Chris Matthews described the country as he sees it from the Left. VDH sees the country a little differently from the Right. Same country, different visions, starkly stated from the point of view of each man. There are those who want to fundamentally transform the country like the administration, and those who do not.

It is odd that there remain those on the right who think that the last three years have been some sort of failure or series of mistakes. It’s too bad the economy isn’t doing better, but that’s not the priority of these folks. The priority is making things fairer, according to their enlightened vision.

The most remarkable thing about this administration is not incompetence; it is discipline. (As the man said: “We are five days from fundamentally transforming the United States of America.”) They stay relentlessly on their message of the moment, positioning themselves as the reasonable ones in the center, amidst those on the left and right who take irresponsible positions — and all the while they are quietly executing their agenda, moistly through the federal agencies and cabinet departments. Clever, profoundly anti-democratic.

But the playbook is badly out of date. OWS isn’t random; it’s straight from the playbook. No doubt it will metastasize over the next year and show up at Tea Party events and so forth to cause no end of trouble. The most peculiar thing about this exercise is that it is happening at almost precisely the wrong historical moment. The USSR fell almost a generation ago, and the welfare states of Europe are crumbling under the weight of their entitlement burdens. What a bizarre moment to emulate them.

The second most peculiar thing, at least to us, is our discovery of the extent of the corruption. Many years ago we wrote about the temptation to corruption in declining industries such as the legacy media. We had no idea how bad it really is. Congressmen can legally trade on insider information; major media outlets ignore huge scandals when they are politically inconvenient. And on and on.

We don’t think this is going to end well for the left. We think that they total about a third of the electorate. though the media megaphone makes them seem much more populous. It’s not really a 50/50 country when very basic issues are in play. As evidence we point to Independents flipping by 33 points last November after they figured out they had been sold a bill of goods in 2008. However, we do not underestimate the lengths to which those in power will go to remain in power. Frankly, we’re not looking forward to what the next political year is likely to bring.

The Washington Times on the spread of the contagion to the largest troubled country in Europe:

Italy’s debt totals $2.6 trillion, which is 119 percent of its gross domestic product. Only Greece has a worse position in the European Union. The rule of thumb for most economists is that a debt-to-GDP ratio of 90 percent is the danger zone where economic growth falters. This is reflected in Italy’s lackluster growth numbers. After seeing 1.3 percent growth last year, the figure crawled at a pathetic 0.8 percent in the second quarter of this year.

The market sees the possibility of default on the horizon, so the Italian government’s cost of borrowing is escalating rapidly to reflect the risk. Italian bond yields hit 6.73 percent earlier this week, perilously close to the 7 percent mark where Greece, Ireland and Portugal were forced into the line asking for IMF handouts. On Wednesday, they climbed to 7.35 percent, suggesting the markets know the problem isn’t solved by finding a new prime minister. Investors also realize Italy, with an economy larger than Russia or India, cannot be bailed out.

The NYT reports that a fund of $3 trillion might be necessary to stem the crisis, but notes: “Europe has set up a special bailout fund…promises to leverage the fund even up to $1.4 trillion have not been fulfilled. Efforts to get other nations to invest in it or in a proposed parallel fund were flatly rejected.” Looks bad. Better check your euros. Dump the ones whose serial numbers begin with “S” if you still can.

CBC:

“We cannot accept the explosion of the euro, which would mean the explosion of Europe,” Sarkozy told a news conference before the G20 leaders went into a working dinner Thursday evening. “If the euro exploded, Europe would explode. And in fact it’s the guarantee of peace on the continent where there were terrible wars — fiercer than anywhere else in the world — not in the 15th century but in the 20th century.”

Guarantee of peace? Huh? The euro is about a decade old. Maybe he meant the Common Market, which dates back to the 50′s, though Britain and others didn’t join until decades later.

In any event, the strange hyperbole is interesting. We seem to see nonsensical talk all the time among politicians these days. What’s French for “Pass This Bill Now”? HT: BC

Eugene Robinson seemed awfully sure of himself in the WaPo:

The scientific finding that settles the climate-change debate…For the clueless or cynical diehards who deny global warming, it’s getting awfully cold out there.

