Although I suspect that I’m probably among the last to read it, I ran across Richard W. Fisher’s excellent speech to the Commonwealth Club of California, earlier today. Called “Storms on the Horizon”, it was delivered May 28 in San Francisco.

I think it’s worth a read by anyone; despite being a few months old at this point, it’s still quite topical. His main focus is on fiscal (as opposed to monetary) policy, which hasn’t been getting very much attention lately. In particular, he concentrates on the issue of unfunded Social Security and Medicare liabilities, and the effect they will have on the overall government budget deficit.

His general premise — that both Social Security and Medicare, but especially the latter, cost tremendous amounts of money — is not very controversial. Where he splits from the current administration’s party line is over whether we’ll have the ability to pay for them in the not-too-distant future without going into the red.

In keeping with the tradition of rosy scenarios, official budget projections suggest [the current] deficit will be relatively short-lived. They almost always do. […] If you do the math, however, you might be forgiven for sensing that these felicitous projections look a tad dodgy. To reach the projected 2012 surplus, outlays are assumed to rise at a 2.4 percent nominal annual rate over the next four years — almost double the rate of the past seven years. Using spending and revenue growth rates that have actually prevailed in recent years, the 2012 surplus quickly evaporates and becomes a deficit, potentially of several hundred billion dollars.

That deficit is driven in large part by the costs of Social Security and Medicare, which — especially when viewed long-term — are staggering to behold. Fisher gives the net present value of only the unfunded portion of both programs as $99.2 trillion USD; if paid yearly (‘pay-as-you-go’) instead of up front, as they would in a balanced budget, they represent 68% of current income tax revenue.

If that doesn’t give you immediate pause, it should. Particularly as we seem to be headed for an economic downturn, that 68% will only increase if income tax receipts decline. The bottom line is brutal:

No combination of tax hikes and spending cuts, though, will change the total burden borne by current and future generations. For the existing unfunded liabilities to be covered in the end, someone must pay $99.2 trillion more or receive $99.2 trillion less than they have been currently promised. This is a cold, hard fact. The decision we must make is whether to shoulder a substantial portion of that burden today or compel future generations to bear its full weight.

Or, of course, the third path, the one no politician wants to mention: cut back drastically on benefits. In reality I think it’s inevitable that this will be a major part of any solution. Nothing else will work, particularly if there’s a serious recession or depression. Fat chance selling the American public on that, though, especially those who have spent decades paying into a system that was supposedly for their retirement, but was actually being looted by Congress for other purposes.

Fisher warns against the temptation presented by the Mint:

We know from centuries of evidence in countless economies, from ancient Rome to today’s Zimbabwe, that running the printing press to pay off today’s bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid. […] Even the perception that the Fed is pursuing a cheap-money strategy to accommodate fiscal burdens, should it take root, is a paramount risk to the long-term welfare of the U.S. economy. The Federal Reserve will never let this happen. It is not an option. Ever. Period.

This at least is reassuring — or, rather, it should be. But as many have noted, the Fed has essentially been playing the cheap-money game for a while, and continues to play it today, by stoking the bubble economy with bargain-basement interest rates. While this admittedly isn’t Zimbabwe or Weimar Republic-style money printing, it certainly undermines the Fed’s credibility when it claims to have long-term health rather than short-term painlessness in mind.

Towards the end of the speech, Fisher points the finger at the place where the buck really stops: voters.

When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them. You are the ones who let them get away with burdening your children and grandchildren rather than yourselves with the bill for your entitlement programs.

However, I take a little issue with his conclusion:

Yet no one, Democrat or Republican, enjoys placing our children and grandchildren and their children and grandchildren in harm’s way. […] You have it in your power as the electors of our fiscal authorities to prevent this destruction.

While I appreciate the sentiment (and his need to end on something other than a doom-and-gloom note), I see no evidence to support his assertion that either Democrats, Republicans, or the American public at large have any problem burdening their children and grandchildren in order to get a check cut today. Over and over again, we have seen just that happen. Voters are only too happy to pay Tuesday for their hamburgers today.

