Saturday, September 20, 2008

Why the Bail Out

Why the Bail Out

Initially, upon first hearing of the bail out, I was indignant and proposed to all of my cats that the Rich should be made to directly fund the bail out themselves, out of their personal accounts, which could be compelled from them by raising their Tax Rates to about 99% while offering tax exemption only in the case where they voluntarily purchase Federal Bail Out Bonds. But soon it occurred to me that the very reason a Bail Out is required is that nowhere in America does there remain any big pile of money still sitting around. What happened to all the Dollars? Well, they have gone to the Near East for Oil, or they have gone to China for Goods, or even to India for Services. These Foreign People, not being as economically sophisticated as Americans, demand cash. So, the American’s made due by borrowing, and they borrowed by collateralizing what they thought they owned – they borrowed on their Houses and on their Hedge Fund Accounts. The very essence of the Emergency is that these sources of collateralized debt have now been demonstrated to be effectively valueless. There is no actual Wealth left in America.

Years ago in better times an Economics professor taught us about Monetary Velocity. He presented a pithy example – pretend that in India or somewhere a Shop Owner sells a shovel for 10 rupees, and then he stuffs the 10 rupees into his mattress. There, the effective worth of the 10 rupees is one shovel’s worth of value, or in terms of Velocity, 1 Shovel per Day. But in America, in the morning a shovel is bought for 10 dollars and then immediately the Shop Owner makes a call and spends the 10 dollars for a drum of nails, and then the nail sales man buys a couple cases of beer, and then the beer store owner buys a bundle of magazines…. On and on and on. The same ten dollars, in a High Velocity Economy is worth far more than just one shovel per day. This was seen, back then, as a good thing.

Now, what we have is High Velocity Debt. The way that works is that Collateralized Debt is used to advance further borrowing. People assert ownership of what they had only borrowed to purchase, and while barely nothing is actually paid for, they pledge their Title of Ownership as collateral for their next level of Purchases. What we eventually have is Trillions of Dollars of On-the-Book Ownership, but with almost no equity to support any of it, that is, no solid dollars of value anywhere to be found. Honestly, what does happen to the ownership status of hundreds of millions of dollars of collateralized purchases all spiraling out from a single Mortgage Deal that in the end turns sour? What we find happening is that the entire Economic Boat capsizes.

So, okay, things are indeed bad. Can there even be a Bail Out? Well, honestly not. The American Government has no Dollars. Yes, the American Government could print a great many new Dollars, but one would expect that everybody presently holding U.S. Dollars, U.S. Bonds, and assets which are indexed to the value of the U.S. Dollar, well, all these people should strenuously object at any Bail Out Plan that consists wholly in diluting the value of Dollars that are out there in the accounts of honest people across the World.

So, if anybody should be discussing the implementation of a Bail Out Plan, it should be those Nations that now hold so much in the way of Dollar Reserves, and that is Japan, China, and all of the Oil Economies. And their Bail Out Plan can be straight forward – they can purchase all of these worthless banks for next to nothing, fire all the Good-for-Nothing Americans, and place their own Managers in charge of the World Economy.

I can conclude with two statements. Firstly, if the American Taxpayer is made to Bail Out this Wealthy Top One Percent of America, then there needs to be a Transfer of Ownership. The Wealthy in America cannot be rescued from the torrent by its Wage Slaves and then still expect that the relationship will remain as it had been. A National Rescue must certainly infer an Effective Nationalization of Ownership. We will no longer expect Taxes from the wealthy. America will pay its Bills with its rightful Dividends from its asserted Ownership. As these Capitalists have always insisted, it is all just a Game of Winners and Losers and the Losers should be good sports. Well, now they are the Losers. The Nation now OWNS the Banks. That is that!

