It's Still Winter Around Here

Image credit: Cujo359 (click to enlarge)

Apologies to dial-up users, but this is a nice photo.

Not all that long ago, I was telling a friend who just recently moved to this area that winter tends to end by late February up here in the Pacific Northwest. Not this year. This isn't a photo from December, it's from today.

One of these days, winter will end. Possibly by Spring.

The Cliff Is In Sight

This is a chart, produced early February, of job losses in the current recession and in previous ones. (Click to enlarge) Image credit: Speaker of the House

Two different financial experts, with different backgrounds and experience, smacked the Obama Administration around today regarding their handling of the economy. The first was Warren Buffett, who was interviewed on CNBC today:

The economy, ever since we talked in September, we talked about it being an economic Pearl Harbor and how--what was happening in the financial world would move over to the real world very quickly. It's fallen off a cliff, and not only has the economy slowed down a lot, people have really changed their behavior like nothing I've ever seen. Luxury goods and that sort of thing have just sort of stopped, and that's why Walmart is doing well and you know, and I won't name the ones that are doing poorly. But there's been a reset in people's minds, and we see that in something like Geico where year after year after year we say you can save some money insuring with Geico, and year after year there's been a certain number of people who have said, `You know, I've got this pal, Rotary Joe, and I've been insuring with him and for 100 bucks, why should I shift?' Every week we're just seeing it build and build. More and more people are calling. Our price differentials haven't widened, our advertising isn't that much different, but the American public really has changed their buying habits. On the reverse side, our jewelry stores just get killed in a period like this. And high end gets hurt the most, next down gets hurt the second most, and the lowest people get hurt the least.

Buffett Breakfast on CNBC (Transcript for March 9, 2009)

This is one small part of the conversation, of course, but it's an important one. The sense of urgency, and some of the reasons for it, are what are interesting in this context.

The other financial expert, who gave an even more ominous warning, is Paul Krugman writing today in the New York Times:

President Obama’s plan to stimulate the economy was “massive,” “giant,” “enormous.” So the American people were told, especially by TV news, during the run-up to the stimulus vote. Watching the news, you might have thought that the only question was whether the plan was too big, too ambitious.

Yet many economists, myself included, actually argued that the plan was too small and too cautious. The latest data confirm those worries — and suggest that the Obama administration’s economic policies are already falling behind the curve.

To see how bad the numbers are, consider this: The administration’s budget proposals, released less than two weeks ago, assumed an average unemployment rate of 8.1 percent for the whole of this year. In reality, unemployment hit that level in February — and it’s rising fast.

Behind the Curve

[emphasis mine]

Even two weeks out from the signing of the stimulus bill, it's already looking pitifully inadequate. Let me just return to something I wrote about Saturday:

The best news I can tease out of this data is that at least the rate of job loss is no longer accelerating. It's been about 600k for each of the last three months. That's not very good news when we're shedding more than half a million jobs at a time. Of course, as I've pointed out before, we also need to add more than 100k jobs per month just to keep up with population growth. If this rate of job loss continues, we will have fallen almost an additional ten million jobs behind by the end of this year. [W]e were already in rather bad shape.

Two Giants In Trouble

Trying to project out unemployment as I did is obviously specious. A national economy seldom stays linear or predictable for long. The reason I did it, though, was to give some sense of the kind of trouble we're in for if things continue as they are, which is to say, largely uncorrected. The chart that begins this article, which was produced by Nancy Pelosi's office, should make that danger abundantly clear, particularly since you can now continue that green line further downward. So, keep that ten million jobs deficit in mind as you read on.

Krugman continues:

Employment has already fallen more in this recession than in the 1981-82 slump, considered the worst since the Great Depression. As a result, Mr. Obama’s promise that his plan will create or save 3.5 million jobs by the end of 2010 looks underwhelming, to say the least. It’s a credible promise — his economists used solidly mainstream estimates of the impacts of tax and spending policies. But 3.5 million jobs almost two years from now isn’t enough in the face of an economy that has already lost 4.4 million jobs, and is losing 600,000 more each month.

Behind the Curve

We're way behind already. The best thing the stimulus bill could have done was continue state and local programs that were being cut back or stopped because the states and municipalities are running out of money. That money would have gone immediately to programs already in place, and thus would have had immediate effect. This is the sort of thing you'd expect an emergency stimulus bill to do. Yet that was part of the stimulus package that was "compromised". The collective idiocy of this Congress is nothing short of mind boggling.

