DEATH TO THE BLUE RAT

It's Michigan Week.

Contrary to past form, I've managed to remain substantially productive at work this week, but not because I think the game is automatic or anything. I'm old enough to remember John Cooper's Reign of Terror and have no illusions about the actual inevitability of any supposedly inevitable wins by The Ohio State University over the wicked, cheating scoundrels from Meatchicken. And literally everything in the world (apart from Meatchicken's obvious and terrific awfulness) points to scUM pulling the upset this week.

First-year coach at TSUN, not one of whom has ever lost their first game against Ohio State: check.

Ohio State never having ever, ever beaten Michigan five straight times: check.

Wildly overconfident tOSU fans with no sense of historical perspective on the rivalry and possibly infecting the mental composition of the actual Ohio State players who after all are only 20 years old and themselves have no sense of historical perspective on the rivalry: check again.

To remind myself to actively hate Michigan every day and with every fiber of my core, I will be watching ESPN Classic's rebroadcast of the 1995 and 1997 Ohio State self-immolations against TSUN when they are on this week. As a diehard Buckeye from way back in the day before all this "spread offense" business was all the rage with the kids, I must say I find Ohio State's 1996 loss to Michigan the most painful and inexplicable of the many stunning examples of John Cooper finding a comical and improbable way to lose to an inferior team from a cold and rat-infested northern climate. Since I'm really trying hard this week to get my anger up, allow me to ask rhetorically: why does ESPN never rebroadcast that 1996 loss, or the stunning shutout loss in 1993? The 1995 and 1997 losses are on all the time. Why not the 1988, 1989, 1990, 1991, 1999 or 2000 losses, which were no less bitter for being less surprising?

Yes, this makes me sort of a connessour of the many flavors of defeat, which was a dish annually served to us Buckeyes in barely differing vintages for thirteen long and desperate years beginning the same month the first George Bush got elected. (And, this being a political blog, I can't help but observe that we'll be getting a different but similarly rancid flavor of defeat for at least four years beginning the month that BHO was elected. See if you can guess what I'm referring to! End political aside.) I use this angle to remind myself never to let down my guard against the treacherous heathen from Ann Arbor--because that's just what they would want us to do.

Never stop hating Michigan just because they momentarily appear laughable and hapless. It's all a show and a clever ruse. If the Buckeyes fall for it and allow the improbable 20-point spread go to their heads, the northern rodents will ply their sneaky rodent wares on us all and rise up from their totally feigned ineptitude to stab our Godfearing Buckeye hearts with a plastic spoon melted down into a pointy prisonyard stabbing implement. Never trust a Michigan rodent. DEATH TO THE BLUE RAT.

More on GM from WSJ

There's a great (subscription) editorial in the Journal today entitled Why Bankruptcy is the Best Option for GM, penned by Michael E Levine. Naturally this makes me feel just unsufferably smart for pointing some of this out a few days ago, and it's worth excerpting in areas I didn't explore:

Foreign-owned manufacturers who build cars with American workers pay wages similar to GM's. But their expenses for benefits are a fraction of GM's. GM is contractually required to support thousands of workers in the UAW's "Jobs Bank" program, which guarantees nearly full wages and benefits for workers who lose their jobs due to automation or plant closure. It supports more retirees than current workers. It owns or leases enormous amounts of property for facilities it's not using and probably will never use again, and is obliged to support revenue bonds for municipalities that issued them to build these facilities. It has other contractual obligations such as health coverage for union retirees. All of these commitments drain its cash every month.

I hadn't really forgotten the Jobs Bank, which is probably the most egregious example imaginable of union excess. Many former employees who were laid off report to the Jobs Bank office daily to "earn" eight hours' pay by playing cards and drinking coffee. Exactly what GM thought they were getting by offering this concession is hard to imagine.

Federal law provides a way out of the web: reorganization under Chapter 11 of the bankruptcy code. If GM were told that no assistance would be available without a bankruptcy filing, all options would be put on the table. The web could be cut wherever it needed to be. State protection for dealers would disappear. Labor contracts could be renegotiated. Pension plans could be terminated, with existing pensions turned over to the Pension Benefit Guaranty Corp. (PBGC). Health benefits could be renegotiated. Mortgaged assets could be abandoned, so plants could be closed without being supported as idle hindrances on GM's viability. GM could be rebuilt as a company that had a chance to make vehicles people want and support itself on revenue. It wouldn't be easy but, unlike trying to bail out GM as it is, it wouldn't be impossible.

So I'm not the only one who thinks throwing money at a failing company without reforming it first is a dumb idea. As a voting taxpayer, I kind of do have an interest in whether that money (mine, after all) is thrown about with reckless stupidity.

But unless we are willing to support GM as it is indefinitely, the downsizing and asset-shedding will have to come anyway. Even if it builds cars as attractive and environmentally responsible as those Honda and Toyota will be building, they won't be able to carry the weight of GM's past.

Amen. It's gratifying to see that the grownups have joined the conversation.

Bailouts 'R' U.S.

The $700B was naturally just the beginning.

Now that we've established in the public's mind that virtually every company in this grand old republic of ours is "too big to fail," there will be no end of requests. This week's pleas from General Motors (which the Michigan public naturally supports) and the good Mr Paulson's new and randomly-evolving strategy to now use the money to directly bail out consumers are a taste of what we're getting into here, where the general assumption is that the federal government can simply write checks to cure all ills.

BHO and Nancy Pelosi have chipped in with their helpful suggestions that we solve the nation's problems by extending unemployment benefits and increasing spending on food stamps, and also hire a bunch of workers to upgrade roads and other "crumbling infrastructure." This overlooks that unemployment insurance already runs for three months, and there is evidence suggesting that increasing the length of time a person can receive a check for not working may sometimes--surprise!--increase the duration of unemployment, but nevermind. And Nancy wants a(nother) $25B handout to GM.

Thankfully, the good news this week is that congressional Republicans have already started to regroup after the past several years of spineless and unprincipled opportunism have cost them two elections by wide margins. The Republicans in the first half of Bill Clinton's first term were a disciplined and (relatively) principled group; nothing quite lends focus to an operation like being the last line of defense against an ascendant liberal doctrine determined to shower the masses with taxpayer-funded hugs and rainbows and lollipops and soothing assertions that the scariest elements of competition and bad consequences can simply be legislated from existence.

John Boehner, from my temporarily blue state of Ohio, has come forth to lead Republican opposition to democrats' intentions to throw good money after bad by allocating some of the $700B financial system bailout to General Motors. Boehner observes that spending "billions of additional federal tax dollars with no promises to reform the root causes crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy." [Applause--Ed.]

This makes sense on a lot of levels; the whole $700B spending spree by the government should be an alarming prospect of impending Soviet-style nationalisation to anyone who believes our economic freedom is part of the great tradition of personal liberty in the United States, or who believes that the innovations of free enterprise are the cause of our unprecedented economic hegemony among the other participants in the world economy, as I do.

The massive bailout made sense only in the context of avoiding something much, much worse, and the failure and resultant bankruptcy of any particular company doesn't elevate to that level. The only thing that elevates to the level of requiring an unprecedented nationalisation of private companies and the expenditure of that much money would be something truly horrifying that would rain down sweet justice on the innocent and guilty alike--such as the total failure of the banking system. The $700B we're talking about the government handing out to essentially whomever they think needs the cash is a staggering amount--more than the total cost of the entire Iraq war--and is the equivalent of a financial nuclear option. A hammer this big shouldn't be used against anything other than an existential threat, and the democrats have predictably cheapened the argument by (equally predictably) drifting toward turning the whole program into a broad giveaway to everyone and anyone who supported democrat campaigns.

The real issue here is whether we are willing, amid a severe economic challenge, to act like serious grownups for a little while and choose accordingly. The appropriate level of seriousness which this discussion requires is contrary to the norm in Washington, but not everything reduces to the cartoonish moral simplicity of the arguments offered by Chris Dodd and Nancy Pelosi--that we can give (another) $25B to GM and that the only measures we need take to ensure that we're not merely increasing the cost of the eventual bankruptcy is to place "severe limits" on executive compensation. This is a favorite bugaboo of the left, and is offered as the sole product of their supposedly serious review of GM's cost structure, and what needs to happen to ensure its longterm viability. It doesn't work.

Let's take a look. If we're going to do this honestly, now would be a good time for everyone to go download their very own copy of General Motors' 2007 annual report, so we can argue from facts instead of parroting talking points. There's a lot of typical glossy corporate propaganda in the report, but skip past about the first 40 pages and we can get to the meat of the financial statements.

