small town, think of all the time I've just saved you.

The town actually hasn't been frozen in time since 1900. If it were dying, you wouldn't see this:

would you? As though the aging miner's son who started the pool hall and watched his kids grow up and move to Grand Junction would have any use for that.

Which means the town is growing. Here's the part of the new town that the Fine Arts and Zoning Commission got it hands on before it went up:


See, by definition it's new, which means it has to live up to code, which means it can't actually be interesting. But they want to make it look as though it's what the original town fathers would have come up with if they had had sheet rock instead of wood. Right down to this:

Which is kind of - cute - compared to this:

Which comes from this:

Which is what you normally associate with Growth Near Aspen. Old downtowns and small original houses, lorded over by people with trophy homes, further up the hill, Then again, given what the original residents are doing for paint jobs:

you get to thinking that gentrification can't come fast enough.

Of course, it also helps to know where the growth is coming from. In this case, it's Mexico:


There's another even larger trailer park off to the right of the first picture, but by design, it's well-hidden, and there's no reason not to enjoy the view. Chatting with the guy at the hotel about the Valley, he had claimed that about 40% of the population was illegal. I couldn't believe it. For one thing, where would they all live? That's where.

At least the Fine Arts and Zoning Commission has a sense of humor:

Yep. Catch-and-release.

November 23, 2005

The American Thinker on Yoffie

I still plan to write more about Eric Yoffie and the Reform Movement's biennial convention in Houston. For the moment, I'll yield the floor to Richard Baehr (a politically conservative Jew himself) of the American Thinker:

A comparison to Nazis? That is the kind of cheapening of the uniqueness of the Holocaust that normally gets one in trouble with the Anti-Defamation League and its President Abraham Foxman. At least most of the time, it does. But Foxman did not find any problem in Yoffie’s outrageous and vile comparison of the Nazi killing machine to anti-gay marriage advocates among the Christian right. When you do not agree with the political and social priorities of Rabbi Yoffie or Rabbi Saperstein, you must be a Nazi or sinful. This is the wonderful language of these temperate, thoughtful leaders.


It is not evangelical Christians who hijacked airplanes and crashed them into tall buildings in New York. And it is not evangelical Christians calling for the elimination of the state of Israel or murdering Jews there, or murdering Americans in Iraq and elsewhere. Of course, Abe Foxman and Rabbi Yoffie believe we have bigger threats than radical Islamic terrorism, such as silent prayers before a school day begins, a nativity display next to a Menorah in the town square, and making sure that minority students do not get a better education in a private school with a religious affiliation financed by education vouchers.

By failing to recognize the most basic realities around them, focusing on imagined enemies while ignoring and even cozying up to those who support real enemies of the Jewish people, the liberal Jewish panjandrums have clearly entered pathological territory.

He's actually kinder than I would have been. For instance, he fails to note that, later in his address, Yoffie (rightly) condemns radical settlers for comparing Sharon to the Nazis, thereby "cheapening the Holocaust."

Read the whole thing.

Posted Without Comment

From KATU-2 in Portland:

EUGENE, Ore. - A construction workers' tradition of cooking a turkey for an early Thanksgiving celebration went awry when the oil in their deep fryer caught fire, burning the house they had just finished building.

Rabbi Invokes Hitler, Press Yawns

I'm no fan of Eric Yoffe. But the religious head of the Jewish Reform Movement in America gives a biennial sermon at the national convention, to set the tone and the agenda for the next tow years. This time, he's outdone himself. In discussion the "religious right" and its approach to gay issues:

We cannot forget that when Hitler came to power in 1933, one of the first things that he did was ban gay organizations.

I'm going to have more - a lot more - to say about this, especially about his call for "discussion with civility", but for the moment, just consider the irony from the press's point of view. He's sought out for quotes on Supreme Court nominees. When Senators call him "The Antichrist," they back down. Political meetings he attends are front-page news. The Post and the News report about James Dobson as though the Colorado Springs exits off of I-25 have toll booths with direct deposit to Focus on the Family, and participants in City Council meetings need to kiss his ring before they can go into chambers.

But when the spiritual head of one of the three major Jewish denominations compares him to Hitler, that's unremarkable.

November 22, 2005

BBC: Israel Defends Self, Violates International Law

The BBC has a funny view of international law - make sure the obligations fall on Israel.

Yesterday, Israel responded to a broad Hezbollah attack - including artillery-supported cross-border raids - by, well, responding:

Hizbullah launched a failed attempt to kidnap soldiers Monday in an assault on Mount Dov and the northern town of Rajar and a coordinated mortar and rocket barrage on northern Galilee towns and kibbutzim.

A fierce Israeli response killed four infiltrators and struck at Hizbullah targets in south Lebanon, but at least 12 soldiers were wounded and a house severely damaged in Metulla by Hizbullah mortar fire.

Now, here's the BBC on the matter:

Israeli troops have killed three Hezbollah fighters during a guerrilla attack near the Lebanese border, which also left several Israelis wounded.

It was the heaviest fighting in the disputed Shebaa Farms area since 2000, when Israeli troops left south Lebanon.

Hezbollah fighters launched a major assault on Israeli army posts, triggering retaliatory air strikes.

Israel captured the area from Syria in the 1967 war but it is now claimed by Lebanon with Syria's backing.

Eyewitnesses reported at least 250 explosions in an intense two-and-a-half hours of rocket duels.

Scores of fighters were observed taking part in the Hezbollah operation, which Lebanese security sources said was aimed at taking Israeli hostages.

Israeli aircraft overflew south Lebanon as far north as Tyre, in defiance of repeated calls by the United Nations for an end to violations of Lebanese air space.

Israeli TV said Hezbollah's artillery barrage was designed to divert attention from a raid on the Druze village of Ghajar to capture Israeli soldiers.

The majority of residents in Ghajar are reported to have taken Israeli nationality after Israel captured the Golan Heights from Syria in 1967.

The water-rich Shebaa Farms area lies at the convergence of Lebanon and Syria and the Israeli-occupied Golan Heights.

The UN has ruled that the area belongs to Syria - not Lebanon - and says its fate is linked to the Golan Heights.

In 2004, UN Resolution 1559 called for the disarmament of Hezbollah, but the Lebanese government has so far refused to act.

So, in 246 words, the Beeb manages to:

1. Start the story with Israel killing Hizbollah fighters
2. Mention twice that Shebaa farms is "disputed," while leaving until the next-to-last paragraph the news that the only people disputing its status are those who want to keep killing Israelis
3. Refer to Israeli overflights as "defiance," while waiting until the last paragraph to note that the Lebanese government apparently has different definitions of "sovereignty" for different parts of its territory
4. Not note the irony in those two facts.
5. Ignore completely Hizbollah rocket attacks on Israeli civilians in towns far from the attempted raids...
6. ...leaving the impression that almost all the fighting was at Shebaa Farms

Naturally, it's not only the BBC. Reuters does pretty much the same thing, waiting 10 paragraphs to note the nature of the "dispute" over the area.