The latest icy blast of reality comes from an eminent scientist whom the climate-change skeptics once lauded as one of their own. Richard Muller, a respected physicist at the University of California, Berkeley, used to dismiss alarmist climate research as being “polluted by political and activist frenzy.” Frustrated at what he considered shoddy science, Muller launched his own comprehensive study to set the record straight. Instead, the record set him straight.

“Global warming is real,” Muller wrote last week in The Wall Street Journal. Rick Perry, Herman Cain, Michele Bachmann and the rest of the neo-Luddites who are turning the GOP into the anti-science party should pay attention…

Muller’s plain-spoken admonition that “you should not be a skeptic, at least not any longer” has reduced many deniers to incoherent grumbling or stunned silence. Not so, I predict, with the blowhards such as Perry, Cain and Bachmann, who, out of ignorance or perceived self-interest, are willing to play politics with the Earth’s future…

The Berkeley group’s research even confirms the infamous “hockey stick” graph — showing a sharp recent temperature rise

There’s only one little problem with all this. Here’s the actual data from Best’s archives, without the ten-year “smoothing” and other features created to produce the graph above. As you can see, it shows cooling over the last decade:

However, Mr. Muller was already on the record: “Richard Muller, leader of the initiative, said that the global temperature standstill of the past decade was not present in their data.” Oops!

James Delingpole of the Telegraph is in high dudgeon: “I had my doubts about Muller’s findings from the start. I thought it was at best disingenuous of him to pose as a ‘sceptic’ when there is little evidence of him ever having been one….I really didn’t want my first blog post in a week to be yet another one about global bloody warming. Problem is, if those lying, cheating climate scientists will insist on going on lying and cheating what else can I do other than expose their lying and cheating?”

Of course, much of this is becoming irrelevant, since the US and the West can’t afford the expensive fantasies like cap-and-trade and so forth. But it’s nice for candidates for cutting government spending to stand up and draw attention to themselves as Muller has done.

Bloomberg:

Flight 447 from Rio de Janeiro to Paris crashed on June 1, 2009, after ice-blocked speed sensors shut down the autopilot and the crew reacted incorrectly by pulling the jet into a steep climb until it slowed to an aerodynamic stall, France’s BEA accident investigation bureau said in May. The interim report from the criminal probe broadly endorses those findings. “The aircraft’s stall went completely unnoticed by the crew, who made no reference to it,” according to the report, which was presented to victims’ families yesterday. Faced with unusual readings, the two co-pilots, alone at the controls while the captain was on a rest break, “rejected them en masse”…

The document identifies no fault with the Airbus SAS A330, beyond the failure of Thales SA (HO) airspeed sensors which caused the autopilot shutdown…

Air France Flight 447’s crew reacted badly to an autopilot shutdown and misread instruments showing the plane’s rapid descent before it plunged into the Atlantic, killing all 228 people aboard, a report shows. “I’ve lost VSI,” the junior co-pilot said of the Airbus’s vertical-speed indicator, according to a recording detailed in the report from court-appointed experts. In fact, the instrument was functioning normally, its analog needle immobilized at the lower limit because the plane was hurtling toward the ocean at 15,000 feet a minute,

Aircraft are designed to minimize the number of situations where a single failure can cascade into a catastrophe. It’s pretty disturbing that the pitot tubes’ getting fouled can lead to a disaster like this on an airplane that sophisticated.

We wrote about this remarkable man’s commencement speech at Stanford some time ago. Now he’s gone, and we all pray for him and his family. He’s in the company of Edison, Bell, the Wrights, Ford, and others we praised for creating this wonderful world of technology, profit, and affluence. May he rest in peace.

First, here’s a story from AP:

Sen. Dick Durbin of Illinois, the second-ranking Democrat in the Senate and an Obama ally, told a radio interviewer this past week that there were not 60 votes in the Senate now for Obama’s bill.

That’s not what he said; he said he couldn’t get to 50 Democrats. Then there’s Arianna Huffington:

voters, including those mythical swing-vote independents, want the same thing everyone does: jobs and a strong economy.

