Krugman's Army Arms Up

For today's feature I could post about how the protesters in Madison got in trouble for, ahem, taking things into their own hands, but instead I will focus on the original protest.

Fights are erupting among Occupy Wall Street protesters, so much so that one corner of Zuccotti Park has emerged where protesters say they won't go for fear of their safety, the New York Daily News is reporting.

Police officers also have been warned of "dangerous instruments" being concealed in cardboard tubing, the News says it has been told by unidentified police sources.

Krugman's Army Marches Down the Charles River

I could make c into a regular feature. But at least none of them are breaking out those tricorner hats!

BOSTON - A man and woman who have been living in a tent with Occupy Boston protesters have been arrested for allegedly selling heroin to an undercover police officer.

Issac Bell, 34, and Charlene Dumont, 31, both pleaded not guilty to drug possession and distribution charges at their arraignments Monday. They were released on their own personal recognizance and ordered to stay away from the Occupy Boston encampment.

Prosecutors say police set up a sting after learning of drug activity in the encampment.

Krugman's Army on the March

Don't think this will make his next column either.

Dallas Police continue to investigate whether a teenage runaway was sexually assaulted by an adult male at the Occupy Dallas encampment behind City Hall.

A source within the Dallas Police Department who spoke on condition of anonymity because of the ongoing investigation said the girl ran away from home in Garland last month and that she is now refusing to cooperate with investigators. She initially told officers that she had sex with a man in his early twenties and had engaged in sexual activity with several other people.

Some members of the group told CBS 11 the girl identified herself as a 19-year-old and never knew she was 14.

Krugman's Army

As Paul Krugman said earlier.

Consider first how Republican politicians have portrayed the modest-sized if growing demonstrations, which have involved some confrontations with the police — confrontations that seem to have involved a lot of police overreaction — but nothing one could call a riot. And there has in fact been nothing so far to match the behavior of Tea Party crowds in the summer of 2009.

Odd, I don't remember this happening at any Tea Party event.

Cleveland police are investigating an alleged sexual assault incident that occured Saturday at the "Occupy Cleveland" rally involving a 19-year-old female student.
According to police reports, the 19-year-old student was instructed by "Occupy Cleveland" personnel to "share a tent with the suspect due to a shortage of tents."

Or this:

Thanks to some watchful officers and Occupy Seattle protesters, police have arrested a man suspected of exposing himself to children at least five different times throughout Seattle.

Police had been searching for suspect since the incidents, which occurred between September 29 and October 3.

“During the course of their investigation, detectives discovered that the suspect had been at Westlake Park, participating in Occupy Wall Street,” said detective Reneee Witt “Flyers of the suspect was circulated to officers and the public at the event.”

But don't worry, they are taking the problem seriously.

Efforts by the Occupy Baltimore protest group to evolve into a self-contained, self-governing community have erupted into controversy with the distribution of a pamphlet that victim advocates and health workers fear discourages victims of sexual assaults from contacting police.

The pamphlet says that members of the protest group who believe they are victims or who suspect sexual abuse "are encouraged to immediately report the incident to the Security Committee," which will investigate and "supply the abuser with counseling resources."

A Beautiful Mind: Part II

Paul Krugman shows he is sinking deeper into dementia, with a series of recent editorials. First, from Friday (emphasis added).

Bear in mind, too, that experience has made it painfully clear that men in suits not only don’t have any monopoly on wisdom, they have very little wisdom to offer. When talking heads on, say, CNBC mock the protesters as unserious, remember how many serious people assured us that there was no housing bubble, that Alan Greenspan was an oracle and that budget deficits would send interest rates soaring.

Uhh, like Paul Krugman said himself:

So what? Two years ago the administration promised to run large surpluses. A year ago it said the deficit was only temporary. Now it says deficits don't matter. But we're looking at a fiscal crisis that will drive interest rates sky-high.

Now Krugman is chiming in on the Occupy Wall Street protests.

Consider first how Republican politicians have portrayed the modest-sized if growing demonstrations, which have involved some confrontations with the police — confrontations that seem to have involved a lot of police overreaction — but nothing one could call a riot. And there has in fact been nothing so far to match the behavior of Tea Party crowds in the summer of 2009.

Uhh... really? Are you serious?

