02/19/2015 archive

Squeezing out Greece

Greece wants to save Europe, but can it persuade Europeans?

by Pavlina R. Tcherneva, Al Jazeera

February 18, 2015 3:40PM ET

Greek voters last month rejected continuation of an austerity program that has plunged their economy into depression, voting in a government determined to break out of the current terms on which Greece gets help from the Troika.

On Monday, it looked as if the negotiations had reached an impasse. Euro members refused to provide Greece with a bridging loan, demanding adherence to the austerity bailout terms negotiated under the previous government.

European officials, so far, have refused to budge. They are betting that Greece will seek to avoid a default at all costs to dodge a possible banking crisis, which could inflict more hardship on the population and undermine confidence in the new government.

Default on its debts is not an appealing option to Greece, although the consequences of such a move may not be as dire as some expect. Greece currently runs a primary surplus, and may well have enough cash on hand to pursue its stimulus reforms for a while. But at some point, the funding problem will re-emerge. Greece is hoping that improvements to the economy, including rapid growth in employment, incomes and profits that would bring more tax revenue and reduce anti-poverty spending would be sufficiently swift to produce rapid short-term growth, all of which would improve Athens’ ability to borrow from private markets for long-term public investment projects. The fundamental problem, however, remains a loss of monetary sovereignty.

Fears of a banking crisis in Greece in the event of a default, though, may be overstated. Greek banks are all already regulated by the European Central Bank (ECB). Continuing the U.S. analogy, would the Fed shut down Citibank if the state of Georgia went rogue and refused to pay its debts?

Germany may be determined to hold the eurozone together, but on terms that enforce the conservative economic orthodoxy first championed by President Ronald Reagan and Prime Minister Margaret Thatcher across Europe. If, indeed, all parties at the table seek to make the EU a political union, Varoufakis will be arguing that cannot be achieved on the basis of the Troika recipe, but requires broad embrace of more progressive pro-growth principles.

Greece takes to the negotiating table a desire to stem the humanitarian crisis created by austerity, while avoiding the go-it-alone option of ditching the euro and reintroducing the drachma. But convincing the powers that be in the eurozone, and the vested interests behind them, of the need for a fundamental policy re-orientation toward a more progressive consensus remains a tall order.

Obama Administration Throws Greece Under the Bus; ECB Leak Recommends Capital Controls; Greece Weighing Capitulation (Updated: Germany Rejects Greek Proposal)

by Yves Smith, Naked Capitalism

February 19, 2015

As we’ve said from the outset, as much as we’d liked to see Greece prevail in its efforts to restructure its relationship with its creditors, not just for its own sake but for the benefit of other periphery countries and the Eurozone project, it was unlikely to prevail unless it could rally support. One possible source was the anti-austerity and anti-Eurozone parties in the rest of Europe. Perhaps we’ve missed it, but we’ve seen nary a sign of Marine Le Pen in France or Spain’s Podemos, the two proximate threats to business as usual in the Eurozone, using the extraordinary hostility of the Eurogroup to economically rational proposals from Greece as a talking point.

And as we pointed out at the time, the Administration had legitimate reason to try to push the recalcitrant Germans and northern countries to relent. The Eurozone is on utterly unsustainable foundatoins. It isn’t just that its structure is defective, with monetary integration but no Federal fiscal structure to allow for Eurozone-wide government spending to help equilbrate economic performance across regions. It is also that the design of the Eurozone is far too skewed to Germany’s advantage. Germany continues to run large trade surpluses with the rest of the Eurozone; they’ve even widened to a record 7.4% of GDP. Germany wants the impossible, to run persistent trade surpluses with its trade partners, yet not finance their purchases.

Unlike the Eurocrats, the Administration, along with most financial analysts, knows that persisting in this course of action assures a Eurozone breakup. And unlike Germany and its allies in the Eurogroup, it believes that a Grexit would pave the way for other countries leaving, and that the consequences of a Eurozone implosion would be catastrophic for Europe and not too pretty for the US either. So the intervention was hardly selfless. And our sources tell us Treasury did expend some effort on Greece’s behalf, although given the lack of movement from the Eurogroup side over the last week, we doubted how forceful a case was made.