November 21, 2005

Remembrance of Disengagements Past

One of the refrains from the Left about Israel's disengagement from Gaza was to compare it to Lebanon. After all, the argument went, since Israel pulled out from southern Lebanon, Hezbollah has been quiet. Obviously, the violence there was solely a result of Israel's occupation.

Not now:

Following an afternoon of escalating violence along the northeastern border between Israel and Lebanon, residents of the north from the Mediterranean to Mount Hermon were ordered into bomb shelters Monday evening for the first time in years.

In the latest development, Hizbullah extended the fighting across the entire northern border, as mortars landed near the towns of Nahariya and Shlomi.

Earlier in the evening, mortar and Katyusha barrages hit the northern Galilee towns of Kiryat Shmona and Metulla during which one house in Metulla was directly hit by a Katyusha. While family members were in the house at the time, no injuries were reported. Extensive damage was caused to the building.

While it's tempting to think that everything your enemy does is in response to what you do, this may or may not have anything to do with Israel's announcement of early elections next March.

More importantly, it should remind us that the Islamist war on Israel isn't circumstantial, but existential.

Vanity (or is the Emptiness?)

The 45th edition of Haveil Haveilim or (Habel Habelim, if you're Yemenite) is up, over at Mirty's Place.

November 20, 2005

Carnival of the Capitalists

Brian Gongol has this week's Carnival up a little early. Lots of blogging for bucks worth reading this week.

Friendly Persuasion

Welcome, Corner readers, and thanks to Andrew Stuttaford for the kind link.


China's formally unveiled the obligatory Cute Little Olympic Mascots for the 2008 Peking Olympics. They're called - seriously - the "Five Friendlies," and here they are:

No jokes about "huanhuan" being the temporary guest worker they brought in, only with his name misspelled. Frankly, given China's human rights regime, I'm surprised one of them isn't named "Sing-Sing."

The warm, fuzzy Leninists over at the Games also have little pictures of the Friendlies playing various Olympic sports:


Although to be honest, in the wrestling picture, HuanHuan looks more like he's smuggling JingJing across the border than like he's wrestling, and YingYing seems to be dodging a tear gas canister.

Anyway, not all the sports are represented yet, and I thought I'd help out with some designs for the demonstration sports the Chinese were planning on introducing in '08:


For those of you who don't know Mandarin, yes, those are the real traditional Chinese characters, brought to you by Babelfish.

And for those of you / without a sense of humor, yes, American copyright law does make exceptions for obvious cases of parody or satire. If these aren't obviously satirical enough for you, perhaps you need to rethink your political system.

UPDATE: The Skwib has another new demonstration sport being introduced. Harsh Mark, very harsh.

Friday Night Dinner

So, I'm having dinner with a number of young couples on Friday night, and they start discussing how they met, moved out to Denver, etc. One of the wives mentions that one day, she saw her husband coming upstairs with a bag full of shredded paper.

"What's that?" she asks.

"Oh, nothing, just the files I kept on the girls I went out with."


Another guest: "Let me guess. You're a value investor."

November 18, 2005

Blowing Smoke

An Italian film crew claims that the US military indiscriminantly blanketed civilians in Fallujah with the white phosphorus during last year's assault on the city. The Denver Post picks up the Colorado angle on the white phosphorus non-story, and while it impeaches the credibility of the film's star witness, it buries the lead, and leaves most of the background fabrications intact.

Here's the big news. The "witness," Jeff Englehart, can only claim to know that 1) white phosphorus was used in the attack, and 2) someone inside the city got caught in it:

Englehart said Thursday that some of his statements were taken out of context. He maintained that he believes white phosphorus killed civilians, though he never saw anyone burned by it while in Fallujah.

"I never personally did," he said. "That's where the ... documentary misquoted me. They took that out of context."


"I know I heard it being called for on the radio. That's the only proof that I have, and I talked to a reconnaissance scout after the siege while we were still in Fallujah. He said they called in for white phosphorus on human targets," Englehart said.

Englehart said an Italian reporter asked him during a five-hour interview in August whether he had seen innocent civilians killed in Iraq. Englehart said he had. Englehart said the producers of the Italian documentary took his answer to that question and edited it in after a question from a reporter about whether he had seen women and children killed by white phosphorus.

"It wasn't very good journalism," Englehart said. "It's about 80 percent true."

Sounds to me like it's about 0% true. It ought to be the lead of the story, and it ought to be the headline.

(Also, Washington Post military affairs blogger William Arkin takes the claims at face value, while appearing to hedge his bets on its legality. He lumps various governmental responses together, assuming that any given briefer has perfect information, and that, for instance, the State Department can speak for the DoD. According to this logic, I suppose I should just skip the intermediaries and claim that the WaPo takes the claims at face value. Naturally, if white phosphorus isn't a chemical weapon - and it factually isn't - then we would deny having used "chemical weapons," until it became clear what the hell the accusation is.)

But again, as with so many attempts to turn the US Military into a marauding gang of war criminals, there's just no there there.

Here's the DenPo again:

The use of white phosphorus is not banned but is covered by Protocol III of the 1980 Convention on Certain Conventional Weapons. The protocol prohibits use of the substance as an incendiary weapon against civilian populations and in air attacks against military forces in civilian areas. The U.S. is not a signatory to the convention.

Here's Snapping Turtle on that:

I've seen a lot of people claiming that the 1980 Incendiary Weapons protocol of Geneva forbids the use of white phosphorus against civilians. It does not. It forbids the use of "incendiaries," and specifically excludes weapons like WP where the incendiary effect is a secondary effect of smoke production (incendiary weapons by definition are those weapons designed to create fires... WP occasionally will start fires, but it's not very reliable in that role... generally it just creates a lot of smoke). Whether the U.S. has signed it or not is irrelevant.

As for how the weapon was used, there's been some confusion. Apparently, the State Department, as the Turtle puts it, managed to make things worse by confusing phosphorus with magnesium, and claiming rounds that make smoke were being used for illumination. (Cough.) The military claims that it was using WP to smoke out defenders from hardened positions, and it's certain that some of those defenders happened to be standing a little too close to those shells when they went off. For further common-sense rebuttals, see tjic and Mudville Gazette.

Murtha: Porkbusters Target?