Seattle police arrested 25 people on Wednesday as they clashed with protesters and hauled away tents. The protest continued after arrests were made.

Wednesday's showdown — in one of downtown's most popular gathering spots — began just after lunchtime, as some demonstrators refused a city order to remove the tents.

Several influential New York state lawmakers have received threatening mails saying it is “time to kill the wealthy” if they don’t renew the state’s tax surcharge on millionaires, according to reports.

“It’s time to tax the millionaires!” reads the email, according to WTEN in Albany. “If you don’t, I’m going to pay a visit with my carbine to one of those tech companies you are so proud of and shoot every spoiled Ivy League [expletive] I can find.”

These are the shocking scenes that have led some people to accuse the Occupy Wall Street protesters living rough in New York's financial district of creating unsanitary and filthy conditions.
Exclusive pictures obtained by Mail Online show one demonstrator relieving himself on a police car.
Elsewhere we found piles of stinking refuse clogging Zuccotti Park, despite the best efforts of many of the protesters to keep the area clean.

Thousands of Occupy Wall Street protesters swarmed the Brooklyn Bridge Saturday, shutting down car lanes and setting up yet another tense showdown with the NYPD.

Roughly 700 people were arrested after standing in the roadway, blocking the Brooklyn-bound lanes. Traffic in the opposite direction was slowed -- but still running after the 4 p.m. standoff.

Ask and Ye Shall Receive

Jimmy Hoffa, introducing President Obama on Monday:




And now today:

At least 500 Longshoremen stormed the Port of Longview and broke out windows in the guard shack, according to Longview Police Chief Jim Duscha. As men wielding baseball bats and crowbars held six guards captive, others cut brake lines on boxcars and dumped grain, according to Duscha.

None Dare Call it Economics

Krugman has gone over the edge, now proclaiming that virtually any kind of spending, no matter how productive is beneficial.

This puts us in a world of topsy-turvy, in which many of the usual rules of economics cease to hold. Thrift leads to lower investment; wage cuts reduce employment; even higher productivity can be a bad thing. And the broken windows fallacy ceases to be a fallacy: something that forces firms to replace capital, even if that something seemingly makes them poorer, can stimulate spending and raise employment. Indeed, in the absence of effective policy, that’s how recovery eventually happens: as Keynes put it, a slump goes on until “the shortage of capital through use, decay and obsolescence” gets firms spending again to replace their plant and equipment.

And now you can see why tighter ozone regulation would actually have created jobs: it would have forced firms to spend on upgrading or replacing equipment, helping to boost demand. Yes, it would have cost money — but that’s the point! And with corporations sitting on lots of idle cash, the money spent would not, to any significant extent, come at the expense of other investment.

So why not force corporations to build ice sculptures in their cafeterias or something? At least that would look nice.

Practicing Journalism Without a License

I always thought that the AP was an actual news organization, not an arm of the Democratic Party. I have been shaking my head all day at this AP story, run here in the Seattle Times, with the headline:

GOP aims for end to payroll tax break

But if you actually read the article, however, it doesn't list a single Republican "aiming" to end this, much less any indication that it is part of GOP policy, and in fact concludes with:

Neither House Speaker John Boehner, R-Ohio, nor Senate Minority Leader Mitch McConnell, R-Ky., has taken a firm stand on whether to extend the one-year tax cut.

Journalistic Standards

After my previous post on Greg Valentini, the war-story telling vet who is suing the VA, I e-mailed it to Steve Lopez, the journalist for the LA Times who written 3 stories on the guy with lurid but vague tales of bloody combat. I never received a response.

I just noticed though that Mr. Lopez has now written a fourth article on the guy, with no mention of the previous issues with his stories.

Valentini enlisted in the Army in 2000 primarily for the G.I. Bill and ended up in heavy combat a year later, even though he's generally antiwar. He hung a "Veterans for Peace" sign on his dorm room door at the vet center, and when Zenner objected, Valentini hung it on Zenner's door.

So I e-mailed Mr. Lopez again, and this time I got a pretty swift response. Mr. Lopez insisted that I didn't know what I was talking about and the Rakkasans had fought in Operation Anaconda. Nevermind that I had already stated that fact in the first story that I did, less than a week in a support roll for the Army Rangers, does not count as "9 months of bloody combat", in addition to the issues of claiming to have assaulted Tora Bora or the Kandahar Airport.

