From The Street...
Tuesday, June 15, 2004
Carbs cause disease...
Here's some"plain talk", albeit filled with medical terms, about how bad carbs are; "bad" is not a good term in science; maybe harmful is better; nature's way of killing us off without making us feel bad. Like the high from running. Something is chasing me; I may get caught, so here are some good chemicals to make you feel better about that when it happens.
http://www.mercola.com/2004/jan/3/carbohydrates_age.htm
Scientific Proof Carbohydrates Cause Disease
By Kent Rieske
Carbohydrates cause nearly all age-related diseases. Age-related diseases are thought of as unavoidable. Many people consider it normal to get one or more of these diseases as they age. They rationalize that they are simply unlucky or that others have "better genes," neither of which is true. Their health problems are most likely caused by their belief in the many popular myths and distortions about nutrition. Most likely they got hooked by the low-fat, high-carbohydrate diet craze and are now suffering as a result.
The most common excuse used instead of identifying the real culprit, carbohydrates, is heredity. People flippantly say, "It runs in my family," or "My mother also had diabetes," or "My father also had high blood pressure and heart disease." Age-related diseases could best be described as "Excessive Carbohydrate Consumption Syndrome."
The scientific evidence is clear. Carbohydrates are a sinister, sly food category that has been getting away with murder. Carbohydrates have powerful allies. They grow, manufacture and market thousands of different carbohydrate products made from fruit, grains and starchy-vegetables. The supermarket floor space allotted to these manufactured carbohydrate foods is about 80 percent of the store, and yet the scientific minimum requirement for carbohydrates in the diet is ZERO.
Carbohydrates are not an essential element for health. In fact, optimal health lies in keeping the amount of carbohydrates in the diet to a minimum. The supermarket departments that contain the healthy essential proteins and essential fats are the fresh meats, fresh fish and seafood, dairy and non-starchy vegetables. Everything else in the store is very high in carbohydrates, which turn to glucose, hype the metabolism and trigger the release of disease-causing hormones like insulin, cortisol and adrenaline.
A low metabolism is ideal for long life and good health. A high metabolism excites hormones in the body that eventually cause age-related diseases. A low metabolism is analogous to diesel engines that are known for longevity and high mileage without a breakdown. Diesel fuel is an oil that the engine uses for energy similar to fats in the diet. A high metabolism is analogous to a nitro-methane drag racer that gives a tremendous burst of energy but explodes after a few races. The nitro-methane fuel is fast burning similarly to sugar in the diet.
The pathogenic effects of carbohydrates are slow but sure. The "20-year rule" was coined to describe the length of time between the start of the high-carbohydrate diet and the onset of disease. The number of diseases, severity and time to develop are directly related to the percentage of carbohydrates in the diet. In the advanced stage many diseases are prevalent in the sufferer before death occurs.
Carbohydrates displace essential protein and essential fats in the diet to cause a double health reversal. The carbohydrates themselves cause disease, and the deficiency of protein and fats contribute or cause other diseases.
The consumption of carbohydrates generally begins showing the disease effects in either one of two directions.
Body fat accumulation leads to obesity, diabetes, heart disease, cancer, gallbladder disease, degenerative bone diseases and many others.
Damage to the intestinal tract leads to leaky gut syndrome, inflammatory bowel diseases and a medical textbook listing of autoimmune diseases. These illnesses generally make the sufferer underweight and deficient in vitamins and minerals caused by poor digestion.
The primary high-carbohydrate foods to avoid are sugars, honey, flour, grains, legumes, fruit, milk and starchy-vegetables.
Whole grains cause disease in both humans and animals. Whole grain breads and bagels are not the healthy food as people are lead to believe. All grains have a very high level of omega-6 fatty acids, which are pro-inflammatory. Grains are a poor source of protein. Grains are the most allergenic of all foods. Multiple sclerosis, lupus and rheumatoid arthritis are rare in populations where no grain products are consumed such as the Paleolithic (hunter-gatherer) diet.
The Awful Truth About Eating Grains
Grain fed to feedlot steers makes them fat and causes intestinal diseases. The feedlot diet given to steers is almost identical to the USDA Food Guide Pyramid. Both diets are very high in grains. The feedlot operator is deliberately making the steers fat. Fatty beef is given higher grading, receives the best price and has the best flavor. The time in the feedlot is short and the steer is sent to slaughter prior to developing any serious health problem. People get fat and develop disease for the very same reasons. Grains are worse for humans because we are omnivores. Steers are herbivores, but the grains still make them fat and give them diseases.
Primitive cultures that primarily ate meat from the hunt lived in relative good health. Those people who switched to a grain-based diet obtained from the cultivation of grains suffered poor health, diseases and a smaller stature.
Fruit is Not as Healthy as Many Claim
Fruit is not the healthy food many claim. Fruit is mostly fructose sugar with some vitamins, minerals and other nutrients. Those vitamins and nutrients are easily obtained from meat and non-starchy vegetables without the fructose. The body processes fructose from fruit in the same way as it processes fructose from soft drinks. There is no difference. Fructose is fructose no matter what the source. Fructose causes insulin resistance as proven in scientific tests. Fructose is highly addictive and most people simply refuse to give up fruit no matter how sick they become. This is identical to lung cancer patients who continue to smoke cigarettes. See links below for more information:
Fructose, weight gain, and the insulin resistance syndrome.
Tissue-specific impairment of insulin signaling in fructose-fed rats.
Carbohydrates Trigger Disease-Causing Hormones
The hormones involved in the carbohydrate disease loop are not the sex hormones but rather metabolism hormones. The process starts when carbohydrates are eaten in the form of sugars such as sucrose, fructose, lactose and others. Simple carbohydrates are molecules made by chains of glucose that are short. Longer glucose chains form carbohydrates that are classified as complex. The body breaks the chains apart until individual molecules of glucose are released into the blood stream. Then the problems start. The body is very sensitive to the amount of glucose in the blood, commonly called blood sugar. A small part of the brain called the midbrain that is about 1 inch (25 mm) long and red blood cells require glucose as they lack mitochondria (powerhouse of the cell) and cannot use fatty acids for fuel.
The lack of glucose (hypoglycemia) as energy for the brain can cause symptoms ranging from headache, mild confusion and abnormal behavior, to loss of consciousness, seizure, coma and death. The body can maintain an ideal level of glucose by creating it in the liver from amino acids derived from protein and/or from triglyceride fatty acids in a process called gluconeogenesis. The low-carbohydrate diet results in a perfectly controlled and stable blood glucose level in this way. On the other hand, the high-carbohydrate diet results in the body's constant attempt to prevent blood glucose swings both to the low-side (hypoglycemia) or the high-side (hyperglycemia). This control is regulated by the hormone insulin to reduce the glucose level and the hormone adrenaline to act as an emergency method of raising the glucose level.
Hypoglycemia is the train whistle signaling the diabetes train is coming down the track. The diabetes engine is powered by carbohydrates and gaining speed. Nibbling complex carbohydrates throughout the day to control the blood sugar swings will do nothing more than slow the train a year or two. The diabetes train can be stopped dead on the tracks only by avoiding all carbohydrates. The condition of uncontrolled blood sugar swings is called diabetes mellitus, or type 2 diabetes, and has become epidemic in all English-speaking countries. It will soon become a catastrophe. (Experts: World Facing Diabetes Catastrophe.)
Younger people appear to handle carbohydrates without a problem because the cells of the younger body readily accept the glucose with a small insulin response and turn the glucose into energy. However, the cells get resistant to this constant bombardment of glucose, and increasing levels of insulin are necessary to maintain a normal blood glucose level. As the cells become resistant, the insulin assists in the conversion of the extra glucose into triglycerides, which raise the triglyceride level in the blood and are deposited as body fat. Carbohydrates cause obesity, not fat. The high carbohydrate diet is a natural killer for many reasons.
Insulin is a Disease-Causing Hormone
Insulin is a hormone made by the beta cells in the islets of langerhans in the pancreas. Body cells require insulin in order to use blood glucose.
A high level of blood insulin causes many unhealthy body reactions, which eventually lead to diseases of all types. Glucose from the excessive consumption of carbohydrates is turned to body fat by the high insulin level and is also deposited in the arteries and organs causing arterial diseases, heart disease, strokes, blood clots and other diseases. High blood glucose signals increasing insulin production until the pancreas becomes fatigued after many years, making the disease seem age-related. Glucose rises uncontrollably when insulin production drops. The result causes diseases of the eyes, kidneys, blood vessels and nerves.
