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Bill Gates Takes America’s Governors to School

Leave it to Bill Gates to shake up the National Governor’s Association meeting. Despite not suggesting anything revolutionary, having a person of his stature excoriating all governors present for not fixing America’s high schools was long overdue. He also voiced strong support for smaller class sizes, and smaller high schools. Gates is no demigod, but his criticism does mean two separate things. One, it means he feels he has to do better to attract talent from overseas where he cannot find it domestically. But two, this business reality may convince Gates to open the floodgates and have Microsoft lobby much harder for educational reforms.

Still it’s a bit curious to hear this from a man who spends much of his time hiring cheaper workers from overseas to do the same job Americans can. In his defense, Gates claims that there are simply not enough “quality” engineers and scientists to fit his needs. That could be true; watchdog groups like WashTech.com detail a Microsoft all too eager to purge those workers who can be replaced by hiring someone in India. It’s perfectly acceptable to use outsourcing to replace someone worth $72,000 with someone worth $56,000 but a tragedy to substitute someone earning $42,000 a year with a person paid $24,000.

Nevertheless, Gates’s analysis is completely accurate. However, the causes of these problems are incredibly varied. They range from an overemphasis on athletics by school departments, a lack of a national curriculum, the desire to use liberal immigration laws to keep the cost of labor down, to white flight. And opposition to change is a surprising alliance of people from the Catholic Church to most large teacher’s unions to Wal-Mart to major media conglomerates. The Catholic Church because of their ownership and maintenance of a whole shadow system of education, teacher unions because higher wages inevitably would be tied to less job security, Wal-Mart because skilled workers would command higher wages and likely unionize, and major media because they lose millions on televising pro sports with the hope it will attract men without a college education to watch their programming.

Lucky for Bill, educational initiatives tend to be popular. His job, it appears, will be to crack the whip.
posted by Thomas at 12:48 AM 0 comments

 
Cut and Run

There have been no major terrorist attacks in the United States since 2001. Security lapses remain, and Osama bin Laden is nowhere to be found. The only explanation appears to be that America has been lucky, and that “hundreds of plots” have been broken up by the diligence of law enforcement. Nevertheless, the more time passes, the less luck seems a plausible answer.

Instead it seems more like Al Qaeda has pushed US attacks to the backburner. Bush appeased them by withdrawing our military footprint in Saudi Arabia. This leaves the Saudi forces to defend them against popular insurgency. Bin Laden is thrilled and the Iraqi military occupation and strengthening insurgency is precisely what he wants to see as well. In some sense, bin Laden may find Iraq to give cause to a whole new series of attacks on Americans. Yet given the indigenous origin of Iraq’s insurgency and the chance that the new government will favor Islamic rule, he may seek to leave well enough alone.

However, bin Laden may yet attack us again on behalf of other Muslims. The growing footprint in Kazakhstan or Uzbekistan could find Al Qaeda turning its energies on Moscow or DC. The hotel bombing in Taba hints at Al Qaeda not only targeting Israel, but also Egypt. No group is a monolith, though. Serious debate may be going on with Al Qaeda as to where the organization should focus the majority of its energies now that US forces have packed up and left Saudi Arabia.

Americans can hope that this debate causes Al Qaeda to fragment and lose much of its effectiveness. But the US Government should not rest on its laurels. To cut and run from Saudi Arabia, or Lebanon for that matter, is one thing. To completely disengage the Islamic world is something far different. Al Qaeda will find a new a cause to champion. Should attacking the US further that cause, bin Laden and the current leadership certainly not afraid to try. But if our intelligence services and general population not know what the new cause is, never shall we know who to look for. And if we have no idea what to expect, we will find ourselves at as much of a loss for words as on that bright day in September 2001.
posted by Thomas at 7:03 PM 0 comments

 

Reviving the Court of the Star Chamber

The US Constitution specifically prohibits in Article IX any bills of attainder. Yet somehow, the Executive Branch of the government manages to claim a person may be an “enemy combatant”. Simply put, a Bill of Attainder stripped free British subject of certain rights in courts of law if ordered by the king. During the passage of the Constitution, it was not uncommon for the Crown to issue Bills of Attainder should a person be accused of a crime. Criminal cases were tried by the auspice of the king. Before the English Civil War kings had used Court of the Star Chamber to try political enemies without being guaranteed any rights.

