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The Untold History of the United States: Episode 3, The Bomb

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Do you like hearing truth? I mean, do you want to know what is and isn’t even if it’s going to be uncomfortable? Well, if you are like me and you just want to be leveled with I’ve got a video for you. The show “Oliver Stone’s: Untold History of the United States” is automatically uncomfortable/controversial for several reasons, not least of which is the fact that he is considered a pillar in liberal media. Whether that makes listening to him more or less appealing for you it is probably worth at least learning what he has to say. This episode of “Untold History of the United States” is tough for a few reasons, as it calls in to question the intentions of some of our nations leaders during WWII, and the humanity of some of our foreign policies. The greatest question for many that is addressed in this episode will be whether or not we had to drop the atomic bomb on Japan. I would imagine that this is a question that will be debated for a long time, or at least until the Atomic Bomb kills us all (kind of kidding), and feel that anything that is likely to divide us so needs to be stared in the face.

Many people admire President’s Franklin D. Roosevelt and Harry S. Truman, especially people who were alive during their Presidencies. These 2 men however aren’t necessarily as publicly linked to the atomic bomb in the eye of the public as they maybe should be, as “the bomb” is not as popular as they were/are. FDR was the president when the Manhattan Project  was developed (which was lead by Robert Oppenheimer, and if you’ve read my favorite book “Outliers” by Malcolm Gladwell you might remember that he tried to kill his professor as a young man…), and Truman made sure that it was not a wasted venture by the United States government. This story is one in particular that I think should be told, and discussed by the public as much as possible. I think that if there is anything that could kill us all, and we get to elect those with the fingers that will be placed on the always spring-loaded trigger we should at least have a conversation about it.

*WARNING: This film is graphic

If you’ve come this far you might as well watch this short clip of people in Honolulu celebrating after the dropping of the bomb.

“VJ Day 1945: The Bravest Generation Celebrates WWII’s End”

To follow up those videos I thought it might be worthwhile to look at some statistics about the bomb and what it actually did.

The Atomic Bombings of Hiroshima and Nagasaki

Total Casualties

There has been great difficulty in estimating the total casualties in the Japanese cities as a result of the atomic bombing. The extensive destruction of civil installations (hospitals, fire and police department, and government agencies) the state of utter confusion immediately following the explosion, as well as the uncertainty regarding the actual population before the bombing, contribute to the difficulty of making estimates of casualties. The Japanese periodic censuses are not complete. Finally, the great fires that raged in each city totally consumed many bodies.

The number of total casualties has been estimated at various times since the bombings with wide discrepancies. The Manhattan Engineer District’s best available figures are:

TABLE A: Estimates of Casualties
Hiroshima Nagasaki
Pre-raid population 255,000 195,000
Dead 66,000 39,000
Injured 69,000 25,000
Total Casualties 135,000 64,000

The relation of total casualties to distance from X, the center of damage and point directly under the air-burst explosion of the bomb, is of great importance in evaluating the casualty-producing effect of the bombs. This relationship for the total population of Nagasaki is shown in the table below, based on the first-obtained casualty figures of the District:

TABLE B: Relation of Total Casualties to Distance from X
Distance from X,
feet
Killed Injured Missing Total
Casualties
Killed
per square mile
0 – 1,640 7,505 960 1,127 9,592 24,7OO
1,640 – 3,300 3,688 1,478 1,799 6,965 4,040
3,300 – 4,900 8,678 17,137 3,597 29,412 5,710
4,900 – 6,550 221 11,958 28 12,207 125
6,550 – 9,850 112 9,460 17 9,589 20

No figure for total pre-raid population at these different distances were available. Such figures would be necessary in order to compute per cent mortality. A calculation made by the British Mission to Japan and based on a preliminary analysis of the study of the Joint Medical-Atomic Bomb Investigating Commission gives the following calculated values for per cent mortality at increasing distances from X:

