Kanan Makiya: I’ve reached a point where I don’t even bother to reply to such critics. They are just not serious people any more; they are expressions of failure, inactivity, and irresponsibility, rather than critics of substance and with serious ideas. My case has always rested on an Iraqi perspective, on what is in the best interests of the 25 million or so people of Iraq. That’s very important and something that people don’t often see. It was the best thing that ever happened to me when I shed those kind of abstract rubrics which for so many years enabled me to hide from the defence of Iraqi interests as I saw them. Abstract categories like ‘anti-imperialism’ and ‘anti-Zionism’ concealed behind them a cover-up for terrible things that were taking place inside Iraq, things that are implicitly condoned by people like Chomsky and Said. I can’t engage in that kind of obfuscation any more. The be-all and end-all of politics for me is tyranny and totalitarian dictatorship. That was the theme of Republic of Fear and it was the main theme of Cruelty and Silence.

When there is abuse of human beings, there is no longer any philosophical or political argument that I can tolerate listening to if it justifies or somehow legitimates the continuation of that abuse. If there is any course of action that can diminish or eradicate the sources of that abuse from the world it seems to me that the high moral ground of politics is to call for it. And the left, by no longer doing so, has really lost its place in the world, and that is a sad thing and something I deplore. These accusations about Bush and the so-called neo-cons (a phrase, by the way, that I don’t think has any clear meaning) conceal a failure on the part of people like Chomsky and Said to understand that human suffering is orders of magnitude more important than how much they like or dislike the US or the person of Bush, or even whether one likes this or that position of the United States. If I can reduce the amount of human suffering in the world by even a jot, if it is possible to demonstrate that overall suffering has been reduced, then the right position in politics is always to be for that reduction.

Alan Johnson: And are you still confident that a ‘cost benefit analysis’ would show a reduction of suffering in Iraq?

Kanan Makiya: Yes. Ask Iraqis themselves. 14 million people voted [in the December 2005 poll). Everyday the media inundates us with images of terrorist attacks and gore. But in a whole slew of polls 70- 80% of Iraqis are still shown to be ‘optimistic’ about the future! That’s a remarkable statistic. One needs to ask what it means. What does it say about what they came out of to be so optimistic about the future at this moment?

And no, I’m not officially resurrecting the blog.

The housing bubble has been one of the big topics that we have been following over the last year or so, mostly offline, but it looks like things are about to come to a head as the mainstream financial press begins to go nuts on the issue. Fortune for instance had a cover story about the phenomenon a few weeks ago which unfortunately has moved into the subscriber only archive. The subtitle is telling though:

They snap up real estate, flip it, then chase the next hot market. They’re the new day traders—and they’re dancing on the edge of a volcano.

In the following issue, Fortune subtitled an article with the phrase “Yes, asset prices have gone wild. And nitwits are getting really rich.”

The Economist famously produced one of the best predictors of recessions but simply scanning Lexis-Nexus for the word “recession” and watching for sudden increases. This ‘wisdom of crowds’ approach to economics would be interesting to apply to financial bubbles to try to pinpoint the early stages of a blowout. As it is, I’ve been predicting the house pricing bubble to be ready to burst for well over two years, and like my predictions of a stock market correction in 1999, I’ve been correct, but way too early. In fact predicting the exact end of a bubble is notoriously difficult. Disgraced stock analyst Henry Blodget, famous for calling for Amazon’s stock to hit $400 in 1998, published an interesting article last week, also in Fortune, on the psychological aspects of bubbles.

In the middle of a bubble (which until it bursts, don’t forget, is a boom), individuals, executives, politicians, central bankers, journalists, and others are confronted with hard choices. Sometimes their decisions are aggressive: I want to make money. Sometimes they are defensive: I want to keep my job. Sometimes they are emotional: I just don’t want to be wrong anymore. What these decisions are not is “insane.”

One of the more enduring myths about bubbles is that participants are so besotted that they never imagine they might be in one. To debunk this, we need only glance at today’s real estate market. An expert a week opines that ballooning property prices are a disaster in the making (which they probably are). But for a variety of reasons—we need to live somewhere, the skeptics might be wrong, and the market keeps going up—we continue to participate. And so it was with the stock market. In April 1999, a full year before the crash, Barron’s asked professional money managers whether they thought the market was experiencing a speculative bubble. A resounding 72% said yes. And in the following 12 months, as the Nasdaq doubled and the Dow rose nearly 20%, many of those managers kept right on buying.