According to the consolidated statement of operations (page 49), GM lost $38.7B last year. That's a truly awesome failure on many levels and approaches federal government levels of fruitless expenditure, but soak in the sheer awfulness of the number for a moment: a single company lost $38,732,000,000 in one year. And it would have been worse except for having sold a major component of the company during 2007 (the Allison Transmission business) and recording a gain of almost $4.6B on this. The number which should grab your attention here is Loss from Continuing Operations: $43.3B.

Against this monumental loss, Nancy Pelosi proposes "strict limits to executive compensation" as a magic bullet. Individual executives' compensation is public record, and can be found, among other places, here. How much do they make?

Including salary, stock awards, stock options, incentive and all other forms of compensation, they make a lot by the standards you and I are used to living on. Rick Wagoner, CEO and Chairman, makes $14M, which is obviously a lot. If you add up the total compensation of Wagoner, Fritz Henderson (CFO), Bob Lutz (Vice Chairman) and the two other group vice presidents named in the table, you get $38.9M, coincidentally contributing almost exactly 0.1% of GM's loss for the year. So if Nancy's "strict limits to executive compensation" could convince them to volunteer their time and work for free, GM's loss for 2007 would still be 99.9% of what it actually was. So while there may or may not be a playground issue of fairness going on, this executive compensation is not really where the money is.

Much of the money is in note 15 to the financial statements, Pensions and Other Postretirement Benefits, which is the grand legacy of decades of UAW extortion. Take a look at the table of benefit payments on page 107 of the annual report. In 2008 GM plans to write $7.6B in checks to its US pensioners; when you figure in non-US pensioners and other postretirement benefits (eg., free health insurance) the total balloons to $13.5B, so we've stumbled onto an apparently major component of it. The legacy of being under the thumb of the union for decades is the annual expenditure of more than thirteen billion dollars of checks written to people who no longer are productive contributors to the company.

[Technical note to other accountants: yes, this oversimplifies things, and the payments are technically from the Plan, not the Company, and yes, the Plan earns a non-trivial amount of interest on its assets so only a portion of this must be funded annually by cash contributions by the company. But the contributions cumulatively made by the company to the plan over the years represent foregone modernizations, capital improvements, R&D, etc; and the company and probably even the union wish at least some of that cash was still presently on hand to pay salaries.]

Page 50 of your GM annual report tells us that GM sold 9,370,000 cars worldwide in 2007. The $13.5B in postretirement benefits amounts therefore to $1,441 per car sold. This is how much a GM buyer pays to the union every time they buy a GM product, just for the union's former workers.

So what ultimately is the point of all this? That the UAW contributes more to GM's long term uncompetitiveness than do much maligned executive compensation packages. The union has been so successful for so long in its negotiations with management that it has finally actually bankrupted the company. I struggle to comprehend how a workforce can negotiate thirteen billion dollars a year out of its employer just for its retirees.

I recognize the issue of equitability at stake in renegotiating any of this, since real individual people who have reached retirement age and have planned their finances carefully around what their union promised them are not in a position to adapt to change very well after their working careers are over (leaving aside the hale healthy 50-year olds retired on pensions equalling their full pay and indexed for inflation, who I can't really feel sorry for despite my best efforts). It's not just that it was a bad deal for the company, though it was; it was so bad a deal for the company that it's going to kill the company outright.

Now. What do we do about this? If a federal bailout is to be made, it must be done with fundamental changes to GM's cost structure that make it viable. To do otherwise is simply to throw taxpayer money down the drain. None of GM's competitors (even Ford and Chrysler, to say nothing of the much more relevant Toyota) have this huge legacy of costs built into it. If GM is to be competitive, it's insufficient to simply say that executives should be paid less. The real question is whether GM can afford to continue to pay UAW wages and benefits when Toyota and Honda plants in this country largely don't. I don't think anyone should think it a good thing that reducing pay and benefits to union workers is the likeliest outcome, but if we're honest about the analysis, it is pretty clearly a necessary thing.

And, incidentally, if the company enters bankruptcy it will suddenly gain the legal right to negotiate alterations to many of the contracts which provided for these legacy costs. So for GM itself (though not its present shareholders), bankruptcy would actually have some salutary consequences. And contrary to the doom-and-gloom forecasts of millions of jobs lost, it's worth observing that when a company that size enters bankruptcy, it doesn't simply close its doors and sell off its remaining equipment. Worldcom, to name but a single example which occurs to me offhand, went into bankruptcy in 2003 and came back stronger than ever. The new GM would likely do the same.

Ultimately this entire issue, from union benefits to bailouts and the discussions about it in Washington all feature one prominent defect: a willingness to embrace wishful thinking and avoid hard choices. It would be great if union retirees could really quit at 50 on full salary and benefits for the rest of their comfortable lives (or accountant retirees, for that matter). But it is not affordable. Insisting that it is, or should be, or gosh-that's-what-we-were-promised doesn't change the fact that there's no such thing as a free lunch, however much we would want it to. Bailing out everyone in the country who's made a bad decision in real estate by conjuring money from thin air doesn't make everyone rich either. You can't legislate prosperity or argue that only the fatcat executives are to blame or should have to pay to fix the mess, because the money just isn't there. And if a federal stimulus could really fix this thing, let's stop messing around with a paltry $300 per person and let's really fix this thing.

If GM goes bankrupt and forcibly imposes some reality onto the discussion, that wouldn't necessarily be an entirely bad thing.

The big one

For all the fuss about government-provided health care, bailouts to AIG, &c, a phenomenon approaches which I think probably demands more attention due to the sheer awfulness of the idea. We approach a tipping point at which more than half the voting public pays zero income taxes to the federal government.

When that point is reached, there is no recovering from what will prove an endless exercise in trying to squeeze more money from fewer people, in order to provide more services at greater cost to more people. Once a voting bloc gains the power to tax a minority without restraint, the largesse-addicted majority loses the incentive to work since raising someone else's taxes is simply so much easier; and, incidentally, the working and taxpaying minority loses the incentive to work as well since the return on incremental hours worked or capital risked will diminish rapidly.

An example of this principle in action can be observed at the level of state governments wrestling with the implications of falling tax receipts. During the halcyon days of the late 1990s, virtually every level of government everywhere ran a budget surplus, and most of them rather lazily allowed spending to increase far in excess of either inflation or population growth. When the economy tanked after the dot-com bust, state and local governments had managed to get their constituents used to certain levels of services and government spending, which they could no longer conveniently afford to provide. This phenomenon is one of the problems Michigan and Ohio have had, and they're still picking up the pieces. When I was in school up at Eastern Michigan, we spent a fair amount of time in my government accounting class discussing this process, and it was an instructive exercise.

One constant which you will notice as you listen to the budget debates in Michigan is that it is considered politically expedient to raise the cigarette tax repeatedly. In 2001, from a budget amounting to $35B, cigarette taxes amounted to $596M (1.7% of total state revenues from all sources). By 2007, the budget had increased to $39B despite the flagging Michigan economy, and cigarette taxes had roughly doubled to $1.1B (2.8% of total revenues). Since only 21.1% of Michiganders smoke, it's a politically low-cost proposition to raise cigarette taxes every time a budget crunch presents itself--certainly easier than proposing meaningful spending cuts no matter how badly the economy is doing.

Now it may be supposed that raising cigarette taxes is good in that it encourages people to quit since it's more expensive (though I haven't noticed a tremendous amount of success behind this concept in the usage of illegal narcotics, which suggests that some people will find the black market to be more appealing than forgoing cigarette consumption). To the extent this is true, it is certainly for the good, but there's more to it at work than just that. The 79% of Michiganders who don't smoke have increasingly turned to simply raising taxes on a minority to fund their perpetually expanding expectations of spending by the government. It's easy, it's cost-free, and it happens with little or no political opposition most every year in Michigan.

Soon, we who pay income tax to the federal government will become our own minority. When that happens, we will discover abruptly that we have no political power to oppose the ravenous calls of the largesse-receiving majority for us to furnish them with ever more shiny pretty government-funded baubles, and the noble wealthy liberals among us will be surprised to discover that by then it cannot be stopped.

Mark Steyn has an excellent essay out today on this subject, which as always is worth a read.

So where are we now?

Quite the eventful week. A few quick takes on the election: mostly bad of course, since it's no secret I think elevating BHO to the presidency will have untoward consequences for the nation, and that I also regret what this outcome says about our nation and its priorities. But! Ever the optimist, there are a few silver linings to be had if one but pauses to look for them.

The bad:
I'll refrain from even talking about policy here, since frankly that's been exercised over and over for the past three months or so and there's nothing really to add, and it's obviously too late even if I had something new to contribute. But there's two things I think are especially unfortunate.

1. This outcome rewards past bad actions and therefore encourages future occurances of same.

What bad actions? The frenzied, paranoid, repulsive wallowing in a simmering broth of incoherent hate which has represented so much of Democratic opposition policy the past eight years. The years-long campaign at the expense of governing. The Machiavellian disregard for laws (eg. campaign finance) and civility, and the variously successful attempts to suppress free speech which the BHO campaign and its apologists and sycophants in the press have so enthusiastically embraced.