Still, they don't look so bad compared to what the Obama White House has been trying to do to deal with the banking crisis. Even though many economists have recommended that the failed banks be nationalized, the President continues to pooh-pooh the idea as the notion of a few random fruitcakes:

“Part of the reason we don’t spend a lot of time looking at blogs,” he said, “is because if you haven’t looked at it very carefully, then you may be under the impression that somehow there’s a clean answer one way or another — well, you just nationalize all the banks, or you just leave them alone and they’ll be fine.”

Obama Ponders Outreach to Elements of Taliban

A strawman false dichotomy. As a fan of rhetorical fallacy, I have to love the efficiency of that statement.

Here's Krugman's conclusion:

The broader public, by contrast, favors strong action. According to a recent Newsweek poll, a majority of voters supports the stimulus, and, more surprisingly, a plurality believes that additional spending will be necessary. But will that support still be there, say, six months from now?

Also, an overwhelming majority believes that the government is spending too much to help large financial institutions. This suggests that the administration’s money-for-nothing financial policy will eventually deplete its political capital.

So here’s the picture that scares me: It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.

But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.

O.K., that’s a warning, not a prediction. But economic policy is falling behind the curve, and there’s a real, growing danger that it will never catch up.

Behind the Curve

This is the danger. The work to prevent this needs to start now. Anyone who thinks that Obama's ratings will remain high despite his not having accomplished things that will help average folks out, and help retain their jobs, is an idiot. I'll grant you there are quite a few of those wandering the halls of Congress, but they, and any like-minded idiots in the White House, had better start getting with the program.

UPDATE: Over at FireDogLake, commenter selise pointed out this article:

The struggling companies whose freewheeling business practices have contributed to the country's economic woes are getting a lucrative return on at least one of their investments. Beneficiaries of the $700 billion bailout package in the finance and automotive industries have spent a total of $114.2 million on lobbying in the past year and contributions toward the 2008 election, the nonpartisan Center for Responsive Politics has found. The companies' political activities have, in part, yielded them $295.2 billion from the federal government's Troubled Asset Relief Program (TARP), an extraordinary return of 258,449 percent.
...
President Obama collected at least $4.3 million from employees at these companies for his presidential campaign.

TARP Recipients Paid Out $114 Million for Politicking Last Year

While there may be other motivations, this money alone is a good explanation for why none of the folks who actually could do it seem interested in nationalizing failed banks.

Two Giants In Trouble

This is a General Electric Dash 9 locomotive that is being operated by the Burlington Northern Sante Fe Railroad. Railroad locomotives are one of the many different products that GE produces. Until recently, General Motors produced all the other locomotives manufactured in North America.

Image credit: Morven/Wikimedia Commons


Before I get onto the main topic of this article, here's some related news from this week, as summarized by FireDogLake diarist eCAHNomics :

The February employment data continued the labor market disaster. The headline unemployment rate jumped to 8.1%, from 7.6% the month before and the highest rate since December 1983, over 25 years ago. Payrolls plunged 651,000, and the prior two months were revised downward. Job losses during 2008 were 3.0 million, the largest for any year in the post-WWII period. But by shifting the period by just two months, to February 2009 versus February 2008, employment plummeted 4.4 million.

Employment Update - February 2009 Data

eCAHNomics has been writing excellent summaries of employment data the last few months. I recommend that you check out her diaries on the first Friday of each month.

The best news I can tease out of this data is that at least the rate of job loss is no longer accelerating. It's been about 600k for each of the last three months. That's not very good news when we're shedding more than half a million jobs at a time. Of course, as I've pointed out before, we also need to add more than 100k jobs per month just to keep up with population growth. If this rate of job loss continues, we will have fallen almost an additional ten million jobs behind by the end of this year. As eCAHNomics points out, we were already in rather bad shape:

The most comprehensive rate for labor underutilization is called U-6 (see original diary for the definition). It leaped to 14.8% in February from 13.9% in January and 9.0% a year earlier. That compares to a headline unemployment rate of 8.1% from 4.8% the year before. The February U-6 set another new high. (The Bureau of Labor Statistics started reporting this measure in January 1994, when it was 11.8%, whereas most of the other data go back to 1948. See Table 2.) If the regular unemployment rate reaches double-digits, as is widely forecast, U-6 will be close to 20%.

Employment Update - February 2009 Data

[link from original]

Thankfully, most economists predict that things will get better toward the end of this year. If that is in fact the case, we will still have to create a lot of new jobs in the next few years to reach employment levels that we last saw in the Clinton Administration. Something like five or six times the number of jobs that were created in the entire Bush Administration is about what it will take.