The mythical swing-vote independents aren’t so “mythical”: they flipped by 33 points in November 2010. And of course there’s the good ole NYT:

The devastation extends worldwide. The great euphorbia trees of southern Africa are succumbing to heat and water stress. So are the Atlas cedars of northern Algeria. Fires fed by hot, dry weather are killing enormous stretches of Siberian forest. Eucalyptus trees are succumbing on a large scale to a heat blast in Australia, and the Amazon recently suffered two “once a century” droughts just five years apart, killing many large trees. Experts are scrambling to understand the situation, and to predict how serious it may become. Scientists say the future habitability of the Earth might well depend on the answer…forests have been absorbing more than a quarter of the carbon dioxide that people are putting into the air by burning fossil fuels

Go out and buy a fishbowl and 10,000 blue marbles. Put the marbles in the fishbowl. Take out one blue marble and put in a green marble. You’ve just demonstrated how much CO2 has increased in the air in the last 300 years. If that’s a catastrophe, we’re all dead no matter what we do. So much rubbish, so little time.

Nile Gardiner in the Telegraph:

Obama looks ridiculous as he lectures Europe while wrecking the US economy…Germany’s finance minister Wolfang Schauble has launched a stinging rebuke to the Obama administration after Washington pushed for the European Union to boost its EFSF bail out fund. After Obama declared that the European financial crisis is “scaring the world”, Schauble shot back at the US president by warning: “It’s always much easier to give advice to others than to decide for yourself. I am well prepared to give advice to the US government.”

He also made it clear what he thought of the idea of increasing the 440 billion euro lending limit, a position supported by US Treasury Chief Tim Geithner: “I don’t understand how anyone in the European Commission can have such a stupid idea. The result would be to endanger the AAA sovereign debt ratings of other member states. It makes no sense.”

It is rather ironic that Barack Obama, who has probably done more damage to the American economy that any president in modern US history, is now lecturing European leaders on their financial problems as well. The Obama administration’s track record of out-of-control government spending and borrowing, a $1.3 trillion budget deficit (the largest since World War Two), combined with mammoth bailouts, has been nothing short of disastrous. 14 million Americans are out of work…

The administration’s entire approach to the European Union is fundamentally flawed, and is based on the underlying premise that the EU needs more integration, not less, with a greater pooling of national sovereignty. As I noted in an earlier piece, while Euroscepticism is on the rise across the EU, Eurofederalism remains deeply entrenched among America’s liberal elites, from the offices of The New York Times to the State Department and the White House…

as Lady Thatcher noted in Statecraft, the European project is “perhaps the greatest folly of the modern era”, and the unprecedented experiment in economic and political integration within the EU is beginning to fall to pieces. Even the German public, probably the biggest traditional supporters of a federal Europe, have begun to turn overwhelmingly against the euro

Unsurprisingly, Gardiner’s prescription for what should be done resembles our own views. The dismissive tone of this piece is a little surprising, however. We know we’re a broken record on this, but we can’t imagine how things can continue on this ridiculous and destructive path until November 2012. What will they be writing in the Telegraph a year from now? HT: GP

We don’t really know that much about what constitutes 95% of the universe. And even the things we think we know may not be true. BBC:

The speed of light is the Universe’s ultimate speed limit, and much of modern physics — as laid out in part by Albert Einstein in his special theory of relativity — depends on the idea that nothing can exceed it. Thousands of experiments have been undertaken to measure it ever more precisely, and no result has ever spotted a particle breaking the limit.

But Dr Ereditato and his colleagues have been carrying out an experiment for the last three years that seems to suggest neutrinos have done just that.

Neutrinos come in a number of types, and have recently been seen to switch spontaneously from one type to another. The team prepares a beam of just one type, muon neutrinos, sending them from Cern to an underground laboratory at Gran Sasso in Italy to see how many show up as a different type, tau neutrinos.

In the course of doing the experiments, the researchers noticed that the particles showed up a few billionths of a second sooner than light would over the same distance. The team measured the travel times of neutrino bunches some 15,000 times, and have reached a level of statistical significance

Lots of theories in the comments section here; we blame global warming for the anomaly. Time for the another look at the amusing LHC video again.

Gretchen Morgenson, who knows a bit about the financial crises of the last few years, talks about how troubled the European banking system is. NYT:

Regulators encouraged European banks to hold huge amounts of European government debt by letting them account for these investments as if they posed zero risk. That meant the banks didn’t need to set aside a single euro in capital against those holdings. Now, according to an analysis by Autonomous Research, 43 large European banks hold debt in troubled sovereigns that is equal to 63 percent of those institutions’ book values.

