Don’t bet the farm on it.

Europe’s Food Poisoning Outbreak: Reaping What It Has SownEurope’s Food Poisoning Outbreak: Reaping What It Has Sown

by Henry Miller

Northern Europe is in the throes of a record-setting outbreak of potentially fatal food poisoning that has caused serious illness in more than 1,200 and killed 16.  The pathogen is a virulent strain of bacteria called enterohemorrhagic E. coli.  This enterohemorrhagic E. coli can cause severe gastrointestinal and systemic disease, including hemolytic-uremic syndrome leading to kidney failure and death.  The source of the bacteria is still unknown, but fresh cucumbers, tomatoes or lettuce are the prime suspects.

Modern farming operations — especially the larger ones — employ strict standards and safeguards designed to keep food free of pathogens. But growers of fresh produce cannot ensure that their harvests will be completely safe all the time.  During the past few years, the American food supply has experienced a number of high-profile incidents of contamination of beef, fresh produce and processed foods, including Mexican peppers, California lettuce and peanuts from a Georgia processing plant.  Federal officials have expressed concern: “We recognize that we have reached a plateau in the prevention of foodborne disease, and there must be new efforts to develop and evaluate food-safety practices from the farm to the table,” said Robert Tauxe, the deputy director of the CDC’s Division of Foodborne, Bacterial and Mycotic Diseases.

Because agriculture is an outdoor activity and subject to all manner of unpredictable challenges, there are limits to how safe we can make it.  If the goal is to make a cultivated field completely safe from microbial contamination, the only definitive solution is to pave it over and build a parking lot on it.  But we’d only be trading very rare agricultural mishaps for fender-benders.

Nor can we rely on processors to consistently make food pathogen-free.  A 2006 spinach-based outbreak of food poisoning demonstrated that our faith in processor labels such as “triple washed” and “ready to eat” must be tempered with skepticism.  Processors were quick to proclaim the cleanliness of their own operations and deflect blame toward growers.  Finger-pointing aside, every link in the food chain shares responsibility for food safety and quality.

Risks of the trade

Chinese agency accuses U.S. of ‘already defaulting’

by agence france-presse 

A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order.

“In our opinion, the United States has already been defaulting,” Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.

Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies — eroding the wealth of creditors including China, Guan said.

Guan did not immediately respond to AFP requests for comment.

The U.S. government will run out of room to spend more on August 2 unless Congress bumps up the borrowing limit beyond US$14.29 trillion — but Republicans are refusing to support such a move until a deficit cutting deal is reached.

Ratings agency Fitch on Wednesday joined Moody’s and Standard & Poor’s to warn the United States could lose its first-class credit rating if it fails to raise its debt ceiling to avoid defaulting on loans.

A downgrade could sharply raise US borrowing costs, worsening the country’s already dire fiscal position, and send shock waves through the financial world, which has long considered US debt a benchmark among safe-haven investments.

China is by far the top holder of U.S. debt (not counting the FED) and has in the past raised worries that the massive U.S. stimulus effort launched to revive the economy would lead to mushrooming debt that erodes the value of the dollar and its Treasury holdings.

Beijing cut its holdings of U.S. Treasury securities for the fifth month in a row to US$1.145 trillion in March, down US$9.2 billion from February and 2.6% less than October’s peak of US$1.175 trillion, U.S. data showed last month.

Foreign ministry spokesman Hong Lei on Thursday urged the United States to adopt “effective measures to improve its fiscal situation”.

Dagong has made a name for itself by hitting out at its three Western rivals, saying they caused the financial crisis by failing to properly disclose risk.

The Chinese agency, which is trying to build an international profile, has given the United States and several other nations lower marks than they received from the the big three.

Beyond Gas

Oil is "Lifeblood" of U.S. Economy

by Mark Perry

Less than 46% of each barrel of crude oil gets processed into "finished motor gasoline" according to the EIA. So what gets produced from the other 54% of each barrel of crude oil?  
You can find the details here, but the list includes aviation and jet fuel, kerosene, lubricants, waxes, asphalt, dyes, athletic shoes, crayons, car tires, cosmetics, and plastics that are used in appliances, toys, flooring, computers, desks, carpeting, automobiles and medical equipment (syringes, artificial joints, prosthesis, catheters, hearing aids, artificial corneas, etc.).  
As ExxonMobil's Ken Cohen concludes, "When some politicians, celebrities and even other companies talk about getting “off oil,” [MP: Or raising taxes on "Big Oil"] I hope they realize what that would really mean for our way of life – because it might make them think twice."