Onto the subject at hand. Two of the giants of American industry appear to be in lots of trouble. In a report released Thursday, independent accountants stated their conclusion that General Motors may not be a viable entity:

General Motors Corp.’s auditors have raised “substantial doubt” about the troubled automaker’s ability to continue operations, and the company said it may have to seek bankruptcy protection if it can’t execute a huge restructuring plan.

...

“The corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern,” auditors for the accounting firm Deloitte & Touche LLP wrote in the report.

Concerns Raised That GM Will Not Survive

"Inability to generate sufficient cash flow" should be taken as meaning that GM's credit is none to good at the moment. Any manufacturing business will have cyclical cash flow issues. While times are tough, or when new products are being readied for market, a business will probably not have enough cash to operate. During those periods, loans are required to handle those expenses. As we've learned, loans aren't widely available right now. Nothing about this report will help that situation.

GM is mostly about automobiles. Its major subsidiaries include other automobile producers like Pontiac and Hummer, the auto parts producer AC Delco, and GMAC, the auto loan company. Perhaps its most diverse holding of any size was the Electro-Motive Divsion, now Electro-Motive Diesel, (EMD), which builds railroad locomotives. It was sold off in 2005. According to its 2008 SEC form 10-K (pg. 19), GM employs approximately 91,000 people within the U.S., 25,000 in the rest of North America, and just under 130,000 more around the world.

As part of the recovery plan it submitted to the government, GM is planning on selling off several of its divisions, including Hummer, Saab, and Saturn. It is also considering selling off its AC Delco division.

Two weeks ago, Business Week published a scathing review of the GM recovery plan:

GM is basing its speedy payback plan on the assumption that Americans will ramp up their car-buying rate to 18.3 million annually by 2014. That's 500,000 more than they bought in 2000 when sales hit an all-time high. Back then, the economy was strong and automakers handed out cheap loans to just about anyone with a driver's license. Such conditions are unlikely to arise again soon. This year automakers will be lucky to sell 11 million vehicles in the U.S., and Chrysler, in its own plan, figures overall sales will not exceed 13 million in 2014. If that's the case, according to GM's own calculations, it won't have paid off taxpayers in five years. Rather, it will have to borrow more and owe taxpayers $30 billion.

GM's Dicey Recovery Plan

It's axiomatic that GM will need more help than it has received so far. In contrast to the giveaways banks are receiving, though, the help that GM and Chrysler are receiving from the government is in low interest loans.

Some divisions are seeing increased business already, thanks partly to lower oil prices. The Baltimore plant, which makes truck transmissions, avoided layoffs recently thanks to increased sales. That plant was converted to be "landfill free" in 2007. GM stated in their 2008 SEC form 10-K (pg. 14) that they intend to convert half their facilities to be landfill free by 2010.

Eventually, the money will be repaid to taxpayers, assuming the corporations survive. I feel no such assurance in the case of the trillions of dollars we've poured into the financial industry of late. Think about that next time someone complains about "handouts" to auto workers. Thirty billion dollars seems like a pittance in comparison.

The other giant that is in trouble, it would seem, is General Electric. Joe Nocera summarizes:

[T]he truth is, nobody knows for sure whether G.E. is in trouble — not even the bears who are shouting it from the rafters. G.E.’s numbers are the proverbial enigma wrapped inside a riddle. If it wants to end the storm swirling around it, the company is going to have to offer the kind of detailed disclosure of the portfolio of assets carried on the books of G.E. Capital. As it happens, that is precisely what the company says it will do the week of March 16.

Is General Electric Next?

GE is an even larger company than GM. As most folks know, it produces light bulbs. This was the foundation of its business. In the last century, GE has become the epitome of a diversified corporation. It has divisions that produce medical equipment, jet engines, TV programs and movies and, yes, railroad locomotives.

According to its 2007 SEC form 10-K, GE employs 155,000 people in the United States, and 172,000 elsewhere around the world.

As Nocera notes, it's too soon to say just how much trouble GE is actually in, but it definitely faces some of the same problems GM has. It too, has cyclical expenses, at least within its various divisions. It cannot function without at least occasional financing. According to a press release on Thursday, though, it has no unmet capital needs:

GE CFO Keith Sherin said today that the Company has taken the right steps to ensure that it is safe and secure in this environment and that he sees no need to raise additional capital. Mr. Sherin said GE’s financial services business expects to be profitable in the first quarter of 2009 and for the full year, and the Company will provide a detailed review of the financial services business the week of March 16 in a dedicated GE Capital meeting.