Yes, I know this is a cheap shot, but as long as we're playing offense here, maybe someone should ask Murtha about this US News article from May, about the NDIC. Seems as though Murtha was learning a few lessons from another "conservative" Democrat:

Pork? In the beginning, the Johnstown center did have some friends in the White House. With the blessing of President George Herbert Walker Bush, then drug czar William Bennett proposed the creation of the NDIC in 1990. Its mission: to collect and coordinate intelligence from often-feuding law enforcement agencies in order to provide a strategic look at the war on drugs. But the Drug Enforcement Administration, worried that its pre-eminent role in the drug war was slipping away, openly fought the idea. So did many on Capitol Hill, arguing that the new center would duplicate the efforts of existing intelligence centers, notably the El Paso Intelligence Center, operated by the DEA. With little support in the law enforcement community, the NDIC looked all but dead. Enter Congressman John Murtha. The Pennsylvania Democrat, who chaired the House Appropriations Subcommittee for Defense, tucked the enabling legislation for the center into a Pentagon authorization bill, with the caveat that it would be placed in his district.

The center was troubled from the start. Murtha's new drug agency was funded by the Pentagon, but the Department of Justice was authorized to run it--an arrangement bound to cause problems. "All of us wanted the NDIC," says John Carnevale, a former official with the Office of National Drug Control Policy, as the drug czar's office is known. "But none of us wanted it in Johnstown. We viewed it as a jobs program that Mr. Murtha wanted [for his district]."

Murtha bristles at implications that the Johnstown center is a boondoggle. "They say anything we do is pork barrel," he fumes. The congressman argues that the federal government should spread its facilities around the country, citing the security risk of a centralized government and cheaper operating costs elsewhere. But "obviously," he says, "I wanted it in my district. I make no apologies for that."

Headquartered in a renovated department store downtown, the center has brought nearly 400 federal jobs to Johnstown, a struggling former steel-mill town. Law enforcement agencies, ordered to send employees to the new center, had trouble finding skilled analysts or executives who would agree to live in Johnstown. Even the bosses didn't want to go. The first director, former FBI official Doug Ball, traveled back and forth from his home near Washington. His deputy, former DEA agent Jim Milford, did the same and made no bones about it. "I've never come to terms," Milford says, "with the justification for the NDIC."

I wonder if those "cheaper operating costs" include all the gas and rubber being burned in I-70 and the Pennsy Turnpike. I used to work at NDIC for a government contractor, and I would drive up and back each week, spending three, sometimes four nights at the lovely downtown Johnstown Holiday Inn, all expenses paid by you. It was the Monkey's Paw version of, "I'd like a job with travel."

To be honest, we all thought it was part of a good fight, but I didn't see anything particularly urgent going on there, and I certainly didn't see any former steelworkers holding down analyst positions. Maybe we should take the money spent at NDIC, and spend it on winning the war.

Then again, maybe that's what Murtha's worried about.

November 17, 2005

More Efficiency, Less Margin for Error

One of the great success stories of American business over the last 20 years is inventory management. Take a look at the inventory-to-sales ratio over the last 20 years:

Overall, businesses have to carry less than 3/4 as much inventory as they did 14 years ago to fulfill the same number of orders. For manufacturers, that number is 5/8. Multiply that by the overall growth in the GDP, and the savings are staggering. In fact, manufacturing efficiency is really driving this improvement. The correlation between the overall number and manufacturing is an astonishing 0.98. So while resellers are getting better at inventory mangement, most of the improvement comes from innovations like Just In Time manufacturing.

This is both a cause and a result of technology, as better processes free up money for capital investment, which further increases efficiency. To the extent that American manufacturers haven't been run off the playing field altogether, this is why. To be fair, other factors such as proximity to markets help. More clothes are being produced in smaller quantities locally, as a futher aid to flexibility. And some of the biggest adopters of just-in-time are the welfare states known as the auto companies, so all they've done is stave off the inevitable. But auto producers aren't nearly as big a part of the economy as they used to be, so these efficiency gains are quite real.

This doesn't come without a price, however. In this case, it's a loss of flexibility. If that truck with the spare parts isn't there on time, you're less likely to have a box of them lying around on the shop floor. Take a look at the PMI survey component called Supplier Deliveries. Over 50 means that supplier deliveries are getting slower:

Whoa. Better processes mean more stability - a lot more stability -, but since 1992, only rarely have purchasing managers seen actual improvemet in the month-to-month situation, and that improvement tends to be correlated with economic slowdowns. (No, 1996 wasn't an actual recession, but there was a good deal of grumbling that Greenspan had tapped the brakes hard enough for most of us passengers to spill our coffee.) Now maybe some of this is just purchasing managers always worrying about where their next bucket of bolts is coming from, but there must be more to it than that, otherwise why ask the question?

None of this should be too surprising. Robert Bruner, in his M&A How-Not-To book, Deals From Hell, notes that tight coupling, or loss of flexibility, lets trouble propagate through a business much more easily. And what's true for individual companies is true in the aggregate.

Now, it would be interesting to see how many of these slow deliveries are raw materials, and how many are manufactured goods. Given China's recent propensity for trying to lock up raw materials and resources, a lot could be riding on that answer.

Faster, Please

Iraq may be the central front in the War on Radical Islam, but there should be no doubt about who the central enemy is. Iran's leader has told the Palestinians to be patient for just a little while longer, the Badr Brigade is busy giving the Iraqi government a bad name, and the Iranian armed forces are essentially fighting a proxy war against the British and us in Iraq.

Today, FrontPage publishes an interview with a former UNSCOM inspector. While his comments about Iraq have gotten most of the attention, this paragraph seems to have immediate relevance:

It was probably on my second inspection that I realized the Iraqis had no intention of ever cooperating. They had very successfully turned The International Atomic Energy Agency (IAEA) inspections during the eighties into tea parties, and had expected UNSCOM to turn out the same way. However, there was one fundamental difference between IAEA and UNSCOM that the Iraqis did not account for. There was a disincentive in IAEA inspections to be aggressive and intrusive, since the same standards could then be applied to the members states of the inspectors. IAEA had to consider the continued cooperation of all the member states. UNSCOM, however, was focused on enforcing and verifying one specific Security Council Resolution, 687, and the level of intrusiveness would depend on the cooperation from Iraq.

(Hat tip: Powerline)

Note that right now, today, as Iran either nears a bomb or bluffs its way to more time, the IAEA is the organization responsible for enforcing their cooperation, as task at which it has completely and utterly failed.

This is a real threat. Here. Today. Now.

If the Senate Democrats were part of a serious party, they'd be paying attention, prodding the Administration, turning up the heat on real, rather than imagined, enemies. But they have no agenda for dealing with Iran, any more than they have for dealing with Iraq. Their vocabulary for dealing with enemies doesn't extend past the international alphabet soup that already doesn't work. Any more than their worldview allows for the existence of actual enemies.

So it's not only that they're reduced to Orwellian rewritings of history, using selective readings that do little more than prove that all intelligence analysis is a judgment call, that you can always find someone who disagrees. (See Joel Engel, Norman Podhoretz, Stephen Hayes, and others for more complete rebuttals.) It's that they fundamentally don't see anything wrong with trying to cripple the Administration diplomatically, or keep it from acting effectively.

I'm sure that when they wake up to newscasts talking about the former city of Tel Aviv, they'll be full of remorse.

