Copycat Juntos!

There's a movement afoot!

No doubt having heard of our successes, peeps be clamoring for juntos:
Why Aren't There More Juntos in American Colleges?
















... and some clowns out in Portland respond, trying to emulate us:
The Junto: Guys night out or powerful force?

Yes. Yes? Uh, I dunno.

I love history and sociology and should have been an historian-author or sociologist instead of a gearhead. How can we not find amusement and intrigue in social trends all around us? People are innately social, and the sea change in attitudes, in life, and the world around us during the past 150 years easily outpaced the evolution of attitudes, life, and the world from the previous 2000 years (and well beyond). The case can be made that there was more similarity between Christ’s world and Ben Franklin’s world than between Franklin’s and our own; while technology had evolved a bit and we had entered a new scientific age by the time of Franklin, you can easily argue that technology and social structures and mores have morphed more quickly in the 20^th Century than ever. In this context, please read the following link, an article on the marriage age in modern-day America. In general, most people still want to marry and still want to have kids, but usually only after some token desires and milestones are fulfilled and some good times had. I don’t count myself sorry to be tokening and milestoning up my 20’s and 30’s—no regrets—but this guy makes a good case for how those of us single-folk can better understand the wild and crazy motivations that lead our friends to voluntarily pull themselves off the market "early." (Link immediately below)

"Say Yes. What Are You Waiting For?"

To me, this speaks to something more than just statistics, prejudices, attitudes, and desires for fun; it speaks to the whirlwind of societal change in our times. In my parents’ childhood years, folks still married in their late teens and early 20’s, women stayed home, men earned the bread, no one had the time, energy, or inclination to do something so frivolous as to train for a silly event called “triathlon,” and children were popped out of kitchen-tending moms like drunken Clarendon Ballroom collar-poppers bounced out da cluuuub at 2am on a Saturday. That’s only 50 or 60 years of time, but an epoch of social change. Our lives and times never cease to amaze me. Just think about it in terms of technology. 0 AD versus 1776 (1776 years of candle-lit nights and fire-warmed winters). 1776 versus 1950 (174 years, ending with coal furnaces and electric lights—and nuclear weaponry, which really harkened prospects of a new age). 1950 versus today (59 years to nuclear and solar power and a greening of a huge carbon economy). That last, short interval is really something, isn’t it? Technology, social norms, all of it.

A Conversation With Nassim Nicholas Taleb

Interview

Sunday, March 15, 2009; B02

Options trader Nassim Nicholas Taleb made his name and career anticipating the powerful historic events he calls "Black Swans,"which include World War I, the rise of the Internet and the stock market crash of 1987. In two books published in 2001 and 2007, he urges readers to concentrate more on what they don't know than on what they do.



More recently, Taleb has blasted bankers and economists who issued reassuring forecasts right up to the brink of the current global financial crisis. He spoke recently with Washington Post reporter Peter Whoriskey. Excerpts:



You're a fierce critic of the entire field of economics. Don't economists know anything?



You have close to a million people out there in economic life. How many people saw the extent of what could happen in this financial crisis? Some people said we'd have a problem of too much leverage, but very few saw the potential total impact that could come out of it. They didn't see the cascading effects that can be produced by a complex system. Years ago, I noticed one thing about economics, and that is that economists didn't get anything right. I wanted to find out the reason. They would say their models are not perfect. But data show that you do much worse using their models than you would without them. It's a bull [expletive] science.



Can you give a specific example?



Every time I saw [Federal Reserve Chairman Ben] Bernanke [on television], I would have a fit of rage. He claimed that we were in a period of "great moderation." He did not understand that Black Swans are preceded by low volatility and the buildup of hidden risks. He mistook absence of volatility for the absence of risk. It was like someone sitting on dynamite and saying "It's okay, we're safe because nothing has happened." In a complex system, things that are fragile should be allowed to fail very fast. [Former Fed Chairman Alan] Greenspan and Bernanke let something fragile, like the banks, survive very long. The longer it takes to break, the worse the outcome. That's why I think Obama needs to start with a new economic team -- Treasury Secretary Tim Geithner and Lawrence Summers were among those who didn't see this coming in the first place. He needs new people who understand complex systems.



