Archive for September, 2006|Monthly archive page

The Stupidities of the Inept Wars on Drugs, Cancer, and Terror

We owe the war on drugs and the war on cancer to Richard Nixon. In a brief extract from my new book in progress, The Great Capitalist Restoration: Seeds of a Catastrophic Depression, I make the case that the war on drugs may have been enough to put George W. Bush in to office, where he was able to give us his war on terror.

The aims of the war on cancer are admirable, even though the government is careful not to attack corporations that are responsible for much of the carcinogenic pollution that surrounds us. Yet, some recent newspaper stories suggest that the conduct of the war on cancer may be succumbing to the same sort of bureaucratic stumbling that characterizes the current war in Iraq, thanks to the current regime.

I guess it is time to go back to William James & the moral equivalent of war.

I begin with two short notes about the Centers for Disease Control, then give the extract from my book. The stupidity of the conduct of the invasion of Iraq needs no comment.

Young, Alison. 2006. “Exodus, Morale Shake CDC.” Atlanta Journal-Constitution (10 September).

“An exodus of key leaders and scientists from the Centers for Disease Control and Prevention has raised “great concern” among five of the six former directors who led the agency over the past 40 years. Their concerns, expressed in a rare joint letter to current CDC Director Julie Gerberding, come amid growing staff complaints about whether her strategic shifts in the agency’s focus are putting public health at risk, according to interviews with current and former CDC officials and documents obtained by The Atlanta Journal-Constitution.”

“Critics say the agency is changing to a top-down management style that stifles science and that new layers of bureaucracy are being created that make agency operations more cumbersome.”

“The most visible sign of potential trouble at CDC is the loss of more than a dozen high-profile leaders and scientists since 2004. By the end of this year, all but two of the directors of CDC’s eight primary scientific centers will have left the Atlanta-based federal agency. The wave of departures — which numerous CDC leaders call unprecedented — also includes the agency’s top vaccine expert and world experts in several diseases. Just last week CDC’s pandemic flu coordinator said he’s leaving.”

The article gives much more detail about the problems.

Then, the New York Times describes how Gerberding’s close associates are getting an outsized share of the bonuses.

Harris, Gardiner. 2006. “Inner Circle Taking More of C.D.C. Bonuses, Agency Records Show.” New York Times (17 September).

“Top officials at the Centers for Disease Control and Prevention received premium bonuses in recent years at the expense of scientists and others who perform much of the agency’s scientific work, agency records show. Those inside the office of the centers’ director, Dr. Julie L. Gerberding, have benefited the most, the records show.”

“From 2002 through mid-2006, William H. Gimson III, the agency’s chief operating officer, received bonuses totaling $147,863, which included seven cash awards of more than $2,500. Mr. Gimson’s bonuses were about twice the amount granted to any other C.D.C. employee, the agency’s records show. Mr. Skinner said Mr. Gimson was not immediately available for comment. Mr. Gimson’s deputy, Barbara W. Harris, received six premium bonuses of $2,500 or more from 2002 through mid-2006 for a total of $84,894, agency records show.”

“In 2005, the records show that officials in Dr. Gerberding’s office received 60 premium bonuses totaling $515,075.”

Nixon’s War on Drugs

The Nixon administration declared a war on crime, but crime in reality was a code word for Blacks and other people who disagreed with the administration. The famous war on drugs is a case in point. Dan Baum’s wonderful book, Smoke and Mirrors, reports on his interviews with the founding fathers of this ill‑conceived “war” (Baum 1996). Some of them freely admit that the war on drugs had little to do with either public health or safety. Instead, they saw the stereotypical drug user as either an antiwar activist or an urban black. Not without reason, neither group had much affection for the Nixon administration. Attacking these “enemies” seemed to be a tempting opportunity to further the political agenda of the party in power. In Baum’s words:

[In the 1968 primaries] Nixon looked at “his people” and found them quaking with rage and fear: not at Vietnam, but at the lawless wreckers of their own quiet lives ‑‑ an unholy amalgam of stoned hippies, braless women, homicidal Negroes, larcenous junkies, and treasonous priests. Nixon’s genius was in hammering these images together into a rhetorical sword. People steal, burn, and use drugs not because of “root causes,” he said, but because they are bad people. They should be punished, not coddled. [Baum 1996, p. 12]

According to his close advisor, H. R. Haldeman, Nixon “emphasized that you have to face the fact that the whole problem is really the blacks. The key is to devise a system that recognizes this while not appearing to” (Baum 1996, p. 13; citing Haldeman 1994, p. 53).