So what evidence do we now have that indicates that bad tiding await the global housing bubble. consider these facts from the Economist’s special report:

• In California, Florida, Nevada. Hawaii, Maryland and Washington, DC, [the average price of homes over the past year] soared by more than 20%.
• American prices have risen by less than those in Britain, yet this is still by far the biggest boom in American history, with real gains more than three times bigger than in previous housing booms in the 1970s or the 1980s.
• America’s ratio of prices to rents is 35% above its average level during 1975-2000 (see chart 1). By the same gauge, property is “overvalued” by 50% or more in Britain, Australia and Spain.
• A study by the National Association of Realtors (NAR) found that 23% of all American houses bought in 2004 were for investment, not owner-occupation. Another 13% were bought as second homes.
• In California, over 60% of all new mortgages this year are interest-only or negative-amortisation, up from 8% in 2002.
• a drop in nominal prices is today more likely than after previous booms for three reasons: homes are more overvalued; inflation is much lower; and many more people have been buying houses as an investment. If house prices stop rising or start to fall, owner-occupiers will largely stay put, but over-exposed investors are more likely to sell, especially if rents do not cover their interest payments. House prices will not collapse overnight like stockmarkets—a slow puncture is more likely. But over the next five years, several countries are likely to experience price falls of 20% or more.
• Economists at Goldman Sachs point out that residential investment is at a 40-year high in America, yet the number of households is growing at its slowest pace for 40 years. This will create excess supply.
• Goldman Sachs estimates that total housing-equity withdrawal rose to 7.4% of personal disposable income in 2004. If prices stop rising, this “income” from capital gains will vanish.
• The housing market has played such a big role in propping up America’s economy that a sharp slowdown in house prices is likely to have severe consequences. Over the past four years, consumer spending and residential construction have together accounted for 90% of the total growth in GDP. And over two-fifths of all private-sector jobs created since 2001 have been in housing-related sectors, such as construction, real estate and mortgage broking.
• All but one of those housing busts led to a recession, with GDP after three years falling to an average of 8% below its previous growth trend. America was the only country to avoid a boom and bust during that period. This time it looks likely to join the club.
• Japanese property prices have dropped for 14 years in a row, by 40% from their peak in 1991. Yet the rise in prices in Japan during the decade before 1991 was less than the increase over the past ten years in most of the countries that have experienced housing booms (see chart 3).

This last bit of information is so incredible, that it deserves to be quoted fully:

But even if prices in America do dip, insist the optimists, they will quickly resume their rising trend, because real house prices always rise strongly in the long term. Robert Shiller, a Yale economist, who has just updated his book “Irrational Exuberance” (first published on the eve of the stockmarket collapse in 2000), disagrees. He estimates that house prices in America rose by an annual average of only 0.4% in real terms between 1890 and 2004. And if the current boom is stripped out of the figures, along with the period after the second world war when the government offered subsidies for returning soldiers, artificially inflating prices, real house prices have been flat or falling most of the time. Another sobering warning is that after British house prices fell in the early 1990s, it took at least a decade before they returned to their previous peak, after adjusting for inflation.

Greenspan argues that there are only localized bubbles in America, and he’s correct that the housing price trend has been largely focused on specific regions, with some areas (Houston for instance), actually seeing a drop in the ratio of houses to earnings.

The reasons for this are manifold, aside from explosive growth in specific cities, lax regulation in many states has contributed to massive localized booms. Florida for instance allows for property titles to be flipped before the new owner even takes possession. States also vary on how long a house must be lived in to avoid paying capital gains tax on the sale of a primary residence, as well as whether capital gains can be avoided on the sale of a second home. Clearly this uneven regulatory framework can lead to huge distortions in the national housing market.

All the same, the rise in housing prices has fueled an enormous amount of consumer borrowing which has fueled the economy and done a good deal to help America, and, in the current world economic climate, the world from experiencing much in the way of a recession after equity revaluation in 2001.

A theme that was very well covered last year on the Roger Arnold Show was the idea that the massive monetary pumping and dramatic lowering of interest rates and expansion of credit by the Fed from 2000 onwards was going to test the monetarist hypothesis that these instruments could, properly applied, mitigate the risk of a recession and move the economy into a new period of growth. In the last few years it has appeared to be working.