The voters have it in their power to prevent a disastrous fiscal policy crisis from taking shape, but they haven’t done so thus far, and I see little reason why that will change at the 11th hour.

Having finished Gang Leader for a Day (someday soon I’ll get around to writing up some of my final thoughts), I’ve moved onto Jared Diamond’s Collapse for my sitting-in-airports reading. Although I’ve barely made it through the introduction, so far I’m impressed. Despite his tendency to be longwinded — the major criticism of Guns, Germs, and Steel that I agree with — he seems to have a good grasp of the complex issues underlying modern environmental issues.

There’s a choice quote in the first chapter that I wanted to highlight. Diamond quotes environmentalist David Stiller, writing about the nature of the corporation as an entity.

“ASARCO [American Smelting and Refining Company {…}] can hardly be blamed [for not cleaning up an especially toxic mine that it owned]. American businesses exist to make money for their owners; it is the modus operandi of American capitalism. {…} Successful businesses differentiate between those expenses necessary to stay in business and and those more pensively characterized as ‘moral obligations.’ Difficulties or reluctance to understand and accept this distinction underscores much of the tension between advocates of broadly mandated environmental programs and the business community.

(Text in square brackets is Diamond’s, in curly braces is mine.)

This is a good point and bears much repeating. Corporations aren’t immoral, they’re amoral. Asking corporations to act ‘morally’ is like asking water to flow uphill. We’d do better to make the behaviors that we want — protecting the environment, treating workers fairly, whatever they may be — profitable, either by creating genuine incentives, or by punishing noncompliance, than to ask nicely and cluck our tongues when our toothless requests are ignored.

On the other side of the coin, Diamond seems to also appreciate that as simple as corporations are, actual human beings are not.

Whenever I have actually been able with Montanans, I have found their actions to be consistent with their values, even if those values clash with my own or those of other Montanans. That is, for the most part Montana’s {environmental} difficulties cannot be simplistically attributed to selfish evil people knowingly and reprehensibly profiting at the expense of neighbors. Instead, they involve clashes between people whose own particular backgrounds and values cause them to favor policies differing from those favored by people with different backgrounds and values.

Together, I think these two statements could be applied truthfully and insightfully to a wide range of current issues. The motives of other people, including and perhaps especially those with whom we disagree strongly, are seldom as simplistic as they appear. The motives of abstract, non-human actors like corporations, however, despite being made up of people, are often relatively simple.

It’s a mistake to reify corporations, and it’s equally a mistake to treat other real people like automatons. Both mistakes may produce what seem to be good predictions at first, but will fail in the long run; corporations don’t have a moral center, and will frequently do things that nobody in them as an individual would ever consider doing themselves, and virtually no one gets up in the morning intent on doing what they percieve to be evil.

If we want to produce realistic, workable solutions to pressing problems, one of our first steps has to be eliminating fallacious assumptions, no matter how satisfying (for example, perceiving those we disagree with as evil morons) they may be.

While poking around on Wikipedia I came across this interesting graphic. It’s a map of the Regional Bell Operating Companies (RBOCs), the regional telecom monopolies — I’m sorry, I meant incumbent carriers — showing their coverage of the U.S. both today and back at deregulation in 1988. It’s worth taking a look at.

The color-coding represents their territory coverage today, while the shaded lines mark boundaries between RBOCs at deregulation.

Ironically, there are fewer of them today than there were in 1988. That’s right; for all the effort that went into deregulating Ma Bell, she’s putting herself back together again, Terminator-style.

Consider the southeast and midwest, which has been subject to the greatest amount of reconsolidation. Originally, there were three RBOCs: BellSouth, Southwestern Bell, and Ameritech. BellSouth had the southeast from Kentucky to Florida; Southwestern Bell had the southern part of the midwest from Missouri to Texas; and Ameritech had the Great Lakes region, from Wisconsin east to Ohio.