TABLE C: Percent Mortality at Various Distances
Distance from X,
in feet
Percent Mortality
0 – 1000 93.0%
1000 – 2000 92.0
2000 – 3000 86.0
3000 – 4000 69.0
4000 – 5000 49.0
5000 – 6000 31.5
6000 – 7000 12.5
7000 – 8000 1.3
8000 – 9000 0.5
9000 – 10,000 0.0

It seems almost certain from the various reports that the greatest total number of deaths were those occurring immediately after the bombing. The causes of many of the deaths can only be surmised, and of course many persons near the center of explosion suffered fatal injuries from more than one of the bomb effects. The proper order of importance for possible causes of death is: burns, mechanical injury, and gamma radiation. Early estimates by the Japanese are shown in D below:

TABLE D: Cause of Immediate Deaths
Hiroshima
Cause of Death Percent of Total
Burns 60%
Falling debris 30
Other 10
Nagasaki
Cause of Death Percent of Total
Burns 95%
Falling debris 9
Flying glass 7
Other 7

White House explains why Obama didn’t say “under God” in Gettysburg Address

Today I was having lunch with my dad, who recently changed jobs and is now able to come home at the noon hour, and we were discussing business and current events. My father asked me if I had heard about the newest “stink” in the White House over the President omitting “Under God” from his recitation of the Gettysburg Address, and I said no. We talked about what might possibly be going on, so I told him I’d look it up. My dad is a rather reasonable man, and he recognized that while he isn’t the biggest fan of the Presidents that even taking a breath makes some people mad at the President.

So with a little help from Google and a quick read this wasn’t a quick mystery to solve. It appears that the President was handed an originally copy of the speech by renowned documentarian Ken Burns, as White House Press Secretary Jay Carney clarified. The phrase “Under God” seems to have been added later by President Lincoln in the middle of giving the speech. So if there is any blame to really delve out here, it seems that it might need to be aimed towards mister Burns, and I’m sure that he would be willing to have that conversation (he is a very professional and thorough arbiter or history).

The one tidbit that I would like to add to this conversation however is that it seems that the President’s harshest critics might be missing one piece of the puzzle in regards to their constant war with President Obama. Barack Obama was elected President of the United States 2 times – and he was the first man to be re-elected with more than fifty percent of the vote since Dwight D. Eisenhower (and yes, that was in the 1950’s…). The majority of the American people identify in some way with this man, and being on such a hair-trigger to condemn anything that he does isn’t seeming to help their credibility with the average voter, or non-voter (seeing as how non-voters tend to lean for the Democratic Party). If they want to truly revamp their party they need to consider a new path when it comes to dealing with this President. He hasn’t been as warm and friendly as some presidents of the past (i.e.: Bill Clinton), but that is also the case for his behavior with his own party. His personality is not really a partisan issue, just ask the Democrats in Congress.

*This is not an analysis of his governing abilities.

I’ve included the article from CBS News addressing the omission of “Under God” from the speech, and the White House reaction. I think for those of you reading this who are highly skeptical of President Obama you might want to consider what your best strategy moving forward might be in regards to rebuking him, as the game plan for the GOP thus far has not been successful.

White House explains why Obama didn’t say “under God” in Gettysburg Address

AP PHOTO/CHARLES DHARAPAK

President Obama irked some conservatives with his recitation of the Gettysburg Address, which he read aloud as part of a project celebrating the 150th anniversary of famous Lincoln speech. For the project, spearheaded by documentarian Ken Burns, a number of politicians and other high-profile people recorded themselves reading the Gettysburg Address. Some conservatives took offense to the president’s reading. “Lincoln added ‘Under God’ as he was looking out over battlefield. why would Obama remove?” Former House Speaker Newt Gingrich said on Twitter.