A competing business cycle theory, from the Austrian school of economics states that by making credit artificially cheap an over active central bank will subsidize unsustainable over-investment, prolonging the period of growth, but deepening the necessary and inevitable correction.

Only a naif or a genius would dare to make a hard prediction other that this is going to be an interesting year for amateur economists.

As overwhelming as the center-left’s adulation for Barack Obama, the 99th ranking senator in the house, seems at times, I have to admit to just loving his speeches. Riffing off on the themes of personal responsibility and American exceptionalism, ground long ago ceded by most Democrats, Obama’s June 4th Commencement address at Knox College, was a masterstroke.

“What will be your place in history?”

In other eras, across distant lands, this question could be answered with relative ease and certainty. As a servant in Rome, you knew you’d spend your life forced to build somebody else�s Empire. As a peasant in 11th Century China, you knew that no matter how hard you worked, the local warlord might come and take everything you had�and you also knew that famine might come knocking at the door. As a subject of King George, you knew that your freedom of worship and your freedom to speak and to build your own life would be ultimately limited by the throne.

And then America happened.

A place where destiny was not a destination, but a journey to be shared and shaped and remade by people who had the gall, the temerity to believe that, against all odds, they could form “a more perfect union” on this new frontier.
And as people around the world began to hear the tale of the lowly colonists who overthrew an empire for the sake of an idea, they started to come. Across oceans and the ages, they settled in Boston and Charleston, Chicago and St. Louis, Kalamazoo and Galesburg, to try and build their own American Dream. This collective dream moved forward imperfectly–it was scarred by our treatment of native peoples, betrayed by slavery, clouded by the subjugation of women, shaken by war and depression. And yet, brick by brick, rail by rail, calloused hand by calloused hand, people kept dreaming, and building, and working, and marching, and petitioning their government, until they made America a land where the question of our place in history is not answered for us. It’s answered by us.

Have we failed at times? Absolutely. Will you occasionally fail when you embark on your own American journey? You surely will. But the test is not perfection.
The true test of the American ideal is whether we’re able to recognize our failings and then rise together to meet the challenges of our time. Whether we allow ourselves to be shaped by events and history, or whether we act to shape them. Whether chance of birth or circumstance decides life�s big winners and losers, or whether we build a community where, at the very least, everyone has a chance to work hard, get ahead, and reach their dreams.

We have faced this choice before.

This is followed by a litany of achievements by the center-left of the country. Obama places civil rights, regulation of public markets, public education, anti-trust legislation in the context of American achievement. TNR weighs in, noting that Obama avoids almost all of the pitfalls that befall Democrats these days, presenting a fresh positive agenda that proffers no demagoguery.

Still another remarkable point about Obama’s speech is that it focused mostly on working Americans without patronizing them as victims or publicly wondering why they vote Republican. Instead, he spoke straightforwardly of “the fact that when you drive by the old Maytag plant around lunchtime, no one walks out anymore.” And, gently, he warned the graduates that countries like India and China are producing a new generation of “skilled educated workers” who will be competing with their American counterparts, not just the guys who get laid off from factory jobs.

Presenting what few progressives bother to offer nowadays–a view of the global economy that is neither Pollyanna-ish nor protectionist and a vision of America’s future that includes good-paying blue-collar as well as white-collar jobs–Obama called for more job training and retraining and also government investments in new technologies that could give our businesses and workers a competitive advantage. “Just imagine what it could do for a town like Galesburg,” he said. “Ten or twenty years down the road that old Maytag plant could reopen its doors as an ethanol refinery that turned corn into fuel. Down the street a biotechnology research lab could open up on the cusp of discovering a cure for cancer.”

Just as impressive as what Obama said is what he didn’t say. There were no references to his inspiring life story, few indictments of injustices against those he described as “men and women who looked like me,” and little else that would make a middle-class, white, or conservative listener tune him out.

Of course we’ve yet to see a lot of concrete evidence how Obama will manage the implementation of his vision at the federal level, but he seems rooted strongly enough in the 21st century to be able to see where old ideas won’t cut it.

One of the reasons that Obama gets so much attention is that the dissaffected New Democrat wing of the Democrats has been so short on heroes lately. This blog subscribes to the view that Clinton’s triangulation strategy in the nineties was not a simple act of ordering policies from two columns, Chinese menu style, but the emergence of a distinct strain of American political thought, as TNR eloquently argued in May.

