An Efficient Phone Call? A Little Story for Our Times

After the American Century

The story I am about to tell is representative of a larger trend. Over and over, administrators proclaim that they are going to become "more efficient" and save money. Who can be against that? But in practice, becoming more efficient means just the opposite. 

Once upon a time, if I needed to make a conference call, I pushed one button on my phone, reached the operator, gave the numbers of the other parties, and then waited at most two minutes before our telephone meeting began. Clearly, my university found this terribly inefficient, I found out yesterday. I called the operator in the usual way and was told that now I am to arrange conference calls directly. To do so, I needed a set of instructions, which were emailed to me. After printing them out (3 pages) there were several points that were unclear. So I called the operator again for a discussion, focusing particularly on what my customer code number might be. That was something only the Department Secretary knew. Being hellbent on efficiency, I left my office immediately and found the Secretary, who was on the phone herself. After ten minutes I was back in the office with the code.

I was then ready to call the phone company. I listened to an automatic answering machine recite a list of options, managed to select the right one, and within another minute was talking with an operator in a faraway place who had never heard of my university. I gave him my name (would I spell that please?), my email, my department's name, the three phone numbers to be linked with, plus my phone number, plus the secret code number. The gentleman then promised to send me an email confirming the arrangement, with all the phone numbers listed so I could check them. Several minutes later the email came, with an attachment. I opened it, printed it out, and read it over. The numbers were correct. Time ellapsed: 45 minutes.  Time saved: minus 43 minutes (so far).

I still have not had that phone conference, which I ordered for later today. But I am proud of having mastered this new efficient system.

[I had imagined the call would be dialed automatically, but in fact an operator called me and then linked up to the others who were to take part in the meeting. All the preparation time was completely unnecessary.]

Greeks Undermine the Euro by Underpaying Their Taxes: $30 Billion Each Year

After the American Century

Since writing the previous posting about the Greek debt crisis, the New York Times has published an article about the widespread failure of wealthy Greeks to pay income tax. Estimates are that the Greek government has failed to collect $30 billion every year. In other words, there really should be no debt crisis, but there is a corruption crisis. 

How can the European governments be conned into bailing out a country that is systematically being ripped off by its own citizens? See the Times story here.

The idea that the Euro should drop in value because of corruption is Greece is absurd. The rest of Europe should punish Greece for bad faith and for harming the common interests of the rest of the EU member states.

And the bankers, who were willing to loan money to Greece, assuming that they could pressure the rest of the EU to secure the loans, should be more tightly regulated. The EU should put in its constitution that each nation is responsible for its own debts, and that no other nation has any responsibility to make them good. Rather, EU nations might turn to their federal government in times of natural catastrophe, invasion, or other calamities over which they had no control.


Why does all this matter? Because Greece is only the worst case. The EU has been too lax. It has allowed member nations to ignore fiscal responsibility. It has allowed bubble economies to grow in Spanish and Irish real estate. After the collapse of the Spanish bubble unemployment has risen to 20%. Entire housing estates in Ireland have been built without finding buyers, and thousands of houses stand empty there.

This is the first crisis of the Euro, and if it wants to be taken seriously as a world currency, the EU has to put a stop to fiscal irresponsibility. As it is, the EU members such as Sweden, Denmark, and Britain, that have not joined the common currency are likely to wait a good long time before they can muster a majority to take the plunge.

A Greek Crisis Should NOT be A Euro Crisis

After the American Century

When my neighbor down the street goes on a spending spree, no one thinks all the neighbors should chip in and pay for his extravagance. The neighbor has to learn to live within his means. The same applies to nations. Greece has for years been living far beyond its means. It has allowed people to go on pensions at an earlier age than they can in other nations. It has not collected taxes from some of its citizens. It has allowed its public sector to grow and grow. It has routinely had much larger deficits than are allowed in the European Union.

Now the bill is coming due, and suddenly the world's stock markets see this as a crisis of the Euro. It is not. There is no reason for Germans to work a year longer before retirement so that Greeks can retire early. There is no reason why British home owners should pay higher interest rates because the Greeks have not lived within their means. There is no logic to the idea that the Euro will be stronger if other countries pay Greece's bills. Rather, it is logical that the Euro will be stronger if its nations enforce fiscal responsibility and prudence.