America’s Last Acceptable Prejudice

Hating Boomers

By Leonard Steinhorn

So now we can finally point the finger at those truly responsible for the sex abuse scandal in the Catholic Church. No, it’s not the priests who actually exploited the young children entrusted to them. Nor is it the bishops themselves, many of whom looked the other way and willfully ignored the signs of dysfunction in their church.

Thanks to a new report released by the United States Conference of Catholic Bishops, we now have a group of people singularly deserving of blame: baby boomers.

Yes, baby boomers, the new piñata for all the problems we have in society today. Or as the New York Times put it, the Church has decided to put forth a “blame Woodstock” defense.

By now we can pretty much dismiss any excuse Church leaders offer as yet another acrobatic attempt to rationalize a demon the hierarchy should have honestly addressed long ago. Displacement of blame seems to be Church practice these days.

More interesting is that the Church chose to hold the baby boom culture of the Sixties and Seventies responsible for its problems. It’s a very clever ploy not because it’s right, but because hating boomers has become the last acceptable prejudice in America – and the Church probably figures it can get a bit of a free pass in the blame game by riding this anti-boomer sentiment for all it’s worth.

Perhaps Church leaders took their cue from New York Times columnist, Thomas Friedman, who calls boomers a generation of “hungry locusts”whose penchant for excess and self-indulgence disrespects the sacrifice of their self-effacing parents.

Or perhaps the bishops found inspiration from Indiana Governor Mitch Daniels, who describes boomers as “self-centered, self-absorbed, self-indulgent, and all too often just plain selfish.”

Or maybe they were reading the columnist George F. Will, who regularly bashes boomers, saying they are a generation steeped in “moral vanity” and “narcissism” and claiming that the only thing serious about the boomers is their “own self-flattering estimate of their seriousness.”

Or perhaps they picked up on the many anti-boomer headlines written by snarky journalists, as in “A generation learns that the world doesn’t revolve around it anymore” (Washington Post) or “Boomers hit new self-absorption milestone” (New York Times).

Indeed the bishops didn’t have to go far to find their boomer villain. Liberals and conservatives, left and right all seem united on this: boomers are to blame for whatever has gone wrong in America. And all the good things in our country today? According to these critics, boomers had nothing to do with them even though they like to take all the credit, which is yet another sign of their vanity and narcissism.

Last year the conservative group Citizens United produced a film,Generation Zero, blaming boomers for the Wall Street financial crisis. The film, according to Citizens United, shows “how the mindset of the baby boomers sowed the seeds of economic disaster that will be reaped by coming generations.”

Okay, so let’s hold boomers responsible for the worldwide credit crisis.

Back in the early 1980s, before the bulk of boomers started raising families, they were said to be too selfish to have kids. Then, when boomers turned out to be pretty good and selfless parents, they were accused of getting too involved in their kids’ lives.

Boomers have been accused of creating cultural chaos through moral relativism. Then, when boomers came of age and declared that bigotry of any kind was immoral in America, they were accused of being politically correct.

Boomers have been derided as Yuppies living in a state of Transcendental Acquisition even though the 1984 Newsweek Magazine article that spawned this caricature acknowledged that only about two percent of boomers fit the description. Of course the Greatest Generation had its “keeping up with the Jones” cohort and many of their Roaring Twenties parents lived lives of “conspicuous consumption,” but only boomers get tarred with this unflattering stereotype.

Today the critics point their venom at boomers simply for being alive. As a demographically huge generation that will live long because of medical advances, boomers are being pilloried in advance for eventually bankrupting America through Social Security and Medicare. Rarely are these accusations thrown at those older than boomers, who squawk every time legislators propose cuts in their cost of living adjustments.

Boomers have pretty thick skin and take all this hostility in stride. They’ve been through worse. Millions went off to fight a pointless and duplicitous war created by their elders, and millions more took all the slings and arrows from that elder generation as they protested the pointlessness and duplicity of that war. To the horror of their scolding parents, boomers willingly dated across ethnic lines and ushered in a culture in which gay did not mean closeted.

