The FT on IQ

The FT On IQ:

http://www.ft.com/cms/s/2/4add9230-23d5-11de-996a-00144feabdc0.html

The last time the debate flowered in full was in 1994, on the publication of The Bell Curve by the psychologist Richard Herrnstein and the conservative political scientist, Charles Murray. They argued that intelligence test scores were both a good indicator of social success and strongly determined by our genes. The implication, that an unequal society was inevitable and fair, and that a black, inner city “cognitive underclass” was having too many children, made it seem as though eugenics had never gone away. “Mr Murray can protest all he wants,” wrote Bob Herbert, a columnist for The New York Times, “his book is just a genteel way of calling somebody a n*gg*r.”

More on The Bell Curve here.

Too Soon to Judge Current Stimulus Package

The WSJ's Corey Boles brings some common sense to the table:

According to the report, 90% of the money distributed has come in the form of increased federal education and health-care grants to state governments...[but] most of the spending money from the stimulus plan had yet to go out, and so it was too soon to tell whether it was working.

The author says that $29 billion out of the $787 billion stimulus package has been given to state governments. The WSJ author also writes that of the money that has been spent, almost all of it has gone to state governments, presumably to prevent layoffs and the stoppage of essential services.

Unless I'm missing something, the $29 billion number does not represent the total amount distributed so far. The federal government's own website states that a total of $60.4 billion has been paid out. The government's website is quite interesting, because it shows several non-U.S. states receiving millions of dollars from the Recovery Act. For example, Palau is receiving about $2 million. I don't necessarily mind these smaller outlays--it's good to have friends all over the world--but why did it have to part of the "American Recovery and Reinvestment Act of 2009"?

In any case, although we still have hundreds of billions of dollars to go, many people, including Paul Krugman, are already recommending a second stimulus plan. A second stimulus plan seems premature at this stage. Hundreds of billions of dollars have yet to be distributed. Haven't these second-stimulus people heard the (sarcastic) remark, “A billion here, a billion there, and pretty soon you're talking about real money”? Sarcasm aside, shouldn't we wait a little longer for the current stimulus money to work its way through the system before devising a Plan B?

John Stuart Mill and Freedom of Speech

From John Stuart Mill's On Liberty:

Society can and does execute its own mandates, and if it issues wrong mandates instead of right, or any mandates at all in things with which it ought not to meddle, it practices a social tyranny more formidable than many kinds of political oppression, since, though not usually upheld by such extreme penalties, it leaves fewer means of escape, penetrating more deeply into the details of life, and enslaving the soul itself. Protection, therefore, against the tyranny of the magistrate is not enough. We need protection also against the tyranny of the prevailing opinion and feeling, against the tendency of society to impose, by other means than civil penalties, its own ideas and practices as rules of conduct on those who dissent from them.

Mill is promoting absolute freedom of speech. How can we actually enforce such unfettered freedom without being tyrannical? If you have an idea, please post a comment.

TSA = Totalitarian, Sadistic Agents?

For anyone who's ever had to deal with an unreasonable TSA agent, here is some good news:

http://online.wsj.com/article/SB10001424052970204556804574261940842372518.html

A federal judge in June threw out seizure of three fake passports from a traveler, saying that TSA screeners violated his Fourth Amendment rights against unreasonable search and seizure. Congress authorizes TSA to search travelers for weapons and explosives; beyond that, the agency is overstepping its bounds, U.S. District Court Judge Algenon L. Marbley said.

Finally, we have a judge who does his job--keeping the government in check when it unreasonably and arbitrarily exercises power over American citizens. Maybe now TSA agents will focus on doing their job--searching for weapons, explosives, and other harmful items--instead of acting like Interpol officers. For more TSA incompetence, check out this link.

Also, if you haven't heard about what happened to Steven Bierfeldt, google his name and do some reading.

Bonus: here is comic writer Mark Sable's deliciously ironic TSA experience.

California's Education and Pension Costs Out of Control

From AP writer Judy Lin:

Funding for K-12 schools and community colleges accounts for roughly half of annual state spending.

Funny how we haven't gotten smarter, but we've definitely gotten poorer. Meanwhile, California's state worker pension fund--which includes teachers' pensions--is still worth $177.7 billion. (Yes, that's billion with a "b.")

