Civil War Close to Home?

California to suspend tax refunds, welfare checks, student grants

LATimes | The state will suspend tax refunds, welfare checks, student grants and other payments owed to Californians starting Feb. 1, Controller John Chiang announced Friday.

Chiang said he had no choice but to stop making some $3.7 billion in payments in the absence of action by the governor and lawmakers to close the state's nearly $42-billion budget deficit. More than half of those payments are tax refunds.

The controller said the suspended payments could be rolled into IOUs if California still lacks sufficient cash to pay its bills come March or April.

"It pains me to pull this trigger," Chiang said at a news conference in his office. "But it is an action that is critically necessary."

The payments to be frozen include nearly $2 billion in tax refunds; $300 million in cash grants for needy families and the elderly, blind and disabled; and $13 million in grants for college students.

Even if a budget agreement is reached by the end of this month, tax refunds and other payments could remain temporarily frozen. Chiang said a budget deal may not generate cash quickly enough to resume them immediately.

Not all payments will stop Feb. 1. Most school and healthcare programs will be paid, as required by state and federal law. The state will continue to pay more than $6.6 billion in such bills.

And Los Angeles County officials said they would cover welfare payments to more than 500,000 local recipients -- for now.

But California is projected to be $346 million short of the funds it needs to pay all its bills in February. By March, the state would be so far in the red that even continuing to suspend payments would not cover the shortfall. California would be insolvent, making the issuance of IOUs likely.

Global Population Speak Out

We invite you to be a part of the Global Population Speak Out (GPSO). It’s a simple idea in response to humanity’s greatest challenge. You are one of a group of important voices we believe can make a difference.

What this is about
Our global ecological plight continues to worsen. A recent WWF Living Planet Report suggests that in “a moderate business-as-usual scenario… exhaustion of ecological assets and large-scale ecosystem collapse become increasingly likely.”

Many of us agree that we are, in fact, well into overshoot of the planet’s capacity to sustain us. Arguably, global ecological collapse is already underway. The progression of the Sixth Mass Extinction, climate change, and an array of other severe, interrelated problems threaten enormous numbers of lives, human and otherwise.

Coverage is lacking
Media coverage of the problem is sorely lacking. Particularly underreported is the fundamental link between the size and growth of the human population and environmental degradation. It is no comfort that the rate of global population growth has slowed in recent years; both our sheer numbers and the scale of our activity are already far beyond Earth’s limits.

We must act. Change does not spring from silence; without getting the population issue to the center of the public discussion, we have no chance to end the global environmental crisis.

It’s hardly surprising, though, that population is barely discussed. The media are generally pro-growth, and public calls to address population often meet criticism and resistance from groups with interests in continued growth. Writers and commentators fear such groups trying to discredit them. Is it any wonder so few want to discuss population under those conditions?

Full Monty here:

Who’s in Charge—Obama, the Pentagon or Israel ?

TruthDig | When Pentagon officials met with Obama last month, there again were winks and nods to the press. Obama was a naive and inexperienced politician from Flyover Land . He could and would be “handled.”

Now Obama has handled them. He has said, no doubt very politely, that he is the president and the military services are constitutionally required to carry out his policy, not their own. This naturally has produced journalistic murmuring of “clashes” between Pentagon and White House. If there should be clashes, the Pentagon will lose. The military have become accustomed to getting whatever it wants from presidents and Congress. That must end, and it is essential that the new president and his military advisers make this clear, however politely.

I began with a comment on luck. That referred to the plunge into the political abyss by the Israeli rightist forces, which are accustomed to claiming that they “own” the U.S. Congress. Israel’s useless, senseless and self-destructive assault on the people of Gaza, and upon the U.N.‘s headquarters and warehouses of food and medicine, has proved globally devastating to the reputation and moral credit of Israel. Even in the United States , there has been a precipitous drop in support for what Israel has been doing, and for Israeli policy in general.

In international political circles, there is disbelief that Israel could imagine that this attack on Hamas, with its civilian casualties and physical destruction of Gaza, would “strengthen” the position of the Palestine Authority and of Mahmoud Abbas and his Fatah Party. It is a death blow to them. Israel behaves as if it has completely lost touch with reality.