Secondly, if America has demonstrated to the entire World that it is effectively Bankrupt, then the Rest of the World needs to step up and exert its influence to prevent America from taking any further rash actions that could continue to thin down the value of the Dollars, so many of which these Foreign Powers hold in their Reserves. How could these Foreign Powers exert any leverage? Easy. America has thrived upon the Dollar’s status as the effective International Currency. Those who hold the most Reserves of Dollars could simply threaten to throw them out the windows, into the streets, to swamp the world in Trillions of Dollars which everyone will soon enough find to not be worth the paper they are printed on. You see, a U.S. Dollar is only worth what somebody is willing to give for it, and we all know very well that America no longer has anything to sell. The Value still residing in the Dollar comes largely from the effect of the Rest of the World still trading with it among each other. Therefore, if the World ever rejects the Dollar, well, that’s the End Game and Checkmate for America right there.

And what could America do about it? America, since it has no real Oil Reserves could not even afford to throw even much of a Military tantrum, and America would starve into the worst 3rd World squalor in less than 180 days. Remember how quickly the Soviet Union had collapsed? Well, America would set some new records for Speedy Demise.

And I think the American Economic Leaders know it… and that is why they are scrambling to implement some kind of a Bail Out. And I suspect they are holding their breath hoping the Rest of the World stands by and does nothing.

Saturday, September 13, 2008

An Essay on Writing Essays

An Essay on Writing Essays

A correct and effective essay consists in three elements – an introduction, the body of the essay, and its conclusion.

The introduction, of course, introduces, telling the reader, in short, everything he is about to learn, making all of the assertions that will be supported and proven within the subsequent body of the essay. In addition to innate on-the-face positive proofs for the author’s own assertions, recourse can be made to supporting scholarship or even scholarship to the contrary, by discrediting it with one’s own observations and opinions. Remember, that in Scholastic Circles NOBODY is ever totally right, and there is always open some crack of imperfection even in the Best Previous Scholarship that new Scholars can bore into and criticize. Scholars have no respect for the God’s, not even their own. Agreeing with Past Scholarship always seems timid and servile compared to attacking it with opinions of one’s own, and there is always more room for further thought about things. Anyway, once all open circles of inquiry promised by the introduction have been closed, a conclusion comes in order. This is where the reader is informed, in some clever way, that if he had not been convinced by the preceding essay, then, well, he very well should have been. In the best of essays the Conclusion, in establishing that the promised Truth had been found, should suggest, again cleverly, that some Greater Truth is now revealed and evident.

These conditions for an essay – the Intro, the body, and the Conclusion – have never been just mere literary conventions. It is all just common sense, just as any essay is supposed to be. We can see this even if we reduce it to simplest terms, to a gem of an essay in less than 50 words: (Intro)Watch out for that truck! (Body) You were about to step into it. It was 20 tons and going 60 miles per hour and would not have been able to stop. (Conclusion) It would have killed you dead as a bug. The Intro quickly captured the attention of the audience, presenting the problem to be discussed. The problem was discussed lucidly within the Body, and the Conclusion set it all into the pithy perspective of Life Death Mortality issues.

So an up and coming essay writer will never go wrong as long as he remembers those three essential things, to say what he will say, to say it, and say that he said it… and the World now better off for it.

Friday, September 12, 2008

The Woodward Secret Operation

The Woodward Secret Operation

In Bob Woodward’s new book he speaks at half length about a Secret Operation in Iraq that has the proportions of another Manhattan Project, the program that created the Atomic Bomb and which was a huge employer during the Second World War, employing most Scientists and hundreds of thousands of additional people … although most people didn’t know what they were working for or why. Anyway, this new Secret Operation is purported to be just as big and historically momentous as all of that. And this is coming from Bob Woodward who can be expected to understand the proportions of scale before using words like ‘big’ or ‘momentous’.

Anyway, I was curious. Bob gave a few hints but basically begged off because everyone swore him to secrecy (probably telling him they would block future interviews unless he held his tongue, and of course we can trust a journalist to do the right thing). Besides, we already suspected that if we want to know about the Truth of Government, the Media certainly wasn’t going to be much help. The Media gets their Paychecks from the same People who are paying off the Politicians. They’re all one big happy family.