Conservative Christian leader Bryan Fischer added “Obama’s omission of ‘under God’ is more evidence of his anti-Christian bigotry. He honors Islam but disrespects Christianity.” White House spokesman Jay Carney on Tuesday gave a simple explanation for the reading. “He read the version of the address that Ken Burns provided,” he said, noting that Burns is a “noted Civil War scholar.” Specifically, Carney said that Burns gave Mr. Obama the “Nicolay copy” of the Gettysburg Address — the first draft of the speech, named after John Nicolay, the White House staffer who preserved it.

© 2013 CBS Interactive Inc. All Rights Reserved.

What Will We Say About President Obama’s Legacy in 20 Years?

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Pres. Obama’s future legacy continues to be hotly debated and estimated, as it has been over the last few years. Considering how the pages of his biography will read is a fascinating to me. His first big policy agenda was about Health in America. This healthcare policy has been debated, is being debated, it likely will be debated for a long time. What seems important to note however is that one way or another this will reflect in large part how he is to be remembered.

What seems to many to most likely to be the next major policy battle is immigration reform. I think it will be interesting to watch with both parties reshuffling amidst some rather chaotic times – primarily the Republicans however with the splintering factions in the party. It seems possible that The Republican Party might find a rebound from struggling lately by sponsoring and helping to pass some type of immigration reform, but I personally don’t see this as likely with this new generation of warlike primary season. I suspect that the Democrats will probably push to pass this legislation, and I would imagine it will be the second half major legislation of this president’s term. I would love to see the Republicans talk about governing on this, because they care about border security, and that’s okay. So this is just my guess, but I think this is what we’ll be talking about next.

With all of that said what I think is a fascinating topic for us to be completely skipping over his guns. With 90% of the population seemingly supporting legislation for universal background checks it was blocked by a a minority in congress. Now hear me out my conservative friends, just hear me out. While I think securing our borders is important last year we had net 0 (people) with illegal immigration… and we can talk about the effect of immigrants and society, but that is unless the debate the mass violence in this nation. People are the talking points about guns, it is very sensitive subject – well I know it is in Oklahoma at least… one thing that we must all recognize though is that we always brag about how great America is, but we are killing each other with guns more than any other nation in this world. We need to have a grown-up discussion about this, especially with their having been so many mass shootings in the last few years. It’s finally on our minds, these deaths happen all the time, but when it’s one there, anyone there, and three there, nobody cares… We need to have some serious discussions from serious people about what we can do as individuals to make a difference.

I don’t know that we should pass more gun laws, I think we probably should (although I don’t know what they are), but I don’t think we can sit here and do nothing. Maybe we should get some friendly feedback and ask others around the world why they think we have so much gun violence and they don’t. It’s what you would do if you thought you had something in your teeth, you’d ask a friend to give you some feedback really quick so you don’t look like an idiot. And of course more people are killed by other means than gun in very poverty-stricken parts of the world, so that seems probable to skew the data pool. We’re the wealthiest and most powerful nation in the history of mankind, but to the world it seems that with these challenging issues we can’t stop hitting ourselves in the face.

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One reason that the gun debate has become so divisive is the attachment to the racial divide. Some people consider it to be a conversation about race bating, but while I think that race is a part of the conversation it’s not about one race against the another, other than the blind eye that we seem to turn towards gun ravaged communities in the inner-city. There is no question that “black-on-black” gun violence is the most prevalent gun violence in our nation, but we have to ask the tough questions about how we can change our inner-cities. Even with marginal improvements in many areas of the country we are still the most violent gun nation in the world, at least on record… That just doesn’t seem acceptable to me. The main problem seems to lie with hand guns. So outside of outlawing them how can we make a dent in this situation where people can so secretively be armed with deadly force?

