Old guys rule

The pleasure of seeing expectations confounded: young athletes get made up convincingly as geezers, then show up on the basketball court or skateboard park. It's a good joke on everyone, and no hard feelings.

Bad Habits

Same band as last night, this time singing about cocaine.



I don't care at all about cocaine -- I'm one of the last Americans to have never done any illegal drug -- but I was wondering about this song for a while. I heard it in this documentary about the Angels, and for a long time I thought it was an ode to BDSM: "everybody take a whip on me!" That turns out not to be the relevant lyric at all. It's an old tune, done by Woodie Guthrie.

By the way, forward that video to 8:24 to hear Jerry Garcia give an ode to bikers. "Is that out front, or what?"

"Are you afraid of them?"

"Sure."

"Why?"

"Because they're scary, man."

Root for the Socialists. It's Important.

There was a famous election in which David Duke ran against a legendarily corrupt politician that produced the slogan, "Vote for the crook. It's important." (The same politician produced the aphorism about political death meaning being caught in bed with "a dead girl or a live boy," the truth of which might now be questionable). At The Week, Michael Brendan Dougherty argues that conservatives should root for the socialists in Greece.

Conservatives may say that people get the governments they deserve. But the Greeks actually did something that was unthinkable in this country, kicking out both of the major parties that led them into debt-peonage. Syriza was their Tea Party, and like the Tea Party it boasts some grandiose and irresponsible rhetoric, flagrantly breaks Godwin's law, and is generally unruly.

This is what I mean when I say that I expect us to have a conversation like this down the road. The ones who've been striving hardest against reckless spending are the ones being told they have to accept the consequences, including the disarmament of the Greek military at a time of national crisis. Doubtless we will hear the same things in our hour. We should look differently upon them, as we would want others to look differently upon us.

Too far?

Oh, my. I assumed the village flag in this HotAir newsclip was for funnsies, but apparently not.

Beating China on price?

Will the Chinese equivalent of WalMart soon have to start importing cheaper U.S.-made consumer goods? I wouldn't bet on it quite yet, but a Boston Consulting Group study claims that we're closing the gap in manufacturing costs and might actually get cheaper than China within three years, mostly as a result of drastically reduced fuel costs, which is turn will be mostly because of drastically reduced fracking costs. As the article notes, all other things being equal, American companies would prefer to eliminate the risk and delay inherent in shipping "cheap" goods here from halfway around the world. We have to get pretty uncompetitive before that starts making sense, but maybe we can innovate our way out of the jam. Or maybe the EPA will find a way to outlaw fracking, to keep us from doing anything competitive or unfair or harmful to Gaia.

Tonight's Music

A little piece about the Cumberland river.

The Greek Perspective

We've been talking about the crisis in terms of the English-language commentary on it, and in terms of the clash between German and contemporary Anglo-Saxon economic philosophy. What we haven't really heard about is what the Greeks think, except insofar as it has been represented by Germans or Frenchmen or English or American thinkers. A Greek whose acquaintance I made in the last few days sent me this graphic to explain how the crisis looks to him.

From his perspective, the Greeks are proposing to pay 3.5B of the 4B Euros being asked. The creditors group is demanding the 4B (officially), but the way it has come up with for Greece to afford it is to violate its basic national security requirements. The Greeks were already proposing defense cuts at half the level the creditors would prefer, but -- at a time when Greece is facing a heavy influx of refugees, and possibly infiltrators, from the crises caused by ISIS and in Africa -- the creditors are demanding cuts to the bone.

Now national security in the face of an immediate threat is one of the few cases in which we often think it is reasonable for a sovereign power to run a deficit. After all, what are your alternatives?

Under this reading, the Greek position suddenly looks a lot more reasonable. They're willing to meet their creditors most of the way, but they aren't willing to commit suicide to close the remaining gap. And, by the way, isn't it really to all of Europe's advantage if Greece is able to maintain sufficient defense forces to deal with the influx of refugees? That seems like a problem it is carrying for the rest of Europe, to a certain degree. Might not the rest of Europe help to carry that burden a bit, or at least not kneecap the Greeks while the Greeks are carrying that burden for them?

