Never forgive, never forget

And we won't.

A silly graph on a serious matter

In a post at the Volokh Conspiracy, David Bernstein links to a graph produced originally by Liz Ann Sonders, the Chief Investment Strategist at Schwab. The graph strikingly shows the relationship between the NAHB housing index and the S&P 500 index, with the clear implication being that equities are due for a big fall. It's certainly striking, but it's also very silly.

It's common practice in the investment strategy field to produce graphs of this kind: superimpose two lines, shift one by a few months, and you have an immediate prediction mechanism for something or other. The problem is, these graph are seldom based on true insight, and even less often on rigorous quantitive analysis. I've seen quite a few of these peddled over the years, including some more far-fetched that this one. The guilty shall remain nameless.

Aside from the natural curiosity of what happens to the relationship on a longer timescale than the one shown, the graph cannot make fundamental sense, at least not in the way it is implying it can. The main problem is that the two lines represent totally different kinds of indices: the S&P has no maximum possible value, while the NAHB is a diffusion index that by defition will have a value between 0 and 100. If we take the graph at face value, it would imply that the S&P would have a maximum value of around 2,000, a 50% or so increase from current levels. That's clearly nonsensical.

Looking at the history of the relationship, you can see how this breaks down:

Prior to 1995, there is no relationship whatsoever between the two. But the really weird thing is that it does work very well in the period since then. Doing a regression of the NAHB against the S&P 500, you end up with an R-squared of 0.77:

That's a pretty powerful explanatory relationship. Taking it at face value, it would mean that with the NAHB housing index at 30, the S&P 500 would have to fall to 354, a drop of 74% from current levels, or 10.5% a month, every month for the next year. Using the S&P 500 total return index, which includes dividends, the R-squared is even higher at 0.80, and implies a drop of 81% in the S&P in a year, or 13.0% per month.

That's some pretty serious declines there. And they're not going to happen. At least, not in that magnitude. I think it's perfectly reasonable to predict some declines in the S&P, but relying too much on this graph and its implied message of doom is not the way to do it. As Lev, one of the commenters at the Volokh Consipracy pointed out, Schwab agrees with this as well, as they're underweighting equities by only 5%. That's hardly a message of doom.

However, it is clear that the US housing market is in trouble. That can certainly be inferred from the NAHB index. I agree that the US residential housing market has experienced a bubble, and that it is deflating, but I'm not inclined to conclude that the US economy is bound to collapse as a result. The risk does exist, but it's not a foregone conclusion.

So while using the NAHB index to predict the S&P is not going to lead to much joy, it might lead to insight into the development of house prices. Mapping the NAHB index against real median house prices (deflated with headline CPI), the relationship is still pretty weak:

Real house prices stayed flat throughout the 1980s, and only began to rise in the 1990s and seem to have peaked in the recent past. The NAHB index has been useful in picking up some of the downdrafts, but not in a truly convincing fashion.

Further declines will take place given the bubble that has developed, but I remain skeptical that it is going to derail the economy in a significant way. While there will be people who get burned badly on their speculative purchases, it takes a truly big downturn to turn this into a broad economic recession. Evidence from other countries with housing bubbles, like the Netherlands, UK and Australia shows that markets can go through step-changes in pricing without suffering crashes later. (Of course, we're not out of the woods on any of those yet, and they could yet sell off in the coming years if interest rates rise dramatically). Higher rates and slower growth led to a moderation of house prices and some falls overall, but not a crash. Median house price to median income ratios in these three countries are all higher than the US at around 3.5. (Sorry, I don't have a source at hand, so I'm typing this from memory).

The reason why people do worry that the US experience will be more painful is that US mortgage equity withdrawal has been a big factor in driving consumer spending. Should house prices fall, mortgaged home owners could end up with negative equity and become forced sellers. Less dramatically home owners might simply stop withdrawing home equity, and thereby be forced to cut down on spending. So how extended is the US homeowner?

The Federal Reserve has an amazing amount of data in its Flow of Funds data, and sometimes they calculate data for us. In the below graphs I have taken the data from the FoF unless otherwise noted.

Can consumers still pay for their mortgages with higher interest rates? The amount they need to spend on servicing their debt has been rising, although the mix has been shifting towards mortgage debt:

With both total and mortgage debt servicing costs at historic highs, it is clear that consumers will be hard-pressed to take on more debt. I have no idea what a natural and reasonable upper limit would be though. It could go even higher, but I would tentatively assume that any further increases will be limited.

A similar picture results when plotting mortgage liabilities relative to total net wealth and relative to real estate assets:

In both cases the US consumer now has reached record levels indebtedness relative to assets. With mortgage liabilities equalling about 17% of total net wealth, and about 48% of real estate assets, both measure seem to indicate that while the situation mamy be stretched historically, there is still a big buffer to eat into should things go wrong. Total real estate wealth would have to be cut in half for the market as a whole to experience negative equity.

So far, so good. But these numbers only show the aggregates. They do not show the details one would need to do a proper analysis of the situation. It'd be much more interesting to see the distribution of mortgages versus real estate assets: what percentage of households is overmortgaged? How many households have no mortgage at all? What's happening in the tails of the distribution?

Unfortunately, I don't have that data. So all I can do is ruminate vapidly on the basis of the data I do have, and the best I can do there is the following. The US housing is deflating a bubble, but the pain this will cause will not be widely distributed across the economy. As long as people have jobs, they will still be able to pay their mortgages. The problem arises when they become forced sellers (for instance, when they lose their jobs). Rather than causing a recession, it would be the recession with its layoffs that will cause the housing market really to sell off. It's a definite risk but not something I expect to happen. I won't go into the details here as it would require another lengthy post.

There is one glaring omission in all of the above: what about home equity withdrawal? For something that's been so instrumental in sustaining economic growth, reliable numbers are suprisingly hard to find. I've seen wildly contradictory numbers on this, ranging from a pickup to historic highs this year to a massive fall-off. I have tried to reproduce the numbers myself from the FoF and national accounts (and other sources), but without any success.

The great cathartic collapse of the bubble in real estate is unlikely to happen. It will continue to deflate, and will cause problems locally, but unless the US economy ends up in a recession, there is no reason to become despondently gloomy.

A new Hollywood ritual

Perhaps this has been going on longer and I never paid attention to it, but it looks like a new Hollywood ritual can soon be added to the release of any major movie: the Whine. After the Muslims' whine about X-Men 2, we now have albinos whining about The Matrix Reloaded. I also vaguely remembered some complaints about the Harry Potter books and films from the camp of Christian fundamentalists. A quick googling comes up with links to ExposingSatanism.org and how Harry lures kids to witchcraft.

