23 December 2009

Update no.418

Update from the Heartland
No.418
14.12.09 – 20.12.09
Blog version: http://heartlandupdate.blogspot.com/
To all,
At the outset, I offer my apologies for the late distribution of this Update issue. We made an extended weekend journey to Austin, to visit our Grandson Judson James and his parents. We took our Granddaughters Aspen Shae and Shalee Lynn with us. A great time was had by all. Thank you very much, Melissa and Tyson.

The follow-up news items:
-- In furtherance of his political agenda, the Obama administration has apparently decided to repatriate six Yemeni, battlefield combatants held at the Guantánamo Bay detention facility, and may well portend additional such releases of captive battlefield combatants to achieve the President’s 22.January Executive Order [371]. My, my, I feel better already.
-- President Obama flew to Copenhagen, Denmark, to salvage the World Climate Conference [417] and reportedly achieved some “claimed” breakthrough of the loggerhead stalemate that paralyzed the conference. Obama called the emerging agreement imperfect and emphasized that no country would get everything it wants. He called the agreement a “substantial step forward.” Time shall tell the tale.
-- A couple of rather sobering articles from across the pond:
“Siemens High Tech for Tehran – German Government Probes Shipments to Iran”
Der Spiegel
Published: 14.December.2009
http://www.spiegel.de/international/world/0,1518,666900,00.html#ref=nlint
and
“Secret document exposes Iran’s nuclear trigger”
Catherine Philp
The Times [of London]
Published: December 14, 2009
http://www.timesonline.co.uk/tol/news/world/middle_east/article6955351.ece?&EMC-Bltn=EFPBO1F
Each of these news items is what I refer to as a dot. We collect dots (we have been collecting dots, in this case). Then, as best we are able, we connect the dots to see what picture emerges. Taken individually, perhaps none of the dots is particularly ominous . . . well, except the uranium deuteride, neutron initiator, nuclear trigger item; that one is threatening no matter how you cut it. As I understand the physics, there is only one purpose for uranium deuteride – and, it is not civil. I hope someone beside the Iranian regime feels good about and finds comfort in this news. I do not! I see this news much as the Israelis must see it – as the proverbial Damocles Sword hangs precariously above their head. Israel has a far lower threshold and tolerance of the very real threat from Iran [137 et al]. Each day, the Western Allies take on the image, if not the role, of whiners, frustrated and confused, who cower in the corner unable to figure out how to deal with the bully. The latest news from the Times amplifies the image. Pakistan may have been a breeding ground for Islamic-fascist fodder, but they were never state-sponsors of terrorism. The Islamic Republic of Iran rarely sends its own minions to do their dirty work, and they have become experts at encouraging and supporting other mindless, suicidal fanatics to carry out their bidding. Pakistan with nuclear weapons; we can tolerate. The IRI with nuclear weapons – unthinkable! The issue with the IRI is not their use of WMDs, but rather who they will provide the material and capability to as they continue their sponsorship of Islamo-fascist activities. The Times’ revelation certainly did not get the Press play and interest it deserves. We are talking about something that is as close to a smoking gun as you can get without with the seismic recording of the actual event.
-- A public update by our Director of National Intelligence:
“Strengthening our nation's front line of defense”
by Dennis C. Blair
Washington Post
Published: Friday, December 18, 2009
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/17/AR2009121703672.html?wpisrc=nl_opinions
Denny [366] tries to give us a “warm & fuzzy” regarding his responsibilities toward the national defense and specifically the National Intelligence Reform Act of 2004 [PL 108-458] [343]. Oddly, our greatest intelligence weakness and vulnerability – HUMan INTelligence (HUMINT) – was not recognized or addressed. I suppose we can only hope the Intelligence Community (IC) leadership and professionals are working feverishly and purposely to fill the gap in our capabilities.
-- Mayor Adrian Fenty of the District of Columbia signed into a law a measure allowing gays and lesbians to marry [148 et al] in the city. The bill passed the City Council by a vote of 11-2. Unique to DC, the law must also pass a 30-day congressional review process before becoming effective. A long journey begins with small steps.
-- The Northwest Flight 188 incident with the supposedly laptop-distracted crew overflying their destination continues to spark attention. An Op-Ed column in Wednesday’s New York Times reminded me of work done 25 years ago.
“Pilots on Autopilot”
by Arnold Reiner
New York Times
Published: December 16, 2009
http://www.nytimes.com/2009/12/17/opinion/17reiner.html?_r=1&th&emc=th
Set aside my opinion of the pilots of NW Flt 188 [414], Reiner – a retired airline captain – raises some interesting points, not least of which includes the fundamental fallibility of human beings. In the mid-1980’s, we worked on a complex and challenging task to develop a single-pilot, advanced, attack helicopter for the U.S. Army, in an operational environment that can easily saturate two focused pilots. We created, refined and tested a highly automated flight control system that dramatically reduced the pilot’s basic flying workload, ostensibly to allow the pilot to focus more attention on the combat and situational awareness task. One of many questions posed by the Army with single pilot operations was, what happens if the pilot is injured or incapacitated? We devoted part of our development effort to working out the algorithms necessary for the “system” to alert the pilot or assume control of the aircraft in the event of incapacitation. We proved the process in advanced simulations, and by the time I left the project, we had flown parts of the program. The capability existed 25 years ago. Cockpit automation has continued to advance, which makes the implementation of those algorithms even more practical and feasible today. Whether the NW Flt 188 crew was sound asleep or jointly distracted by their laptops is irrelevant; they were essentially incapacitated as far as flight management was concerned. Arnold Reiner is correct, but he did not go far enough. We can do better.