Just so you know how it looks from the other side.

Oh, Really? Were There Snipers?

This story sounds familiar.

She told a story about the 2009 United Nations Climate Change Conference in Copenhagen, Denmark. Clinton and President Obama were trying to negotiate terms with India and China—two of the fastest-developing countries in the world—for a climate change agreement.

The problem: China and India's leaders were nowhere to be found. Clinton said she and Obama "sent out scouts," who found that the leaders were meeting in a clandestine conference room. Clinton and Obama marched to the room, she said, and pushed past Chinese security guards to confront the heads of state. As a result, the assembled countries signed an accord... though much of the text was nonbinding.

Hm.

Iron Lady II

For those of you who (like me) have never closely followed European politics, this WSJ article, which is linked via a Google search and won't trigger a paywall, is a fascinating summary. I didn't know that Angela Merkel was raised under communism or that she was a research physicist before going into politics. As she was the daughter of a West German Lutheran pastor who was assigned a parish in East Germany, her relationship with communism seems to have been ambivalent. She is a Christian Democrat who is openly skeptical of multi-culti assumptions, whose economic views pass for right-wing free-market enthusiasm in Europe, and who doesn't altogether despise Israel. She's also the Mean Mommy who tells countries with failing economies that they have to do their "Hausaufgabe"--their homework. Update: This is not a bad thumbnail sketch of the bid-and-asked in the negotiations between Greece and its creditors.

Freedom Machine

Let's stick with Junior Brown for another day. I liked the last one because of some of the clever word-play. This song doesn't really have any of that, but it does have some solid looking hotrods and ratrods.



We're still close enough to the 4th for an anthem to freedom. America has 365 freedom days.

The Robot Wars

The Japanese accepted.

Freedom

From Political Humor:

Eric Hines

If You Put Your Thumb on the Scales Hard Enough, It All Makes Sense

The governor of Pennsylvania demonstrates a Euro-like understanding of the workings of the market. There hard liquor sales are run through state alcoholic beverage control centers, which set prices and determine how much you are allowed to buy. The legislature moved to privatize hard alcohol sales, but no. The governor vetoed the bill with this statement:

This legislation falls short of a responsible means to reform our state liquor system and to maximize revenues to benefit our citizen,” Governor Wolf said. “It makes bad business sense for the Commonwealth and consumers to sell off an asset, especially before maximizing its value. During consideration of this legislation, it became abundantly clear that this plan would result in higher prices for consumers. In the most recent case of another state that pursued the outright privatization of liquor sales, consumers saw higher prices and less selection.

Turns out he's right about the last case, which was Washington state. Prices did go up after privatizing the market -- because the government slapped a huge tax increase on the stuff at the same time.

Crisis Averted!

The Greeks have made it all up to the EU.

Late to the party

So I had a quiet 4th of July at home with my wife and mother-in-law (as my wife has managed to break her tibia, she is unable to walk for about the next three-four weeks), and am just now getting caught up here at the Hall.  I came across Grim's An Independence Weekend Story and was reminded of a man I knew, who perhaps never fought for the Finns or Nazis, but did serve in the US Special Forces after fleeing the Soviet Union as a boy.  His name was COL Sobichevsky, and I met him in 1993 during cleanup of the Defense Language Institute of Monterrey as we were expecting a Base Realignment and Closure Committee visit.  So all the lower enlisted got to edge curbs, mow grass, trim hedges... all the normal spit and polish nonsense which kept up (or so the theory goes) from plotting bloody mutiny.  He came up to me and asked to speak with the NCO in charge of my detail, so I pointed out SGT Schwartz and got back to work.  He told my SGT to let us all know that we were doing a good job, and to let us know why we were out there... "Because those mother****ers want to close my base."