What about economist Nouriel Roubini? Wasn't he calling attention to the potential danger?



Yes, Roubini got it right. But Roubini wasn't right because he's an academic economist. He was right because he is a very insightful fellow. He is so good he managed to surmount his education in economics. Other than you, who would be the right choice for the Obama administration?
I know who should not be on his team -- anyone who did not understand that the world financial system included more risks than it showed. This leaves plenty of individuals outside the administration and outside the economics profession who warned about it. Aside from Roubini, the closest thing in the economics profession would be Ken Rogoff. I would also require that the person be a business person -- someone who did not make a career writing papers to impress fellow economists.



So what's your prescription for the economy?



The first thing we need to do is to get rid of the vicious bonus system at banks that encourages you to take these huge hidden risks. When it all blows up, they still have their bonuses, because the Black Swans happen only every so often. You see a lot of people walking around who are massively wealthy who never made a penny for their investors. Look at [former Treasury secretary Robert] Rubin at Citigroup. He made and kept a $115 million bonus while the taxpayer has to bail them out. We should not be paying the Bob Rubins anymore. We have to have clawback provisions to make sure that we punish people for their bad bets. I am in favor of partially nationalizing the banks for this reason and banning complex derivatives. Nobody understands them. I would also start indicting the vendors of these financial risk management systems that everyone relied upon to tell them everything was okay when it wasn't.



How do you define a Black Swan? If they're so unexpected, how can we prepare for them?



A Black Swan is an exception, like the bird. It is an event with massive consequences that is unexpected. My idea is not simply to say that these things happen. My idea has been to identify the vulnerabilities, the spots where people are driving the school bus blindfolded. In banking, I identified a huge amount of risk taking on the part of banks that were using bogus models to estimate their risks. It was so painful to watch the banking system become so fragile to the Black Swans. Now there is wealth turning into air as we speak.



What do you see ahead? What do you make of the mainstream economists who predict that the economy will turn around later this year or next?



Look, globalization has created this interlocking fragility. At no time in the history of the universe has the cancellation of a Christmas order in New York meant layoffs in China. So for a while it created the illusion of stability, but it has created this devastating Black Swan.
Complex systems do not like debt. So it will proceed to destroy tens of trillions in debt until society rebuilds itself in an ultraconservative manner. We are in for a worse ride than people think. People have the problem of denial. This is one of the things I learned in Lebanon. Everybody who left Beirut when the war started, including my parents, said, 'Oh, its temporary.' It lasted 17 years! People tend to underestimate the gravity of these situations. That's how they work.



Is this crisis going to last 17 years?



Unfortunately no, complex systems cascade much faster than that. However, the destruction will be deeper than people anticipate. It will bring down a lot of people. My rosy scenario is that a better economic environment will develop, a low-debt, robust growth world, in which whatever is fragile will be allowed to break early and not late. My nightmare scenario is that the government saves Citibank once again, as well as the other banks, and business resumes as usual. Then, the next time the system breaks, it breaks much, much bigger.

First- I have to learn that what I put on here semi-regularly is a "post" and the thing itself is a "blog". I am constantly clicking on "create blog" thinking I can write there, but it makes me do a whole new blog. Technology.

Second- I am always up for drinking/training. I have purchased a bike which is being shipped today, we are buying one for W this weekend (hopefully) and I am aggressively talking to reid about his. We are coming to NY 5/3.

Third- The sidewalk between my house and the supermarket has been plowed! Yay! 4.1 miles, 35 minutes

On The Road To Socialism? We've Arrived!

In his campaign and inaugural address, Barack Obama cast himself as a moderate man seeking common ground with conservatives.

Yet his budget calls for the radical restructuring of the U.S. economy, a sweeping redistribution of power and wealth to government and Democratic constituencies. It is a declaration of war on the right.

The real Obama has stood up and lived up to his ranking as the most left-wing member of the Senate.

Barack has no mandate for this. He was even behind John McCain when the decisive event that gave him the presidency occurred — the September collapse of Lehman Bros. and the market crash.

Republicans are under no obligation to render bipartisan support to this statist coup d'etat. For what is going down is a leftist power grab that is anathema to their principles and philosophy.