After years of staying mostly neutral, the San Jose Mercury News (July 7, 2009) finally issued an editorial opinion asking Sacramento to enact pension reform:

http://www.mercurynews.com/ci_12772192

The unfortunate truth is that the Democrat-controlled Legislature has been too quick to increase pension benefits and will resist reconsidering them unless it's forced to. Now is the time to do that...

Now, because of stock market declines and rising costs of health care, retirement costs are already siphoning $3.3 billion from the state budget, just when California is facing substantial cuts in education and services to the poor. That cost is expected to rise steeply. [Emphasis added]

By the way, in case you're wondering, state workers get the following benefits: "3 percent of pay for every year worked, up to 90 percent maximum after 30 years for safety officers and 60 percent for other employees." Where can non-government workers get 60% of their salary guaranteed in retirement? If you discover a place that allows non-executives to claim the 60% retirement bracket, let me know. I won't be holding my breath.

Update on July 12, 2009:

For the record, I favor increasing teachers' salaries as long as pension costs are eliminated. Why not replace teachers' pensions with 403b plans (the public-sector equivalent of a 401k)? If a 401k/403b is good enough for a Google/Apple/Target employee, why isn't it good enough for a government employee, too?

The average government worker should not have better retirement benefits than the average non-government worker. Is a secretary or lawyer who works for the government "better" than a secretary who works for Pfizer or Pepsi? I don't think so, especially not when the modern economy is so inter-connected.

Retirement benefits like lifetime pensions and lifetime medical care are inherently unstable because you have to predict how long a worker will live--that's not an easy task. As a result, costs are unpredictable, which makes accurate budget planning difficult. Why not create a budget framework that allows us to definitively ascertain employee costs without worrying about the ticking time bombs of unfunded, unpredictable long-term liabilities?

Good Riddance: Peggy Rips Palin a New One

Someone finally summarizes why Sarah Palin is the wrong choice for the Republican Party...and it's a Republican! I've always liked Peggy Noonan's common sense--it's something the GOP desperately needs right now:

http://online.wsj.com/article/SB124716984620819351.html

[Palin] was not thoughtful...she was out of her depth in a shallow pool. She was limited in her ability to explain and defend her positions, and sometimes in knowing them. She wasn't thoughtful enough to know she wasn't thoughtful enough...[s]he is a ponder-free zone...

For national elections, the Republican Party needs to attract more than just religious conservatives to win. Remember: most Americans now live in large cities, a group that is less Christian and more diverse and not particularly attracted to someone like Sarah Palin.

If the Republican Party wants to have any hope of winning national elections, it should ask Palin to create a religiously-inclined third party or handle Midwestern/Southern GOP fundraising efforts. At the same time, the GOP should cast out anyone within its ranks who does not adamantly support the separation of religion and state. Basically, unless Republicans re-affirm the Goldwater/Eisenhower philosophies--limited government and limited interference in other countries' affairs--it will have a tough time winning over voters in metropolitan areas. With these voters, the GOP cannot win the presidency as long as the electoral college system exists.

Ms. Noonan is trying to help the Republican Party. Republicans disregard her advice at their own risk.

Immigration Laws Provide the Government Too Much Discretion

Ken McLaughlin has written an interesting story (SJ Merc, 7/3/09) about the broad discretion of immigration judges:

http://www.mercurynews.com/ci_12744965?source=rss&nclick_check=1

If the link doesn't work, try googling these words:

When he was 10, Hank Nijmeh moved with his family to San Jose when the Beatles were still together and much of the Santa Clara Valley was carpeted with mustard fields. He was one of five children in a friendly Palestinian Catholic family that established one of the valley's most beloved eateries — the Falafel's Drive-In on Stevens Creek Boulevard...

U.S. Immigration and Customs Enforcement has kept Nijmeh in custody since April 2006, when he tested positive for marijuana while on probation....U.S. Immigration and Customs Enforcement has kept Nijmeh in custody since April 2006, when he tested positive for marijuana while on probation...

Immigration laws may be unevenly applied and enforced because of the wide latitude given to immigration judges. Remember this immigration fiasco, when immigration authorities wanted to deport the widows of American citizens because BCIS delayed processing their citizenship applications? Talk about pouring salt into an open wound...