It's of course shameful that the so Politically Correct Hollywood crowd can't create a movie that doesn't offend important victim groups in society. Being the enlightened progressive citizens they are, they should have long since seen the obvious and start making films with only average, featureless people in them. And perhaps make no more movies with villains at all. It's the least they can do.

Montana sells French stocks

The publicly run pension fund in Montana recently decided to sell its French equities. It was billed as an investment decision:

"We couldn't figure out why France would be so adamant in keeping a murderous dictator in office," Klawon said. "The only thing we could surmise is perhaps French companies have been doing business with Iraq against U.N. sanctions."

If there were illegal dealings by the French, Klawon said that would add to local investment risk.

"If we were helping French companies that were indirectly contributing to terrorism, what would the people of Montana think?" he said.

With a total of around $15 million in stock, the amount is puny and is not going to make the slightest difference in French stock prices. Although the rationale given is investment-based, it's obvious that the underlying motive is political. While I've been avoiding French products myself, it's a rather more dangerous thing to do for the trustees of a pension fund. They have a fiduciary duty towards their shareholders to protect their investments and to take decisions that are in their interests. Failing to do so runs the risk of serious jail time. While I sympathize with the sentiment, the Montana trustees are opening themselves up for a potential legal liability here.

However, the investment-based case is not entirely without merit, as French companies have been dealing with Saddam. It's not clear though how much of an impact these deals have made on aggregate profitability of corporate France. The most flagrant of these is probably the deal that TotalFinaElf made with Saddam to develop the Majnoon and Bin Umar oil fields (these are known as "supergiant fields," with estimated reserves of 10 billion barrels of oil, and production capacity of 1 million barrels per day). That deal was thought to be worth in the order of $50 to $75 billion dollars. I don't know how these estimates were made, but it when people are talking about the worth it's like to be in terms of revenues rather than profits. TotalFinaElf currently has about $100 billion in revenues a year, and that $50 to $75 billion is probably a lifetime number, not an annual one. Still, it would have added perhaps $5 billion a year in revenues, and that would translate into $500 million to $1 billion in extra profit, depending on how much of a sweetheart deal TotalFinaElf got from their friend Saddam. But even that does not necessarily move stock prices.

It all depends on what kinds of expectations have been priced in. It's all a relative game and any newsflow affects stock prices to the extent that the newsflow differs from the expected, priced-in newsflow. That's how companies can report a huge profit but still see their stock price decline, if that profit did not match expectations. It does not look as though TotalFinaElf's megadeal with Saddam was priced in to begin with, so there are unlikely to be any losses stemming from the unwinding of the deal. On the other hand, there is a huge loss compared to what might have been.

The way French stock prices might be affected is by the marginalization of French companies by American consumers, be they private, corporate or government consumers. If the anti-French feeling persists for long enough, then French companies will be feeling the pinch eventually. But it's unlikely to be a short-term effect. Although there is plenty of anectodal evidence for Americans boycotting French products, the effects have thus far not been quantifiable. It'll be interesting to see how that shakes out. The much bigger worry for French companies is the poor state of the French economy, which really could put a big dent in their earnings.

A Vulcan mindset

Another final last ultimate chance resolution is being introduced, which will give the UN Security Council its final, last, ultimate chance to prove its irrelevance. It is being introduced unilaterally by the US, Britain and Spain too, so that might cause additional problems. Naturally, the European Axis Powers of France and Germany are not happy about this.

So let me get this straight: if the US does not introduce resolutions in the UN Security Council and acts with its allies to protect its national security, that's Bad. And if it introduces another resolution in order to act with its allies, that's Bad too. Damned if you do, damned if you don't. This vaporizes any last shred of doubt that may have existed that the Axis Powers have but one goal: to obstruct the US. All the sound of fury that they bring to bear serve but to obfuscate this one central issue. They want America to fail. That's it. There's nothing else to it, and they'll go to any lengths to achieve that, even if it means that they themselves will be vulnerable to the Islamofascists in the future. Apparently in the warped Franco-German mindset it's preferable to defeat an imaginary American threat than to face the real Islamofacsist threat.

What really amazes me is how civil and polite throughout this American politicians have been. The worst we've seen thus far was Rumsfeld's "Old Europe" outburst, but in the face of such duplicitous idiocy coming out of Europe, I am beginning to wonder whether there's something Vulcan about American diplomats and politicians. Almost preternatural restraint there; I don't think I could pull it off.

Psychotic sunrise

License plates are a little bit of cultural identity, that reflect either the message the state wants to convey or some individual preference if you have vanity plates. This does not apply to most countries in Europe, where there is very little variation in the plates. You just get whatever the state decides you should have. In the US on the other hand, states have their individual license plates, each with the individual message. North Carolina claims to be the "First in Flight," New Jersey makes sure everyone knows it's the "Garden State" and Colorado has a mountainscape on the plates. Alabamans suffer from falling stars; as a friend of mine said, "That's why all the people are leaving Alabama; the stars keep falling on their heads and they're getting hurt." (Best rendition of the song I know is Sinatra's 1957 version on the "A Swingin' Affair" album. The Louis & Ella version is great too.)

Once every so often the plates will get redesigned, and the state of Kentucky took this opportunity to show how friendly it is. Yes, it's that friendly. Soon most cars in the Bluegrass State will have plates with psychotic smiling sunrises staring out at you, making sure you know they're friendly. I've never been to Kentucky, so I can't comment on the friendliness of people there. The only connection with Kentucky is Jim Beam or Wild Turkey Bourbon, although I still prefer the product of Tennessee, Jack Daniels. Curiously, their site has an option for displauing information in Czech and Turkish in addition to more widely spoken languages such as English, Spanish and German.

What's up with the blue grass anyway? It's also mentioned in the song "You're in Kentucky," which I know from a great recording by Rosemary Clooney on the "Dedicated to Nelson" album. The Nelson here is Nelson Riddle, one of the great arrangers of American music in the 1950s and 1960s. He arranged many of Frank Sinatra's greatest hits, including his theme song "I've Got You Under My Skin." The 1956 arrangement for the "Songs For Swingin' Lovers" album has pretty much been the definitive version of the song. Nelson worked with many of the great singers of the Great American Songbook, and apart from Frank Sinatra, many of his best arrangements were for Ella Fitzgerald. The Gershwin Songbook is a fantastic work of art, as are the albums "Ella Swings Brightly With Nelson" and "Ella Swings Gently With Nelson." As is often the case, during his lifetime Nelson Riddle never got the recognition he deserved, and it's only now that his great contribution to American music is being recogonized.