Enter Ahmed Omar Abu Ali, enemy of the state. The centerpiece of the US’s argument against him appears to be a confession he gave while tortured by the Saudi government. Already there is evidence the US has signed off on torturing potential terrorists by having friendly ally governments like Egypt and Saudi Arabia do the dirty work while handing American authorities a transcript. But now it appears, the Executive Branch is ready to assert that these torture transcripts provide enough evidence to convict Abu Ali.

Does this mean the Court of the Star Chamber is back with a vengeance? Not yet. While Abu Ali may be convicted initially, the Constitution explicit rules against attainder imply that there would be no ability for precedent. In other words, should the US have to try Jose Padilla, Yaser Hamdi or other American citizens currently deemed “enemy combatants” prosecutors could not assume any evidence wrought by other governments torturing would be admissible. A judge would always have the final say.

That is unless a convicted Abu Ali appeals and the Supreme Court weighs in. For now, the Government alleges that the planning was only “at the talking stage.” Federal conspiracy charges do not require a tremendous amount of evidence. But they still need proof of an affirmative act towards the conspiracy’s end. While the legal question is where the prosecution found evidence of this affirmative act, a more salient one is what the act was. Should the Government refuse to say, then the Court of the Star Chamber might be on its way to a comeback.

posted by Thomas at 5:54 PM 0 comments

 

On to Canada!

If you knew that Calgary’s National Hockey League franchise was originally from Atlanta would be surprised that the sport is suffering from a year long lockout? Would it shock with a sport that overbuilt itself would suffer a monetary contraction and hence, labor troubles?

On the face of things, Major League Baseball, the NBA, and the NHL have suffered remarkably analogous fates in the past few years. The NFL appears to do much better but that is a façade as we shall see. In each sport, the economic boom of the 1990s encouraged expansion and new stadia from coast to coast. The NBA opened its first two Canadian franchises, the NFL relocated teams to St. Louis, Baltimore, and Tennessee while putting expansion teams in Charlotte and Jacksonville. Baseball finally put teams in places most known for Spring Training: Arizona and Florida as well as Denver. And the NHL forsook its Canadian/Snow Belt roots for Phoenix, Colorado, Dallas, and North Carolina.

The reasons were very simple. Owners moved their clubs to cities and states that were willing to pour in money for new construction. You might call this extortion, but only if you think that a team owes something to the city that it occupies. This extortion does not always work however: Los Angeles still has no football because it refuses to finance a new edifice for the NFL. Winnipeg and Quebec City balked at the thought of taxing its citizens to build state of the art facilities. And now, each sport is facing lower or stagnating television revenues. So when the NBA gets a cold, the NHL might as well have pneumonia.

Many hockey franchises are losing money, and unsurprisingly most of them are in smaller cities outside of the Northeast or Canada. So before the owners and fans convince themselves the only way to save the NHL is contraction considering this. Move franchises with little or no fan support but are otherwise viable back to Canada.

Now it is true that aside from Winnipeg or Quebec City, there seem to be few good options. But don’t forget the potential to make Detroit a two-team city, where a Canadian counterpart would be based in Windsor Ontario. The Edmonton-Calgary rivalry sizzles just as much as the one between the Flyers and Rangers. “Saving the NHL” is all about creating a marketable product. When you forget the history of that marketplace, economic troubles are never far behind.

posted by Thomas at 10:15 PM 0 comments

 

Was Chalabi Part of the Cheney Energy Task Force?

Ahmed Chalabi has been accused of a lot. He was tried for bank fraud in Jordan, he was supposedly the source of “bad intel” on Iraq. And the guy is also purportedly a spy for the US, Iran, or perhaps both. So when he continues to suggest he might become the “first prime minister of a free Iraq” you begin to wonder. Just what is going on here?