There are a few subjects that most folks are simply uncomfortable talking about; one of those topics is sex – a natural, normal, biological function common to virtually every living thing in existence. Of the vast array of organisms and creatures, only humans and some primates can express pleasure associated with sexual activity. A couple of recent articles accentuate the dramatic contrast in the dilemma we face regarding any discussion of sex in this country and especially regarding any meaningful debate about childhood sex education.
“Obama’s risky-sex czar”
Editorial
The Washington Times
Published: Wednesday, December 9, 2009
http://www.washingtontimes.com/news/2009/dec/09/obamas-risky-sex-czar/
The other article is:
“Parents’ Sex Talk with Kids: Too Little, Too Late”
by Alice Park
Time [magazine]
Published: Monday, December 07, 2009
http://www.time.com/time/health/article/0,8599,1945759,00.html, or
http://news.yahoo.com/s/time/20091207/hl_time/08599194575900
When you read the former article first, I imagine most folks would react as I did – nope, not touching that 3rd rail with a ten-foot pole. Further, place such charged rhetoric in the context of the last administration’s insistence upon “abstinence-only” sex education [190 et al], can there be any wonder why no one wants to even mention of the words “sex” and “child” in the same sentence in any context? The first sentence of Park’s article speaks volumes. “The sex talk is never easy. It’s not comfortable for anyone involved — parents are afraid of it, children are mortified by it — which is probably why the talk so often comes after the fact.” I invariably ask myself, why? Why is it “never easy”? Why does it make us so uncomfortable? I ask these questions as points of inquiry. I shall not bore you with my opinion. Our laws, which are a reflection of our Judeo-Christian heritage, have at their root an assumption (or expectation) that sexual activity should be confined to adult, heterosexual, monogamous, state (and church) sanctioned marriage, and beyond that for procreation only. In 1897, Oliver Wendell Holmes Jr. observed, “It is revolting to have no better reason for a rule of law than that so it was laid down in the time of Henry IV [1399-1413]. It is still more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from blind imitation of the past.” [notation & emphasis added] Wise and evocative words, it seems to me. Further, any sexual conduct beyond that foundation assumption invariably instigates emotionally charged epithets such as slut, whore, tramp, adulterer, pedophile, philanderer, abuser, and the like – all with the purpose of producing shame and forcing conformity to the socially acceptable norm of previous generations. Add to this, our Puritanical / Victorian notion that nudity / nakedness is inherently sexual, we have mothers who are afraid or embarrassed to breastfeed their infants; we have parents who are fearful of any progress whatsoever toward enlightenment for their children regarding matters sexual. The bottom line here, in this context, is recognition that we must amend the law and our attitudes to define proper public conduct while we remove the government / law from private family affairs. Changes such as this would allow parents to make the best decisions for their children, based on their values, without fear of retribution; the Jones’ choices do not have to agree with the Smith’s choices. Part of the public fascination with Tiger Woods’ recent difficulties springs from the need for titillation with the forbidden topic – in the guise of news, somehow it is OK for consumption. The tragedy of his private life being thrust into the Klieg lights of public scrutiny comes from our judgment of the news nuggets by the metric of our social norms, rather than as a private matter. The news suggests he stepped far beyond the norm; yet, what really matters is between a wife and husband – a private relationship. At the end of the day, unless we can convince enough citizens the law and our attitudes must change, we shall continue fumbling along condemning our children to the lottery of ill-informed choices, and somehow we feel vindication when we excoriate our neighbors for their choices. So, are we going to blindly imitate the past, or are you going to examine the basis and rationale for our laws and our standards of conduct? Clearly, I advocate for the latter, and in this topic, for a more mature, informed and interactive relationship with our children. Let us not blindly imitate the past.

