Jobs are on the way

A close reading of Meg Whitman's campaign bus.

As I was perambulating through town on the day of California's recent gubernatorial debate, what did I see but an enormous bus, emblazoned with "Jobs are on the way", featuring California poppies on a field of green. I immediately cracked up, as this was the campaign bus of Meg Whitman, posing as some kind of flower-child messiah. I figured that she was parked outside the local Staples to catch a snooze in a business-friendly atmosphere before the night's debate, held right here in the fair city of San Rafael.

The back of the bus... note license from Tennessee.

Speaking of the atmosphere, the bus was running the whole time I was nearby, perhaps to keep her cool and comfortable on a hot day, but not doing much (in my book) for her green credentials, of which there are precious few. Nor were there any windows on the bus- the sides were devoted entirely to the colorful and boastful publicity, leaving whoever was inside none the wiser about where in California they might be passing through. The bus was also emblazoned in smaller type as the "Take back Sac express", a minor-key homage to John McCain's doomed buses of yore.

But what really got me thinking was the "Jobs are on the way" slogan, paired with Whitman's mantra that she is a job creator and knows how to make jobs. If we had an honest politics, the message would be quite different, perhaps "I know how to fire people".

Whitman's central skill is management of corporate brands and large business organizations, and this is not a skill to sneaze at. Our state government is an enormous, recalcitrant behemoth, in need of effective management. And Whitman's program for the government, as far as I can discern, is to fire a lot of people and cut the pay and benefits of the rest. Not necessarily a terrible program for a bloated bureaucracy with wildly unrealistic benefits and a good deal of corruption.

Yet there are some problems. First is that the main issues at the state level are not just ones of management, though good management is always in short supply. The main issues are structural, due to the chaos of our endlessly amended constitution, which empowers special interests of many stripes (and especially minorities in the legislature) to hold the state hostage like so many Lilliputians. Schwartzenegger has taken a few shots at these structures, mostly ineffectively. He has also supported a few propositions that promise to help the situation, namely those for open primaries, rational redistricting, and passing budgets with a simple legislative majority. But much more needs to be done, and I have not heard either candidate supporting the kind of deep reform or even constitutional convention it might take to accomplish real change.

In that respect, Jerry Brown clearly has more experience than Whitman does, knowing the nuts and bolts of the state government perhaps better than anyone, from the bottom up and the top down. Does he have a coherent critique of that government and a path for fixing it? I haven't heard it yet, so this campaign has failed on that basic point of discussing the most important issues.

With the immediate question of the state's general employment situation, we presumably get to the bus slogan above, and Whitman's claim that she "knows how to create jobs". Personally, I wouldn't think the governor has a great deal to do with the cycles of state economy. The foremost job of the state government is to govern well, provide robust public goods, and let the economy wend its way through the regular business cycle with minimal interference. The economy is far more strongly affected by federal policy, and it is additionally hard to imagine how firing lots of state employees will raise employment statewide, except perhaps in homeless shelters.

At any rate, what Whitman offers explicitly is the straight Republican plutocratic line- that cuts in capital gains taxes will magically create jobs and help balance the state budget. And that her tough love at the state level, reducing business regulation, eliminating public goods, and cutting taxes of the wealthy, will make business people happier and more likely to create jobs here.

Here is where Whitman's campaign parts with reality. Republican economics have gotten us into a long-term economic ditch nationally, and California is part of that trend. The widening gap between rich and poor over the last thirty years has failed to lead to the trickle-down promised land, but instead has led to ... further widening the gap between rich and poor, which in turn leads to private overindebtedness, amplified economic crises, and economic stagnation.

This gap also leads to reduced commitment to public goods and impaired political leadership, since the rich increasingly supply their own "public" goods in the form of private communities, private air services, private security, private schools, private ... you name it. Competent regulation of companies and the economy generally is another public good that has suffered due to this shift in power and resources, since the rich have, along with gobs of money, captured a great deal of political power. Obama's coddling of the banks provided eloquent testimony to the takeover of both parties by the rich.

So Whitman's prescription of more trickle-down economics is not a plausible program, unless we are interested in turning California into a something more feudal like Southern states which compete for low-skill non-union jobs in the margin before they are shipped overseas. Nor have Whitman's own business or non-business activities shed any light on her capacity to improve California's economic prospects. She began as a brand manager for Procter & Gamble. Then she worked with Mitt Romney at the investment house Bain & Co. Then it was off managing consumer products at Disney for three years. Then to Keds shoes, then FTD, then Hasbro. After ebay, she served as fundraiser for friend Mitt Romney and on several corporate boards. No government experience at all, other than hobnobbing. Business experience focused on selling brands to apathetic consumers. One can see where the slick sales job comes from, but not where deep public policy experience or leadership is supposed to come from.

Nor does Whitman's specific experience at ebay have much to do with the innovation that lays the basis for better job creation in this state. The idea of ebay was someone else's, and that idea, plus its technical incarnation, was what created the economic job-creating juggernaut that is ebay. Whitman was the "adult" CEO brought in to organize the company's growth, promote its brand, and keep costs under control. She not only had nothing to do with the original idea, but spent her time managing headlong growth, a quite different proposition from the stagnation, sclerosis, and extreme animosity that she will, if elected, undoubtedly face in Sacramento.

Whitman also was on the board of Goldman Sachs during perhaps its most profligate period, the dot-com boom, and is squarely in the plutocratic camp- by wealth, by background, by personal experience, by personal attitude (e.g. the housekeeper drama), and by avowed policy. Is this what California needs? The way I see it, the state needs its crumbling infrastructure kept up and pushed forward to projects such as high speed rail. We need governance reform. We need better bargaining with public employees which puts them in touch with reality and removes them from the political process. We need reduced incarceration. We need to restore budgets at all levels of education, and resume California's commitment to low-cost higher education. We need a vision of public policy that sees the state lead in great future challenges, such as green energy, climate change mitigation, scientific and business innovation, demographic change, and continued attention to civil freedoms and diversity.

Whitman has explicitly disavowed the legislature's and Schwarzenegger's work on carbon emissions reductions, and would suspend its implementation if elected. She supported proposition 8 which denied marriage rights to gay couples, (and which would no longer pass). She plans, as indicated above, to cut taxes for the rich, widening an already enormous gap. She has attacked illegal immigrants and plans to reduce their educational opportunities, though employing them herself and proposing a temporary serf program instead. She wants to reduce business regulation and engage in a regulatory race to the bottom vs other states. She opposes legalization of marijuana. She has no plan for higher education, despite education being a supposed focus. She opposes the high-speed rail project that would join Northern and Southern California. She personally failed to vote for 28 years, up to 2007, and has otherwise had no political involvement at any level, other than being friends with Mitt Romney.

So while there is a glimmer of reason to her candidacy in terms of sheer management chops and domineering will, it is hard to see how, for all her talents and her $170 million media blitz, (outspending Jerry Brown 6:1, and including the notorious "Talk to Meg" listening tour last spring), the citizens of California can take her seriously as a leader on the many issues afflicting our state.

• Arnold vs the prisons. Exhibit A of dysfunction.
• Senator Shelby blocks Nobel laureate Fed appointee out of concern for "qualifications". But Bill Mitchell has nothing but scorn for this crop of laureates, so maybe Shelby is barking up the right tree after all!
• The revolution might even start in church.
• Newton and transmutation.
• I can't believe this made it into USA Today.
• Bill Mitchell quote of the week, here quoting a Morgan Stanley economic report:

"Business was the biggest beneficiary of policy stimulus: it didn’t have to pay for the recovery. Consequently, the profit recovery was strong even though the growth recovery was weak. If corporates don’t start ‘paying’ – hiring and, to a lesser extent, investing – then expect a double-dip. If they do start to pay, the recovery will continue, but it won’t be as profitable as the first phase of the expansion. The Great Swap that ended the Great Recession involved a big transfer of income from the public sector to the private sector."

A "point debt" down at the bowling alley

Extending the bowling alley analogy about how money is made and managed.