Perhaps a little insight into the man's history would give some clarity on why he made such an impression on me 20+ years ago.  Vladimir Sobichevsky fled the Soviet Union in 1943 with his mother.  They emigrated from a displaced persons camp to the US in 1949.  Seven years later, he enlisted in the US Army, and joined the first Special Forces group.  He spent his enlisted career in Special Forces and rose to the rank of Sergeant First Class, and decided to become an officer.  He then proceeded to spend almost all of his commissioned career in Special Forces.  For those who know of the Army's preference to "cross pollinate" officers between different branches of service, this will come as a surprise.  For those who don't, then just know that this does not happen in the US Army.  Officers don't get a choice in the matter, most times, unless that choice is to resign their commission.  My own father went from an Armor Officer to Quartermaster.  No one asked him if he wanted to.  But every time orders would come down to transfer CPT (or MAJ, or LTC) Sobichevsky to another branch, his commanders would send a request up the chain of command stating that Special Forces could not spare Sobichevsky, and so he would be left in branch.  One time (so the story goes) the request went before President Reagan himself who ordered Sobichevsky left in branch.

But we (of Military Intelligence) got COL Sobichevsky in 1992 for one very specific reason.  In order to advance in rank to BG and stay in Special Forces, one of the BG's in charge of Special Forces Western Hemisphere or Eastern Hemisphere had to go.  And neither was due to do so.  So, for the first time in his Army career of nearly 40 years, COL Sobichevsky found himself out of Special Forces.  We (lower enlisted soldiers) were more than a little intimidated by him, when he first arrived.  And I think he was more than a little discomfited by us and our non-SF ways.  One of his first acts upon being made Commandant of the school was to hold inspections of each soldier, sailor, airman, and Marine attending his school.  Since he really wasn't up on the uniform regs for the other services, they were mostly judged on the shine of their boots, while we soldiers got a full uniform inspection.  As I recall, he was impressed by the Marines, horrified by the sailors, lukewarm on the airmen, and we soldiers did okay (he passed by me without remark, not all were so lucky).  No official condemnation or corrective action ever came because of his inspection, but it gave us our first glimpse of the new Commandant.

In researching for this article, I found that COL Sobichevsky retired in 1995 after completing his tour as Commandant.  I was a little saddened by this, as it seems an ignominious close to an otherwise epic career, but a more earned retirement (39 years of service is a LONG time) would be difficult to find.  I hope the good COL (Ret) is doing well, and I wish him all the best.

Shale crash? Not so fast

The conventional wisdom was that shale production couldn't survive the lower oil prices that it brought about by its own success in flooding the market.  What's happened instead is that the pressure of lower prices has wrung cost reductions out of the market:

A Bloomberg analyst suggested that the cost of drilling services have fallen between 20% and 50% with break even prices in parts of the Permian and Eagle Ford below $40 per barrel.

Director of upstream research for Wood Mackenzie, Scott Mitchell forecast that producers could add up to 100 oil rigs by the end of the year.

The article also notes that increased production will require employers to go back to the labor market with their hats in their hands, which will drive up wages and therefore production costs. That's how prices work. Meanwhile, Brits (and New Yorkers) still hate fracking, while Argentina and China lead the world in shale exploration.

Earth slows down, women and minorities hardest hit

As a result of toxic CO2, the Earth is orbiting the Sun at its slowest speed in a year.  Wait, actually it's the aphelion, which happens this time of year.  At 2:41 p.m. Central today, we'll be the farthest we get from the Sun in our elliptical orbit.  We don't notice the resulting decrease in insolation here in the Northern Hemisphere, because the effect of being tilted toward the Sun in summer overwhelms the effect of being 3 million miles farther from the Sun than we were in January.

The slow-down, a natural aspect of orbital mechanics rather than a plot between The Heartland Institute and Big Fossil Fuel, means that summer lasts 5-1/2 days longer in the Northern Hemisphere than in the Southern.