Blog: Christopher Fountain

I just discovered an interesting blog:

http://christopherfountain.wordpress.com/

Mr. Fountain discovered a website that allows readers to see newspapers all over the world:

http://www.thepaperboy.com/newspapers-by-country.cfm

Disclosure: I don't know Mr. Fountain personally and do not necessarily endorse everything on his website. I do, however, like the fact that he's apparently a former attorney.

Bonus: here's another excellent blog:

http://lacunaemusing.blogspot.com

Here are Lacunae Musing's posts on Madoff:

http://lacunaemusing.blogspot.com/2009/01/bernie-reality-show.html [Reality Show?]

http://lacunaemusing.blogspot.com/2008/12/madoff-bailout.html [Bailout?]

Write Your Congressperson about H.R. 2798

It was only a matter of time--Madoff's investors have asked the 111th Congress for a bailout. The House of Representatives has obliged, and the House Committee on Financial Services is currently reviewing H.R. 2798. As of July 10, 2009, H.R. 2798 has not been submitted for a vote. You may write to the House Financial Committee using the following link: http://financialservices.house.gov/contact.html

Here is my letter:

Dear House members:

I am asking that you vote against H.R. 2798 or decline to submit the bill for a full House vote. The proposed bill seeks to bail out Madoff's investors under the guise of shoring up the SIPC. For example, SIPC members will only be expected to pay $1000 annually (up from $150 annually) into the SIPC fund. This amount is stunningly low, given that credit unions have had to pay millions of dollars to shore up their own version of SIPC, called the National Credit Union Share Insurance Fund (NCUSIF). Star One Credit Union, for example, will be assessed a $44.2 million charge to maintain adequate member protection. Thus, a revised annual SIPC fee of $1000 is laughable if consumer protection is the goal.

H.R. 2798 would be even more comedic if the money to expand SIPC protection wasn't coming from taxpayers. Unfortunately, because the SIPC has been woefully underfunded, if Congress passes H.R. 2798, the U.S. Treasury must issue loans to raise the SIPC fund's available credit from one billion dollars to $2.5 billion. As you know, the U.S. Treasury is basically the American taxpayer, so ordinary Americans and their children will be on the hook for this proposed bailout.

Most tragically, H.R. 2798's proposed penalties for white collar crime are too low at five years' jail time and a $250K fine. Such minimal deterrence will not protect the public against a future Madoff. Approving such low penalties post-Madoff may cause voters to wonder if white collar criminals have lobbyists. If I worked in Congress, I would not want my name associated with H.R. 2798 in its current form. Please vote "no" on H.R. 2798.

Sincerely,
Name

French-Algerian Celebrities

Reading some of the anti-Muslim comments French citizens, including Brigitte Bardot, have made, I am struck by how quickly memories fade. The French seem to have forgotten that some of their most famous representatives come from Muslim families. For example, Marcellin "Marcel" Cerdan, Edith Piaf, and Zinedine Zidane are all of Algerian Muslim descent. [It is true that Edith Piaf became Christian, but her maternal grandmother was Aïcha ("Emma") Saïd ben Mohammed (1876–1930).]

Castigating or judging people on the basis of their religion makes no sense. Throughout history, each religion has been persecuted. Clearly, the choice of religious persecution depends on whomever has a population advantage. One day, it might be your turn--unless we work hard to overcome our atavistic tendencies.

Bonus: "The media's primary function [is] to protect the weak from the strong. Now the strong have lost all shame... Every party in any given conflict always has at least some truth on its side, with the weakest party generally holding a little more." -- Leonid Bershidsky

Campbell: Local Fare

1. Anthony Bourdain would like Isabella's. Isabella's Restaurant is located at 70 S. Winchester Blvd., San Jose, California. It specializes in South American cuisine and its chef is Peruvian. The decor is nice--make sure you catch the small wooden sculpture of a soccer player on the left hand side of the restaurant. The location could be better--being next to a hairdresser and across from a nail salon doesn't scream five-stars--but I didn't care about the neighbors once I tasted the food.