I enjoyed an essay/book by Warren Mosler, one of the advocates of MMT, the modern form of Keynesianism. Especially the point he made about the government making money pretty much the same way a bowling alley makes points .. they just make them up! (using a few rules, of course). So I thought I would try to extend this to model some more aspects of the monetary system such as banks, inflation, unemployment, and more.

Image a bowling alley, where people come to enjoy themselves and get points for doing so. At the outset, the only worth those points have is reputational- we take pleasure in winning and knowing we have won, and want to know our bowling/social status vs other people.

The point system is rather rigid. Points are created and awarded for certain accomplishments, then disappear uselessly after the game of ten frames ends. So while the alley might provide the service of tallying up and presenting the points won after every frame, the players themselves might whip them out of thin air just as easily.

This part is reminiscent of the way banking used to work. Before the federal reserve system, banks, and even individuals, used to make up their own currency, in the form of "notes" or IOUs, also called notes of hand in the case of individuals. In the 1800's, banks created their own notes, which were sort of a hybrid between bonds and currency. The Federal government first issued its own paper notes "greenbacks" only in 1861. All these were passed around, and since the banks promised to redeem them for gold, they functioned as currency, as long as the issuing bank was solvent. Thus started the tradition of banks taking super-secure names like First National Trust, and so forth, to hide the phenomenal danger they pose to customers as well as to the larger monetary system.

Bank. In this case the architecturally amazing National Farmer's Bank of Owatonna, Minnesota.

Gold was the great common denominator, so just as in the bowling alley case, once one knew how much gold one had (or how many pins one had knocked down), one knew how many dollars (or points) one had as well. It all seemed very easy, at least until the proceeds from a massive gold rush caused inflation, or foreign exchange problems caused other fluctuations, or people agitated for silver to be added to a "bimetallic" system because there wasn't enough gold to back the amount of currency needed (the so-called "cross of gold"), etc. ... Rest assured that our current floating, fiat currency system is far easier to manage!

Now let's switch gears and regard the bowling alley as something closer to a fiat currency system, where the alley generates points as it sees fit based on the health of the bowling economy. Let us also imagine that bowlers pay up front in points (not in dollars) to participate (renting shoes, balls, lanes, etc.). If they win more than they paid, they come out ahead and can save their points (minus a cut for the alley- more on that below). But if not, woe to them! The alley casts them into the dark depths and makes them oil the machinery that sets up the pins!

Let's also imagine a middle tier of bowling bankers, who sit outside the front door with desks, lamps, and green eyeshades, lending points to people who come along, after reviewing their past bowling scores and satisfying themselves that those customers will likely come out with more points than they were loaned going in. The alley lends these bankers a few points to start with- say, 10% of what the bankers plan to lend out. But the bankers get to make up the rest of the points as they go along, and if they make a string of bad loans, then a lot of customers will find themselves in the back of the alley, shining gear boxes, the bank will be out of business, the alley will be out its set of base points, fewer customers will be able to come in, and a lot of points will have gone up in smoke.

(Note that the sidewalk bankers make up points out of thin air just as the alley itself does. Only the rule is that they have to have a capital base of points of some fraction of what they are lending out. The points they create are just as good as those from the alley itself, and when the credit crash comes, those points evaporate as bowlers default and the banks go out of business when their losses exceed their capital base. Leverage like this is extremely fragile to adverse shocks, or to plain mismanagement.)

Obviously, that is where we find ourselves today. Due to lax regulation, short-termism, fraud, a race to the bottom of underwriting standards, etc.. the banking system overextended itself, and we are left holding the bag, both for the specific banks, and for the ailing economy as a whole. The deepest effect is that a huge amount of money has gone up in smoke, causing fewer customers to come in the front door to bowl (reduced demand). Now that the alley has fewer customers it will shutter some of its lanes and fire some of its employees, (unemployment), and there are more customers working menial jobs in the back, buffing the pins to a high shine (i.e. debtors are defaulting and going in to backruptcy and poverty at high rates, twiddling their thumbs, doing nothing productive).

Note that nothing real has happened, however. There are still just as many people who might like to bowl, they bowl just as well as they did before, (for some time, at least), and just as many alleys are there for them if they could get in the door. What has changed is that there is shortage of point-tokens due to the collapse of the sidewalk bankers, which led to contraction of the bowling economy.

What can the alley do? One solution is to save the bowling bankers from their self-immolation, set them up with extra points and beg them to lend again. But those who are left are scared out of their wits. They blew it big-time, and now only lend to championship bowlers who can prove statistically that they bowl >250 at least half the time. Not only that, but with some lanes temporarily closed down, (this being a very small town), several alley employees, who were being paid in points, are out of work and don't come themselves to bowl any more. They are depressed!

Something else needs to be done or the alley will have lanes closed for a very long time. It should be obvious that the quickest solution is for the alley to create and directly distribute enough extra points so that more customers start coming in again, replacing the points that went down the drain during the banker's crisis. The alley can create as many points as it likes- they are intrinsically worthless, after all. Their only purpose is to facilitate the joy of bowling that is now deficient.

But if it creates too many, then the alley will get too many customers coming in the door and too many bowlers who get in each other's way. The alley can't make more lanes, (in this scenario), so the extra points just let more people in the door to a lower-quality experience, essentially devaluing their points, which in the real world would be inflation. If the alley persisted in issuing more and more points, for whatever reason, they would create hyperinflation and essentially destroy the value of those points completely. Lines of people with plenty of points to "spend" would form outside and never get in at all!

From the bowling alley's perspective, it needs to keep just the right level of points in the system- too few, and not enough people come in the enjoy the lanes. Too many, and the points themselves become devalued, even worthless. While it was convenient for the bowling alley to use sidewalk bankers to extend points on credit to prospective customers and not take those risks itself, that system blew up in its face, with the result that it had to mop up the bankers's losses and also extend points itself to deal with the drop in bowling customers. One wonders- why have bankers at all, if they are such remarkably dangerous entities in such a system? Will the alley keep its bankers on a much shorter leash in the future, perhaps requiring 20% or even 100% capital backing? That is a question for another day.

What of all the points that have been created? Hasn't the bowling alley run up some kind of "point debt"? Not at all. Our bowling alley didn't have to get its points "from" anywhere. It just made them up. The government makes our money in just the same way, crediting and debiting electronic accounts. But one thing our government does do differently is sell public debt. Why is that? One reason is that there is a law about it, saying that if the government spends more than revenue, it has to issue debt for the difference. This is a mostly artificial system with little point, other than to hand out money to rich people who buy such bonds (in the form of future interest). It is also a relic of the gold-standard days.

The other reason is that some of this debt is essential for monetary policy & management. It helps to "drain" excess money from the system, provide a savings vehicle for the public, and set interest rates. Since that drained money only turns into the only slightly less liquid form of bonds, the functional difference isn't great, but those bonds do serve the important role of setting interest rates at various terms. Our bowlers don't think of the future, though, so no interest rates there.

Will the "point debt" have to be "repaid"? Let's assume for the moment that the bowling alley puts out a series of point-based bonds to be bought by rich bowlers who give the alley their old points in return. The alley does have to keep making small payments to the bond holders over the life of the bonds, which means making up yet a few more points over the ones they have already made up. No problem there, of course. Inflation is the only risk, can be continuously managed by a vigilant alley, and is minor considering the scale of these payments.

When these bonds come due, the alley could pay out made-up points, creating more real points in the private sphere, which could lead to point inflation. Or, it could keep issuing new bonds to replace the ones expiring. It all depends on the conditions at the time, whether inflationary or deflationary. The alley never has a problem controlling the point economy, achieving its goals of keeping the point values stable and keeping people coming to the alley at an optimal rate. The "point debt" just expresses the net position of the alley as it manages its balance of point tokens with respect to the public at large, who may have a lot of points saved up with the alley in the form of bonds.

As these bond holders age and bowl less proficiently, they will draw down their point savings to keep bowling into their golden years. The alley doesn't have to worry about "repaying" these points from some internal point vault, but does have to manage the overall level of points across the point economy. If needed, it can just make them up, or extinguish them, as needed. Its only worry is managing the current system, which, while it can be whipsawed by banking catastrophes and demand fluctuations, is ultimately manageable by the alley's point creation and extinction ability ... if it has the courage and insight to do so.