Adding to the peril is that these banks are funded primarily by short-term investors, like buyers of commercial paper, rather than by depositors, as is more often the case with American banks. This was the same problem faced by Bear Stearns and Lehman Brothers…

Billions of dollars in swaps have been written on sovereign debt, guaranteeing that those who bought the insurance will be paid if Greece or other countries default. As of Sept. 9, some $32 billion in net credit insurance exposure was outstanding on debt of Greece, Portugal, Ireland and Spain, according to Markit, a financial data provider. An additional $23.6 billion has been written on Italy’s debt. Billions more in credit insurance have also been written on European banks, many of which hold huge positions in troubled sovereign obligations.

But since these instruments trade in secret, investors don’t know who would be on the hook — as A.I.G. was in its ill-fated mortgage insurance — should a government default or a bank fail.

Are we going through 2007-2008 all over again? The Bear Stearns conference call, the toxic CDS’s, the cascade after Lehman. Maybe we’re about to get an answer to the question we asked three years ago: what if the deleveraging process has much further to go? Say it ain’t so!

Janet Daley sees a few problems. Telegraph:

the choice is between abandoning the democratic principle which holds that the legitimacy of government derives from the consent of the governed, or backing down on the commitment to the euro and all the strictures that go with it. We know which side of this argument our Government has chosen. Mr Osborne reiterated last Friday his insistence that the EU needs “fast-track” fiscal integration -– and never mind the democratic scruples…

Angela Merkel cannot do what her critics are insisting that she must do –- as George Osborne put it, show that she recognises “the gravity of the situation” and is “dealing with it” -– because her electorate will not wear it. She cannot commit herself to endless bail-outs and the under-writing of infinite Mediterranean debt, just as the Greek government cannot deliver the EU’s austerity measures –- because the people of both these countries do not wish it. The irresistible force has met the immovable object.

Even religions that few believe in anymore die hard. We seem to have a bit of that in this country too.

Some quasi-amusing commentary on a UBS research report at Zero Hedge:

“Euro Break Up — The Consequences.” UBS conveniently sets up the straw man as follows: “Under the current structure and with the current membership, the Euro does not work. Either the current structure will have to change, or the current membership will have to change.” So far so good. Yet where it gets scary is when UBS quantifies the actual opportunity cost to one or more countries leaving the Euro. Notably Germany.

“Were a stronger country such as Germany to leave the Euro, the consequences would include corporate default, recapitalisation of the banking system and collapse of international trade. If Germany were to leave, we believe the cost to be around EUR6,000 to EUR8,000 for every German adult and child in the first year, and a range of EUR3,500 to EUR4,500 per person per year thereafter. That is the equivalent of 20% to 25% of GDP in the first year. ”

It also would mean the end of UBS, but we digress. Where it gets even more scary is when UBS, like many other banks to come, succumbs to the Mutual Assured Destruction trope made so popular by ole’ Hank Paulson: “The economic cost is, in many ways, the least of the concerns investors should have about a break-up. Fragmentation of the Euro would incur political costs. Europe’s “soft power” influence internationally would cease (as the concept of “Europe” as an integrated polity becomes meaningless). It is also worth observing that almost no modern fiat currency monetary unions have broken up without some form of authoritarian or military government, or civil war.”

So you see: save the euro for the children, so we can avoid all out war (and UBS can continue to exist).

In the middle of the last decade, the dream was for the Euro to be a new reserve currency, and now this. How times have changed.

Bloomberg:

Societe Generale shares slumped as much as 23 percent and were down 16 percent at 21.89 euros at 4:27 p.m. in Paris. Credit-default swaps on the bank rose 29 basis points to a record 299 basis points. Societe Generale “categorically denies all market rumors,” Emmanuelle Renaudat, a spokeswoman for the French bank said in an interview.

That’s precisely how it all began four years ago. The rumors, the shorts, the CDS’s. The banks are structurally the easiest institutions to start a panic with, because of their high leverage.

We have said that the last two years have been time wasted when the nation should have been getting its fiscal and financial house in order. That’s true, but in another sense the last 2 1/2 years have been like the final part of a fireworks display when all sorts of rockets are set off at once in a giant blazing farewell.