Leaving aside any actual policy outcomes, it would be preferable in a healthy and mature republic to have had repudiated all these bad actions. Is it even conceivable that Democrats will suddenly and unprovokedly abandon all these wildly successful strategies in future elections, or are we more or less permanently to be subjected to this?

2. What the outcome says about us.

I'm tempted to simply overlook the pedestrian observation that the average American doesn't pay much attention, as has been evidenced in countless Jay Leno man-in-the-street type interviews where a staggering number of people can't name the vice-president, etc. But, at the risk of piling on, I'll simply point out that if a Democratic congress has a lower approval rating than George Bush, the logic which was employed to justify sending more Democrats to power in congress simply eludes me. I rather suspect that a non-trivial proportion of actual voters are entirely unaware that Democrats have been running both houses of congress for the past two years.

Also, I must confess that I simply can't grasp how Democrats are given higher marks for how they would handle the economy (and that BHO was probably carried to victory substantially on the expectation that he would solve our current economic woes). Sure, they care more than Republicans. But what are the major business-related planks of Democratic policy? Higher taxes on rich people and corporations. Higher taxes on capital gains, even if that results in a reduction of taxes paid to the treasury, as a matter of fairness. "Ending tax breaks for corporations that ship jobs overseas." Protectionism.

All of these are gut-level reactions which utterly fail when put into practice, at least if their intent is to create jobs and economic growth. I'm sure I'll have ample leisure over the next four-to-eight years to go on about this at length, but for now I'll simply summarize that anti-growth policies do not help to create jobs or wealth, no matter how much we want them to.

The advent of the BHO presidency suggests that we've become totally unmoored and unserious, and we are collectively willing to overlook the fact that wishing things in great and profound earnestness doesn't make them so.

The good:
For a variety of reasons, having a black president will be good for the country. I would rather our first black president have been Condoleezza Rice (which I would have enthusiastically supported), because I think her policy instincts are vastly preferable to those of BHO. But the outcome of the election will at least serve to prove that America isn't just a great seething maze of racism, as some [coughJesseJacksoncough] racialist opportunists [coughAlSharptoncough] have made careers by insisting. Anything that marginalizes Sharpton et al, or at least quiets their rantings, does serve some practical good.

Further along those lines, now that we've demonstrated America's non-racist bona fides, perhaps we can all start to come to agreement that any form of race-based discrimination is bad, and we can start to see affirmative action relegated to the pantheon of those noble programs which have succeeded so thoroughly as to have therefore outlived their usefulness.

One other thing: the Democrats will now have to actually govern instead of simply trying to sabotage every element of public policy whose success might have tangentally afforded some credit to George Bush. Transforming the Democrats in Washington from a bunch of shrill bleating children advocating ridiculously bad policy at every turn and confident in their minority status preventing them from absorbing any actual responsibility, into a bunch of shrill bleating children with bad policy ideas who can now scarcely avoid responsibility for the actions of government, may sober them up just a little. Not much, in all likelihood, but perhaps enough to avoid the most pernicious of their own ideas.

Lastly, the Republicans may now understand that the last two elections are, more than just bad timing from having an economic meltdown in the eighth year of an administration, also a referendum on a party which failed to adhere to many of its own principles. Small government, fiscal responsibility, and the ability to treat the economy seriously and in a grownup fashion are not characteristics of George Bush's administration nor of the Republicans in congress in recent years.

The United States has survived worse than this, and will survive BHO as well, no matter how foolish and ill-considered his policies will likely be. Such good as can come of this should be embraced and advanced at every opportunity. So smile, be brave, and be well.

Where have I been?

Hello...hellooo...

Is this thing on?

I apparently slept through an entire presidential administration since my last post (over at mu.nu) was the day after Indecision '04 as I recall. And here I am again.

Water under the bridge? Check. An incoming administration overflowing of exciting new ideas in spendthrift chicanery? Check again. Finally getting to play the role of dissatisfied opposition party instead of constantly fighting a grim rearguard action against the lies of the Kos Kids? Check check check. It's gonna be a thrilling ride the next four to eight years, and we'll break it all down right here at the newly improved Electronic Countermeasures.

I've gone over the wall.

Check out the new and possibly improved home of Electronic Countermeasures at http://countermeasures.mu.nu.

See you there.

JKS.

BLAH
Thank merciful heaven April 15 has come and gone (well, not for a few hours technically, for you last-minuters out there). I found a happy surprise when I did my taxes that I had a refund coming to me (which, yes, means I paid too damn much over the course of the rest of the year, I know). And part of the happy surprise was that the Bush tax cuts ended up with me having a lower overall tax bill this year, for which I for one am happy. Not everyone I've spoken to is.

Some individuals I know are actually angry at having received a refund this year based on the reduced tax rates and increased child tax credits permitted this year. Since for the first six months of the year everyone's withholding was calculated at the higher rate, almost everyone should have received a refund this year unless they were shrewd enough to trick their company's payroll department into withholding during the last six months of the year at a lower than normal rate.

I for one am pleased to keep more of the money that I work to earn, instead of less, but for those who find their refund check nothing more than a troubling reminder that George Bush has raped and pillaged the Treasury and singlehandedly wrecked the economy such that all posterity will curse his name, I direct you to the third column of page 60 on your Federal 1040 instruction book:

How Do You Make a Gift To Reduce the Public Debt?
If you wish to do so, make a check payable to "Bureau of the Public Debt." You can send it to: Bureau of the Public Debt, Department G, PO Box 2188, Parkersburg, WV 26106-2188. Or you can enclose the check with your income tax return when you file.

I offer this as a helpful suggestion to those magnanimous liberals out there who feel angry because they paid too little tax. Just pay whatever extra you think makes up your fair share, and don't ruin it for the rest of us. If you're really the utterly selfless bunch John Kerry seems to suggest you are, the coffers should be full in no time.

And! Remember this helpful tip for those considering making such a gift:

TIP You may be able to deduct this gift on your 2004 tax return.

The mystery majesty of government at work.

JKS.

I don’t think I was quite precise enough in my last article.

Econopundit posted a few remarks on it, and pointed out a helpful paper published by the Bureau of Labor Statistics discussing the different series and their methodologies and reasons why they produce different measurements. Econopundit summarized his analysis as follows:

Viewed just as a series, differences between the two surveys are actually vanishing on a long-term basis, with a possible interruption in this trend following the last recession. The current uptick is sharp, to be sure, but we've seen at least one downtick (roughly '64-70) apparently just as sharp, and similar but smaller upticks following other recessions.

In short: neither data nor method seem questionable. If the two surveys correlated perfectly it would be a waste of tax dollars to collect them both. These are two useful and perfectly valid methods of measuring the same thing. Neither is "right." Neither is "wrong." The complement and validate each other.

This is true, but ignores the fact that there is also a derivative data series which is politically at play, which is not so much the absolute number of jobs, as the change in employment year-over-year (or administration-over-administration). The manner in which the separation between the two surveys series has recently increased (with the two data series heading in opposite directions) is not irrelevant.

Mathematically speaking: the two main data series (employment in the households survey, and employment in the payrolls survey) over time are themselves closely positively correlated with each other. A look at the graph which Econopundit posted over the weekend (and which I referred to yesterday) suggests something like a +0.8 correlation (just estimating by eye), which of course is quite high. The separation between them has sometimes increased, and sometimes decreased, but the two series have generally moved in the same direction and are highly positively correlated.

But recently the separation between them is increasing because one derivative series (year-over-year change in employment measured by the households survey) is positive, while the other derivative series (year-over-year change in the payrolls survey) is negative. This means that for the politically sensitive derivative measure of year-over-year change in employment, there is negative correlation between the two series. And although it is true that there have been sharp upticks in the separation between the other two series before, it is not quite accurate to say that those previous periods (eg, 1980-1985) are similar: while the separation between the surveys was increasing then, both series were increasing so the derivative series remained positively correlated. I maintain that the recent four-year period 2000-2003 has been unique due to the negative correlation of the two derivative data series, and that this shows some new and fundamental developments in the way work gets done and people get hired.

I actually agree with Econopundit’s last paragraph entirely. My main point in all this is not that the payrolls survey is wrong or should be ignored, but that the overall employment situation has evolved in some subtle ways not entirely or even closely summarized by merely quoting only the payrolls survey. It continues to be a disappointment that the drop in employment from the payrolls survey is all one hears about in the mainstream press—which, after all, is where the main body of voters will get their information when assessing George Bush’s performance in office. The households survey suggests other conclusions than the payrolls survey, and both need to be considered, which politicians don’t seem to be doing to any real extent.