The war on drugs had another attractive feature: it deflected blame from a sagging economy, destructive business practices, or society at large, holding individual behavior responsible. For example, the war on drugs played a role in framing matters of workplace safety. The ostensible purpose of the Occupational Safety and Health Administration (OSHA) was to attempt to prevent business from exposing workers to unhealthy and unsafe conditions. The rhetoric associated with the war on drugs allowed opponents of workplace safety regulations to blame the workers themselves for their own misfortunes. Symptomatic of this attitude was an article that Government Executive published in 1982, entitled, “White House Stop‑Using‑Drug Program ‑‑ Why the Emphasis Is on Marijuana.” According to this article: “While OSHA was created (in itself, a result, in part, of political pressure in Washington by anti‑Big Business activists) and gushing regulations having to do with workplace machines and procedures, corporations themselves began attacking a major part of the problem where it really was ‑‑ in alcohol and drug use by employees” (cited in Baum 1996, p. 188).

The rhetoric associated with the war on drugs also provided an easy answer to those who saw poverty as a sign of injustice. Defenders of the status quo could respond that poverty was a result of personal deficiencies, as evidenced by widespread use of narcotics.

In the 2000 presidential election campaign, the world discovered another unintended right‑wing benefit of the war on drugs. Many Southern states have felony disenfranchisement laws.

Draconian drug laws account for much of the swelling prison population. The enforcement of these drug laws falls disproportionately upon the poor, especially poor Blacks. Ira Glasser observed:

“According to federal statistics gathered by the Sentencing Project, only 13 percent of monthly drug users of all illegal drugs ‑‑ defined as those who use a drug at least once a month on a regular basis ‑‑ are black, about their proportion of the population. But 37 percent of drug‑offense arrests are black; 53 percent of convictions are black; and 67 percent of all people imprisoned for drug offenses are black. [Glasser 2006]

So, largely because of the war on drugs, criminal convictions removed more than four million people from the voter lists (Abramsky 2006). Because the poor and the minorities, who make up a disproportionate number of the prison population, are likely to vote Democratic, their disenfranchisement was the decisive factor in the presidential election of 2000. For example the state of Florida, where Bush’s victory depended on a mere 537 votes, disenfranchised 200,000 black Floridians.

The right‑wing receives a further electoral boost from the increased population of prisoners, over and above disenfranchisement. The Census Bureau counts incarcerated prisoners as part of the districts where the state houses them rather than in one of the districts that supply many of the prisoners. As a result, not only does imprisonment deny people the right to vote, it gives an extra weight to voters in the in Republican‑dominated rural districts where many prisons are located.

For example, imagine that right before reapportionment a new prison would double the population of a legislative district. Each vote in this district would have twice the weight of those in an average district. As a result of the relocation of the prisoners, the voters of this district could now have two representatives instead of one. If all the prisoners had come from two urban districts and had been eligible to vote before, those two urban districts could collapse into a single district. Of course, redistricting is always more complex than this example, but it still illustrates how the relocation of prisoners skews elections.

The state of New York, for example, tends to be vote for the Democratic party, although the less‑populous upstate region is mostly Republican. Despite their lesser numbers, Republicans control the state senate. If prisoners were counted as part of the district where they last resided, as many as seven upstate districts might have to be withdrawn, with the downstate Democrats picking up some seats (Roberts 2006). Just as counting slaves as three‑fifths of a person distorted elections in the period before the civil war, the policy of the Census Bureau together with the harsh drug laws and the racial and class biases of the judicial system help to reinforce the Republican advantage.

A serious and a not-so serious question

I wonder how many women abort babies because of exposure to toxic chemicals? Are there any figures on this?

I wonder if right to life fanatics would mind if women eliminated unwanted pregnancies by taking jobs in toxic workplaces?