I ordered the anticucho de corazon and the tacu tacu. If you like rice dishes, definitely get the tacu tacu--it's a flavorful rice and beans dish. The steak that came with the tacu tacu failed to impress, but I ordered it for the rice portion, so I didn't mind.

The anticucho de corazon was also great. It's basically four skewers of animal heart. What's animal heart? Well, imagine liver, but without the icky texture and aftertaste. Definitely try it--it was the highlight of my dinner.

2. I am always happy when I see an immigrant opening a new store. It reminds me the American Dream is alive and well. A new Ethiopian store, Tana Liquors and Groceries, has opened on 1358 S. Winchester Blvd., San Jose, CA. The store is very small and appears to have opened recently.Their advertising focuses on their imported spices, coffee, and liquor. I also noticed pre-paid phone cards. Right now, the store is new, so it doesn't have tons of products, but I bought and enjoyed a small apricot drink. The store's phone number is 408-871-8199; listed cell phone is 408-373-0606.

3. If you're into veggie food, don't forget Chaat Bhavan.

Disclosure: as of this writing, I have no financial interests in the above establishments and have not received "kickbacks" from them.

ABA: Loan Forgiveness Coming

For all you law school hopefuls and grads, President Obama and Congress are going to help you:

http://www.abajournal.com/weekly/student_loan_relief_on_the_way_for_law_grads

Make sure you read the comments, which are usually the best part of an ABA Journal post. One person says the world doesn't need help getting more lawyers. He has a point.

I paid off all my student loans myself, but I suspect more than a few people game the system. For example, I've heard that some recent graduates had taken loans against their houses and used a home equity loan to pay off their student loans. Then, depending on the remaining value of the home and their state's exemptions, they may have been able to declare bankruptcy and still keep their home. There are probably other ways to game the system, but the way banks were giving out HELOCs, using your home was probably the easiest way.

Some people have suggested getting Perkins loans. When I was in law school, my financial aid advisor recommended that I maximize my Perkins loans, so every year, I'd go to the financial aid office and ask for more Perkins loans. From 1999 to 2002, Perkins loans had low interest rates and were therefore favored by many students; however, under the new "Competitive Loan Auction Pilot Program" terms, I've heard that Perkins loans are not entitled to any relief unless they are consolidated. (At least according to this Sunday's SJ Merc.) One thing's clear: more than ever, it's essential to talk with your financial counselor to make sure you know all your options. Make sure you do your due diligence.

For all you policy wonks, here is a link that leads to the text of the law itself. You'll notice that Dems sponsored the bill, and George Bush signed it. So why is President Obama getting credit for this "new" student loan relief? Because Section 701 recently gave his administration more power and discretion:

Section 701 -

Directs the Secretary to conduct a Competitive Loan Auction Pilot program, beginning in July 2009, under which biennial auctions are held in each state allowing prequalified lenders to compete for the exclusive right to make FFEL program PLUS loans at all IHEs within the state. Provides that the winning bids from each state auction shall be the two bids containing the lowest and the second lowest proposed special allowance payments requested from the Secretary. Requires the Secretary to guarantee 99% of the unpaid balance of such loans.

Basically, President Obama's appointee gets to set the terms for lenders who want to loan money to students. In exchange, eligible lenders get a guarantee that 99% of the unpaid balance of the loans issued under President Obama's rules get paid back, courtesy of the American taxpayer. Interesting, no? Congress passes a law in 2007 with provisions that "activate" in 2009 and thereafter until 2017.

CIA to Congress: We Misled You, but That's Not Our Policy

Some strange things are going on between Congress and the CIA:

http://www.cnn.com/2009/POLITICS/07/08/cia.congress/index.html

http://www.latimes.com/news/nationworld/politics/wire/sns-ap-us-congress-secret-briefings,1,2711337.story

Letters by the chairman of the House Intelligence Committee and other members of the panel say CIA Director Leon Panetta told Congress last month that senior CIA officials have concealed significant actions and misled lawmakers repeatedly since 2001.

I am upset that rather than focusing on stopping the CIA from misleading Congress in the future, the media and House Republicans are making this an issue about Pelosi. I think Senator Pelosi knew about harsh interrogation methods, but not all the details. I do wonder if she knew about waterboarding, but it doesn't matter now--she had her chance to speak out against harsh interrogation methods and failed to do so. The real issue now is reforming the CIA, not Pelosi.