Today, you’ll find scant evidence of those companies — they’re all parts of the AT&T empire once more, along with the former California and Nevada RBOC, Pacific Telesis. The rest of the nation is basically split between Quest in the West and Verizon in the East.

It’s looking more and more like 1988 will be remembered as the high-water mark for telco competition in the U.S., with a total of eight regional operating companies. Now, we’re down to three.

It’s as though the U.S., with a few years to dull the bad memories of high rates and rented phones, has forgotten what life under a monopoly carrier was like. If we’re not careful — especially with the evisceration of many pro-competition policies in the fallout from USTA v. FCC (2004)¹ — we’re going to end up back in some places we’d probably rather not return to.

Footnote 1: One of the best summaries of the issues at play in USTA v. FCC was written in early 2004, before the USSC declined to take up the case. It’s “USTA v. FCC: A Decision Ripe for the Supremes” by Fred R. Goldstein and Jonathan S. Marashlian. Here’s the money shot:

Of course, we know that’s exactly what the Supreme Court did, or rather declined to do; the decision wasn’t taken up for review, the DC Circuit’s pro-RBOC decision stood, and years of progress in bringing competition to telecommunications at the local level disappeared virtually overnight.

Alex Steffen has a nice essay on the WorldChanging site where he sums up the problem I’ve always had with some self-described ‘survivalists’ and many ‘apocalyptic environmentalists’:

But real apocalypses are sordid, banal, insane. If things do come unraveled, they present not a golden opportunity for lone wolves and well-armed geeks, but a reality of babies with diarrhea, of bugs and weird weather and dust everywhere, of never enough to eat, of famine and starving, hollow-eyed people, of drunken soldiers full of boredom and self-hate, of random murder and rape and wars which accomplish nothing, of many fine things lost for no reason and nothing of any value gained. And survivalists, if they actually manage to avoid becoming the prey of larger groups, sitting bitter and cold and hungry and paranoid, watching their supplies run low and wishing they had a clean bed and some friends. Of all the lies we tell ourselves, this is the biggest: that there is any world worth living in that involves the breakdown of society.

It’s not the main thrust of the essay (although it’s worth reading anyway), but when I read it, I felt like he’d been reading my mind. It’s easy to look at the range of problems facing the world and fall into despair, or worse, self-hate. And it’s a short step from worrying about catastrophe to actively wishing for it.

Which is not to say that we shouldn’t consider or plan for terrible scenarios, we just need to evaluate them rationally and not fall into the trap of being seduced by doomer porn, and believe that such catastrophes won’t affect us negatively.

We have some major challenges facing us as a civilization in the next generation or two; Sir David Omand, former head of the British National Security Agency, put them into three major groups. There are political threats, including wars, terrorism, and governmental de-stabilization by other groups; there are environmental threats, including the end of petroleum fuels, global warming, and pollution; and finally there are economic threats, including a “meltdown” of the global economy.

Unfortunately it’s rare for more than one of these problems to capture the public’s attention at once. We tend to fixate on one issue — sometimes to the point of obsession, as in the case of the ultra-survivalists and ‘doomers’ — while letting the other ones slide, then get bitten in the proverbial ass and fix our attention somewhere else. It’s important that we keep a steady eye on all the issues, but not get so caught up in any of them that we despair completely.

Just in case anyone thought that mind-boggling ignorance and gross stupidity was restricted to members of the U.S. government and civil service, this story out of Russia, reported by Ars Technica will disabuse you of the notion. Apparently they want to impose a mandatory registration and licensing regime on all consumer Wifi gear, under penalty of confiscation:

[T]he government agency responsible for regulating mass media, communications, and cultural protection has stated that users will have to register every WiFi-enabled device with the government […] registration could take as long as ten days for standard devices like PDAs and laptops and […] it intends to confiscate devices that are used without registration.

The Ars story references a Russian source, Fontanka, but it’s (unsurprisingly) in Russian.