After the collapse of Enron, there was talk that Ken Lay had attended a secret energy task force headed by Dick Cheney in March of 2001. There’s no dispute that this task force existed or that they eventually made a recommendation in May of that year. However, when the Government Accountability Office attempted to audit the records from those meetings, Cheney declined, citing executive privilege. Other interested parties such as the National Resources Defense Council, and Judicial Watch joined the litigation fray which produced some documents but not all of them. The US Supreme Court ultimately upheld the right to Cheney’s privilege even though Justice Antonin Scalia and Dick Cheney went duck hunting in Louisiana aboard Marine One while the case was under advisement. Up to know, conventional wisdom is that big energy executives such as Ken Lay and Enron got together with Cheney in the smoke-filled room and hashed out major payola. End of story.

Judicial Watch is quick to point out that one of the disclosed documents it has are maps of Iraq’s oilfields. Bush commissioned the panel on January 30, 2001 after blackouts in California. However, most of the emails revealed to the public are from the middle of March. At the same time, it was clear the Iraqi National Congress leader was visiting Iran, not Washington. It is also true that Cheney had a heart operation earlier in month that still leaves February and April of ’01 as unaccounted for. The British-based ‘Guardian’ reported that Chalabi was in Washington DC on February 16, 2001 to meet with Assistant Secretary of State of Middle and Near East Affairs Edward Walker. He was actually a Clinton appointee who was replaced by June of that year. Ostensibly this is because the Bush Administration had decided to pay Chalabi money again to help his “insurgent” activities against Saddam Hussein’s Baathist regime. But is it possible that Chalabi really was there to discuss the Administration’s plans to attack Iraq?

Could it be that actually the “energy task force” was really a cover for nascent plans to attack Iraq? Chalabi’s continued involvement with the US makes this harder to deny. His presence also begs the question just what else was deliberately withheld? One email the NRDC points out only says “what are we going to do about the natural gas problem?” Russia had the largest proven reserves as of 2003, but it is followed by Qatar and Iran. Each of these countries dwarfs national reserves in Uzbekistan, Saudi Arabia, the United States, and even Venezuela. There is evidence the coup against Hugo Chavez was American-supported, and the Pentagon has built permanent bases in Uzbekistan. Where both of these decisions made as a result of the “energy task force” too?

Perhaps the scariest part of this is that Cheney and company already know what the rest of the script is. The rest of us just don’t. We have to wait it out and see what happens next.

posted by Thomas at 4:37 PM 0 comments

 
Big Al’s Big Day:

Once again Federal Reserve Chairman Alan Greenspan wrapped the world around his finger today by testifying before Congress. One thing he said caught my eye:

More broadly, rising home prices along with higher equity prices have outpaced the rise in household, largely mortgage, debt and have pushed up household net worth to about 5-1/2 times disposable income by the end of last year. Although the ratio of net worth to income is well below the peak attained in 1999, it remains above the long-term historical average. These gains in net worth help to explain why households in the aggregate do not appear uncomfortable with their financial position even though their reported personal saving rate is negligible.

Of course, household net worth may not continue to rise relative to income, and some reversal in that ratio is not out of the question. If that were to occur, households would probably perceive the need to save more out of current income; the personal saving rate would accordingly rise, and consumer spending would slow.

Apparently Al is not following the trends that closely. Most longtime homeowners have tapped into their equity to make ends meet. It could be just to pay off other debt, or it could be because they have gone back to school or have a new job that pays less. But even if that is oversimplification, Greenspan seems certain that if the housing market cooled people would suddenly start saving. Again, that seems sort of difficult when to use the equity in your house, you must borrow it.

Furthermore, if there is a real estate bubble present that could portend real economic pain. These two paragraphs are particularly eye catching because after his initial address, he signed off on personal accounts for Social Security insofar as it would increase personal saving. Just how indebted people will be able to pay off more of the debts by saving additional money is a mystery.
posted by Thomas at 9:53 PM 0 comments

 
Red State Diaries: Montana

A “Wal-Mart tax”? You heard right sir; a Montana state legislator submitted today a bill that would tax large retailers who do not provide certain benefits to their employees. There is no telling if the measure would pass and be signed into law. Assuming it happens, Wal-Mart and Costco both seem ready to claim a violation of interstate commerce in federal court. To some extent, the law may be on the retailers’ side.

But ask yourself this: if resistance to Wal-Mart’s expansion has been largely in urban states, why do they find themselves on the defensive in Montana?

First, Montana is actually a progressive state. It is one of nine nationally that allows marijuana to be used for medical treatment. Also, the state collects only income and property taxes from individuals, eschewing the idea of a sales tax.