I've spent a bit of time looking around for someone else commenting on this business of net job creation during the Bush presidency, and I haven't found much of it. I have occasionally found a mention that acknowledges the increase in the employment figures reported by the household survey, but generally there is a pooh-poohing that it's not really proper to say that one data series is better than the other. This, generally, is true; as I pointed out in the last article, it's wrong to ignore one in favor of the other when one needs to consider both of them to gain a comprehensive perspective. But there's something a bit unusual going on in the economy right now that is illustrated only by the household survey of employment.

There is a neat graph in an article posted over the weekend over at Econopundit, which shows a graph over time of three data series: the payrolls survey; the household survey; and a Yale model which is a predictor of total employment. All three give different numbers, which isn't really the point. Econopundit picks up on one of the key points shown on the graph, but misses on another.

First, as Econopundit points out, the Yale model gives different absolute numbers than measured by either survey series, but as his graph shows, it does track very closely and has a highly positive correlation with actual employment. When the model says employment should go up or down, it generally does, and generally in proportion to the quantity predicted. And right now, under current tax policy, the Yale model predicts 10 million new jobs over the next four years. It probably isn't a coincidence that John Kerry has positioned himself to take credit for this development, by promising minor tinkering with the tax code which, he says, will create--ahem--10 million new jobs over the next four years.

The other point which I think is key is that, as Econopundit's graph shows, while the spread between the payroll and household surveys has evolved over time, nowhere else on the graph but presently do we see the two data series moving in completely opposite directions for a four-year period such as 2000-2003. The mere fact that such an unprecedented divergence of the two series has been going on for so long demands our attention, and points to some highly unusual employment market developments.

Employers right now, buoyed by consistent productivity gains, simply don't want to hire new people even though business has picked up. Overtime and temporary labor and outsourcing to independent contractors has supplied the difference. This has been good for the companies in question, who retain far greater flexibility in staffing and manpower levels; it has also been good for the independent contractors themselves, who now find themselves working for wages and profits, not just wages. It's a rather new trend, which deserves much more consideration and discussion than it has generally received. Demagoguing over jobs lost when measured by just one data series does not serve the country or the economy very well.

Since the election of the Leader of the Free World will evidently hinge primarily on whether the nation has more or fewer jobs come November 2004 than it had under Bill Clinton, a close examination of the surrounding facts is in order.

Economic analysis isn't the easiest thing in the world, and it requires one to pay attention for an extended period to some subtle concepts, which much of the American public isn't necessarily good at. But in this case the stakes are sufficiently high in the coming election that we should try really hard to have an informed national debate on the subject. Soundbyte politics is easy; substance is hard. This is more technical than most of what I post, but for serious discussion of the facts this simply can't be avoided. I will be happy to elaborate on anything which I've not sufficiently explained; just leave a comment or send an email. This is my opening contribution to the serious national debate about economics which we truly need to have.

The Democrats will have us believe that the economy is really bad right now. The Republicans point to fantastic GDP growth, low interest rates, and low inflation and say that things are pretty swell. The Democrats counter that for those out of work, low prices and high GDP don't matter, and that there are too many of this sort out there. And that the economy is really, really bad unless you are a fat cat who works for Halliburton.

It's apparently all about jobs. Jobs, jobs, jobs. I keep hearing ceaselessly about jobs, and in particular the absolute number of jobs gained or lost under George Bush, as if that single number represents a competent referendum on his performance as President. The obsession with this particular data series strikes me as being a new and somewhat unusual target of economic fixation; during the "it's the economy, stupid" run-up to the 1992 election, for example, it was the unemployment rate that was the important number. During the 1970s, truly a dark economic time in America, the misery index, gained by adding the unemployment rate to the inflation rate, was frequently the main subject of complaint.

Now it's the absolute number of jobs gained or lost, presumably because the opposition party doesn't really think that complaints based on the unemployment rate or the misery index will stick. And they're probably right: the unemployment rate in January 2004 was 5.6% (compared to 7.3% at the time of the 1992 election), which is pretty close to the 5.0% unemployment rate which is traditionally considered "full employment." The misery index in January 2004 was a mere 7.5% (5.6% for unemployment, plus the 1.9% increase in CPI from January 2003 to January 2004; this figure compares to the 20.1% misery index in October 1980, at the end of Jimmy Carter's Reign of Terror). So, using the various historical shorthand forms, present conditions look reasonably good despite John Kerry's rather fatuous bellowing of the worst economic performance since Herbert Hoover.

Now this business of absolute numbers of jobs is a shifty target. We have been hearing for months of the mythical "2.2 million jobs lost under This President," which is presumably the numerical basis for the Herbert Hoover comparison (though naturally this disregards the fantastically larger overlying civilian workforce in 2001-2004, so that 2.2 million jobs lost under Hoover would have represented a far larger portion of the workforce suddenly out of work). At the same time we are told of a near-apocalyptic number of jobs being shipped overseas, which complaint we've heard over and over at least since NAFTA and presumably before. It's nothing new, but it's tempting to draw a correlation between the mythical 2.2 million jobs lost and this international outsourcing and blame the latter, for which protectionist policies are the natural solution.

So, before we go looking for the culprits of the problem, let's first examine what the numbers themselves specifically are and determine whether the mythical 2.2 million jobs lost is mythical after all, or real. Now would be a good time for you to run off to get the actual numbers in front of you, so we can all argue from the facts. Virtually all the numbers we'll use from here out are conveniently summarized in a document called Economic Indicators January 2004. This document is published monthly by the Government Printing Office and is a compilation of economic statistics gathered into one handy spot from various government sources.

Job growth (as reported by the Department of Labor's payroll survey) has, in fact, lately been disappointing. This is the data series Kerry has focused on, and it's here that he gets his claim of 2.2 million jobs lost. The number series, in summary, looks like this: (this is the table at the bottom of page 14 in the Economic Indicators. Job counts are given in thousands of jobs, and are yearlong averages.)

Table 1.
        Nonagricultural
Year      Employment
2000        131,785
2001        131,826
2002        130,341
2003        129,932

So this data series shows a loss of roughly 1.85 million jobs between the average for 2000 and the average for 2003. What if we look at the actual yearend number for 2000, just days before Bush took office (instead of the yearlong average) and compare it to the actual latest month, January 2004?

Table 2.
            Nonagricultural
Year          Employment
Dec 2000        131,953
Jan 2004        130,155

Still about 1.8 million jobs lost according to this figuring of the data. But the lowest monthly figure for 2003 (according to Economic Indicators January 2004) was 129,789 in August; this number actually reflects a decrease in the number of jobs of 2.16 million, compared to the December 2000 figure above, so at least we can confirm Kerry's 2.2 million jobs claim and we know how his numbers were derived. And even according to the data series Kerry evidently is referring to, it now would be more correct to speak of a decrease of 1.8 million jobs, not 2.2 million, which still seems to be the number I keep hearing.

Such monolithic reliance on a single data series is something that the astute listener should regard with some distrust. There is no such thing as a perfectly designed or totally comprehensive data series, and this one (Nonagricultural Employment) is no exception. The important thing is that whatever each series' shortcomings are, they are repeated each month and their values are therefore comparable over time. But the Department of Labor collects other data series as well, such as the Unemployment Rate, to provide collectively a more comprehensive treatment of our employment situation. The other data series we will consider in detail is Status of the Labor Force, and this is presented on page 11 of Economic Indicators January 2004.

The same time period considered above, 2000-2003, looks rather different in the Status of the Labor Force report, summarized as follows:

Table 3.
        Total Civilian
Year      Employment
2000        136,891
2001        136,933
2002        136,485
2003        137,736

This series shows, rather surprisingly, an increase in total civilian employment of 845,000 jobs from 2000 to 2003. Where does the difference between the two series come from?

It helps to know a bit about the methodology of the two series. The Nonagricultural Employment report comes from an employers' survey. Companies with employees and payrolls are the only contributors to this number. The Status of the Labor Force report comes from a households survey, where respondants are asked to characterize themselves as "working" or "not working." So what's the difference?

Footnote 1 on page 14 of our January 2004 report spells out what John Kerry's data series doesn't consider:

Excludes proprietors, self-employed persons, unpaid family workers, and private household workers. Data from the household survey [Status of the Labor Force] shown on p. 11 include those workers and also count persons as employed when they are not at work because of industrial disputes, bad weather, etc., even if they are not paid for the time off. In the series shown here [Nonagricultural Employment], persons who work at more than one job are counted each time they appear on a payroll, in contrast to the series shown on p. 11 where persons are counted only once--as employed, unemployed, or not in the labor force.

So anyone who quits, or is laid off, and then finds identical or other work as a self-employed independent contractor is counted as unemployed in John Kerry's data, even if they are in fact working and even if they are earning more than previously since they are working for profits and not wages. And, according to the household survey, more people themselves say they are working now than in Bill Clinton's last year in office.