“We have taken a number of actions to make the Company stronger and safer. These actions have given us an incredibly strong liquidity position, including $45 billion in cash," Sherin said. “We have no triggers that we can see that would have any call on our cash in the short-term; and we have $60 billion of additional capacity available under the Temporary Loan Guarantee Program (TLGP). We've done 70% of the long-term debt we need for this year, and we're going to complete the remainder of 2009's funding needs in the near future. We have the capacity under TLGP to complete 2010's funding needs as well.

GE CFO Keith Sherin says Company is Safe and Secure and Sees No Need for New Capital

Assuming that's true, then the problems that Nocera's informants are referring to must lie elsewhere. Given the eclectic nature of GE's products, unless it's something to do with GE's own financial division it's hard to imagine what those problems might be.

These are two of America's leading manufacturing companies. They employ hundreds of thousands of Americans, Canadians, and Mexicans in high-paying jobs. In addition, they purchase parts and manufacturing tools and facilities from hundreds of thousands of other North Americans. If they are allowed to go under, we can expect our economy to get worse for a long time before it gets better.

UPDATE (March 8): Over at the FireDogLake edition of this article, commenter ubetchaiam pointed to this as a possible explanation for GE's troubles:

March 6 (Bloomberg) -- General Electric Co. Chief Executive Officer Jeffrey Immelt is paying the price for his investments in commercial real estate and U.K. property debt.

Profit at GE Real Estate dropped by $1.1 billion last year, according to the annual report from the parent company’s GE Capital finance arm. Fairfield, Connecticut-based General Electric’s real estate earnings are likely to fall further as occupancies and rents drop in a U.S. recession that’s now in its second year, said James S. Corl, who oversees distressed real estate investments at Siguler Guff & Co. in New York.

“They spent a huge amount of money in real estate,” Corl said. “They paid a full price for what ends up being a lot of mediocre real estate.”

General Electric Pays Price for Real Estate, Debt Investments

While this certainly is a cause for its stock price to decline, I don't see why this would be a major crisis for GE. It may end up being a crisis for certain portions of GE's management, particularly those who made or supported the decision to go so heavily into commercial real estate and debt instruments. In retrospect, neither was a good idea. Commercial real estate accounted for much of the losses identified earlier this year that RGE Monitor identified.

The Blowhards And The Analysts

Image credit: Five Thirty-Eight

Over at Salon, former Secretary of Labor Robert Reich wrote an article in which he justifiably slammed the so-called financial analysts who have been making so much noise lately about how the measures that President Obama is proposing to keep the economy from worsening have already made America a socialist hell:

Is Obama responsible for the meltdown of the Dow? The consistently wrongheaded Wall Street Journal's editorial page says so, as does Republican Fox News, CNN's reliably demagogic Lou Dobbs, and now CNBC (where, full disclosure, I frequently appear as a token liberal). CNBC's Jim Cramer, who bloviates nightly about stock picks, says Obama is pushing a "radical agenda" that's destroying investors' wealth. My friend Larry Kudlow, who rants nightly about nearly everything, says Obama is destroying capitalism. CNBC reporter Rick Santelli's ballistic nonsense about Obama's mortgage plan made him a pop-populist icon for a week or so.

Is Obama Responsible for Wall Street's Meltdown?

The short answer to the question Reich poses in the article title is, no, he's not. At least, he's not yet. That should be obvious. Nothing Obama has done is so Earth-shatteringly new and different that the economy has simply crashed as a result. The economic slide we are in is a result of decisions made by the Bush Administration, and the previous three administrations. What he is doing is starting to have an effect, though.

How to measure that effect is another question, and Nate Silver has been thinking about this. On Thursday, he wrote an interesting article on the relationship between stock market prices and the health of the economy in general. While it tends to focus on what the underlying attitudes of investors might be, it's nonetheless interesting. Here's his introduction:

Looking at the performance of the stock market offers both promise and peril in providing insight into the future direction of the economy. The promise comes because the market, in a fundamental sense, ought to reflect anticipated future profits of a wide array of publicly-traded large and midsize businesses. All else being equal, these companies can be expected to earn more money in good times than in bad, and therefore economic expectations will be reflected in their share prices.

The peril comes because the market will also pick up a whole host of other things that aren't particularly relevant to the well-being of the economy as a whole.