After a great dinner with great steak and a great Bordeaux, the appropriate thing to do is to have a shot of Jack Daniels now. Cheers!

Senator Frist takes over

Sen. Frist Unveils GOP Racial Segregation Plan.

(Just a link this time.)

Killing two insects with one stone

The United States has asked Germany to provide protection for its bases from the end of January? Another piece of the puzzle falls into place, and Iraq is another step closer to liberation. The German reaction will be interesting to watch. A spokesman for the German defense ministry said that Germany had actually agreed to help to guard US bases, but it had made no commitments as to the extent of the aid. This is going to be a highly explosive issue for the coalition of Greens and Social Democrats, as Schröder won re-election by running against the US. There's a very large number of pacifist idiots in Germany who're opposed to any German aid to the US, no matter how indirect. Overflight rights? Of course not. Limiting US troop movements? Well, sure. (I wonder how they would want to put that into practice, being pacifists and all). In fact, they would oppose military action against Saddam even if all other countries in the UN came crawling on their knees to beg for German support. War is wrong, they say, violence never solves anything, so let's allow the madman to build weapons of mass destruction (you know, the kind that never solve anything). One day they might not solve anything by leaving a radioactive crater in Frankfurt, Munich or Berlin.

So the pacifists in both coalition parties are likely to be in explosive mood when the shooting in Iraq begins. Schröder will have to make a stark decision at that point, and no matter what he chooses, he has a problem. Since the election he has realized that sticking to his dogmatic unilaterist approach of no German aid whatsoever is going to cause Germany great harm internationally. He also knows that the left wing of his SPD party is going to be even more upset with him than it already is, and the see-no-evil-unless-its-American Greens with their pacifist roots are going to go into spontaneous combustion. If Schröder does accede to the US demand for protection of US bases and overflight rights, there's a good chance that his coalition will fall. If the does not, then the opposition will have a field day with piling on to Schreöder's already dismal position in the polls by pointing out that internationally he's a disaster for Germany too. Either way this is going to result to more damage to the already sinking ship of the Red-Green coalition. The Reds and the Greens are so far behind in the polls now that there's no chance that they could win another election now.

What I really wonder is this: are American forces really stretched so thin that they really, really need German aid in guarding American bases? Sure, it helps and allows American military personnel to be used more fruitfully in Iraq, but is it really necessary? Or is Bush killing two disgusting insects with one stone here? War in Iraq takes care of both Saddam and Schröder. You gotta love it.

Free education in Missouri

A judge has ruled that alumni of the University of Missouri are entitled to free education, based on a 1889 law which gave free education to "all youths of the state of Missouri, over the age of 16 years." After this lawsuit was filed the law was quickly changed, but the fact remains that by charging tuition, the University of Missouri has for years been acting illegally. It could cost $450 million dollars (approximately its annual operating budget) to repay the illegally charged tuition, a prospect that would sure bankrupt the university.

Legally the plaintiffs appear to be on firm ground. The University's defense that it was charging "education fees" rather than "tuition" was shot down by the judge:

"Dr. Pacheco's testimony was nothing more than pure pretense, incredible and sadly not believable," Judge Romines wrote in the decision, issued on Dec. 6. "Resort to all editions of all dictionaries and honest scholarship demands the conclusion that `tuition' and `educational fees' are synonymous."

It looks like the judge was not very keen on ruling in favor of the plaintiffs, but had no other choice. But what's to gain from suing in this case In the words of Frederick Eccher, one of the plaintiffs:

"Getting the judge's opinion was worth the wait, but saying something was wrong is one thing, and justice is putting things right," he said of the absence of any remedy so far. "What would make me feel better would be them paying back the tuition, and interest."

The pursuit of money is obviously a big factor in all of this. While the legal position of the plaintiffs seems impeccable, this whole thing still feels deeply wrong, because by winning this lawsuit the plaintiffs could well sink the University of Missouri education system, denying the opportunity of getting an education to others. This is clearly an instance where being technically right is not exactly edifying. The law is an ass again. On the other hand, throwing this ruling out simply because it's inconvient rankles too, and I'd find that deeply unsatisfactory. The plaintiffs should not have sued in this case, although I realize they were fully within their rights to do so.

I'm obviously not an expert on Missouri law, so I wonder whether the judge can award symbolic damages only in this case. Or would the eighth Amendment provide a way out if they'd have to pay $450 million?

Infocom adventures

When I saw the headline"4 arrested in federal terror probe into Infocom", my first reaction was "they still exist?" followed by "how on earth could it be linked to terrorism?" Of course, the Infocom in this case is not the same Infocom I used to know. The company no longer exists, but its memory lives on the in nether realm of computer nerds who spent way too much time playing Infocom's games. By common acclaim, Infocom made the greatest adventures, with such legendary titles as the Zork series, Planetfall and also The Hitchhiker's Guide to the Galaxy, which they did in cooperation with Douglas Adams. What used to require the full capacity of a computer twenty years ago, you can now play online in your web-browser. To those who're used to the whizz-bang graphics and sound of modern games, the Infocom adventures are unlikely to be very captivating at first sight. But the level of immersion into the worlds Infocom created was very high nonetheless. What the computer could not show, you had to make up for with your imagination.

The goal of an adventure is to solve puzzles as you go along. You can type simple commands to the computer, such as "look" and "get toothbrush," or "lie in front of bulldozer." One of the classic puzzles in the Hitchhiker's Guide to the Galaxy was getting the Babel Fish into your ear... I can still remember how to do it. (I compensate for this by not being able to remember birthdays, anniversaries, holidays or anything that happened before my last nap.) Ah, those were the days...

Rebuilding Lower Manhattan

The new plans for the WTC site have been announced by the Lower Manhattan Development Corporation, following the lukewarm reception of the old plans. Out of the seven, four plans propose creating the world's tallest skyscraper, the highest coming in at 2,100 feet. This is considerably taller than the Petronas Towers in Kuala Lumpur which has a height of 1,483 feet. The LMDC has the new plans online, but the site is very slow right now, so it's hard to tell whether they actually look good.

Building anything less than the world's tallest building would be a betrayal of the spirit of New York, and indeed the American spirit.

Citizenship Exchange Program

I don't want to do this issue to death, but something occurred to me in reading Steven Den Beste's response to my comments about the troubled prospects for Europe. He writes:

The remarkable thing about the brain drain is how one-sided it is. It's not so remarkable that Europeans are coming to the US; what's remarkable is how few Americans go the other way. European companies don't recruit here, and few here I've ever met have any interest in moving to Europe. That alone says enormous amounts.

