"No one … could possibly say that there is no chance of a catastrophic outcome" JPMorgan Chase CEO Jamie Dimon told analysts last week.
The more likely scenario that investors are preparing for is that a temporary deal is struck to lift the debt ceiling. But such a makeshift plan is unlikely to allow the U.S. to maintain its AAA grade with bond rating companies. Citigroup analysts say the odds are 50-50 that the U.S. will be demoted to an AA rating for the first time ever.
Such a downgrade could lead to a temporary market panic
Tuesday, July 26, 2011
I'm in good company
JP Morgan's CEO agrees with me:
Why I'm worried
I want to be very clear about exactly what kind of alarm I'm raising. We are not headed inexorably towards global economic catastrophe. We are heading for a global catastrophe if Congress does not raise the debt ceiling before August 2 (or thereabouts -- there is some disagreement over the exact timing, but it doesn't matter. We actually will reach the point of no return earlier than that.) So avoiding catastrophe (for the time being) is very simple: raise the debt ceiling. That's it.
Normally this would not be an issue at all. The debt ceiling has been raised 90 or so times since it was first created back in WWI. What's different this time is that we have an opposition party in Congress that is determined to see to it that Obama is a one-term president by any means necessary. Against this we have a president who looks back as a role model on Bill Clinton successfully standing up to Newt Gingrich in the mid-90's. And we have a ticking clock. That is a very dangerous combination.
The other difference this time is that the stakes are much, much higher. Shutting down the U.S. government is a colossal pain in the ass, but ultimately not a long-term problem. Defaulting on the debt, which will happen if the debt ceiling isn't raised, will be vastly worse. It will be be the worst thing that has happened to the world economy since WWII, and possibly the worst in living memory. No one knows. But since WWII, all of the mathematical models that underpin the world's economy are based on the assumption that the U.S. will not default on its debt. If that assumption is discharged, all bets are off. No one knows exactly what will happen, but whatever it is it will not be good for most people. There will be runs on banks, unemployment, foreclosures, that will make 2008 look like the good old days.
I still believe that Washington will ultimately come through and figure this out. But the clock is ticking, and right now things are not looking good. The chances of a worst-case scenario are low, but they are not zero. And the more time goes by the higher the probability becomes, until at some point we will reach a tipping point and by then it will be too late.
Exactly where that tipping point will be is also impossible to determine. Frankly, I'm surprised the markets have not reacted more negatively to the situation. There are two possibilities: either someone out there knows something I don't, or the world is being complacent. There is ample precedent for complacency. Ironically, it is the firm belief that nothing bad will happen that could ultimately prove to be one of the major contributing factors to something bad actually happening. That is why I am sounding this alarm. It's not because I want to be a doom sayer, it's because I'm hoping that if enough people get scared enough and start making enough noise that that will contribute to solving the problem, at least in the short term.
[UPDATE:] For a contrary view, read this. And for a counter-contrary view, see this.
Normally this would not be an issue at all. The debt ceiling has been raised 90 or so times since it was first created back in WWI. What's different this time is that we have an opposition party in Congress that is determined to see to it that Obama is a one-term president by any means necessary. Against this we have a president who looks back as a role model on Bill Clinton successfully standing up to Newt Gingrich in the mid-90's. And we have a ticking clock. That is a very dangerous combination.
The other difference this time is that the stakes are much, much higher. Shutting down the U.S. government is a colossal pain in the ass, but ultimately not a long-term problem. Defaulting on the debt, which will happen if the debt ceiling isn't raised, will be vastly worse. It will be be the worst thing that has happened to the world economy since WWII, and possibly the worst in living memory. No one knows. But since WWII, all of the mathematical models that underpin the world's economy are based on the assumption that the U.S. will not default on its debt. If that assumption is discharged, all bets are off. No one knows exactly what will happen, but whatever it is it will not be good for most people. There will be runs on banks, unemployment, foreclosures, that will make 2008 look like the good old days.
I still believe that Washington will ultimately come through and figure this out. But the clock is ticking, and right now things are not looking good. The chances of a worst-case scenario are low, but they are not zero. And the more time goes by the higher the probability becomes, until at some point we will reach a tipping point and by then it will be too late.
Exactly where that tipping point will be is also impossible to determine. Frankly, I'm surprised the markets have not reacted more negatively to the situation. There are two possibilities: either someone out there knows something I don't, or the world is being complacent. There is ample precedent for complacency. Ironically, it is the firm belief that nothing bad will happen that could ultimately prove to be one of the major contributing factors to something bad actually happening. That is why I am sounding this alarm. It's not because I want to be a doom sayer, it's because I'm hoping that if enough people get scared enough and start making enough noise that that will contribute to solving the problem, at least in the short term.
[UPDATE:] For a contrary view, read this. And for a counter-contrary view, see this.
Maybe you don't realize how serious this is
It occurred to me that maybe most people don't actually realize just how serious the fiscal situation in the U.S. is. They have some idea that August 2 is not really a hard deadline, that there are some games that can be played with the books and delaying social security payments and whatnot. If you think this, if you are not seriously worried, you need to listen up because you do not understand the situation.
It is not the case that on August 2 the U.S. hits its debt limit ceiling. The U.S. hit its debt limit ceiling back in May. Since then we've been running on cash reserves. What happens on August 2 is that the United States of America runs out of cash. In the absence of at least some additional short-term borrowing, a default is inevitable. Yes, in the aggregate, there is more than enough money coming in to service the debt, but the timing is wrong. Tax revenues are not a steady stream, they come in sporadically, and the next big batch of revenue is not expected until after the next round of debt payments are due. The U.S. is quite literally living paycheck-to-paycheck, and on August 2 we hit the wall hard.
I hope I do not have to point out the obvious, that if we do hit the wall hard, the result will be that even the sporadic tax revenues will shrink because we will be immediately embroiled in Great Depression II, which will make the first one look like a cake walk by comparison. The actual bankruptcy of the United States of America, that is, a situation where total tax revenues are not enough to cover the debt even in the aggregate, is not out of the question.
On August 3, if Congress does not get its act together, there are going to be a whole lot of folks who will wake up and find themselves with no job, no cash, and very shortly thereafter, no home and no prospects, and they will say, "What the fuck just happened?" Now you know. Tell your friends. Call your senators and congresscritters, ESPECIALLY if they are tea partiers. This is serious, serious shit, folks, and time is running out.
[See my follow-up here.]
It is not the case that on August 2 the U.S. hits its debt limit ceiling. The U.S. hit its debt limit ceiling back in May. Since then we've been running on cash reserves. What happens on August 2 is that the United States of America runs out of cash. In the absence of at least some additional short-term borrowing, a default is inevitable. Yes, in the aggregate, there is more than enough money coming in to service the debt, but the timing is wrong. Tax revenues are not a steady stream, they come in sporadically, and the next big batch of revenue is not expected until after the next round of debt payments are due. The U.S. is quite literally living paycheck-to-paycheck, and on August 2 we hit the wall hard.
I hope I do not have to point out the obvious, that if we do hit the wall hard, the result will be that even the sporadic tax revenues will shrink because we will be immediately embroiled in Great Depression II, which will make the first one look like a cake walk by comparison. The actual bankruptcy of the United States of America, that is, a situation where total tax revenues are not enough to cover the debt even in the aggregate, is not out of the question.
On August 3, if Congress does not get its act together, there are going to be a whole lot of folks who will wake up and find themselves with no job, no cash, and very shortly thereafter, no home and no prospects, and they will say, "What the fuck just happened?" Now you know. Tell your friends. Call your senators and congresscritters, ESPECIALLY if they are tea partiers. This is serious, serious shit, folks, and time is running out.
[See my follow-up here.]
Monday, July 25, 2011
This might have some relevance...
The other day I wondered out loud why the federal government was taking such a keen interest in Aaron Swartz and going out of its way to prosecute him for a "crime" despite having no one willing to step up and claim to be the victim. Well, here's a clue:
There is no greater crime in the U.S. than posing a credible threat of making powerful people look bad.
(Hm, maybe I'd better be more careful what I say.)
... [Swartz] worked with Shireen Barday at Stanford Law School to assess “problems with remunerated research” in law review articles (i.e., articles funded by corporations, sometimes to help them in ongoing legal battles), by downloading and analyzing over 400,000 law review articles to determine the source of their funding. The results were published in the Stanford Law Review.
There is no greater crime in the U.S. than posing a credible threat of making powerful people look bad.
(Hm, maybe I'd better be more careful what I say.)
Are we bankrupt yet?
Yeah, pretty much:
[UPDATE:] Some people have disputed Wilson's results. It's important to understand that the U.S. actually hit its debt limit back in May. Since then it has been paying its bills with cash on hand. Yes, there is money coming in, but it's not a steady flow. It comes in batches. You can see the spikes in Wilson's graph. In the aggregate there is enough money coming in to cover interest payments, but because of the way the timing works out, default is inevitable without at least some additional short-term borrowing. This is serious shit. On August 2 we really do hit the wall hard.
Here's one way to express how catastrophically screwed the U.S. government's finances are: If the entire U.S budget were cut to zero, effective immediately—the military, all entitlements, the electricity bill for the Capitol—there still wouldn't be enough money to cover the payments on old debt that come due every day.
[UPDATE:] Some people have disputed Wilson's results. It's important to understand that the U.S. actually hit its debt limit back in May. Since then it has been paying its bills with cash on hand. Yes, there is money coming in, but it's not a steady flow. It comes in batches. You can see the spikes in Wilson's graph. In the aggregate there is enough money coming in to cover interest payments, but because of the way the timing works out, default is inevitable without at least some additional short-term borrowing. This is serious shit. On August 2 we really do hit the wall hard.
Sunday, July 24, 2011
Glenn Greenwald to the rescue
I wanted to write something about the Norwegian terrorist attacks but couldn't come up with anything that didn't sound hackneyed. Good thing I have Glenn Grenwald to fall back on.
As usual with Greenwald, it's worth reading the whole thing.
That Terrorism means nothing more than violence committed by Muslims whom the West dislikes has been proven repeatedly. When an airplane was flown into an IRS building in Austin, Texas, it was immediately proclaimed to be Terrorism, until it was revealed that the attacker was a white, non-Muslim, American anti-tax advocate with a series of domestic political grievances. The U.S. and its allies can, by definition, never commit Terrorism even when it is beyond question that the purpose of their violence is to terrorize civilian populations into submission. Conversely, Muslims who attack purely military targets -- even if the target is an invading army in their own countries -- are, by definition, Terrorists.
As usual with Greenwald, it's worth reading the whole thing.
The government is out of control, part N
I'm starting to lose count of the number of "government spinning wildly out of control" stories I've linked to here. It's shit like this that makes me sympathize with the Tea Party's desire to shrink the federal government:
Sure gets the blood boiling.