What the Stock Market Really Thinks About the Economy

He lists several reasons why simply looking at the price of all stocks, or stock lists like the Standard and Poors (S & P), isn't a true indication of what investors are thinking about the economy, and how optimistic they might be about the immediate future.

He goes on to explain a new metric he's been comparing to the economy's performance. He calls it the Cyclical Expectations Index (CEI), which is a normalized ratio of the price of stocks that are tied to "staple" industries, agribusinesses and some retail, for instance, and "discretionary" industries, like cars and cruise lines. As you may recall, last year I wrote an article about losses that Starbuck's was experiencing, in which I theorized that this indicated tougher times ahead. Starbucks is an example of a discretionary business - people don't need to buy coffee at a shop. They can make it at home, or stop drinking it. Nate seems to be thinking along similar lines, but in a more thorough way. If investors are more willing to invest in discretionary industries, then they are implicitly more optimistic about the short term future of the economy.

The results of his analysis are interesting. They suggest yet another reason to assume that just looking at stock prices isn't all that much an indicator of the optimism investors have about the economy:

It appears that when the CEI dips below 100, this indicates recessionary expectations. The CEI fell below 100 on October 11, 2000, about five months in advance of the recession that began in March 2001 (it also briefly dipped below the 100 mark following the events of September 11th). The CEI also began falling significantly as of about August 2007, losing 25 percent of its value in the second half of that year in advance of the current recession, which dates back to December 2007 . In both cases, the CEI was much quicker to anticipate the recession than the broader S&P 500[.]

What the Stock Market Really Thinks About the Economy

Go check out the article for all the fine points. His conclusion is that the market is actually more optimistic than the prices alone would suggest.

Which brings us back to the blowhards Reich was taking to task. In addition to being unable to analyze the economic picture well enough to have anticipated our current situation, these guys are wrong for yet another reason. There are certainly people who did, including Paul Krugman, Nouriel Roubini, and, in a small way, Yours Truly. These clowns are also assuming that a stock market that has lost a considerable amount of value is pessimistic by definition. This assumption is yet another thing they're wrong about, as Nate Silver has helped make clear.

UPDATE: Robert Reich, not Robert Rubin, was the author of this piece. Thanks to selise, who noted the correction at FireDogLake.

More Personnel Issues

In comments yesterday, Dana Hunter left a hint about another personnel issue that President Obama is facing. In a word, it's pettiness:

Their stalled nominations serve as another reminder that Obama may find it difficult to live up to his campaign promise of changing the partisan culture in Washington.

Democratic Senate Majority Leader Harry Reid of Nevada “was outrageous in abusing the Senate’s advise and consent powers,” said Tony Fratto, a former Bush spokesman. “So no one should be surprised if Senate Republicans follow the precedent he set.”

Obama’s Economy Team Lacks Top Aides as Senate Delays (Update1)

This has been a long-standing practice in the Senate. Reid hasn't been either exceptional nor particularly successful at it. In fact, he came in for a lot of criticism for not blocking some knuckledragger federal judges.

I've hit on this theme before, as have lots of others, but what is readily apparent here is that one party is playing the same partisan games now that it played last session, and the other is trying to get something done, despite disagreements both within their own ranks and with the opposition. In fact, the latter party has been entirely too accommodating (lots more where those came from). This New York Times article from last month tells a typical tale:

As Republicans confronted President Obama in another budget battle last week, their leadership included another new face: Representative Eric Cantor of Virginia, who as the party’s chief vote wrangler is as responsible as anyone for the tough line the party has taken in this first legislative standoff with Mr. Obama. This battle has vaulted Mr. Cantor to the front lines of his party as it tries to recover from the losses of November.

As Republican whip, Mr. Cantor succeeded again on Friday in denying the White House the support of a single House Republican on the stimulus bill. That was a calculated challenge to the president, who, in his weekly address on Saturday, hailed the bill as “an ambitious plan at a time we badly need it.”

...

[I]t is Mr. Cantor who is pushing the party in a direction that Democrats, and some Republicans, say is risky: almost lock-step opposition to Mr. Obama’s economic plan. Democrats have already made clear that they intend to use those votes against Republicans in 2010, and sooner, with advertisements noting the middle-class tax cuts included in the bill.
In Gingrich Mold, a New Voice for Solid Republican Resistance

This is their strategy - simply to make anything the Obama Administration or Democrats in Congress try to do as difficult as possible. What is shocking is how unified they have been in that effort.