Marvelous Streaming Economic Lectures

The Center for Economic Policy Research has put together some marvelous streaming lectures.  Stop reading this immediately!  Look at the lectures.

Needed: A Better Class of Crooks in Office

What is it that makes hypocritical politicians make their foibles a centerpiece of their careers? I pity a person like Rep. Mark Foley, who was part of a congressional caucus to protect abused children, yet had a thing for young boys. I assume (perhaps out of excessive generosity) that he must have been a tortured soul. I can not image such a tinge of conscience for the chicken hawks, who strut about as war heroes, while covering up their efforts to avoid the draft.

I prefer politicians like former governor Edwin Edwards who behaved as if he knew that everybody else knew he was a crook. He also had a sense of humor. I remember when he was running against David Duke, the Republican Klan candidate for governor. Edwards said, “I too am a wizard under the sheets.”

Major League Corporate Inefficiency?

Advocates of corporate capitalism never tire of justifying their preferred policies by presuming that corporations are the epitome efficiency. Yet the same corporate leaders typically display highly inefficient behavior when they purchase sports teams. For example, the Journal of Economic Perspectives has an econometric analysis of the Moneyball Hypothesis, a name given to Michael Lewis’s analysis of the way the Oakland A’s win baseball games with a lower budget per victory than other teams. They show that the Oakland Athletics were correct in discarding the standard measures of efficiency and looking. They were able to land on the frontier of efficiency by winning games with the relatively low budget. In particular, the team could win a game spending about a half-million dollars per game, about 1/6 the cost of the least efficient teams.

Hakes, Jahn K. and Raymond D. Sauer. 2006. “An Economic Evaluation of the Moneyball Hypothesis.” Journal of Economic Perspectives, 20: 3 (Summer): pp. 173-85.

Not long ago, Richard Thaler published an article demonstrating the inefficiency in the way NFL teams draft new players. In the course of the article he quotes Lewis:

Massey, Cade and Richard H. Thaler. 2005. “The Loser’s Curse: Overconfidence vs. Market Efficiency in the National Football League Draft.”

Michael Lewis, author of Moneyball, said, “If professional baseball players, whose achievements are endlessly watched, discussed and analyzed by tens of millions of people, can be radically mis-valued, who can’t be? If such a putatively meritocratic culture as professional baseball can be so sloppy and inefficient, what can’t be?” Neyer, R. 2003. Examining the art of evaluating:

Outrageous Tax Havens

Evans, David. 2004. “The $150 Billion Shell Game.” Bloomberg Markets (August): pp. 61-7.

61: “On a January afternoon in George Town, the capital of the Cayman Islands, the sun beats down on three cruise ships anchored at Hog Sty Bay. Along the waterfront on Church Street stands a green-trimmed, white, five-story office building called Ugland House. From the outside, there’s no way to see it’s the official address of 12,748 companies.”

62-3: “J.P. Morgan Chase & Co. estimated in a June study that $650 billion of profit earned abroad by U.S. companies over decades had never been taxed by the U.S. That’s up from a cumulative total of $500 billion cited by J.P. Morgan in a study a year ago. In 2001, almost half of the money U.S. companies earned outside the U.S. — 47 percent — was accounted for in offshore tax havens such as the Cayman Islands, which has no corporate income tax, says Martin Sullivan, 45, a former U.S. Treasury Department economist, citing Commerce Department data. As a result, companies didn’t have to pay the 35 percent U.S. corporate income tax.”

62: “[Senator Carl Levin]: “When $250 billion of the $880 billion in foreign bank deposits within U.S. banks is attributed to the Cayman Islands, to connect the dots you’ve got to ask questions about the extent of tax dodging in that country and other tax havens.”

63: “In a March report on financial crime and international law enforcement, the U.S. State Department cited examples of transfer pricing abuses, without naming companies. It said one company claimed to import dish towels from Pakistan for $153.72 each; another reported it had imported briefs and panties from Hungary for $739.25 a dozen; a third claimed it had paid $4,896 a unit for metal tweezers imported from Japan. The report also cited a company claiming to export toilet bowls to Hong Kong for $1.75 each. The State Department report called those prices absurd and ridiculous.”