Except... wait, this is the Wall Street Journal. The Wall Street Journal is owned by Rupert Murdoch. Rupert Murdoch is not known for adhering to the very highest levels of journalistic ethics. Could it be that there's some, uh. spinning going on here? After all, you can't trust anyone any more.
Invoking Bobby Unser sure sounds like it's designed to tug at the heartstrings of the NASCAR set. Could there be another side to this story? Apparently not. The Salon report makes the incident sound even more egregious than the WSJ account, and Salon is not exactly known for its conservative bias.
All of which leads me to conclude that the real problem we have in the U.S. is that we seem to have abandoned every last vestige common sense.
In 2009, [Eddie Leroy Anderson of Craigmont, Idaho] loaned his son some tools to dig for arrowheads near a favorite campground of theirs. Unfortunately, they were on federal land... [and] the Archaeological Resources Protection Act of 1979 ... makes it a felony punishable by up to two years in prison to attempt to take artifacts off federal land without a permit.
There is no evidence the Andersons intended to break the law, or even knew the law existed, according to court records and interviews. But the law ... doesn't require criminal intent...
Faced with that reality, the two men, who didn't find arrowheads that day, pleaded guilty to a misdemeanor and got a year's probation and a $1,500 penalty each.
...
As federal criminal statutes have ballooned, it has become increasingly easy for Americans to end up on the wrong side of the law. Many of the new federal laws also set a lower bar for conviction than in the past: Prosecutors don't necessarily need to show that the defendant had criminal intent. [Emphasis added.]
These factors are contributing to some unusual applications of justice. Father-and-son arrowhead lovers can't argue they made an innocent mistake. A lobster importer is convicted in the U.S. for violating a Honduran law that the Honduran government disavowed. A Pennsylvanian who injured her husband's lover doesn't face state criminal charges—instead, she faces federal charges tied to an international arms-control treaty.
Sure gets the blood boiling.
Except... wait, this is the Wall Street Journal. The Wall Street Journal is owned by Rupert Murdoch. Rupert Murdoch is not known for adhering to the very highest levels of journalistic ethics. Could it be that there's some, uh. spinning going on here? After all, you can't trust anyone any more.
Last September, retired race-car champion Bobby Unser told a congressional hearing about his 1996 misdemeanor conviction for accidentally driving a snowmobile onto protected federal land, violating the Wilderness Act, while lost in a snowstorm. Though the judge gave him only a $75 fine, the 77-year-old racing legend got a criminal record.
Invoking Bobby Unser sure sounds like it's designed to tug at the heartstrings of the NASCAR set. Could there be another side to this story? Apparently not. The Salon report makes the incident sound even more egregious than the WSJ account, and Salon is not exactly known for its conservative bias.
All of which leads me to conclude that the real problem we have in the U.S. is that we seem to have abandoned every last vestige common sense.
Wednesday, July 20, 2011
"Shoot the nigger!" is Constitutionally protected speech
So says the 9th Circuit court of appeals (at least if the LA Times is to be believed):
Of course, the Times spelled "nigger" as "r-a-c-i-s-t s-l-u-r."
So let me see if I've got this straight. If I say, "I'm going to shoot the nigger," that is a felony threat against the president. But if I simply urge other people to "shoot the nigger" that is Constitutionally protected free speech. Have I got that right?
So does that mean that if Jeb Bush ever ends up in the White House (God forbid) that I can with impunity call on people to "shoot the redneck" as long as I get drunk first? Oh happy day.
A ... man who posted racial epithets and a call to 'shoot' Barack Obama on an Internet chat site was engaging in constitutionally protected free speech, a federal appeals court ruled Tuesday in overturning his criminal conviction.
Walter Bagdasarian was found guilty two years ago of making threats against a major presidential candidate in comments he posted on a Yahoo.com financial website after 1 a.m. on Oct. 22, 2008, as Obama's impending victory in the race for the White House was becoming apparent. Bagdasarian told investigators he was drunk at the time. [Emphasis added. See below.]
[T]he U.S. 9th Circuit Court of Appeals overturned [his] conviction Tuesday, saying Bagdasarian's comments were "particularly repugnant" because they endorsed violence but that a reasonable person wouldn't have taken them as a genuine threat.
The observation that Obama "will have a 50 cal in the head soon" and a call to "shoot the [nigger]" weren't violations of the law under which Bagdasarian was convicted because the statute doesn't criminalize "predictions or exhortations to others to injure or kill the president," said the majority opinion written by Judge Stephen Reinhard.
Of course, the Times spelled "nigger" as "r-a-c-i-s-t s-l-u-r."
So let me see if I've got this straight. If I say, "I'm going to shoot the nigger," that is a felony threat against the president. But if I simply urge other people to "shoot the nigger" that is Constitutionally protected free speech. Have I got that right?
So does that mean that if Jeb Bush ever ends up in the White House (God forbid) that I can with impunity call on people to "shoot the redneck" as long as I get drunk first? Oh happy day.
Geek corner: A C puzzle
A bucket full o' bits to the first person who can correctly answer this question without actually running the program: what is the output of the following C program:
Hint: It's not "0 0".
More info, particularly in the comments. Sometimes it's a wonder that anyone manages to write working code in C. (That anyone can write working C++ is nothing short of miraculous.)
#include
main() {
unsigned int i = 0;
unsigned short s = 0;
int x = -1;
printf("%d %d\n", x>i, x>s);
}
Hint: It's not "0 0".
More info, particularly in the comments. Sometimes it's a wonder that anyone manages to write working code in C. (That anyone can write working C++ is nothing short of miraculous.)
Tuesday, July 19, 2011
Obama endorses DOMA repeal!
I've said on a number of occasions that I'm disappointed in the extent to which the policies of the Obama administration have tracked those of the Bush administration. So I have to give credit where it's due: Obama, despite previous waffling, has endorsed the Feinstein-sponsored repeal of the Defense of Marriage Act. That is clearly not something George Bush ever would have done. Kudos!
The government really is wildly out of control
They have indicted Aaron Swartz, one of the co-founders of Reddit, for downloading scholarly articles form the internet:
I've had firsthand personal experience in how hard it is to get prosecutors to file charges against someone even when there is a victim willing to step up and say they've been victimized. That they would go to the effort of prosecuting someone like Aaron without a victim is simply mind boggling. Either these people are complete morons, or there's something sinister going on behind the scenes.
Here is JSTOR's statement about the case.
Shocking news: Moments ago former Demand Progress Executive Director Aaron Swartz was indicted by the US government. As best as we can tell, he is being charged with allegedly downloading too many journal articles from the Web. The government contends that downloading so many journal articles constitutes felony computer hacking and should be punished with time in prison. We disagree.
The charges are made all the more senseless by the fact that the alleged victim has settled any claims against Aaron, explained they've suffered no loss or damage, and asked the government not to prosecute.
I've had firsthand personal experience in how hard it is to get prosecutors to file charges against someone even when there is a victim willing to step up and say they've been victimized. That they would go to the effort of prosecuting someone like Aaron without a victim is simply mind boggling. Either these people are complete morons, or there's something sinister going on behind the scenes.
Here is JSTOR's statement about the case.
This is why I'm worried
I still believe that Congress will figure out a way to increase the debt ceiling, but it's hard to see how it's going to get done in light of facts like these:
Funny thing is, I actually sympathize with Rokita's basic sentiment. But, oh my God, does he (and, more to the point, his supporters) seem to have no freakin' clue what kind of fire he's playing with.
[M]any Republican House members are absolutely genuine in their adamant belief that stopping an increase in the debt ceiling -- an archaic relic from World War I -- that has been raised dozens and dozens of times without incident -- is a good way to combat deficits, which they truly believe are about to turn America into Greece. This view seems particularly pronounced among the 87 Republican freshmen (who together account for nearly 40 percent of the entire GOP conference) who were elected last fall. To many of them, the debt ceiling is a new concept; they haven't been in Congress for years, routinely voting to raise it. What's more, many of these freshmen are also convinced that the deficits that so upset them are the result of their own party's unwillingness in the past to stand firm at moments just like this one.
...
Perhaps the best example of the resistance GOP leaders will face when they push a deal comes from Rep. Todd Rokita, a freshman from Indiana. In an interview with ABC News' "Top Line" on Monday, Rokita said that even $4 trillion in immediate cuts -- three times the amount that is apparently now being discussed by GOP leaders -- "may not be enough" to convince him to support a deal. A default, he suggested, could be a good way of forcing the country to live within its means -- "even if the stock market does go down, if the economy does get worse."
You can call this crazy, and maybe it is. But remember: The 4th District that Rokita represents is overwhelmingly Republican. When he was elected last year, it was the GOP primary (which he won with 42 percent of the vote), and not the general election (when he cruised with nearly 70 percent), that Rokita had to worry about. In other words, not only is it likely that Rokita genuinely believes what he's saying about the debt ceiling, it's also likely that he'll be rewarded for it by the folks back home.
Funny thing is, I actually sympathize with Rokita's basic sentiment. But, oh my God, does he (and, more to the point, his supporters) seem to have no freakin' clue what kind of fire he's playing with.
Monday, July 18, 2011
The Tea Partiers are extortionists
If there is any lingering doubt in your mind that a U.S. default would be Bad with a capital B read this. The entire economy of the planet since WWII has been based on the assumption that a U.S. default would not happen. If that assumption is discharged -- and it's looking more likely every day -- then the rules of the game will have to be rewritten from scratch. What the net result will be is anybody's guess, but it's a pretty safe bet that it won't be pretty.
It is this threat of economic armageddon that the Tea Partiers are wielding in order to accomplish whatever it is they are really hoping to accomplish. Exactly what that is is far from clear. They say that they want to shrink the size of government, but their actions belie this.
So there are only two possibilities: either they're stupid, or they really want to accomplish something else. Either way does not bode well for the future.
But their actual goal doesn't affect the fact that whatever it is they want to accomplish they can't do it via the normal legislative process. So they have to resort to the threat of economic armageddon with an outcome contrary to their stated goals in order to do whatever it is they really want to do. That is the very definition of extortion.
BTW, I am seriously considering going to the bank and withdrawing a rather substantial amount of physical cash, and I urge you to do likewise. There are two reasons for this. First, in a worst-case scenario, physical cash will be very useful, and if you wait until it's too late you won't be able to get any. And second, if We The People start to pose a credible threat of broad-based run on the banks before it is too late to pull back from the brink, maybe that will knock some sense into these morons.
I still believe that Congress will figure this out and we won't default. Certainly the bond market seems very sanguine about what is going on. But I think the odds are no longer 100% even to an engineering approximation, and that makes me very, very nervous. Because the Tea Partiers just might be crazy enough to take us over the edge.