How is that working out for the GOP? Not well, according to just about any poll on the subject. Here's one example:
Image credit: Pollster

Now that the Democrats have large majorities in both houses of Congress, public approval has been climbing.

Here's another example:

After Barack Obama's first six weeks as president, the American public's attitudes about the two political parties couldn't be more different, the latest NBC News/Wall Street Journal poll finds.

Despite the country's struggling economy and vocal opposition to some of his policies, President Obama's favorability rating is at an all-time high. Two-thirds feel hopeful about his leadership and six in 10 approve of the job he's doing in the White House.

...

By comparison, the Republican Party — which resisted Obama's recently passed stimulus plan and has criticized the spending in his budget — finds its favorability at an all-time low. It also receives most of the blame for the current partisanship in Washington and trails the Democrats by nearly 30 percentage points on the question of which party could best lead the nation out of recession.

Poll: Obama's Rating At All-time High

Dana has more examples. It's not a pretty picture. The only thing in the GOP's favor is that it's almost two more years until the next congressional election.

It would be one thing if this obstruction were based on some particular principle of government. If it were, there would be a particular pattern to the obstruction. Instead, it appears to be simply to make things as difficult as possible in general, so that the Republicans will look good in comparison.

At this point, it's not working out that way.

UPDATE: I forgot to point out Dana's article from this morning, which also provides examples of Republican obstructionism.

Personnel Issues

The Obama Administration ran into a couple of personnel issues today. Bloomberg reports:

Former U.S. Securities and Exchange Commission member Annette Nazareth has taken herself out of the running to be deputy Treasury secretary, according to people familiar with the matter.

Nazareth, who hadn’t been nominated, was warned that her SEC work would be assailed at Senate confirmation hearings, the people said. Before becoming a commissioner, Nazareth was head of the SEC’s market regulation division where she helped design an oversight regime that has been criticized for missing Wall Street’s excessive risk taking.

Nazareth’s decision is a setback for Treasury Secretary Timothy Geithner, who is without any confirmed senior aides as he grapples with the global financial crisis.

Nazareth Said to Withdraw for Deputy Treasury Post (Update4)

Yes, it's true, I don't know much about banks and other financial institutions. But can it really be that tough to find someone who wasn't asleep at the switch for the last ten years while all the shenanigans were going on? It's hard to believe this is the best they can do.

On a related note, Dr. Sanjay Gupta has decided he doesn't want to be considered for Surgeon General. Back in January, I argued that there was already a better alternative:

Why don't I find Gupta all that inspiring a choice for Surgeon General? After all, he's someone who's used to communicating with the public, which is an important part of the job. He's an accomplished doctor and academic, even though his specialty strikes some as a bit limited. However, besides his apparent bias toward keeping the broken parts of our medical system the way they are, there's a more basic difficulty - the possible alternatives. There are plenty of good choices who have at least as much relevant experience, and who aren't influenced by big pharma or the insurance companies. John Conyer's choice for the job is an example:

Alas, although CNN, Politico.com and other national news organizations have covered Conyers' opposition to Gupta, they've failed to raise the public profile of Dr. Herbert Smitherman, the assistant dean at the WSU School of Medicine who is Conyers' on-record pick as the surgeon general.

Universal Health Care? Dream On

He sounds like he's worth a look. Let's see if the Obama team finally gets this right. (h/t Lotus)

I Win Again

[Pound notes, plus a few dollars, at the donations box of the British Museum. Image credit: Lawrence OP.]









Once again, I've won a lottery:

From: "Mr.Wellington"
To: undisclosed-recipients@null, null@null
Subject: [SPAM:#####] 2009 Multi-Match bonanza
Date: Mar 5, 2009 12:42 AM

Maryland Lottery United Kingdom
P.O Box 789
Harrogate
HG1 2YR

Our Dear Winner,

You have won the sum of £710,000 (SEVEN HUNDRED
AND TEN THOUSAND, POUNDS STERLING) from Maryland Lottery
On our 2009 Multi-Match bonanza.

Contact immediately our Claims Department below quoting winning number:
LOTTERY
NUMBERS: 14-21-22-35-36-40.

Contact Person: Mr.Greg Walter
Email: noone.nohow@live.co.uk.invalid
noone.nohow@yahoo.co.uk.invalid

Tel: +XX-XXX-XXX-XXXX


Congratulations once again.
Regards,
Mr Buddy Roogow

It used to be that you actually had to enter a lottery to win. It was a rule or something. You'd think someone who ran a million-dollar lottery could afford his own e-mail address, wouldn't you?

They just don't make lotteries like they used to.