Until the next news cycle.

Barone Speaks

I had the pleasure of attending the Independence Institute's Founders Dinner last night. The Institute has been around for 21 years now, and this was a chance for a relative newcomer like myself to get acquainted with a prior generation of conservative and free-market activists, people whose names aren't so well known outside those circles. In part, this is because they were the change, starting their work during a period of high-profile Democratic governors and senators such as Dick Lamm, Tim Wirth, and Gary Hart.

On display was some of the best-known local talk radio talent, including Mike Rosen, Jon Caldera, and John Andrews. Andrews was presenting an award to Ralph Nagel, local architect-turned-campaign donor, and when he finally got to speak, he took it out on Daniel Liebeskind, somewhat to the bewilderment of the assembly.

But the highlight of the evening was Michael Barone. Barone has only recently emerged as a conservative writer, having had to develop his career hiding in the tall grass of the Washington Post editorial page, but his literally encyclopedic knowledge of gives him the tremendous advantage of being able to take the long view.

Certainly he got off the best line of the night, when discussing the effect of Hurricane Katrina on the administration's image. While pointing out that it was primarily the local and state governments that had failed, he suggested that we grade them on a curve because,

they had the same original handicap as Haiti: a legacy of slavery run by the French, which is very difficult to overcome.

Baron's basic point is that as we move to a post-Industrialist economy, we will also move to a more decentralized society, and that it's up to us, the free-marketeers and those with respect for the founders, to make sure that our governmental institutions also reflect that shift.

November 15, 2005

1925 This Ain't

As his contribution to this week's Carnival of the Capitalists, the Prudent Investor takes the Fed to task for deciding to stop publishing M3 data. This Austrian blogger believes that 1) the M3 has been expanding at rates that should indicate a strong market in wheelbarrow futures, 2) the Fed is engaged in the beginnings of a coverup that will hide this fact, destroying all US economic forecasting, and 3) the US government bombed the Pentagon on 9/11 to justify a Nazi-like takeover of the country.


You know how we used to talk about the "Vietnam Syndrome," how every war was another Vietnam? Apparently, for some Mittel-Europeans, every large-scale terrorist assault followed by the response of a healthjy society, combined with normal governmental activity, is another Anschluss. No doubt the incipient hyper-inflation is merely another step in Hermann von Rumsfeld's plan for a New American Century fund.

It would help if more than about 1% of his analysis were grounded in fact. Bernanke wants to expand transparency of the Fed's decision-making process, the money supply isn't expanding like a Guth-universe, and Barbara Olsen actually died when her plane hit the Pentagon. Then again, any government capable of turning the Pentagon into the set of Capricorn One could probably fake these numbers more easily then just not publishing them.

What's that point #2 again? The money supply isn't running out of control? Well, not entirely.

Here are the year-over-year graphs for M1 and M2:

And here's the year-over-year for M3:

Sure, it's higher than growth, but by historic levels, it's not particularly high, and through the low-inflation 90s, its margin compared to GDP growth was much higher than it is now.

Where's the extra growth coming from? Here's the Fed's definition of the M3:

M3: M2 plus large-denomination ($100,000 or more) time deposits; repurchase agreements issued by depository institutions; Eurodollar deposits, specifically, dollar-denominated deposits due to nonbank U.S. addresses held at foreign offices of U.S. banks worldwide and all banking offices in Canada and the United Kingdom; and institutional money market mutual funds (funds with initial investments of $50,000 or more).

And here are the M3-specific components:

Which one of these things is not like the others? Why, it's large-denomiation (read: institutional) time-deposits! That's where the M3 growth is coming from. Companies with too much cash, looking for places to invest. There are some signs that inflation could become a problem, including high metals prices, some evidence from the price indices, and lots of purchasing- and supply-manager survey data. But the money supply itself doesn't look like it's flying off into space.

November 14, 2005

The Carnival of the Capitalists

...goes back to school, with a whole lot of assigned reading.

After dinner, let's head down to the Corner for a few games of 8-ball, though, huh? The library'll still be there when we get back.

November 13, 2005

Haveil Havelim

So it turns out that with about 2 minutes to go until sundown, I discovered I was short of dog food, and wouldn't have enough to get the big guy through Shabbat. It was suggested that I go get enough for the dog's breakfast and dinner from some friends, but I couldn't.

You're not allowed to be mikibble on Shabbat.

And with that, on to this week's Haveil Havelim. I had a hard time deciding whether some posts belonged in the Israel section or the Archaeology section, an occupational hazard when dealing with a country with so much history, so close to the surface, I suppose.

In addition to the submissions, I've added a few postings from other Jewish blogs I read. These postings aren't necessarily an endorsement of their opinions, but you may take them as an endorsement of the blogs themselves.


Israel Perspectives finds immediacy in history at Latrun.

Shiloh Musings lets us know that the Vatican has its eyes on a prime piece of historic Jewish real estate.

Mirty draws attention to readin' and writin', 10th Century BCE-style.

Israel & The Middle East

Chayyei Sarah explains why government offices need to treat immigrants differently from tourists.

Uber-Haveil Soccer Dad has some thoughts about the New York Times of Israel, and exactly how apt that appellation is.

Daled Amos notes that the Palestinians lead the Iraqis in one important category.

Samizdat has a suitably depressing take on the state of Israel's political parties, sparing no one.

CosmicX suggests that Shimon Peres may not be the loser we all assume he is, despite the similarity between his general election record and that of the Buffalo Bills in Super Bowls.

IRIS blog has collected a bunch of links that point to more Islamic influence in the French riots than we may have thought.

And TheRaphi has some friendly suggestions for the French on dealing with their Muslim populations.

Religious Stuff

Out of Step Jew revisits a great article by Haym Soloveitchik, and wishes the tenor of the debate were a little more contructive and respectful.

Judith Plaskow's Standing Again At Sinai has inspired quite a debate over at Western Jew.

And Modern Orthodox Woman notes some changes on women's roles in the Orthodox community.

Me-ander meditates on Parshah Lech Lecha, and has some comparisons between Abraham and Ruth.

The 37th Tzaddik has some fairly high-level discussion of what happens after you die. Warning: Hebrew required.

For those of you contemplating yet another schism, On the Main Line has some thoughts on Karaism.

Jewish Book Month

A Whispering Soul notes that it's Jewish Book Month, and has some personal favorites to suggest.

A Simple Jew has the story of some books from a Judenrein shtetl, the last living remnants of that place.


Elie continues Aaron's Story, at the halfway point of saying Kaddish.

Gadol Hador signs off.

And let's finish with a little poetry from Musings of a Jewish Soul.

Haveil Havalim (The Jewish/Israeli blog carnival) can also be found at The Truth Laid Bear's ÜberCarnival.