And if they do, it will be Bad.
It is this threat of economic armageddon that the Tea Partiers are wielding in order to accomplish whatever it is they are really hoping to accomplish. Exactly what that is is far from clear. They say that they want to shrink the size of government, but their actions belie this.
...the consequences of any default would, ironically, actually increase the size of the government relative to the U.S. economy—the very outcome that Republican intransigents claim to be trying to avoid.
So there are only two possibilities: either they're stupid, or they really want to accomplish something else. Either way does not bode well for the future.
But their actual goal doesn't affect the fact that whatever it is they want to accomplish they can't do it via the normal legislative process. So they have to resort to the threat of economic armageddon with an outcome contrary to their stated goals in order to do whatever it is they really want to do. That is the very definition of extortion.
BTW, I am seriously considering going to the bank and withdrawing a rather substantial amount of physical cash, and I urge you to do likewise. There are two reasons for this. First, in a worst-case scenario, physical cash will be very useful, and if you wait until it's too late you won't be able to get any. And second, if We The People start to pose a credible threat of broad-based run on the banks before it is too late to pull back from the brink, maybe that will knock some sense into these morons.
I still believe that Congress will figure this out and we won't default. Certainly the bond market seems very sanguine about what is going on. But I think the odds are no longer 100% even to an engineering approximation, and that makes me very, very nervous. Because the Tea Partiers just might be crazy enough to take us over the edge.
And if they do, it will be Bad.
Wednesday, July 13, 2011
The Republican party's number one goal...
According to Kentucky senator Mitch McConnell is (still) to stop Obama from being re-elected. It's not to create jobs, or win the war on terror, or make progress towards energy independence. The single most important thing is to get Obama out of the white house by any means necessary.
Including bringing the country to the brink of default (and maybe even go over the edge -- who knows how batshit crazy these Republicans really are?)
What is most mind-boggling about this (and I have to credit this observation to Senator Al Franken) is not that the Republicans have this goal (which should come as no surprise to anyone) but that they are actually willing to admit it, that they actually seem proud of the fact that they are playing Russian roulette with the economy for political purposes.
A number of normally conservative sources are starting to desert the sinking ship. Even David Brooks has gone so far as to say that the Republicans have "No sense of moral decency." Brooks was referring to their willingness to voluntarily shirk the (by traditional conservative standards) sacred responsibility to pay back debt. But I think there's a case to be made for a much more sinister interpretation of their tactics: the Republicans show every sign of being willing to utterly destroy America's credibility and its economy in order to pander to those who want to -- why mince words? -- get that f******* n***** out of the white house.
If there's a more plausible explanation for their tactics I'm all ears.
[As a side note, I am posting this from an airplane via GoGo in-flight internet. It is truly an amazing time we live in.]
Including bringing the country to the brink of default (and maybe even go over the edge -- who knows how batshit crazy these Republicans really are?)
What is most mind-boggling about this (and I have to credit this observation to Senator Al Franken) is not that the Republicans have this goal (which should come as no surprise to anyone) but that they are actually willing to admit it, that they actually seem proud of the fact that they are playing Russian roulette with the economy for political purposes.
A number of normally conservative sources are starting to desert the sinking ship. Even David Brooks has gone so far as to say that the Republicans have "No sense of moral decency." Brooks was referring to their willingness to voluntarily shirk the (by traditional conservative standards) sacred responsibility to pay back debt. But I think there's a case to be made for a much more sinister interpretation of their tactics: the Republicans show every sign of being willing to utterly destroy America's credibility and its economy in order to pander to those who want to -- why mince words? -- get that f******* n***** out of the white house.
If there's a more plausible explanation for their tactics I'm all ears.
[As a side note, I am posting this from an airplane via GoGo in-flight internet. It is truly an amazing time we live in.]
I feel so much better now
Ben Bernanke says the economy will get better Real Soon Now (tm). This is the same Ben Bernanke who just a few weeks ago said the economy was getting worse and he didn't have a clue as to why.
Well, here's a theory: Rupert Murdoch paid negative $4.8 billion in taxes on profits of $10.4 billion. That's right, the U.S. government gave Murdoch $4.8 billion. [UPDATE: Reuters has retracted this report. See the comments for details.]
In other news, the state of California is going to close 50 state parks to help close the state's budget deficit. The move will save $19 million (with an M, not a B).
But we can't raise taxes on Murdoch because that would kill jobs.
Well, here's a theory: Rupert Murdoch paid negative $4.8 billion in taxes on profits of $10.4 billion. That's right, the U.S. government gave Murdoch $4.8 billion. [UPDATE: Reuters has retracted this report. See the comments for details.]
In other news, the state of California is going to close 50 state parks to help close the state's budget deficit. The move will save $19 million (with an M, not a B).
But we can't raise taxes on Murdoch because that would kill jobs.
Tuesday, July 12, 2011
You're all wrong!
I've been quite remiss in tending to the Ramblings of late, so thanks to Don for picking up some of the slack. Time constraints have kept me from writing as much as I would like, and the result has been a piecemeal and somewhat incoherent set of posts on my part. But the scope of the issues raised by the current economic situation is so vast that it's hard sometimes not to feel overwhelmed and just throw up one's hands in despair. Surveying the economic and political landscape today evokes in me a feeling somewhat akin to watching the last scene in Raiders of the Lost Ark.
I do believe that at root we probably agree on more than we disagree, but that makes for boring television. So I'll cut right to the chase and say that I think that quibbling over which way the causality ran in 2008 is badly missing the point. The problems we're experiencing right now have been forty years in the making (and there is evidence that the seeds were actually planted 80 years ago). None of the policies that put us where we are today have been changed, nor is there any indication that they will or even could be changed given today's political realities. It has next to nothing to do with Ben Bernanke. My problem with Bernanke is not that this mess is all his fault (it isn't) it's that he's not even pretending to know what's going on and what to do about it, which is the job he's being paid to do.
(That's the thing that pisses me off most about this situation: tons of people are being paid tons of money for being incompetent. I want a piece of that action. I can be more incompetent than any of those clowns, and I'll do it for half what they're making.)
The situation is so complicated that it's very hard to boil it down to a pithy sound bite, but here's my best shot at it: the people of the United States, including, apparently, those at the very top, have fundamentally lost sight of the difference between money and wealth. They think, for example: if I pay more taxes, I have less money, so I'm poorer. If I pay less taxes I have more money so I'm richer. So cutting taxes makes everyone richer. Duh! It's very compelling logic (if you're an idiot), but it is, of course, wrong.
I am reminded of a scene in one of Douglas Adams's books where the smart people on a particular planet that is becoming overcrowded manage to con all the stupid people to emigrate to a different one. Upon arrival on their brand spanking new planet the stupid people decide to declare that leaves are money. Everyone stuffs their pockets full of leaves, and -- presto! -- everyone is rich. They didn't even have to go to the bother of building printing presses!
This is, I am sad to say, the kind of logic that is being bandied about in all seriousness today by people who really ought to know better. The proposition that all our problems would go away of only Bernanke would print more dollars is not so far from the Adamsian proposition that all our problems would go away if only we just proclaimed leaves to be money. That at least would solve the problem of the Fed chairman's obstinacy, wouldn't it?
The problem is that money isn't wealth. It isn't even a proxy for wealth! It's a tool, a technology, and like any technology it can be used to help create wealth, but it can also be used for other purposes, like obtaining power and influence (which some people -- mainly those who have it -- reckon as wealth).
This is the fundamental problem: not everyone reckons wealth the same way. Not everyone has the same quality metric. One of the things that makes money so useful is that it helps catalyze a process by which multiple disparate quality metrics can be mutually reconciled so that everyone gets what they wants. This is the beautiful promise of the free market, that actual wealth can be created out of nothing merely by providing a venue where people can exchange goods and services, and an accounting mechanism that allows the goat herder and a barber to trade 1/10th of a goat for a shave without having to actually go to the trouble of butchering a goat.
No one seems to understand this any more. Certainly the "wizards of Wall Street" don't seem to understand it.
Sub-prime did not cause the great recession. Neither did the great recession cause the mortgage crisis. Both were caused by vast numbers of people buying into the theory that money is wealth, that if you create money you create wealth, that everyone can get rich by stuffing leaves into their pockets. Of course, the details are quite a bit more complicated than that. The reality was more like: the recession and the crisis were caused by vast numbers of people buying into the theory that you could eliminate risk from financial transactions by building up a Ponziesque scheme of derivatives. The problem was then exacerbated when the perpetrators of this scheme were let off, not just scot-free, but were actually rewarded by the government for essentially perpetrating a fraud. (I am speaking here of AIG being forced by the treasury to pay Goldman Sachs 100 cents on the dollar for their credit default swaps in exchange for a government bailout of AIG. It is no coincidence that many of the government officials who instigated this policy were Goldman alums.)
I could go on and on and on. The level of incompetence at the highest levels is truly staggering. Take the ratings agencies for example. They got paid to rate bonds. They gave AAA ratings to bonds backed by sub-prime mortgages that they knew would default. They did this because they got paid by the bond issuer. Then they hid behind the first amendment to evade liability. Again: vast numbers of people getting paid vast amounts of money, not to create wealth, but to actively destroy it.
Go back and watch that clip from Indiana Jones again.
Of course, ultimately the blame lies with the American people. None of this would have been possible without the complacent acquiescence of vast numbers of ordinary citizens. But although the responsibility ultimately lies with them it's hard for me to count these folks as villains. Most people, I think, just want to do an honest day's work for an honest day's pay and leave the complicated stuff to someone else, and it's hard to find fault with that. The wealth of this nation was built in large measure by people with that kind of outlook on life. Those people are not the bad guys.
The bad guys are the intellectual elites in this country who really ought to know better. No one should be allowed to graduate from Harvard or Yale without understanding the difference between money and wealth, and yet the corridors of power in this country are chock full of ivy league grads who either don't get it or don't care. Either way, this mess is their fault.
I do believe that at root we probably agree on more than we disagree, but that makes for boring television. So I'll cut right to the chase and say that I think that quibbling over which way the causality ran in 2008 is badly missing the point. The problems we're experiencing right now have been forty years in the making (and there is evidence that the seeds were actually planted 80 years ago). None of the policies that put us where we are today have been changed, nor is there any indication that they will or even could be changed given today's political realities. It has next to nothing to do with Ben Bernanke. My problem with Bernanke is not that this mess is all his fault (it isn't) it's that he's not even pretending to know what's going on and what to do about it, which is the job he's being paid to do.
(That's the thing that pisses me off most about this situation: tons of people are being paid tons of money for being incompetent. I want a piece of that action. I can be more incompetent than any of those clowns, and I'll do it for half what they're making.)