The Americans whom I have encountered here in Europe tend to be here temporarily, sent by the companies they work for to spend a few years in their European operations. I used to drive past the American high school in the Netherlands on my commute to work, and you'll find similar clusters of American expatriates working here. But when their stint is over, the vast majority of them move back.

But it's not true that there are no Americans who want to come to Europe. In fact, I've met a few when was traveling through Silicon Valley this summer. No, they're not Silicon Valley engineers, but they're the humanities majors at the elite universities in the area. They're the folks who inhabit the warrens of Indymedia, the Naderites who think America is the root of all evil in the world and generally fawn over the sophisticated superiority of Europe.

So I'd to propose a Citizenship Exchange Program. It's obvious I'm a complete misfit here in Europe, just as they are in the US so both sides benefit. Under the CEP, any American could exchange his citizenship for that of a European country if he finds a willing donor. The change would be total: no vestigial rights, no green card. Just as if they'd never had American citizenship in the first place. An analogous situation would prevail for the European counterparty.

The snag is this: how many of them would actually be willing to take that step? How many would really give up their American passports? For all the whining we've heard from Hollywood liberals about George Bush's election victory, most of them still seem to be living in the US as citizens of the US. If they hate America so much, why not take the obvious next step? Let's make it easier for them and see what happens.

Educational excellence

The difference in the quality of primary and secondary education between the US and Europe has long since become one of the standard items in transatlantic comparisons. The received wisdom is that the US system underperforms Europe in educational achievement. A recent UNICEF study seesm to confirm this, as the US ranks 18th out of 24. It's certainly not a stellar performance, but looking at the scores the striking thing is that the countries that the US beat out are Germany, Denmark, Spain, Italy, Greece and Portugal. Beating the southern European countries really should not be too much of a problem, but Germany and Denmark? The top scoring countries are Korea, Japan, Finland, Canada and Australia. I don't know much about the education systems in those countries, but it would seem to me that they must be doing something right, at least as measured by scores on standardized tests. But what else can you use to compare? The problem with primary and secondary education in the US is not going to be solved by throwing more money at it. Figure 10a in the report on page 14 shows that the US is already the second-highest spending country as measured by average expenditure per child from the beginning of primary education till age 15, at around $70,000. Top-ranked Korea spends less than half that.

There's a whole lot more interesting information in the report, and I haven't yet had the time to go through it as thoroughly as I would have wanted. Their main conclusion is that the best explanatory variable of educational achievement in children is their parents' level of education. Given the good scores of Asian countries (see also the chart on page 27), it is tempting to conclude that their educational systems might be worthy of copying. Yet the insane pressure that parents put in their children < ahref="http://qsi.cc/blog/archives/000103.html#000103">in Japan cannot be healthy either. Perhaps a better role model would be the Canadian, Australian or Finnish system, which might make a better fit; at least it's worth exploring how they manage to score so much better and then experiment with the findings. There are many, many school districts in the US, so it should not be too hard to find a system that works better. It's a sad commentary on the state of public schools in the US that this has not happened yet.

On food, license plates and spies

My absence from the blogging over the past week was caused by quite a bit of travel (there's more coming this week, but only within Europe) which took me to Washington DC. The Latham hotel in Georgetown was a bit disappointing in all. It certainly does not measure up to its pretention of a full-service luxury hotel. Then again, at the rate I got I suppose I can't complain too much. On the other hand, the restaurant in the hotel is absolutely excellent. It's Michel Richard's Citronelle which offers great ambience, good service and exquisite food. The food was in fact so good that even stuff I usually don't like tasted good. I had the Tuna Napoleon as the first course, which was amazingly light and melty on the tongue. The main course was the venison special with port sauce and a puree of chestnuts. Normally, I would not have even touched the latter, but the first course convinced to be braver. The best parts were the wine and dessert. They have a great wine list (including a 1961 Cheval Blanc at $4,000 a bottle), but I settled for a less bank-breaking Carruades. Dessert was the famous chocolate bar. Excellent small bars of crispy chocolate in a sweet hazelnut sauce. Fantastic.

Anyway, so much for the food. One thing that struck me was the composition of out-of-state license plates. For some reason, I saw a lot of cars with Alabama and Tennessee plates. I thought it might have been the influx of staffers for newly elected senators and representatives, but that leaves unexplained why there were no Minnesota plated-cars. Very peculiar. Of the Maryland-plated cars, I saw a great many with Ehrlich bumper stickers, while the Townsend stickers were much rarer. This points to much higher mobilization among Ehrlich voters, or perhaps they're just more disposed to putting bumper stickers on in the first place. I am sure somebody must have done a study on bumper sticker frequency as a predictor of election results. Since nobody's using it, I guess it's not a very good predictor. And what to make of the Giant Parking Chickens of Dulles?

I can recommend the Spy Museum if you have a few hours to spare in DC. It has a nice collection of actual spying gear from many countries around the world. Button-hole cameras, various bugs and surveillance mechanisms are explained. I found the actual stories that go with the devices most interesting. The various attempts at bugging the US and Soviet embassies in Moscow and Washington respectively are explained in some detail. Some other items such as suicide capsules highlight the dangers of undercover work.

The Spy Museum also has exhibits on well-known traitors and the consequences of their treason. There's Mitrokhin, a KGB agent who for years copied files at the office and stored them at home. When he defected to Britain, he took 300,000 files with him, which obviously was a great help to us. I have no sympathy who betrayed our side though. In the Cold War, there was a clear moral choice to be made between good and evil, right and wrong. The difference between the two opposing systems was clear and obvious. Many of the ideologically-motivated traitors were the kinds of people who saw themselves as the avant-garde of enlightened opinion. The kinds of cultured intellectuals who saw the superior ways of communist dictatorship that the capitalist-democracy-supporting sheeple simply were too stupid to understand. The kind of people who were so smart that they managed to convince themselves to believe incredibly stupid things. That's how the Soviets got the secret of the bomb.

Examples of the archetype exist in today's war too. The big difference is that there is no centralized enemy, but a more diffuse set of loosely cooperating enemies, which are not well equipped to mount a massive intelligence operation against us. But I am sure that it's not for lack of trying, or for lack of useful idiot volunteers who despise the capitalist liberal democratic system. I suppose there are fewer useful idiots who actually want our enemies to establish an Islamofascist theocracy; however, their dislike of the west blinds them to the evil that is now arrayed against us.