SDT-2013-05-gun-crime-2-5

The unbelievable decorum, and disrespect in the public square is really astonishing. Maybe take this opportunity to think of someone who you disagree with, and will probably never agree with on something and you let them know that you love them. You know why? You should do it because they probably mean it too when they express their beliefs, and that alone is worth something. They probably earnestly care about and fully believe in the things that they say, even if it seems ridiculous to you. Tell them why you think they’re wrong, and ask why they believe what they believe. If they freak out move on, at least you tried, but remember there were defensive because they care about something. Just let them know that you’re interested in why they believe what they believe. If you find that your discussion isn’t getting anywhere it’s okay to move on, but there’s nothing wrong with trying to get to know someone a little better. Plain and simple the sooner we start learning how to engage with others who have different beliefs the sooner we can stop being the guy sitting in the corner pulling our own hair out.

I don’t think that I’m superior because I’m an American, but I think we have a great country and we can set a good example for the rest of the world. The way that we shoot each other, and the way that we govern each other we have to ask what kind of an example we are setting for the other 95.5% of the world. Well whatever is written in the history books it will seemingly fall on the shoulders of President Obama in the minds of many, or at least that’s how it’s worked in our past. So hopefully: healthcare will become less expensive as we become healthier, will figure out how to start having the conversation about immigration reform as adults should, and we stop shooting one another. Of course there are many other things that are on the table, but the seem especially pertinent. I hope that our president end’s up with a positive legacy, because that means that we will have done well.

 

I’m including a great investigative report by VICE about guns in Chicago “Chiraq”.

Iconic Photo of Clinton Meeting JFK Gets Fresh Update

Iconic Photo of Clinton Meeting JFK Gets Fresh Update – Huffington Post

I try not to swoon too much over any politicians or leaders in general, as they are simply people. However, I always enjoy watching worlds and leaders collide like this.

“That had a very profound impact on me,” Clinton told ABC News of his brief meeting with Kennedy. “It was something that I carried with me always.”

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President Obama and Chancellor Merkel’s Post G8 Press Conference

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I feel that I must admit that I don’t usually watch these press conferences, I usually wait for a lot of different people to tell me what they think, and then go see which parts they are talking about. I mean, I just don’t have time for these things usually.

I did however listen to this one, and I enjoyed myself. These simple token acts of diplomacy might be somewhat robotic, but they matter. So, if you’d like to watch just click it. Also, if you’re uninterested in listening to Merkel she only speaks for a few minutes, so you can just skip ahead.

The White House Correspondents Dinner (2013) – Conan O’Brien and “House of Cards”

Oh man… So this is a fun post for me. The event that I would most like to attend each year is the White House Correspondence Dinner (followed by the Oscars), where the worlds of politics and comedy collide. Also, this year I happened to be watching the dinner whilst sitting about 2 miles away trying to think of ways to participate… I am sorry to report that I didn’t get to be a part of it in any way, but I did get to tweet a little bit with a wonderful comedian Ophira Eisenberg – whose book I’m reading right now “Screw Everyone: Sleeping My Way to Monogamy” (and yes it’s a bit risqué , but it’s honest and for that I treasure it). Also Ophira’s trivia show on NPR “Ask Me Another” is a real treat for a nerd who loves podcasts. Oh yeah, back to the correspondence dinner. This dinner is intended to honor the press, while also roasting them a little bit too. They used to be rather mild roasts, but they have gotten more and more shall I say “bold” each year. And ever since Stephen Colbert so controversially roasted President George W. Bush to his face the whole game has changed.

While I think that President George W. Bush was actually pretty good at events like this, President Obama is just better, in my opinion. He knows not to laugh when the crowd is, and then he is the first to laugh when they don’t laugh, or show some type of hesitancy. I’m sure he was trained to do this, but controlling when he laughs like that isn’t easy I’m sure, but it displays a cool confidence and that in comedy can be powerful stuff… I’d love to talk about which jokes were my favorite, but this is one of those things that I’d rather just let you dive into on your own, it’s that fun.

I hope you enjoy it.

P.S. if you don’t watch “House of Cards” this first video probably won’t be quite so funny to you, but I recommend the show (and it’s a Netflix original, so you won’t find it on your cable channels).