The U.S. Supreme Court agreed this week to hear an appeal by the City of Ontario (California) of a decision by the 9th Circuit Court of Appeals in the case of Quon v. Arch Wireless, Inc. [9CCA 07-55282 (2008); D.C. no.CV-03-00199-SGL]. The Supremes view of this case could have far reaching consequences for all of us who are still employed and use electronic communications at work. The 9th Circuit held in favor of Ontario Police Sergeant Jeff Quon, that text messages sent via a police department pager were protected by a reasonable expectation of privacy, and thus the city’s search of Quon’s text messages violated his 4th Amendment rights against unreasonable search and seizure. Circuit Judge Kim Anita McLane Wardlaw rightly observed, “The extent to which the Fourth Amendment provides protection for the contents of electronic communications in the Internet age is an open question. The recently minted standard of electronic communication via e-mails, text messages, and other means opens a new frontier in Fourth Amendment jurisprudence that has been little explored.” Since oral arguments will not be heard until spring, we may not get the decision until the end of the session. We shall wait patiently to see what the Supremes think.

In my relentless endeavor to illuminate the challenge and threat we face with government encroachment upon our “Life, Liberty, and pursuit of Happiness,” I search, read, listen, argue and try to learn. Volatile, emotionally sensitive topics often thwart or deflect constructive debate. A great deal of the difficulty comes in my ability to find topics that average citizens can related to regarding the issue of the citizen versus the State, or in other terms, private versus public. My latest attempt comes from a curious and interesting Supreme Court ruling – Barnes v. Glen Theatre [501 U.S. 560 (1991)] – an Indiana case involving nude dancing and freedom of expression [1st Amendment]. The Supremes reversed the 7th Circuit Court of Appeals, deciding the state could require / demand that female dancers (no mention of requirements for male dancers) wear pasties over their nipples/areolas and G-strings over their genitalia. The Supremes relied upon analysis of the O’Brien criteria {United States v. O'Brien [391 U.S. 367 (1968)]}, which states that a government regulation of a citizen’s 1st Amendment expression is sufficiently justified:
1. “if it is within the constitutional power of the Government;
2. “if it furthers an important or substantial governmental interest;
3. “if the governmental interest is unrelated to the suppression of free expression; and
4. “if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.”
In Barnes, the Supremes decided the Indiana statute satisfied the O’Brien criteria; the dissenters (4) disagreed. Beyond the law, let us use this case to further the public-private debate. I think we can all agree that the State has a proper, legitimate interest in defining and regulating public conduct. Likewise, although numerous powerful and influential people adamantly disagree, I think most of us would concur that the State has no authority to enter a citizen’s home for similar moral regulation. The question to us is, where is the limit, the boundary, and how stretchable is that boundary? In Barnes, the Supremes considered the adult entertainment theater or bar as a public locale or venue, thus susceptible to State regulation. The Court declared, “Public nudity was considered an act malum en se [wrong in itself],” and noted that it had been so in English common law since 1664. Chief Justice William Hubbs Rehnquist writing for the majority stated, “Public indecency statutes such as the one before us reflect moral disapproval of people appearing in the nude among strangers in public places.” The Court saw a pay-for-entrance, adult-restricted, club, bar or “theater” as a public place. In essence, virtually any establishment other than a private home can be classified as a “public space.” Further, Rehnquist wrote, “[The Indiana nudity statute] and other public indecency statutes were designed to protect morals and public order.” Once again, I am reminded of Oliver Holmes’ wise words noted above. Fortunately, the Court has begun to tip-toe back from such an intrusive interpretation of the law. Justice O’Connor noted a decade later, “A law branding one class of persons as criminal solely based on the State's moral disapproval of that class and the conduct associated with that class runs contrary to the values of the Constitution and the Equal Protection Clause, under any standard of review” [emphasis added] – Lawrence v. Texas [539 U.S. 558 (2003)]. We have a very long way to go in rolling back the Court’s sanction of extraordinary governmental intrusive upon our privacy all in the name of “protecting the morals” of such a fragile, immature and subvert-able citizenry. The Court was drastically wrong in Barnes. I defend absolutely the State’s interest in defining acceptable public conduct, regardless of whether any of us agrees with those public restrictions. One day, we shall return to a proper relationship between the government, and our most fundamental and precious freedoms. For what it is worth, the Court rather cavalierly validated the State’s authority and interest in suppressing a citizen’s freedom of expression; the Supremes were wrong. Unfortunately, the Indiana law (and similar laws in other states) still exist and are occasionally enforced when some socially-conservative politician, prosecutor or police chief wants to make a point that his sensitive moral values are offended and is disgusted that any other citizen might not be as morally grounded as he is. A controlled access club is not a general public location and should be regulated in accordance the associated restrictions. Nudity is quite like a loaded pistol; it hurts no one until it is used. Perhaps one day, citizens will cease peering into other folks homes and being offended by nakedness.