Such a display! Instead of getting the nation’s balance sheet in order, the government added trillions upon trillions of new and unnecessary debt. Instead of respecting the will of the majority, the government pushed through vast and controversial new entitlements on a party-line basis, an unprecedented approach to such major legislation in recent times. Instead of creating an atmosphere fostering job creation, the government added new healthcare costs, new regulations, and manifold new uncertainties for business. Instead of pointing out the ridiculousness of these foolhardy decisions, most of the media establishment cheered wildly — precisely the opposite of their function in a free society. The cheering that began in 2008 seems pretty much over. (Indeed, the establishment media sound rather pathetic now with all their humbug and invective.)

With the caveat that uncertainties can sometimes spiral out of control, we are firmly not in the Department of Doom. Indeed, rather the opposite. There’s plenty of work to be done to get the financial house of the US in order, and to foster job creation at home. But as we have said many times over, this is not that hard either to conceptualize or to execute. Of course those who want to get these things done will continue to face intense opposition from forces in government, the media, and even big business. But so many of the opposition’s rockets have already been fired, and for the moment at least, they have little of consequence to offer as an alternative.

Dr. Doom, Nouriel Roubini in the FT:

can we avoid another severe recession? It might simply be mission impossible. The best bet is for those countries that have not lost market access -– the US, UK, Japan, and Germany –- to introduce new short-term fiscal stimulus…

Until last year policymakers could always produce a new rabbit from their hat to trigger asset reflation and economic recovery. Zero policy rates, QE1, QE2, credit easing, fiscal stimulus, ring-fencing, liquidity provision to the tune of trillions of dollars and bailing out banks and financial institutions -– all have been tried. But now we have run out of rabbits to reveal.

The misguided decision by Standard & Poor’s to downgrade the US at a time of such severe market turmoil and economic weakness only increases the chances of a double dip and even larger fiscal deficits. Paradoxically, however, US Treasuries will probably remain the world’s least ugly safe asset: risk aversion, equity declines and a looming slump could even see treasury yields fall…

since this is a crisis of solvency as well as liquidity, orderly debt restructuring must begin. This means across the board reduction on the mortgage debt for the roughly half of America’s households that are underwater, and bail-ins for creditors of banks in distress. Greek-style coercive maturity extensions, at risk free rates, must also come for Portugal and Ireland, with Italy and Spain to follow if they lose market access. Another recession may not be preventable.

And from the Not Doom department, Burton Malkiel in the WSJ:

The sharp decline in stock prices last week has renewed fears that the economy is headed for a double-dip recession. Economic growth has been reduced to stall speed, with gross domestic product rising at less than a 1% annual rate during the first half of 2011. Real consumer spending has been negative over the past two quarters. Just as a rider risks falling over when his bicycle slows sharply, so the economy is dangerously close to slipping into recession even before a real recovery has taken hold. And now Standard & Poor’s has downgraded the U.S. credit rating, citing inadequate progress in Washington on long-run budgetary problems…

stocks today are cheap. Price/earnings multiples are just over 14 and forward P/E multiples, which use forecasted earnings, have shrunk to less than 12. These multiples are low relative to historical precedent and are especially low when considered in comparison to a 10-year Treasury yield of 2.5%. Dividend yields of 2.5% also compare favorably with 10-year Treasurys…

we have problems, but the current situation bears no resemblance to 2008. And for those who believe that the decline in the stock market reliably predicts a new recession, remember the famous dictum of the late economist Paul Samuelson: “The stock market has predicted nine of the last five recessions.” A strong dose of modesty is clearly in order…stay the course. No one has ever become rich by being a long-term bear on the fortunes of the United States, and I doubt that anyone will do so in the future. This is still the most flexible and innovative economy in the world.

Let’s be clear about one thing at least: this is not 2008.