So I called a few old friends that had friends in various Black Ops Organizations. Now the trick about dealing with Ex-Military Spook Types is that Military Culture is a bunch of drunks, when reduced to simplest terms. And drunks talk. The good stuff they brag about. Now this Super Secret Operation that Woodward was talking about, so effective, so momentous… well, there would of course be bragging about THAT. I know, I know… its SUPPOSED TO BE Secret. But the thing about talk is that it is only just talk. Its Documents they worry about. Yes, it would raise a great good many red flags if one were to actually reprint some specific Secret Papers. But drunken talk is customarily assigned the Status of Conspiracy Theory, right next to UFO conjectures and Elvis sightings. The Government would not wish to draw attention to it by shushing it… and so it is that in the shady bars of Spook World everybody knows everything, at least in broad strokes if not in every detail. And so everybody was glad to tell me everything that had been churning through the rumor mill. You know, it’s not so remarkable. It’s probably the same way Bob Woodward found out everything. And if they gave me a million dollar book deal NOT to say anything, I’d keep it a Big Secret too.

And, yes, Wow! Bob was right!... in what he did allow himself to say. It is big… and getting bigger every day. It started small enough. Intelligence Analysts were only looking for a way to cut through all the Data that was piling up – surveillance data from satellites, from airplanes and drones, aerial balloons… it was swamping them. They just didn’t have time to comb through it all. At first they tried to write Computer Programs to sort through the information, but the IT guys were taking forever with it, and getting further behind the longer that they worked at it. Then someone somewhere combined two promising Technological Trends – Computer Generated Design and Artificial Intelligence. Even ten years ago Engineers had noticed that Computer Generated Design was developing a kind of mind of its own – through apparent trial and error CGD was formulating original and innovative design concepts that no human being had even imagined… its what would happen when Computers were allowed to do their own Thinking. And Artificial Intelligence builds even upon that, systematically pursuing objectives while continuously learning from experience. Anyway, regarding the Birth of the Secret Operation, they patched together an Artificial Intelligence Algorithm into a Computer Generated Program Writer. All they wanted it to do was catalog data, and it sure did!

As I have hinted above, the Computer Engineers were surprised at how well the new programming worked, while at the same time sort of expected to be surprised. The Most Important Surprise came when the Program suddenly was able to so effectively catalog Identity. You see, in order to cut down on the total amount of Data which would have to be saved to memory, the Program found a way of reducing Identity to the most basic terms. The Program looked at all sorts of variables that no human Programmer would have thought of. Not that anybody really KNOWS how the program is really working. The Results are fine, and who needs to know how it works anyway. Its Artificial Intelligence doing its thing. But there were requirements. It began asking for specifics. “Don’t give me that! Give me this!” The Engineers had not expected that. The Program wanted Data Surveillance in several Light and Energy Spectrums. Given a few overlapping surveillance photos, reflecting different spectral qualities, the people being observed, even if they appear to be the tiniest of dots, are effectively ‘marked’, can be catalogued in just a few numbers, and will be remembered if they ever pop up again… even as the tiniest of surveillance ‘dots’. This was the real Big Secret Golden Nugget within the Big Secret.

Were the Program Tags perfect? Well, probably not, or not at the beginning. But what was soon discovered was that the Program was great at Tracking and Sorting. As long as the Surveillance Cameras were running individuals could be followed, and nobody could ever be lost in the crowd. Even if thousands of people were to go into an Opera House… I mean Mosque… out of sight for hours, well, as soon as they would leave, everyone would be re-identified and picked up again. Once ‘tagged’ there was never any getting away, and this was with a system that required only the barest levels of stripped down data. Huge areas could be kept under surveillance, quantifying the interactions of hundreds of thousands of ‘targets’.

Of course this could be useful. Think how it might work -- if a Satellite picks up an Insurgent Attack, all the insurgents can be tagged and followed. They don’t need to be instantly arrested, or assassinated, but can be allowed to follow their day by day routines… business as usual. Every move they made would be catalogued.