It sounds harsh but it is only fair that, if the Greeks cannot pay their bills, they must find their own solution to the problem. Greece is not a poor nation. It has many wealthy people. It has not suffered an earthquake or some other unforeseeable natural disaster. Greeks saw the problem for years and failed to deal with it. Greeks have to take responsibility for their own fate, rather than expect the International Monetary Fund or the other EU counties to pay their bills. Loans to Greece are fine, but only if they are going to be paid back.

People seem to think it terrible to contemplate Greece defaulting on their national debt. Yes, it is terrible, but it is even more terrible if other countries pay their bills. The Germans are quite right to resist loaning the Greek government money before they demonstrate that they can bring their economy into balance. The banks should have been equally hard on Greece years ago. International investors have over-extended credit to profligate nations, and they want others to pick up the tab. Sorry, but that is not how things are supposed to work.

Ah, but we are told, the poor Greeks will suffer under the austerity of budget cuts. Indeed, they will. That is the logical consequence of fiscal irresponsibility.  The Greeks as a whole are not poor,  and if they really want to they can invest their considerable wealth in government bonds, and then, as voters, make sure they get their money back. The Greek pension funds could be heavily invested in the Greek national bonds.  Or the Greek's could hold a massive telethon and get their own citizens to buy ten year government bonds at 5%. That would inject some reality into the situation. If Greeks don't want to buy their own debt, then why should anyone else?

Beware of Greeks demanding gifts. Beware of investment banks wringing their hands and saying the Euro is at risk, when it is their  poor judgement that led them to keep loaning money to Greece. And stop this nonsense of thinking that if Greece goes bankrupt due to a lack of political integrity and national will, somehow that means that the Euro itself is weak or that Germany or France or Sweden suddenly are not good places to do business. It should be just the opposite situation. The reluctance to pay the Greek bills should signal that the EU nations as a whole are sensible, that they will not be stampeded by incautious bankers into paying someone else's bills.

If all this seems a rather harsh argument, consider that other common market, the United States. The 50 individual states each has its own budget, and some of them at times get into trouble. California has overspent and under taxed itself into a corner at the moment. But that is California's problem, and it does not mean that the dollar is suddenly a bad currency.

California's economy is larger than that of Greece. Time to get some perspective on this issue.

The Ipad Commeth

After the American Century

Apple announced that it has sold 300,000 Ipads in the first two days. Toss in some accessories, and this works out to be roughly  $200 million in sales. Not at all bad for a new item that does nothing you cannot do with Apple's previous products.

Is it an Iphone on steroids? Or a mouseless computer that cannot multitask? Or truly a new category? The answer to this question is probably up to Apple. I assume that after selling these models for a bit less than a year, the new and improved versions will appear, including much of what is not there now. This would include a USB connection, now notably absent, and presumably the ability to have more than one application open at the same time.

Another guess: Apple eventually will have so many applications and peripherals for the Ipad that it will replace the low-end computer and the portable DVD player and the Ipod. If Apple also decides to integrate the Iphone into it, this device would become a portable television/phone/computer/music player. In other words, it has the potential to become a universal device that contains everything the modern nomad needs.

It is also possible, of course, that the Ipad will end up a commercial disaster, like Apple's earlier product, The Newton. That was a sort of Ipad, and it worked well enough, but no one bought it.

This time, however, the new tablet may be the portal to the electronic future. If it sells extremely well, its price may come down to just slightly over cost, because Apple will really make money selling all the apps, songs, television programs, and peripherals. Kodak did that with cameras for years, selling them cheaply to make money on the film, processing, and specialized paper.

Whatever happens, this will be fun to watch. When the Ipad eventually gets to Europe, it will be time to decide whether to buy this first version or wait a little longer for the successor which is sure to be packed with more things, cost no more, and have any bugs eliminated.

Republican Demonology: Return of the Paranoid Style in American Politics

After the American Century

The Republicans are a party possessed, a party that has rediscovered the paranoid style that periodically rears its illogical head in American politics. Such paranoia is not new but tends to emerge at moments of historical transition such as the 1830s/1840s, when the US confronted the sectional crisis and industrialization.