House of Cards Intro

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Obama Monologue

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Conan Monologue

Obama Administration Says President Can Use Lethal Force Against Americans on US Soil

Oh boy, drones are getting to be a big part of our national conversation, and this is a big development to a lot of people. Who would’ve thought that a Democratic President would’ve been explaining to an enraged Republican Senator that they have the authority to kill Americans on U.S. soil?… Not me, but I do know that in our ever complicated world this is just going to be a part of it – things are not simple… I have mixed feelings about President Obama having that authority, but I feel even more uncomfortable that this precedence could hand this authority to someone else who I might have even more caution towards in regards to defense.

I’ve blogged about this before, and I think it would be wise to keep up with this story.

1. TED Talk about militarism and technology – Malcolm Gladwell “The Strange Tale of the Norden Bombsight

2. Police Departments ordering potential drone usage – Maddow on Domestic Drones

3. Rachel Maddow Slamming President Obama’s policy on Drones – Maddow on Secrecy on Drone Legality

 

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Obama Administration Says President Can Use Lethal Force Against Americans on US Soil

—By Adam Serwer

| Tue Mar. 5, 2013 12:55 PM PST

Yes, the president does have the authority to use military force against American citizens on US soil—but only in “an extraordinary circumstance,” Attorney General Eric Holder said in a letter to Sen. Rand Paul (R-Ky.) on Tuesday.

“The US Attorney General’s refusal to rule out the possibility of drone strikes on American citizens and on American soil is more than frightening,” Paul said Tuesday. “It is an affront the constitutional due process rights of all Americans.”

Last month, Paul threatened to filibuster the nomination of John Brennan, Obama’s pick to head the CIA, “until he answers the question of whether or not the president can kill American citizens through the drone strike program on US soil.” Tuesday, Brennan told Paul that “the agency I have been nominated to lead does not conduct lethal operations inside the United States—nor does it have any authority to do so.” Brennan said that the Justice Department would answer Paul’s question about whether Americans could be targeted for lethal strikes on US soil.

Holder’s answer was more detailed, however, stating that under certain circumstances, the president would have the authority to order lethal attacks on American citizens. The two possible examples of such “extraordinary” circumstances were the attack on Pearl Harbor and the 9/11 terrorist attacks. An American president ordering the use of lethal military force inside the United States is “entirely hypothetical, unlikely to occur, and one we hope no president will ever have to confront,” Holder wrote. Here’s the bulk of the letter:

As members of this administration have previously indicated, the US government has not carried out drone strikes in the United States and has no intention of doing so. As a policy matter moreover, we reject the use of military force where well-established law enforcement authorities in this country provide the best means for incapacitating a terrorist threat. We have a long history of using the criminal justice system to incapacitate individuals located in our country who pose a threat to the United States and its interests abroad. Hundreds of individuals have been arrested and convicted of terrorism-related offenses in our federal courts.

The question you have posed is therefore entirely hypothetical, unlikely to occur, and one we hope no president will ever have to confront. It is possible, I suppose, to imagine an extraordinary circumstance in which it would be necessary and appropriate under the Constitution and applicable laws of the United States for the President to authorize the military to use lethal force within the territory of the United States. For example, the president could conceivably have no choice but to authorize the military to use such force if necessary to protect the homeland in the circumstances like a catastrophic attack like the ones suffered on December 7, 1941, and September 11, 2001.

The letter concludes, “were such an emergency to arise, I would examine the particular facts and circumstances before advising the president of the scope of his authority.”

In a Google+ Hangout last month, President Obama refused to say directly if he had the authority to use lethal force against US citizens. As Mother Jones reported at the time, the reason the president was being so coy is that the answer was likely yes. Now we know that’s exactly what was happening. “Any use of drone strikes or other premeditated lethal force inside the United States would raise grave legal and ethical concerns,” says Raha Wala, an attorney with Human Rights First. “There should be equal concern about using force overseas.”

This post has been edited to include Paul’s statement and the final line of Holder’s letter.