Even a cursory examination of some of the actions that Clinton’s Democratic critics point to as proving his accommodation to conservative ideology–such as signing a balanced budget, pushing for welfare reform, and declaring an end to the “era of big government”–show something more than a search for the center. Rather, they are the authentic expressions of a worldview Clinton carried not only throughout his presidency but through a quarter-century of public life. Three notions–America’s increasing global interdependence, the importance of the bonds of community, and the need to rethink government for a post-bureaucratic age–formed the basis for Clinton’s approach to government. They constituted an outlook–Clintonism–that has become rare to the point of extinction among Democrats since he left office. It is a vision Democrats would be wise to revisit.
…
From the promise in his second inaugural as governor to provide “a government that will give our people a better chance to fight for themselves” to his second inaugural address as president, when he pledged “a new government … humble enough not to try to solve all our problems for us, but strong enough to give us the tools to solve our problems for ourselves,” Clinton did what Democrats rarely do: He outlined a consistent vision for government and then acted to change not just what government does, but how it does it.
…
Today, most every Democrat running for national office will include in their stump speech a throwaway line extolling American virtues of “patriotism, responsibility, family, and faith.” But, to Clinton, these were not rhetorical boxes to check, but rather animating principles behind the policy decisions he made.

Obama’s rhetoric echoes many of the themes that Clinton espoused, and his biography could be offered up as proof-positive for Clinton’s vision of what America can offer. The question is how well Obama will gain experience and mature in office, and how long can his admirers allow him to do so. Then again, maybe he’s already qualified for a VP run in ‘08.

I’d love to read something critical about this guy if anyone can find anything.

Popular Mechanics takes on the 911 conspiracy theories. It’s pithy, well researched and referenced, logical and clearly presented. It should be emailed to as many people as the poorly presented, half-assed, foaming at the mouth, conspiracy theories were, but that would just be asking too much.

Healthy skepticism, it seems, has curdled into paranoia. Wild conspiracy tales are peddled daily on the Internet, talk radio and in other media. Blurry photos, quotes taken out of context and sketchy eyewitness accounts have inspired a slew of elaborate theories: The Pentagon was struck by a missile; the World Trade Center was razed by demolition-style bombs; Flight 93 was shot down by a mysterious white jet. As outlandish as these claims may sound, they are increasingly accepted abroad and among extremists here in the United States.

To investigate 16 of the most prevalent claims made by conspiracy theorists, POPULAR MECHANICS assembled a team of nine researchers and reporters who, together with PM editors, consulted more than 70 professionals in fields that form the core content of this magazine, including aviation, engineering and the military.

In the end, we were able to debunk each of these assertions with hard evidence and a healthy dose of common sense. We learned that a few theories are based on something as innocent as a reporting error on that chaotic day. Others are the byproducts of cynical imaginations that aim to inject suspicion and animosity into public debate. Only by confronting such poisonous claims with irrefutable facts can we understand what really happened on a day that is forever seared into world history.

Please, if you found this post via Googling for conspiracy theories, join us in reality. Also, let me introduce you to my friend Occam.

People wait for practically any diagnostic test, surgical procedure, or consultation with a specialist. The doctor shortage is so severe that, in Norwood, Ont., winning the town lottery isn’t a ticket to material wealth. With just one family doctor to service the entire town, the physician will take only 200 new patients over the next four years. As a result, the town held a lottery, with the 200 winners getting an appointment with him.

Ours is a consumer-driven society, in an era of high-tech, high-expense medicine. Yet the paternalistic system envisioned by Douglas Jay carries on in Canada today. The times have changed. So must medicare.

Looks like we’re finally going to get an honest debate on medicare in Canada.

In the meantime enjoy this interview of Christopher Hitchens and his estranged (by 4 years) brother Peter.

Are you two friends?

PH No. There was an old joke in East Germany that went, Are the Russians our friends or our brothers? And the answer is, they must be our brothers because you can choose your friends.

CH The great thing about family life is that it introduces you to people you’d otherwise never meet.