That's One Dysfunctional Family

According to the Rocky Mountain News, more and more Westerners think of wildlife as "family." Right. Except family don't normally think of each other as dinner.

Look, my dog is family, a companion. That bobcat shadowing me to make sure I don't get too close to her real family, not so much. CSU professor Mike Manfredo, who seems to be a last bastion of common sense in academia, is quoted extensively:

CSU professor Mike Manfredo, who headed the study, said 50 years ago when there were a higher number of people living in rural areas, the majority probably believed in hunting wild animals.

But as more people moved into the state, often from large U.S. cities, the number holding those beliefs began to change.

Television shows that foster concern and even familiarity with wildlife by those who may never go into the country contribute to the trend, Manfredo said.

The study even found some people who said if there was an accident involving a human and an animal, they would help the animal first.

The reason for the change in attitude, Manfredo said, is the people moving into western states come from highly urbanized areas, usually with higher personal incomes, and have attitudes more opposed to the traditional values of hunting and fishing.

This kind of romanticizing of wildlife is what leads to biopics like these. That these "activists" were probably dumber than the average bear doesn't seem to have diminished peoples' sympathy for them. This wasn't "tragic," except maybe as an indictment of their local public education system.

But it's not just that they've been inculcated with post-modern a-dog-is-a-boy-is-a-fish-is-a-mosquito attitudes. It's also the hair- and consciousness-raising experience of running into an animal without a plexiglass wall or a chain-link fence to help you out. People who have to deal with real bears on a regular basis tend to take a somewhat dimmer view. And in places where the bears have figured out that we're as scared of them as they are of us, it's starting to get testy again.

Just for fun, here's the data from the survey (not given online), with the remainder taking either a live-and-let-kill approach, or just not caring:

New Mexico35.231.93.3
North Dakota46.115.530.6
South Dakota49.915.134.8

And just for fun, I charted the difference between the bubbas and the pooh-bears against the state-by-state margin for Bush vs. Kerry:

There's an old joke that goes like this. The local government of Alberta, or Montana, or someplace where easterners go to indulge their fantasies, issues a bulletin. They advise backcountry hikers to wear bear bells to warn bears that they're coming, and to carry pepper spray for any bears that don't take the hint. They also suggest that you can tell black bears and grizzly bears apart by looking at their droppings. Black bear droppings are small and have seeds in them. Grizzly bear droppings have bells and smell like pepper.

These results shouldn't surprise anyone, especially someone who know what a pheasant hunt looks like, and that you don't crawl around on your belly to hunt deer. But it does seem to suggest a connection between understanding reality and having to deal with it on occasion.

Egypt Opposes Democracy - State Department Disappointed

Egypt has torpedoed a US diplomatic initiative to expand democracy in the Middle East:

In a surprise move, Egypt, which accounts for more than half the Arab world's population and is the second-largest recipient of U.S. aid, derailed the Forum for the Future by demanding language that would have given Arab governments significant control over which pro-democracy groups would receive aid from a new fund.

Fortunately, the US let the conference break up without agreement, rather than cave to Cairo on this one.

Why, oh why do we continue to believe that despotisms will ever support efforts to undermine them? I'm sorry, Mr. Morris, but the more Condi Rice acts like Brent Scowcroft, the less she looks like a President.

November 11, 2005

LPR Friday

Blogging today will be light to non-existent, as I will be attending an LPR meeting today, at a remote location where wifi is either a distant dream or a lurking nightmare, depending on your point of view.

In the meantime, Charles Krauthammer shows that, no matter how brilliant a psychiatrist he is, and no matter how incisive he is about the Middle East, he and his keyboard shouldn't be allowed anywhere near economic issues.

In promoting his idea for a (basically unenforceable) $3 floor for the pump price of gasoline, he claims

It makes infinitely more sense to reduce consumption, drive the world price down and let the premium we force ourselves to pay at the pump (which begins the conservation cycle) go to the U.S. Treasury. If the price drops to $2, plow that $1 tax right back into the American economy by immediately reducing, say, Social Security or income taxes.

The beauty of a tax that keeps gasoline at $3 is that it obviates the waste and folly of an army of bureaucrats telling auto companies what cars in which fleets need to meet what arbitrary standards of fuel efficiency. Abolish all the regulations and let the market decide. Consumers are not stupid. Within weeks of Hurricane Katrina, SUV sales were already in decline and hybrids were flying off the lots.

As though this Congress, or any Congress, would use extra revenue to reduce other taxes. As though the price of gas doesn't seep into every other item we buy. As though the very last sentence, the part about consumers not being stupid. doesn't proves that you could get rid of the CAFE-bureaucracy right now, without any new tax.

And then, there's the irony (already noted), in pushing for a mandated price in order to "let the market decide."

Have a nice weekend. Go for a drive someplace. See you Sunday.

November 9, 2005

Iran: Worse Than You Think

How is that possible? Well, it turns out that the conference at which the Iranian President declared his intention to, uh, redraw the map of the Middle East has a website. I admit, I'm at something of a disadvantage here, since most of the juicy bits are in either Arabic or Farsi, but they do have an English section.

Now, the English section doesn't actually have much English, which ought to be a tipoff that we're not likely to get the subtle, nuanced, witty political discourse of Jonathan Swift or Chuck Schumer. Instead, we get a lot of cartoons and pictures. Now admittedly, the state-sponsored conference & rally garnered fewer people that typically show up when a guy with a bullhorn yells "panty raid" at a frat party, but this is what the Iranian government wants you to know about them:


OK, ready?

First of all, anyone care to tell me now that anti-Zionism isn't anti-Semitism? The Jewish noses all look like they were borrowed from Jimmy Durante, and I haven't seen that many black coats since, well, shul this weekend, which is kind of the point. Moreover, the Jews-not-in-uniform are all religious Jews - haredi - as though that were the driving ideology of Zionism. Aside from the endless irony of that assertion, what on earth is going on here?

These are Jewish representations, that have nothing whatever to do with the secular Jewish state and parties that runs the show. Now, maybe the mullahs just have an affinity for guys with beards dressed in black caftans, but by picking religiously Jewish symbols, they make it clear who exactly in their eyes is providing the intellectual backing for Israel. They make Judaism their enemy, and legitimize attacks on Jewish targets all over the world. So when it comes to criticizing Israel without being anti-Jewish, apparently that memo wasn't written in Farsi.

The other message is that War on Israel is all about the kids. But only very special kids. White ones. How many Arab kids have you seen with freckles? Now we know what's substituting for all those English words they left out. And for those of you who still think that the Religion of Peace is also the Religion Without Racism, check out this winning entry from a government-sponsored contest on, ahem, "Justice." (Speaking of Justice, or rather, not speaking of it, those crickets you hear are the Jesse Jacksons, Al Sharptons, and Cynthia McKinneys.)

As a side note, the URL is right there on the poster. Here. Small print at the bottom. Evidently a little too small for most western reporters to read.