The Greek government should have imposed capital controls by now but was loath to do so, since any leak of that line of thought would increase the deposit run. While it could be done in isolation, simply as a protective measure to prevent deposits being moved out of the country and to reduce daily withdrawals. it would be entirely logical to see it as a step on the way to a Grexit. Anyone with an operating brain cell would want to minimize their exposure to having cash in the bank turned into less valuable drachmas.

The irony here is that if Greece were willing to default, Germany would have turned an intended subjugation of Syriza into a devastating political wound to the ruling German parties. Refusing to extend the ELA any further, if it were to come to that, merely limits ECB losses. If Greece were to default, it would suddenly expose the size of the commitments to Greece through the Target2 system, the vehicle used to launder the bailout money from Greece to French and German banks. Most Germans have the inaccurate picture than the rescue funds went to stereotypically lazy Greeks, when 91% of the payments actually went to banks.

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Follow us on Twitter @StarsHollowGzt

Trevor Timm: Obama, Republicans and the media concur: it’s time for war with Isis

It’s sounding like the Bush years all over again: the administration and Congress want a war and the media’s happy to cover it as the government prefers

After more than six months of virtually ignoring the fact that the war against Isis was illegal by almost anyone’s standards – given Congress’s cowardly refusal vote on it and the White House’s refusal to ask them first – the Obama administration has finally submitted a draft war authorization against Isis to Congress.

That means the media can go back to doing what it does best: creating a “debate” over how many countries we should invade, without any discussion of how our invasions created the very situation in which we feel we have to contemplate more invasions. It’s like the early Bush years all over again. [..]

And, as New York Times’ Peter Baker noted matter-of-factly on CBS this Sunday: “[the authorization] is not going to change what’s happening on the ground. President Obama has made clear whether it passes or not, he’s going to continue to do the exact same thing.”

The only thing more farcical than the White House’s position is the Republican party’s: after months of hyperbolic grandstanding over Obama’s supposed abuses of executive power when it comes to immigration, health care, net neutrality or anything else, his political opposition has suddenly decided that they won’t agree to pass anything that doesn’t give the president absolutely unlimited authority to engage in a forever war with Isis.

Richard (RJ) Eskow: Fifty Shades Of Austerity: The Germans, The Greeks, And The GOP

Cultural references may seem frivolous in the face of a financial crisis, but the Eurozone’s Greek crisis is at least as much cultural as it is economic in nature. It’s partly an anthropology problem: Europe’s negotiators are under the spell of a German-driven economic cult whose adherents seem willing to disregard empirical data in order to protect its norms and folkways.

From all appearances, Germany’s leaders have leavened their misplaced faith in austerity with some quasi-Puritanical beliefs. For example: that debt and poverty are sins, regardless of cause, and that sin must lead to pain.

The United States has its own austerity cult. We’ve drawn parallels between the German government and the GOP before, but the resemblance grows stronger with every passing week. For these cultists, as for the characters in our nation’s newest hit movie, pain seems to have become an end unto itself.

Steven W. Thrasher: Sorry, Oklahoma. You don’t get to ban history you don’t like

Going after history classes that don’t teach “American Exceptionalism” is anything but patriotic

Oklahoma House Republicans on the Common Education Committee voted on Tuesday to ban advanced placement US history courses, because they think it shows “what is bad about America”. If I were Oklahoma, I’d want to forget about “what is bad about” American history, too, especially in my corner of it! [..]

Just last month, Education Week gave the state a D- on education and ranked it 48th in the nation. Clearly, Oklahoma could move up from being third dumbest, fourth most incarcerated, and sixth fattest state if it just ignored its unpleasant history, right?

Nationally, if history teachers were to banish everything “bad” about America from our classrooms [..] and to instead only teach about what was truly exceptional about America, what would be left to give lessons on?