Although it’s easy to go for the censorship-conspiracy angle, I’m not sure that there’s as much evidence for that interpretation as there is for plain old public-sector incompetence:

The Fontanka.ru article quotes an industry specialist who points out that the government agency behind the policy is run by a former metallurgic engineer who likely has no clue about many of the technical issues overseen by his organization.

It’s almost heartwarming, how much we have in common.

The Financial Times has a very interesting article on the relationship — or in this case, lack thereof — between population growth and prosperity. It astounds me a little that any of their findings would be surprising to a first-worlder in 2008, but I’ve heard enough people lament the population decline in Japan and Western Europe that this obviously isn’t the case.

There are two important lessons here. One is that we should always look at per capita, rather than overall, production when measuring the success or failure of various economic policies. Any policy that produces a higher GDP at the expense of a lower per-capita figure is stupid, since it’s the per-capita figure that’s linked most intimately with standards of living. Lesson two is that policies that are based on continuous population growth just aren’t sustainable, and we need to get rid of them (or at least rethink them) before we hit the inflection point and they become untenable. What we need not to do is view the population decline itself as a problem, because it’s not. It’s taking population growth as a given that’s the mistake.

Countries with declining populations, or with populations that may begin to decline soon, have a unique opportunity to consolidate standards-of-living gains and create new social structures that aren’t predicated on pumping out offspring (and consuming non-renewable resources) by the bushel-basket. This is nothing but good for people living in those areas, provided the transition is managed thoughtfully.

Conservative political strategist and blogger Patrick Ruffini has an interesting insider’s take on the fatal flaw of the Romney strategy. It was written on February 2nd, and seems even more relevant now — with Super Tuesday in the rear-view mirror — than it did then.

Huckabee and McCain represent two very distinct sides of both the Republican party and the ‘conservative’ movement in general. Huckabee is traditional and appeals to the base; McCain appeals to moderates and fence-sitters. That they are fundamentally different candidates is well-understood; this has basically been the nature of the Republican party since 1980 or so, and candidates’ overall success has basically been measured by how well they reconcile these two groups.

Enter Mitt Romney: onetime moderate, blue-state governor, Yankee Republican, entrepreneur. Realizing perhaps that it would be impossible for him to ‘out-liberal’ McCain without opening himself to accusations of being the Republican answer to Joe Lieberman, he made the strategic choice to place himself to the right of McCain and compete instead for the social conservative vote.

I thought and continue to think that this is a move requiring a whole lot of cojones. I’m not sure it was a good move, but you have to at least appreciate the inherent audacity. In theory, it’s pretty brilliant, but as good old Carl von Clausewitz once said, “Theory becomes infinitely more difficult as soon as it touches the realm of moral values.”

McCain is the Coca-Cola of GOP candidates, always performing at a consistent 30-40% … McCain does well in swing counties and liberal-leaning metro areas, but surprisingly, he doesn’t tank in rural, Evangelical areas. But Romney does.

My suspicion right now is that history will remember Romney’s bid as an interesting, but ultimately unsuccessful, gamble. What he probably could have been best at — wooing moderate voters and staking out a reasonable plank on both social and fiscal issues, backed with lots of past performance — was crushed as McCain and Obama both moved towards the center from opposite directions.

EDITED TO ADD: Romney dropped out earlier this afternoon, but has currently not pledged his delegates to any other candidate.

Bruce Schneier has an excellent short essay on the latest fallacy being parroted by the ‘homeland security’ apparatchiks: ‘security versus privacy.’

Security and privacy are not opposite ends of a seesaw; you don’t have to accept less of one to get more of the other. Think of a door lock, a burglar alarm and a tall fence. … The debate isn’t security versus privacy. It’s liberty versus control.

The idea that security and privacy are at either ends of a spectrum, that some tradeoff is always required or a ‘balance’ always struck, is, he argues quite convincingly, completely false. Most good security actually increases privacy, rather than diminishes it.