(ht: neo-neocon)

“This is a move by big money. Magna Corp., controlled by Stronach’s father, and the Desmarais’ Power Corp. machine backing Martin, making a corporate merger to maintain control over this country. In yet another clumsy manoeuvre that compromises the federalist option, Martin has now set the national debate as a choice between a sovereign Quebec based on principles of social democracy and a federal Canada run by corporate oligarchy.”
-disgraced Quebec Liberal bagman Beryl Wajsman

Andrew Coyne, as always, shines at well-argued invective (not available online due to “copyright issues”, read: the lead quote from the Great Gatsby forced a take down?!? So glad Canadian law protects us from fair use.).

We can see now what the 9nine days were for, why the government refused to resign, or call an immediate confidence vote, after it was defeated in the House last Tuesday, but instead insisted, against all precedent, that it was entitled to remain in office until a week Thursday. The loss of a confidence vote is no longer to be taken as a fundamental loss of democratic legitimacy, but rather as a signal to spend more, threaten louder and otherwise trawl for votes on the opposite benches, for as long as proves necessary. It took only a few days this time, but after all nine days can stretch into two weeks, and two weeks could as easily be three, and then we’re into a month, and then it’s recess. Indeed it is an open question whether the Liberals would have even held the budget vote if they hadn’t made this deal, or whether they would have promised one if it were not already in the works.
…
Is it a constitutional crises if no one understands it is? A government without the support of a majority of Parliament has spent billions it has no legal authority to spend and dangled offices that are not in its power to bestow, in hopes of recovering that majority.

Now there’s THIS:

Surrey Conservative MP Gurmant Grewal alleges that the Liberals offered him and his wife plum posts if he helped their minority government survive.

Grewal said the Liberals promised him an ambassadorship, or a Senate seat for his wife Nina � also a Tory MP � if he didn’t vote against the budget in Thursday’s confidence vote.

Grewal alleges he made an audio recording of the offer, which he said came from Liberal Health Minister Ujjal Dosanjh and Tim Murphy, Prime Minister Paul Martin’s chief of staff.

“I was given an understanding that I would be rewarded in some fashion,” Grewal said at an Ottawa news conference on Wednesday.

“Some of the options discussed were different diplomatic appointments or a future senate seat for Nina.”

Disgusting.

UPDATE: Audio of the offer. If this is Tim Murphy the government is through… I mean it has to be right? right?

I called up Elections BC this morning, to clarify their position:

* Yes, blogs must be registered as election advertising.
* If I put up a single web page with text expressing support for a candidate, party or referendum issue, it must be registered.
* Newspapers, including editorials and letters to the editor, get an exemption. Actually, the exact words used were “bona fide news organizations”. I should have asked what qualifies as a bona fide news organization, but didn’t (I’ve sent a follow-up email).
* Is it the medium or the content? I was told that it was definitely the latter. Because, after all, newspapers appear online as well.

Not just stupid, but disgraceful.

As paradoxical and absurd as it sounds, it’s cheaper for a Hollywood studio to make a big-budget action movie than to make a shoestring art film like Sideways. Consider Paramount’s 2001 action flick Lara Croft: Tomb Raider. On paper, Tomb Raider’s budget was $94 million. In fact, the entire movie cost Paramount less than $7 million. How did the studio collect over $87 million before cameras started rolling?

First, they used the German tax-shelter gambit. Loopholes in Germany’s tax code are responsible for a good portion of Paramount’s profits–an estimated $70 million to $90 million in 2003 alone. Best of all, there’s no risk or cost for the studio (other than legal fees).

Please governments of the world, please, just stop.

Elsewhere, Cadence’s hometown shoutouts get Simon Reynolds off his back. While most of us can’t appreciate the local flavor of “Oliver Square”, we feel Cadence’s connection to them, and the low-level mystery of it all–like the best low-level mysteries–keeps us on pins. The city, seemingly forgotten by as many Canadians as the millions of Americans who don’t watch ice hockey, serves as an ideal backdrop for Cadence’s occasional “people are gonna respect me if it kills them” demeanor: “Don’t generalize, you must think and wonder/ Why I drink 40s and memorize BusLink numbers/ Well, I don’t have a license, but I’m tryna gain prominence/ ‘Cause I’m living in a house with a fridge full of condiments.”

Go to Cadence Weapon’s site to make a purchase of the debut while you can still get it out of his backpack; I just did.

My enthusiasm for this goes way beyond the Edmonton references. Also check out the Soundclick page.