Carbohydrates drive insulin production that causes cardiovascular heart disease (CHD). Many heart attack patients first learn they are diabetic in the hospital emergency room, but they may not be told about the close relationship between their two conditions. Blood insulin reaches high levels and remains high as one progresses from hypoglycemia to Type II diabetes where insulin production collapses. Insulin is a very strong anabolic hormone. It pushes blood glucose into cells. It turns blood glucose into triglycerides and stores them as body fat. This sudden appearance of heart disease has been described by the author as the "Instant Atherosclerosis Cycle" (IAC).
Insulin also pushes small dense LDL molecules into the artery wall to start the atherosclerosis process. Animal research with insulin has proven many years ago that the artery will plug with atherosclerosis just downstream from the point of injection.
Carbohydrates cause the LDL molecules to be the unhealthy small, dense variety. The high-fat, low-carbohydrates diet causes the LDL molecules to the safe large fluffy light density variety. Higher LDL blood levels on the low-carbohydrate diet do not present the same CHD risk as do LDL levels on the USDA Food Guide Pyramid diet of 60 percent carbohydrates.
High-Insulin (Hyperinsulinemia) Increases Cancer Risks
High-Carbohydrate Diet Implicated in Pancreatic Cancer
Low-Fat, High-Carbohydrate Diets Contribute to Hyperinsulinemia and Hypertriglyceridemia
Diet and Colorectal Cancer: The Possible Role of Insulin Resistance
Fasting Insulin and Outcome of Early-Stage Breast Cancer
Diet, Lifestyle, and Colorectal Cancer: Is Hyperinsulinemia the Missing Link?
Carbohydrates drive blood insulin production that causes cancer. There are strong associations between a high-carbohydrate diet and many diseases that present a secondary cancer risk. Cancer risks are greatly increased with diabetes, inflammatory bowel disease and many other unhealthy conditions caused by the high-blood glucose and high-blood insulin levels.
High-Insulin (Hyperinsulinemia) Increases Cardiovascular Disease Risks
Insulin Resistance is an Important Determinant of Left Ventricular Mass in the Obese
Insulin Resistance Syndrome Predicts the Risk of Coronary Heart Disease and Stroke
Coronary Heart Disease Mortality Risk: Plasma Insulin Level Is a More Sensitive Marker Than Hypertension or Abnormal Glucose Tolerance
Hyperinsulinemia as an Independent Risk Factor for Ischemic Heart Disease
The only way to prevent diseases caused by insulin spikes and plunges is to eat a low-carbohydrate diet. Many primitive societies have lived with very few carbohydrates in the diet and have proven diabetes and all the diseases of consequence do not exist. A great example is the Eskimos of the far north prior to the introduction of white-man food.
The bad effects of insulin do not end here. High insulin spikes signal the body to release cortisol and adrenaline hormones, which also contribute to disease.
Cortisol is a Disease-Causing Hormone
Cortisol is the major stress hormone of the natural glucocorticoid family, which regulates metabolism and provides resistance to stress. Glucocorticoids are made in the outside portion (the cortex) of the adrenal gland and are chemically classified as steroids. Glucocorticoids increase the rate at which proteins are catabolized (broken down) and amino acids are removed from cells, primarily muscle fiber, and transported to the liver.
Glucocorticoids cause amino acids to be synthesized into new proteins, such as enzymes. They also raise blood pressure by constricting vessels, which is a benefit in case of injury. They are also anti-inflammatory. All of this is well and good in a healthy individual with normal glucose and insulin levels. Unfortunately, high cortisol levels cause many unhealthy reactions.
Understanding Adrenal Function
"An excessive ratio of carbohydrates to protein results in excess secretion of insulin, which often leads to intervals of hypoglycemia. The body, in an attempt to normalize blood sugar, initiates a counter-regulatory process during which the adrenals are stimulated to secrete increased levels of cortisol and adrenalin. It follows that an excessive intake of carbohydrates often leads to excessive secretion of cortisol."
Excess cortisol:
Diminishes cellular utilization of glucose
Increases blood sugar levels
Decreases protein synthesis
Increases protein breakdown that can lead to muscle wasting
Causes demineralization of bone that can lead to osteoporosis
Interferes with skin regeneration and healing
Causes shrinking of lymphatic tissue
Diminishes lymphocyte numbers and functions
Lessens SIgA (secretory antibody productions). This immune system suppression may lead to increased susceptibility to allergies, infections, and degenerative disease
High-cortisol levels caused by excessive carbohydrate consumption and high-insulin levels cause the body to extract high-tensile strength collagen protein fibers from bones, remove the mineral matrix by demineralization and weaken connective tissue at the joints. The protein loss is accelerated by a low-protein diet, and the bone minerals are lost in the urine. One is literally peeing his/her bones away. The result is a rapid and shocking diagnosis of osteoporosis and degenerative disk disease where the spine can lose as much as one inch (25 mm) in height in as little as one year. Bones fracture more easily, and the dreaded hip fracture is much more likely to occur.
Women are told to drink lots of milk and eat plenty of yogurt to get additional calcium with the promise it will prevent bone loss, but the advice is based on faulty logic. The additional lactose in the milk and yogurt plus the additional sugar and fruit added to yogurt only serve to increase the dietary carbohydrate load. The net result is harmful to the bones as many are discovering.
All of this can be prevented by eating a high-protein, high-fat, low-carbohydrate diet.
Adrenaline is a Disease-Causing Hormone
Adrenaline (epinephrine) is the "fight-or-flight" stress hormone. Epinephrine is a neurotransmitter secreted by the adrenal gland that is associated with sympathetic nervous system activity. It prolongs and intensifies the following effects of the sympathetic nervous system.
Causes the pupils of the eyes to dilate
Increases the heart rate, force of contraction, and blood pressure
Constricts the blood vessels of nonessential organs such as the skin
Dilates blood vessels to increase blood flow to organs involved in exercise or fighting off danger, skeletal muscles, cardiac muscle, liver, and adipose tissue
Increases the rate and depth of breathing and dilates the bronchioles to allow faster movement of air in and out of the lungs
Raises blood sugar as the liver glycogen is converted to glucose
Slows down or even stops processes that are not essential for meeting the stress situation, such as muscular movements of the gastrointestinal tract and digestive secretions
All of these effects are great if one is being chased by a lion or attacked by an intruder into the home. However, these effects are unhealthy to a person sitting in an office, watching a football game or simply going about his everyday life.
The last item on the above list is very disruptive to the intestinal tract and leads to intestinal diseases. People are advised to eat more high-fiber whole grains and high-fiber fruit to overcome the constipation resulting from this slow down of the intestinal system, but this advice is backward. These are very high-carbohydrate foods, which cause a surge in insulin and adrenaline that shut down the digestive processes. (Bowel Diseases and Candida--News You Can Use.)
High-insulin and hypoglycemia (low-blood sugar) cause adrenaline to increase when no fight-or-flight stress situation exists and thereby causes unhealthy body changes. The helpful body responses to adrenaline become a health hazard when adrenaline is elevated over a period of time. The long-term elevation of adrenaline is very unhealthy and leads to many diseases.
These changes include effects to the cardiovascular system that increase the risk of coronary heart disease. The low-fat, high-carbohydrate diet as recommended by the USDA Food Guide Pyramid is disease causing because it promotes hypoglycemia, hyperinsulinemia, hypertriglyceridemia and hyperadrenalemia. Prolonged elevated adrenaline has the following effects on the cardiovascular system:
Increases in the production of blood cholesterol, especially the undesirable LDL
Decreases the body's ability to remove cholesterol
Increases the blood's tendency to clot
Increases the deposits of plaque on the walls of the arteries
Adrenaline addiction is very common. Type-A personalities become addicted to their excessive activity by the stimulation and arousal of adrenaline. People who are constantly angry, fearful, guilty, or worrisome arouse their adrenaline hormone even though they may sit around doing nothing else. People who are excessive in their participation in jogging, exercise, bodybuilding, aerobics, sports, skiing, mountain climbing, car racing or flying aerobic airplanes become addicted because of the adrenaline rush from their activity. They describe the "rush" they get from their activity and feel depressed when they can't participate for some unexpected reason.