VC Gets Conservative?

Again, with the WSJ. They report this morning that VCs are starting to invest later in the business lifecycle, maybe the cocoon stage rather than the caterpillar stage. While seed- and early-stage investment has stayed about constant for the last 5 years, later-stage investment has tripled since 2000. Some of this is just investing leftover dot-com-boom cash that had been mouldering under the mattress, before the funds expire and close up shop (VC funds usually have a limited lifespan). They'd need to be able to get out sooner rather than later, and later-stage companies give them that chance.

Still, the traditional VC model has been kind of like Dave Kingman - no average, but lots of power. Maybe only one in ten, one in fifteen really pays off, but when it does, it's a 10- or 20-bagger. If this does represent a more conservative mentality, it may not bode well for those entrepreneurs. On the other hand, VC's are probably in that game because they like it. So this may be more of a cyclical phenomenon, and when new funds open up, they'll be there looking for the Main Chance again.

I'm not in VC myself, but so far, none of the more / high-profile / VC / bloggers has commented. Maybe they're out looking for the Next Big Thing.

UPDATE: Friday, I spoke with a VC friend of mine, who seemed to think is was both monetarily and psychologically psyclical. He had noticed the same thing in his own business, but also seemed to think that the change wasn't permanent - that new money would be pushed into startup and seed-stage companies, and that it would take a couple of big winners there to get the rest of the industry to follow suit.

So all isn't lost, but depending on where the business cycle is when that new money starts coming in, it may take a little while for the engine to get revved up again.

Ownership Society

The Wall Street Journal carries a story this morning about the benefits of homeownership - for poverty-stricken Latin Americans. Turns out that owning their own homes actually gives them a stake in the society and the motivation to take advantage of the liberalized economies:

The Argentine study followed 1,800 squatter families who in 1981 occupied a one-square-mile piece of what they assumed was public land. It had once served as a garbage dump. Through a quirk of the legal system, roughly half of the settlers in the heart of the neighborhood gained title to their properties, while the other half didn't. The researchers found that over the course of two decades, the title holders surpassed those without them in a host of key social indicators, ranging from quality of house construction to educational performance to rates of teenage pregnancy.


The investigators concluded that titles improved access to credit only slightly. Banks appeared to have a deeply ingrained reluctance to lend to the poor, in part because of the cost and difficulty of foreclosing in Argentina's legal system. But even without bank loans, they said, landowning families improved their homes substantially by squirreling away cash and doing the work themselves. Architects affiliated with the study concluded that homes on titled lots had sturdier walls and sounder roofs, were more spacious and had better sidewalks.

An accompanying study, co-authored by Mr. Di Tella, detected a difference in the attitude of landowners. They were more materialistic and individualistic, and more inclined to say that money was important to happiness, and that individual initiative leads to success.

The researchers found that landownership status seemed to make no difference in employment or income. But it did seem to affect the way residents spent their money, and their aspirations and expectations. The researchers figure that the children of the landowners could eventually earn significantly more than the children of the untitled.

The results aren't exactly counterintuitive, but every once in a while, it helps to be reminded that the system you believe in actually works.

A Week Late and Many Dollars Short

The state audit board released a report showing that the CU Foundation has been spending like drunken sailors, and that CU itself has few, if any structural answers to this mess.

Boy, I'm sure glad we didn't know about this before we voted for Ref C.

(Democratic) Party Like It's 1973

Harry Reid's tantrum the other day certainly reads like a bill of particulars in the court of public opinion:

The manipulation of intelligence, to sell the war in Iraq, Vice President Cheney is involved in that. The White House energy policy, that puts Big Oil ahead of the American consumer, Vice President Cheney is behind that. Leaking classified information to discredit White House critics, the Vice President is behind that. Halliburton, contracting abuse, the list goes on and it goes on. Certainly America can do better than that.

Leave aside that there's not a single sentence that's not demonstrably false. It doesn't matter. The Democratic Party is now attempting to create a series of unchallengable orthodoxies in the public mind. Iraq was a mistake, if not a moral obscenity. The war was conducted for Big Oil, and at the behest of corporate slavemasters. The Bush administration, having not found either hidden underground terrorist enclaves, and not found WMD, clearly told untruths during the runup to the war. Therefore, BUSH LIED about those things. What's that you say? We saw the same intelligence and came to the same conclusions? Well, then, Bush, er Cheney, must have manipulated the intelligence. From there, it's a short step to simply having lied us into war.

There's no question that the Democrats seek to fan a general discontent into a general rage. That this strategy will forfeit Iraq and make action against actual enemies like Iran, Syria, and North Korea all but impossible is beside the point.

Whether or not it comes to actual impeachment, the Democrats seem to think it's 1973 all over again. They can attack and either remove or neuter a Vice President (although it was easier then, since they had Agnew's fingerprints on the money envelopes), and then reduce a President to impotence or remove him. Then, as now, allies of good faith will be abandoned to barbarians. Then, as now, the Party has no strategy to confront an existential threat to the country.

Should they gain power in 2008, that will all too tragically obvious.

Virginia, Mother of Presidents

There's no point in pretending that last night was anything but a washout for Republicans. The race that everyone's pointing to is in Virginia, where Democratic Lieutenant Governor Tim Kaine beat Republican Attorney General Jerry Kilgore. I haven't been following my home-state politics all that closely, but everyone seems to want to read the morning coffee-grounds and turn this into a proxy national fight. Guru Larry Sabato says that they have a 50-50 chance of being right:

So what does this show? In two cases, the off-off year elections were indicators of the following year's political trends, and in the other two cases, they weren't. Please remember this unimpressive record of prognostication when you read the party press releases and the gee-whiz news stories next month. Here's the useless summary, based on history: The off-off year elections of 2005 may either be a harbinger of things to come in 2006, or they may not be.

What people miss is that Virginia has a one-and-done term limit, and that outgoing Democrat Mark Warner is extremely popular, having governed as a centrist. (Even liberals tend to govern as centrists in Virginia. It was First-Black-Governor-Elected-Since-Reconstruction-Doug-Wilder who signed a bill combining Lee-Jackson Day with MLK's birthday to make Lee-Jackson-King Day.) So people were voting for what they see as Warner Redux.

Yes, the race was a proxy, but not between Bush and whatever shrieking conspiracy theorist the Dems have making the rounds on Sunday morning this week. It was between Warner and George Allen. Kilgore is Allen's protege, and both Allen and Warner have presidential ambitons. (I think a Warner-Allen matchup in 2008 would be great fun. Virginia would probably end up being the swing state, and they could set up the debates at all those Civil War battlefields, just to remind people which side the Democrats were on back then.)

To the extent that Kaine's win validates the idea that a centrist Democrat can win in a state without a coastline, this is bad news for Hillary.

November 8, 2005

How Do You Say "Protection" In Arabic?