So where have all those 2.2 million jobs (really 1.8 million) gone? Nowhere. They're mainly just working for themselves as proprietors now instead of for a corporate employer. It's just a different type of employment arrangement. It's worth stating again, since you hear so little of it:

More people are working now than were before George Bush took office. We have numbers to prove it.

Yes, yes, I hear John Kerry harrumphing, but those people now are uninsured and don't have unemployment insurance, and aren't fully protected by Workers' Compensation, etc. Maybe so. But sole proprietors can pay for unemployment insurance for themselves if they choose to pay for it (at least in Ohio, the laws of which I'm familiar with). They should pay into the Workers' Compensation fund for themselves, for their own protection, though they aren't legally required to. And as a small business owner myself, I know that it is possible to buy health insurance for a small company, though it can be expensive. It's a riskier way to make a living than by showing up for a wage-paying position with a company, but the returns tend to have more upside potential since the proprietor keeps all the profits (after tax, of course) and these tend to be higher than the wage value of a job.

How does all this play out in balance? According to the Department of Commerce's National Income report (top of page 4 in Economic Indicators January 2004), two components of national income--wages and nonfarm proprietors' income--summarize as follows: (all figures are in Billions of nominal dollars)

Table 4.
                      Nonfarm
                    Proprietor's
Year     Wages        Income         Total Income
2000    $5,782.7      $705.7           $6,488.4
2001     5,940.4       745.6            6,686.0
2002     6,019.1       783.4            6,802.5
2003     6,185.6       827.2            7,012.8

So wages are up, proprietors' income is up, and obviously total income earned by wage earners and proprietors combined (the group identified as "working" in the Status of the Labor Force report) is up during Bush's term. This is in nominal dollars, however, so we need to adjust for inflation, and report everything in "2000 dollars," which is simply an acknowledgement that the same dollar earned today has less purchasing power than one earned in a prior year. The baseline year can be any that is convenient, and we will adjust our 2001-2003 figures downward to use values equal to the value of a dollar in the year 2000. There are a large number of inflation measures available, reaching their results in different ways and giving (not incidentally) somewhat different answers.

It is my opinion that, as a measure of inflation, the Implicit GDP Deflator is much superior to the Consumer Price Index (though I'll give results according to both so it won't be supposed that I'm cherry picking only the favorable measures). The Personal Consumption GDP Deflator, applied to the income figures above, is as follows: (Nominal income is in Billions of current-year dollars; real income is in Billions of 2000 dollars.)

Table 5.
        Nominal      GDP         Real
Year    Income     Deflator     Income
2000   $6,488.4    100.000     $6,488.4
2001    6,686.0    102.038      6,552.5
2002    6,802.5    103.429      6,577.0
2003    7,012.8    105.298      6,660.0

Notes to Table 5:
1. Nominal Income is as calculated in Table 4 of this document.
2. GDP deflator figures come from the table Implicit Price Deflators for Gross Domestic Product on page 2 of Economic Indicators January 2004; the column used is for Total Personal Consumption Expenditures.
3. Real income is calculated as Nominal income divided by the GDP Deflator x 100.
4. The CPI index figures, where the years 1982-84=100.0, are as follows for the above period: 2000=172.2; 2001=177.1; 2002=179.9; 2003=184.0. Refer to the Bureau of Labor Statistics CPI reports, check the first box for US All Items, 1982-84=100 and press Retrieve Data.
5. Real income for the above years, in 2000 dollars deflated by CPI instead of the GDP deflator, is: 2000=$6,488.4; 2001=$6,501.0; 2002=$6,511.3; 2003=$6,563.1.

So even adjusted for inflation we are earning more income among our workers and proprietors now than before George Bush took office. The last question is to consider whether, when this increased income is divided among more people who report that they are working, all workers collectively are better or worse off now compared to 2000. (Income figures are in Billions of 2000 dollars; Civilian employment is in thousands of workers.)

Table 6.
         Real       Civilian       Real Income per
Year    Income     Employment      Employed Person
2000   $6,488.4     136,891            $47,398
2001    6,552.5     136,933             47,852
2002    6,577.0     136,485             48,188
2003    6,660.0     137,736             48,353

Notes to Table 6:
1. Real income is as calculated in Table 5 of this document.
2. Civilian employment is from Table 3 of this document.
3. Real income per employed person is real income divided by the number in total civilian employment. Note that, as Real Income (RI) is in $Billions and Civilian Employment (CE) is in thousands, it is necessary to take (RI/CE) x 1000000 to find Real Income per Employed Person.
4. For those interested in deflating nominal income by CPI, Real Income per Employed Person would be as follows: 2000=$47,398; 2001=$47,476; 2002=$47,707; 2003=$47,650.

You read it here first: more people are now working, and on average each of them is now earning more real income than before Bush took office.

I think it should be obvious that our true economic situation is far too complex for John Kerry's soundbytes about 2.2 million jobs lost and the worst performance against that measure since Herbert Hoover. I further posit that a close analysis of the numbers reveals that our economy now is, at minimum, no worse than before Bush took office--though I'd want to see the unemployment rate drop from 5.6% to the statistically "full employment" level of 5.0% before I suggested that everything was just swimmingly grand. But when John Kerry suggests unusual, European-sounding measures to halt a putative loss of jobs, an astute listener should be aware that the employment situation is by no means so simple or so bleak as Kerry claims.

Your Federal tax dollars at work.
I was gratified to hear Alan Greenspan's testimony to Congress yesterday in which he called for cuts to Social Security spending as the most critical element of a deficit-elimination process. This is the only sensible approach to a problem which will presently balloon entirely out of control--spending on the elderly (Social Security and Medicare combined) already amounts to more than one-third of the total federal budget, and matters will only get dramatically worse from here as the Baby Boomers retire and health care costs continue to spiral out of control. Luckily I have devised a solution to both problems, which--posturing by the Democrats notwithstanding--has plenty to make everyone happy.

But, in order to present it in a credible and comprehensive manner, a few numbers would be in order. These will also serve to allow me to confirm for myself that the plan works before dispensing a bunch of facile platitudes on the subject which sound pretty as long as they're kept to generalities. Facts are good and are our friends. We'll leave the facile platitudes to the politicians, since they are almost universally incapable of doing any justice to any problem of even moderate complexity, which the current situation certainly is.

Remember the annual muted hooplah surrounding the release of the President's budget proposal? I saw a bunch of stock shots of a guy pushing a hand truck with stacks of budget documents on them, each one shrinkwrapped individually and about the thickness of four telephone books, and said to myself "Gotta have it." Yes, accountants can be such dorks sometimes, but the whole notion of having that many actual numbers to run my fingers through and see just how bad things really are--as measured with numbers, not volume of rhetoric--presents a really exciting opportunity to see what all this budget deficit fuss is all about and how it can be fixed. So I found myself wishing I could have my own copy, not just the fat cat members of congress, none of whom naturally read it anyway.

It occurred to me about that time that as a taxpaying citizen of a free republic, I by all rights should have a copy of the budget, at least if I wanted one, which I did. So I wandered off to the Office of Management and Budget website to commence making inquiries.

I already knew I could download much, or most, or theoretically all of it, from OMB's FY 2005 Budget page. But the ability to do so is rather theoretical, since in addition to the obviously named Budget of the United States Government, Fiscal Year 2005 (which itself contains some 33 chapters, each of which can be downloaded individually); there's also some supporting documents such as Analytical Perspectives, Budget of the United States Government, Fiscal Year 2005; a whole fascinating collection of Historical Tables, Budget of the United States Government, Fiscal Year 2005; and an Appendix which contains a further 35 chapters. And other stuff too. For some of it it isn't immediately obvious what overlaps with what, if in fact it does at all. It's a little overwhelming to try to look at online, even though it is in fact all there.

So the accountant in me decided that the thing to do was to get one of those really pretty shrinkwrapped bound hard copies all the cool kids in Washington are toting around these days. Hard copies are just so much easier to work with. So I followed OMB's link to the Government Printing Office's page to buy these very documents, and found out that sure enough they are available to buy for any schmo who wants one, provided that schmo has $250 he doesn't mind parting with to get his own pristinely geeky hard copy of the US budget and its various supporting documents. Which I don't, in fact, have, living as I do on a budget where American Express doesn't grant the same sort of consideration for deficit spending that Congress enjoys.

So, being cheap, I ordered the CD-ROM which contains all the budget documents and costs just twenty bucks. Which, yes, gets me right back where I started, having only electronic copies I'd have to print myself (just like the internet version), but at least I wouldn't have to download seventy-odd individual files, create a little file directory system for them, get bored and give up halfway through, etc. But it's here that things got funky.