We won't know how many of those who profess their disdain for western civilization will actually end up actively helping the enemy for a while yet. But I am certain there are present-day Rosenbergs and Fusches lurking somewhere to be tapped. And one wonders: how can people be so stupid?

Veterans' Day

Thank you.

The inevitable election commentary

I suppose I should add some comments about the mid-term elections in the US, since it seems to be the hot topic of the day. First of all, I'm glad the Republicans did well. I'd also like to extend my congratulations to my loyal readers in Maryland who'll be delighted with the Ehrlich win (whoo-hooo), as well as the Missourian who forgot to get her absentee ballot. (*ahem*) But all's well that ends well, I suppose. Be more careful next time.

At the time of this writing, the Senate race in South Dakota has not been conceded yet. Johnson, the incumbent Democrat leads the Republican challenger Thune by 167.481 to 166,954. The Libertarian Evans managed to pick up a few thousand votes, just enough to spoil the Thune's chances. What's even sadder is that he suspended his race on October 17th and endorsed John Thune. I don't know whether the people who voted for him were extremely absentee or postal voters, or whether they were the Libertarian ideologues who'd rather have Utopia than something that's second-best. I just hope this thing doesn't end up being a rerun of the 2000 Florida debacle. Don't litigate this race to hell and back. I hope whichever candidate (most likely Thune) who ends up behind after a few days will have the grace to concede. It would be in keeping with the Republicans' message of serious politics, rather than the Democrats' poltics-at-any-cost sleaze. While the Republicans may end up with one seat less in the Senate, a gracious concession would win them points longer-term. Let the Democrats be the Nasty Party.

Perhaps I am too optimistic though. In any case, the Republicanization of the South continues. I am still amazed at how many Democrats manage to get elected in the South. Those roots go deep. Very deep. But here too, as in Lautenberg's New Jersey and Mondale's Minnesota, the Democrats are the party of the past. The future is Republican in the South, and gains made by Jeb Bush amongst Latinos show that the GOP can reach out beyond its caricature white aging businessman core. Georgia completely flipped to the Republican Party this cycle after more than a century of Democrat control. One thing I am wondering about is what this means for the Republican coalition. Did the GOP win because of its socially conservative message or because of its economically liberal message? (I know, I am fighting a futile campaign to return the word liberal to its original, non-pejorative meaning.) If you will, it is a conflict between the Values of Religion and the Values of Investing. The increase in share ownership is a trend favorable to Republicans, which is predisposing swathes of suburban knowledge economy workers to the Republican party on economic issues. They're the Investor Values people, and they don't much care for the social conservatism of the Religious Values people. Both currently share the Republican tent, and neither has a place to go unless the Democrats come to their economic senses and dump the last vestiges of sneaking socialism in their program. The best way for the Democrats to win back a majority is to stop business-bashing and embrace the free market. Of course, they're not going to become Libertarians, but a centrist position with a non-government tilt would do really, really well. It also requires the Democrats to get serious about the war. The survival of America is at stake. Chanting Vietnam-era slogans is not going to dispel the Islamofascist threat, and the American people know that. The Vietnam-era slogans condemned the people of Vietnam to communist tyranny. I'd like to avoid having a Islamofascist tyranny in America. Get serious.

I haven't seen much commentary yet on this (then again, I don't spend all day reading blogs, although it sometimes seems that way), but there has been a Republican revival in the northeast. Pataki won big in New York, Republicans won gubernatiorial races in Connecticut, Maryland, New Hampshire and Massachussetts, while they might win in Vermont too. Sununu won the Senate race in New Hampshire. Sure, New England is not going to become a Republican hotbed because of this, but it does mark a revival after some poorer showings recently.

So what should President Bush do with his new majority? Two things: ruthlessly prosecute the war against the Islamofascists, and give America another tax cut.

How the Muppet Show got it wrong

It was last week when I happened across a rerun of the Muppet Show on Dutch TV. It had been ages since I'd last seen an episode and I was getting tired of flipping through channels anyway, so I watched it. This was the episode where the ballet dancer Rudolf Nureyev. Since a representative of High Art was going to be on the show the Muppets dressed in formal evening dress, and Sam the Eagle was especially excited to get some Real Culture on the program instead of the low-brow demotic frivolity that so he looked down upon. This of course set up a running joke throughout the program, with Sam ending up sorely disappointed as Rudolf did "Top Hat, White Tie and Tails" complete with Astairesque tapdancing routine.

Sam was the Muppets' token caricature conservative on the show. Choosing a bald eagle for their caricature was also telling. Aside from this one episode I have just seen, I haven't seen any in decades, so I don't remember what Sam really was like in the other shows and I'm not going go off on that tangent. Instead what struck me on reflection is that the light-hearted amalgamation of High and Low culture on this Muppets episode was quintessentially American. Sam's haughty attitude was more akin the European condescension towards American culture than a reflection of America. Instead of a bald eagle, a stinky weasel would have been a better character.

It's not just the Europeans of course. The lefty pomo intelligensia in the US fawns over the haughty Europeans and joins them in lusty self-flagellation. Bad TV! (Whip!) Bad Consumerism! (Whip!) Shallow cowboys! (Whip!) Uncultured brutes! (Whip!)

I guess it makes them feel better. And boy, does it ever feel good to proclaim self-righteously that you never watch TV. Every moment not watching TV brings additional karma. But the conservative right has representatives that share at least part of these sentiments. Much like the caricature Sam, they look down on popular American culture and pine for the days when everything was better. I still have such tendencies too in my weaker moments when I get nostalgic for an age I never even knew. But the imagined Golden Age is always better than the one the people at the time had to live through. I prefer to live in the present, thank you very much.

It's not that I actually like pop culture very much, but I wouldn't want to be without it. Countries that lack a strong pop or counterculture have always been terrible places to live. Sure, the Soviet Union had endless productions of Swan Lake and a Shostakovich or Tchaikovsky festival every year, but the culture was sterile. It was ritual veneration of the past without creating any new. The creative process is messy. Most of the stuff that is created will be crap. Sturgeon's Law states that 90% of anything is crap. And it's universally valid. (This blog is of course in the other 10%, that goes without saying).