A quick Internet search yielded this example of the same letter from last year that was sent to an e-mail list. You'd think the winning number would have changed in the last six months, wouldn't you? No wonder so many people win this lottery.

As always, I have no idea whether any names on this e-mail represent the people who are actually involved in the scam. In fact, I assume they don't. I've made the e-mail addresses meaningless, but left the host names to illustrate my point.

Learning From Mistakes - It's What We Do

Over at FireDogLake Jane Hamsher wrote today about a race in Illinois, and a disagreement of sorts among progressives about who should have been supported that I wasn't aware of until now:

I don't think Chris Bowers owes anyone an apology for backing Tom Geoghegan, he's a great guy and a true progressive who really inspired people. I also understand that people are upset. I appreciate Chris offering his thoughts on what his decision making process was in supporting Tom, so I thought I would offer mine as to why I didn't.

There will no doubt be endless stupid stories about how "the netroots can't win an election" focusing on this race, but the fact is that the two biggest netroots Act Blue fundraising efforts -- Kos's Orange to Blue and our Blue America -- didn't endorse Geoghegan. Many wonderful, smart people endorsed Geoghegan, and I support that decision completely, he's an inspirational guy who has been a guest here on FDL before with his book. I can only speak to my own decision making process and let people know why I didn't feel right about backing him.

IL-05 and Geoghegan: The Day After

Tom Geoghegan, whom Chris Bowers of Open Left had supported, ran what was apparently an unfocused and badly organized campaign. He lost, by a lot. Apparently, some folks recognized that problem, and some didn't.

Jane's point here is particularly important:

I spoke to the person on the campaign running the field operation. I did not get a sense that there was a solid plan in place, though I certainly did not know the district well enough to make that judgment definitively. As I recall, their plan was to get 20,000 contacts in the district through a volunteer network they had not started building at the time I spoke with them, which was shortly before the end of January. I was also getting information from Emily's List which indicated Sara Feigenholtz had already made that many contacts, had a big fundraising advantage, and the somewhat formidable power of their organization behind her. With little time to make up the difference and no real plan for doing so that I could see, it appeared Tom could be heavily out-gunned.

IL-05 and Geoghegan: The Day After

The campaign wasn’t organized at a time when it should have been. Assuming you’re trying to win an election, backing such a candidate really will be a waste of time, unless he can already count on name recognition.

Often times when you make a decision can be the difference between being right and wrong. I could see myself early in this process backing someone like Geoghegan, thinking that he was good on the issues and therefore worth backing. I can also see myself, later in the process, asking the same questions Jane did: Where’s the organization? What’s the plan? Do we have resources in place? If I could see that the answers to those questions were unsatisfactory, I’d conclude that this candidacy wasn’t a happening thing.

Recognizing signs of trouble early on will be key to ensuring that we don’t waste time and effort on campaigns that won’t work. That's why it's good to have discussions like this, and for everyone to remember that this really is a learning process, and that the problem itself is always changing.

Anyway, not backing this candidate at this time was a good decision. Jane concludes by writing:

But before anyone writes any articles about “netroots failures,” they need to allow for the fact that the netroots is a broad and heterogeneous group that doesn’t run in lockstep. At any given time any number of people or groups with a netroots presence can get behind a particular candidate.

IL-05 and Geoghegan: The Day After

Frankly, I wouldn’t have it any other way. Discussion and disagreement produce correct decisions, not lockstep adherence to the wishes of the leaders. That’s what The Other Guys do, and it’s not working too well for them.

Hey, even Chris Bowers can be wrong.

How Bad Are Things?

If you want some idea how bad things are in Pakistan, consider this quote from the New York Times:

ISLAMABAD, Pakistan — A dozen gunmen attacked the Sri Lankan national cricket team and its police escort in a brazen commando-style operation in the city of Lahore on Tuesday, killing six police officers and wounding at least six cricketers before fleeing in motorized rickshaws, the Lahore police chief and a Sri Lankan official said.

Eight Die as Gunmen in Pakistan Attack Cricket Team

As the article goes on to point out, the Sri Lankan team is one of the few international cricket teams to participate in matches there in the last few years:

The Australian and other cricket teams have refused to play in Pakistan, saying that the safety of its players was at risk and that Pakistan was unable to provide adequate protection. Australia, England, New Zealand and South Africa all boycotted a major tournament in Pakistan last year.

Eight Die as Gunmen in Pakistan Attack Cricket Team

Cricket is as popular a sport in Pakistan as baseball or football are in America. That terrorists can do this, and are willing to, shows how extreme things are getting in Pakistan.