Where the U.S. government usually consumes 21% of gross domestic product, this Obama budget spends 28% in 2009 and runs a deficit of $1.75 trillion, or 12.7% of GDP. That is four times the largest deficit of George W. Bush and twice as large a share of the economy as any deficit run since World War II.

Add that 28% of GDP spent by the U.S. government to the 12% spent by states, counties and cities, and government will consume 40% of the economy in 2009.
We are not "headed down the road to socialism." We are there.

Since the budget was released, word has come that the U.S. economy did not shrink by 3.8% in the fourth quarter, but 6.2%. All the assumptions in Obama's budget about growth in 2009 and 2010 need to be revised downward, and the deficits revised upward. Look for the deficit for 2009 to cross $2 trillion.

Who abroad is going to lend us the trillions to finance our deficits without demanding higher interest rates on the U.S. bonds they are being asked to hold? And if we must revert to the printing press to create the money, what happens to the dollar?

As Americans save only a pittance and have lost — in the value of homes, stocks, bonds and other assets — $15 trillion to $20 trillion since 2007, how can the people provide the feds with the needed money?

In his speech to Congress, Obama promised new investments in energy, education and health care. Every kid is going to get a college degree. We're going to find a cure for cancer.

Who is going to pay for all this? The top 2%, the filthy rich who got all those Bush tax breaks, say Democrats. But the top 5% of income earners already pay 60% of income taxes, while the bottom 40% pay nothing.

Those paying a federal tax rate of 35% will see it rise to near 40% and will lose a fifth of the value of their deductions for taxes, mortgage interest and charitable contributions.

Two-thirds of small businesses are taxed at the same rate as individuals. Consider what this means to the owner of a restaurant and bar in Los Angeles open from noon to midnight, where a husband and wife each put in 80 hours a week.

At year's end, the couple find they have actually made a profit of $500,000 that they can take home in salary. What is the Obama-Schwarzenegger tax take on that salary? Their U.S. tax rate will have hit 39.6%. Their California income tax will have hit 9.55%.

Medicare payroll taxes on the proprietor as both employer and salaried employee will be $14,500. Social Security payroll taxes for the proprietor as both employer and employee will be $13,243.

In short, U.S. and state income and payroll taxes will consume half of all the pair earned for some 8,000 hours of work.

From that ravaged salary they must pay a state sales tax of 8.25%, gas taxes for the 50-mile commute, and tens of thousands in property taxes on both their restaurant and home.

And, after being pilloried by politicians for having feasted in the Bush era, they are now told the tax deduction they get for contributing to the church is to be cut 20%, while millions of Obama voters, who paid no U.S. income tax at all, will be getting a tax cut — i.e., a fat little check — in April.

Any wonder native-born Californians are fleeing the Golden Land?

Markets are not infallible. But the stock market has long been a "lead indicator" of where the economy will be six months from now. What are the markets, the collective decisions of millions of investors, saying?

Having fallen every month since Obama's election, with January and February the worst two months in history, they are telling us the stimulus package will not work, that Tim Geithner is clueless about how to save the banks, that the Obama budget portends disaster for the republic.

The president says he is gearing up for a fight on his budget.

Good. Let's give him one.

- By Patrick J. Buchanan

Give Him a Break and Some Credit

As the sun sets on George W. Bush’s presidency, many Americans are thankful to see him go. Over the past four years, Bush has been lambasted by the country and the world. The last eight years have certainly been tumultuous for the president, there is no argument here. There have been some major blunders; treatment of prisoners and Katrina quickly come to mind. However, Bush deserves a break and some credit where credit is due.

The world changed on September 11, 2001. In the months after the attacks, our country, for the most part, was behind the administration in our “with us or against us” mentality. Let’s attack and destroy our enemies before they can attack us. Make no distinction between the terrorists and those who harbor them. Enter Iraq. The CIA thought Iraq had WMDs. So did the United Nations. British intelligence agreed. As did the Germans…the French, the Israelis, the Russians and even the Chinese! Iraq did NOT have anything to do with 9-11 but Iraq had used WMDs before and had thrown out UN weapons inspectors. And let’s not forget, Saddam was a sworn enemy of the United States. Was it really a good idea to allow Saddam Hussein to remain in power? The Bush Administration believed we should use force to expel the dictator and in true democratic fashion (because we are a democracy and not a dictatorship) proposed the following resolution to congress: “To Authorize the Use of United States Armed Forces Against Iraq”.