(Extinction happens through various forms of leakage, like people dying with unbequeathed points hidden in their mattresses, a fee taken off the top of shoe rentals that is not paid back out in earned points (i.e. taxes), and people using points to buy high-tech bowling balls from China, which seems to enjoy piling up bowling alley points, for reasons that are not entirely clear. The shoe taxes are not imposed to "pay the point debt", but to drain points from the economy so that a flood of points converted from savings to spending doesn't cause inflation.)

Note that the austerity response to our bowling alley depression would be to close more lanes and "tighten our belts", waiting for those bankers out front to smoke some weed and lower their cortisol levels to the point that they resume lending as normal. After all, if the customers are stuck in a depressed state, cutting point coupons from the local paper, shouldn't the bowling alley likewise tighten more, firing more workers and closing more lanes?

Unfortunately, the bankers under even this scenario have no rational incentive to lend to quite the level they did before, since they are facing poorer customers with less "point" collateral and forced to present more accurate bowling history documents, who, when they go in to bowl, tend to get lower scores and fewer points because they are out of practice (i.e. commercial bank customers have lowered economic prospects due to the general recession). The credit system alone will not and can not bring the system back to the happy days of yore. Austerity is the road to continued point penury and under-utilization of our bowling prowess!

But that all depends on what our goals were in running the bowling alley. I assume that the goal was not the piling up of points, (since they are ultimately worthless), but the enjoyment of bowling. I also assume that the goal was not to teach bowlers a lesson about Personal Point Responsibility by imposing bowling austerity due to a breakdown in the sidewalk credit system, thence consigning many to the pointless depths of the vast pin-collecting machinery. Nor was it to reduce wages at the bowling alley by making its workers more insecure. The ultimate cause of the crisis, after all, was lax lending leading to insolvency of the sidewalk bankers. Their customers doubtless grabbed more points than they were good for, but the fault was very much shared by their lenders, not to mention their regulators. Nor certainly was the fragility of the larger system their fault at all.

• Computers ... will ... win.
• Our criminal world of finance ...  also running the government.
• Some words from Liu Xiaobo.
• From the Afghan front line.
• Where a Republican society gets us. 
• Cohen on our times.
• Ebay's founder isn't on Meg Whitman's side.
• Alas, faith!
• Unemployment and age-ism is crushing people. 10 million jobs are missing.
• Join the Fox advertiser boycott.
• Bill Mitchell quote of the week:

"In other words, Summers advised the President to allow unemployment to sky-rocket but to do just enough to prevent a depression (catastrophic failure). Fiscal policy didn’t fail in the US. It just wasn’t given a chance to work when it should have been. Had the US government introduced a $US1.2 trillion stimulus and relied on multipliers to fill the identified $US2 trillion output gap things would have been very different and the job losses would have been less."

China is the climate gorilla

When it comes to future emissons, it mostly comes down to China

An interesting article appeared in Science recently, modelling what would happen if no fossil fuel-burning facilities & machines were built ever again, as of right now. They found that while current warming is 0.5ºC over the historical baseline, future warming would rise to 1.3ºC under this scenario, below the 2ºC which is typically regarded as a sort of absolute must-not-go-beyond point of no return by the climate community.

This scenario involved letting all carbon sources (cars, electricity plants, etc.) age to their natural replacement lifetimes, then replacing them with some carbon-neutral technology. Needless to say, this is fantastically optimistic, but gives us a sort of baseline against which to view the energy and climate landscape we actually put into place.

Full-stop scenario for no new CO2 sources, by country/region.

The world uses about 12,000 GW of energy, and may want to use 30,000 GW by 2050. The mix is 85% fossil-fueled now, and the question is how to move to sustainable energy systems (i.e. 0%) as quickly as possible. As I have frequently argued, with renewable energy sources on the edge of economic viability, our public policy position (i.e. a carbon tax) is the only robust way to bring sustainable energy into use rapidly. Technological change alone is not enough when fossil fuels like coal fail to have their many external costs priced in. Indeed, government subsidies for fossil fuels still far out-strip those for renewable energy, not to mention other implicit external costs.

The paper provides some interesting observations on our actions in the past decade. In the US, the mean age of electric power plants is 32 years, making this end of our infrastructure ripe for a green revolution. In the last decade, the US has added 224 GW of new plants, of which only 3.5% have been coal, (halleluja!), 84% natural gas, and a surprising 12.7% wind. Not great, but we are making slow progress.

On the other hand, China has added 322 GW of coal generating plants in the last decade. This is one reason why China has such a huge influence on our future climate trajectory. Not only does China now emit more CO2 than any other country on earth, (thanks in part to their takeover of manufacturing on the world's behalf), but through its relatively recent build-out, China has also committed to huge emissions far into the future, quite apart from what machinery they build from here on out.

Proportions of 1326 GW of electrical generating capacity installed since 2000.

And since China is still climbing the industrialization curve, there may be plenty more where that came from. Per capita CO2 emissions are roughly half those in the US. While China may be at a peak of its dirty industry phase of development, its remaining poverty indicates that just in consumption terms, a great deal more build-out, more fossil fuel use, and more emissions are probable.

Of course China suffers from all this growth internally. Pollution is terrible and the government is more or less desperate to mitigate it. Green is on the agenda, both as a domestic priority (if somewhat far off) and as another industrial focus. This month's heavy-handed blockade of shipments of rare earth metals to Japan (used in manufacturing Prius cars, etc.) was one small skirmish in a far larger war for control of the green tech industry, which, as all these numbers indicate, is destined to have a staggering scale.

This is the other angle of China's status as key to the coming energy regime. Not only will it be the leading emitter, but it will be central to reducing emissions world-wide through its manufacturing and innovation heft. Will China speed towards green energy deployment, or is its green policy push only window dressing? Will it use its trade weight to kill nascent green sectors in other countries? Will it pursue retrograde policies in the developing world to corner energy and materials markets? Of course we in the US are hardly in a position to complain, having created international mayhem for decades out of our thirst for oil, and being far behind the green program ourselves, (the Kyoto program for example), but nevertheless, where is China going?

This link is an impressive rundown of the plans and progress China is making on the green energy front. Its current five year plan calls for reducing carbon intensity relative to GDP by 20%. This is substantial, but easily achievable by raising the mix of high-value manufacturing, and taking old infrastructure out of service, as well as installing green energy, including the enormous Three Gorges dam. And in the face of near 10% annual GDP growth, it means continuing rising emissions. In real terms, China out-invests us 2:1 in green energy. So it is easy to see that while the sunk (and soon-to-be-built) infrastructure of China is the leading element of future CO2 emissions, China is also the leading green tech investor and manufacturer of the future.

• Mormons get married, or else!
• Sex in the muslim world.
• Imagine ... no, live in ... a country without religion.
• Pot, coming in from the cold.
• Skidelsky decries the hair shirt of British austerity.
• A note on the coming class war in Europe.
• The psychological mysteries of tipping. Note how here, as in religion, what people say and think they do is completely different from what actually happens.
• Bill Mitchell quote of the week, here quoting Alan Blinder, 1987:

"The political revival of free-market ideology in the 1980s is, I presume, based on the market’s remarkable ability to root out inefficiency. But not all inefficiencies are created equal. In particular, high unemployment represents a waste of resources so colossal that no one truly interested in efficiency can be complacent about it. It is both ironic and tragic that, in searching out ways to improve economic efficiency, we seem to have ignored the biggest inefficiency of them all." (Also, note Mitchell's quantitative treatment of mid-recession austerity.)

On party discipline

Discipline is important to gaining power, but fatal to making good policy.

On the current political scene, party discipline plays an interesting role. Republican are famous for having more discipline, and playing correspondingly more rough (and shameless) politics, than Democrats. What does this mean, both for the character of the party, and for the sorts of policy that result?