Update on July 20, 2009: Judge rules CIA lied to the court:

http://news.yahoo.com/s/ap/20090720/ap_on_go_ot/us_cia_fraud

According to court documents unsealed Monday, U.S. District Judge Royce Lamberth referred a CIA attorney, Jeffrey Yeates, for disciplinary action. Lamberth also denied the CIA's renewed efforts under the Obama administration to keep the case secret because of what he calls the agency's "diminished credibility" in the case.

Commodities, Cap and Trade, and Natural Gas

There's a lot of hubbub about H.R. 2454, otherwise known as the "cap and trade" program. My main criticism is that is that cap and trade programs require inter-country cooperation to be effective, but inter-country enforcement mechanisms have not been clearly defined or tested. What will the U.S. do, for example, if China "cheats" on carbon emissions? China, after all, uses mostly coal for its energy needs. (Perhaps we'll have some version of the International Atomic Energy Agency (IAEA), but for carbon checks.) Another problem: although heavy-handed enforcement will strain relations between countries, a heavy hand is necessary to convince everyone to play by the rules.

In any case, I jumped into commodities earlier this week (a few days too early), and am happy to hold UNG, FCG, WMB, WPZ, GSG, COP, and DBC. If approved, President Obama's cap and trade program will reduce coal and encourage more natural gas and solar power. Thanks to environmentalists, America may finally be able to reduce its use of "dirty" energy sources, including oil.

As I've already pointed out, the "cap and trade" program is not perfect--the government may end up artificially increasing certain commodity prices by transferring subsidies from coal to other energy sources. Even so, I'd rather subsidize clean energy than environmentally harmful energy sources.

Owners of Market Vectors Coal ETF (KOL) might want to assess the impact of the cap and trade program very carefully. Although it provides some exposure to Chinese coal companies, all coal companies will remain an uncertain bet as cleaner energy becomes more viable. After all, why would power plants use coal when they can use natural gas? From the EIA:

In the electric power sector, natural gas is an attractive choice for new generating plants because of its relative fuel efficiency and low carbon dioxide intensity. Electricity generation [will account] for 35 percent of the world’s total natural gas consumption in 2030, up from 32 percent in 2006.

You might still be wondering, "Why natural gas? Why not nuclear, wind, or solar companies?" Elementary, my dear Watson--it's the simple process of elimination.

First, America has far more natural gas than petroleum. Many Americans already know we have more natural gas than oil, but I am very surprised to see so many people overestimating cap and trade's foreign policy implications. If you think switching to natural gas will crush foreign regimes, don't kid yourself--the Middle East still has the world's largest supply of natural gas. I am willing to bet that in ten years, Russia and Iran spearhead a new natural gas "OPEC." That's okay--America won't ever be as dependent on natural gas imports as it has been on petroleum imports. In fact, Canada will probably be the largest foreign beneficiary of increased natural gas use.

Second, wind power looks D.O.A.--T. Boone Pickens, its most visible proponent, has scratched the idea, at least in Texas. That's not a good sign for the Pickens Plan.

Third, solar power is more complicated than it looks because it requires lots of empty land to put all the solar panels a power plant requires. Solar panels are most effective when powering relatively small structures, like houses and outdoor emergency phones. In any case, I don't know of any solar power plants that can supply power on the same scale as traditional power sources. (I am not an expert on solar power, so I appreciate being corrected if I am wrong.) At least for now, solar will not displace natural gas, but will probably work in conjunction with it.

Fourth, nuclear power suffers from a major image problem. Chernobyl will force legislators to hedge their bets on other energy sources and/or slowly adopt nuclear power.

I hope I've adequately explained why I believe natural gas has a bright future. If we're weaning ourselves from "dirty" energy like oil and coal, and solar and wind power have years to go before effective nationwide use, what's left? Aside from nuclear power, which suffers from a NIMBY problem, there's just natural gas. (Please don't get me started on ethanol--the idea of driving up food costs to get oil is untenable--and both Alan Greenspan and Charles Munger agree.)

Mind you, I do not expect natural gas prices to rise immediately. Even if the Senate approves the cap and trade bill, also known as H.R. 2454 (American Clean Energy And Security Act of 2009), it will take years for demand to dent the current supply of natural gas.