Neil Armstrong, Toni Morrison, and the snuggie? [..]

This latest anti-education effort, which will only punish really smart kids (who are the ones who want to earn college history credits while in a high school AP course) came about because Republicans think the coursework doesn’t shill for “American exceptionalism” enough. But why would Oklahoma Republicans – who embrace education “options” – want to rob all of their brightest high school seniors of the choice to inexpensively earn college history credits just because their history lessons may be critical and not necessarily full of pro-American propaganda?

Ted Rall: Obama Destroyed Libya

Barack Obama destroyed Libya.

What he did to Libya is as bad as what Bush did to Iraq and Afghanistan. He doesn’t deserve a historical pass.

When Obama took office in 2009, Libya was under the clutches of longtime dictator Colonel Muammar Gaddafi. But things were looking up.

Bush and Gaddafi had cut a deal to lift Western trade sanctions in exchange for Libya acknowledging and paying restitution for its role in the bombing of Pan Am flight 103 over Lockerbie, Scotland. In a rare triumph for Bush, Libya also agreed to give up its nuclear weapons research program. Libyan and Western analysts anticipated that Gaddafi’s dictatorship would be forced to accept liberal reforms, perhaps even free elections and rival political parties, in order to attract Western investment.

Libya in 2009 was prosperous. As citizens of a major oil – and natural gas-exporting nation, Libyans enjoyed high salaries, low living expenses, generous social benefits, not to mention law and order. It seems like a mirage today.

Cenk Uygur: You Know You’re a Bigot When…

You know you’re a bigot when you can’t take out the word “Muslim” from a sentence you stated and replace it with “Jew” and still have it be socially acceptable. Let’s start out nice and easy. A sentence I get with great regularity:

“You’re a Muslim apologist.”

Ok, let’s try our simple test here:

“You’re a Jew apologist.”

Wow, that sounded ugly, didn’t it? Wait, let’s be fair and phrase it slightly differently and see if it gets any better:

“You’re an apologist for the Jews.”

Nope, that wasn’t any better.

So, why are you obviously bigoted when you say it about Jewish people and not equally bigoted when you say it about Muslims? It’s partly because there are very few people in America ready to stick up for Muslims. That’s, ironically, because they will be called Muslim apologists.

Robert L, Borosage: The Case for a Populist Challenger in the Democratic Primaries

A raft of reasons are floated for why someone should challenge the prohibitive favorite, Hillary Clinton, in the Democratic primaries, most of them spurious. Yes, polls show Democrats want a contest, not a coronation for their presidential nomination. The press and talking heads also yearn for a contest, if only to have something to cover. But this doesn’t justify a run.

Contrary to many pundits, Hillary (first name used as shorthand to distinguish her from her husband) doesn’t need a primary contest to get her campaign in shape. She’s already been central to three presidential campaigns, as underdog, incumbent and, disastrously, overwhelming favorite. She has every high-priced operative in the party. If she doesn’t know how to put together a campaign by now, an upstart challenger won’t help. [..]

There are two compelling reasons for a populist challenger to get in the Democratic primaries: a fundamental debate about the direction of the country has only just begun and must be expanded, and a growing populist movement would benefit from a populist challenge to Hillary.

The Breakfast Club (Chicken Heart)

breakfast beers photo breakfastbeers.jpgSo this is a story I’ve told before but not with such detail and outrage.

The essence of the scientific method is that theories are disprovable (by contradictory experimental results) and that experiments are replicable.  The reason I call Economics no more than Shamen dancing around a corpse shaking rattles is that the theories are not disprovable (for the most part, since like all social sciences experiments to test the conclusion are impossible to arrange and only observation is feasable) and when examining the results of natural experiments (oh, say austerity in Greece) they are shown to be in direct contradiction of the predicted results.

It’s worse than that he’s dead Jim, Dead Jim, DEAD!