I've been reading an excellent biography of Stalin by Russian playwright and historian Edvard Radzinsky, whose high point is the show trials of the late 1930's. The remaining luminaries of the Bolshevik party, foremost among them Nikolai Bukharin, were each put on trial on false charges, confessed to everything, and then shot. One, (Kamenev), went so far as to say: "I stand before a proletarian court for the third time. My life has been spared twice, but there is a limit to the magnanimity of the proletariat." The author adds: "The accused unanimously asked to be shot. Once again, the trial could not have been running more smoothly".

Later on, as the purges reached the lower levels of the party, confessions were rapidly extracted by torture as a matter of course. But these men were not tortured. Early on, loyalty to the party was enough. The Bolshevik party had enormous discipline, forged through revolution and then civil war. Coming to power as a small minority party, with only localized popular support among the Petersburg workers (and most important, the disgruntled Petersburg sailors), it had to band together ruthlessly to survive and work its will on the country.

Over time, this discipline took the form of the Party being correct in everything it decided collectively. Any dissention or factionalization was tantamount to treason. Without broad popular support, internal consistency was essential, and rather rapidly led to internal, as well as external, despotism. Some actual discussion was allowed among the heros of the revolution- Lenin, Trotsky, Stalin, and a few others. But time and again, deviant "lines" were quashed and unanimity restored. Lenin called the shots, including leaving Stalin in charge at his death. And the "collective" became more concentrated.

Burkharin and colleagues were schooled in the Party ideology, which included complete devotion to its collective wisdom, much as it claimed to guide the country at large based on a sort of collective wisdom based on the "workers", the "proletariat", the Soviets, and on its scientific ideology. Thus when the collective wisdom asked them to give up their personal lives for the greater good, they were, well, not happy to do so, but willing. The fact that this wisdom was not collective at all, but the personal despotism of Stalin alone, was only too obvious, but at the same time impossible to fully acknowledge.

The Bolsheviks would never have gained power without their internal party discipline. They had spent the  decade before 1917 in exile, publishing popular leaflets and party newspapers in Russia, establishing a network of secret party cells in Russia, and developing the leadership and ideology that they would deploy against the Kerensky government. Where the Kerensky government was weak through lack of unity and purpose, the tiny Bolshevik party was strong with idealism and operational discipline.

One can make a similar case with regard to the Catholic church, which the recent scandals show possesses a remarkable degree of discipline, or perhaps unanimity of purpose and method, or at least deference to authority. The approach of church authorities to abuse scandals was uniform over decades- forgiveness of the perpetrator, reassignment, repetition, and silence. This church has been far faster to excommunicate based on threats to its hierarchy than for immorality of any kind. For example, no Nazi was ever excommunicated for being a Nazi or for killing Jews. Doctrinal disputes are resolved, not by a democratic procedure or public process, but by the infallible pope. While the succession procedures of the Church have been more successful than those of Bolshevism, their answer to factionalism has been the same- concentration of power at the top, creating a unitary power served by a disciplined hierarchy.

Armies likewise require close discipline to leverage small numbers into great power- that is the nature of power, perhaps formally expressed as the product of numbers of people times their cohesion, even fanaticism. (Which could be called the inverse of their political entropy!).

But cohesion is philosophically opposed to liberal, humanist tendencies. Each person is unique, free and independent, and our most cherished institutions allow maximum individual expression and action. If the ideal social system fosters scope for individual freedom, yet power accrues to those who submerge their differences into a common discipline, how can liberal ideals survive politically?

They can only survive by being baked into the system and into the culture. By dividing power by design and forcing discussion, negotiation, and compromise. By enculturing the population to not capitulate to the most powerful grouping of its fellows, but to insist foremost on the principles of the (liberal) system before resuming the political fight. That is what Western political history has bequeathed to us, and obviously has served quite well.

This leads to a moderation of power struggles, as it also leads to better policy, by which I mean policy that reflects the broad consensus of society rather than the whims of a powerful cadre. We are currently in some danger of retreating from the liberal system because a lust for power is overtaking reason in one of our political parties.

As Paul Krugman points out, the current Republican platform doesn't even try to make arithmetic sense, promising endless tax cuts and balanced federal budgets at the same time. Many other forms of base demagoguery infect its discourse, indicating either cult-like delusion or contempt for the electorate, a contempt especially cruel at a time when its proposed policies would be so economically damaging to those suffering through the current crisis. The harsh discipline of the Republican party is most evident in the Senate, where good or bad policy be damned, they stand as one to thwart any Democratic success. It is also evident at FOX news, which presses the "party line" of the moment, no matter how absurd.

While the republic is not yet in dire straights, the development of legitimate public policy depends on the opposite of discipline. It depends on each party, (indeed, each individual), differing as they might, mounting a reasoned argument for its position in the court of (educated) public opinion and before their colleagues. In a world of incomplete information, many reasoned positions can lead to reasonable (if not wise, or optimal) policy choices. But to base one's positions on deceit and vitriolic (even Orwellian) propaganda, and to stick to them with party discipline, as the right of our political spectrum makes an increasing habit of, is fundamentally destabilizing and deeply worrisome.

• Krugman on the rich.
• David Packard talks about work.
• And Lyons talks about talent.
• The pope, on atheists.
• Skidelsky analyzes Europe.
• A Modern Monetary Theory primer. "... you knock down 5 pins at the bowling alley and your score goes from 10 to 15. Do you worry about where the bowling alley got those points? Do you think all bowling alleys and football stadiums should have a ‘reserve of points’ in a “lock box” to make sure you can get the points you have scored? Of course not!"
• At the same time, Greenspan loses his mind on the debt. But will the old oracular magic work?
• Bill Mitchell quote of the week:

"Further, the capacity to cope with a rising dependency ratio comes from productivity growth and technological change. We typically get that from increased skill levels of the workforce and extensive research and development. In turn, strong higher education and public research institutions are crucial for the development of these advantages. Again, fiscal austerity undermines the capacity of an economy to generate these long-term benefits.

Fiscal austerity is about the “race-to-the-bottom” – where low-wages, insecure employment and low productivity are the salient characteristics. It is a mindless and totally unnecessary strategy."

Duel to a minature death

Bacterial viruses are fascinating, if only we squint really hard!

I ran across a lengthy review of the bacterial virus (or phage) called T4, and was inspired by the elegance and intricacy of this organism. Bacteria can hardly be seen through a light microscope. Their viruses can't be seen at all unless you have an electron microscope (90 nm across. For comparison, a water molecule is 0.2 nm across). These are the ultimate mite on the flea on the hair of the dog. But such viruses are everywhere, thought to outweigh humanity in overall biomass (with ~10E32 individuals). They pervade the oceans and anywhere else bacteria exist, and have been used in medicine as antibiotics.

The T4 virus, about 90 nm across, 200 nm long

The T4 virus uses a lunar-lander structure to detect and attach to its host, and then inserts a microscopic needle to inject DNA from its head capsule into the hapless victim. No consciousness is involved- this is a fateful dance of molecular entities, one battling the other for the prize of the bacterium's accumulated cytosol- chemicals and energy.

The bacterium has several weapons at its disposal. First, T4 docks on some simple sugars on the bacterial surface. But not all bacteria display them, so not all bacteria are equally susceptible. After the virus has injected its DNA, many bacteria are able to cut it apart with DNA-cleaving enzymes- which cut DNA at particular sequences, (which are specially shielded in the host cell), leading them to be called "restriction" enzymes for their ability to restrict which viruses infect that host.

But often enough, the virus wins and commandeers the host completely, using the bacterium's various materials to make copies of itself. T4 has about 300 genes (in 169,000 base pairs), devoted to such things as turning off the host's RNA, DNA, and protein synthesis, digesting these  host molecules, altering some of the host enzymes for its own uses, carrying out its own DNA replication, generating its own complex viral shell, and popping open the host cell to finally release the newly manufactured T4 particles. It even carries functions that block super-infection by other T4-like viruses. Greedy bastards!