Nor do boomers really need credit for raising the most inclusive and least prejudiced generation in our nation’s history. Or for building a society unprecedented in its equal rights for minorities and women. Or for flattening hierarchies and opening up society for people to express themselves without fear and shame. Or for creating a nonprofit sector far greater in reach, scope, and impact than we have ever seen before. Or for advancing environmental awareness so that we now consider the green consequences of economic progress.

Boomers are comfortable with these accomplishments and don’t need to justify them.

The irony, of course, is that in pushing so hard to free America from its overt, covert, public, and genteel prejudices, and in stepping on so many toes in the process, boomers left themselves open as an all-purpose target of blame.

But boomers are moving into their twilight years. So if in the decades ahead there’s another sex abuse scandal or financial collapse or unforeseen misfortune, who will we blame then?

If it pays, it stays

Shoot an Elephant, Save a Community

by Terry Anderson

When GoDaddy CEO, Bob Parsons, posted a video online of himself shooting an elephant in Zimbabwe, he unleashed a stampede of criticism. The hunt, which took place in March, resulted in the killing of a problem bull elephant found raiding farmers’ crops. People for the Ethical Treatment of Animals (PETA) discovered the video, plastered it all over the web, and dropped their account with GoDaddy—a web hosting service—urging others to follow suit. NameCheap, a rival web company, persuaded more than 20,000 GoDaddy customers to switch their accounts by pledging to donate a portion of its revenue to the nonprofit Save the Elephants.

Such emotional activism on behalf of elephants is understandable. But whether PETA’s activism goes beyond rhetoric to achieve results—like more elephant habitat and more elephants—is another matter. Unfortunately, environmental groups such as PETA are too often long on rhetoric and short on results.

Like many environmental groups, PETA is all about the "anti." In this case, it is anti-hunting. Its supporters rally against causes with easily identifiable "bad guys" such as corporations and hunters like Bob Parsons. While such good-versus-evil narratives are useful for garnering financial support, they ignore the complexity of human-wildlife conflicts in Africa and the role of property rights and local management in resource conservation.

Seldom does PETA advocate for more practical but less emotive "pro" causes such as wildlife habitat, community resource management, or higher incomes. As a result, it neglects solutions such as devolving wildlife management to the local level, where the people living with the costs of wildlife can find ways to profit from sustaining the habitat and the animals. Where property rights to wildlife have been assigned to local communities—either through explicit institutional reforms or innovative entrepreneurship—Africans have proven that private ownership means resources stewardship.

Parsons’ hunt epitomizes results rather than rhetoric and shows how active conservationists can help both people and wildlife. In Parsons’ words, "This farmer was desperate. He couldn’t get the herd out of his field. He asked us to come and deal with it." Parsons’ video, albeit distasteful at times, reveals the cold reality of conservation in Africa. Wildlife imposes real costs on the nearby communities. Achieving results means involving these communities in wildlife management and providing them the right incentives to protect wildlife and its habitat.

PETA’s anti-hunting rhetoric fails on both counts. Anti-hunting groups succeeded in getting Kenya to ban all hunting in 1977. Since then, its population of large wild animals has declined between 60 and 70 percent. The country’s elephant population declined from 167,000 in 1973 to just 16,000 in 1989. Poaching took its toll on elephants because of their damage to both cropland and people. Today Kenya wildlife officials boast a doubling of the country’s elephant population to 32,000, but nearly all are in protected national parks where poaching can be controlled. With only 8 percent of its land set aside as protected areas, it is no wonder that wildlife in general and elephants in particular have trouble finding hospitable habitat.

After Kenya banned all hunting in 1977, its population of large wild animals declined between 60 and 70 percent.

For the landowners who bear the costs of wildlife, the decision of whether to protect wildlife is a simple one: if it pays, it stays. The ban on hunting gives wildlife little or no economic value, causing rural Africans to view wildlife as a liability to be avoided rather than an asset to be protected. As a result, landowners have increasingly turned to agriculture instead of habitat protection, which decreases available habitat and increases the potential for human-wildlife conflicts.