James F. Fixx was addicted to running and wrote the famous jogger's book, The Complete Book of Running. He was a marathon runner and vegetarian on a diet of high-carbohydrates and low-protein. These were a perfect setup to arouse and maintain a high level of adrenaline. He died on his daily run of a massive heart attack proving to the world that exercise does NOT prevent coronary heart disease. Fixx admitted in his book that his own research showed the athletes from his university alumni had a shorter life span than the "couch potato" students. This difference may have been caused by the difference in adrenaline between the two groups. Hypoglycemia and stress are a deadly combination.
Sunday, June 06, 2004
Summer starts...
What’s happening:
War. Again Victor Davis Hanson writes of America’s attitudes on the War so clearly and so correctly, it is a joy to read. I could go cut and paste and copy all his recent stuff, but better to go look at it directly on National Review Online or other places. Excerpt below:
The New Defeatism
Partisanship about the war earlier on established the present sad paradox of election-year politicking: Good news from Iraq is seen as bad news for John Kerry, and vice versa. If that seems too harsh a judgment, we should ask whether Terry McAuliffe would prefer, as would the American people, Osama bin Laden captured in June, more sarin-laced artillery shells found in July, al-Zarqawi killed in August, al-Sadr tried and convicted by Iraqi courts in September, an October sense of security and calm in Baghdad, and Syria pulling a Libya in November.
These depressing times really are much like the late 1960s, when only a few dared to plead that Hue and Tet were not abject defeats, but rare examples of American courage and skill. But now as then, the louder voice of defeatism smothers all reason, all perspective, all sense of balance — and so the war is not assessed in terms of five years but rather by the last five hours of ignorant punditry. Shame on us all.
Historic forces of the ages are in play. If we can just keep our sanity a while longer, accept our undeniable mistakes, learn from them, and press on, Iraq really will emerge as the constitutional antithesis of Saddam Hussein, and that will be a good and noble thing — impossible without America and its most amazing military.
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Health. On my expanding To Do List is to extract parts of Light Out. Sleep Sugar and Survival and present them here. I have both the e-Book version (duly protected against even copying a phrase of text) and the print version. I’ve re-read it several times. Wonderfully written, great premise, backed by lots of research and citations, etc. A great, readable piece on evolutionary biology, which attempts to explain our current behaviors as “selected” – and wired in - because they improved survival chances.
In a few words:
We were designed as human beings (by God or evolution, or both, whatever) over thousands of generations and developed by behaving in a way that helped us survive. We slept when the sun went down; we ate local stuff, including lots of meat, we slowed down in the winter and lived off accumulated fat. If we follow a similar regimen, we stay healthy, our immune systems prosper and we die much later. All this is backed by references and extensive research that leads one to the conclusion that carbs are not at all good for you, especially sugar; and that if you will only get 9-10 hours of sleep at night (starting by 9 or 10 pm) lots of good things happen in and to your body. Pretty simple.
The lights of electricity and computers cause an extension of the day past it’s normal dark ending at sunset, and cause our bodies to keep eating carbs and storing fat, since it must be “summer”, of long days and short nights, when we have to do that, to survive the upcoming winter.
More coming…
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Garden. Roto-tilled three times the area and have most of it filled; still some transplants waiting another burst of ambition. A tall 100-year old or so tree came down last summer in a storm and now the area gets much more sun.
Only one potted rose survived the winter, as did the rosemary. Planted trees (small pine), berries, and lots of vegetables and herbs. So far, deer, squirrels and other vermin of the forest have left it all alone. They’ll get the grapes, as a minimum, at just the right time, for sure.
Feeding birds with seeds in the front porch birdbath produces lots of bird varieties and quite a show; but the squirrel population is booming here and they take over regularly. Comes along Squirrel Be Gone (Danger Wear Gloves) to be added to a seed mixture. Apparently it is mostly dried chili peppers that are supposed to discourage consumption by squirrels and will be ignored - or picked around – by birds. In practice, squirrels seem to love it like salsa, and invite in their families to party.
Lost the BB-gun, hiding it successfully somewhere around here when we went out of town; so I’m now reduced to rock throwing: ineffective in keeping them away for long, but works wonders for redeveloping my old pitching arm and releasing frustration…
Saturday, April 17, 2004
Are We Crazy?
Classics Scholar Victor Davis Hanson again asks and answers the basic simple questions about the War...
Wednesday, April 07, 2004
Woman in Combat -
Blogging NCO in the middle of the nasties. Amazing and scary stuff...
http://www.livejournal.com/users/ginmar/
Ginmar on livejournal.com
Friday, March 26, 2004
Finishing the War...
Victor Davis Hanson, again, says it all and says it well...from today's National Review Online
"It is never wrong to be on the side of freedom — never."
Finishing...
Thursday, March 25, 2004
Peggy Noonan on Clinton's Moral Retardation
Leadership is doing the right thing...and convincing people to support you doing that, not governing by polls.
Hearings Won't Make Us Safe
Wednesday, March 24, 2004
CounterTerrorism Expert Speaks...
With all the political talk about blame pre-9/11, I recall seeing Larry Johnson trotted out on several news channels in the past to "explain it all". He was the State Department Guy In Charge of Counterterrorism.
Here is a reference to his thoughts before 9/11 - from NR Online today,
Cliff May's article.
===============
Michael Ledeen, in his fine book, The War Against the Terror Masters, points to an op-ed that ran in the New York Times on July 10, 2001 — almost exactly two months before the 9/11 attack. Written by Larry C. Johnson, a former State Department counterterrorism specialist, it reflected the conventional wisdom within America's foreign-policy elites.
"...If you are drilling for oil in Colombia — or in nations like Ecuador, Nigeria or Indonesia," Johnson wrote, "you should take appropriate precautions; otherwise Americans have little to fear."
Johnson actually predicted that terrorism would decline in the decade beginning in 2000 as, he argued, it had in the '90s because of "the current reluctance of countries like Iraq, Syria, and Libya, which once eagerly backed terrorist groups, to provide safe havens, funding and training."
Johnson blamed excessive fear of terrorism on "24-hour broadcast news operations too eager to find a dramatic story" and on "pundits who repeat myths while ignoring clear empirical data," along with politicians who "warn constituents of dire threats and then appropriate money for redundant military installations and new government investigators and agents."
Johnson also criticized the military and intelligence bureaucracies, saying they were "desperate to find an enemy to justify budget growth."
This is an astonishing analysis when you consider that Johnson was writing after the first bombing of the World Trade Towers, after the bloody battle depicted in the book, Blackhawk Down — involving Osama bin Laden-trained Somali guerillas — after the attempt by Saddam Hussein to assassinate former President Bush in Kuwait, after the bombing of our troops in Khobar Towers in Saudi Arabia, after the terrorist attacks on America's embassies in Kenya and Tanzania, and after the attack on the USS Cole, and after Secretary of State Albright included Iraq among the seven countries designated as state sponsors of international terrorism in 2000.
Sunday, March 14, 2004
Cheaper Medicine
I met Peter Huber at a Gilder Telecosm several years ago. A great writer who now does an occasional column for Forbes.
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3/10/04
The cost of health care in the U.S. has been declining steadily for the last 50 years. It will decline faster still in the next 50. All of the doleful commentary about mushrooming costs and budget-busting programs ignores the principal economic costs of illness, which are falling fast, and the science of pharmacology, which is transforming the economics of health care.
By far the largest economic cost of illness is lowered labor productivity. Sick people can't work, and when adults die in their prime, they take all their intelligence, skills and initiative with them. Until recently, the cost of illness among children and the elderly was also shouldered mainly by the healthy adults who devoted countless hours to their care. Such costs aren't reflected in revenues to doctors or hospitals, still less in federal insurance programs. They are felt in lost corporate profits, lower wages and, for many women, tireless but entirely off-budget toil in the home.
Several developments radically changed this economic calculus in the second half of the 20th century. Vaccines all but eradicated many of the most common childhood diseases and substantially curbed infectious disease among adults as well. However much it cost to develop the whooping cough vaccine or to distribute it free to families who couldn't afford it, the cost must surely have been dwarfed by the economic gains that came from freeing up mothers to engage in other pursuits. Antibiotics had a comparable impact. Tuberculosis was a fantastically expensive disease a century ago--think of the balconies in the mountains of Davos or Saranac Lake. Polio meant braces and iron lungs. Those costs have all but disappeared...