64: “The Caymans provide near-total financial secrecy for companies, banks and accounts. There are more than 500 banks and trust companies with deposits of more than $1 trillion in the Cayman Islands, according to the Cayman Monetary Authority. That’s more deposits than there are in New York City, says Manhattan District Attorney Robert Morgenthau.”

64: “The Caymans are home to about 40,000 residents and an equal number of foreign-owned companies.”

Golfing for Bush and God

Bruce Selcraig

Playing the patriot game

“In America, with several notable exceptions, most pros seem like friendly apolitical athletes who, if the conversation veers from golf, might talk about football or reality TV, but seem incurious about world affairs and, as Bush memorably once confessed, have little inclination to read books. In the US PGA Tour media guide by far the most popular “special interest” listed by players is fishing, followed by hunting.
Rarely does any player mention current events, history, film or politics. The famously laid-back but college-educated Fred Couples, no doubt speaking for many on tour, once told me during the Bill Clinton years that he had never voted in his life.”


“In a Sports Illustrated survey of 76 US Tour players published in March, 88% said they supported the American invasion of Iraq, and 91% supported Bush’s controversial nomination of Samuel Alito to the US Supreme Court – a judge who was welcomed by Republican and fundamentalist Christian groups as the court’s possible swing vote in one day outlawing abortion.
This Republican tilt on tour has been documented since at least the Ronald Reagan administration and is so widely accepted as fact that in the presidential election year of 1996, Golf Digest asked me to do a story on tour politics and specifically hunt for any golfer who would actually admit to supporting Clinton, a Democrat (in 1993, some Republicans on the American Ryder Cup team threatened to boycott a visit to the White House to protest against a Clinton tax plan that raised taxes on the rich).
My search only turned up one heretic – former US Open winner Scott Simpson – a free spirit and “born again Christian” who has now reversed his thinking and supports Bush.”

“Not coincidentally, the American pro golf world, which has been heavily influenced by corporate America and Republican politics for at least 30 years, now has such a strong element of Christian fundamentalists that the entire Ryder Cup leadership – Tom Lehman, Corey Pavin and Loren Roberts – are all self-professed born-again Christians. Roberts was even converted and baptised at a tournament.
In the book The Way of an Eagle, Lehman says: “God has definitely used golf in a great way over the last several years. I think of myself as a Christian who plays golf, not as a golfer who is a Christian. So whatever kind of job I do, there is a way for God to use that as a tool. In society at large, especially the way golf is growing, there is a huge platform for golfers.”
Perhaps because of his public Christianity and several incidents of less-than-Christian-like behaviour, Lehman has developed an unflattering reputation in some golf circles. John Huggan, the European golf correspondent for Golf Digest, recounts how Lehman confronted him angrily when he wrote about Lehman’s much-criticised behaviour in 1999 at the Ryder Cup near Boston, when he led the ghastly American charge of players across the 17th green following Justin Leonard’s miraculous putt.”

Gas Prices and Conspiracy Theory

Sam Smith posted this
LE METROPOLE CAFE – In yesterday’s WSJ in Section C there is a very, very interesting item in the article, Some Investors Lose Their Zest For Commodities. The article notes that over that past few months, commodity funds have been liquidating commodity holdings. But here’s the stunner: “Consider the Goldman Sachs commodity index, one of the most popular vehicles for betting on raw materials. In July, Goldman Sachs tweaked the index’s content by cutting its exposure to gasoline. Investors tracking the index had to adjust their portfolios accordingly — which sent gasoline futures prices tumbling.”
Prior to Goldman’s July GSCI revision, unleaded gas accounted for 8.45% of the GSCI. Now unleaded gas is only 2.30%. This means commodity funds had to sell 73% of its gasoline futures to conform to the reformulated GSCI. . .
Here we have Goldman, qua keeper of the commodities index, manipulating markets simply by adjusting index components. It is noteworthy in several respects. First, we are used to the notion of them front running market sensitive information announced by third parties, but here a glorified hedge fund – albeit one dominating central banks and finance ministries worldwide – maintains market-moving indices itself. . . . Second, it lends credence to the theory that the current well-publicized commodities decline is just a well-timed, well-orchestrated head fake to benefit the incumbents in the run up to the midterm elections – someone noted recently that Bush’s ratings vary inversely with gas prices. . .