The social role of scavengers

What the Turks Can Teach Us about Recycling

by Doug French

After battling the teacher's union in Wisconsin, that state's governor, Scott Walker, proposed a state budget that would have eliminated mandatory recycling. The outrage came fast and furious. An editorial at TheJournalTimes.com began with:

"Recycling has developed into a service too valuable to toss on the scrap heap.

Some officials worry Wisconsin communities will revert to a sort of Wild West dumping ground if Gov. Scott Walker's budget passes as is. Under the plan, subsidies for local recycling programs would end and municipalities would no longer be required to run those programs."

The editorial went on to say: "recycling is cleaner than garbage, trims energy use, creates jobs, and keeps tons of waste from ending up in landfills."

The governor quickly folded his plan when he failed to get the backing of key Republican lawmakers, who said his plan goes too far. So Wisconsin residents can look forward to sorting and separating their paper, plastic, and cans under the thumb of Wisconsin authorities. It's now radical to believe that people should just throw unwanted items away. To allow people to do this is "going too far."

Forcing people to spend time separating garbage turns the division of labor on its head. Wisconsin residents could hire specialists to come to their homes to separate the garbage, but that would be costly and inefficient. Plus, the government mandate gives no consideration to which materials have value in the scrap market.

As Wisconsin's Governor Scott Walker learned the hard way, it's now radical to believe that people should just throw unwanted items away.

So while in certain cities of the United States, people are forced to sort through their own garbage, in a number of places in the world, residents throw away their trash with no worries. The trash will be sorted and removed by the estimated 15 million waste pickers in the world.

Spend any time in Istanbul and you see(mostly) men pulling what look to be large canvas bags strapped to steel frames on two wheels. They are everywhere — residential and commercial areas.

Before the municipal garbage trucks pull up to empty trash bins, these waste pickers comb through the trash, pulling out paper, plastic, glass, or anything else they know they can sell. The typical garbage collectors reportedly earn from 50 to 100 Turkish lira a week.

But there is considerable upside depending upon what a picker may find in the trash.

In the words of one trash picker,

"Every garbage can contains a new dream. You go to a garbage bin. You dip your hand inside, and you start dreaming about what you might find. Perhaps it will be something valuable. And if you don't find it in this bin, you go to the next. In this manner, you can walk for seven or eight hours daily."

Another take on the Austrian Business Cycle

Death By Debt

by Chris Martenson

One of the conclusions that I try to coax, lead, and/or nudge people towards is acceptance of the fact that the economy can't be fixed.  By this I mean that the old regime of general economic stability and rising standards of living fueled by excessive credit are a thing of the past.  At least they are for the debt-encrusted developed nations over the short haul -- and, over the long haul, across the entire soon-to-be energy-starved globe.

 

The sooner we can accept that idea and make other plans the better.  To paraphrase a famous saying, Anything that can't be fixed, won't. 

The basis for this view stems from understanding that debt-based money systems operate best when they can grow exponentially forever. Of course, nothing can, which means that even without natural limits, such systems are prone to increasingly chaotic behavior, until the money that undergirds them collapses into utter worthlessness, allowing the cycle to begin anew.

All economic depressions share the same root cause. Too much credit that does not lead to enhanced future cash flows is extended.  In other words, this means lending without regard for the ability of the loan to repay both the principal and interest from enhanced production; money is loaned for consumption, and poor investment decisions are made. Eventually gravity takes over, debts are defaulted upon, no more borrowers can be found, and the system is rather painfully scrubbed clean. It's a very normal and usual process.

When we bring in natural limits, however, (such as is the case for petroleum right now), what emerges is a forcing function that pushes a debt-based, exponential money system over the brink all that much faster and harder. 

But for the moment, let's ignore the imminent energy crisis.  On a pure debt, deficit, and liability basis, the US, much of Europe, and Japan are all well past the point of no return.  No matter what policy tweaks, tax and benefit adjustments, or spending cuts are made -- individually or in combination -- nothing really pencils out to anything that remotely resembles a solution that would allow us to return to business as usual.