America in 2012, as Told in Charts – Steve Rattner

America in 2012, as Told in Charts.

I have been posting articles and charts from Steve Rattner for a while now, and I’m glad that he compiled the most influential and compelling charts of this past year for me. If you feel like you don’t know much about politics or economics I think that Steve Rattner would be a good guy to check out, he knows things…

These charts tell multiple stories which fit within a narrative that belongs to all of us. Things are complicated, and this world has many moving parts. It’s very easy to reconfirm assumptions you might already have, but I would like to ask you why that will benefit you. I would offer to you that believing in the importance of framing ideas with genuine curiosity will limit your anxieties and frustrations, and help you live a happier life. The key word is Nuance. What I mean is this: the charts below have a lot of information, and I can look at them and become fearful of what’s ahead, or I can make sure that I process the information and ask what our options are rather than assume the apocalypse.

I challenge you to look at these charts, and read Mr. Rattner’s commentary and do your own research about the questions that they might inspire. They tend to tell a story of mixed political talking points. They address tax revenue, entitlements, personal wealth in America, and much more. Having moved and made a job change recently I have been in somewhat of an introspective process where I question my life and purpose. I would like to make sure that I’m being fair with my posts, so I’m asking that if you read this to hold me accountable. I will try to provide information that I come across that seems of value, but please believe me when I say that my purpose for posting on here is sincere and based in honesty. Ok, enjoy the charts, they are all pretty fascinating to me.

-Grady

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America in 2012, as Told in Charts

Posted: 01 Jan 2013 09:45 AM PST

Originally published in the New York Times

The weak economy, widening income inequality, gridlock in Congress and a presidential election: Those were perhaps the dominant economic and political themes of 2012. To supplement the torrent of rhetoric, I offer charts to help provide facts and context for the debate around these important issues. Below are nine of my favorites from the past year.

In 2012, the slow recovery dominated both the economic news and the worries of most Americans, but the underlying components of the weak job market were not always fully dissected. In fact, job growth was so paltry in large part because it was so unbalanced. Since the recession ended in June 2009, three key sectors – government, construction and information – that together account for 22 percent of all employment lost more than 1 million jobs. Equally significantly, two of them, government and construction, generally add a disproportionately large share of jobs during a recovery. With government contracting and construction stalled, that did not occur.

The economic boom that peaked in 2007 represented the first time that median real (that is, inflation-adjusted) incomes did not recover to their previous peak before declining into the next recession. More ominously, family incomes have yet to recover, even though the recession ended three and a half years ago. That has brought the total decline in real incomes to nearly 9 percent since 2000. So where has the economic growth from the recovery gone? Much of it has gone to corporate profits, as companies took advantage of the high unemployment rate and the ability to shift production globally to hold down wages in the United States.

Screen Shot 2013-01-04 at 4.05.29 AM

The rise in income inequality has exacerbated the decline in median incomes. In 2010, a stunning 93 percent of all income gains went to the top 1 percent of Americans. Also astonishing: just 15,000 households received 37 percent of all of those income gains. In no other period in recent American history have economic gains been concentrated so disproportionately in an elite sliver. (The red bars indicate recessions.)

The explosion of the federal budget deficit since the turn of the century stems from multiple causes, including huge tax cuts in 2001 and 2003 and rapid spending growth in many areas like defense, and later, the stimulus to combat the recession. But no budget-busting factor looms larger than the soaring cost of government-financed health care, particularly Medicare and Medicaid. In addition to driving current and projected deficits, the rise in spending has squeezed the resources available for other domestic programs. Often dismissed as wasteful government spending, these “discretionary” programs include important areas of investment, such as infrastructure, research and development and education. In reducing such investments, we are eating our seed corn.