The problem is conflating ‘security’ with ‘control.’ People who have spent too long in government, or other organizations with strict top-down management styles, apparently think that the only path to security involves giving them control of everything. It’s the worst kind of paranoid micro-management, and it’s directly at odds with democracy, which is not a top-down organization — quite the opposite.

It’s the mindset that imagines that the easiest way to prevent aircraft hijackings is to compile dossiers on every passenger aboard, rather than working to make the planes harder to hijack. It’s the mindset that wants to check for IDs and confiscate shampoo rather than screen for threatening behaviors that match actual terrorist profiles.

The worst part, the biggest irony of it all, is that this ‘security’ doesn’t even work very well. It creates inflexible chains of command, concentrates vulnerable points of failure, and tends to be reactive rather than proactive. It wastes resources and distracts from the real issues. And that’s just the tip of the iceberg.

However, most people have heard the security/privacy dichotomy so many times that they’ve come to accept it as truth, even if there’s not really anything behind it. It has the ring of truthiness to it. That’s why it’s so dangerous.

Although I’m obviously several days too late to participate in the whole “Blog for Choice” party — not really due to lack of interest but more because I really felt like I had nothing to add — I couldn’t pass up the opportunity to pass along one link, compliments of baby_balrog on MetaFilter:

“Is Abortion Murder” by Graham Spurgeon.

I find it interesting because it’s exactly the sort of argument I’d never really try, or be able to, make. Social-utility arguments? Sure. Legal arguments? Sure. Rights-based arguments? Definitely. But religion-based arguments? I wouldn’t know where to start.

And that, I think, is part of the problem. While listening to a recent debate between the president of the National Organization for Women (NOW), and some Washington flack for NRLC, it became apparent to me that each group was speaking its own language. There wasn’t even the semblance of discussion, and certainly no possibility of winning anyone over who wasn’t already convinced, because each was speaking in the language that their supporters know and understand.

When someone from Planned Parenthood, NOW, or NARAL speaks, it’s generally a pretty safe bet that they’re going to emphasize the right of an individual to control their own body, and perhaps the personal and social cost of unwanted pregnancies and children. When a pro-life advocate speaks, it’s almost always about “babies.” Occasionally there’ll be hints made at promiscuous sex and slut-punishing, but usually the emphasis is on those “unborn children” and the inherent value of potential human life.

Spurgeon’s essay bridges this gap a little. It’s a pro-choice argument, but written entirely in Biblical terms. While I can’t comment or critique his scriptural references, it’s at least a different approach.

PollingReport.com has a nice selection of national opinion polls on the Democratic race for the Presidential nomination. Most of them show Clinton over Obama, about 40% to 30%, with Edwards a distant third with ~10% and then minor candidates and ‘unsure’ making up the remainder.

Obama does seem to be closing the gap, though I’m not sure it’ll be enough to actually bring in a win. The AP shows him increasing his lead almost 10 points (from 23% on 12/5/07 to 33% on 1/17/08) over the holidays, within reach of the front-runner.

The really odd poll in the bunch is one conducted by “Financial Dynamics” on Jan 10-12, which showed Clinton at 38% and Obama at 35%; essentially equal when uncertainty is taken into account. While it’s hard to be sure, the difference between these results and the AP / USA Today polls seems to be that it didn’t allow ‘Unsure’ as a choice; it forced respondents to pick one or the other. I think Clinton benefits from name-recognition here, but that doesn’t necessarily translate into votes, since many ‘unsure’ voters may not bother to vote in the primary anyway.

If slick Flash applets are more your cup of tea, USA Today has a neat Presidential nomination poll tracker (requires JavaScript and Flash). Its ‘poll of polls’ puts Obama strongly in the lead in South Carolina, still behind in Florida, approaching parity in California, and still significantly behind in New Jersey and New York (but with an upwards trend).

There seems to be a lot of speculation going around that the current focus on the economy will hurt Obama and help Clinton, but so far the polls don’t seem to be reflecting that. If he wins in South Carolina, as seems likely, Clinton may find it very difficult to maintain her national lead going into the remaining primaries and Super Tuesday.