Second, Montana’s small population means that it has reached a crisis point over public health faster than others. With more big-box store jobs replacing both unionized and the so called “mom and pop” operations nationally, states with fewer people face a shortfall for public assistance sooner than others.

Now again, because this is a form of taxation that could be construed only to affect businesses headquartered outside of Montana it might fail on Constitutional grounds. But along with California’s attempt to force employers to provide health care to employees, the Montana “Wal-Mart tax” reveals that eventually states will find the optimal way to make “high volume retailers” pay their fair share toward their workers’ wellbeing.
posted by Thomas at 3:02 PM 0 comments

 
Weird Political Science

The right wing punditocracy is already has a favorite to replace the gay-marriage debate, at least if this National Review editorial is any indication. This time, it’s Massachusetts Senate President Robert Travaglini playing the role of Gavin Newsom and none other than Governor Willard Mitt Romney as the heavy. Calling anything Harvard does immoral is enough to generate major buzz in Massachusetts, and the conventional wisdom is that Romney is staking this position to enhance his political affinity to Republicans in places like South Carolina come 2008. That assumes however the Governor also thinks there is something here that bolsters his reelection campaign in 2006.

Kansas Senator Sam Brownback has proposed a national ban on therapeutic cloning, though it’s uncertain if it will pass. Romney’s hope is likely that all of the money expended in California and New Jersey could be for naught. His fear could be that the state will be blindsided if ban passes. Already this sounds like the gay marriage debate in Massachusetts where Romney was not so proactive. Simply put: no one really knows what the economic effects of sanctioning gay marriage are. Whereas it’s easy for the Governor to imagine many of his state’s biotech firms bankrupted after years of research are declared illegal.

After all, any Governor that runs for President has to tout successful programs and initiatives from back home. The only risky thing is Romney that proposes only half a loaf.
posted by Thomas at 6:07 PM 1 comments

 

Like to Give Iowa a Try?

Richard Doak of the Des Moines Register argues about legislatures overemphasizing the role of tax breaks in manipulating the public’s behavior:

The other argument for lowering taxes is to stay competitive with other states. There might be something to this. Everyone has heard about the affluent retirees who move to Texas because it has no state income tax. But if economic growth is inevitably attracted to states with the lowest taxes, why does the most robust growth in the Upper Midwest occur in Minnesota and Wisconsin, the two states with not only the coldest climates but the highest taxes?

Again, the point is that the state tax code is vastly overrated as an instrument for shaping the state's economy. Despite what some lawmakers seem think (like those who came up with the notion of exempting young adults from the income tax), most human beings do not make every life decision based on its tax consequences.

You may have heard the media frenzy after Republicans in Iowa’s Legislature submitted a proposal to have only residents over the age of 30 pay state income tax. Now, since most people deduct their (usually much smaller) state franchise fee out of their federal income tax this only looks good if you work at the IRS precinct for the Hawkeye State. But it underlines the frustration many states have keeping younger people around. There’s no set answer but Iowa’s predicament is particularly curious.

Let’s start with the obvious. Iowa usually finds itself in the news when political campaigns set up shop for its January Presidential caucus. The rest of the time, the word “Iowa” is associated with one thing: college sports. It’s not the only state that has the problem is being ignored unless sports is involved. But it is true that Iowa is one of only a handful of states with no professional sports teams of any kind. But the importance of the University of Iowa and Iowa State University is more than just athletics. Already there’s a large biotech program that is growing at ISU. The state should match that by setting up a center for biomass fuel research at U Iowa. That will help encourage people to attend the state’s schools.

Once they arrive, it might seem like keeping them around would be difficult. But it’s more nuanced than that. Iowa lacks a major airport and with it, nonstop flights to escape the wintry chill. The cultural offerings of Chicago and Minneapolis knock the state out for the count. But even places like Austin, Texas have vibrant nightlife communities centered around would you believe live music? All this implies that Iowa must be a rural state with plenty to see outdoors. Interestingly though, there are no national parks in Iowa.