More at Medicine Gets Cheaper
His Web site:Peter Huber
Saturday, March 13, 2004
Got Rice?
Nice to hear a little bad news about what the Chinese are doing occasionally. The following is from the inestimable ("too great to be calculated...") Mogambo Guru
============
"...The Chinese are discovering that the sad result of rapidly expanding the money supply, a lot of which was used to soak up all those American dollars that are flooding the world, is that it causes price inflation. And the poor people, and there are lots and lots of Chinese people who are poor and almost-poor, and who get really irritated when they have to pay higher prices for things. In this particular case, it is the price of rice that is causing distress. The price of rice, which is referred to as a "staple," is up around 40% from this time last year. While all foodstuffs are rising mightily, it is rice that is garnering the lion's share of the publicity, as it is the predominant staple I guess. And all other prices are rising, too, in case you were wondering, which only goes to show you that inflation seeps into the prices of everything.
To show you that government idiocy is pandemic in the world, the Chinese response is to "increase supply" by increasing farmer subsidies by $1.2 billion to encourage them to grow more rice. "Supply-side China" is a phrase that ought to send chills up your spine. Apparently they are unaware that the $1.2 billion is money, too, and they are just making the problem worse by giving them more money, and they will necessarily reap not only a little more rice, but also the mal-investment of artificially jiggering the economy. Which will, if you are up to date on your mal-investment jiggering theory (MJT), create more mal-investments."
Saturday, February 28, 2004
"We no more need a phone company...
"...than we need a text company"
Clay Shirley offers his unique insights here:Networks, Economics and Culture
Excerpt from Today's email -
==========================
VoIP - Plan A vs Plan B
2003 was a remarkable year in the US for voice over the internet
(VoIP). If you needed a label for the events of the year, "Collapse of
Denial" would be a good one -- after a long period of relative
inaction, the FCC and the state regulators are suddenly pushing hard
for a regulatory framework. The question is no longer whether voice is
going to become an internet application, but when.
"When" could still be a very long time, however. The incumbent local
phone companies -- Verizon, SBC, BellSouth and Qwest -- have various
degrees of interest in VoIP, but are loathe to embrace it quickly or
completely, because doing so means admitting to everyone --
shareholders, regulators, customers -- that both monopoly control and
artificially high voice revenues are going away. (The fact that this
is true does not much lessen the pain of saying so.) As a result, they
will likely try to convince regulatory agencies, both the FCC and the
states', to burden competitive VoIP firms like Vonage with additional
costs and rules, while delaying their own offerings.
Complicating this de facto Plan A, however, is the fact that VoIP
isn't a service, it's just a set of protocols, meaning that
competitors don't have to set themselves up as upstart phone companies
to deploy VoIP. If Plan A is "Replace the phone system slowly and from
within," Plan B is far more radical: "Replace the phone system.
Period."
Where Vonage and a number of the other VoIP startups present
themselves to the customer as phone companies, emulating the
incumbents they are challenging, you can think of Plan B as the Skype
plan. Skype isn't taking on the trappings of a phone company; instead,
it offers free two-way voice conversations over the internet (they
aren't phone calls, for the obvious reason) between users who have
downloaded and installed software onto their computer. (Other versions
of Plan B include instant messaging clients that let users talk, not
just type, and software like shtoom, a set of VoIP tools for the
Python programming language.)
The Plan B strategy is simple: "Familiarity is the enemy of progress.
Forget backwards compatibility, and concentrate on offering services
the traditional phone companies can't touch." For example, Skype
recently added user-defined conference calling, a kind of cross
between call waiting and conference calling, so that when someone
calls while you're on the phone, you can simply turn it into a
three-way call, a pattern more like joining a conversation at a party
than today's cumbersome conference calling.
Where Plan A is a fight between incumbent and upstart phone companies,
Plan B says that we no more need a phone company than we need a text
company. Email and weblogs and IM all use text -- why not use voice in
a similar variety of applications, and with a similar lack of
commercial bottleneck?
Plan A and Plan B are caricatures, of course. Vonage is experimenting
with un-phone-like features like mailing out voicemail messages as
audio file attachments, while Skype is talking about ways of
interfacing with the traditional phone network. Nevertheless, the
tension between the two plans is real: modification or replacement of
the current phone system. The litmus test is emphasis -- Plan A
emphasizes for-fee calls to ordinary telephones, with free
computer-to-computer calls presented as a bonus, while Plan B
emphasizes free calls as the main event. And much of how VoIP unfolds
will have to do with regulations written in 2004.
- The End of the Three-Part Deal
The official tradeoff in current telecom regulation is service
guarantees in return for monopoly control. Over the decades, though, a
third part of the bargain has arisen. Phone companies tolerated high
taxation as well, in part because it guaranteed continued freedom from
competition. As a result, telephony is treated as a vice instead of an
essential service -- the taxes and surcharges on a phone bill are more
in line with the markup on alcohol and tobacco than with gas or air
travel.
However, monopoly control, essential for the current bargain, is
ending. The cumulative threats of competitive local phone companies,
the decrease of second lines due to DSL and cellphone use, and now
VoIP have made the old deal unsustainable. The rise of a competitive
market seems conceptually simple, but most parts of the US have had a
phone monopoly for longer than they've had indoor plumbing, so the
possibility of phone service without the incumbent phone company is
hard for man observers to understand.
Even now, 20 years after the breakup of Ma Bell, some commentators
have criticized VoIP by noting that the phone company often provides
the high-speed DSL service that carries the VoIP traffic. "Isn't VoIP
simply a parasite technology?" goes this line of thought, on the
assumption that by undermining inflated voice revenues, VoIP will
destroy the DSL business as well.
This question makes no sense in a market economy. With railroad
bankruptcies in the 1940s, no one thought that the tracks would be
ripped up and sold for scrap. Similarly, the question of whether the
incumbent phone companies can survive if VoIP pops the bubble of voice
revenues is separate from the question of whether the wires in the
ground will continue to exist. Someone will sell data transmission
over copper wires, but there's no reason it has to be the existing
phone companies, in the same way that someone still runs trains from
St. Louis to Chicago, but it isn't the B&O Railroad anymore.
- Plan B: Saving Plan A?
With their monopoly ending, incumbents have no choice but to embrace
VoIP someday, because of the cost savings and the superior
flexibility. However, they may succeed in significantly delaying that
someday with the strategy of attacking their competitors through the
regulatory system, while slowing their own deployment of the
technology.
Plan B, however, is resistant to this strategy, because while it
creates the same value as a phone call, it does so without any of the
mechanics that regulation attaches to. No dialing, no phone numbers,
no _phones_ even, and, most ominously for the incumbents, no charge to
the end user. Vonage may be competition, but they don't undermine the
idea of charging the user the way Skype or Yahoo Instant Messenger do.
If you had to bet on the impulses of the phone companies and state
regulators, your bookie wouldn't raise an eyebrow if you put
everything on their trying to kill every Plan A company in sight.
We've seen this story before, as when the music industry, unable to
grasp the profundity of a technological change, killed Napster rather
than trying to bargain. This in turn sent the users to Kazaa and
Gnutella. The RIAA has now spent far more time, energy and money going
after these services than they ever did on Napster, with distinctly
less decisive results.
Similarly, the phone companies are overestimating the threat of Vonage
(which also wants to charge users to talk to one another) and
underestimating the threat of Skype (which doesn't.) And yet if they
succeed in killing off their Plan A competitors, they will strengthen
the far more radical challenge from Plan B.
This is the big wild card of 2004. It's clear what the consumers want
-- the maximum amount of experimentation with all sorts of models, and
not being forced to choose between new features and backwards
compatibility. However, telephony regulation is notoriously resistant
to user demands -- neither the FCC nor state regulators are elected,
and neither group is very responsive to citizen action.
The only thing that might save Plan A from death by delay is evidence
that users are adopting Plan B in large numbers, using the internet
for voice applications completely outside the framework of telephony
as we've known it for more than a century. We should all hope that
happens, because if wide adoption of Plan B convinces the regulators
and incumbents to acclerate their VoIP offerings, the users
benefit. And if it doesn't, Plan B will be all we get, so we may as
well start experimenting with it now.