Large deficits have driven a key ratio – government debt to gross domestic product – to 72.8 percent, from 36.2 percent in 2007. But without new policies, that’s just the beginning. Under realistic assumptions, the debt-to-G.D.P. ratio will rise to more than 80 percent over the next decade. The recommendations of the Simpson-Bowles Commission, if adopted by President Obama and Congress, would have brought this ratio down to 65 percent by 2022. But that plan never was adopted. Even if one of the proposals being debated by the White House and Congressional Republicans, very similar in the impact on the deficit, were put in place, it would only manage to drive down this ratio to 72 percent and stabilize it there – a minimally acceptable goal.

The debate over budget-cutting has touched off fierce emotions on all sides, sometimes at the expense of facts. Take, for example, the proposal to change the cost-of-living adjustment used to calculate Social Security benefits. Rarely discussed in that context is the fact that the current adjustment formula has delivered benefit increases to Social Security recipients that are larger than the wage increases of average Americans – a difference of more than $2,500 over the past 12 years.

That Congress has ceased to function effectively has become an article of faith for most Americans. But the extent of the gridlock on Capitol Hill may not be fully appreciated. Over its two-year life span, the 112th Congress that just adjourned passed just 200 laws, 31 percent of the average of the 32 Congresses preceding it. Even the bills that were passed were mostly housekeeping measures, like laws to name post offices or extend existing laws. Now, some may say, “That’s great. I don’t want Congress to do anything anyway.” I have a different view. I believe that our country has many problems and that our federal lawmakers are paid to help address them.

Another article of faith is that Congress has become far more polarized. That general perception is well supported by a number of academic studies. For example, one researcher, Keith T. Poole, assigned a score to each member of Congress based on his or her voting record. He then calculated an average for Democrats’ and Republicans’ scores and used the difference to create an index. His conclusion was that the House has become more polarized than at any time since at least 1879, and the Senate nearly so.

Nate Silver was not the only statistically based political prognosticator to cover himself with glory during the recent presidential election. The online betting service Intrade did nearly as well. Throughout the ups and downs of a hard-fought campaign season, it remained solidly confident that President Obama would be re-elected. (The October surge in the probability of an Obama victory probably resulted from Mitt Romney’s notorious “47 percent” remark; the subsequent decline for Mr. Obama followed his poor performance in the first debate.) Intrade also predicted correctly the winner of 49 states and 31 of 33 Senate races. Mr. Silver, who writes for The New York Times, relies on statistical analysis of polling data; Intrade is a prediction market, and its electoral forecast is grounded in the widely accepted belief that the views of thousands as to who they think will win (as opposed to whom they support) provides more accurate forecasts than polls do.

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© Steven Rattner 2013

The Liberation of General Motors – Steve Rattner

I still have my questions about bailouts in general, but I tend to sympathize with the auto bailout much more than the bank bailout, mostly because we’re talking about an actual product rather than financial/imaginary products that are much more subjective in valuation. I mostly recommend watching this because it is about the Auto Bailout, and it’s written by the man who has been in charge of monitoring the whole bailout (Steve Rattner). Please feel free to tell me what you think about this, or any other bailout.

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The Liberation of General Motors

Originally published in the New York Times

Like Willy the whale, General Motors has finally been freed – or nearly so.

Today’s announcement that the Treasury Department had agreed on a process to extricate the government from its ownership stake in G.M., the world’s largest automaker, is welcome news.

For General Motors, the separation will conclusively remove the appellation of “government motors,” a stigma that the company had argued affected the buying decisions of a meaningful segment of consumers.

The divorce will ultimately also liberate G.M. from a number of government-imposed restrictions, importantly including those relating to executive compensation. These restrictions adversely affected G.M.’s ability to recruit and retain talent. Now, compensation decisions will be made by the company’s board of directors, just as they are in every other public company in America.

From Washington’s point of view, divesting its remaining shares will end an uncomfortable and distinctly un-American period of government ownership in a major industrial company.

Neither the George W. Bush nor the Obama administrations volunteered to bail out G.M., Chrysler and other parts of the auto sector. Both subscribed firmly to the longstanding American principle that government should resolutely avoid these kinds of interventions, particularly in the industrial sector.