Not that this keeps the Shamen from shaking their rattles and dancing.  It’s FAITH you see and when we’re talking about WASP Christianity the firm belief that the elect, favored by God and predestined before birth to sit at his side on the big rock candy mountain in the sky by and by, display the benefits of God’s grace even in this mortal coil.

That’s why the rich are rich you know.  They deserve it.  And all you all expecting divine justice like some kind of after-life lottery don’t really understand that ‘so above as it is below’ and the opiate of justice is merely to numb your pain as you suffer and die for the benefit of your betters.

You think God wants to hang with you?  You wouldn’t know a pickle fork (two tines) from a dessert fork (three) unless a servant laid them out in the correct order (always good to wait until you can see what your host uses).

Which brings us to the Chicken Heart.  This is why I’m conflicted about Cosby.

My dear readers, you may disagree with my opinions, object to my theories, but when I talk about science I insist that my experiments are reproducible and consistent.

What pushes scientists to lie? The disturbing but familiar story of Haruko Obokata

John Rasko and Carl Power, The Guardian

Wednesday 18 February 2015 08.30 EST

The man in the middle of it all was Alexis Carrel, a brilliant and rather dapper Frenchman working at the Rockefeller Institute in New York. Carrel discovered that, if you remove some cells from the body, sit them in a nutritious broth and handle them correctly, they can not only survive, but thrive and multiply. Also, if you take some cells from one culture, you can start a new one and, with that, a third, and so on. The importance of this technique – know as cell “passaging” – can’t be overstated. With it, Carrel literally opened a new era in cell research. Unfortunately, he did so with an experiment that, while earning him international superstardom, proved to be a complete and utter train wreck.

On 17 January 1912, Carrel removed a chick embryo from its egg and cut out a small fragment of its still-beating heart with the aim of keeping it alive as long as possible. He had hardly begun this experiment when he announced to the world that his chicken heart culture was immortal, that immortality belonged potentially to all cells, and that death was only the consequence of how cells are organised in the body. In other words, the secret of eternal life is within us all, an attribute of our basic biological building blocks. It captured the public’s imagination and was soon accepted by the scientific community.

Carrel and his assistants kept – or claimed they had kept – that culture alive for 34 years, which is five times longer than the average chicken. For many years, around 17 January, journalists wrote birthday stories on the chicken heart and wondered how large it would have grown had Carrel nurtured every one of its ever-multiplying cells. (According to calculations, it swiftly dwarfed the Earth and filled up the entire solar system.)

The problem was, no one else could keep a cell culture alive indefinitely. Lab after lab tried and failed, decade after decade. Because Carrel was a giant in the field of cell research and a Nobel Prize winner, few dared to doubt him. Scientists blamed themselves when their cells died. They assumed that they lacked the master’s skill, that his lab had higher standards than they could reach, that they had somehow exposed their cells to infection or failed to keep them properly nourished. We now know that the reverse was true. Other researchers probably couldn’t duplicate Carrel’s results because they weren’t incompetent or dishonest enough.

It was only in the mid-60s – half a century after Carrel established his chicken heart culture – that the dogma of cell immortality came crashing down. That’s when Leonard Hayflick, an ambitious young researcher at the Wistar Institute in Philadelphia, discovered that ordinary body cells have a finite life span – or, more precisely, an average number of times they can multiply in vitro. This is their Hayflick number. For chickens, it is 35. In other words, a population of chicken cells can double about 35 times before they die, which usually takes several months.

By the time Hayflick proved this, Carrel was long dead and his “immortal” chicken cells discarded. Which means that we know Carrel’s most famous experiment was a sham, but not why. If it was fraud, it was one of the most outrageous cases in the history of science. However, the cause may have been carelessness rather than dishonesty. Carrel and his staff used “embryonic juice” as a culture medium and, if they prepared it badly, it might have contained live chick cells. In that case, instead of just feeding their culture, they re-seeded it. It’s an easy enough mistake, but to make it consistently enough to keep their chicken heart cells alive for 34 years suggests an astonishing degree of negligence.