Hillary Clinton agreed that force was the right action. So did her husband, the former president. So did Al Gore, John Edwards, John Kerry, Joe Biden, Harry Reid, Chris Dodd and Dianne Feinstein – ALL gave the go ahead for the country to go to war. Most made speeches on the floor of congress and to the media denouncing the Iraqi dictator and calling for action.

Since the invasion, we’ve learned that the intelligence was wrong…intelligence most global agencies agreed was correct. Some have even argued that Bush purposely “lied” about the intelligence in an effort to drag us into the Middle East. Agreed, it was no “slam dunk” as the Teddy Bear Tenet suggested, but conventional wisdom at the time argued otherwise. Because of this global failure, Bush, the “gun toting Texan” who is poor at public speaking and who “stole” the 2000 election, has wrongfully become a scapegoat for the invasion; a fall guy for the world’s intelligence gaffe.

After the fall of Baghdad, the war began to go horribly. Violence flared all over Iraq. US casualties began to rise and hundreds of Iraqis were slaughtered wholesale by suicide bombers on a daily basis. Thousands of Iraqis were butchered every month. Al Qaeda in Iraq was beheading westerners on the internet and strapping suicide bombs to children with Down’s syndrome all while Suni and Shiite militias waged wicked war against each other openly in the city streets. The war was going bad. Political leaders started to point fingers and make accusations. Opposition to the war grew; “the war was a huge mistake”, “we never should have gone in”…“all was lost”. It was all Bush’s fault - mainly due to the fact that this was a pre-emptive war. So, it became Bush’s War. Senator Ted Kennedy went as far to call it “Bush’s Vietnam”. Why should Americans play referee in a vicious ethnic gang war? NBC branded the situation “Iraq: The Civil War” (they later quietly retracted this graphic from their broadcasts). Some wanted an immediate withdrawal. Senator Joe Biden even suggested dividing the country into three NEW countries. Something had to be done, but what?

Over the past four years, the Bush Administration made many mistakes; invading a country with an army too small (something John McCain quipped about in 2003), de-Bathification and declaring “Mission Accomplished” to name a few. For four years, Iraq had been under the command a variety of U.S. generals; Franks, Sanchez, Abizaid, Casey, but it wasn’t until January 2007 that George W. Bush found his U.S. Grant (his Ike, his Washington) in the intellectual General David Petraeus. Petraeus, the author of the Army’s field guide to counterinsurgency warfare, insisted the only way to quell the violence in Iraq was with a “surge” of combat troops. The plan received little support, even members of the military brass objected. Americans did not want to send MORE troops into a quagmire. The word Vietnam resurfaced and made its rounds through the media. Bush signed on anyway. Soon thereafter, 30,000 additional troops poured into Iraq and within months the surge had beat back Al Qaeda and the Shiite militias.

The Surge worked. Violence has gone down drastically. Iraqi civilian deaths went from a high of 3,400 a month in September 2006 to 250 in December 2008. US casualties have likewise decreased. If we had left Iraq in 2007, as many had proposed, Mesopotamia would have become a holocaust; an orgy of bloodlust that would have made Darfur look like a sibling rivalry. An ENDLESS cycle of killings and revenge killings would have spiraled on and on and on and on…and on. And, at the end of the day, America would have been blamed for all of it.

Today, the outlook in Iraq is much better than it’s ever been. In fact no one even talks about Iraq anymore. That in itself tells you how well it is going! Many (most?) in America might be all smiles to see Bush head back to Texas, but please look at the past four years and try to remember how far we’ve come with respect to Iraq. Truman was similarly booed upon leaving office and now is considered one of the best presidents of the 20th century. Some critics might shun, but history will be the judge. At the moment, former President George W. Bush receives plenty of credit for botching the invasion (an invasion that so many supported), but receives little credit for fixing it (which very few supported). That’s a damn shame.

The Viceroy

Senior Fellow, THE WASHINGTON JUNTO