However, in this case, that was simply not possible, as Mr. Bush and Mr. Obama both concluded. I and the other members of the Obama administration’s auto task force determined that the industry’s crisis was caused not only by the financial and economic meltdown but, equally, by poor management that had run these American icons into the ground and exhausted their cash resources.

We were faced with a classic market failure: Not a penny of private capital was willing to provide the financing essential for these companies to keep running. Those (like Mitt Romney) who contend that G.M. and Chrysler could have been restructured without government involvement simply don’t understand the facts.

The only alternative to government stepping in would have been for the companies to close their doors, terminate all their workers and liquidate. That would have led to huge failures and layoffs among the suppliers. Even Ford would have had to shut down, at least for a time, because of the unavailability of parts.

Here’s another important lesson of the auto rescue: It would not have been possible without the existence of the much-hated $700 billion Troubled Asset Relief Program.

Without TARP, we could not have provided the $82 billion to these companies without Congressional approval. And given the dysfunction of Congress, I don’t believe there was any chance that the legislature would have acted within the few weeks that we had before the companies would have collapsed.

In a perfect world, I would not be a seller of G.M. stock at this moment. For one thing, the company is still completing the reworking of its sluggish management processes in order to achieve faster and better decisions and lower costs.

For another, G.M.’s financial problems slowed its development of new products during 2008 and 2009. Now, a passel of shiny new models offering great promise is about to hit showrooms.

And in my view, G.M. stock remains undervalued, trading at about 7 times its projected 2013 earnings, compared with nearly 13 for the stock market as whole.

But as my former boss in the White House, Lawrence H. Summers, kept reminding us in 2009, this intervention needed to be the opposite of Vietnam: We wanted to have as small a footprint as possible while the government was a shareholder and to get out as quickly as practicable.

While the government still retains (temporarily) a majority stake in Ally, G.M.’s former finance arm (formerly known as GMAC), the scorecard for the auto rescue is nearly complete.

Of the $82 billion that the two administrations pumped into the auto sector, Treasury is likely to recover all but about $14 billion.

No doubt, bailout haters will focus on this loss of taxpayer money. But remember two key points:

First, the $17.4 billion initial round of bridge loans that was provided at the end of 2008 was necessary only because GM and Chrysler had been utterly derelict in not preparing for restructurings through bankruptcy that were clearly inevitable. G.M., in particular, wallowed in an irresponsible state of denial. Had the companies been properly prepared, the loss of that $17.4 billion could have been avoided.

Second, for $14 billion – 0.4 percent of the government’s annual expenditures – more than a million jobs were saved at a time when unemployment in the Midwest was well above 10 percent.

The auto industry has not only survived but it is flourishing. Car sales, which had sunk as low as 10.4 million in 2009, are now running at an annual rate of more than 15 million. As many as 250,000 new workers have been added. Disastrous past industry practices – from bloated inventories to excessive sales incentives – have been curbed. As a result, G.M. earn more in 2011 than in any year in its 104-year history.

Finally, let’s keep well in mind the most important lesson of the auto rescue: While government should stay away from the private sector as much as possible, markets do occasionally fail, and when they do government can play a constructive role, as it did in the case of the auto rescue.

via The Liberation of General Motors.

Fiscal Cliff Blame Game (part 2)

I posted recently about polling on the Fiscal Cliff, and who voters were most likely to hold responsible if there were to be a negative outcome. Well, the polling showed a heavy lean towards the blame being placed on congressional Republicans, and newer polling shows that the gap has virtually closed. This is all of
Of course this is all according to polling, and since I have a hard time believing that the numbers closed as much as the polls would indicate I would imagine that one of them is wrong.

Another point of interest, assuming that this polling is somewhat accurate is the gap between the parties willingness to compromise. I wish that compromise wasn’t such a dirty word…

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