Having sometimes execrably crappy pop culture, silly game shows on TV and all the rest is a good thing. It's a good thing because it's a reflection of freedom. No freedom comes without a price. The First Amendment means that people will be able to say things you find offensive, or practice a religion you find repugnant. But it means you're free to speak your mind, to assemble peaceably and seek redress of your grievances. The Second Amandment means that people will use guns to commit crime, but also means guarantees your right to defend yourself against criminals and the government, should it become too oppressive. The Fourth and Fifth Amendments mean that those guilty of crimes will walk free sometimes, but they also give you a fair shot at a trial and acquittal if you're innocent. In each of these instances, the benefit of having these freedoms far outweighs the negative corrolary effects they have. So hooray for consumerism and pop culture. I would not want to live without it.

Swinging wartime songs

Praising Lileks is utterly futile. Even if I were to whip up an attempt at a Lileksian simile, the things he writes are an infinitely more impressive testament to his writing skills. At some point in the future, the English language will have the expression "you might as well praise lileks" as a way of expressing the blatantly superfluous. Entire immersive tactile 3D hypernetsites will be dedicated to finding the etymology of "lileks." It was a kitchen implement! It was an AI computer! It was a hoax! Bush had him murdered!

Enough of that. The Daily Bleat has long been a staple and those of you not reading it should start doing so right now. Immediately. The reason I'm bringing Lileks up is his recent Bleat about wartime songs. As a big Sinatra fan, I was reminded of the songs on the "Rarest Sinatra" CD, where there are four World War II vintage performances. (I'm not going to delve into the huge stack of Glenn Miller songs; that would take forever to blog.) The lyrics are marvelously unsubtle and would face the Inquisition of the PC touchy-feely brigade in a blink.

There's the "War Bond Man:"

The Jap as you should know
will be the toughest foe.
We've got to win, but that takes dough.
Back up the war bond man!

We have a score to settle on that far Pacific shore
Before we're done the Rising Sun will set to rise no more.

[...]

Why let your dollars nap, when they can set the trap
for the rat that they call the Jap, back up the war bond man!

[...]

What would your fortune be without democracy?
In liberty, security buy all the bonds you can!"

Little is left to the imagination there. And it's a swining tune too. Here's some lines from the Victory Polka:

And when we've lit the torch of liberty
in each blacked-out land across the sea,
when a man can proudly say "I'm free,"
we'll be dancing the victory polka.

It'll be a Hot Time in the Town of Berlin:

It'll be a hot time in the town of Berlin
when our fightin' boys begin
to take the joint apart and tear it down
when they take old Berlin.

They're gonna start a row
and show them how
we paint the town back in Kokomo.
They're gonna take a hike
through Hitler's Reich
and change that Heil
to watcha know Joe.

And you know what, they did.

After the funding for the war came the funding for the peace. The song "Buy a Piece of a the Piece" exhorts Americans to swingfully use their gold and what money they could muster to fund the reconstruction effort after the war.

You can all buy a piece of the peace
big or small, buy a piece of the peace.
Seven times before you've bought the bonds we've sold
victory isn't free so trade it in for your gold.

This is it, buy a piece of the peace
do your bit, buy a piece of the peace
Please for freedom's sake don't cease
come on and buy a piece of the peace!

[...]

Dig way down, buy a piece of the peace
go to town, buy a piece of the peace.
Just to say OK no matter what the cost.
Listen friend, unless you spend
the things we've won can be lost."

I think we needed a few more exhortations to buy a piece of the peace. But I should not be cynical. It's too easy to slip into trendy and effete cynicism; it the money that was stumped up by Americans after the war that allowed Europe to revive economically, just as it was American power that kept us free and prosperous during the cold war.

I have no idea how much these songs contributed to the war and peace bond funding drives. As Lileks said, Americans will have had they BS detectors back then too. That's not the point. The point is that America did win the war, did liberate western Europe and Japan, we did have the Marshall Plan, and both America and Europe benefited enormously from it. For what it's worth: thank you guys. Europe owes you big time. It's disgraceful European politicians have forgotten that.

Unintended consequences

Decimalization all seemed so perfectly sensible. Stocks in the US used to be quoted in fractions: halves, quarters, eights, sixteenths and even thirty-seconds of a dollar were the fractional prices paid for equities bought and sold on the US exchanges. The rest of the world had long since switched to decimal pricing, and with ever smaller increments being quoted for US stocks too (sixty-fourths anyone?) the pressure was on to rationalize the system. No more fractions and prices for equities could be expressed in dollars and cents, just like virtually everything else. The changeover took place in April 2001.

The Nasdaq market relies on "market makers," which are big institutions who intermediate between buyers and sellers on the market. They make their money by selling the stocks at a slightly higher price than they buy them: this is called the bid-ask spread. There had been much criticism of market makers and the high spreads that were quoted on many Nasdaq stocks, and decimalization was supposed to bring spreads down. And down they have come. In fact, they have come down so far that the profitability of making markets in smaller stocks is no longer viable, or so claims Nasdaq CEO Wick Simmons. He says that the decision by some big market makers like Merrill Lynch to withdraw from smaller stocks proves the point, and he now says that decimalization was a horrible mistake. What's worse, this makes access to the trading of smaller stocks more difficult, hurting both small investors and small companies.

So is this a classic Hayekian case of unintended consequences? I'm not so sure. The erosion of the bid-ask spread is a classic case of a more efficient market. The bowing out of some players is also a market response; you can't force people to engage in unprofitable business. (Well, you can, but it's not a good idea). So thus far what we're seeing is the market changing participants' preferences. Those who find no utility in making markets in small stocks will leave, and have their place taken by competitors who think they can make a buck doing so. It's also worth bearing in mind that decimalization took place at while the big Internet Bubble was deflating, and all Wall Street firms have fallen on tough times since then. Trading volumes aren't what they used to be, and small investors' appetite for small cap tech stocks is way down too. So perhaps Merrill Lynch's decision to exit the market making business in small caps is more related to the bear market than to decimalization. It would be interesting to see some data on other market-making exchanges around the world (couldn't find hard data on this).

We'll have to see how this pans out. Based on the evidence I have seen thus far, I'm not willing to say that decimalization is at fault here. If many players exit the market-making business in small caps then spreads will start to widen again as a illiquidity premium will have to be paid. As supply goes down, prices (i.e. spreads) will go up, which will attract players until the market reaches a new equilibrium. No need to panic yet. We'll announce the proper time to panic on the PA system.

Golden Agism

In an excellent comment on yesterday's item on democracy (scroll down), reader FeloniousPunk writes:

I think that one of America's hidden virtues is its youth as a nation. America is not burdened by history in the way that, say, the Arabs are. There is really no golden past to harken back to that forms the bedrock of cultural and national identity; if anything the idea that progress is not only possible but inevitable and that the greatness of the nation lies in the future rather than the past, that is the bedrock of the identity. Without this burden of the past, the society is relatively unencumbered to change and adapt and to work for a future. By contrast, for so many societies the desired future lies somewhere in the golden past, so real change and progress is not possible.