Yesterday's Wall Street Journal discusses the role of French Muslim groups in trying to calm the situation in Paris and around the country, and how they stand to enhance their status. While there's no evidence that they're actually inciting the rioting, that might be something to keep an eye on.

Everyone understands that the riots are fed - at least in part - by the insular character of these Muslim immigrant communities. But the Islamists, and indeed most mainstream Muslim leaders in Europe encourage that very isolation. In doing so, they'll be helping to perpetuate the situation that requires their aid. In the US, we call this sort of thing either "the welfare state," or "organized crime," and in France, it has an element of both.

If the French government finds itself relying on these groups to restore order, and in turn, taking their advice on how to treat the immigrants, it will only be encouraging a obviously dangerous trend, not solving the problem.

November 7, 2005

Rubicon And Us

I've finally posted my review of Tom Holland's Rubicon. It's a good book, but more importantly, there's a reason the Founders studied this period. Not for nothing was Cato one of the most popular plays of the day. I know people are tired of hearing this, but just because we don't need to read this stuff in Latin doesn't mean we don't need to read it at all.

What does this have to do with us? Well, no, it doesn't mean that money is the equivalent of Legions, and that therefore, McCain-Feingold is saving us from Octavian Redux. It does mean that federalism and separation of powers are a good thing. Not because of concentration of power per se, but because smaller offices are less tempting to ambitious men. And if you've got a lot of small offices scattered all over the country, it's almost impossible to dominate them all.

Secondly, there's the importance of citizenship and engagement. Before baseball, politics was the great participatory sport. We find it hard to believe, but read just about any contemporaneous account. Read Washington Irving, or Tocqueville, or Dickens, and they all say the same thing. And not just blowing smoke, but informed debate.

The danger of uninformed, selfish engagement without virtue is that you end up with a mob that's easily led or bought off. And the more the point of political engagement becomes to secure favors and money, the less it becomes about building a community. Which means it becomes passive, and then disappears altogether.

So how do these threats manifest themselves to us? Ah, that's for another post.

Holtzman v. Beauprez

Venturing back into the realm of the Group Political Blog, the Rocky Mountain Alliance is today launching Holtzman v. Beauprez, based on Salazar v. Coors and the grandaddy, Daschle v. Thune. Yes, it's hosted here, but it's not like I actually have any control over what gets posted. I do have some control over the layout, so look for some enhancements over the next couple of weeks.

As I mention there, we already disagree about this race, and nobody has yet come out with a formal endorsement. Given that the election itself is over a year away, we can all be thankful for that.

It will have a separate notifications list - although I'll probably be cross-posting all my relevant entries - so if you want to be on the HvB mailing list, let me know, and I'll add you to it.

Looks like it's going to be a close race, too, which should make for better copy.

November 4, 2005

Intifada Parisienne

Did you notice how the Israeli government hasn't issued any statements criticizing French police tactics?

Also, remember that it was in a Paris hospital that Arafat died. Trouble just seems to follow this guy around, doesn't it?

Marc Holtzman Is For Real

Michael, Ben, and I had a chance to sit down with Marc Holtzman yesterday, and I now understand why campaigns organize these things. All three of us were leaning towards Bob Beauprez; all three of us are now reconsidering that not-position.

I don't want to repeat their analyses, so I will just add my own impressions. First off, the campaign is clearly well ahead of normal schedule in terms of organization and ground game. Secondly, Marc really is an ideas guy. And third, there's the Internet: it's not just for email anymore.

I'll start with the ideas. Holtzman is a former VC and investment banker, and he's clearly applying that technical knowledge to the state's budget issues. His arguments in favor of securitizing the tobacco settlement are the kind a finance-type would love, citing interest rate spreads and long-term effects of health education, funded by, er, the tobacco settlement. He makes a strong case that the state will never get a better deal than the one it can get now, and putting that money away to retire debt or for a rainy-day fund can be part of a structural solution to the budget problems.

He also talks about securitizing other state assets such as real estate. His example is the highly-successful REIT that Tony Blair launched in Britain, based on Public Health Service properties. The problem is that politically, it's already been charicatured as selling off the State Capitol, and he'll need to find specific, goofy examples of property that the state owns. I'm sure they're out there.

By comparison, a number of Beauprez's answers seemed sincerely conservative but not yet a governing program. He'll have to come up with something that fits that bill.

As for the ground game and technology, the campaign is impressive. They're already well ahead of where a campaign normally is, in terms of counting heads going into the convention. Holtzman also talked about using a VOIP conference-call technology that captured hundred of voters for over 45 minutes. Cool stuff.

Holtzman is clearly positioning himself as the non-establishment candidate, recalling Ronald Reagan's visit to Republican Party headquarters in 1977. (The Rockefeller Republicans running the party stiffed him. They paid for that later.) So internal rebellions can happen. But the more common career path for a party insurgency is the Howard-Dean-Mike-Miles trajectory.

The good news, from Holtzman's point of view, is that he's a much more substantial candidate than Miles ever was, and a much more serious person than Howard Dean. And while Dean counted on college students in Iowa, Kerry had organization. We know how that one turned out.

Stay tuned folks, this one's just getting started,

November 2, 2005

If You Don't Pass This Bill, We'll Shoot This Blog

The Online Freedom of Speech Act, designed to protect blogs and the Internet from the predations of McCain-Feingold, failed to make it out of the House this evening. Hat tip: Powerline, although it appears that this was a procedural motion to suspend certain House rules in order to move the bill along. The motion got a majority, but not the super-duper-majority (with acknowledgements to Arlen Specter) that it needed.

Colorado's delegation voted 5-2 for it, with only Diana DeGette voting against, it, presumably because it doesn't prevent blogs from price-gouging.

Oddly, the other "no" vote came from the very conservative 5th-District representative Joel Hefley. What's up with that?

Referendum C - What Went Wrong, Where Do We Go?

With Referendum C passing by about 52-48 yesterday, TABOR limits are essentially repealed for the next five years. Regardless of what proponents say (and don't those proponents just say the darndest things?), the money can be used for anything, anywhere, anytime they like. However, the baseline income tax rate will be reduced in five years, and barring any new referenda, TABOR limits will also return then. Naturally, the fear here is that a psychological boundary has been crossed, one that will make it easier to pass new taxing and spending measures in the future.

What Went Wrong? Basically, this loss was a comprehensive, although not massive, failure of Republican and fiscally conservative leadership in the state. Once the Governor gave the game away by not coming up with effective counterproposals, we couldn't count on a unified Republican response. Despite this, the measure still only passed by 4 points statewide, which means that the argument was not only winnable, it was almost won.