At the heart of it all, the developed nations blew themselves a gigantic credit bubble, which fed all kinds of grotesque distortions, of which housing is perhaps the most visible poster child.  However, outsized government budgets and promises, overconsumption of nearly everything imaginable, bloated college tuition costs, and rising prices in healthcare utterly disconnected from economics are other symptoms, too. This report will examine the deficits, debts, and liabilities in such a way as to make the case that there's no possibility of a return of generally rising living standards for most of the developed world.  A new era is upon us.  There's always a slight chance , should some transformative technology come along, like another Internet, or perhaps the equivalent of another Industrial Revolution, but no such catalysts are on the horizon, let alone at the ready.

At the end, we will tie this understanding of the debt predicament to the energy situation raised in my prior report to fully develop the conclusion that we can -- and really should -- seriously entertain the premise that there's just no way for all the debts to be paid back.  There are many implications  to this line of thinking, not the least of which is the risk that the debt-based, fiat money system itself is in danger of failing.

Too Little Debt! (or, Your One Chart That Explains Everything)

[Note: this next section is an excerpt from a recent Martenson Blog entry, so if this seems familiar to any site members, it's because you've seen it before.]

If I were to be given just one chart, by which I had to explain everything about why Bernanke's printed efforts have so far failed to actually cure anything and why I am pessimistic that further efforts will fall short, it is this one:

 

There's a lot going on in this deceptively simple chart so let's take it one step at a time.  First, "Total Credit Market Debt" is everything - financial sector debt, government debt (federal, state, and local), household debt, and corporate debt - and that is the bold red line (data from the Federal Reserve). 

Next, if we start in January 1970 and ask the question, "How long before that debt doubled and then doubled again?" we find that debt has doubled five times in four decades (blue triangles).  

Then if we perform an exponential curve fit (blue line) and round up, we find a nearly perfect fit with a R² of 0.99.  This means that debt has been growing in a nearly perfect exponential fashion through the 1970's, the 1980's, the 1990's and the 2000's.  In order for the 2010 decade to mirror, match, or in any way resemble the prior four decades, credit market debt will need to double again, from $52 trillion to $104 trillion. 

Finally, note that the most serious departure between the idealized exponential curve fit and the data occurred beginning in 2008, and it has not yet even remotely begun to return to its former trajectory.

This explains everything.

From the era of mismanagement into the era of no-management

Ecoterrorism Kills

But not necessarily the way you think

By Robert J. Smith

With reports that some of the fires in California may have been started by arsonists, some people have speculated that all the fires were set by ecoterrorists. What these accusations seem to overlook, however, is that the nation has long faced a much deeper and more insidious philosophical ecoterrorism.

This philosophical ecoterrorism envisions and strives for an mythical, pre-settlement America — while ignoring the fact that we have 300 million people living here. This philosophy, combined with governmental inefficiencies, has created the conditions under which forest fires flourish and eventually spread out to destroy private property, as has occurred with the most recent catastrophe.

Every one of this month’s 15 major southern California’s fires started on government lands — mainly in the three or four National Forests that stretch 250 miles from Mexico into Ventura County. These are the Cleveland National Forest, the San Bernardino National Forest, Angeles National Forest, and Los Padres National Forest. Also the Malibu fire came down out of the infamous Santa Monica Mountains National Recreation Area. The eighth-largest fire was at Camp Pendleton Marine Base, which is now run largely as an inviolate Endangered Species Preserve.

These fires have burned out of control for a number of reasons. First, the federal government has mismanaged all the National Forests for a century — believing fires were unnatural and evil, the government sought to extinguish at all costs. The Smokey the Bear era — beginning in the 1940s — exacerbated that policy, pushing to stop every fire within 24 hours.

By contrast, the pre-settlement, open, park-like forests naturally were characterized by relatively frequent ground-hugging low-intensity underbrush clearing fires. However, the action on the part of the feds to stamp these out for about 100 years, filled the forests with duff, needles, cones, deadwood, and downed wood, and thousands of small undergrowth trees — what amounts to a tinder box. In addition, these conditions stressed and weakened the entire forest.

Paradox

Europe Is Warning Us

By Victor Davis Hanson

If Americans think fuel and food prices are high, they should try Europe, where both can nearly double those in the United States -- while salaries here are often lower.

Italians, like most now-broke Southern European countries, are desperate to privatize bloated public-owned utilities. Politicians are trying to curb pensions, and to encourage the private sector to hire workers and buy equipment, as a way of attracting wary foreigner parents to lend such perpetual adolescents more bailout money.