I found a modicum of capacity and decided to read Associate Justice Sonia Sotomayor’s inaugural opinion as a member of the Supremes. The case – Mohawk Industries Inc. v. Carpenter [557 U.S. ___ (2009); no. 08-678] – was marginally of interest in that it dealt with an internal judicial procedural question regarding collateral order appeals of attorney-client privilege rulings – really exciting stuff. Nonetheless, I like her writing style and reasoning, even though Justice Thomas thought the Court a smidge more liberal than his liking – hard to discern the subtlety. So, Sonia gets a pass from moi, not that it really matters a hoot for nuttin’. I look forward to reading more of her work.

News from the economic front:
-- Abu Dhabi has fronted US$10B to Dubai's government, which will pay part of the debt held by conglomerate Dubai World [415] and its property unit, Nakheel. In turn Dubai authorized US$4.1B toward paying Nakheel's Islamic bond obligations. They are still a long way from the US$60B at risk.
-- Citigroup [396, 410] announced it would repay US$20B in bailout money as the bank tries to convince regulators that it is healthy enough to stand on its own. The Treasury backed away from plans to sell a portion of its stake in the banking giant. Further, the IRS has issued an exception to tax rules for the benefit of companies including Citigroup that will allow the bank to retain US$38B in tax breaks that otherwise would decline in value when the government sells its stake to private investors. I am not convinced Citigroup is stable . . . at least by the public signs.
-- Wells Fargo is selling US$10.4B in new stock to repay all US$25B in bailout aid it received from the government at the height of the market meltdown last fall. I can understand and appreciate the banks wanting to get out from under government restrictions, but doing so prematurely might well precipitate a backlash crisis.
-- The government reported that U.S. producer prices rose more than expected in November, lifted by a surge in energy costs – the first increase since November of last year.
-- Credit Suisse will pay US$536M to settle a five-year investigation involving parties subject to U.S. economic sanctions including Sudan, Syria, North Korea and Iran, and their access to the U.S. banking system. This case among others may well be one of the unsung victories in the War on Islamic Fascism . . . and against other bad people.
-- The Wall Street Journal reported that a federal grand jury in Manhattan charged Raj Rajaratnam [409/10] with five counts of conspiracy and six counts of securities fraud related to the insider-trading case involving hedge fund Galleon Group. The grand jury also charged Danielle Chiesi, a former consultant to New Castle Partners LLC, with three counts of conspiracy and seven counts of securities fraud. Rajaratnam and Chiesi are also defendants in an insider-trading complaint filed by the Securities and Exchange Commission.
-- Consumer prices moved higher on energy costs while most other prices were quite modest, suggesting the sluggish economic recovery will keep inflation in check in the months ahead.
-- The U.S. Federal Reserve left its target for the federal-funds rate unchanged at a range of 0% to 0.25%, and will leave rates near zero “for an extended period.” The Fed also acknowledged recent signs that the economy is gaining momentum after its worst slump in decades.
-- After the withdrawal of Swedish boutique carmaker Koenigsegg and Dutch sportscar maker Spyker, General Motors announced it will begin “an orderly wind-down” of Saab – closer to a sad end to a proud company.