=======================
Thursday, February 19, 2004
Chicken on India
From The Daily Reckoning....
Stomaching India
Karim Rahemtulla
About 125 years ago my family left India and made its way to the East Coast of Africa. They were traders and soon built up an array of businesses ranging from retail stores to commodities like oil. My father was one of the largest distributors for Mobil on the East Coast of Africa. We were based in Mombasa (the name probably rings a bell as one of the recent targets of Middle Eastern terrorists.) Prior to 1997, I had never visited India nor paid much attention to the region. After all, the Indians that I knew were all fleeing the country for better opportunities abroad. But, Asia was in vogue in the early to mid-nineties, and I felt the need to make a trip over there and to other parts of Asia to check it out in person.
I set up several appointments with investment firms, bourse officials and investors. I was fully expecting to come back with strong, positive feelings about the region and the potential for investing. But as with China, the results were less than favorable.
Let me digress for a minute. I am not opposed to investing in India, China or Asia in general. I am opposed to investing without a darn good guide who knows what is happening on the ground. There are too many "me too" investments that pop up from these countries with nothing more than a trumped-up story of gold in them thar' hills. So, please, invest away, but do so with eyes wide open and ears to the ground.
Sh** happens
After a late night arrival in Delhi, I woke up the next day for a walk around. I wore new white sneakers, a pair of walkers bought just for the trip. I got my first take on Indian capitalism very soon after leaving the hotel. A street urchin approached me and told me my sneakers needed cleaning. I was wearing shorts and a polo shirt - I guess I stood out as a tourist from a mile. I didn't have to look down - after all, the sneaks were new. I said no and began walking away. He persisted and so I finally looked down, and lo and behold... something gross was smeared all over one of my sneakers. There were few cows walking around on the streets, so I know I did not step in a cow patty. To this day I know the little guy had intentionally pitched something on my sneakers just to make a sale.
"Ok. Go ahead, clean it up." It took him about 20 seconds of mixing some concoction from his little box to come up with a cleanser to miraculously make my shoes look like new again ( I wonder if Proctor and Gamble gets its formulas from some backstreet chemist in Delhi.) His price - $3 dollars. I gave him a dime and told him to take a hike. He did while firing off expletives in hindi in my direction. Hey, I may be a tourist, but I do know the value of a good hosing. I guess in a country where 80% of the population (at least 1 billion out of 1.3 billion) are poor, the art of making something out of nothing has been perfected!
Efficiency in numbers
I was visiting several cities in India before heading off to Bombay to visit the Stock Exchange and meet with some investor types. I hired a driver, Kumar was his name, to drive me all over the place. It cost about $20 a day including gas and tolls. Yes, there are tolls in India. Let me tell you how it works. As we entered Jaipur, I believe (it has been a long time), we stopped at a toll booth. About three toll collectors stuck their heads out of the small window. Kumar handed over a small bill to pay the toll, about 3 cents U.S.. The toll collectors looked at the crumpled note and did not like what they saw. I could see that there were at least another seven or eight people in the small building. They passed the note around some more and finally pronounced their edict. The note was a fake. They would not accept it. It had too many holes in it, too. Meanwhile about three hundred multicolored trucks were lined up waiting to pay their toll. Kumar asked me to help out. I gave him another note. Mine were a little fresher. The toll boothies looked it over and a few minutes later let us pass. This model of Indian efficiency took us about 15 minutes - all for a 3 cent note.
Currying favor
As much as I would like to share the daily adventures of this 3-week trip, I will get right to the point. That point can only be illustrated by my visit to Bombay and the Bombay Stock Exchange. Just before my trip, the BSE had made new all-time highs. Everybody was fat and happy. Even the "Big Bull," as he was fondly nick-named by the press, had predicted even more good times ahead. The Big Bull was more bull than big. His name was Hershad Mehta. He was a big broker on the BSE and had made a lot of people very excited.
Mr. Mehta, as it turns out, was the king of Indian financial chicanery, doing lots of stuff that was not very legal. He was arrested in 1992 and charged with financial fraud. Turns out he was borrowing money from some large State banks and funneling the money to the tune of millions into the illiquid Bombay Stock Exchange. At the time of my visit, he was out of jail and back as a bullish financial prognosticator. The stage was set. The last piece of confirmation that the Indian market was one big scambubble waiting to pop was an admission by one of the head honchos that I met. I can't recall now whether he was the CFO or COO of the exchange. Anyway, he had an air-conditioned office - placing him pretty high up on the food chain. He told me to my face that the markets were rigged. They entire exchange was controlled by a small group of large brokers who dictated every move of every stock. I did not need to hear much more.
A queer incident
Upon my return to the U.S. in August of 1997, I wrote an article. It ended with me saying in no uncertain terms that I would not invest a dime in India. Later that year, in October, I spoke at the Blanchard Conference in New Orleans. I spent half an hour of my speaking slot explaining to the audience why they should not invest in either India or China - opinions based on my visits to both countries. Unbeknownst to me, the following speaker, I will not mention his name, began his speech by pounding home why everyone in the audience should be investing in India right now. Call it luck or fortuitous timing, but the whole of the Asian markets, including India and China, collapsed soon after as a result of the Asian Financial Crisis. Now that WAS an opportunity!
The trip of a lifetime (again)
I can't wait to go back to India and China to see what is really going on. Both countries have truly magnificent scenery and history. The people on the whole are terrific, but that is not why I invest. If I listened to the financial press today, I would be fully invested in the next economic miracle. But, I think I owe myself the real scoop before I get on the bandwagon.
Both countries, and the region in general, could be spectacular stories. But, I have been there and done that several times with emerging markets in Asia, South America, Russia, Turkey - you name it. The recurring theme is this: Buy when blood is running in the streets, not when the chicken in every pot is ready for consumption. That chicken could be you.
Right Wing Wacko...
"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance."
The quote is attributed to Marcus Tullius Cicero, circa 55 B.C.
Sunday, February 15, 2004
Krauthammer's Speech
Dr. of Psychiatry, brilliant, insightful Charles K gave a speech recently. As usual, he is right no target...
JMW
=======================
Democratic Realism
Wednesday, February 11, 2004
More Hitchens...
http://www.opinionjournal.com/forms/printThis.html?id=110004680
Monday, February 09, 2004
Personality, Not Issues....
Christopher Hitchens - principled liberal and wonderful writer:
"I'm a single-issue person at present, and the single issue in case you are wondering is the tenacious and unapologetic defense of civilized societies against the intensifying menace of clerical barbarism."
More, including his take on all the major candidates is here:
All Against Bush
Sunday, February 08, 2004
Can you walk and chew gum? Try this...
Interesting Mind Hack.
Works with most people...not sure why...
===========
An amazing testimony to the incredibly complex neurology in your nervous system. You have to try this out to believe it. While sitting in your chair, lift your right foot slightly off the ground and move it in clockwise circles. Now draw the numeral "6" in the air with your right hand. Your foot will involuntarily reverse direction.
Making Light February 3, 2004
Wednesday, January 21, 2004
Sugar Bad...
I am a Type 2 diabetic and so I watch sugar and carbo intake carefully.
A "best selling" book, published some time ago, Sugar Blues, got into the historical "damage" done by refined sugar and its cultivation and sale. The author goes off for awhile on this Whole Big Theory Thing and gets off thread a bit; but the science part seems plausible.
From a doctor's website - albeit one selling books/diets/seminars/etc, comes this: a list of Why Sugar Is Bad For You, with citations for all of the assertions. Hmmm....
http://mercola.com/blog/2004/jan/19/us_government_influenced_by_sugar_industry/http$3A$2F$2Fwww.mercola.com$2Farticle$2Fsugar$2Fdangers_of_sugar.htm
Why Sugar Is Bad For You
FWIW
Wednesday, January 14, 2004
Florence King Goes To WalMart....
Celebrated Misanthrope Florence King's 1997 piece on greeters and toaster shopping and grandmothers, replayed on National Review Online's The Corner...
Great Stuff...