Why, then, am I buying natural gas and commodities companies now? Two reasons: one, current natural gas prices seem relatively low; and two, if Congress removes certain subsidies for natural gas companies or does not supply them with adequate incentives, companies will halt or reduce natural gas drilling, which will reduce supply and increase natural gas prices.

You might also wonder why I own ConocoPhillips (COP), an oil company. Petroleum will continue to be an important resource (petrochemicals, etc.), and many oil companies also have natural gas interests. In addition, oil companies sell an essential product and pay high dividends (unusual in our current era of 1% money market rates). I also don't mind buying anything Warren Buffett owns.

It is important to note that I hold all of my commodity-based shares in a retirement account to minimize taxes. Owning UNG in a regular account creates tax implications because of its partnership structure. I am not certain, but apparently, UNG does not pay out distributions, but imputes income to its investors anyway. Any more information on UNG's tax issues would be appreciated. (Feel free to leave a comment, especially if you're a CPA.) UNG's tax structure doesn't affect me because I hold my shares in a retirement account, but I am still curious.

Regardless of whether H.R. 2454 passes, the future of the energy industry is clear: the winner will be either nuclear or natural gas. I am choosing natural gas because it has a higher chance of widespread adoption. Fairly or not, nuclear power will always be linked to Chernobyl, Three Mile Island, and Davis-Besse, which reduces its appeal.

Disclosure: I own UNG, FCG, WMB, WPZ, GSG, COP, and DBC. I have recommended to family members to sell KOL if they own any shares.

Disclaimer: The information on this site is provided for discussion purposes only. Under no circumstances do any statements here represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence. To summarize, I do not provide investment advice, nor do I make any claims or promises that any information here will lead to a profit, loss, or any other result.

Update: Of the 20 million barrels of oil consumed each day, 40 percent is used by passenger vehicles, 24 percent by industry, 12 percent by commercial and freight trucks, 7 percent by aircraft, and 6 percent in residential and commercial buildings. (Source) Cap and trade will first impact the 30% slices (industrial and commercial/residential building) of the energy consumption pie, because not enough automobiles currently run on natural gas.

Bonus: below is an interesting link from the State Department on energy use:

http://www.state.gov/g/oes/rls/rpts/car/90316.htm

Clay Bennett

I usually reference Tom Toles when it comes to politically sharp cartoons, but Clay Bennett is right up there:

http://www.timesfreepress.com/news/cartoons/

Most Popular Poet in U.S.

The most popular poet in the U.S. is a Muslim? Apparently so, according to Time magazine.

http://www.time.com/time/magazine/article/0,9171,501021007-356133,00.html

Here with a loaf of bread beneath the bough,
A jug of wine, a book of verse, and Thou
Beside me singing in the wilderness -
And wilderness is Paradise now.

Suffering ennobles a man,
Enduring the oyster-shell's prison makes a pearl of a water drop;
Though worldly goods perish,
Let your head remain like a cup -
When the cup is empty it may be filled again!

by Jalaluddin Rumi, better known as Rumi.

MJ

The big news today was Michael Jackson's funeral. The most emotional moment was hearing Michael Jackson's daughter, Paris, speak:

"Daddy has been the best father you could ever imagine..."

Just an absolutely heart-wrenching moment.

Cold War II?

The radio is abuzz about VP Biden's so-called "green light" to Israel to attack Iran's nuclear arsenal. Maybe I'm over-analyzing VP Biden's comments, but I think the White House is trying to take pressure off Iran's protesters. In other words, this might be a classic diversion tactic.

Iran's current regime is in a tough spot. It lacks the manpower to pre-emptively attack another country, especially when so many of its military members have to handle protesters and internal dissent. Even setting aside international law, an Iranian attack against Israel would be a suicide mission because of Israel's nuclear arsenal. Attacking Saudi Arabia, an American ally, or American troops stationed in neighboring countries would also be a suicide mission for obvious reasons.