The virus performs three distinct waves of gene transcription, called early, middle, and late. Each sets the table for the next stage, first using unmodified host RNA polymerase to express some of the genes important for shutting down central host processes like transcription, translation, and DNA synthesis. Some T4 genes cease expression within 1 minute of injection, though the full infection cycle lasts about 30 minutes at top speed.

Indeed, there are so many genes from T4 that shut down host functions that researchers have had a terrible time cloning many T4 genes (that is, replicating portions of its genome in what would otherwise be its host- E. coli bacteria). Workers trying to sequence the complete genome finally had to resort to non-biological means, using PCR to chemically replicate enough DNA.

Then, Borg-like, the virus modifies the host's RNA polymerase so that it transcribes only on its own genes. T4 genes expressed at this middle phase include components of the virus's own DNA replication machinery, which needs to assemble and begin making DNA before the late phase of T4 gene expression can begin. Finally, the proteins of the virus's shell are made- the head, tail, and tail fiber proteins, along with several scaffold and chaperone proteins that are needed for virion assembly, but then cast off.

There is a fest of DNA replication late in the infection (i.e at around 15 minutes) where stray strands of new DNA invade each other (called recombination) to prime further DNA synthesis, creating a messy catenated, branched network of T4 genomes. This allows replication to amplify exponentially at maximum speed. The mess is later resolved by DNA-cutting and repair enzymes that cut randomly in the genome, and lay one end into an empty viral head.

An ATP-dependent pump at the entrance of such this head then pumps in a headful of DNA, while DNA repair enzymes make sure any nicks or branches are resolved, since those can't get through the pump. A headful of DNA is on average 103% of the T4 genome, ensuring that a full genome's worth of T4 gets in, no matter where the DNA ends happen to be. This also places rather strict limits on how long the genome can be. If a new gene is accidentally captured from a host or fellow phage, some resident gene will likely have to go if the virus is to be successful.

Speaking of which, T4 even carries its own parasites, in the form of self-splicing introns. These are short genetic elements whose RNA form self-excises from longer RNA transcripts, and which encode a small protein that cuts other DNA molecules and promotes recombination that allows the intron to replicate into the new location, given the ambient DNA repair and synthesis activities. A virus with the intron will transfer it to a co-infecting virus without one. Truly, the rigors of natural selection go all the way down.

At this point, a set of whiskers attach to the base of the head, which later restrain the virus's landing gear from premature triggering. Then a tail assembly (tube, baseplate, and tail fibers) attaches to the head, and the virus is complete.

Electron micrographs or T4 particles. Note in the second image one injector needle has fired.

The tail of the virus is a double tube. The outer sheath is a remarkable collapsing tube of proteins that starts out 98 nm long, and when triggered by the tail fibers and virion base attaching to an appropriate bacterial host, shortens to 36 nm, a shortening to almost a third of its original length (see figure). The inner tube does not shorten, of course, and constitutes the needle that is driven into the bacterium by the collapse of the outer sheath, and from which flows the DNA, driven by the electrochemical gradient across the live bacterium's membrane, and possibly a special pore constructed by the virus.

The last stage of host cell lysis calls on yet more molecular wizardry. Late in the infection, viral proteins called holins quietly accumulate in the bacterial cell membrane. Then, upon a trigger that is not understood, these proteins very rapidly form huge holes in the membrane, finally executing the cell and allowing viral degradative enzymes out to chew up the cell wall, after which the expired cell pops open, releasing a new generation of viruses.

The cycle is now complete. The corpse of the bacterial cell is left behind, along with the infecting machinery and a wide variety of intermediate RNAs, scaffolding proteins, DNA polymerases, chaperones and other debris from the viral infection. Perhaps 100 to 300 viral particles go on to try their luck elsewhere.

• Who needs a worldview, anyway?
• Afghanistan.. not so good. A French member at the Carnegie endowment recommends capitulation and renewed civil war. Hmmm.
• Dynamic map of the gulf oil disaster, indicating some confinement to the local area.
• Noah analyzes inequality.
• Whence Russia?
• Bill Mitchell quote of the week:

"In the past, the dilemma of capitalism was that the firms had to keep real wages growing in line with productivity to ensure that the consumption goods produced were sold. But in the recent period, capital has found a new way to accomplish this which allowed them to suppress real wage growth and pocket increasing shares of the national income produced as profits. Along the way, this munificence also manifested as the ridiculous executive pay deals that we have read about constantly over the last decade or so.

The trick was found in the rise of “financial engineering” which pushed ever-increasing debt onto the household sector. The capitalists found that they could sustain purchasing power and receive a bonus along the way in the form of interest payments. This seemed to be a much better strategy than paying higher real wages."

In praise of anthropomorphism

Animals have emotions, despite all our efforts to deny it.

Anthropomorphism has traditionally been held to be a prime scientific sin, forsaking objectivity for blubbery empathy and purple descriptions of the humanity of animals. Incidentally, the term applies to inanimate objects as well, like ascribing emotions to wind and lightning, usually as part of a theistic, or at least animistic, bout of story-telling. But animals are a different matter. They really have emotions and consciousness, and we would be better off accepting and studying them than ignoring them.

Descartes famously declared that animals have no souls, are entirely mechanistic, and thus have no emotions either. Convenient for pulling the legs off frogs, no? It was an advance of sorts, since he recognized the human body was mostly mechanistic as well, with a crowning dab of immaterial soul on top. He thus contributed to the decline of vitalism in biology over the next two centuries. But his line of thought also sanctioned casual violence toward animals.

Are emotions special to humans? That could hardly be true, considering how we regard emotions as such "base" remnants of our evolutionary inheritance. If they are so unshakable, whereas reason is so easily "lost", it hardly stands to reason that they would be absent from our animal forebears and relatives. Indeed, despite animals typically being less demonstrative and vocal about them (due mostly to our obliviousness), we should assume that they have every bit as intense emotions as we do.

Likewise, one can argue from human childhood development, which is characterized by a painfully gradual mastering of our overwhelming and demanding early emotions. Do children and infants feel less than adults? Hardly. They feel more keenly, stocking up on feelings with which they love (or hate, or resent) their relatives for a lifetime. Surely, following the thread backwards, it would be impossible to imagine that animals fail to have similar emotions. Our attachment to pets is of course another expression of this highly trafficked two-way street of emotions.

Behaviorism in the 20th century eshewed any recognition of animal emotions, figuring it could observe inputs and outputs, and not bother with any kind of inner life or complicated modeling of the black box of the mind. (Odd that this movement took place simultaneously with depth psychologies like psychoanalysis and the like. Perhaps this was some kind of intellectual mirroring.) But this soon became totally insupportable, since the most complex element in the equation is the brain, hosting an inner life largely hidden to observers. It takes careful observation of external behavior to appreciate what this main actor- the mind- is up to, as pioneered by ethologists like Nico Tinbergen, Konrad Lorentz, and Jane Goodall.

But really, one only has to look in one's back yard to be struck by animal consciousness and emotion. We have squirrels, blue jays, flocks of finches, nesting titmice in the spring, towhees, hummingbirds, cats and numerous nighttime denizens. They interact with clear emotional content, from taking painstaking care of their young and playing tag to fighting with each other in ever-shifting coalitions. To see a bird switch from solicitously feeding its young and coaxing them out of the nest, to ferociously fending off a marauding jay or squirrel is to know that they feel immediately and intensely the precariousness of their fate.

Chickadees even have a reasonably complicated language of threat levels and locations, which other birds, and now humans, understand. What really brought this to mind recently was a newspaper story in the sports section about a local fisherman who brought up a thresher shark by the tail in San Francisco Bay. A delightful fight was had by all, and the shark ended up dead, either from its exertions or drowned from being dragged backwards to the boat. The proud fisherman displayed his catch, and was congratulated profusely.

But how would he have felt being hooked on the leg and dragged through the bay to his death? We used to do that kind of thing to each other, dragging enemies to their deaths through the streets, but have more recently thought better of it. Another recent bit of media was a couple of reviews of the book "Do fish feel pain"? Obviously they do, though scientists apparently only brought themselves to consider the question in the last decade or so.