JMW
==========
Amidst all the chatter over immigration, gay marriage, and caucuses, we will now provide The Corner readers with a selection from Florence King's beloved "The Misanthrope's Corner" column. This April 21, 1997 gem finds Miss King taking on superstore "Official Greeters" and toaster warnings. Enjoy.....
==========
IT all started when I went to the mall to buy a new toaster. It should have been a day off, which in my case means not writing about America, not taking notes on America, not thinking about America. But such days don’t exist. I got a column out of my day off, and here it is.
Shopping at the big discount chains is a painful experience for me because I’m scared of the Official Greeters, especially the one in the wheelchair. As soon as she sees you come in, she revs up and zooms in on you, shrieking, “How can I help you have a fun-filled shopping experience?” They had her in a TV ad once, racing through the aisles and burbling, “I love people! I love people! I just love people!” Having been stalked by irony all my life, I know an omen when I see one. If there’s the slightest chance of someone being run over by a people-loving disabled American, it’s a dead cert to be me.
My first task was getting into the store without being seen by the cadre of Official Greeters. There’s a way to do this. Lighting a cigarette, I stood outside the door smoking until I saw a covey of Fam Vals approach: distracted parents, three or four kids, everybody dropping things and talking at once. If there’s one thing OGs love even more than human beings it’s kids, so I got behind the Fam Vals and surged in with them. It worked. As soon as the OG on duty saw the munchkins she shrieked, “Hiya, fellas!” and immediately engulfed them, allowing me to sneak past on my little cat feet.
I hadn’t bought a toaster for twenty years so I was unprepared for the new four-slot models (one even had six) that had come on the market since then. Fam Vals again: the bigger the toasters, the better we feel about ourselves. Finally I found a two-slotter and bought it.
Back home, I plugged it in and was about to throw the packing away when I noticed the “Use and Care Guide.” I started reading it, and in minutes I was underlining my favorite passages and making marginal notes in typical workaday fashion.
It opens with “WARNING: A risk of fire and electrical shock exists in all electrical appliances and may cause personal injury or death.” Next comes “IMPORTANT SAFEGUARDS: When using electrical appliances, basic safety precautions should always be followed to reduce the risk of fire, electric shock, and injury to persons, including the following.”
What follows is a list of 17 Dos, Don’ts, precautions, safeguards, warnings, and dire caveats that leave nothing to the imagination, common sense, or sanity itself. Not even those unrivaled connoisseurs of peril, Jewish mothers and grandmothers of all stripes, could come up with a list like this. Things happen here that could happen only in a “Pink Panther” movie.
“Do not use appliance except as intended.”
“Do not use outdoors or while standing in a damp area.”
“Do not place on or near hot gas or electric burner, or in a heated oven.”
“Do not place any part of this toaster under water or other liquid.”
“Do not insert over-sized foods, metal foil packages, or metal utensils into the toaster.”
“Do not clean with metal scouring pads. Pieces can break off the pad and touch electrical parts creating a risk of electrical shock.” “Use toaster in an open area with 4-6 inches air space above and on all sides for air circulation. A fire may occur if toaster is covered or touching flammable materials including curtains, draperies, towels, walls, and toaster covers.” “Failure to clean crumb tray may result in a risk of fire.”
Is Paris burning? You bet; Inspector Clouseau has done with one toaster what von Choltitz failed to do with a whole German army.
Meanwhile, non-klutzy toast lovers are stymied by two SAFEGUARDS that never before crossed their minds: “Do not use appliance unattended” and “Unplug from outlet when not in use.” You don’t really have to go to the bathroom, it’s all in your mind; just stand there and watch the toaster toast and everything will be all right as long as you remember to unplug it before going downstairs to get the mail.
At this point the guide dissolves in repetitive babble. SAFEGUARDS is followed by a CAUTION about extension cords, which “may be used if care is exercised in their use. If an extension cord is required, special care and caution is [sic] necessary.” CAUTION is followed by another WARNING (“Unplug before cleaning. . . . Do not immerse in water”), followed by a four-point CAUTION, only two of which are new. One says: “Avoid using items with ‘runny’ frosting, fillings, icings, or cheese. This includes pre-buttered foods. When these substances melt, they cause a sticky build-up and may result in a risk of fire.” The other new CAUTION says, “Do not physically hold down the toast lever,” which, when combined with “Do not operate unattended,” raises the distinct possibility that there are people in this world who get their kicks from hanging around toasters.
The purpose of this frenzied flyer is to protect the manufacturer against lawsuits, but there’s more to it. The surface of American craziness is only the beginning; the really good stuff is found underneath. Looking at my day off as a whole, I would venture to say that there would be no litigiousness or Official Greeters if we had real Family Values, instead of the fake kind that hangs over everything from shopping malls to focus groups like a damp shroud.
I mean, for example, grandmothers who did not dye their hair and date, but lived with their married daughters and enlivened breakfast with: “If you stick a fork in that toaster you’ll be burned to a crisp. There’ll be nothing left of you except a little pile of ashes and everybody will say, ‘Do you remember that poor little girl who electrocuted herself?’”
That’s called a “loving warning,” and if you grow up hearing them you won’t have to sue people or hug strangers to get attention or prove that somebody cares.
========================
Sunday, January 11, 2004
George Will...Social Hypochondria
George Will writes that perhaps our fascination with little bad news-es is a survival behavoir. The big picture, not good for helping the out-guys throw the in-guys out in an election year - is seen by few and appreciated by fewer, it seems.
JMW
=========================================
DISCONTENTED
George Will
January 11, 2004 -- "What good is happiness? It can't buy money."
- Henny Youngman
SOCIAL hypochondria is the national disease of the most successful nation. By most indexes, life has improved beyond the dreams of even very recent generations. Yet many Americans, impervious to abundant data and personal experiences, insist that progress is a chimera.
Gregg Easterbrook's impressive new book, "The Progress Paradox: How Life Gets Better While People Feel Worse," explains this perversity. Easterbrook, a Washington journalist and fellow of the Brookings Institution, assaults readers with good news:
American life expectancy has dramatically increased in a century, from 47 to 77 years. Our great-great-grandparents all knew someone who died of some disease we never fear. (As recently as 1952, polio killed 3,300 Americans.) Our largest public-health problems arise from unlimited supplies of affordable food.
The typical American has twice the purchasing power his mother or father had in 1960. A third of America's families own at least three cars. In 2001 Americans spent $25 billion - more than North Korea's GDP - on recreational watercraft.
Factor out immigration - a huge benefit to the immigrants - and statistical evidence of widening income inequality disappears. The statistic that household incomes are only moderately higher than 25 years ago is misleading: Households today average fewer people, so real dollar incomes in middle-class households are about 50 percent higher today.
Since 1970 the number of cars has increased 68 percent, and the number of miles driven has increased even more, yet smog has declined by a third and traffic fatalities have declined from 52,627 to 42,815 last year. In 2003 we spent much wealth on things unavailable in 1953 - a cleaner environment, reduced mortality through new medical marvels ($5.2 billion a year just for artificial knees, which did not exist a generation ago), the ability to fly anywhere or talk to anyone anywhere.
The incidence of heart disease, stroke and cancer, adjusted for population growth, is declining. The rate of child poverty is down in a decade. America soon will be the first society in which a majority of adults are college graduates.
And so it goes. But Easterbrook says that such is today's "discontinuity between prosperity and happiness," the "surge of national good news" scares people, vexes the news media and does not even nudge up measurements of happiness. Easterbrook's explanations include:
* "The tyranny of the small picture." The preference for bad news produces a focus on smaller remaining problems after larger ones are ameliorated. Ersatz bad news serves the fund-raising of "gloom interest groups." It also inflates the self-importance of elites, who lose status when society is functioning well. Media elites, especially, have a stake in "headline-amplified anxiety."
* "Evolution has conditioned us to believe the worst." In Darwinian natural selection, pessimism, wariness, suspicion and discontent may be survival traits. Perhaps our relaxed and cheerful progenitors were eaten by saber-toothed tigers. Only the anxiety-prone gene pool prospered.
* "Catalogue-induced anxiety" and "the revenge of the plastic" both cause material abundance to increase unhappiness. The more we can order and charge, the more we are aware of what we do not possess. The "modern tyranny of choice" causes consumers perpetual restlessness and regret.