Telegraph:

Last week the euro hit crisis point. Silvio Berlusconi was forced into a shame-faced climbdown over his handling of Italy’s economy. A €48bn austerity programme will be front-loaded, asset sales accelerated and the country’s outdated labour practices liberalised. The measures will mean the public feels the pain of austerity before Italy’s elections in 2013…Berlusconi has also committed to a balanced budget by 2013 -– compared to a current forecast deficit of 3.4pc of GDP, according to the IMF…

as panic spread and Italy’s bonds hit 6.189pc it became clear that the markets had shut the country out…With €370bn (£322bn) of funding needed for 2011, much of which was scheduled for the second half of the year, Italy was suddenly facing the prospect of running out of cash before the end of September…

A funding crisis may have been of Italian making, but it would not be isolated to Italy. The eurozone would have to come to its aid. But Italy is not Greece. Italy’s funding requirement this year is larger than the entire stock of Greek debt. It is the third largest sovereign debt market in the world, with €1.8 trillion of outstanding bonds. Rescuing Italy could stretch the eurozone to breaking point

AE-P: “unless the ECB is willing to step in –- I mean really step in, not piss in the wind –- until such a time as the revamped EFSF bail-out is ratified by all parliaments and is ready to take the baton (say November), and unless the EFSF itself is quadrupled in size and given a €2 trillion mandate without all the German-imposed ifs and buts, then the game is up.” This seems to be playing out somewhat faster than many predicted.

Mark Steyn:

Remember the Libyan war?…At the start of NATO’s desultory bombing campaign, the French and the British were demanding that Gadhafi be removed from power, leave Libya and be put on trial at the Hague. Last week, they subtly modified their position: He can remain in Libya, but he definitely has to step down from power…

the Lockerbie bomber has been appearing at delirious pro-Gadhafi rallies. Remember the Lockerbie bomber? He was returned to Libya because he was terminally ill and only had three months to live. That was two years ago…

The Libyan war never caught the imagination of the American public, even though you’re paying for most of it. But in Tehran and Moscow and Beijing they’re following it. And they regard it as a useful preview of the post-American world. Absent American will, even a tin-pot desert drag queen can stand up to the great powers and survive.

Days, not weeks. It’s not good to be seen as this feckless.

The Guardian reports on another AGW government policy:

Australia’s population of wild camels, the Financial Times reveals, may soon be shot in order to earn carbon credits under the country’s forthcoming emissions trading scheme. Each one of the creatures is estimated to produce a tonne of carbon dioxide a year –- about the same as a 7,000km flight

Question: if the camel was also the pilot of the plane, what would the emissions be? And what about the methane? What a ridiculous world we have.

There are sensible ways to solve energy problems, and then there’s this. Telegraph:

if Britain is to spend £100 billion on building thousands of wind turbines, it will require the building of 17 new gas-fired power stations simply to provide back-up for all those times when the wind drops and the windmills produce even less power than usual.

We will thus be landed in the ludicrous position of having to spend an additional £10 billion on those 17 dedicated power stations, which will be kept running on “spinning reserve”, 24 hours a day…

it will be amazingly costly and wildly uneconomical, since the dedicated power plants will often have to run at a low rate of efficiency, burning gas but not producing electricity. This will add billions more to our fuel bills for no practical purpose.

The other absurdity, as recent detailed studies have confirmed, is that gas-fired power stations running on “spinning reserve” chuck out much more CO2 than when they are running at full efficiency -– thus negating any savings in CO2 emissions supposedly achieved by the windmills themselves.

But on the plus side, wind farms kill fewer birds than cats do.

VDH:

Why are the Greeks protesting? Against whom? They obtained long ago the promised bloated sector and high taxes that all schemed to avoid. Their alma mater EU is hardly a demonic capitalist-run plutocracy, but a kindred socialist state. Is Greece an oil producer, industrial powerhouse, high-tech innovator — anything that might explain the sort of upscale life, modern infrastructure, legions of Mercedeses, and plush second homes that one began to see in Greece after 1985?

In truth, socialist Greeks are furious that they have impoverished themselves and demand that private money and far harder-working Germans bail them out — but why so, when socialism should not need outside capitalist-generated dollars? Could not the Greeks, Soviet style, set up a Cuban collective, and adjust their lifestyles (there goes Kolonaki culture) to their means, living in an opportunity of result utopia with a huge public sector, more siestas, high but ignored taxes — with a collective good riddance to those awful intrusive German bankers?…

Who are socialists? There are none. Only technocratic overseers who wish to give someone else’s money to others as a means of winning capitalist-style lifestyles and power for themselves — in a penultimate cycle of unsustainable spending.

It’s quite a shell game when you’ve spent so much that taxing people at 100% won’t cure the problem. People, perhaps particularly the young, are going to wake up one of these days and figure out what has been done to them. When that happens, watch out.