One would think the simplest application of the golden rule would imply that torture of animals would not be regarded as a "sport", but rather addressed as psychopathic behavior. Which doesn't mean that meat-eating is necessarily immoral, but that inhumane treatment of animals is. The mechanized farm system is a horror of animal mistreatment, despite some occasional amelioration (see Temple Grandin). This is where we need to raise awareness and apply our moral resources.

A further question is to ask how far back in phylogeny such feelings and consciousness go. I would say that bare emotions go back right to the beginnings of any nervous system. The only point to have such a nervous system, after all, is to search out those things that afford pleasure and avoid pain, as encoded in our emotions. They are what e-motivate us to do those things that keep us and our progeny alive, and what could be more basic than that?

• Our conflicted relationships with animals.
• LSD and psychotherapy.
• Conservative economists and reason ... not related.
• More on income inequality.
• Fraud at the heart of Kabul. No wonder the Taliban gets some credit for better government!
• The Rev. Hearty on the power of words.
• Price, on Jung and blasphemy.
• Bill Mitchell quote of the week:

"I think the best thing a non-sovereign government can do in terms of advancing the interests of its people is to move towards sovereignty as soon as possible. That might involve jettisoning a currency arrangement/peg (such as in Latvia, for example).

It might require exiting a monetary union that has taken the currency-issuing monopoly away (such as the EMU nations). In this instance, that might necessitate a formal default on all debt that was incurred in the currency that the nation is exiting (such as Greece at present).

The reality is that a sovereign government holds all the cards in this situation. Please read my blog – Why pander to financial markets – for more discussion on this point.

There would be short-term costs but by re-establishing the currency sovereignty the nation will always be able to advance the best interests of its domestic economy.

This doesn’t mean that a nation that is short of real resources etc will be able to establish a high material standard of living by moving to sovereignty. The real standard of living is always determined by the access a nation has to real resources. Fiscal policy does not create these resources but can ensure they are more fully utilised and thus more effectively deployed. A poor nation will not become rich just because it is sovereign."

Why work?

In honor of labor day, some thoughts on the importance of work.

People without work are destroyed, slowly but surely. One of the primary objects of our collective enterprise is to provide gainful and meaningful employment, as well as providing for each other's basic needs and wants. Under prehistoric conditions, we had plenty of work that was clearly meaningful- sustenance, close community support of various kinds, warfare.

I think that the US (and other advanced economies to a lesser extent) have lost sight of this important psychological point. Jobs really are primary, and economic productivity is secondary. Our agricultural system produces everything we truly need with 3% of the population. What does everyone else do? They basically serve each other with luxuries of various sorts and keep each other employed in the many projects of civilization, however ephemeral.

Would an economy be good where only half of those who wanted to work got jobs, even if it produced everything everyone needed? No, it wouldn't. It wouldn't be "fair", given our inborn sense that everyone else needs to earn their keep in some way. It wouldn't be psychologically sound, given our equally inborn sense that we ourselves exist to serve the common good in some way, however small. And, given the system of home economics we live in, where expenditure requires income, it would be devastating in the absence of huge income redistribution, repugnant to both recipients and providers.

Here is an interesting quote from a passe psychologist...

"... the proletariat demands the obsession of work in order to keep from going crazy. I used to wonder how people could stand the really demonic activity of working behind those hellish ranges in hotel kitchens, the frantic whirl of waiting on a dozen tables at one time, the madness of the travel agent's office at the height of the tourist season, or the torture of working with a jack-hammer all day on a hot summer street. The answer is so simple that it eludes us:the craziness of these activities is exactly that of the human condition. They are "right" for us because the alternative is natural desperation. The daily madness of these jobs is a repeated vaccination against the madness of the asylum. Look at the joy and eagerness with which workers return from vacation to their compulsive routines. They plunge into their work with equanimity and lightheartedness because it drowns out something more ominous. Men have to be protected from reality. All of which poses another gigantic problem to a sophisticated Marxism, namely: What is the nature of the obsessive denials of reality that a utopian society will provide to keep men from going mad?"  -Ernest Becker, 1974, p. 186, The Denial of Death

We need work, though we also need to be fairly paid (valued) for it. Marx certainly understood this in his theory of alienation, though his now-defunct utopia didn't follow the thread out properly. The point of life is not to escape work, though shallow people may think so. No, the point is to do work you love, and if that is not possible, at least to do work that is socially valued, so that you feel a part of the larger society- to feel needed.

Another aspect of work is self-expression. Even if it is something as small as cooking a meal for an appreciative customer, we are expressing our love and care for others. To do so, one typically has to plug into an organization which leverages individual effort into a useful function, whether a manufacturing plant or a hotel kitchen. Part of that integration is gaining specialized skills. Like learning to play a musical instrument, learning a variety of work-related skills provides a person with new avenues to express themselves- it gives them tools, and makes them more human.

In a full-employment environment, employers take on the responsibility of expanding their worker's skills, because employees are valuable and new skills easier to create by education than to find on the open market. In a high unemployment environment, employers slack off training, since skilled workers knock on their doors every day.

This is one of the more insidious problems of the chronically high-unemployment environment that the US has experienced over the last few decades. Employers have sharply curtailed the implicit contract with workers on all fronts, including reducing education and training. Workers are expected to come fully skilled from the school system or other experience gained on their own, including hopping between employers. Training is a dead letter, other than on strictly job-related terms. This doesn't work nearly as well as a more balanced system where workers are exposed to continuing education and don't have to go back to school (or quit their jobs) to gain new skills. The culture at large also loses out when employers treat their employees as mushrooms rather than as flexible learners.

So, while alienation from work is rampant, it doesn't have to be, and one of the most important ways to make work more humane, as well as better-paid, is to even the macro-economic playing field between workers and employers by pursuing policies that lead to full employment. Needless to say, this is not what is happening in Washington right now.

• Reich on work.
• Krugman on work, giving some notable numbers.
• Workers vs the financial system, in the contemporary class war.
• Work, at the movies.
• Price on piety and pietism.
• Bill Mitchell quote of the week:

"The rise in acceptance of Monetarism and its new classical counterpart was not based on an empirical rejection of the Keynesian orthodoxy, but was instead, according to Blinder, “a triumph of a priori theorising over empiricism, of intellectual aesthetics over observation and, in some measure, of conservative ideology over liberalism. It was not, in a word, a Kuhnian scientific revolution”."

An Obama report card

In the midst of media crazy, I offer a time-out to evaluate our helmsman.

As Republicans and their media lackeys demonstrate an ability to lower our political debate to unforseeen depths, out of range of reality force fields, I reluctantly wade into politics on this otherwise wider-ranging blog and try to make sense of the first half of Barack Obama's administration.


Grade: A

I give Obama a solid A. He has shown steadfastness and moral fortitude in the face of enormous challenges and maddening political headwinds, not to mention large piles of garbage left on the premises by his predecessor. He has also shown great intelligence in his policy and political actions. Do I wish for more? We all do. But Clark Kent he ain't. And the system he heads has serious problems translating even the best intentions and wisdom into practice.

What is going on, then, with the mood of the country and the polls, which show Obama and the Democrats slipping? Some of it is rational, since every leader's position degrades once he or she gets into the weeds of actual policy, unseemly legislative compromises, and the inevitable scandals of a far-flung bureaucracy. Also, the economy is bad and getting worse, much to everyone's chagrin. Republicans are polling worse even than Democrats, however, so we seem to remain with what is apparently only one responsible, if unloved, governing party.

But some is also not rational, as the "ground zero" mosque flap has shown. Republicans know the erogenous zones of their base, if not the electorate at large. So while Obama keeps appealing to our better angels, the party of crazy appeals to our demons, whether Muslim, Mexican, or fiscal. While Obama puts together centrist, even Republican-flavored policies, Republicans cry "No, No, NO", and somehow their base comes to believe that this is the way politics should work. Well, it isn't, not unless you are a Bolshevik bomb-thrower.

But enough of the happy talk. I'm a critic, so herewith we'll get into the deficiencies of the Obama administration.