Israel, on the other hand, is also in a tough spot. Although it has the advantage in terms of weaponry, it must still weigh the overall benefits versus the costs of attacking Iran. At this time, the costs of an Iranian attack are undefined and possibly unmanageable because of Iran's influence in Iraq and Afghanistan, not to mention Iran's long range ballistic missiles. In addition, Iran doesn't lack the ability to defend itself. Iran has wartime experience because of the 1980-1988 Iran-Iraq war and has formidable support in Hezbollah, which has recent experience fighting against Israeli troops.

As for VP Biden, he seems to be playing the role of bad cop to President Obama's good cop. That's not necessarily a bad strategy, because even if VP Biden goes overboard, his words aren't binding--after all, he's not the President. In any case, President Obama is also in a tough spot. He knows his options are limited. Most Americans do not want to sacrifice more American troops in another non-defensive war. As a result, it looks like a stalemate and another Cold War until the fall of the current Iranian regime and a Middle Eastern glasnost.

Update on July 7, 2009: I just saw CNN's ticker--President Obama said there is no "green light" for Israel to attack Iranian nuclear sites.

All this attention on Iranian nuclear capabilities ignores the possibility that the current Iranian regime might be out in the next three years. Meanwhile, North Korea already has nuclear weapons and has threatened American interests. If I lived in Hawaii, I'd be more than a little concerned to be within shooting distance of North Korea. I am concerned President Obama hasn't provided a plan for containing the North Korean threat. As of today, North Korea, not Iran, represents the greatest threat to the United States.

As for Israel, it should focus on peace with Lebanon. Hamas and Hezbollah are greater threats to Israel than Iran. A prosperous, friendly Lebanon will cause Hezbollah and Hamas to wind down operations the same way the Provisional Irish Republican Army (IRA) gave up power to Sinn Féin once Ireland became prosperous. The 2006 Israeli-Lebanon war showed that force won't work in Lebanon. If Israel wants peace, having Lebanon as a peaceful partner is key. An Israeli-Lebanese partnership should be a higher priority for Israel than a possible Iranian threat three years from now.

But then again, what do I know? I've never visited North Korea, Lebanon, or Israel. Still, I hope one day to see all three countries experience lasting peace.

Bonus: Alan Dershowitz on Israel in the WSJ (7/3/09):

http://online.wsj.com/article/SB124649366875483207.html

A majority of American-Jewish supporters of Israel, as well as Israelis, do not favor settlement expansion. Thus the Obama position on settlement expansion, whether one agrees with it or not, is not at all inconsistent with support for Israel...

I believe there is a logical compromise on settlement growth that has been proposed by Yousef Munayyer, a leader of the American-Arab Anti-Discrimination League. "Obama should make it clear to the Israelis that settlers should feel free to grow their families as long as their settlements grow vertically, and not horizontally," he wrote last month in the Boston Globe. In other words, build "up" rather than "out." This seems fair to both sides...

Islamic-Compliant ETF

Below is an interesting article about how deeply religious Muslim investors avoided the full brunt of the stock market crash:

http://seekingalpha.com/article/147358-religious-muslims-now-have-an-etf-to-call-their-own

Hint: if you can't invest in companies that charge interest on loans, you avoid investing in banks.

Update: my friend, M. Izak, reminds us that Muslims aren't against banks per se. He says the current banking system is anti-Islamic because it charges interest rather than fees. Banks may rely on fees instead of interest payments but have chosen to rely on interest payments.

Hiking in the Dark: Don't Do It

Lesson learned: never, ever go hiking without a whistle; lots of water; food; blanket; and phone # of the ranger. Also, try to go in the daytime and with someone--when it gets dark, hiking gets scary if you're by yourself. I got lost hiking last weekend in Almaden Quicksilver park and walked, in fear, for 3 hours straight before finding my way out.

My sole saving grace is that I had lots of water, which saved my hide. Without the water, I could not have walked that long, even with fear as a motivator.

My friend Marlene B. had these recommendations:

~Always bring your phone--you never know where you'll have a signal.
~ Always have water
~ Bring a snack
~ Wear sunscreen
~ Hat... you can put a solar kind of emergency blanket in your pack.
~ NEVER HIKE ALONE! I don't care if you're a boy!
~ Take a map unless you know the route for sure

Other people suggested toilet paper, a headlamp and a GPS. One really good idea was attaching a bell to your backpack and letting it ring. It's the best way to make noise to make the predators look up and away instead of startling them. (Thanks to Mike I. for the recommendation.)