In theory, Italians accept that they are going to have to be a lot more like the Germans, and less like the Irish, Portuguese and Spaniards. In fact, they may end up like the Greeks, who are still striking and occasionally rioting because too few foreigners wish to continue subsidizing their socialist paradise. Red graffiti on Italian streets still echoes socialist solidarity, while Italian politicians talk capitalism to foreign lenders.

The European Union, like the 19th-century Congress of Vienna, can point to one achievement -- a general absence of war in Western Europe for more than 60 years. Otherwise, almost all its socialist promises of an equality of result are imploding before their eyes.

The higher taxes go, the more people cheat on them, the less revenue comes in. There are sometimes two prices in Italy (and often elsewhere in Europe) -- the official price that includes a high value-added tax that the unwary pay, and the negotiated, under-the-table, tax-free discount that the haggling shopper obtains.

Europe is essentially defenseless, as governments further trim defense budgets to keep shrinking spread-the-wealth entitlements alive. The French and British -- the continent's two premier military powers -- have been trying for nearly three months to defeat Muammar Gadhafi's ragtag nation of less than 7 million, itself rent by civil war. The ancestors of Wellington and Napoleon so far seem no match for Gadhafi or the Taliban. Both nations will soon be leaving Afghanistan in frustration.

Subsidized wind and solar power have not led to much of an increase in European electricity supplies, but they helped to make power bills soar. Highly taxed gas runs about $10 a gallon, ensuring tiny cars and dependence on mass transit. Central planners love the resulting state-subsidized, high-density European apartment living without garages, back yards or third bedrooms. Yet the recent Japanese tsunami and accompanying nuclear contamination have reminded European governments that their similarly fragile models of highly urbanized, highly concentrated living make them equally vulnerable to such disasters.

Popular culture may praise the use of the subway and train. But about every minute or two, some government grandee in a motorized entourage rushes through traffic as an escort of horn-blaring police forces traffic off to the side. A European technocratic class in limousines that runs government bureaus and international organizations -- for example, disgraced former International Monetary Fund chief Dominique Strauss-Kahn -- lives like 18th-century aristocrats at Versailles as they mouth socialist platitudes.

Throughout Western Europe, a subordinate class of unassimilated North African, sub-Saharan African and Pakistani immigrants hawk wares and do menial labor -- and are increasingly despised by Europeans as times get rougher. A growing number of the working classes here are getting fed up that the welfare state means sky-high fuel and food costs for the masses, small and expensive apartments, limited disposable income -- and lots of aristocratic perks for the technocrats who oversee the redistributive mess. The notion of a large and esteemed class of self-made, independent-thinking business people and empowered upper-middle-class entrepreneurs is a concept that seems foreign, if not subversive.

An acknowledged despair now seems to permeate Western Europe. A glorious past is equated with tourist dollars, not appreciation of the European Renaissance or the Enlightenment. Majestic churches are more moneymaking museums or tourist stops than honored hallmarks of past culture and current faith. European Christendom often helped to preserve humanity through horrific crises, but you would never learn that from the average cynical European, who appears either indifferent to or apologetic about both his religion and the hallowed European origins of Western Civilization, responsible for much of what is good in the world today.

All this European turmoil raises a paradox. If dispirited Europeans are conceding that something is terribly wrong with their half-century-long experiment with socialism, unassimilated immigrants, cultural apologies, defense cuts and post-nationalism, why in the world is the Obama administration intent on adopting what Europeans are rejecting?

What about 150 stars

California A Failed State

by WALTER RUSSELL MEAD

The controversial US Supreme Court decision (pdf) that could ultimately force California to release tens of thousands of prison inmates is more than a shockingly broad exercise of judicial power.  It is also an official declaration by the highest constitutional authority in the land that California meets the strict test of state failure: it can no longer enforce the law within its frontiers.

Let there be no mistake: when you produce so many criminals that you can’t afford to lock them up, you are a failed state.  Virtually every important civil institution in society has to fail to get you to this point.  Your homes and houses of worship are failing to build law abiding citizens, much less responsible and informed voters.  Your schools aren’t educating enough of your kids to make an honest living.  Your taxes and policies are so bad that you are driving thousands of businesses away.  Your management systems must be fouled and confused to the max for you to create something so dysfunctional, so wildly beyond your means, that the Supreme Court of the United States (wisely or foolishly is another question) starts to micromanage your jails.