Reproducibility is one of the cornerstones of modern science. Unless an experiment can be repeated again and again by different researchers, each time yielding similar results, it can’t be said to prove anything much. At least that’s the theory. Carrel’s chicken heart experiment shows how far science can stray from the scientific method. And the fault doesn’t just lie with Carrel and his laboratory. The entire scientific community shares some of the blame because it upheld the dogma of cell immortality for more than 50 years despite the fact that it was based on a single, sensational, irreproducible experiment.

Tha-thump.  Tha-Thump!  THA-THUMP!

So why is credibility so important to you ek?

I write pseudonymously.  I don’t delude myself that it protects me from various initialed government agencies, that’s not the point.  What it has done (so far) is keep my mail relatively spam free and save me from random strangers who want me to help them and people who fiercely disagree with me and would like to burn a cross on my lawn (kerosene just ruins the grass, you have to re-sod).

I can not expect you to accept my assertions merely on the basis of my expertise and reputation.  Test them yourself!

The law that entropy always increases holds, I think, the supreme position among the laws of Nature. If someone points out to you that your pet theory of the universe is in disagreement with Maxwell’s equations – then so much the worse for Maxwell’s equations. If it is found to be contradicted by observation – well, these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.

Sir Arthur Stanley Eddington, The Nature of the Physical World (1927)

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On This Day In History February 19

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 19 is the 50th day of the year in the Gregorian calendar. There are 315 days remaining until the end of the year (316 in leap years).

On this day in 1942, U.S. President Franklin D. Roosevelt signs Executive Order 9066, authorizing the removal of any or all people from military areas “as deemed necessary or desirable.” The military in turn defined the entire West Coast, home to the majority of Americans of Japanese ancestry or citizenship, as a military area. By June, more than 110,000 Japanese Americans were relocated to remote internment camps built by the U.S. military in scattered locations around the country. For the next two and a half years, many of these Japanese Americans endured extremely difficult living conditions and poor treatment by their military guards.

The Order

The order authorized the Secretary of War and U.S. armed forces commanders to declare areas of the United States as military areas “from which any or all persons may be excluded,” although it did not name any nationality or ethnic group. It was eventually applied to one-third of the land area of the U.S. (mostly in the West) and was used against those with “Foreign Enemy Ancestry” – Japanese.

The order led to the internment of Japanese Americans or AJAs (Americans of Japanese Ancestry); some 120,000 ethnic Japanese people were held in internment camps for the duration of the war. Of the Japanese interned, 62% were Nisei (American-born, second-generation Japanese American and therefore American citizens) or Sansei (third-generation Japanese American, also American citizens) and the rest were Issei (Japanese immigrants and resident aliens, first-generation Japanese American).

Japanese Americans were by far the most widely affected group, as all persons with Japanese ancestry were removed from the West Coast and southern Arizona. As then California Attorney General Earl Warren put it, “When we are dealing with the Caucasian race we have methods that will test the loyalty of them. But when we deal with the Japanese, we are on an entirely different field.” In Hawaii, where there were 140,000 Americans of Japanese Ancestry (constituting 37% of the population), only selected individuals of heightened perceived risk were interned.

Americans of Italian and German ancestry were also targeted by these restrictions, including internment. 11,000 people of German ancestry were interned, as were 3,000 people of Italian ancestry, along with some Jewish refugees. The Jewish refugees who were interned came from Germany, and the U.S. government didn’t differentiate between ethnic Jews and ethnic Germans (jewish was defined as religious practice). Some of the internees of European descent were interned only briefly, and others were held for several years beyond the end of the war. Like the Japanese internees, these smaller groups had American-born citizens in their numbers, especially among the children. A few members of ethnicities of other Axis countries were interned, but exact numbers are unknown.

Secretary of War Henry L. Stimson was responsible for assisting relocated people with transport, food, shelter, and other accommodations.