It's the thought that counts

The action so far:  Greece borrowed a third of a trillion dollars.  It's been obvious for some time it neither would nor could pay it back.  Despite the best efforts of a lot of financial and political whizzes to obscure the issue in a series of "extend and pretend" paper blizzards, the issue came more or less to a head last week as the issue suddenly became concrete and unavoidable:  the Greek banks have been closed for a week.  Only little trickles of cash were available from ATMs, and that perhaps not for long.*  Suddenly foreign banks aren't just the guys who are demanding payments any more:  they're the guys with the buckets of cash that are needed to fill the ATMs back up.  Greece faces the prospect of having to consume only what it can produce locally.

The fascinating thing about the bank closure is that the issue no longer is about whether Greece will pay back its loans; of course it won't.  Four or five years ago, when it became obvious no such repayment would ever happen, the private lenders mostly sold out of the Greek debt and left it to the central banks.  It's now a political issue: will governments, especially Germany, soak their taxpayers for new cash to subsidize Greece's living beyond its means indefinitely?

This being an extremely uncomfortable question, not to mention one that will inspire Spain, Italy, Portugal, and perhaps France to demand similar subsidies, all efforts are now being directed to creating the illusion that the corpse of the Greek debt is still dragging itself along by its fingernails.  Everyone is frantically trying to preserve the impression that they are dealing responsibly with a troubled debt instead of deciding whether to pour shiny new Euros into the international project of making Greece a permanent welfare queen.  Bloomberg has laid out an impressive array of squid ink available to ECB officials in this effort:

Greece won’t leave the euro overnight. But it may face face three or four weeks of increasing pressure to start printing its own money.

That’s because Greek banks might soon be unable to meet European Central Bank demands for the collateral needed to keep access to Emergency Liquidity Assistance [a/k/a German cash subsidies], and the Greek government would run out of cash to pay its bills and workers....

[The ECB's] bank supervision arm will decide how to value the government-backed assets held on Greek banks’ balance sheets. Meanwhile, the central bank’s monetary policy arm will consider whether to object to collateral that lenders post to gain ELA [German cash subsidy] access from the Bank of Greece.

... Then, the banks would get calls for new collateral and might come up short. Taken together, the supervisory and ELA review could show the Greek banks to be insolvent, and Greece wouldn’t have the means to use euros to prop them up again.

At some point, a default could force a decision on Greece’s euro access. For example, if the government defaults to the ECB [again, and we really mean it this time] on July 20, that could trigger margin calls on the banking system and lead to a more generalized default....

The euro area could decide to help Greece to an “orderly exit,” through a phased withdrawal of liquidity [i.e., cut off the subsidies more gradually, like over a period of several lifetimes] or some other settlement mechanism. It could also put Greece’s euro membership on temporary suspension, a prospect raised over the weekend by German Finance Minister Wolfgang Schaeuble.

[Central Bankers could] convert the emergency aid into a swap line, a tool that central banks use to extend liquidity to their counterparts.

Already, the ECB is preparing a facility with its Bulgarian counterpart, as a way to offer euros to the Bulgarian banking system against eligible collateral. Neither central bank would comment on the project.

Meanwhile, Greece issues dire warnings about the humanitarian crisis that Europe is causing.  "Give me what I want or I'll keep hurting myself."

*Update:  The Fiscal Times estimated that the Greek banks have about 1 billion euros left, which is 90 Euros per Greek.

Venom Wearing Denim

Just a little piece of honky-tonk to start the week.

Pensions for Poppers

I'm imagining a conversation.  "I am also willing not to shoot people for a thousand bucks a month.  I mean, contingently.  There may be the odd month where somebody really just needs shooting.  But I've got a pretty good record going, so..."

"That's just why you're not eligible.  Your good record is pretty uniform.  We only pay people who kill people sometimes.  You weren't going to shoot people anyway."

"Well, probably, but now I'm thinking that I need to get on the list of people you want to pay off..."

They say they've had good results.  I'm sure they have.  What I wonder about is whether this is the sort of thing that doesn't set up perverse incentives over time.