How important is the symbolism of the attack? Here's a quote from Al Jazeera:

It seems certain at least that Pakistan – a nation with a proud cricketing history and obsessive fans – will struggle to recover as a serious international force.

Former England cricketer Dominic Cork was a strong voice against England's return to India last year, but travelled to Pakistan as a commentator for the Sri Lanka series.

Speaking to Sky News from Lahore, he said he would not be returning - and doubted whether any cricketers would be either.

"I was badly advised to come out and commentate and will certainly be looking at the decision (in future) no matter what the country is," Cork said.

"Sport is second – it has to be second – until this region is sorted out["]

Lahore Assault Casts Long Shadow

It serves to further isolate Pakistan from the rest of the world. What's worse, it will do nothing to ease the tensions between Pakistan and its neighbor. Xinhua reports:

NEW DELHI, March 3 (Xinhua) -- In the wake of the attack on the Sri Lankan cricket team in Pakistan Tuesday, India has decided not to play in the neighboring country at least for four or five years, Board for Cricket Control of India president Shashank Manohar said.

India cricket team not to play in Pakistan after Lahore attack

Cricket is one of the points of commonality between India and Pakistan. The symbolism of this announcement isn't good, either.

This attack was conducted with heavy weapons and looks to have been well planned, much as the attack in Mumbai, India was a few months ago. Whether the same group is responsible remains to be seen, but if you ask yourself who benefits from the results, a few obvious suspects emerge. The most likely are the religious fanatics, such as the Taliban, who would like to see Pakistan more isolated. Indian extremists might be a possibility, also, though I don't know of any who could conduct this sort of operation.

Whoever it turns out to be, it's another clear sign that things aren't getting better in Pakistan.

OMG, We're Gonna Die! Or, Maybe Not...

A couple of folks have picked up on this already, so I'll just quote the basics. Yesterday, Jen Dimascio of Politico wrote:

Defense Secretary Robert Gates and the chairman of the Joint Chiefs of Staff aren't on the same page regarding Iran's nuclear capabilities.

Iran may have enough nuclear material to make a bomb, the chairman of the Joint Chiefs of Staff told CNN's "State of the Union" Sunday.

Adm. Michael Mullen, told CNN host John King Iran is close.

“And Iran having a nuclear weapon I've believed for a long time is a very, very bad outcome for the region and for the world.”

Gates and Mullen disagree on Iran

I don't know where Admiral Mullen gets that idea from. Uranium has three different isotopes: U-234, U-235, and U-238. Only U-235 is radioactive, and thus fissionable. The vast majority of uranium is U-238. Uranium for nuclear reactor fuel, which is what Iran is officially trying to produce, needs to be refined to something like five percent U-235. Nuclear weapons fuel, on the other hand, needs to be something over 90 percent U-235. The International Atomic Energy Agency (IAEA) is monitoring the fuel that's been produced so far. Its latest report, released just two weeks ago, says that to their knowledge, none has been refined beyond the purity needed for reactor fuel. Physics Today observes:

However, as Chemist Cheryl Rofer points out, at 3.49% , the concentration of Iran's 1010 kg of enriched uranium-235 is still too low to make an atomic bomb and would have to be reprocessed for a number of months to reach the necessary enrichment level for military applications. The uranium enrichment facility would also have to be reconfigured to reach higher concentration levels of U-235.

IAEA Report Leads To Press Confusion Over Iranian Nuclear Program

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It appears to me that Mullen is right to the same degree that someone who says that because he has ten acres of forest, he has the materials for a nice, big mansion is right. There’s a lot of bother between those two conditions, particularly if you don’t have the tools and you’re not able to move the wood once you’ve cut it down.

Reactor fuel is a much lower purity than weapons grade uranium. Getting there really is a lot of bother, and they’d have to sneak that fuel past the inspectors somehow.

There is also that little matter of the CIA report that no one wants to mention that says the Iranians gave up their nuclear weapons program five years ago.

I'm not bothered by public differences of opinion from officials in the same department of government. That should be the norm when there is doubt on some issue. But I see no reason to think Mullen is right here. Iran looks to be years away from having a bomb, even assuming they still want one enough to make it.

UPDATE: Changed the wording of how much U-235 is required for weapons-grade uranium. Before, it said "around 95 percent". While this might seem a trivial change, the difference actually meant I was implying that it needs to be almost twice as pure as the physics sites I've looked at say it does.