First of all, twenty bucks is a bargain compared to the $250 they're asking for on the hard copy, but--again--for taxpaying citizens of a free republic, the feds ought to practically force everyone to take one of these, just so we can all play the role of informed voter debating from the facts. Instead they sell them, charging what seems to me kind of a steep price for a CD containing nothing but data which is in the public domain. I can buy fifty blank CD-ROMs from Office Depot for about $15, and churn out fifty copies of whatever is on that disc in the matter of a few hours. An additional two dollars each (let's be generous) for jewel case and printed liner notes, assuming these are inlcuded, plus fifty cents to mail the final product, and the government's actual cost is about $4 apiece, including labor. Perhaps the other sixteen dollars I paid is my gift to reduce the Federal debt and should be included on my IRS Schedule A as a charitable contribution. I could buy a disc from the thieving RIAA for less. Note to potential IRS inquisitors: I will not include any such thing on my Schedule A, the information on which really is entirely legitimate and painfully honest.

Next problem is that every clown in the country who cobbles together a weblog for his own amusement probably went through some of the same process I did, and these CDs must have sold like hotcakes because I ordered my copy only one day after it was released, and ten days later got a postcard informing me that my budget document was out of stock and should be available in another four to six weeks. Hmph. Given the modest difficulty of burning a disc and mailing it, I'm struggling to comprehend the possibility of facing a month and a half delay. Which, after all, represents a delay in receiving a one-year document which is nearly 12% of that year. I hope it's still relevant by the time I get it.

Adding insult to injury, I discovered today that GPO then proceeded to charge my credit card twice for the same order that I still haven't received. Grr.

So, the short form of all this is that while I have developed a scheme to save the country from the sure economic ruin which our present inertial course will eventuate in, I don't yet have the numbers to do fact-checking and so forth. So you'll all have to wait. But it's coming, eventually, just like my alleged CD-ROM is.

And, since you've all been dying to know, we come finally to discuss John Kerry.
I've been watching the Democratic primaries with mixed feelings, which response is hard to avoid with such a bunch of vitriol, puerile taunting, demagoguing, and generally behaving poorly being broadcast with such alarming constancy by the news networks. I've been pulling for John Edwards as the best of the electable bunch (I have a lot of respect for Joe Lieberman, but primary races for either party tend to be really ugly affairs which reward campaign behavior which isn't Joe's strong suit). I don't think I agree with John Edwards on many things, and I know I didn't agree with Howard Dean on some things (Iraq, his current economic policy) though I agreed with him on others (gun owners' rights, and the fiscal moderation and discipline he demonstrated while he actually governed). I have no idea whether John Kerry and I agree on anything, because I have concluded that John Kerry believes in nothing. Except, naturally, for his desire to beat George Bush and propel himself to power. Which I don't agree with.

If you look up at the top left corner of this page you'll see my own little political axiom, which at its simplest is that all politicians are basically venal. I'm sure Howard Dean had more than a little fancy for the Oval Office, and I disagree wholly with his take on the Iraq war, but I believe him when he says he believes these things. And there's no doubt that what George Bush says is more than a little colored by the fact that he'd rather keep his job than lose it, but there's little doubt that what he represents as his core beliefs are genuine.

But I think John Kerry is the very worst sort of politician in this regard, one who is actuated solely by his venality, and is devoid of any real beliefs of his own. His rather tortured attempts to change his story and expain away his votes on the Iraq war resolution suggest that nothing he says or votes can be taken at anything like face value. It's worth noting that he voted against the 1991 Iraq war, despite its having UN approval, though he now explains that that was so President Bush 41could build more domestic support for the effort. And he voted for the current war, which he now says he opposed, and which war can be blamed on George Bush and Halliburton. (Come on. He's on the Senate Intelligence Committee. He's privy to all the intelligence the President reads, both during the Clinton administration's Operation Desert Fox and in the run-up to the current war. Saying that he only supported the war because of faulty intelligence--so it's not his fault and he can't be blamed for it--but then condemning George Bush for doing the same is absurd, and any thinking person knows it. I'm frankly insulted he expects that to fly, and more than a little appalled that so far, in fact, it is.)

And he voted for the Patriot Act, which in fact he co-authored, and which he now virulently opposes for, essentially, its "chilling effect." Tip to astute listeners: the supposed chilling effect, which you will hear cited as a basis for opposing all manner of Republican legislation, is only cited in the face of an utter absence of real and specific problems with the policy being criticised, and it means that not only have no actual abuses surfaced, that it's difficult even for educated critics to even imagine specifically what might go wrong.

Kerry voted for the Iraq Liberation Act in 1998, making regime change for Iraq the official position of the United States, though evidently not with any real seriousness of purpose, according to what he's been saying lately about how wrong it was for us to actually depose him. And, every Democrat's pal, Bill Clinton, signed this bill calling for regime change, so why all the Democratic angst when it comes time to actually do it? The same liberals who always wore FREE TIBET t-shirts in high school should have loved our kicking of a murderous oppressive tyrant from power, though in fact they were the loudest to oppose it for some reason.

Lest I digress into an analysis of the state of American Liberalism, which is perhaps a subject worthy of some attention but which would take us rather too far afield, let us return to John Kerry. I started to notice his yea on the Iraq war becoming but Bush assembled a "fraudulent coalition" and I didn't expect George Bush to fuck it up as badly as he did once Dean's consistently strident opposition to the war had made him (Dean) the temporary front-runner. Which vulgarity, in that Rolling Stone article, was an especially nice touch for the man who would be leader of the free world, as it nicely encapsulated not only that the way he actually votes shouldn't be held against him, but that he was also too angry to talk about it without having his grammar explode. Yale-educated three-term United States Senators have fully sufficient savvy and self-awareness to avoid any accidental embarassing choices of diction, and I haven't heard Kerry dropping F bombs on Tim Russert and Brit Hume, so I can only attribute this particular choice of language as a carefully considered maneuver to position himself favorably in whatever particular idiom he thinks the readers of Rolling Stone should view him in order for him to garner the support of another subsection of a demographic. Taken together, I must confess that I just don't buy it. He's faking it, and he doesn't even have the decency to be convincing about it.

So what? My problem with all this is that John Kerry is just Bill Clinton, devoid of charm and probably less likely to philander. His every policy focus-group tested, governing according to the latest opinion tracking polls, and always choosing what's momentarily most advantageous--not for the nation, but most advantageous to John Kerry's gaining and continuing in power. This habit was obvious and annoying, though slightly amusing, during the Clinton administration, when the economy was booming and the nation was generally at peace. Matters are rather more serious now, and as a consequence we don't have the luxury of playing silly posturing games with our policies or indulging leaders who just want to make everyone like them so they'll be re-elected. Because the easiest and most dangerous policy which Kerry will end up selling us before this is over is that we're not really even at war anymore.

The reason he'll sell this, and why I fear a dangerous number of Americans might buy it, is because it offers the easy path. It's much easier to say, and for a listener to hear, we're not really at war anymore, than to listen to George Bush say that we're at war; it will be long and difficult; there will be setbacks and men will die; and sacrifice will be needed from all of us. Which, if you've been listening, is pretty much what George Bush has been saying all along. It's the hard path, and it makes even a great wartime leader vulnerable in peacetime. It's why no less a leader than Winston Churchill himself was voted promptly out of office in the first election after the danger was past. No one wants to hear about sacrifice and toil and endurance, or vote for someone who offers nothing but.

None of which has anything whatever to do with whether we're really at war right now. We are. The absence of major attacks in the US since 9/11/2001 is significant and gratifying, but it does not mean our enemy has been beaten or has given up. For all the comparisons the Iraq war draws to Vietnam, I maintain that the overall War on Terror is much more like World War II than Vietnam, for it is fundamentally an existential conflict against a deranged enemy who will stop at nothing to see us wiped off the very face of the earth. Hitler and Hirohito had their armies and navies of hundreds of thousands of men to try to accomplish this; all the terrorists need is one major breach in nonproliferation security and they may be able to develop or acquire a nuclear weapon. Or, possibly worse, an enhanced strain of smallpox. Either one would be at least two orders of magnitude more deadly than 9/11 was, and would have the potential to cause the utter economic collapse of our civilization. That's what we're up against here, and it's every bit that serious.

This is not a game. I don't care exactly about the Nigerian yellowcake, or whether Saddam had actually tricked us into thinking he still had weapons he had really destroyed (which, really, does seem incredible). I really don't care whether "Mission Accomplished" was an arrogantly premature celebration of a victory not yet achieved, or was really meant just for the crew of one carrier who had served admirably and honorably. I really don't care whether George Bush's dental records prove he was at a meeting in Alabama for the ANG in the '60s, and whether the one meeting he missed was optional or supposedly mandatory. All that kind of quibbling is silly kid's stuff, and the fact that the Democrats are obsessed with it all shows just how profoundly unserious they are about winning this war, or even recognizing and admitting that it is a war and not just an elaborate law enforcement excercise. Right now we don't have the luxury of indulging silly politicians who want to pretend that the war is over, and we won, and we can all come home and disarm and celebrate the new Peace Dividend. Because right now that sort of thinking from the elected leaders in our highest offices has the ability to get an unseemly large number of us killed.