The situation is so complicated that it's very hard to boil it down to a pithy sound bite, but here's my best shot at it: the people of the United States, including, apparently, those at the very top, have fundamentally lost sight of the difference between money and wealth. They think, for example: if I pay more taxes, I have less money, so I'm poorer. If I pay less taxes I have more money so I'm richer. So cutting taxes makes everyone richer. Duh! It's very compelling logic (if you're an idiot), but it is, of course, wrong.
I am reminded of a scene in one of Douglas Adams's books where the smart people on a particular planet that is becoming overcrowded manage to con all the stupid people to emigrate to a different one. Upon arrival on their brand spanking new planet the stupid people decide to declare that leaves are money. Everyone stuffs their pockets full of leaves, and -- presto! -- everyone is rich. They didn't even have to go to the bother of building printing presses!
This is, I am sad to say, the kind of logic that is being bandied about in all seriousness today by people who really ought to know better. The proposition that all our problems would go away of only Bernanke would print more dollars is not so far from the Adamsian proposition that all our problems would go away if only we just proclaimed leaves to be money. That at least would solve the problem of the Fed chairman's obstinacy, wouldn't it?
The problem is that money isn't wealth. It isn't even a proxy for wealth! It's a tool, a technology, and like any technology it can be used to help create wealth, but it can also be used for other purposes, like obtaining power and influence (which some people -- mainly those who have it -- reckon as wealth).
This is the fundamental problem: not everyone reckons wealth the same way. Not everyone has the same quality metric. One of the things that makes money so useful is that it helps catalyze a process by which multiple disparate quality metrics can be mutually reconciled so that everyone gets what they wants. This is the beautiful promise of the free market, that actual wealth can be created out of nothing merely by providing a venue where people can exchange goods and services, and an accounting mechanism that allows the goat herder and a barber to trade 1/10th of a goat for a shave without having to actually go to the trouble of butchering a goat.
No one seems to understand this any more. Certainly the "wizards of Wall Street" don't seem to understand it.
Sub-prime did not cause the great recession. Neither did the great recession cause the mortgage crisis. Both were caused by vast numbers of people buying into the theory that money is wealth, that if you create money you create wealth, that everyone can get rich by stuffing leaves into their pockets. Of course, the details are quite a bit more complicated than that. The reality was more like: the recession and the crisis were caused by vast numbers of people buying into the theory that you could eliminate risk from financial transactions by building up a Ponziesque scheme of derivatives. The problem was then exacerbated when the perpetrators of this scheme were let off, not just scot-free, but were actually rewarded by the government for essentially perpetrating a fraud. (I am speaking here of AIG being forced by the treasury to pay Goldman Sachs 100 cents on the dollar for their credit default swaps in exchange for a government bailout of AIG. It is no coincidence that many of the government officials who instigated this policy were Goldman alums.)
I could go on and on and on. The level of incompetence at the highest levels is truly staggering. Take the ratings agencies for example. They got paid to rate bonds. They gave AAA ratings to bonds backed by sub-prime mortgages that they knew would default. They did this because they got paid by the bond issuer. Then they hid behind the first amendment to evade liability. Again: vast numbers of people getting paid vast amounts of money, not to create wealth, but to actively destroy it.
Go back and watch that clip from Indiana Jones again.
Of course, ultimately the blame lies with the American people. None of this would have been possible without the complacent acquiescence of vast numbers of ordinary citizens. But although the responsibility ultimately lies with them it's hard for me to count these folks as villains. Most people, I think, just want to do an honest day's work for an honest day's pay and leave the complicated stuff to someone else, and it's hard to find fault with that. The wealth of this nation was built in large measure by people with that kind of outlook on life. Those people are not the bad guys.
The bad guys are the intellectual elites in this country who really ought to know better. No one should be allowed to graduate from Harvard or Yale without understanding the difference between money and wealth, and yet the corridors of power in this country are chock full of ivy league grads who either don't get it or don't care. Either way, this mess is their fault.
What caused the recent Great Recession?
[A guest post from Don Geddis]
Ron recently complained about Ben Bernanke. In particular, he shared his own theory of who is to blame for the recent bad US (and world) economy (high unemployment, fall in GDP):
Scott Sumner (my economist hero blogging at The Money Illusion) has recently posted what I think is an excellent summary of the real issue about assigning this blame correctly:
But Sumner rightly questions the second part of the link. What if it doesn't matter that mortgages collapsed? What if that didn't need to lead to a huge recession? Sure, you can blame the match for starting the destructive wildfire ... but when you see the fully-staffed fire trucks parked right next door, and they decline to intervene to put out the fire as soon as it begins ... well, is the match really the "cause" of the wildfire's destruction?
Sumner himself echoes this in a comment on his own post:
Ron recently complained about Ben Bernanke. In particular, he shared his own theory of who is to blame for the recent bad US (and world) economy (high unemployment, fall in GDP):
The housing crisis was not an unexpected aberration, it was the completely predictable result of the systematic dismantling of the tax and regulatory regime that was in place in this country since the end of WWII [...] The predictable result was increasing financial instability and economic inequality. Since 2008 we have done absolutely nothing to change the strategic situation so it shouldn't come as a surprise to anyone that we continue to see the same results.I disagreed with this analysis, and there was some lively debate in the comments.
Scott Sumner (my economist hero blogging at The Money Illusion) has recently posted what I think is an excellent summary of the real issue about assigning this blame correctly:
Progressives tend to blame the instability of unregulated capitalism, prone to bubbles and crashes. Conservatives blame moral hazard created by government insurance and/or policies that tried to get more low income people into housing. But both seem to see the sub-prime crash as the proximate cause of the crisis of late 2008. I think they are both wrong. [...] I’m depressed by almost all discussions of the current crisis, as they all start with the premise that “it goes without saying” that the Great Recession was triggered by financial crisis. No, the Great Recession caused the financial crisis.It's true that the first obvious sign we all saw, back in 2007, was the bubble in housing prices, and then the collapse of subprime mortgages. But people on "both" sides of the political debate seem to spend all their time trying to pin the blame on what led to the subprime collapse, as though the subsequent (worldwide!) Great Recession was a necessary consequence, once the mortgage crisis began. To avoid such future economic pain (years of high unemployment, low GDP growth), both sides seem to be trying to figure out how to prevent another mortgage collapse. And of course they have wildly different theories on how to go about that.
But Sumner rightly questions the second part of the link. What if it doesn't matter that mortgages collapsed? What if that didn't need to lead to a huge recession? Sure, you can blame the match for starting the destructive wildfire ... but when you see the fully-staffed fire trucks parked right next door, and they decline to intervene to put out the fire as soon as it begins ... well, is the match really the "cause" of the wildfire's destruction?
Sumner himself echoes this in a comment on his own post:
Suppose the helmsman fell asleep at 2:00am. The ship goes of course. Who’s fault is it–the wind, or the sleeping sailor? I say the sleeping sailor.(BTW: if you want to know the "real" cause of the recession of the last few years, Sumner has convincingly argued that it happened because the US Fed incorrectly allowed nominal GDP to plummet after the mortgage crisis began. In essence, we didn't have enough inflation; the Fed allowed damaging deflation instead.)
Sunday, July 03, 2011
Tough call
For $100,000 you can get either one of the last Tesla Roadsters or one of 99 Zafirro Iridium razors. Yes, that's "razor", like the thing you use to shave with.
If the existence of this product isn't proof that some people have waaaaay too much money I don't know what is.
If the existence of this product isn't proof that some people have waaaaay too much money I don't know what is.
Tuesday, June 28, 2011
Doin' what comes natchurly
The Second City Network has made a wonderfully irreverent video answer to people who say that gay marriage is not "natural". WARNING! Highly NSFW. If you are easily offended, do not watch this video.
Saturday, June 25, 2011
Five down...
I've not been blogging much because I'm working on a new startup which is taking up most of my time, but I could not let the legalization of gay marriage in New York pass without mention. So... kudos to the New York legislature, and all the hardworking folks working behind the scenes. Well done. And a special honorable mention to Mark Grisanti who stood up to his party to do the right thing.
Friday, June 24, 2011
Wouldn't it be easier to just pick the lock?
UCSD scientists have demonstrated that you can create duplicate keys from photos of the keys taken up to 200 feet away.
Thursday, June 23, 2011
Can Ben Bernanke really be this stupid?
Ben Bernanke is surprised that the economy is not recovering faster:
Well, I'm not surprised. It's completely obvious to me why the economy has not recovered: we have done absolutely nothing to fix it. The housing crisis was not an unexpected aberration, it was the completely predictable result of the systematic dismantling of the tax and regulatory regime that was in place in this country since the end of WWII, and replacing it with a tax and regulatory regime that more closely resembles what we had after WWI. In 1925 top marginal tax rates were lowered from 46% to 25% and banks were deregulated. Five years later the Great Depression started. By 1945 top marginal rates were back up to 90% and a strong banking regulatory regime was put in place that resulted in thirty years of unprecedented financial stability and prosperity. Starting in 1982 we began to dismantle that regulatory regime and lowered top marginal tax rates back down to 30% or so. The predictable result was increasing financial instability and economic inequality. Since 2008 we have done absolutely nothing to change the strategic situation so it shouldn't come as a surprise to anyone that we continue to see the same results.
I'm going to go on record here with the following prediction: within the next five years we will see an economic crisis that will make 2008 look like a cake walk by comparison. We came very close to a global meltdown back in '08, and the only thing that saved us from complete calamity was using up what little margin was left in the system to restore liquidity. The next time things start to come apart at the seams that margin will be gone. I have no idea when or how this crisis will come about. I just know that unless we make some painful choices it is a question of when, not if, this will happen. And right now I see no indication that those painful choices will be made. The fact that Ben Bernanke apparently has his head shoved so far up his butt that he can't see what is blatantly obvious to an amateur like me does nothing to bolster my optimism.
[UPDATE] Looks like my prediction may be coming true faster than I thought.
Fed Chairman Ben Bernanke told reporters Wednesday that the central bank had been caught off guard by recent signs of deterioration in the economy. And he said the troubles could continue into next year.
"We don't have a precise read on why this slower pace of growth is persisting," Bernanke said. He said the weak housing market and problems in the banking system might be "more persistent than we thought."