I fully agree with this. This syndrome of Golden Agism has always been pervasive. It is rare to find fundamentally optimistic societies, as it so much easier to succumb to cynicism and seek redemption in the recreation of a mythical past. Some people take it very literally.

Some time ago on GeekPress I found a link to a speech given by science fiction author David Brin at the Libertarian Party national convention in July. It's fairly long, but well worth reading even if you are, like me, not a capital-L libertarian. One the things he mentions in his case for a "cheerful libertarianism" is the difference between the Look-Back View and the Look-Forward View. The former is what I call Golden Agism here, the belief that once upon a time things were better. Look-Forward is the conviction that the best is yet to come, if we make it happen.

More importantly he also takes to task the curmudgeonly, the ranters, the spewers and generally angry. How easy it is to believe that you are one of the few enlightened souls to see the full awful truth about your favorite issue! Although I am generally sympathetic to the libertarian conclusion, reading the frothing comments by self-styled followers of the philosophy turns me off. Seeing the world (or America, as it may be) as moving irrevocably towards to a totalitarian police state, a bunker mentality sets in. It's the enlightened few railing against the blindness of the masses who are being led like lambs to the slaughter. All sense of proportion is lost. Lileks addressed the tendency to extremist characterizations in his piece on Wellstone's death:

But if you’re going to accuse someone of being kith and kin to tyrants and murderers, you have to realize that intentions do count, as I’ll explain. And if you’re going to call Wellstone a tyrant and group him with the A-list collectivists, insist that his vision of government was a gun to your head, then you have no gas left in the tank when it comes time to run over the guys who really meet those descriptions. We can have fun with the guy when he’s alive, but death changes the tenor of the debate. Put the broad brush back in the muck bucket.

But moving back to Golden Agism, although America as a society has stuck to the Look-Forward View for most of its history, the temptation to think in terms of smaller Golden Ages is still there. (Does that make them Silver Ages?) Just look at the various political camps. The anti-war left is desperately yearning for its heyday of the Vietnam era. The 1960's are the Golden Age for a generation of lefties. On the right there is a similar hankering for an even earlier era. The glorification of the 1950's as the Golden Age of family values, motherhood and apple pie is palpable in the commentary of the "social and moral decline" conservatives. Libertarians pine for the Golden Age of the Founding Fathers, when the Constitution was pure and unspoilt by political reality. All three groups will complain bitterly that things are going to hell. Only American socialists thankfully have no Golden Age in America's past to look back to. Instead they celebrate the contemporaneous past of Cuba's communist dictatiorship, where hell already exists.

In thirty or forty years' time, we'll have different political groups talking dreamily about the wonderful 1980's, 1990's or those heady days of the new millennium, while speaking bitterly of the decline in their pet indicators of National Health since these glorious times.

I wonder whether this is something that the young are more prone to. The first adult impressions of the world have a tendency form the baseline for all comparisons. When things change, youthful bitterness will cast it in the light of "things are going to hell." Even the cancelation of a favorite TV show will lead to complaints that TV is no longer what it used to be and will now be in terminal decline forevermore. Perhaps I have been exposed to too many whiny kids in their late teens and early twenties. As I am edging towards tumbling into pre-early physical middle age myself, I am hoping that with age comes the ability to see things more clearly. Then again, why do people always talk about bitter old men?

I need my own personal Golden Age. There's a business opportunity here. Design a fake coat of arms, a fake genealogy and a fake Golden Age to go with them. I could be rich...

The essential guide to MoDo

Josh Chafetz at OxBlog has written the definitive guide to NY Times columnist Maureen Dowd, called The Immutable Laws of Maureen Dowd, which actually makes reading her columns interesting again. I had stopped reading her a long time ago.

Who said the Left had the best idiots?

With all the attention being paid to prominent Idiotarians on the left such as Noam Chomsky and Susan Sontag, it seemed the left had the market for idiocy cornered. Fortunately for the right, the infallibly idiotic Jerry Falwell is stepping up to challenge the leftist supremacy of field of Idiotarianism.

In a a characteristically brilliant piece of analysis, the incisive Rev. Falwell says that "Muhammed was a terrorist." Gee, thanks, Jerry, for that valuable contribution to the debate. When asked to explain on these comments, he had this lame reply:

Falwell stood by his opinion in a telephone interview with The Associated Press. He said Simon asked directly whether Falwell considered Muhammad a terrorist and he tried to reply honestly. The minister said he would never state his opinion in a sermon or book.

No, it would not do to put this in a sermon or a book, but expressed as an answer to a question it's perfectly OK. Pffft.

Falwell is a good analogon to the Chomskys of the left. Their reasons for hating America of today may be different, but hate it they do. Chomsky & co get all worked up about America's perceived misdeeds abroad, while Falwell fulminates about America's misdeeds domestically. Pathetic. Truly pathetic.

And then there's this:

Hooper noted that Falwell and Robertson will speak at next week's Christian Coalition convention in Washington alongside House Majority Whip Tom DeLay and other politicians.

This is just plain stupid on the part of Tom DeLay. The Republicans are winning the argument decisively on the war against islamic extremism, and they really don't need the "support" of America-hating nuts like Falwell and Robertson who think that the 9/11 attacks were somehow America's fault. If DeLay goes ahead with this, he should get voted out. Trust the GOP to clutch defeat out of the jaws of victory.

Free trade back on track?

The Blogosphere erupted in a synchronized paroxysm a few months ago when President Bush caved into to domestic steel producers and imposed tarriffs on imported steel. Had I been blogging at the time, I would have paroxyzed in sympathy. Don't mess with my Free Trade! I don't remember who blogged it at the time, but there were voices who saw it as a tactical retreat rather a strategic defeat. Perhaps they were right. It is encouraging to see that Bush is indeed using his Fast Track authority to push forward with additional free trade deals. The countries mentioned in the current round are a slew of Central American countries, as well as Singapore and Chile. But th real standout for me is Morocco. It does seem rather out of place in the list of countries with whom America would trade much. But Morocco has been changing since the accession to the throne of king Mohamed VI in 1999. He has been trying to take a few tentative steps on the road to modernizing the country. There's just been another round of elections which by north African standards have been reasonably free and fair, although they would fail to pass muster over here. True power still resides with the king, and this is not the first time that an Arab ruler has tried to modernize society. In fact, history is replete with examples of Arab and Ottoman rulers trying to catch up with developments in the West. The fundamental problem has always been the structure of the society itself, and the theocratic nature of the state. Church and state, or rather mosque and state, have always been closely entwined, making it very hard to push for reform without running the risk being called a heretic.