A paranoid fear of change also was a strong undercurrent in the politics of the 1920s, when millions joined the KKK, not just in the South but all sections of the US. Nor was the Klan the only expression of paranoia during those years, which also saw immigration restriction, Prohibition, and the anti-evolutionary "Monkey Trial" in Tennessee.

The paranoid style reappeared again in anti-communist hysteria of the late 1940s and 1950s. Sometimes labeled McCarthyism, this movement briefly was dominant in the halls of Congress. McCarthy was convinced that communists had infiltrated everywhere and were about to destroy the nation. He warned of "a great conspiracy on a scale so immense as to dwarf any previous such venture in the history of man."

Today, the paranoid style is alive and well, personified in the often incoherent rhetoric of Sarah Palin and the "Tea Party" groups who are convinced that the US is about to succumb to totalitarianism (the Democrats) and/or socialism. The danger is emerging that the Republican Party as a whole may fall into the pit of paranoid delusions. This did not happen in the 1950s, in good part because President Eisenhower did not make common cause with Senator McCarthy. Ike was fundamentally a sane person and a centrist in politics.

But there are signs that the Republicans of today lack Eisenhower's sensibilities. Leaders of the Republican Party have made statements in recent days suggesting that they have achieved a hallucinatory consensus among themselves.

Consider the image used by the Repubican Natinonal Committee to raise money for the November 2010 elections. It shows Nancy Pelosi against a background of red flames with the caption "Fire Pelosi." It looks very much like they want to burn her at the stake as a witch. (This image was removed sometime after I wrote this words, to be replaced by an image of Pelosi looking rather manic with a raised fist.)  Sadly, Arthur Miller is not around to comment on the original image, but perhaps we will see a revival of his still very pertinent play about the Salem Witchcraft trials, The Crucible.

In the image Pelosi looks threatening, both arms raised, fists clenched. Republicans are encouraged to see her as a demon from hell. But it seems to me that the Republicans are projecting their own fears, that they themselves are possessed, and that they face the danger of political damnation.

It seems that the United States cannot entirely escape its origins in the seventeenth century.

After Health Care, Where To Next?

After the American Century

The Obama Administration has used far more time on the health care legislation than one might have thought possible. The victory seems to have come, at last, but many other problems await. It seems the Republicans do not want to accept that they have lost and want to keep on fighting the health care battle, which is not exactly a constructive approach.

While the battle of health care legislation has raged, legislation regulating Wall Street has been side-tracked, along with vital bills to promote green energy and move the economy toward the next energy transition. It has been sad to watch China charge ahead in this area for the last year, while Congress proved unable to multitask. 

Indeed, the Republicans seem unable to perform even a single task, having become enamored of just saying no. Being against all policy initiatives at a time when the US world position is slipping will be harshly criticized by future historians, I submit.

The US badly needs immigration reform, too, and lawmakers may have to take a look at the tax code which seems to reward companies that export jobs to offshore factories. In short, it is time for American lawmakers to find common ground on important issues and move forward. If near stalemate continues, the nation will suffer. 

CEPOS-Gate: Who in the Danish Government Knew? And When?

After the American Century

When did the Danish Prime Minister know that CEPOS was working to undermine the energy policies of the Obama Administration? When did the current government know about the CEPOS campaign against wind power, with its false accusations and mis-information? When did the Danish government first know that the "think-tank" it is closely associated with was being funded by American energy companies opposed to the adoption of green energy?  Should the current Danish government resign or be forced to hold an election because of this scandal?

On Feb 25 this Blog presented the case that CEPOS was either lying or incompetent in its smear campaign against the Danish windmill industry, launched in the United States. CEPOS intentionally spread false information, of that there is no doubt. But I suspected there was more to the story, and in that column, I asked:

"Why did Cepos take such an interest in attacking wind energy? What is their purpose? Why did they think they should spread misinformation about Denmark in the United States? Who are they really working for? This campaign of falsehoods would please Saudi Arabia, and it would be music in the ears of Fox News. Who is donating money to support Cepos? Any oil companies on the list?"