Well, I'm not surprised. It's completely obvious to me why the economy has not recovered: we have done absolutely nothing to fix it. The housing crisis was not an unexpected aberration, it was the completely predictable result of the systematic dismantling of the tax and regulatory regime that was in place in this country since the end of WWII, and replacing it with a tax and regulatory regime that more closely resembles what we had after WWI. In 1925 top marginal tax rates were lowered from 46% to 25% and banks were deregulated. Five years later the Great Depression started. By 1945 top marginal rates were back up to 90% and a strong banking regulatory regime was put in place that resulted in thirty years of unprecedented financial stability and prosperity. Starting in 1982 we began to dismantle that regulatory regime and lowered top marginal tax rates back down to 30% or so. The predictable result was increasing financial instability and economic inequality. Since 2008 we have done absolutely nothing to change the strategic situation so it shouldn't come as a surprise to anyone that we continue to see the same results.
I'm going to go on record here with the following prediction: within the next five years we will see an economic crisis that will make 2008 look like a cake walk by comparison. We came very close to a global meltdown back in '08, and the only thing that saved us from complete calamity was using up what little margin was left in the system to restore liquidity. The next time things start to come apart at the seams that margin will be gone. I have no idea when or how this crisis will come about. I just know that unless we make some painful choices it is a question of when, not if, this will happen. And right now I see no indication that those painful choices will be made. The fact that Ben Bernanke apparently has his head shoved so far up his butt that he can't see what is blatantly obvious to an amateur like me does nothing to bolster my optimism.
[UPDATE] Looks like my prediction may be coming true faster than I thought.
Thursday, June 16, 2011
Fukushima: It's much worse than you think
I've been a proponent of nuclear power. I'm still a proponent of nuclear power. But because I endorsed the view that there was nothing to worry about at Fukushima and that nuclear power is the safest way to generate electricity (which it actually still is) I feel duty bound to point out this article from Al Jazeera (which nowadays seems to be a fairly reliable source) that says that the situation at Fukushima is pretty frickin' bad, much worse than official sources would have one believe.
Because reliable information from Fukushima is so hard to come by it is probably impossible to say if this article has overblown the actual danger. But the article seems plausible to me. I still believe it is possible to design and build safe reactors. But at this point I don't see how any reasonable person could fail to concede that Fukushima manifestly wasn't.
Because reliable information from Fukushima is so hard to come by it is probably impossible to say if this article has overblown the actual danger. But the article seems plausible to me. I still believe it is possible to design and build safe reactors. But at this point I don't see how any reasonable person could fail to concede that Fukushima manifestly wasn't.
Tuesday, June 14, 2011
Wouldn't it be ironic...
... if CO2 emissions ended up saving the environment instead of destroying it?
Py-bcrypt discrepancies explained
Earlier today I raised an alarm over some discrepancies that I discovered between the behavior of the py-bcrypt library and the published description of the bcrypt algorithm. Today I got a response from the author of py-bcrypt, which I quote here in its entirety:
For the record, I never meant to imply that py-bcrypt was malicious, only that it is prudent to track down and understand discrepancies like this when one encounters them because they could some day be an indication of something malicious going on.
It's true that I did not wait a week before going public, I waited two days. I think reasonable people could disagree over what the appropriate length of time is in a situation like this.
In any case, for the record, there is now no reason I know of not to use py-bcrypt, and I apologize for any misunderstanding my earlier post may have caused.
No, they are not bugs. As usual in the real world, there are differences between academic work and practical implementation. There is no reason to worry about this because:
a) The truncation of the hash exists in the reference implementation that was written by Provos and Mazieres (the paper authors). You can check this for yourself in OpenBSD's CVS.
b) The incremental likelihood of collision caused by truncating the hash is in the order of 2^-186, which is irrelevant in this context.
Why was this done? You'd have to ask Niels or Davis, but I'd guess that they figured 60 characters was a more convenient length.
I guess this blog post was yours: http://rondam.blogspot.com/2011/06/possible-flaw-in-open-source-bcrypt.html
I have to say that I find it completely assinine and irresponsible. You imply that this difference in behaviour could be a deliberately-inserted vulnerability, without waiting even a week for a reply from me or bothering to check the reference implementation or its authorship before insinuating malicious intent.
Please retract your your post.
For the record, I never meant to imply that py-bcrypt was malicious, only that it is prudent to track down and understand discrepancies like this when one encounters them because they could some day be an indication of something malicious going on.
It's true that I did not wait a week before going public, I waited two days. I think reasonable people could disagree over what the appropriate length of time is in a situation like this.
In any case, for the record, there is now no reason I know of not to use py-bcrypt, and I apologize for any misunderstanding my earlier post may have caused.
The darker side of bitcoin
Isn't it funny how sometimes life seems to follow a theme? Here I am being all paranoid about security and not five minutes later I stumble across this:
No, there is nothing that this poor sod can do. That is the whole point of bitcoin. It's untraceable virtual cash, and like physical cash, if someone steals it from you it's gone for good.
Wow, the bitcoin that was stolen was worth about half a million dollars at current exchange rates. You gotta wonder if the motive was profit or to undermine trust in bitcoin.
Hi everyone. I am totally devastated today. I just woke up to see a very large chunk of my bitcoin balance [has been stolen].
I feel like killing myself now. This get me so f'ing pissed off. If only the wallet file was encrypted on the HD. I do feel like this is my fault somehow for now moving that money to a separate non windows computer. I backed up my wallet.dat file religiously and encrypted it but that does not do me much good when someone or some trojan or something has direct access to my computer somehow.
...
Block explorer is down so I cannot even see where the funds went.
I tried restoring an earler backup of my wallet but naturally that does not work because the transaction has already been validated.
Needles to say I feel like I have lost faith in bitcoin.
Anyone have any ideas what I can do besides just jump off a bridge?!
No, there is nothing that this poor sod can do. That is the whole point of bitcoin. It's untraceable virtual cash, and like physical cash, if someone steals it from you it's gone for good.
Wow, the bitcoin that was stolen was worth about half a million dollars at current exchange rates. You gotta wonder if the motive was profit or to undermine trust in bitcoin.
A possible flaw in open-source bcrypt implementations
[NOTE: See updates below and here.]
I'm working on an application that requires a secure password hash. The state of the art is Colin Percival's scrypt but the available code base is not very developer-friendly. Scrypt is published as a self-contained file-encryption utility, and to extract the key-derivation function is not trivial. It's not a lot of work, but it does require a fairly deep understanding of how scrypt actually works under the hood to make sure that you don't screw it up (and crypto code is notoriously easy to screw up even for someone who knows what they are doing). So I decided instead to try bcrypt, which is not as secure as scrypt but is a lot easier to use because it has python bindings and a password-hashing-friendly API.
So I downloaded and installed py-bcrypt, ran a few tests, and everything seemed to be working properly. But then I noticed something odd. The hash produced by py-bcrypt was 60 bytes long:
Let's deconstruct that. The format of the bcrypt hash is:
1. A 7-byte header ("$2a$12$") identifying this is a bcrypt hash, followed by...
2. A 22-byte base-64 encoded salt ("'w6IdiZTAckGirKaH8LU8VO") which decodes to a 128-bit binary salt value, followed by...
3. A 31-byte base-64 encoded hash ("xEvP97cFLEW5ePVJzhZilSa5c.V/uMK") which is supposed to decode to a 192-bit hash.
Except that it doesn't. 31 base64 encoded bytes only yield 184 binary bits. One byte of our hash has gone missing. [NOTE: this is corrected from an earlier version where I had two bytes missing. Those damn off-by-one errors :-) ]
OK, so maybe someone accidentally introduced an off-by-one error into the python wrapper. Except that the problem is not in the python wrapper. You can find bcrypt test vectors on the web, and they are all 60-byte strings.
It gets weirder.
The official bcrypt paper says (and other accounts corroborate) that bcrypt is limited to hashing 55-byte-long passwords. But empirically, py-bcrypt uses up to 72 bytes:
That is a very big discrepancy between the actual behavior of the code and the description given in the literature. It's vastly too big a discrepancy to be explainable by a simple inadvertent bug.
Now, some people might say I'm being excessively paranoid, but I don't think so. The higher the stakes in the internet security game get, the more incentive there is for attackers to try all kinds of sneaky and nefarious tricks to introduce weaknesses into people's defenses, and one of the easiest ways to do that is to publish some plausible-looking open-source security code that actually has a hidden weakness built in to it and hope that nobody notices. So IMHO it is prudent to raise at least a yellow flag any time the actual behavior of security code deviates from its peer-reviewed specification. When it comes to security, a certain level of paranoia can be prudent.
I sent an email to the author of py-bcrypt asking about this but didn't get a response. If anyone who knows their way around crypto code can shed some light on this I would be very grateful.
[UPDATE: My general level of paranoia has been at least partially vindcated]
[UPDATE2: The discrepancies have apparently been cleared up]
I'm working on an application that requires a secure password hash. The state of the art is Colin Percival's scrypt but the available code base is not very developer-friendly. Scrypt is published as a self-contained file-encryption utility, and to extract the key-derivation function is not trivial. It's not a lot of work, but it does require a fairly deep understanding of how scrypt actually works under the hood to make sure that you don't screw it up (and crypto code is notoriously easy to screw up even for someone who knows what they are doing). So I decided instead to try bcrypt, which is not as secure as scrypt but is a lot easier to use because it has python bindings and a password-hashing-friendly API.
So I downloaded and installed py-bcrypt, ran a few tests, and everything seemed to be working properly. But then I noticed something odd. The hash produced by py-bcrypt was 60 bytes long:
>>> import bcrypt
>>> bcrypt.hashpw('x', gensalt())
'$2a$12$w6IdiZTAckGirKaH8LU8VOxEvP97cFLEW5ePVJzhZilSa5c.V/uMK'
>>> len(_)
60
Let's deconstruct that. The format of the bcrypt hash is:
1. A 7-byte header ("$2a$12$") identifying this is a bcrypt hash, followed by...
2. A 22-byte base-64 encoded salt ("'w6IdiZTAckGirKaH8LU8VO") which decodes to a 128-bit binary salt value, followed by...
3. A 31-byte base-64 encoded hash ("xEvP97cFLEW5ePVJzhZilSa5c.V/uMK") which is supposed to decode to a 192-bit hash.
Except that it doesn't. 31 base64 encoded bytes only yield 184 binary bits. One byte of our hash has gone missing. [NOTE: this is corrected from an earlier version where I had two bytes missing. Those damn off-by-one errors :-) ]
OK, so maybe someone accidentally introduced an off-by-one error into the python wrapper. Except that the problem is not in the python wrapper. You can find bcrypt test vectors on the web, and they are all 60-byte strings.
It gets weirder.
The official bcrypt paper says (and other accounts corroborate) that bcrypt is limited to hashing 55-byte-long passwords. But empirically, py-bcrypt uses up to 72 bytes:
>>> hashpw('x'*71, s)
'$2a$12$w6IdiZTAckGirKaH8LU8VOMZSlhS0VSZlNwXRObFsZV4.wyRyEn9.'