FBI Director J. Edgar Hoover opposed the internment, not on constitutional grounds, but because he believed that the most likely spies had already been arrested by the FBI shortly after the Japanese surprise attack on Pearl Harbor. First lady Eleanor Roosevelt was also opposed to Executive Order 9066. She spoke privately many times with her husband, but was unsuccessful in convincing him not to sign it

Post World War II

Executive Order 9066 was rescinded by Gerald Ford on February 19, 1976. In 1980, Jimmy Carter signed legislation to create the Commission on Wartime Relocation and Internment of Civilians (CWRIC). The CWRIC was appointed to conduct an official governmental study of Executive Order 9066, related wartime orders, and their impact on Japanese Americans in the West and Alaska Natives in the Pribilof Islands.

In December 1982, the CWRIC issued its findings in Personal Justice Denied, concluding that the incarceration of Japanese Americans had not been justified by military necessity. The report determined that the decision to incarcerate was based on “race prejudice, war hysteria, and a failure of political leadership.” The Commission recommended legislative remedies consisting of an official Government apology and redress payments of $20,000 to each of the survivors; a public education fund was set up to help ensure that this would not happen again (Public Law 100-383).

On August 10, 1988, the Civil Liberties Act of 1988, based on the CWRIC recommendations, was signed into law by Ronald Reagan. On November 21, 1989, George H.W. Bush signed an appropriation bill authorizing payments to be paid out between 1990 and 1998. In 1990, surviving internees began to receive individual redress payments and a letter of apology.

No Shame

CFAA == Computer Fraud and Abuse Act.

Nominee For Attorney General Tap Dances Around Senator Franken’s Question About Aaron Swartz

by Mike Masnick, Tech Dirt

Wed, Feb 18th 2015 11:31am

While there have been many egregious CFAA cases, one of the most high-profile, of course, was that of activist Aaron Swartz, who was arrested for downloading too many research papers from JSTOR from the computer network on the MIT campus. The MIT campus network gave anyone — even guests — full access to the JSTOR archives if you were on the university network. Swartz took advantage of that to download many files — leading to his arrest, and a whole bunch of charges against him. After the arrest, the DOJ proudly talked about how Swartz faced 35 years in prison. Of course, if you bring that up now, the DOJ and its defenders get angry, saying he never really would have faced that much time in prison — even though the number comes from the DOJ’s (since removed) press release.

Swartz, of course, tragically took his own life in the midst of this legal battle, after facing tremendous pressure from the DOJ to take a plea deal as a felon, even as Swartz was sure he had done nothing illegal or wrong. Since then, there have been a few attempts to update the CFAA to block this kind of abuse, but they have been blocked at every turn by a DOJ that actually wants to make the law even worse. This includes the White House’s latest proposal for CFAA reform, which would actually make more things a felony under the CFAA, and could drastically increase sentencing for things that many of us don’t think should be a crime at all — such as tweeting out a list of worst passwords on the internet.

Outgoing Attorney General Eric Holder has done his best to ignore or downplay any suggestion that his Justice Department abused the CFAA in going after Swartz. And it looks like his likely replacement is trying to do the same.

Senator Al Franken questioned nominee Loretta Lynch about Swartz and the CFAA (.pdf) and got back a response that is basically her avoiding the question. She doesn’t say anything about Swartz, but goes off on some FUD about the dangers of malicious hackers and how the DOJ needs the tools to fight spyware. She then claims that the newly proposed CFAA changes are okay because they only increase the possible maximum sentences, but not the minimums, leaving things up to the discretion of judges (and prosecutors).

This is such a total braindead law enforcement view of things: that if only there were greater punishment it would scare the “bad people” out of doing what they’re going to do. That’s never really worked, and especially not in this area, where the law is being abused to go after people who don’t think they’re actually doing anything wrong.

Second, it just plays up the FUD that “bad stuff is happening” so “something must be done.” But it ignores how vague the law is and how it’s wide open to abuse. A good law enforcement official would ask for clearer laws that more narrowly target actual bad behavior, rather than celebrating a broad and vague law that can be, and is, widely abused just to rack up more DOJ headlines and “victories.”