I was not expecting that level of wilderness on the side trails (which I went on accidentally). I couldn't see a darn thing, and the path got really narrow. I expected better signposts, maybe even lighted signposts. When it got dark, I could barely see/read where I was going. One disconcerting but apparently normal event was that my hands felt inflated--I had a hard time making a fist. (If anyone knows the science behind this phenomenon, please post a comment.) Then, birds started chirping, so I started singing to let the animals know I was coming. At least my night hiking trip is going to be a funny cocktail party story. I guess state parks are one place where the lawyers haven't been able to make the experience foolproof. That's a good thing.

Taxpayers on the Hook for Public Pensions

From WSJ (July 6, 2009, Andrew Biggs):

http://online.wsj.com/article/SB124683573382697889.html

[E]conomists Robert Novy-Marx and Joshua Rauh calculate that, even prior to the market collapse, public pensions were actually short by nearly $2 trillion. That's nearly $87,000 per plan participant. With employee benefits guaranteed by law and sometimes even by state constitutions, it's likely these gargantuan shortfalls will have to be borne by unsuspecting taxpayers.

Lord, what fools these mortals be.

Palm Beach Post Gets it Right

Congratulations to the Palm Beach Post for doing the right thing. Its headline on July 5, 2009: "No bailout for Madoff's investors." Full opinion here:

http://www.palmbeachpost.com/opinion/content/opinion/epaper/2009/07/05/a22a_thought_0705.html

Back in the day, we would call this journalistic integrity. Hope the Wall Street Journal gets a copy.

Movie Recommendation: Au Revoir Les Enfants

I just watched Au Revoir Les Enfants, a 1987 docu-drama about a Catholic boys' school in Nazi-occupied France. Many WWII films are melodramatic or make the war into a typical American tale where the good guys win.

In contrast, Au Revoir Les Enfants avoids all melodrama. Its beauty comes from its stunning realism of the war and its victims. Au revoir gains a lasting imprint in the viewer's psyche because of its understated simplicity. I recommend the film. (4 out of 5 stars)

Bonus: if you haven't seen the Hobart Shakespeareans (2004), you are missing out. It's one of the best documentaries I've ever seen. The documentary follows an elementary school teacher and his class of inner-city, immigrant students as they learn Shakespeare, Mark Twain, and other famous authors. Special appearance by Sir Ian McKellen.

Wisdom

Robert Haas, from the WSJ, 06/27/09:

In his 1980 Nobel acceptance speech, [Czeslaw] Milosz said something similar: "Those who are alive receive a mandate from those who are silent forever. They can fulfill their duties only by trying to reconstruct precisely things as they were, and by wresting the past from fictions and legends."

Happy 4th of July

A high school teacher once call me a rabblerouser. Jim Hightower's 4th of July article reminded of my former teacher's unintentional compliment:

http://www.alternet.org/story/141055/this_july_4th%2C_rebel_and_agitate_for_change

Agitators created America, and it's their feisty spirit and outright rebelliousness that we celebrate on our national holiday.

Website Promotes Government Transparency

This is a great website that promotes government transparency:

http://www.govtrack.us/congress/

Here is the link to what I call the "Madoff Investors' Bailout Bill":

http://www.govtrack.us/congress/bill.xpd?bill=h111-2798

When May a Judge Take Away a Citizen's Passport?

An interesting court decision was handed down by an Israeli judge in February 2009:

http://www.haaretz.com/hasen/spages/1097217.html

Sometimes, I think about whether America should have mandatory military service. Perhaps if more Americans served in the military and were at risk for deployment, our government would use the military option less. At the same time, the development of unmanned "killer" drones seems to be making war less risky, less human, and more one-sided.

As for Yaniv David Harel's case, I don't know how I would have ruled. The judge may not have adequately considered that fact that Mr. Harel wasn't goofing off when he requested the second extension:

He [Mr. Harel] offered to volunteer as a doctor in the medical corps and serve in the standing army, the same way some conscripts are sent to university by the army and then serve a longer time than regular inductees...[After the Israeli military refused,] Harel decided to finish medical school at Columbia University in New York.

I hope everything works out for Mr. Harel.