>>> hashpw('x'*72, s)
'$2a$12$w6IdiZTAckGirKaH8LU8VOD.VdDKdNfUBylAAnnmZvJuKg6dhqMLq'
>>> hashpw('x'*73, s)
'$2a$12$w6IdiZTAckGirKaH8LU8VOD.VdDKdNfUBylAAnnmZvJuKg6dhqMLq'
>>>
That is a very big discrepancy between the actual behavior of the code and the description given in the literature. It's vastly too big a discrepancy to be explainable by a simple inadvertent bug.
Now, some people might say I'm being excessively paranoid, but I don't think so. The higher the stakes in the internet security game get, the more incentive there is for attackers to try all kinds of sneaky and nefarious tricks to introduce weaknesses into people's defenses, and one of the easiest ways to do that is to publish some plausible-looking open-source security code that actually has a hidden weakness built in to it and hope that nobody notices. So IMHO it is prudent to raise at least a yellow flag any time the actual behavior of security code deviates from its peer-reviewed specification. When it comes to security, a certain level of paranoia can be prudent.
I sent an email to the author of py-bcrypt asking about this but didn't get a response. If anyone who knows their way around crypto code can shed some light on this I would be very grateful.
[UPDATE: My general level of paranoia has been at least partially vindcated]
[UPDATE2: The discrepancies have apparently been cleared up]
Wednesday, June 08, 2011
Obamacare takes another step towards the grave
A year ago March I predicted that the Supreme Court would overturn Obamacare on Constitutional grounds. Today the LA Times reports:
So it's looking good for my prophetic abilities. Not so good for the country.
A top Obama administration lawyer defending last year's healthcare law ran into skeptical questions Wednesday from three federal judges here, who suggested they may be ready to declare all or part of the law unconstitutional.
Acting U.S. Solicitor General Neal K. Katyal faced off against former Bush administration Solicitor General Paul Clement in what has become the largest and broadest challenge to the healthcare law. In all, 26 states and the National Federation of Independent Business joined in urging the judges to strike down the law.
... in an ominous sign for the administration, the judges opened the arguments by saying they knew of no case in American history where the courts had upheld the government's power to force someone to buy a product. {Emphasis added.]
So it's looking good for my prophetic abilities. Not so good for the country.
Tuesday, June 07, 2011
One dollar, one vote
Former Minnesota Gov. Tim Pawlenty is calling for big tax cuts. (My, what an innovative idea.)
Hm, let's see what we can find on Google nowadays. I can find this. And this. And this. And this and this and this. Oh, those aren't goods and services available for sale you say? Well, how about this or this or this.
The point being (not that this should come as a surprise to anyone who hasn't been living in a cave for the last ten years): you can find freakin' anything on Google. Of course the private sector will step up and provide any service that the government doesn't for which there is demand. But you might not like the terms.
Here's the problem: we as a society are not willing to let people suffer the consequences of their actions, and with good reason: sometimes the consequences of your actions affect the people around you. Want to ride a motorcycle without a helmet? If you splatter your brains on the sidewalk it's not just you that suffers. It's your kids. It's your employer (or your employees). It's whoever gets stuck with the job of scraping you and your motorcycle off the pavement and disposing of them. And if you should be so unfortunate as to survive the accident, people seem generally unwilling to muster the cold-heartednes to let you die if your insurance premiums aren't up to date, or your pockets aren't deep enough.
So we build emergency rooms and make rules that they can't turn you away if you can't pay. We fund police and fire departments in the recognition that if your neighbor's house is robbed or burns down, you suffer too. We build schools because if your fellow citizens are uneducated, you suffer, because they vote.
Unless, of course, they didn't.
The idea of one-person-one-vote that we Americans claim to hold in such high esteem is actually a fairly recent innovation. When our country was founded it was one-landowner-one-vote. Then it became one-white-make-one-vote, then one-white-person-one-vote.
Most of us like to think that these are settled issues. But it is in our nature as humans to seek power and influence, and unlike wealth, where trades can produce winners on both sides, power and influence are zero-sum games. The whole point of having power and influence is to get other people to do what you want instead of what they want. Someone has to pick the vegetables, clean the sewers, fight the wars. How do you decide who draws the short straw?
It turns out there are lots of ways, some better than others. You can create a government and have it make the decisions. You can create a free-market economy and let that decide. Or you can create a system where some people are left with no alternative but to do the dirty work or starve.
That is what the Republican program of dismantling government is heading towards. If you replace government with the free market, then you replace one-person-one-vote with, effectively, one-dollar-one-vote, which some people (generally those with lots of dollars) genuinely consider to be a good thing.
I have to hand it to the Republicans though. Their marketing is brilliant. If they presented their agenda at face value they'd be run out of town on a rail. So instead they wrap their anti-democratic ideals in the flag and convince people that it's patriotic to fight the wars for starvation wages (and put up with being abandoned afterwards).
But it's not patriotic to pay more taxes. Oh, no.
I genuinely don't understand why anyone who isn't a millionaire would fall for this transparent scam. But they do, and by the tens of millions. I wish I did understand it because if I did I'm pretty sure I could make a lot of money.
In order to offset any lost tax revenue — and to tackle the deficit — Mr. Pawlenty calls for something called “The Google Test” to determine whether the government should be involved in a program.
“If you can find a good or service on the Internet, then the federal government probably doesn’t need to be doing it,” Mr. Pawlenty says.
Hm, let's see what we can find on Google nowadays. I can find this. And this. And this. And this and this and this. Oh, those aren't goods and services available for sale you say? Well, how about this or this or this.
The point being (not that this should come as a surprise to anyone who hasn't been living in a cave for the last ten years): you can find freakin' anything on Google. Of course the private sector will step up and provide any service that the government doesn't for which there is demand. But you might not like the terms.
Here's the problem: we as a society are not willing to let people suffer the consequences of their actions, and with good reason: sometimes the consequences of your actions affect the people around you. Want to ride a motorcycle without a helmet? If you splatter your brains on the sidewalk it's not just you that suffers. It's your kids. It's your employer (or your employees). It's whoever gets stuck with the job of scraping you and your motorcycle off the pavement and disposing of them. And if you should be so unfortunate as to survive the accident, people seem generally unwilling to muster the cold-heartednes to let you die if your insurance premiums aren't up to date, or your pockets aren't deep enough.
So we build emergency rooms and make rules that they can't turn you away if you can't pay. We fund police and fire departments in the recognition that if your neighbor's house is robbed or burns down, you suffer too. We build schools because if your fellow citizens are uneducated, you suffer, because they vote.
Unless, of course, they didn't.
The idea of one-person-one-vote that we Americans claim to hold in such high esteem is actually a fairly recent innovation. When our country was founded it was one-landowner-one-vote. Then it became one-white-make-one-vote, then one-white-person-one-vote.
Most of us like to think that these are settled issues. But it is in our nature as humans to seek power and influence, and unlike wealth, where trades can produce winners on both sides, power and influence are zero-sum games. The whole point of having power and influence is to get other people to do what you want instead of what they want. Someone has to pick the vegetables, clean the sewers, fight the wars. How do you decide who draws the short straw?
It turns out there are lots of ways, some better than others. You can create a government and have it make the decisions. You can create a free-market economy and let that decide. Or you can create a system where some people are left with no alternative but to do the dirty work or starve.
That is what the Republican program of dismantling government is heading towards. If you replace government with the free market, then you replace one-person-one-vote with, effectively, one-dollar-one-vote, which some people (generally those with lots of dollars) genuinely consider to be a good thing.
I have to hand it to the Republicans though. Their marketing is brilliant. If they presented their agenda at face value they'd be run out of town on a rail. So instead they wrap their anti-democratic ideals in the flag and convince people that it's patriotic to fight the wars for starvation wages (and put up with being abandoned afterwards).
But it's not patriotic to pay more taxes. Oh, no.
I genuinely don't understand why anyone who isn't a millionaire would fall for this transparent scam. But they do, and by the tens of millions. I wish I did understand it because if I did I'm pretty sure I could make a lot of money.
Thursday, June 02, 2011
If there was any doubt in your mind...
... that we are in another bubble, this should dispel it. Groupon, a three-year-old company with zero profit, is filing for an IPO. Why do they need the money? Because they took all of their previous investment rounds and paid them out to earlier investors:
If it quacks like a Ponzi scheme...
In January, Groupon raised $950 million. By the end of March, it had $209 million in cash. What happened to all that money? The company’s IPO filing spells that out: Almost all of it went right back out the door, to employees and early investors. ... Of note: This wasn’t the first time Groupon had raised money and taken cash off the table. In April 2010, the company raised $130 million, and handed $120 million to many of the same people.
If it quacks like a Ponzi scheme...
Damn straight
"The global war on drugs has 'failed'" according to a new report by ... The Global Commission on Drug Policy.
Wednesday, June 01, 2011
What if they held a revolution and nobody noticed?
This is not a rhetorical question. Apparently, Spain has had people marching in the streets for the last two weeks. Who knew? Not me.
Friday, May 20, 2011
The world will end tomorrow (or is that today?)
I'm going to go out on a limb here and go on the record as predicting that the world will not end tomorrow. (Actually, in some parts of the world it's already tomorrow.
In Samoa, they recently hopped from one side of the international date line to the other. Does this mean the world will end 24 hours sooner in Samoa than it otherwise would have?
In Samoa, they recently hopped from one side of the international date line to the other. Does this mean the world will end 24 hours sooner in Samoa than it otherwise would have?
Wednesday, May 18, 2011
Saturday, May 14, 2011
The Morganza spillway is not the story
The opening of the Morganza spillway for the first time since 1973 is at the top of the news. It's dramatic. A lot of people will lose their homes in order to save a lot more people from losing theirs.
But that is not the story. Or at least it shouldn't be.
The real story is a 35 miles upriver, near the town of Simmesport, Louisiana. There, in 1963, the U.S. army corps of engineers built a floodgate system very similar to Morganza called the Old River Control Structure, or ORCS. The reason the ORCS gets less attention is that water flows through it continuously, so the fact that water is flowing through it now isn't news. The ORCS controls the flow of water between the Mississippi and another river called the Atchafalaya. The Atchafalaya is not a tributary of the Mississippi, it is a distributory. The Mississippi forks at Simmesport, and part of its flow diverts into the Atchafalaya as part of a natural process called avulsion. It works like this: a river carries sediments. Over time those sediments are deposited in natural levees which periodically change the river's course. The Mississippi naturally changes course about once every thousand years or so. The next course change is overdue. When, not if, it happens, the Mississippi will divert into the Achafalaya, which follows a much shorter and hence steeper course to the Gulf of Mexico than the Mississippi does now.