Anyway, after several exchanges as I tried to explain to Mr. Lopez that either both him and Laurence Tribe (he claimed not to be familiar with Tribe's claims) had made up stories, or Valentini had lied to him, I finally got a response stating, "Ok, well I appreciate your service there, and I admit to not knowing everything greg went through because I wasn’t there with him".

Well that isn't the point! I don't know absolutely everything that he did either, but at least I can check the big things, such as the fact that the 101st didn't suffer a single fatality despite their "9 months of heavy combat", hell, I did a search for news articles on Purple Heart recipients for that tour and came up with a grand total of 1. And that was for a pilot, not an infantryman. Aren't journalists supposed to do at least the most basic fact checks, or do they just write down whatever people tell them?

Worst Wall Street Journal Editorial Ever

This editorial is so stupid it defies description. I am starting to think they put it in there just to make unions look bad. Maybe it was published on a dare?

Yet the Boeing case has a scarier aspect missed by conservatives: Why is Boeing, one of our few real global champions in beefing up exports, moving work on the Dreamliner from a high-skill work force ($28 an hour on average) to a much lower-wage work force ($14 an hour starting wage)? Nothing could be a bigger threat to the economic security of this country.

We should be aghast that Boeing is sending a big fat market signal that it wants a less-skilled, lower-quality work force. This country is in a debt crisis because we buy abroad much more than we sell. Alas, because of this trade deficit, foreign creditors have the country in their clutches. That's not because of our labor costs—in that respect, we can undersell most of our high-wage, unionized rivals like Germany. It's because we have too many poorly educated and low-skilled workers that are simply unable to compete.

Why Indeed Do Veterans Sleep in Dumpsters?

Laurence Tribe and Bobby Shriver have an editorial in today's Wall Street Journal about a lawsuit against the Veterans Administration to force them to provide more funding for caring for homeless veterans. Now I don't know the details about the lawsuit or benefits in this particular area, although as a veteran I am of course sympathetic to this. I was a bit concerned, however, with one of the veterans they are taking up the cause of.

Among the plaintiffs in this lawsuit is Greg Valentini. A private in the 101st Airborne, he took part in the initial invasion of Afghanistan. There, he participated in the assault on Tora Bora that sought Osama bin Laden. He was redeployed to Iraq, where he again experienced heavy combat. He received six decorations for his service.

Having served in the original OEF myself though, this claim is not true. The 101st Airborne was not part of the initial invasion of Afghanistan. They did not arrive until mid-January of 2002, two months after Kabul fell. Furthermore, they did not participate in the assault on Tora Bora, which took place in mid-December 2001. The authors of this piece should have known that, since only a handful of special operations troops took part in the operation, working with local Afghan forces, a decision which has been widely criticized over the years as allowing Osama bin Laden to escape to Pakistan. To the best of my knowledge the only significant combat operations they took part in was supporting the Army Rangers during Operation Anaconda, and they spent the rest of the time manning guard posts in Kandahar. At the time the tours were only 6 months. In fact a list of casualties from Afghanistan does not show a single fatality from the 101st for all of 2002, for any reason.

So how exactly did this private end up homeless? Well a previous article in the LA Times tells us:

Back home, it was meth that took the edge off, and nearly destroyed him.

"It wasn't pretty," says Mr. Valentini.

His son was scatterbrained, dishonest and jumpy. Mr. Valentini was torn. He knew Greg was strung out, but he also knew he'd been through something horrible.

"I was probably too lenient, but I was trying to understand his side of it."

"But I got worse and worse," admits Greg, who stole cash, credit cards and jewelry from his father. "I did a lot of humiliating things."

"Yeah, it was a blow," says Mr. Valentini.

Greg, who was arrested several times, often limped back home when he was set free. Once, his father told him he could sleep on the back porch, that was it. Another time, he kicked him out altogether.

In that same article, Valentini tells even farther fetched stories:

As the father grills burgers on a sunny and pleasant Southern California day, the son takes us into a war zone on the other side of the world. In Afghanistan, Greg says, his whole unit smoked opium "to take the edge off." Surviving firefights seemed to be a matter of luck. Once, in a convoy, he was switched out of one vehicle and into another. Minutes later, the first vehicle hit an IED, and there were no survivors.