The remaining state leadership - the House Republicans, John Andrews, the Independence Institute, and the Club for Growth, failed to work together effectively. Each group maintained its own websites, its own financing, its own commercials, and its own message. One example: I had no idea where to get lawnsigns or bumper stickers. I live on Monaco effing Parkway for crying out loud. You don't think that getting a few thousand cars a day to see a yardsign on private property would have made some difference? When your entire morning commute consists of Red-Yellow-and-Blue-plastered medians, a certain sense of inevitability begins to set in. Even a few black-and-gold signs along the way would have reminded people that it wasn't a thought crime to oppose a tax hike.

Secondly, while political and academic debates about why an idea is bad are terrific for party and ideological health, they're death-on-a-stick for a political campaign, especially one about a ballot measure. A simple irrefutable message, endlessly repeated, is far more effective. That would have required an umbrella organization like the Pro-C forces had, one that could have coordinated immediate responses to Pro-C tactics, and would have reminded those non-profits (and their donors) that they're better off building grass-roots support for their projects than spending money on lobbyists.

And finally, an umbrella organization would have required political leadership to take the helm here. Look, Jon Caldera's a bright guy, but didn't it occur to anyone (other than maybe Caldera) that having the libertarian leader of a think tank be the main spokesman for a Republican cause wasn't the best job fit, as they say? Think tanks are for ideas; they provide intellectual capital, they shouldn't be spending it in advocacy. Can anyone imagine the head of the Heritage Foundation, or the Claremont Institute, or the Manhattan Institute, or the Hudson Institute, or the Hoover Institute, leading a political campaign? The point here isn't to "influence the debate," it's to win the vote. Too many people saw a chance to make headlines, and as a result, we lost the campaign.

So how do we keep a TABOR defeat from turning into the catastrophe we're all afraid of? Long-term planning. If we're afraid of long-term programs building in a structural need for higher taxes, we need to point it out loud and long when it happens. This requires a combination of a legislative, executive, and political program, and it requires years of coordinated effort. It requires a legislative leadership willing to push for changes in how accounting it done, and it requires a governor willing to keep his promises on how the money is spent. And it requires groups like Claremont, the Independence Institute, and the Club for Growth to agree on how to measure this spending.

First, money is fungible. Part of C requires a report on how the extra money is being spent. In the real world, that's called a "budget," but in the new political culture of the state capitol, it will be an excuse to take all sorts of new programs, put them under the budget, and take all sorts of old education-roads-research spending and count it under "new money."

The Republican legislative leadership needs to begin drafting legislation, now, today, to make sure that doesn't happen. If they can't they need to issue their own annual reports conforming to those standards. And the governor need to show a little spine and veto spending bills that don't meet the standard, either. So he loses the override? Too bad. If Owens wants to keep next year's Republican nominee from running against his legacy, he needs to show that the party still stands for fiscal restraint.

Secondly, long-term Fiscal Notes. Right now, any piece of legislation requires a 2-year Fiscal Note, an estimate of its spending and revenue effect on the state. Stretch that to 5 years, to put it into the context of a re-TABORed budget. Then the storyline always becomes the effect on the budget after the new rate comes into effect. You think this isn't powerful? Wait until every new budget item is accompanied by a paragraph about how much more money they'll need to keep it going.

When the Democrats complain that 5 years is too long to estimate budgetary effects, remind the public that 1) they were the ones who sold a 5-year plan in the first place, and 2) businesses do it all the time, when valuing companies or evaluating new projects.

Third, compile 5-year budget estimates. This shows the overall iceberg before we hit it, and is the mirror of the Govnernor's Favorite Chart, showing exactly those projects in order to sell Ref C.

Finally, Porkbusters, Colorado-style. If Porkbusters can scrutinize the federal budget for bridges to nowhere, surely we can do the same here.

Fine, we lost the vote, now we have to deal with the consequences. The question is, are we willing to build for the long-term, in order to avoid the fiscal mess Ref C makes possible?

November 1, 2005

Why Refs C&D Are Like Passover

Passover is a expensive holiday that demands extensive preparation. So a lot of people (usually with a lot of money) decide to go away to a Pesach program, at a hotel, and Leave the Kashering to Them. Some friends of ours run such a program, and were kind enough to have us as guests a few years ago.

The logistics of preparing a tour like this are complex. Not only is there the catering, but also the kashering of the kitchen, the programming, setting up a synagogue in the hotel, programming, children's programming, arranging local tours, and so on. Families want special rates. They need special room arrangements for wheelchairs. Some people arrive in the middle, some people leave in the middle, and some families partially arrive in the middle, and want rooms near each other. D-Day took less preparation.

Now, these programs are pretty expensive, especially for a family. A family of four can easily spend $30,000 on such a trip, and some families do it every year. Which means that when things go wrong - and they always do - people complain. As my friend Avi put it, "when you're paying $30,000 for a vacation, every meal is a $30,000 meal, because that's the number they remember."

And that's where C&D come in. When we were interviewing Bob Beauprez, he recalled a conversation with the police department in Delta, and how desperate they were for their piece of that $3.7 billion. "How much of that do you really think you're going to get?" he asked them, in a conversation since repeated a few hundred times. "I think they thought they were getting the whole $3.7 billon."

In fact, since nobody really knows how much they're going to get, $3.7 billion is the number they remember. So every slice, every nonprofit, ever fair-to-middle Montessouri school in the middle of Montrose turns into Mr. Berger, Esq, from Manhattan, and his family of five. Just as every seder turns into a $30,000 meal, and every broken TV remote turns into a $30,000 call to the hotel staff, every non-existent allocation turns into $3.7 billion.

Remember, there is abosolutely nothing statutory about where this money gets spent, how it gets spent, or who gets to see it. Legislatures can't bind their successors that way. The C&D proponents simply dangled this $3.7 billion number in front of these guys, and they all figured they're get a generous helping. They foolishly looked at the long list of advocates, and thought this must be a good thing. In fact, tonight, if C passes, every name on that list makes each piece that much smaller.

When those guys who put their names on the line for $3.7 billion get a check for $5,000, they're going to be more than a little disappointed. And no, don't expect them to have second thoughts about the process. Expect them to ask for even more money.

Which just goes to show that generous non-profits can be just as short-sighted and selfish as anyone with retained earnings.


Power, Faith, and Fantasy

Six Days of War

An Army of Davids

Learning to Read Midrash

Size Matters

Deals From Hell

A War Like No Other


A Civil War

Supreme Command

The (Mis)Behavior of Markets

The Wisdom of Crowds

Inventing Money

When Genius Failed

Blink: The Power of Thinking Without Thinking

Back in Action : An American Soldier's Story of Courage, Faith and Fortitude

How Would You Move Mt. Fuji?

Good to Great

Built to Last

Financial Fine Print

The Day the Universe Changed


The Multiple Identities of the Middle-East

The Case for Democracy

A Better War: The Unexamined Victories and Final Tragedy of America's Last Years in Vietnam

The Italians

Zakhor: Jewish History and Jewish Memory

Beyond the Verse: Talmudic Readings and Lectures

Reading Levinas/Reading Talmud