The ORCS was built to prevent this course change from happening. The flow is carefully controlled to keep Mississippi from fully diverting. But in 1973, the last time a "hundred-year flood" happened on the Mississippi, the flow of water through the ORCS was so massive and turbulent that it undermined the structure's foundations and it very nearly failed. If it had failed, the water would have enlarged the Atchafalaya to the point where the process would almost certainly have become irreversible. The Mississippi River as we know it would have ceased to exist.
It is probably only a matter of time before the ORCS does fail. It was shored up after 1973, but water has a way of going where it wants to go. The Mississippi's sediments are building up, and the more they do the more attractive the Atchafalaya's shorter and steeper route becomes. This could be the year.
If it is, it would be an economic catastrophe of epic proportions. Morgan City, Louisiana would more or less cease to exist. The Mississippi would still flow through New Orleans, but it would not have enough water to support the deep-water river traffic it does today, and it would no longer be a suitable source of drinking water for the city of New Orleans. Most of the Gulf oil and fishing infrastructure would have to be rebuilt. It would be -- sorry, will be, because it's only a matter of time before it happens -- Really Really Bad (tm).
Despite this, I have yet to see any mention of the ORCS is any mainstream news outlet.
But that is not the story. Or at least it shouldn't be.
The real story is a 35 miles upriver, near the town of Simmesport, Louisiana. There, in 1963, the U.S. army corps of engineers built a floodgate system very similar to Morganza called the Old River Control Structure, or ORCS. The reason the ORCS gets less attention is that water flows through it continuously, so the fact that water is flowing through it now isn't news. The ORCS controls the flow of water between the Mississippi and another river called the Atchafalaya. The Atchafalaya is not a tributary of the Mississippi, it is a distributory. The Mississippi forks at Simmesport, and part of its flow diverts into the Atchafalaya as part of a natural process called avulsion. It works like this: a river carries sediments. Over time those sediments are deposited in natural levees which periodically change the river's course. The Mississippi naturally changes course about once every thousand years or so. The next course change is overdue. When, not if, it happens, the Mississippi will divert into the Achafalaya, which follows a much shorter and hence steeper course to the Gulf of Mexico than the Mississippi does now.
The ORCS was built to prevent this course change from happening. The flow is carefully controlled to keep Mississippi from fully diverting. But in 1973, the last time a "hundred-year flood" happened on the Mississippi, the flow of water through the ORCS was so massive and turbulent that it undermined the structure's foundations and it very nearly failed. If it had failed, the water would have enlarged the Atchafalaya to the point where the process would almost certainly have become irreversible. The Mississippi River as we know it would have ceased to exist.
It is probably only a matter of time before the ORCS does fail. It was shored up after 1973, but water has a way of going where it wants to go. The Mississippi's sediments are building up, and the more they do the more attractive the Atchafalaya's shorter and steeper route becomes. This could be the year.
If it is, it would be an economic catastrophe of epic proportions. Morgan City, Louisiana would more or less cease to exist. The Mississippi would still flow through New Orleans, but it would not have enough water to support the deep-water river traffic it does today, and it would no longer be a suitable source of drinking water for the city of New Orleans. Most of the Gulf oil and fishing infrastructure would have to be rebuilt. It would be -- sorry, will be, because it's only a matter of time before it happens -- Really Really Bad (tm).
Despite this, I have yet to see any mention of the ORCS is any mainstream news outlet.
Thursday, May 12, 2011
Thursday, May 05, 2011
Tuesday, May 03, 2011
Also worth noting
The intelligence that proved crucial to finding Bin Laden was not obtained through torture.
More on Bin Laden's victory
This is from Ezra Klein in The Washington Post:
Did Osama bin Laden win? No. Did he succeed? Well, America is still standing, and he isn’t. So why, when I called Daveed Gartenstein-Ross, a counterterrorism expert who specializes in al-Qaeda, did he tell me that “bin Laden has been enormously successful”? There’s no caliphate. There’s no sweeping sharia law. Didn’t we win this one in a clean knockout?
Apparently not. Bin Laden, according to Gartenstein-Ross, had a strategy that we never bothered to understand, and thus that we never bothered to defend against. What he really wanted to do — and, more to the point, what he thought he could do — was bankrupt the United States of America. After all, he’d done the bankrupt-a-superpower thing before. And though it didn’t quite work out this time, it worked a lot better than most of us, in this exultant moment, are willing to admit.
Monday, May 02, 2011
That didn't take long
The birthers have already found a new angle:
Can I call 'em or what?
[UPDATE] Cindy Sheehan is leading the conspiracy nut pack with the theory that Osama bin Laden is not dead. As I post this, 193 people have "liked" her FB post.
A group of die-hard "birthers" took their conspiracy theory about President Obama's birthplace to a panel of federal judges Monday, urging the nation's second-most-influential court to consider what they say is evidence that the president has faked vital documents all his life and is ineligible to be head of state.
Can I call 'em or what?
[UPDATE] Cindy Sheehan is leading the conspiracy nut pack with the theory that Osama bin Laden is not dead. As I post this, 193 people have "liked" her FB post.
More hypocrisy from the right
One of the first things I thought to myself on hearing about the death of Bin Laden was: I wonder how Fox News and friends are going to spin this to make Obama look bad. Now I know.
Bin Laden's ultimate victory
David Sirota nails it:
There's also this from HeathenFace on Reddit:
I'm not sure which is more tragic, that Osama Bin Laden achieved what he set out to do, or that we didn't notice.
"This is bin Laden’s lamentable victory: He has changed America’s psyche from one that saw violence as a regrettable-if-sometimes-necessary act into one that finds orgasmic euphoria in news of bloodshed. In other words, he’s helped drag us down into his sick nihilism by making us like too many other bellicose societies in history -- the ones that aggressively cheer on killing, as long as it is the Bad Guy that is being killed."
There's also this from HeathenFace on Reddit:
I will not remember today for Osama's death. I will remember it for the way I felt watching the videos of my countrymen celebrating in the streets of New York and Washington. I don't recognize them, these people waving flags, singing, and pouring their jubilation into the night because we killed someone. And what about all the others that have been killed? During 10 years we spent unbelievable amounts of blood and treasure, enacted unthinkable civil liberties legislation, and turned ourselves into brutes for this.
And there we were out on the streets. Brutes. We have become brutes.
Yes, the world is a better place without Osama bin Laden. But I fear what this has brought out in us. The structural factors that create Osama bin Ladens still exist, and unless we work to change those, we will continue to undermine ourselves by giving our attention to tomorrow's straw man.
I'm not sure which is more tragic, that Osama Bin Laden achieved what he set out to do, or that we didn't notice.
Wednesday, April 27, 2011
Patriotic Millionaires mix it up with Orrin Hatch
I am a "member" of a "group" called Patriotic Millionaires for Fiscal Strength. The reason I put the words in scare quotes is that nothing binds us together except for the fact that we've all signed a letter to the powers that be in Washington urging them to raise taxes on the rich (which is us) in order to reduce the budget deficit. This apparently got the attention of Senator Orrin Hatch who felt the need to lecture us about the fact that we can make voluntary contributions to the government:
I'm proud to have been the principal drafter of a response to Senator Hatch. I reproduce it here in its entirety:
For those that are interested in making voluntary contributions to pay down the national debt, the process is both easy and advantageous. Federal law authorizes the Secretary of the Treasury to accept conditional gifts to the United Stales for the purposes of reducing the public debt. Individuals can go to ihe website pay.gov where they are able to make a tax deductible charitable contribution to pay down the public debt.
I'm proud to have been the principal drafter of a response to Senator Hatch. I reproduce it here in its entirety:
Dear Senator Hatch:
Thank you for your letter of April 20. With all due respect, you appear to be laboring under a number of misapprehensions. On behalf of the "so‐called" (your words) Patriotic Millionaires we would like to take this opportunity to set the record straight.
First, we are well aware that making voluntary contributions to reduce the deficit is an option that is open to us. That you seem to think reminding us of this is a constructive contribution to this serious debate indicates that you have missed the point. In our democracy, individual citizens do not get to pick and choose what government spending to pay for. You and your colleagues over the past decade have voted for vast outlays that many of us as individuals might not agree with. Nonetheless, we recognize our responsibility as citizens to pay for these expenditures, which were authorized by our elected representatives, and are therefore ultimately our collective responsibility. That is an intrinsic part of living in a democracy: you don't get to opt out.
But letting people opt out is precisely what you are suggesting with your proposal of paying down our debt with voluntary contributions. In World War II, when we faced great challenges as a nation, we didn't ask for voluntary contributions to pay for the war, or ask only those who supported the war to contribute. We had high taxes during the war, and high taxes to pay down the debt, afterward. Today, we benefit from that fiscal discipline. But we are undoing those benefits to society by cutting taxes on the wealthy at the same time we face enormous expenses and are carrying enormous debt. We need all of the above to address this problem, just as we have done in the past.
During World War II, we even resorted to rationing to share the burden of war more equally. Who is paying the burden of war, today? Our less privileged, who fight and die in disproportionate numbers, and our future generations, who will bear the burden of the debt. We think that is shameful.
We are ready to step up to the plate with a willingness to sacrifice for the greater good but we are not willing to make that sacrifice in vain, which it surely would be if we followed the course that you suggest. You even point this out yourself in your letter when you note that "the Bureau of Public Debt recorded only $3.1 million in gifts in 2010." We have been more fortunate than most people, but we are a very small group. If there were even the remotest chance of making a noticeable dent in the problem by acting alone we would have done it already. But we are a few dozen people in a nation of over 300 million facing a debt measured in the tens of trillions. To suggest that we try to tackle this problem by making individual contributions is, frankly, insulting. It is like suggesting to someone expressing a desire to serve their country by bearing arms that they buy a rifle and a plane ticket to Afghanistan. Some problems are too big to be solved except through collective effort and shared sacrifice, and this is one of them.
Second, you write: "this debt crisis is not caused because we tax too little. It is caused because our nation spends too much." This is quibbling over semantics. Deficits result when spending exceeds receipts. Whether that happens because spending is too high or receipts are too low is a matter of perspective and priorities.
In 1977 when you first became a Senator, the U.S. National Debt was approximately $700 billion – that’s with a B ‐ or 36% of then‐GDP. At the end of 2008, before Barack Obama came to the White House, the National Debt ballooned to almost $10 trillion – that’s with a T ‐ and about 70% of 2008 GDP (OMB). While there are different opinions as to how this happened, the National debt did not creep up on us suddenly. The spending that led to such debt resulted from the collective actions of Senators and House Representatives, including you.
It is true that government spending levels are at historic highs, but it is also true that tax rates (and hence receipts) are at historic lows in terms of percentage of GDP. It is the combination of these two factors that has taken us from surplus to near‐catastrophic deficits in a mere decade.