Once again, the 101st did not suffer a single fatality during that tour in Afghanistan. Not a one.

Update: More overwrought stories here:

Six years later, Valentini can still hear the fury and chaos, see himself freezing in his first firefight in Kandahar, feel the butt of the rifle that a buddy used to bust him in the chops and snap him out of paralysis.

He began shooting, and shooting, and shooting, and during nine bloody months of heavy combat in Afghanistan, Valentini came to understand fear, absorb it, get comfortable with it. What was fear of death but a reverence for life?

Update 2: More problems in the complaint, although who knows what of this Valentini said, or his lawyer embellished. From page 38.

Mr. Valentini received his basic training in Fort Benning, Georgia, and was selected for further training at Fort Bragg, North Carolina. He was assigned to the 82nd Airborne Division and then to the 101st Airborne Division. In October 2001, he was deployed to Afghanistan as part of the initial assault on the Taliban and al-Qaeda after September 11.

Mr. Valentini's first mission was to take control of the Taliban-held airport at Kandahar, which involved heavy combat. Many of his fellow soldiers were killed. He also witnessed a number of civilian deaths and was tasked with transporting the dead bodies of civilians.

The first major problem with this being, the Army didn't take the Kandahar Airport, the Marines did in December 2001.

Marines took control of the airport Thursday night without resistance. Afghans on the ground appeared stunned and curious, then waved and fired weapons in the air in a show of support. Still, Brig. Gen. James N. Mattis has ordered that "force protection" remain a major concern as Taliban and Al Qaeda forces continue their retreat.

"These guys might try to make one big hit before they get out of town," said Maj. Tom Impellitteri. "The Marines have to remember: vigilance, vigilance, vigilance."

On Sunday, only one Afghan approached the perimeter of the airport. Given some clothes and food by Marines, he left quickly.

The complaint continues:

In February and March of 2002, Mr. Valentini's unit was part of Operation Anaconda in the Tora Bora Mountains, searching for Osama bin Laden and other elements of the al-Qaeda and Taliban leadership. He took part in significant ground fighting, under nearly constant sniper fire and mortar bombardment. Again, he witnessed the gruesome deaths of numerous civilians, including children.

OK, this might at least explain the previous Tora Bora claim. Operation Anaconda did not take place at Tora Bora, but rather the Shah-i-Kot Mountains. I have no idea what role he played in this, but based on the rest, I am not willing to give him the benefit of the doubt.

Too Big To Fail

OK, haven't posted for a while, been busy, but I was just watching HBO's Too Big to Fail, and reflecting on the whole financial crisis thing. The movie ends with a caption stating how the top 10 banks control 77% of the deposits, and they have been designated "Too Big to Fail". The presumption being that despite all of the chaos we still haven't learned anything and are continuing with the same policies.

This is to a certain extent correct, except now we have the financial system under a ridiculously complicated regulation scheme in which moral hazard is merely explicit rather than implicit, and companies are more formally protected against their business risks by the government. So basically the conflict is between letting the banks take all the risks themselves, the morally correct free market thing, and having the government regulate and guarantee them to some extent, a more practical but morally objectionable stance.

So the question really comes down to, not whether the government should do anything, since all but the most die hard Hayek devotee (of whom I am a non-diehard fan) would agree that government should do something to prevent a reoccurence. So the question is, how can we handle this systemic risk, without government control, and without the moral hazard endemic is classifying businesses "Too Big to Fail".

Unfortunately governments never take the simple solution, they would give up too much control and subtract from their whole raison d'etre. It doesn't have to be that complicated though. The simple solution is, quite simply (to be redundant) to instigate a sliding scale of capital requirements for financial institution. Banks can be as big as they want to, but their costs will simply increase the larger they get, reflecting their systematic risks. Banks already have to maintain a certain reserve ration, for example $1 of assets for every $10 they loan out. So allow this for smaller institutions, but say, for every $100 billion of liabilities that they have (in accounting terms a bank loaning out money is a liability) then this ratio increases by 10%. This will increase the costs of capital for larger insitutions, and bring banks down to a level of equilibrium which is both profitable and manageable, with no more government regulations than were required previously. In fact you could fit this entire program on a single sheet of paper.

Just an idea. Probably never get any politician to adopt it though.

My New Favorite Democrat