I can only say that I wish more Democrats still had the spirit of John F Kennedy, not John F Kerry, as we prosecute this long and shadowy war.

"Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty." John F Kennedy, Inaugural address, 1/20/1961.

Since I'm on this little science kick of late, here are a couple other things you might have missed.
NASA, rather disappointingly, has decided to forego the final scheduled shuttle mission to service the aging Hubble Space Telescope, which was to have taken place next year. Evidently, NASA chief Sean O'Keefe has considered all the input from Hubble supporters as to its ongoing value, and the assessment of risk inherent in the mission from the astronauts' office, and has concluded that on balance it's not worth saving.

If you've never seen the famous Hubble Deep Field photograph, you should go check it out before even proceeding with the rest of this discussion. The Deep Field is a view nearly all the way to the end of the visible universe, in an average slice of sky near the Big Dipper which is no wider than the apparent size of a pencil eraser held at arm's length. And, for context, you might consider this comparison between the best ground-based photograph of the colliding galaxies NGC 4038/4039 and an image of the same from Hubble.

O'Keefe's decision is disappointing, of course, given all that Hubble has allowed us to learn over the past decade. With a fresh set of batteries, new gyroscopes for pointing and a new camera, HST could continue producing effective scientific research for another decade. Hubble never was expected to last forever, of course, but its replacement--formerly known simply as the Next Generation Space Telescope, now the James Webb Space Telescope--won't be ready for launch until 2011 at the soonest. And, as the new space telescope project will cost an unholy fortune, and with NASA now pinching pennies so as to enable the moon base and Mars shot (both discussed here previously), it is far from certain that the Webb Telescope will ever actually see first light. I can readily see a scenario, with the inimitable logic of government, where NASA is told on the one hand that this new Webb Telescope is far too expensive, what with us preparing to go to Mars and all, while HST is still operating; and on the other hand, that upgrading Hubble is an expensive and unaffordable luxury what with the Webb Telescope coming shortly online and all. It's possible we could talk ourselves into a situation where we are without any space telescope operating at visible light wavelengths at all, just a Mars program. And as excited as I am about the Mars program, orbiting telescopes allow some really fantastic science to be done and are just indispensable.

This decision to allow HST to kind of wither on the vine is also somewhat controversial, as a couple of NASA engineers have leaked an anonymous report to CNN arguing that a Hubble service mission is no riskier than any of the remaining 40 scheduled Shuttle missions required to complete the ISS. O'Keefe has asked for a second opinion, which he no doubt hopes will affirm his original decision (otherwise he's in no less an ambiguous situation than he's in now). There's been something of an outcry among interested members of the public, which I guess I'm contributing to here, even among non-scientists impressed by the fantastic images gleaned from HST over the years. The website SaveTheHubble.org claims over 18,000 signatures on their online petition to Congress and NASA not to scrap the telescope. Check it out and add your own if you'd like.

In happier news, as we expected, JPL has announced that the Spirit rover is back in business. Evidently its computers had some sort of Windows 95-era memory management issue, and Bill Gates was able to talk them through how to fix it. With two healthy rovers scrounging on Mars, we should be getting some exciting results from the missions.

First of all, a hearty congratulations to NASA's Jet Propulsion Laboratory, for its success at landing a second rover, Opportunity, on the surface of Mars and sending back pictures.
As I wrote below when Spirit landed safely, putting a remote controlled craft on Mars is exceedingly difficult, and it's fantastic (and, no matter how excellent JPL's team, probably a little surprising) that both of them were successful landings. Kudos; and kudos again.

But, after an exciting initial splash and the return of some tantalizing data, the rover Spirit has encountered some problems. On Wednesday the communications signal was lost and all data transfer stopped. This naturally jeopardizes the rest of the mission and I'm sure JPL's engineers are working furiously to correct the problem and to do so as quickly as possible; the solar panels providing power to Spirit are only rated for a three month operating lifetime in the dusty, sandy Martian environment.

This kind of problem, while serious, is not uncommon. The entirely successful Galileo mission to Jupiter (and the Galileo Extended Mission to examine the four largest Jovian moons) was virtually dead on arrival at the giant planet when its high-gain antenna wouldn't unfurl. The initial plan had been to collect data just as fast as the spacecraft's sensors could, then use the high-gain antenna to transmit this data to earth in near real time (the data would pass through a buffer first, with the occasional buffer overrun captured on a backup tape recorder). Switching to the low-gain antenna would be like canceling your cable modem account and going back to a 2400-baud dialup modem, and I actually remember what using those was like.

The solution, which sounds simple but required extensive reprogramming and a significant change to the mission plan, was to capture all collected data directly to the tape recorder. This required the mission team to be much more selective about which data to collect, since the tape recorder's data capacity was not unlimited, and required huge blocks of time between close approaches for transmitting the contents of the tape recorder back to earth via the pokey low-gain antenna. It all worked brilliantly, and as the spacecraft lasted four times longer than anyone had expected, they eventually were able to collect all their data after all.

JPL announced yesterday that they had established some level of communication with Spirit, and had stopped the onboard computer from continuing to spontaneously reboot (probably calling Bill Gates at home on the weekend for tech support, or something similar). I figure since the spacecraft isn't totally non-responsive, it will be a matter of a few days until we have another successful mission-from-the-fire recovery story to talk about.

But all this brings us to President Bush's recently promulgated goal to send men to Mars, and the general skepticism which greeted the announcement. The main points were to (1) return to the moon; (2) establish a permanent presence there (the fabled moon base); (3) complete, then abandon in place, the International Space Station by 2008; and (4) use all the knowledge and technology developed in steps 1-3 to launch a manned expedition to Mars. Let's jump to the end and work our way backwards through these steps.

Why bother going to Mars at all? I wrote previously about a couple of the exciting prospects for life (or fossil remnants thereof) on the red planet. Let's stipulate that there are scientifically compelling reasons to explore the planet, and just consider whether it is better to do this with men or with remote control craft such as Spirit and Opportunity. The two main arguments I hear from the robots-only crowd are that sending human explorers is (1) too dangerous; and/or (2) that it adds complexity and cost to the mission which is not offset by a commensurate gain in expected return of scientific data.

The first of these, that it's too dangerous to risk human lives in this way, can be dispensed with swiftly. The tragedies of Apollo 1, Challenger, and Columbia notwithstanding, fear of loss is a poor reason to prevent pioneers from attempting to explore new terrain or develop new technologies. Lewis and Clark could have been killed by Indians or eaten by bears. The Wright brothers could have accidentally climbed to fifty feet and then flipped into a nosedive in the treacherous Kitty Hawk winds. But they, like modern astronauts, were volunteers for their particular missions, not ordered into harm's way against their will. The pioneer's personal safety is a poor excuse for society collectively to deny him permission to risk his own life in the advancement of human knowledge. The balance between personal risk and the mission's potential rewards is best evaluated by the pioneer himself, who will bear that personal risk. We would today scarcely credit Thomas Jefferson for forbidding the Lewis and Clark expedition, leaving the Pacific Northwest shrouded in continued mystery, for fear of the explorer’s safety.

The second is a bit tricky. There is no doubt that it adds cost and complexity to the mission, as food, water, and oxygen are all heavy and require much more fuel, and hence a much bigger and more expensive spacecraft, to carry them. And, while a robotic mission has only a few critical systems requiring redundant backups, a manned mission has many more critical systems which require triple-redundant backups. What, scientifically, do we gain from this?

A couple of things. Primarily, the mission gains massively in flexibility. A robotic mission has the ability to deeply explore one or two questions in a very narrow territorial area. But if one of those answers comes back with a negative answer, but a tantalizing possibility which begs of answering just a slightly different question, the robotic mission is over. NASA has to design a new spacecraft (2 years), build it (2 more years) and launch it (2 years flight time) before an answer can be had. And if that second answer demands a similar tangential inquiry, the six-year process begins anew.

A manned mission, with its larger, more complex (and, yes, expensive) facilities, could easily be equipped to handle a wide range of expected tangential inquiries by the crew. The results won’t necessarily be any better than would eventually be obtained robotically, but they will be available much faster. A human crew also has the ability to sample a much wider area, allowing qualified conclusions to be established much more decisively than after a more narrow sample (which would otherwise require a second follow up robotic mission six years hence). The extra cost involved greatly accelerates the whole learning process. We’re still, with the current rover missions, trying to answer the same fundamental questions as we were with the Viking missions in the 1970s—whether there is now, or once was, microbial life on Mars. Had the Viking mission been a well-equipped manned laboratory we would have had the answers to today’s questions thirty years ago. And if we land a manned lab on Mars today, we can immediately answer the questions we’d otherwise still be designing narrow-purpose spacecraft to answer in 2040.