California used to be the glory of this country, the dream by the sea, the magic state.  Now it produces so many criminals it can’t pay to keep them locked up.

This is partly a blue social model thing.  California’s public unions are sucking the state dry — like a parasite killing its host.  Too many Californians buy the ideology of entitlement best described by that great Louisiana prophet of the blue social model Huey Long: “If you aren’t getting something for nothing, you’re not getting your fair share.”

The federal government’s generation of serial failures in migration policy is also to blame.  More exposed to illegal migration than any other state, California has been overwhelmed by both legal and illegal immigrants.  Immigrants are a net plus for the United States, but neither the federal nor the state governments have been willing to provide the appropriate policy framework to manage this flow — and to cope with the consequences.

Some of the fault is judicial.  California’s prison blues partly reflect micromanagement by a host of addled judges who among them have imposed a conflicting and overlapping set of requirements that increase costs to the point where overall conditions decline.  One judge imposes a health mandate; another throws in some food and nutrition requirements; somebody else issues an order for exercise, education, visitation rights or what have you.  In the end the system becomes unmanageable and unsustainable and in yet another fatheaded intervention the Supreme Court supports a lower court order for mass prisoner release.  Judicial intervention in the prison system needs to be safe, legal and rare: at the moment it seems to be none of the above.

It’s partly about corporate flight.  Destructive and shortsighted tax policies have literally driven big corporations out of the state.  For the last five years, Southern California has been losing roughly one Fortune 500 corporate headquarters a year, while the state as a whole has lost four such companies in the last twelve months in an accelerating flight to greener pastures in less-dysfunctional states like Texas, Colorado and Virginia.

Meanwhile, California has the one of the worst business climates in the country: in three widely-cited rankings, California came 49th or 50th.  High taxes, rigid regulations, bribery, unresponsive bureaucrats: California has it all.

Another case of tight coupling with high complexity

How to Make Money in Microseconds

By Donald MacKenzie

What goes on in stock markets appears quite different when viewed on different timescales. Look at a whole day’s trading, and market participants can usually tell you a plausible story about how the arrival of news has changed traders’ perceptions of the prospects for a company or the entire economy and pushed share prices up or down. Look at trading activity on a scale of milliseconds, however, and things seem quite different.

When two American financial economists, Joel Hasbrouck and Gideon Saar, did this a couple of years ago, they found strange periodicities and spasms. The most striking periodicity involves large peaks of activity separated by almost exactly 1000 milliseconds: they occur 10-30 milliseconds after the ‘tick’ of each second. The spasms, in contrast, seem to be governed not directly by clock time but by an event: the execution of a buy or sell order, the cancellation of an order, or the arrival of a new order. Average activity levels in the first millisecond after such an event are around 300 times higher than normal. There are lengthy periods – lengthy, that’s to say, on a scale measured in milliseconds – in which little or nothing happens, punctuated by spasms of thousands of orders for a corporation’s shares and cancellations of orders. These spasms seem to begin abruptly, last a minute or two, then end just as abruptly.

Little of this has to do directly with human action. None of us can react to an event in a millisecond: the fastest we can achieve is around 140 milliseconds, and that’s only for the simplest stimulus, a sudden sound. The periodicities and spasms found by Hasbrouck and Saar are the traces of an epochal shift. As recently as 20 years ago, the heart of most financial markets was a trading floor on which human beings did deals with each other face to face. The ‘open outcry’ trading pits at the Chicago Mercantile Exchange, for example, were often a mêlée of hundreds of sweating, shouting, gesticulating bodies. Now, the heart of many markets (at least in standard products such as shares) is an air-conditioned warehouse full of computers supervised by only a handful of maintenance staff.

The deals that used to be struck on trading floors now take place via ‘matching engines’, computer systems that process buy and sell orders and execute a trade if they find a buy order and a sell order that match. The matching engines of the New York Stock Exchange, for example, aren’t in the exchange’s century-old Broad Street headquarters with its Corinthian columns and sculptures, but in a giant new 400,000-square-foot plain-brick data centre in Mahwah, New Jersey, 30 miles from downtown Manhattan. Nobody minds you taking photos of the Broad Street building’s striking neoclassical façade, but try photographing the Mahwah data centre and you’ll find the police quickly taking an interest: it’s classed as part of the critical infrastructure of the United States.