* The "latest model syndrome" abets the "tyranny of the unnecessary" which leads to the "ten-hammer syndrome." We have piled up mountains of marginally improved stuff, in the chaos of which we cannot find any of our nine hammers, so we buy a tenth, and the pile grows higher. Thus does the victor belong to the spoils.
* The cultivation - even celebration - of victimhood by intellectuals, tort lawyers, politicians and the media is both cause and effect of today's culture of complaint.
Easterbrook, while arguing that happiness should be let off its leash, is far from complacent. He is scandalized by corporate corruption and poverty in the midst of so much abundance. And he has many commonsensical thoughts on how to redress the imbalance many people feel between their abundance of material things and the scarcity of meaning that they feel in their lives.
The gist of his advice is that we should pull up our socks, spiritually, and make meaning by doing good while living well.
His book arrives as the nation enters an election year, when the opposition, like all parties out of power, will try to sow despondency by pointing to lead linings on all silver clouds. His timely warning is that Americans are becoming colorblind, if only to the color silver.
=================
Friday, January 09, 2004
Gilder pooh-poohs Bonner, TDR.../More After TV Dies...
George , the eternal optimist, takes on Gloom and Doom of TDR/Bill Bonner:
=============
Excerpted from George Gilder's 12/27/03 post, "Buffetted in Bonnerville"
on the Gilder Technology Report subscriber message board on
www.gildertech.com To read more of Mr. Gilder's posts, and share insights
with other Gilder subscribers, visit http://www.gildertech.com
"...It's nonsense. The best answer came from Thomas Macaulay, who I quote
at length in Wealth&Poverty on the growth of the British national debt
while all the greatest British economists from Adam Smith to David Hume
prophesied disaster. I update his insights here:
"Those who uttered and those who believed that long succession of
despairing predictions erroneously imagined that there was an exact
analogy between the case of an individual who is in debt to another
individual and the case of a society which is in debt to part of itself;
and this analogy led them into endless mistakes....They were under an
error not less serious touching the resources of the country. They made
no allowance for the effect produced by the incessant progress of every
experimental science, and by the incessant effort of every man to get on
in life. They saw that the debt grew and they forgot that other things
grew as well as the debt....[the economists] went on complaining that [the
nation] was sunk in poverty till her wealth showed itself by tokens which
made her complaints ridiculous....Meanwhile, taxation was almost
constantly becoming lighter and lighter, yet still the Exchequer was
full."
The chief difference today is that the relevant economy is global and the
advance of real wealth is vastly accelerated by the progress of
technology.
Yes, Bonner is right that the stock market might go down and gold might go
up. But he has no clue why. Nothing would accelerate the process so much
as Bonner's (and Buffett's and Soros's) prescriptions: Raise taxes and
devalue the dollar.
--George Gilder
Another 12/27/03 excerpt from George Gilder's message board comments:
"...The future of these companies depends on the expansion of full
broadband last mile links--meaning TV-killer full motion video pipes--into
the US. With fully one third of TV time now devoted to commercial
messages according to the latest reports, TV today is on an avid death
trip, aching for euthanasia. With the death of TV at the hands of two-way
full motion broadband, the funds that support it will flow to the net and
multiply, as Americans regain control of their cultural lives.
Despite all ridiculous claims to the contrary, however, in this richest
and most technological fertile of all nations, two-way broadband scarcely
exists at all, except on the increasingly thronged USB and PCI busses
between monitors and harddrives and UPS busses between Netflix et al and
your front door.
Broadband is expanding explosively in several countries around the globe.
But isolated by distinctive languages, Korea, Japan, and Italy do not
suffice to ignite a surge of global traffic. Thus from XO to GX to 360, to
Broadwing (CORV), the big backbone scavenger carriers continue to wage
price wars for the business of a few hundred giant corporations....."
--George Gilder
Thursday, January 08, 2004
THE IDEA OF AMERICA
A view of what "American" means, from the editor of TDR
===============
THE IDEA OF AMERICA
By Bill Bonner
"Elizabeth," I asked this morning, as my wife climbed out of the
pool. "How would you describe that sea turtle we saw on the
beach?"
Pausing for a moment, she replied:
"Rotating its slow and majestic flippers, it ground its way
slowly and inexorably towards China... "
The sea turtle was headed east. Whether China was its destination
or not, I don't know. I only know that it was about to leave the
Latin America isthmus, from the west coast of Nicaragua, and put
out to sea when a muscular, brown young man picked it up and
carried it back up on the beach. He and his friends had dug a big
hole in the sand where the turtle was placed.
At night we often see the dim light of flashlights along the
beach. "It's the locals looking for turtle eggs," Manuel
explained. "It's illegal to take them, but... " Manuel shrugged
his shoulders.
Sea turtles are protected by international convention. But here
in the wilds of Nicaragua they still end up in the soup from time
to time.
This is America too... but it is not the same America. It is the
New World... but not as new as the world north of the Rio Grande.
Here, the Old World has not yet been snuffed out. It survives in
a semi-tropical paradise.
But the object of our attention in today's Daily Reckoning is
neither the Old World nor the New one - but the ever- changing,
never-fully-explored idea of America.
"Proud to be an American" says one bumper sticker. "One nation -
indivisible," says another. America was, of course, founded on
the opposite principle... the idea that people were free to
separate themselves from a parent government whenever they felt
they had come of age. But no fraud, no matter how stupendous, is
so obvious as to be detected by the average American. That is
America's great strength... or its most serious weakness.
After September 11, so many people bought flags that the shops
ran short. Old Glory festooned nearly every porch and bridge.
Patriotism swelled every heart.
Europeans, coming back to the Old Country, reported that they had
never seen anything like it. A Frenchman takes his country for
granted. He is born into it, just as he is born into his
religion. He may be proud of La Belle France the way he is proud
of his cheese. But he is not fool enough to claim credit for
either one. He just feels lucky to have them for his own.
America, by contrast, is a nation of people who chose to become
Americans. Even the oldest family tree in the New World has
immigrants at its root. And where did its government, its courts,
its businesses and saloons come from? They were all invented by
us. Having chosen the country... and made it what it is...
Americans feel more responsibility for what it has become than
the citizens of most other nations. And they take more pride in
it, too.
But what is it? What has it become? What makes America different
from any other nation? Why should we care more about it than
about, say, Lithuania or Chad?
Pressed for an answer, most Americans would reply, "Because
America is a free country." What else can be said of the place?
Its land mass is as varied as the earth itself. Inhabiting the
sands of Tucson as well as the steppes of Alaska, Americans could
as well be called a desert race as an arctic one. Its religions
are equally diverse - from moss-backed Episcopalians of the
Virginia tidewater to the holy rollers of East Texas to the
Muslims of East Harlem. Nor does blood itself give the country
any mark of distinction. The individual American has more in
common genetically with the people his people come from than with
his fellow Americans. In a DNA test, your correspondent is more
likely to be mistaken for an IRA hitman than a Baltimore drug
dealer.
America never was a nation in the usual sense of the word. Though
there are plenty of exceptions - especially among the made-up
nations of former European colonies - nations are usually
composed of groups of people who share common blood, culture, and
language.
Americans mostly speak English. But they might just as well speak
Spanish. And at the debut of the republic, the founding fathers
narrowly avoided declaring German the official language... at
least, that is the legend. A Frenchman has to speak French. A
German has to speak the language of the Vaterland. But an
American could speak anything. And often does.
Nor is there even a common history. The average immigrant didn't
arrive until the early 20th century. By then, America's history
was already 3 centuries old. The average citizen missed the whole
thing.
Neither blood, history, religion, language - what else is left?
Only an idea: that you could come to America and be whatever you
wanted to be. You might have been a bog- trotter in Ireland or a
baron in Silesia; in America you were free to become whatever you
could make of yourself.
"Give me liberty or give me death," said Patrick Henry, raising
the rhetorical stakes and praying no one would call him on it.
Yet, the average man at the time lived in near perfect freedom.
There were few books and few laws on them. And fewer people to
enforce them. Henry, if he wanted to do so, could have merely
crossed the Blue Ridge west of Charlottesville and never seen
another government agent again.
Thomas Jefferson complained, in the Declaration of Independence,
that Britain had "erected a multitude of New Offices, and set
hither swarms of Officers to harass our people, and eat out their
substance." Yet the swarms of officers sent by George III would
have barely filled a mid- sized regional office of the IRS or
city zoning department today.