Comments and contributions from Update no.417:
Comment from the Blog:
“I find myself unable to resist a background discussion of economics.
“Most of the discussion in the United States is based, knowingly or not, on the theories of Adam Smith (1723-1790), whose work Wealth of Nations (1776) has been used to justify every sort of deregulation and greed. Smith wrote over 230 years ago in a ‘nation of shopkeepers’ (Bartleby attributes the quote to several people, including Smith himself; http://www.bartleby.com/100/777.39.html.) His work deals with a far simpler economy than any developed nation has today, and the most-quoted parts assume honesty by all parties. Thomas Sowell, in his book Basic Economics, points out that Smith had no such faith in his shopkeepers. He quotes page 144 of Wealth of Nations: ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.’ It’s an interesting article; here’s a link:
http://www.typepad.com/services/trackback/6a00d83451b88769e200e553868e848834
I suspect that Smith would not be surprised at the use and abuse of his work.
“Smith did not take into account multi-national corporations, instant communication, or markets the size and style of Wall Street. The methods of a given set of supposed competitors ‘meeting together’ have changed, and the scale of the damage they can do has changed even more. This has made Smith's quote above even more important. If we are to base our thinking on his work, we need to consider the quote above as part of that work. It seems to me that people in important places have found ways to disable or amputate Smith’s ‘invisible hand of the market’.”
My reply to the Blog:
Your observations of Adam Smith’s “An Inquiry into the Nature and Causes of the Wealth of Nations” appear to be quite accurate from my perspective as well. However, the same criticism / observation can be leveled at any historic document including the Constitution of the United States of America, or the Holy Bible for that matter. The key, it seems to me, lies in the interpretation / translation of those historic texts in the context of modern society. As has been pointed out numerous times, the Constitution makes no mention of a citizen’s fundamental right to privacy. Was that because the Framers thought the notion unimportant, or because they considered privacy so fundamental as to be beyond the need to even mention it? The same is true for Smith’s treatise. Just because he was not prophetic enough to see 200+ years into the future does not invalidate his observations. The forces involved in a truly free market are powerful and largely self-correcting. However, as with our laws, the root assumption is people are inherently good and responsive to those market forces. When an unscrupulous individual who has no respect for his fellow man comes along, we invariably experience a Bernie Madoff or Adolf Hitler.
. . . an eMail follow-up:
“I agree with most of what you said, but on second thought I didn't say my piece as well as I might have. My point was that Smith himself apparently did not trust the small-scale capitalists of his day; what I should have clarified is that his mistrust, which I share, has become more important now that we deal with multi-national corporations and with the likes of AIG and General Motors that have grown "too big to fail." The shopkeepers and small industrialists of Smith's time faced poverty if their businesses failed; AIG faced sound if unwelcome advice accompanied by enormous loans.”
. . . and my follow-up reply:
A seemingly appropriate analogy comes in the form of a case to be heard before the Supreme Court next spring regarding the Constitution, the law and modern technology – texting – as the law is slow to adapt to the relentless advance of technology, so too Adam Smith’s notion of capitalism. Yet, when we distill the principles and apply them to modern society, I believe they still have value. The popular notion of “too big to fail” is yet another bastardization by unnatural processes that subverts the underlying principles. If GM, AIG, Citigroup, et cetera, had been allowed to fail, then we would have been closer to Smith’s descriptive model – “the invisible hand” and all.
Intellectual intercourse aside, the broader societal question we face in such discussions remains, how much collateral damage can we tolerate? If it was only the shopkeeper who suffered by his poor choices, I would be OK with that. When millions of people are made to suffer by the irrational and unethical greed of a few bankers and insurance executives, then I find it far less palatable to tolerate the “invisible hand.”

My very best wishes to all. Take care of yourselves and each other.
Cheers,
Cap :-)

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