Small print

An Iranian Suicide

By Ben S. Cohen

In his essay, "The Myth of Sisyphus," the French philosopher Albert Camus depicted suicide as an abdication of one's responsibility to confront the absurdities, disappointments and frustrations that accompany human existence. Our inherent freedom, Camus believed, confronts us continually with the question of whether life is worth living. To answer in the negative is to reject that freedom.

What, then, are we to make of those who commit suicide in the name of freedom? I do not, of course, include suicide bombers in this category, since their purpose is to kill others in a method of murder which necessitates their own death. I am thinking of those who take only their own lives as a political act.

I am thinking of such individuals as Jan Palach, the Prague student who, in 1969, set fire to himself in public to protest the Soviet occupation of Czechoslovakia that crushed a brief flourish of political freedom the year before. I am thinking, too, of Szmuel Zygielbojm, an exiled Polish Jewish activist who, in protest at Allied indifference to the Holocaust, gassed himself in his dingy London flat in 1943. More recently, and far more obviously, there is the example of the young Tunisian, Mohamed Bouazizi, whose self-immolation has entered the popular imagination as the trigger for the current revolutionary upheavals across the Arab world.

And then there is the subject of this article, an Iranian intellectual who chose suicide on April 29 by throwing himself from the balcony of his Tehran apartment. His name, well-known to those who follow the struggle for human rights in Iran, but with nowhere near the mass recognition of a Nelson Mandela or Vaclav Havel, was Siamak Pourzand.

Unlike the three previous examples I gave of political suicide, in which those who died were either young (Palach was 20, Bouazizi was 26) or in middle age (Zygielbojm was 48) the 80-year-old Pourzand was clearly in his final years. A prominent journalist and critic before the Islamist seizure of power in 1979, he had endured more than three decades of vicious harassment at the hands of the regime, including kidnapping by the security police and several years in the regime's notorious Evin Prison, an incarceration that catastrophically impacted his personal health. Somehow, he managed to evade the sentence of execution that is imposed with gruesome regularity -- three hundred in the last year alone -- upon the regime's domestic opponents.

Mother Earth must be pleased

Club a seal, save the planet

Environmentalists turn to animal sacrifice to fight global warming

by Washington Post Editorial 

Saving the baby seals was once the signature cause of environmentalism. The global-warming crowd used the image of an unhappy polar bear “stranded” on a small iceberg to rally support for their cause. Concern for animal rights is now being kicked to the curb in Australia. In order to save the planet, animals must die. It’s all part of a “carbon-farming initiative” designed to help the land Down Under meet its so-called greenhouse-gas emission targets under the Kyoto Treaty.

Aussie lawmakers are putting the finishing touches on legislation that creates economic incentives for companies to reduce carbon-dioxide emissions. Those wishing to get in on the subsidies can apply to the government for permission to carry out projects with no purpose other than raking in the credits. “The scheme covers reductions in emissions from savannah burning,” a summary of the current legislation explained. It also covers “animal emissions avoidance projects such as camel reduction.”

That means pyromaniacs can earn extra cash setting brush fires, allegedly to prevent the larger fires started by nature. The deserts of the Australian outback are home to the world’s largest population of camels, so slaughtering these defenseless creatures has become a sanctioned activity. As ruminants, camels emit a great deal of methane. In greenhouse-gas terms, four camels do the same annual damage to the ecosystem as one Toyota Prius. These impious emissions would come to an end as an eco-friendly helicopter rains fire upon 600 to 750 camels each day. At current prices, that would bring a daily bounty of $11,000 in carbon credits.

This also fulfills the left’s desire to do away with capitalism’s fundamental goal of wealth creation. Liberals are establishing a new, artificial economy where destructive activity and creative output are treated as equally important. Burnt offerings and animal sacrifice can thus be made to Mother Earth so that she will be pleased and cool the planet.

One wonders whether animal-rights activists will step up and defend the camels. These hard-working beasts of burden may lack the cuteness of a polar bear and the adorability of a baby seal, but they don’t all deserve to die simply because Al Gore thinks they smell bad.