Economics: Not enough spending

The reason that we are in a rut, with a double-dip looming, is that the Federal government hasn't spent enough money to restore the loss of aggregate demand from private sources. Simple as that, and as Keynes explained, this shortfall can become chronic, even downward-spiralling, if the Federal government doesn't use its powers properly. The Fed has done all it can. Wall Street has been tended to with fond solicitude and gobs of money. Banks have been flooded with reserves and liquidity. But they still aren't lending because of the above drop-off in economic activity, as well as their near-death experience with bad loans (a death experience for many smaller banks without political pull or systemic bigness).

Politically, Obama got as much as he could get from Congress in the first stimulus, so it is hard to fault him. The political culture is economically illiterate, which is not his fault either (but see below). The current Republican mania against deficits and spending is an alliance of the crazy and the greedy, using short-term demagoguery (not to say hypocrisy) to pursue class warfare and take the country to the cleaners. It is shameful that US citizens can be so easily bamboozled by false analogies between federal and private debts, not to mention amnesia with regard to Republican fiscal and political intentions.

Not enough has been done to bring order to the financial system either, especially instituting fundamental reforms like charging a tax on every transaction, which would serve to put an important brake on the whirlwind of financialization our economy has been through in recent decades. The proposed systemic risk panel will do nothing when the next risk looms over the horizon, since every crisis is caused by blindness on the part of the major actors. This is well-covered by Hyman Minsky's theory of the financial cycle.

On other fronts, like putting the car industry through bankruptcy and funding new energy initiatives, the administration has done an excellent job. In areas within its power, aside from excessive solicitude to Goldman Sachs, it has put forward-thinking policy into practice. But without congressional support, a president can only work around the edges.


Justice: Lamentable perpetuation of executive privilege on intelligence matters

We all thought the new administration would be a breath of fresh air for civil liberties, NSA snooping, wiretap laws, perhaps even airport security theatrics. But virtually nothing has changed from the Bush administration. As covered extensively by Salon's Glenn Greenwald and NPR's On the Media radio program, the Obama justice department has perpetuated the cases and attitudes of the Bush administration, keeping the burgeoning intelligence establishment in clover and giving short shrift to transparency and civil liberties.

I don't fault the administration for failing to close Guantanamo prison on time. That remains a legal nightmare, not to say quagmire. But it would be helpful if the administration worked with Congress on a better legal framework for non-POW prisoners in general, so that coining new names (enemy combatant) doesn't give the executive carte blanche within a legal black hole. The long-term nature of these conflicts, and the non-state nature of the enemy, needs to be faced and addressed humanely and effectively for the long term. The same goes for enemies before they become prisoners, since the battlefield has become world-wide and other countries deserve some transparency on what framework we use to assassinate their citizens.


Foreign policy:  Good intentions beset by some inconsistency

While Obama got off to a good start by capitalizing on his election to mend relations with the Muslim world and most remarkably with Russia, other areas have been less productive. Iran policy and Israeli policy have been captive to the Jewish lobby and stuck pretty much where they were in the Bush administration. The biggest enemy of Israel is its own moral decline, as it dehumanizes the Palestinians and loses its legitimacy inch by inch to the orthodox and others of its own leaders trapped in the past, whether the Arab-Israeli war past, or the Biblical and Roman past.

Iran is not the enemy, but is just gathering street cred/making hay with the Sunni world by its flamboyant hatred of Israel. It is a veneer over the more fundamental Sunni-Shia divide. Iran remembers well its war with Sunni Iraq, and for all its professed craziness would not bring another such war on its head. Pakistan is Islamic too and has a nuclear bomb. Is Pakistan any more of a strategic threat to anyone with the bomb than without it? No- it has made no practical difference, except domestically in national pride and some sense of security. The same low-level wars, terrorism, and foreign policy go on with or without such bombs.

More deeply, the Obama administation has failed to fully put its principles into practice. We should say to Iran, for instance, that we don't accept its government as legitimate and look forward to true democracy instead of the theocracy / autocracy they have now. While sanctions have limited, and sometimes counterproductive effects, our words and actions have great effect, and should with all countries side consistently with the people and with progressive elements over autocratic governments. This goes for friendly countries as well. In Afghanistan, we can work with the government while deploring the election fraud and corruption that makes it such a wretched partner and servant of its own people. More principled consistency, while sometimes costly in the short run (viz our various military agreements & bases with Central Asian autocracies), is critical to our long-term legitimacy in a world where our leadership only goes as far as other people's perceptions and allegiances.


Senate policy: Obama's kowtowing to the Senate has been disgraceful

We need the "nuclear" (or "constitutional") option, and  we need it yesterday. No decent policy can be made with such a sclerotic and corrupt institution. Answer? Warfare, all-out. A recent New Yorker article has described the dysfunction of this institution in some detail.

The basic dynamic is that senators as a body have given themselves powers (holds, filibusters, other procedural roadblocks) that are not in the constitution, but leverage off the constitutional necessity of the Senate to make of each Senator a little Prince of No. Combine that with rampant corruption / influence peddling, and the originally unrepresentative Senate has turned into a place where all decent legislation either dies outright or by a thousand cuts. America can not long survive with such a moribund institution standing in the way of true representation and rational policy. Nor does the trend towards an imperial presidency, which has continued under Obama, get better when oversight from Congress is absent, due to its own institutional sclerosis.

Obviously, the modern 60 vote requirement has protected some liberal causes when the Senate was in Republican hands. So there are dangers to eliminating it. But its flagrant abuse in Republican hands has created total gridlock, and the time has come to end it. More generally, such super-majority requirements sap the institution itself. In California, we have a similar problem, where all budgets require a 2/3 majority. Any minority can hold up a budget, the legislature becomes gridlocked, and its role in state government diminishes (at least any positive role it might have). One can say that the empowerment of individual legislators directly disempowers their institution as a whole. So we need to get back to the original design of majority rule, to strengthen legislative institutions, restoring their responsibility and effectiveness.

Incidentally, Obama needs to use a few sticks when dealing with the Senate. He has been far too deferential to its dysfunctions and prima donnas. It has been all carrots and no sticks. And as the battle lines have hardened and senators have learned that there is little cost to opposing the president, compromise has become more chimerical. I don't know details of how LBJ ran the Senate, but I suspect there was some hardball involved.


Climate policy: Little gains, big loss

I am sympathetic with Obama's basic decision to deal with health care and economic issues with the limited attention span available from the Senate. The House has passed a good climate / energy bill, but the dysfunctional Senate has completely betrayed its putative role as the far-seeing, responsible institution of US government. Indeed, the Senate has betrayed our common future for a few pieces of silver- the corrupt contributions they get from the fossil fuel industry.

So here we are, with the most important issue of our time lying moribund on the operating table, a victim of its very scale, of its long-term and global nature, and of criminal disinformation campaigns by our society's malefactors of incumbant wealth. As I said at the outset, Obama is a superhero, but he can't do everything. The administration has taken bold steps in its stimulus composition, in new vehicle standards, in EPA regulation of CO2, and more. But the overall policy needed to address the true costs of our fossil fuel addiction had a heart attack in the Senate over the summer, and it is not clear whether our political system will ever deal with the issue effectively.


Pulpit policy: For all Obama's speeches, he has failed in critical educational missions

Obama has been very good as a consistent and thoughtful exponent of his administration. The stentorian tone can sometimes grate, but he is clearly engaged and expresses good policy. At a deeper level, however, there has been a failure to educate the electorate about critical realities that all his policy depends on. The president is not just a manager but a leader, who must go beyond expressing what he wants Congress to pass and how he is running his administration, to bringing a sometimes reluctant electorate with him to new views of the metanarrative- how the world works. Granted, with a firehose of hate and misinformation spewing from FOX and related media, he has his work cut out for him. But I believe he could do more.