The article does not say so, but the person in question who showed the relationship between oil and gas, of course, is Doug Henwood, who produced the wonderful graph:

Zuckerman, Gregory and Henny Sender. 2006. “Some Investors Lose Their Zest for Commodities.” Wall Street Journal (21 September): C 1.

The article quotes Howard Simons, a strategist at Chicago-based Bianco Research: “The flood of money that’s come in is out of scale to anything in the past, and most were just speculators.”  There are 68 commodity-oriented hedge funds, up from 29 just three years ago, according to Hedge Fund Research Inc.  Those figures don’t include the growing number of managed-futures funds and so-called multistrategy hedge funds, like Amaranth, that also deal in commodities.

“Low interest rates made it possible for hedge funds to borrow at attractive rates and invest in almost anything.  Lead illustrates the impact: It’s basically industrial waste, the unloved byproduct of processing copper and gold.  But prices for lead — mostly used in batteries, primarily for vehicles — have more than doubled in the past five years, even though stockpiles are high.”

Interesting Experiment

To: CFA Board of Directors, Chapter Presidents, Lecturers’ Council, Council for Affirmative Action, CFA Staff
From: John Travis, CFA President
Re: Flunk Arnold Media Coverage
The Flunk Arnold Contest got off to a great start yesterday with tons of media coverage.
Here are some of the stories, they are also on Please forward.
1. ANTI-ARNOLD CAMPAIGN — KCRA (9-20) It’s called Flunk Arnold, a new contest aimed at arming student voters to speak out digitally against Arnold Schwarzenegger. As Kevin Riggs shows us it’s the brainchild of the California Faculty Association hoping students will get creative and political at the same time.
2. “Flunk Arnold” Campaign – KNBC (9-20) Tonight CSU (reporter messed up) students are getting a rare opportunity to protest the increase in tuition — in a very unusual way. They can actually make a video and enter a contest called Flunk Arnold. Reporter Mike Luery has on this story. <;
3. CSU students invited to ‘Flunk Arnold,’ win year’s worth of fees — AP (9-20) –The candidates in the California governor’s race are spending millions in campaign contributions to run competing television ads. But a more unique spot assailing Gov. Arnold Schwarzenegger could net a California State University student a year’s worth of student fees and a coveted airing during The Daily Show with Jon Stewart. <;
4. CSU Students Set Out to ‘Flunk Arnold’ — KFWB NEWS 980 Los Angeles (9-20) — The California Faculty Association has just launched an online political attack against Governor Arnold Schwarzenegger. KFWB’s Lori Kelman says it encourages Cal State students to get involved. <;
5. Cal Union Opens Student Contest to ‘Flunk’ Governor Schwarzenegger — The Chronicle of Higher Education (9-21) — California State University students can win a full year of in-state tuition to any of the system’s 23 campuses for creating the best Web site or 30-second video that argues for “flunking” Gov. Arnold Schwarzenegger for his record on education.
6. FACULTY REVOLT — The Capitol Insider (9-19) — The California Faculty Association (CFA) is joining with college students at California State University Sacramento and California State University Long Beach in blasting Arnold Schwarzenegger, claiming the Governor has been “horrible to higher education”, because “fees are up” according to Katherine General of the CFA, which represents 22,000 teachers, librarians, coaches and counselors of the CSU system.

The Washington Generals and the Inept Democratic Establishment

When I was young, I used to enjoy the Harlem Globetrotters, an entertaining black basketball team, that could perform magic on the court. The team that traveled with them, the Washington Generals, never won a game. Of course the crowd never came to see the victorious Generals. Instead, people roared when the Globetrotters made the Generals look like inept clowns.

I don’t know if the Generals still travel with the Globetrotters, but I do know that they have a worthy successor in the Democratic establishment. It took an absolute genius to figure out how Kerry could lose to Bush, yet his team did it with an aplomb that would make the Generals proud.

This year the Republicans have a sputtering economy, a disastrous war, and a cornucopia of scandals. How in the world can the Democrats figure out a way of screwing this up? I can almost guarantee you that the spirit of the Generals lives on.

Whether on Iraq, the economy, or the scandals, the Democrats have yet to express a single bold position. The Generals would be proud of their protégés.