Perhaps that is the whole reason the state suffers, it’s maddeningly rural. Few parts of the state are wild, and only slightly more urban, leaving you with rows, and rows, and rows of corn and not much else to see. One possibility is to turn more of the state back to the wild and reintroducing bison to that wilderness area. As luck would have it, this would trigger resort building as wildlife is a year round tourist attraction. And lastly but not least, gambling is legal in Iowa if conducted on riverboats. Imagine the excitement of seeing live bison during the day, enjoying the sybaritic pleasure of a Las Vegas sized casino at night…and then whiling away time cross-country skiing and ice skating in the winter or playing baseball in an honest to god cornfield in the summer.

If you add in affordable housing, good public transportation, nightlife and new cultural opportunities, a new focus on education and more non stop flights, Iowa could just become the new magnet for America’s youth. And even if the state falls a little short, what does it have to lose?

posted by Thomas at 1:56 AM 0 comments

 

Mark Foley (R-FL): Never Scared
posted by Thomas at 3:04 AM 0 comments

 
Social Security Is Class Warfare in Florida

This whole Social Security privatization scheme is causing some Democrats and Republicans to break ranks with their parties. In fact, Josh Marshall, author of the Talking Points Memo, has been providing daily updates on which members of Congress are straying from the pack. The conventional wisdom would be that Ginny Brown-Waite, who hails from the district with the largest number of Social Security recipients, would be a tad gun-shy. The man with the second-biggest cadre of SSI recipients is Democrat Robert Wexler: good luck trying to convince him. But the districts ranked three through five on SSI recipient populations are represented by 2000 Election villainess Kathleen Harris, Connie Mack’s son, and Mark Foley. The latter had described some of his colleagues as “terrified” to the Associated Press. This implies he is not. Kathleen Harris remains just as ambivalent as Brown-Waite. Mack has done little to make his opinion public.

Down at #21….C.W. Young, a Republican, has vowed he will not support any changes to Social Security that involve personal accounts. Florida Dem Alan Boyd meanwhile, has promised to cosponsor Bush’s legislation in the House. So what gives?

M-O-N-E-Y. Not in terms of campaign contributions or corruption but in terms of rich and poor. The skeptical group of Florida Republicans hails from the state’s poorer coast. Namely, the western one. Income differentials between Brown-Waite’s and Young’s district with that of Foley and Wexler’s are striking. The average per capita income in Palm Beach County is $44,000 a year, double the standard found in Brown-Waite’s district.

But wait, there’s more. Currently there has been a spate of editorials suggesting the Democrats have failed to suggest an alternative to save Social Security. Now, the Clinton task force already has four: eliminate the wage cap on payroll tax, retain the estate tax and have it pay into the Social Security Trust Fund, force some state and county workers to pay Social Security if their retirement plans and non transferable, and re-index the benefit schedule.

The first two don’t play real well in Florida. The state has no income tax, causing many wealthy people to claim it is their state of primary residence. Including but not limited to Ted Turner, Rush Limbaugh, O J Simpson, countless professional athletes, and Dick Vitale. The state also has a wacky rule about homestead exemptions, which is largely a measure to prevent probate. In Florida, the homestead exemption is $15 million dollars. But in other states getting a house that is not your primary residence to qualify for the homestead exemption can be difficult, and Florida’s rules are not exactly clear. But the political reality is: rich retirees in Florida will not want to reinstate the estate tax or raise the FICA cap to pay for poorer Americans. Poor SSI recipients, on the other hand, will be more than happy to see the government “spread the wealth”.

And this smells like…class warfare. The favorite Republican response to Democrats pointing out if a particular policy benefits the wealthy over the poor. Now, the Social Security “crisis” is a bit of misnomer. Social Security is so successful because it loans money to the Federal General Fund by purchasing T-Bills and then redeeming them later. The interest on these T-Bills is the whole reason that Social Security “works”. So it is true that by 2018 the payroll tax will not cover the value of the T-Bills cashed in. But the SSA can’t cash its own T-Bills in; the Treasury Department has to do it (indirectly or directly). And as some have pointed out, the amount of T-Bills sitting in the SSTF is around $1.7 trillion. Sounds big until you realize that foreign governments (like China), domestic and international banks, and private individuals like Bush him all hold another $7 trillion in T Bills collectively. So nothing stops us from having Congress buy more T-Bills and put them in the trust fund. Nothing except a veto, that is.

posted by Thomas at 1:43 AM 0 comments