The complexity of the spacecraft itself will also be somewhat offset by the improved ability of a human crew to land safely on the surface. The 20-minute lag of communications sent at light speed makes direct remote control of the landing impossible, so robotic craft have all their landing maneuvers preprogrammed. These programmed command sequences are not always successful, when presented with anything the least unexpected (ask the European Space Agency’s Beagle 2 team, or JPL’s Mars Polar Lander team, about this element).

Manned missions can’t replace robotic missions, and they don’t need to. The two are ideal complements to each other. There are places wholly impractical for manned missions (Europa, for example, with Jupiter's intense radiation so nearby). And for detailed global mapping, an unmanned orbiter can't be improved upon by sending humans along. And as a first inquiry, to see whether a planet is even interesting enough to study so intently, a cheap unmanned probe is superior. Both approaches to exploration have their merits and their place.

Now, moving backwards to the first three elements of George Bush’s Mars plan. It’s plain that a great big, Saturn V style of launch craft is probably not the best choice to go to Mars. We haven’t made anything nearly the size of the Saturn V (the Apollo launcher) in 30 years, and the Space Shuttle’s launcher is nowhere near as powerful. The Saturn V itself is not sufficiently powerful, nor does it have enough fuel capacity, to go directly to Mars anyway. And the type of craft, containing something of a laboratory, is far too heavy to launch with any rocket we have now or have ever built.

Payload weight presents a big problem in launches. For every pound of payload weight launched from earth, something like ¾ pound of fuel is required to elevate it to orbit (to say nothing of actually pushing it to Mars; this just escapes earth’s gravity). Rather perversely, this ¾ pound of fuel itself adds to the takeoff weight, requiring ¾ of its weight again in additional fuel (so ¾ of ¾ pound, or 0.5625 pound) just to lift the initial fuel amount, and so forth. While this calculation iterates infinitely (a third iteration requires ¾ of ¾ of ¾, or 0.421875 pound, etc), the resultant fuel increase at each iteration tapers off toward zero pretty quickly. To be all mathematically precise for a moment, this is known as a converging geometric series, so that as the limit of the number of iterations of this approaches infinity, the amount of additional fuel required for each iteration approaches the infinitely small (essentially zero). For a circumstance requiring ¾ pound of additional fuel per pound of payload, this ends up requiring approximately 1/(1-¾)=4 pounds of fuel per extra pound of payload all told. All this is approximate and just to illustrate the math concept involved; the actual numbers vary considerably depending on the precise type of fuel used, all of which have unique values for specific thrust and exhaust velocity and so forth. If you'd like to expand on the particulars for me, an email would be welcome.

So the idea of launching from a moon base makes some sense. The moon’s gravity is about 1/6 that of earth’s; if ¾ pound of fuel is required in the first iteration in the example above to lift one pound of payload to earth orbit, only 1/6 this amount (1/6 x ¾, or 1/8 pound) is required in the first iteration for a launch from the moon, so the total amount of fuel required per pound of payload to reach orbit from the moon is 1/(1-0.125)=1.14 pounds. Instead of requiring four pounds of fuel per pound of payload, only 1.14 pounds of fuel is required to launch a pound of payload from the moon. This eliminates the need for huge external fuel tanks like the shuttle uses, and enables a two-stage rocket (rather than a three-stage), further reducing the cost. And it may be more politically feasible to launch a fission-powered spacecraft (powering the trans-Mars trip, not the launch itself) from the moon than from earth, making the whole mission an even more efficient package.

The only problem with all this is the cost and expense involved in a moon base, and the lack of a really good reason to have one except for the Mars launch. It might be interesting to do it, just to practice our moon launch methodology with modern equipment, since the last time we were there we were still using vacuum tubes and slide rules; there are likely some scientific justifications for such a permanent presence there (if we can justify a permanent south pole base on the scientific merits, why not on the moon?). It just doesn’t seem all that compelling somehow. And part of the reason is the (rightly) much-maligned International Space Station.

I’ve kind of hated the ISS since its inception back in the 1990s, when funding was “found” for it in favor of funding the Superconducting Super Collider, which had the potential to advance fundamental physics knowledge in dramatic ways. The ISS is a money sinkhole, basically an artificially created purpose for NASA and its Russian partners. It’s an excuse to keep the aging shuttle fleet flying when they (let’s be frank) really aren’t doing much anymore apart from the occasional dramatic and valuable repair of a Hubble Telescope that couldn’t be done with cheap, disposable Delta rockets. It’s scientifically pointless. And yet…

The only reason to have it at all that makes any sense is as an assembly and docking point to launch a manned Mars mission. That’s been the one point that makes the whole project forgivable, in my opinion. There just has to be someone on that project team quietly scheming for when he can casually announce his station’s fitness for a jumping off point to Mars. From the ISS the orbit reaching fuel considerations above are manageable, because no matter how big the end product spacecraft is, it can be brought up to space in tiny parts, assembled at the ISS, and then launched on its way with whatever its final stage propulsion system would be, not a high-thrust low-efficiency takeoff stage. It seems a great and a cheap (compared at least to a moon base) solution, and frankly is so close to being ready (compared, again, to this proposed moon base) that I don’t see the point in going to the moon at all. Not, at least, if the main justification for it is to save launch weight for the eventual Mars mission.

I assume George Bush has people much smarter than I am advising him on this. I only hope they like the moon base because it is the technically best solution, not because of its ability to absorb all the money which can be thrown at it. I’m excited about the notion of a Mars mission, but I remain skeptical about this business of the moon base. We shall see.

A successful Mars landing!
The brilliant folks at Jet Propulsion Laboratory smoothly landed a new six-wheeled roverbot, Spirit, on the surface of Mars at 11:35 PM EST last night. JPL has previously executed such sensational missiona as the Voyager mission to the outer planets; the first ever Mars landings (Viking 1 & 2); and Galileo, which finally allowed us to conclude that that planet's icy moon Europa likely has a subsurface liquid ocean which may possibly harbor life; and many, many other successful missions.

Even for an outfit which has enjoyed such success in the past, Mars is sort of the Bermuda Triangle of the solar system, and landing a craft on the surface is notoriously difficult; even successfully entering orbit has proven an elusive goal in the past. The European Space Agency unfortunately seems to have lost their Mars lander, Beagle 2, which was supposed to land on the surface on Christmas day (though, more happily, that mission's parent ship Mars Explorer has entered orbit around Mars, and is conducting burns to lower itself to its operational orbit over the next week). The apparent loss of Beagle 2 follows some costly and embarrassing failures in the late 1990s by JPL themselves, such as Mars Climate Observer, and the infamous Mars Polar Lander, which reportedly crashed upon landing because the JPL team was inputting metric figures into its computer, while the Lockheed subcontractor had programmed the computer to figure in English units, and the craft basically lost track of where it was. All this is not to mention the really notorious, billion-dollar Mars Observer mission, launched in 1992 and lost in 1993.

Why to mention all these past failures? Certainly not to rub it in; JPL is one of the finest teams in the aerospace industry. Only to illustrate how really, profoundly difficult it is to do what they just accomplished. Certainly not for want of trying, this is the first successful Mars landing since the very photogenic and popular Pathfinder/Sojourner mission which touched down on July 4, 1997, which itself had been the first landing since Viking. Yesterday's success is tremendously exciting, and the mission's ongoing progress can be followed at the JPL home page.

This is significant also because Mars is probably the second most exciting venue for solar system exploration right now, after the aforementioned tantalizing Europa possibilities. There are two ongoing and very illuminating orbiter missions: Mars Global Surveyor (which has taken high resolution photographs of the entire surface of Mars, yielding topographical knowledge simlilar to what we know about remote regions of Earth) and 2001 Mars Odyssey (largely intended to replace the lost Mars Climate Observer mentioned earlier). These have shown visual indications that Mars is currently possessed of some amounts of water, possibly sometimes in liquid form, though recent findings have not been encouraging to those believe Mars was once warm, water-covered, and basically Earthlike. The more water that is there now, the likelier that native Martian bacterial life forms may exist or may have existed; the past presence of liquid oceans would have made possible even more complex life forms in the past, which may be detectable in Mars's fossil record.

Remember the excitement in 1996 when Bill Clinton announced that NASA had found proof of past life on Mars based on analysis of structures found in a Martian meteorite? Those were suggestive, but the original analysis of that particular rock is now generally accepted as inconclusive at best. Spirit should be able to yield additional information on whether we should ultimately expect to find evidence of past native Martian life. I'll be watching their results eagerly.