For example, the current economic debate is shameful in its superficiality. The national debt is "high". How high is "too high"? How high is bad? Media answers to this question have been a Rorschach test of one's politics, having nothing to do with economics. In fairness, Obama's own advisors seem confused on the matter, showing how deep the rot has progressed within the economics profession. But ideally, Obama would come out and say that the US presents zero credit risk of any kind. Investors, far from running scared, are stocking up private savings and buying US debt despite historically low interest rates. And whether they did or didn't wouldn't make any difference to the government's ability to spend the currency it prints as needed to restore economic activity and more importantly, jobs. When times are better, investors will be less interested in buying government debt, will withdraw their savings, and the situation will naturally reverse itself.

These are very simple facts, and go right to the heart of economic theory that was so painfully learned through the Great Depression. Economics seems to be controlled by ideologs opposed to these views, who claim that (Democratic) government is "bad", and that government "meddling" is bad, and that banks will lend when they have less regulations, and any number of other fairy tales. What is needed is a presidential education campaign in serious economics to forestall the floundering inaction that is sending us into further depression/recession.

In all the above issues, (the Senate, foreign policy, economics, climate change), the president needs to develop deeper intellectual knowledge, more fundamental critiques of our current dysfunctions, and clearer rhetoric so that he can lead more effectively from a position of greater authority, cutting through the clouds of chaff thrown up by incumbent interests. Trimming corners works much of the time, and pious hopes make easy speeches. But someone as talented as our current president can do better, and I hope he does.

• Charles Blow on Jews turning Republican. No wonder, as Israel loses the moral high ground and plumps for attacks and a new world war. That sounds Republican to me.
• Economics of the depression, here we come!
• Krugman really, really gets it. In fact, he gets it before it happens.
• Bernanke to Earth ...
• A little more on the real attitude of Pakistan, to the Taliban and Afghanistan.
• Some excellent reflections on the establishment and foreign policy.
• David Yost tells of himself.
• Bill Mitchell: No quote- rather, some ragged clips from his 80's Aussie reggae band.

Design-o-zymes

Interesting progress is afoot in designing enzymes from scratch.

While the vain, egomaniacal self-sequencing Craig Ventner has grabbed headlines for "creating life", more interesting and useful projects are afoot. While his employees have inserted a replica of a natural genome into an existing cell and gotten it to propagate, that was never an interesting problem. We have altered the DNA of organisms for decades through recombinant DNA technology. Whether replacing large amounts or small amounts, the true intellectual difficulty is not whether copied DNA can work in a host cell, it is how to design such DNA to do new things- making novel genes and gene networks that inform us about their biology, synthesize new chemicals, cure diseases, create truly new life forms, etc.

So I was far more impressed by a recent pair of papers in science about new successes in designing enzymes, in one case more or less from scratch and by computational means (accompanied by a review). It is the protein that is the main actor in cells and in life. Anything that needs doing in biology, from digesting food to lifting weights, is done by proteins. The only thing they don't do is store information for their own synthesis, and all the informational and catalytic tasks done by RNA.

Proteins are also dauntingly complex- little dynamic chemical packages that fold into intricate shapes and sometimes harness advanced quantum mechanics, (advanced for us, that is), like in the photosynthetic reaction center), to do magical feats of chemical transmutation. No wonder that it has been extremely difficult for scientists to consider themselves capable of designing new proteins- evolution has set the bar very high. Even understanding how existing proteins work has been hugely challenging. X-ray crystallography has allowed scientists to gain detailed pictures of protein structures, but these are static images. Much of the magic of protein action lies in their dynamics, where complex electronic surfaces and structural rearragements take place on a routine basis.

A classic example is myosin, which uses ATP to bend its head against actin to power our muscles, in a power cycle that has only recently been elucidated. But changes in shape are common, occuring also, for example, in hemoglobin as it picks up oxygen and then dumps it out in the peripheral tissues. These dynamic aspects, along with electronic and even quantum mechanical elements, have made proteins quite difficult to understand, and thus also to model and design for our own purposes.

Nevertheless, Siegel et al. decided to design a novel enzyme for a reaction that, as far as known, is not carried out by any biological enzyme- the joining of two separate molecules into one ring structure in a Diels-Alder reaction. Step one was to imagine the ideal transition state for the reaction- the structure of the reactants just as they cross the energetic divide between being unjoined and being joined. In organic chemistry, this state is typically promoted by using high pressure and exotic catalysts like niobium pentachloride. Enzymes do utilize a wide variety of metals, (like iron to bind oxygen in hemoglobin), but these workers wanted to start simple and begin with just protein-based building blocks. This involved using quantum mechanics and organic chemistry to model that state in terms of both its shape, the electronic fields that would stablize it, and some key hydrogen bond acceptors and donors that could help the reaction along.

Image of one designed catalytic active site (left) with the substrates in color.
At right, the scaffold's structure in green (right), and the designed changes shown in red.

Step two was then to attempt to design a protein which would supply a "pocket" that could fit that transition shape while allowing the reactants access and giving them extra assistance with properly shaped electric fields and hydrogen bond donors, etc. This was done using protein design software based on the relevant chemical principles. The hard part was then next to translate this small "pocket" design into a protein that could provide the backbone and folding to bring such a pocket together.

For this, they consulted a library of known small protein shapes, (which they called scaffolds), and chose 84 candidates for synthesis into proteins. This means that they read out the protein scaffold sequence, then superimposed their designed active site onto that sequence, substituting amino acids as needed in key places, (involving 13 mutations in one case), and lastly back-translated it all (conceptually) into the DNA of a gene they could synthesize on a machine. This DNA was then linked to a promoter that would drive its synthesis and inserted into the genome of a bacterium. They then grew up a bunch of these cells, popped them open and purified out the translated (actual) protein, and tested it for its ability to carry out the new Diels-Alder reaction.

What did they find? Only two designs had detectable, though paltry, enzymatic activity, with turnover of about 4 reactions per minute. Then they went back in, looked under the hood with their modelling programs, and made a few additional mutations on one of these candidates that then increased this catalytic rate a hundred fold. Not too shabby!

Schematic of the reaction and its transition state which was designed around.

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What these experimenters do not go on to do is harness the power of evolution to optimize their design. That is doubtless because they do not have a selective test for their reaction- i.e. a way for cells to depend on successfully carrying out this reaction which is not biologically significant. That could doubtless be arranged, but to show something of the sort, another paper in the same issue takes over the story.

In this case, industrial biochemists with a small biotech (Codexis) and partner Merck wanted a better way to perform a pharmaceutical synthesis previously catalyzed by rhodium under harsh conditions, by doing it with an enzyme. They were able to find an existing enzyme that performs a similar reaction (transamination) and used a bit of design, and a lot of mutagenesis and quasi-evolutionary selection to optimize it to industrially useful levels. A bonus of such a switch is that the new process is more stereo-specific, (as enzymes typically are), creating precisely the correct product, suffers from no rhodium contamination of the products, and can be done under mild conditions, rather than the 250 psi previously used. This is a good example of "green" chemistry.

In brief, these workers slightly opened the binding pocket of their candidate enzyme (from a soil bacterium) using molecular design software to allow it to have some activity on their chosen (unnatural) substrates. They then mutated the active site with abandon to find improved variants, and then finally unleashed the enzyme in more general mutagenesis + selection system to accommodate several other parameters needed for large-scale synthesis. This was done by creating libraries of mutated variants, (35,000 in all), and using industrial-scale screening to test each for its activity individually. They also optimized for performance in their chosen conditions of high substrate concentration and a high level of organic solvents- conditions that a natural enzyme would never see.

The result? An enzyme that is industrially usable, tens of thousands-fold faster than the original semi-designed natural enzyme, giving 100% correct product in 50% DMSO solvent at 40ºC with no heavy metal contamination and less waste and cost all around. While these researchers didn't use a true evolutionary system to optimize their enzyme, (it was not done in cells using an endogenous replication system), there are numerous ways to do this kind of thing, and the principle is the same- make lots of mutations, test them, then take the best candidates and repeat the process.

So, if you are after truly novel functions rather than vanity projects, focus on proteins- the workhorses of life- to do new and useful things. The ability to design truly novel molecular functions opens enormous vistas in both biotechnology and in the more heady project of tinkering with life itself.

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