Woodward tells us that the Secret Operation targets the Leaders. Well, yes, in a way. What the Algorithm is really doing is identifying Nexus Personnel. Yes, often enough tactical level insurgent Personnel will report to official Leaders, and these are identified by the Program. But they also report to various supply clerks, pay clerks, even religious clerks… all the logistical and moral support people that keep day to day terrorist operations going smoothly. So while Leaders are included, the Program is really set up to target all of the necessary support personnel. Leaders are over-rated anyway. The other day I heard the Israelis announce they had just assassinated another Hamas “Leader”… they murdered some young guy who was only 24 years old. If that’s what they call a ‘Leader’ it would probably be more useful to take out somebody really important, like a Supply Clerk. Anyway, the Program takes care of assigning all of these targeting priorities – who sees whom, who reports to whom and how often. The important targets begin to stand out, not necessarily because they are “Leaders” but because they are the people that all the tactical personnel and foot soldiers find it necessary to meet with.

Bob Woodward told us that this Secret Operation is Big and getting bigger. It needs to. As you can guess, such an Operation would be ravenous about sucking up Computer Memory and Power. Although the bulk of the Program is about Cataloging the Important Stuff and tossing out the rest, still, at the onset there needs to be a great deal of Raw Data – surveillance of an entire Country in two or three Spectrums of Light Energy. That chews up a lot of Disc Space. Then, the Cataloging requires a huge amount of Computer Capacity. Records need to go back in time, and even compressed data takes up space in the long run. Indeed, the day to day improvements to the Program are almost entirely measured, not in how it has refined Target Acquisition, but in how it has learned to work just as well with less and less saved data. The limiting factor is Computer Power.

All those Programs we hear about, set up in certain Universities, that ask people to lend over their personal computers for various kinds of Data Crunching, that they say is concerning Global Warming and all such Green Things… well, the rumor is that all such Programs are supplying the necessary Computer Power for the Secret Operation in Iraq. Also, I have been keeping my eyes on my Intel, Cisco and other Computer Technology Stocks. As much as I wish I could say so, I see no sign that the Government is on a Spending Binge in Hi Tech. So, apparently, this Secret Operation was probably something of a lucky accident, at least as far as Government Funding was concerned – doing a lot with what had been an old original limited budget. Anyway, nobody has noticed much of a Supply and Demand distortion in the Civilian Marketplace. My Stock has not gone up. Just think how well this Secret Operation could work once they start really throwing money and resources into it.

Bob Woodward has told us that revealing the Truth about this Secret Operation would get people killed. Well, maybe, at first it would have. You see, at first nobody trusted the Program and they were sending in Intelligence Operatives to check on the Program’s Information. Were the Terrorists reporting to actual Leaders or just going to favorite neighborhood deli stores? They needed to see for themselves. But, since the program has evolved, they have learned to trust it. When the Tactical Teams finally go in, they find very much exactly what the Program had projected.

So why did all the Government Weenies tell Woodward to shut up about it? Well, they are probably afraid of chasing away what is left of the Insurgents and Terrorists who have not already gotten the big message. You see, the Algorithm is easy enough to beat – if you are a Terrorist, then just stop taking any meetings. Stay away from everybody. Of course, terrorism cannot conduct much business like that, but isn’t that what we want? The more they know about this Secret Operation, the more they can be expected to shut down and run for it. If they all go back to herding goats, afraid for their lives, then We have won the war, haven’t we?

Oh, I suppose there might also be concerns about Privacy Issues. Somebody MUST be thinking about bringing the Secret Operation back home. And it would be SO much more effective if people were kept in the dark about it. It could just as well be used against Organized Crime – to shut down Auto Theft, Drug Trafficking, even discrete instances of individual crime – there is nothing very special about Insurgent Operations that a few tweaks in the Program couldn’t turn it into being primarily a Crime Fighting Tool. For the Law Biding Good Citizen, it would be like God watching over us all. But Criminals, Corrupt Politicians and Police, and Privacy Fanatics would have a reflex opposition to it all. So they told Bob to keep it all a Big Secret.

Well, they couldn’t keep the Atom Bomb secret for very long either.