With per capita GDP of $3500 and an economy totally $105 billion, Morocco is not exactly a big market for American goods. But initiating free trade negotiations is nevertheless a positive step to encourage further reforms. If even one Arab country can disenthrall itself from its past it will set an example to the rest of the region. We need to encourage that. I am not sure whether Morocco will succeed where others have failed, but an Arab success story based on secularism rather than islamist fundamentalism is badly needed. Let the experiment continue and hope for the best.

The Loony Left's isolation

On the flight back yesterday from Milan I was going through the Corriere della Sera, one of the main Italian newspapers. On the Culture page there was on interview with David Remnick, the editor of the New Yorker magazine. The interview ended with the following exchange:

Q:Many people have noted the recent full-page ad in the New York Times where many writers and intellectuals declared themselves opposed to a war with Iraq. Do you think the literary conscience of America is reasserting itself as in the times of Vietnam?

A: In my opinion the comparison with Vietnam is wrong. Ho Chi Minh did not have chemical weapons, biological or perhaps even nuclear weapons, nor did he intend to supply them to organizations such as Al-Qaida to attack the World Trade Center or the Pentagon. There's huge difference that leads many people to avoid such comparisons. Even we who have been very critical of Bush's domestic policies have to admit that the problem Saddam has to be resolved.

Q: So what is the position of American intellectuals?

A: The debate is ongoing and there is not a choir of identical voices. Susan Sontag is not the spokesman of the literary world and only speaks for Susan Sontag. And this goes for all the others. Obviously, some artists and writers are firmly opposed to the war, but they do not represent the majority. One could say that the activism is taking places at the universities, but I am not sure of that. And broad public movement, at least for now, we have not seen.

This shows the increasing isolation and irrelevance of the shrill intellectuals, whose preferred course of action is to roll over, play dead and hope nobody ever attacks us again, despite the fact that our enemies have stated many times they wish to destroy us. Any past misdeeds on our part, whether real, perceived or fabricated are irrelevant in this calculation. It is the very basis of our secular, liberal and democratic society that offends them. Or rather, that our infidel ways are producing much greater wealth and power than any sharia-based system ever will. Doing nothing is not an option.

Will Warren, the Blogosphere's poet laureate, put it exquisitely.

The flying manhole covers of Georgetown

Here's another risk to add to your daily routine: flying manhole covers. The problem has been around for some time, but it has not received much attention, except if you live in the DC area, where there has been more intensive coverage of the epidemic of flying manhole covers. They'd had a spate of them a few years ago, and now they're back again. They're still pretty rare occurrences, but there have been fatalities before. The secret life of what's underneath the manhole covers is what keeps things running: gas, electricity, data conduits, water and sewage. The complexity of the systems is enormous if you think of the many interconnects that there are in order to get the payload where it needs to go. And it's costly too, although the costs can be depreciated over many years.

I've never been able to remember whether I should walk on the cracks in the pavement, or avoid them. But avoiding manhole covers is a lot easier. So next time you see one, think of the infrastructure that's underneath, and try not to walk too close to it.

Guess why they're not afraid of fighting

Jonathan Rauch has an interesting article over at Reason, in which he argues that Bush 43, like Bush 41 before him, is doing the UN a favor. He writes:

George W. Bush may not share his father's instinctive sympathy with the United Nations and other international bodies. But he seems to realize, as his father did in 1990, that international bodies charged with defending the peace (the League of Nations, the United Nations) become positive threats to peace if their hollow pronouncements become the skirts for ambitious dictators to hide behind. So the younger Bush has, in effect, offered to put American power at the U.N.'s service, not just for America's sake, but to save the U.N. from a dangerous impotence.

I fully agree that organizations such as the UN need to maintain their credibility if they are to be protectors of, rather than threats to peace. And therein lies the rub. Perhaps I blinked and missed something, but last time I checked the UN had already become a hollow, empty husk which the moral authority of a Neville Chamberlain. The UN has been nothing but a platform for tin-pot third-world dictators who use our money to attack (verbally, if not physically) the United States, and would like nothing better than to see Israel wiped off the map (you know, like, Zionism is Racism and all that. Remember Durban?). The UN has long ago lost any moral authority it may have had (and that's arguable in the first place). The UN is not worth saving. It is beyond repair. It's been braindead for a long time, and now the physical carcass is beginning to rot and smell. From a pragmatic, short-term point of view, this is not the right time to cremate the UN just yet, but getting rid of it in the medium term is necessary.

There's another thing in Rauch's article that caught my eye:

Interestingly, U.N. approval matters greatly to European public opinion, but whether the operation would cause "many" or only "a few" Western casualties matters hardly at all. Europeans are not afraid of fighting; they are afraid of American unilateralism.

Of course they don't care about Western casualties! The fighting would be done by Americans and the British, with not a single European in sight. That's why they don't care.

Ubi bene, ibi patria

It was not until the next day that it really hit me. I was walking up 7th Avenue to our office, my usual early morning exercise for the period I had been in New York. From 24th to 48th, my route took me around Penn Station, where I would go crosstown to 6th to avoid the mad crush of Times Square. Near Penn Station, on the almost deserted streets, I saw two men raising the Flag. I realized it would go half-mast. That hurt. That's when the sadness and grief hit me. The cold, rational thought of the day before "we are at war" was complemented by the emotional impact. The day before had been an attempt to destroy not just buildings and individuals, but the very Thought of America, our civilization, our freedom.

It is exactly the abstract, the powerful Idea that is embodied in the United States that threatens the barbarians' tenuous hold over their victims, for as long as Old Glory waves the irresistable call of a better life, more freedom, more prosperity will turn the oppressed against their oppressors. The pusillanimous moral relativism that exists on the lunatic fringes of society wails and moans, but the rest of us know: we have work to do. There is a war to be won. The survival of freedom is at stake, and many brave men will die to safeguard those rights. Including the rights of the wailing Idiotarians of the "Blame America First" crowd. Thus it has ever been.

After every war America has fought, the world has become a better, freer place. And so it will be this time too.

Remember the ones who were murdered. Remember the ones who gave their lives. Think of the ones who are now protecting ours. Read Lileks today. Remember who cheered.. Buy one of these. Be confident. Be proud. Enjoy life.

Many of today's links come through Instapundit