Third, you cite Kevin Williamson's argument that "a public school administrator earning $130,000 married to a pharmacist earning $125,000 a year is rhetorically lumped together with millionaires and billionaires." That may be, but it is Williamson doing the rhetorical lumping, not us. We have urged the President to raise taxes only on people earning over $1 million a year, so Williamson's argument is a complete non‐sequitur. But even under the most aggressive plan currently on the table, Williamson's hypothetical couple would pay zero additional taxes, as deductions and exemptions would reduce their taxable income to well below $250,000.
Finally, we would like to remind you of two historical points. The first is that the Constitution of the United States of America was established for the express purpose of "promot[ing] the general welfare" and not just the welfare of the rich and powerful. Over the last ten years we, the signatories of the PM letter, have done very well, in no small measure because we benefited from public education, government services, a civil society, and world‐class infrastructure, all provided by the government. However, our good fortune has not been shared by the vast majority of our fellow citizens and since our success has been supported by the general public, we feel an obligation to pay back.
The second historical point is that we have faced a crisis like this before. In the early 1990's we successfully addressed a similar crisis through a combination of tax increases and spending cuts. As a result, in 2000 we were not debating how to address a debt crisis, but rather how best to dispose of a budget surplus. It is also worth noting, as a matter of historical fact, that we reached this happy state of affairs through a bipartisan effort involving a Democratic president and a Republican Congress. This makes us fundamentally optimistic that the problem we face today is surmountable.
You close by expressing concern about raising taxes on us "during a vulnerable economic recovery." It is precisely because we do not want this problem solved solely on the backs of the most vulnerable that we have asked the President to call us to our duty. To him and to you we say again: raise our taxes. We can take it.
A comedy of political errors
The White House has "released" (you'll see why I put that word in scare quotes when you follow the link) the long form of his birth certificate. Donald Trump immediately took credit for "hav[ing] played such a big role in hopefully getting rid of this issue." The CSM gives the win to Trump, saying, "In politics, anytime you force an opponent to react to you, as opposed to talk about what they want to talk about, you’ve often scored a point."
The CSM is right, but it overlooks one important point: this will not get rid of the issue. It will only fan the flames higher. There is a reason that conspiracy theories have "conspiracy" as a prominent part of their name. They are impervious to facts because "facts" can be manufactured. You don't even have to try very hard to concoct a birther-friendly explanation of the alleged long-form birth certificate. For starters, the White House did not release the document in a sane format, like an image of a PDF. They "released" it as an Adobe Flash file. So you can't look at the whole document, you can only peer at it through a teeny weeny little window. Yes, you can zoom in and out and pan around, but if you zoom in far enough to be able to read the text you can only see a tiny part of the document. Why did they do this? Obviously there can only be one "reasonable" explanation: the White House is desperately trying to conceal the fact that the document is a forgery.
So yes, Trump scored a point by making the President react. But then he conceded the game by implicitly accepting the document as legitimate! You can't have it both ways. Either you're playing for the loons or you aren't. Switching horses in mid-stream is political suicide. Trump already lost all the sane people when he signed on as a birther in the first place, but now he will lose the birthers too because he's become part of the conspiracy!
This is Trump's greatest weakness: he can't stop himself from gloating over a victory. It just cost him the White House.
[Update] Turns out they released it as a PDF too. But of course that won't matter either, they'll just come up with some other story.
The CSM is right, but it overlooks one important point: this will not get rid of the issue. It will only fan the flames higher. There is a reason that conspiracy theories have "conspiracy" as a prominent part of their name. They are impervious to facts because "facts" can be manufactured. You don't even have to try very hard to concoct a birther-friendly explanation of the alleged long-form birth certificate. For starters, the White House did not release the document in a sane format, like an image of a PDF. They "released" it as an Adobe Flash file. So you can't look at the whole document, you can only peer at it through a teeny weeny little window. Yes, you can zoom in and out and pan around, but if you zoom in far enough to be able to read the text you can only see a tiny part of the document. Why did they do this? Obviously there can only be one "reasonable" explanation: the White House is desperately trying to conceal the fact that the document is a forgery.
So yes, Trump scored a point by making the President react. But then he conceded the game by implicitly accepting the document as legitimate! You can't have it both ways. Either you're playing for the loons or you aren't. Switching horses in mid-stream is political suicide. Trump already lost all the sane people when he signed on as a birther in the first place, but now he will lose the birthers too because he's become part of the conspiracy!
This is Trump's greatest weakness: he can't stop himself from gloating over a victory. It just cost him the White House.
[Update] Turns out they released it as a PDF too. But of course that won't matter either, they'll just come up with some other story.
Tuesday, April 26, 2011
Is it Lisp or is it me?
John D. Cook writes:
As someone who has specifically gone on the record saying pretty much exactly that (more than once) I feel the need to refute this claim.
Since the argument is based on the premise that I was in fact more productive than my peers, I have to toot my own horn a bit more than I'm generally comfortable with. I spent twelve years of my early career at the Jet Propulsion Lab during which time* I was promoted to the rank of Principal, the highest rung on the technical career ladder. I think it's safe to say that I did not achieve this through my sparkling personality, my willingness to brown-nose, or my finely honed political skills. In fact, looking back on it, I think at one time or another I managed to alienate about 90% of the people I came in contact with. So the only reasonable explanation of the fact that I was promoted instead of fired was that I produced results.
That still leaves open the possibility that I'm just freakin' brilliant, I could have (and would have) produced the same results in any old programming language. But there is actual data to refute that theory.
First, when I was at Google I got to see firsthand what real coding genius looks like, and it ain't me. There were dozens of people at Google who could code so fast and so effectively that it literally left me slack-jawed. My colleagues regularly did things that I would not have even thought possible had I not seen them with my own eyes.
Second, when I tried to learn to do what they were doing, I failed miserably. I tried to wrap my brain around Java and C++ and I just couldn't. I found myself so frustrated by the fact that I had to manually worry about a zillion little details that I could just ignore if I were using Lisp that I got a mental wedgie and I just couldn't get past it. I'd get bogged down in protection faults, STL errors that scrolled off the top of the screen, the fetid cesspool that is Perl, and get so frustrated that I just couldn't make any progress.
Third, I'm not the only one this has happened to. When I was working on the remote agent experiment an attempt was made to port part of that code (the planner) from Lisp to C++. After a year that effort had to be abandoned because the planner team just couldn't make it work. So it's not just me.
Fourth, it's just seems obvious from first principles that it you're using a language where you don't have to worry about memory management, you're going to get things done quicker and more reliably than a language where you do.
It is because of all this that I attribute my own success more to Lisp than to my personal coding prowess.
This is not to say that Lisp is a panacea. I do believe in the Lisp curse that the power of the language is in some respects self-undermining because it empowers the individual and so tends to attract people who don't work well in teams. A team of competent programmers willing to put up with bullshit will out-compete a lone wolf striving for elegance no matter how brilliant he is. It's sad, but that's the way it is.
---
[*] To be strictly accurate, after 12 years I was a Senior, one rung below Principal. I then left for a year to work at Google, and when I returned I was re-hired as a Principal.
I’m skeptical when I hear someone say that he was able to program circles around his colleagues and it’s all because he writes Lisp. Assuming such a person accurately assesses his productivity relative to his peers, it’s hard to attribute such a vast difference to Lisp (or any other programming language).
...
There are genius programmers who write Lisp, and Lisp may suit them well. But these same folks would also be able to accomplish amazing things in other languages.
As someone who has specifically gone on the record saying pretty much exactly that (more than once) I feel the need to refute this claim.
Since the argument is based on the premise that I was in fact more productive than my peers, I have to toot my own horn a bit more than I'm generally comfortable with. I spent twelve years of my early career at the Jet Propulsion Lab during which time* I was promoted to the rank of Principal, the highest rung on the technical career ladder. I think it's safe to say that I did not achieve this through my sparkling personality, my willingness to brown-nose, or my finely honed political skills. In fact, looking back on it, I think at one time or another I managed to alienate about 90% of the people I came in contact with. So the only reasonable explanation of the fact that I was promoted instead of fired was that I produced results.
That still leaves open the possibility that I'm just freakin' brilliant, I could have (and would have) produced the same results in any old programming language. But there is actual data to refute that theory.
First, when I was at Google I got to see firsthand what real coding genius looks like, and it ain't me. There were dozens of people at Google who could code so fast and so effectively that it literally left me slack-jawed. My colleagues regularly did things that I would not have even thought possible had I not seen them with my own eyes.
Second, when I tried to learn to do what they were doing, I failed miserably. I tried to wrap my brain around Java and C++ and I just couldn't. I found myself so frustrated by the fact that I had to manually worry about a zillion little details that I could just ignore if I were using Lisp that I got a mental wedgie and I just couldn't get past it. I'd get bogged down in protection faults, STL errors that scrolled off the top of the screen, the fetid cesspool that is Perl, and get so frustrated that I just couldn't make any progress.
Third, I'm not the only one this has happened to. When I was working on the remote agent experiment an attempt was made to port part of that code (the planner) from Lisp to C++. After a year that effort had to be abandoned because the planner team just couldn't make it work. So it's not just me.
Fourth, it's just seems obvious from first principles that it you're using a language where you don't have to worry about memory management, you're going to get things done quicker and more reliably than a language where you do.
It is because of all this that I attribute my own success more to Lisp than to my personal coding prowess.
This is not to say that Lisp is a panacea. I do believe in the Lisp curse that the power of the language is in some respects self-undermining because it empowers the individual and so tends to attract people who don't work well in teams. A team of competent programmers willing to put up with bullshit will out-compete a lone wolf striving for elegance no matter how brilliant he is. It's sad, but that's the way it is.
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[*] To be strictly accurate, after 12 years I was a Senior, one rung below Principal. I then left for a year to work at Google, and when I returned I was re-hired as a Principal.
Friday, April 22, 2011
New startup rule: revenue pages should get top priority
My world, along with that of a zillion other geeks, came crashing down around me about 24 hours ago when Amazon Web Services went down and took Reddit down along with it. Things are slowly returning back to normal, but at the moment only paid Reddit Gold members are being allowed to log in. I've actually been meaning to sign up for Gold for a while just on general principle because I like Reddit and want to see it continue to thrive, so this seemed like as good a time as any. Unfortunately, it turns out that to sign up you have to log in. Catch-22.
So... if you're doing an on-line startup, you should build it in such a way that the revenue path stays up no matter what, or at least is absolutely the last thing to go. You never know when or why people might want to give you money. You should never make it impossible for them to do so.
So... if you're doing an on-line startup, you should build it in such a way that the revenue path stays up no matter what, or at least is absolutely the last thing to go. You never know when or why people might want to give you money. You should never make it impossible for them to do so.
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