We now have disturbing answers to these questions, thanks to some good work by Ingenioren. CEPOS was paid to write and distribute the report by American oil and coal companies. Martin Ågerup, the Director of CEPOS has admitted that the money was given to them through the "Institute for Energy Research" a lobby organization funded by the American coal and oil industries.  Strangely, Martin Ågerup claimed that he did not know the Institute for Energy Research was a lobby organization, and thought it was, like CEPOS, a think tank. This confusion suggests that Martin Ågerup is not being entirely honest or that he is incompetent. CEPOS was not merely writing a report. It allowed itself to be used to undermine clean energy proposals before the US Congress, by distributing mis-information.

In short, CEPOS should be recognized as a lobby organization that works against alternative energies and seeks to sabatoge the Obama Administration. CEPOS is not a think tank, it is a gun for hire, perhaps one that is quite willing to work with groups that deny the existence of global warming. No one can any longer believe what they say about policy matters, because they are essentially a public relations arm of American coal and oil companies. 

CEPOS has a serious credibility problem. They are hopelessly compromised. The Danish media should stop calling them a "think tank" and certainly should not use them as responsible, disinterested spokespeople on the news. Rather, the Danish media should demand much more transparency, so that we know precisely who is funding CEPOS.

CEPOS also may have legal problems. A "think tank" presumably does not have the same tax status as a lobby organization. The payments from the Institute for Energy Research clearly are taxable as income for work.performed, indeed, for dirty work. They cannot be regarded as tax-free contributions to a non-profit organization.

The mystery is why this story is not front-page news in Denmark. Politiken gives it only a tiny corner of page 4 of the March 19 issue. Who in the Danish government knew about CEPOS's attacks on the Obama energy program? These attacks began in September 2009, well before the climate summit. Is it really credible that no one in the Danish Ministry of Energy knew anything about this? No one in the Foreign Office?

Well before the climate summit the Danish government almost had to know that CEPOS was working against the success of that very summit. It was doing its best to weaken Obama's position inside the United States, so he would have less to bring to the negotiating table in Copenhagen. With this new information, one must wonder: 

When did the Danish Prime Minister know what CEPOS was doing in the fall of 2009? Did he try in any way to stop the disinformation campaign? Was he really in a position to act as an honest broker at the Climate Summit?

When the Lights Went Out

After the American Century

I am delighted to inform readers that my new book,
When the Lights Went Out: 
A History of American Blackouts 
(MIT Press, 2010)
has received some attention from the Blog of The New Yorker.

The official publication date is March 31, but in fact it is already available.

Greek Bail-Out Not a Good Idea

After the American Century

Greece cannot pay its bills, even in the short run. With a national debt that is more than 110% of its gross national product, and a deficit of more than 10% for this year, Greece's debt will only get worse unless and until it enacts real reforms. So far it has failed to do enough, and the deficit will only get worse.

Had the Greeks been hit with a natural disaster like Haiti, they would deserve sympathy and charity. But the Greeks  insist on spending more than they can afford. They have given massive pay increases and early retirement to state employees that are not funded by taxation. They reportedly have a massively inefficient bureaucracy. There is no  reason for the other European states to give or to loan them money unless they show that they can live within their means. Giving them a handout will solve nothing, and will only delay for a short time the day of reckoning.

Indeed, the EU has made a major blunder by even letting this become an issue. Its own laws clearly state that nations who overspend will not be bailed out.

Consider, by comparison, the plight of California. It is also a part of a federation of states that have a common currency. But no one in the US is suggesting that Ohio, Nebraska and Maine should help fund California. Instead, since California voters refuse to raise taxes, they are closing libraries, firing workers, and forcing those who remain to stay at home several days a month because there is not enough money to pay them. Admittendly, this is ridiculous, since California is a rich state and could afford to fund its education system and its services, but this is the choice the state's citizens have made. The rest of the United States will not bail out California, and as a result the state is a less desirable place to live than it was a few years ago. Eventually, the voters will realize that they have made a mistake, and in the meantime loaning them money will actually prevent them from confronting that mistake.

So why are Europeans wringing their hands over Greece? You don't get an alcoholic to reform by buying another round of drinks.