Likewise, the Founding Fathers kvetched about taxation without
representation. But history has shown that representation only
makes taxation worse. Kings, emperors and tyrants must keep tax
rates low... otherwise, the people rise in rebellion. It is
democrats that really eat out the substance of the people: the
illusion of self-government lets them get away with it. Tax rates
were only an average of 3% under the tyranny of King George III.
One of the blessings of democracy is average tax rates that are
ten times as high.
"Americans today," wrote Rose Wilder Lane in 1936, after the
Lincoln administration had annihilated the principle of
self-government... but before the Roosevelt team had finished its
work, "are the most reckless and lawless of peoples... we are
also the most imaginative, the most temperamental, the most
infinitely varied."
But by the end of the 20th century, Americans were required to
wear seat belts and ate low-fat yogurt without a gun to their
heads. The recklessness seems to have been bred out of them. And
the variety too. North, south, east and west, people all wear the
same clothes and cherish the same decrepit ideas as if they were
religious relics.
And why not? It's a free country.
Bill Bonner,
The Daily Reckoning
===============
Tuesday, January 06, 2004
Like to Hate Do You?
From The American Thinker
January 5th, 2004
The Democrats have built a mythology around the 2000 Presidential election, as Richard Baehr convincingly demonstrates in today'sAmerican Thinker. The energy generated by the resulting anger has been a prize sought by party officials and candidates alike. But like the thrill brought on by amphetamines or other nervous system stimulants, the short term surge comes at the cost of longer term damage to health.
Anger has become the fashionable political mood in America’s faculty lounges, big city newsrooms, and best-attended Democratic political events. Howard Dean, the former governor of one of America’s smallest states, has propelled his candidacy to a commanding position, financially and in the public opinion polls, based largely on his superior skill at articulating and embodying the fury which has gripped a substantial fraction of core Democrat activists.
Anger is a terrific motivator. Angry people contribute money, go to events, wear buttons, t-shirts, and funny hats, and readily slap bumper stickers on their Volvos, Beetles, mini-vans, and Lexuses. They enjoy meeting and spending time with others who are in tune with their particular emotional orientation. Some even find that sharing outrage can lead to sharing other passions, via computer dating services linked to the Dean campaign.
But anger has many drawbacks as the basis for an American political movement. Americans tend to favor optimism and a sunny disposition in their political leadership. Ours is a nation built on the pursuit of happiness as an inalienable right granted us by our Creator. More than two hundred years after this right was articulated in the Declaration of Independence, Ronald Reagan won overwhelming electoral support running on the slogan “Morning in America.”
Let the Balkan peoples define themselves by their ancient wrongs waiting to be avenged. Let clans like the Hatfields and McCoys in the hollows ofWest Virginia carry their grudges for generations. They are the curious exception to our general rule of concentrating on what we can become, rather than what our ancestors were. Americans take seriously their birthright, and would rather wipe the slate clean than nurture a collective grudge. Anger is like an acid which curdles the sweet mother’s milk of happiness, whose pursuit is so much a part of our national character.
Of course, there are some who do choose to define themselves by their ancestors’ tragedies, and whose vision of a world put right consists of extracting vengeance of some sort. Most prominently, the movement to collect reparations for slavery, payable 150 years later to the presumptive descendents of slaves, is being touted as a path to cosmic justice. But even its most fervent proponents do not foresee the public ever using the democratic process to enact a reparations law. Rather, litigation, giving the judiciary the opportunity to impose reparations on parties found somehow liable for the damages incurred in the past, is the primary tactic being employed.
Aside from its limited electoral appeal, anger is operationally a tricky, even dangerous force to harness. “Blind anger” is a common expression precisely because anger tends to render its carriers insensible to the complexities and subtleties of their environment. Particularly when the angry gather together, their anger feeds on itself and multiplies its force. It is precisely for this reason that mobs are recognized as dangerous.
Even if the shared anger is nonviolent, it still is capable of blinding the angry to the probable reactions of others. Convinced of their utter righteousness, seriously angry political movements readily overplay the cards they are dealt. Haters of Bill Clinton learned the hard way that the middle/majority of Americans could not be mobilized to share their passion, even when they held an ace, in the form of their enemy’s false testimony under oath.
Anger, held by the candidate and shared by his coterie and followers is the probable reason that Howard Dean has proven so gaffe-prone. He honestly does not seem to understand how most people will react to his assertion that Osama bin Laden is innocent until proven guilty, and nobody around him can caution him to watch his step. The rage which brings them together also precludes them from seeing its dangers. Of course, Dean also seems to have a problem with talking before thinking, and acting on impulse is another characteristic of the angry.
Anger requires an object. There must be someone or some group at which the anger is directed. By its nature, therefore, anger divides people. If the object of the anger is external to the nation, then anger can unite a people, as it has such nations as the Greeks, Koreans, and Poles. But if the object is internal to a nation, then schism, a rejection of the “we the people…” ethos, rears its head.
In George W. Bush, a large segment of the American intelligentsia has found an object wholly outside their framework of affection. People who obtained their status and income partially from the ability to speak articulately, and master a body of learning, find it troubling when one who gives no evidence of even caring about reading books and newspapers, or developing a large vocabulary of eloquently-spoken words, rises above them in status. It is an insult to the personal values they have embraced, and on whose rightness their own sense of self-worth depends.
Even worse, George W. Bush shows no shame or guilt in his character. Rather than embrace his insecurities, and embark on a lifelong path of searching for relief via the therapeutic talking cures so common to the urban educated classes, George W. Bush embraced Jesus Christ, and appears to have been done with his personal demons - no more drinking, no more rebellious streak, no more troubling doubts.
George W. Bush incarnates a rejection of the very values, beliefs, skills, style, and psychology by which large numbers of America’s educated class define themselves. Their self-concept is violated by his actions, his manner, his attitudes, and especially by his triumphs. If he is correct, then they are terribly, terribly wrong.
Charles Krauthammer, a psychiatrist by training and former practice, hascoined the term “Bush Derangement Syndrome (BDS)” to be an affliction quite common today. He defines it as “the acute onset of paranoia in otherwise normal people in reaction to the policies, the presidency -- nay -- the very existence of George W. Bush.” Dr. Krauthammer is better situated than I to diagnose paranoia as an outcome of rage at George W. Bush. But it is consistent with the behavior of other groups which have been animated by anger.
Paranoia is rarely the basis for successful political action. Reading far too much into the actions of their opponents, the paranoiacs dissipate their resources fighting unnecessary battles. Their readiness to assume others are against them creates enemies where neutrals or even friendlies are present. Paranoia is quite simply dysfunctional.
Should the Democrats nominate the angry Dr. Dean, they will find it very difficult to extricate themselves from the problem they will be creating for themselves. A crushing defeat may not only be likely, it may be beneficial in the long term.
Thomas Lifson
==============================
India, not China....Continued...
From Guru Peter Drucker -
=================
The interviewer is FORTUNE editor-at-large Brent Schlender. The title of the piece is "GURUS: Peter Drucker Sets Us Straight" To a question: Does the U.S. still set the tone for the world economy?
Peter Drucker answers as follows:
The dominance of the U.S. is already over. What is emerging is a world economy of blocs represented by NAFTA, the European Union, ASEAN. There's no one center in this world economy. India is becoming a powerhouse very fast. The medical school in New Delhi is now perhaps the best in the world. And the technical graduates of the Institute of Technology in Bangalore are as good as any in the world. Also, India has 150 million people for whom English is their main language. So India is indeed becoming a knowledge center.
In contrast, the greatest weakness of China is its incredibly small proportion of educated people. China has only 1.5 million college students, out of a total population of over 1.3 billion. If they had the American proportion, they'd have 12 million or more in college. Those who are educated are well trained, but there are so few of them. And then there is the enormous undeveloped hinterland with excess rural population. Yes, that means there is enormous manufacturing potential. In China, however, the likelihood of the absorption of rural workers into the cities without upheaval seems very dubious. You don't have that problem in India because they have already done an amazing job of absorbing excess rural population into the cities - its rural population has gone from 90% to 54% without any upheaval.
Everybody says China has 8% growth and India only 3%, but that is a total misconception. We don't really know. I think India's progress is far more impressive than China's.