Thus Israeli Prime Minister Ehud Olmert’s arrogant utterance that he personally caused the United States to reverse its position on the U.N. Security Council resolution last week demanding a Gaza cease-fire. Secretary of State Condoleezza Rice had helped organize support for that resolution and had committed the United States to vote in its favor.

Olmert told an Israeli audience that, last Friday, upon hearing of Rice’s position, he immediately telephoned George W. Bush. Told that Bush was delivering an address in Philadelphia , Olmert replied, “I’m not interested,” demanding to speak to Bush. Bush then left his Philadelphia podium and, according to Olmert, the Israeli prime minister instructed the American president that “the U.S. cannot possibly vote in favor of this resolution.” Bush then telephoned Rice and ordered her to abstain from the vote.

That’s Olmert’s story, or Israeli megalomania, presented to the Israelis with pride, but unlikely to be received by Americans with pleasure. William Pfaff

parallels....,

Kyrgyzstan to demand U.S. army withdraw from Ganci air base

Mathaba | Kyrgyz President Kurmanbek Bakiyev will sign a decree demanding the retreat before his visit to Russia in the near future, the news agency said.

Kyrgyzstan will demand the U.S. army dismantle all its facilities at the Ganci base and halt all activities at the base within six months.

The move by Kyrgyzstan will have a positive influence on negotiations between Russia and Kyrgyzstan over the former providing 300 million U.S. dollars credit to the latter, the Russian Business Consulting Agency said.

Bakiyev also hopes Russia will write off about 180 million dollars in debt.

The United States set up the Ganci Air Base at Manas international airport in the suburb of Bishkek in 2001 in its war against Afghanistan.

In recent years, conflicts between U.S. troops and local residents have occurred from time to time. In Dec. 2006, U.S. soldiers stationed at the base killed a local airport worker, drawing resentment from the Kyrgyz public.

The Kyrgyz parliament has urged the government to reconsider the necessity of the existence of the Ganci base. Kyrgyzstan will call for the U.S. army to withdraw from the Ganci Air Base near its capital Bishkek, Kazakhstan News Agency cited Russian media as reporting on Monday.

What does this mean? Hard to say exactly, but it cannot be great news for US military strategic planners. Is that great game they're all playing going to be heating up soon? Kyrgyzstan straddles the high ground between China and Russia and has great strategic value because of its unique geographic position.

depression ahead, prepare for stock rout

This just in from the RC-net:

Guardian | Societe Generale said on Thursday that the United States' economy looks likely to enter a depression and China's could implode. In a highly bearish note, veteran cross asset strategist Albert Edwards said investors should now cut equity exposure after a turn-of-the-year rally and prepare for a rout.

He predicted that the S&P 500 index of U.S. stocks could be set for a fall of nearly 70 percent from recent levels. Edwards also raised the danger of a global trade war with China.

"While economic data in developed economies increasingly reflects depression rather than a deep recession, the real surprise in 2009 may lie elsewhere," Edwards wrote.
"It is becoming clear that the Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression."

Edwards has long been one of the most bearish analysts in London, first with Dresdner Kleinwort and then with SocGen. But he called in October for clients to increase their exposure to equities, which he said were due a rebound.

"We believe that the market is (now) set to quickly slide sharply towards our 500 target for the S&P," he said. The S&P 500 <.SPX> stock index is currently at 842, up about 14 percent since hitting a low in November.

Peak Capitalism - economists are killing the planet

In this particular session, I want people to understand the main reasons that humans are committing collective suicide. It's because of worthless methodology on the part of the social sciences AND human nature.

The reason that Greenspan failed to understand the impact of peak oil on the economy is because his "methodology" prevented it. The economists must be denounced for their crimes against humanity and removed from their positions of influence. We could discuss this for days...

"Economists have become a plague as dangerous as rabbits, prickly pear or cane toads. Economists have become the cultural cane toads of Canberra, oozing over the landscape and endangering myriad indigenous species. Not only the economy but also mental health would be greatly improved if we could lift the fog of obfuscation on things economic. The first step is to take economists from their pedestal and to see them as the curiosities they are. The first step to reducing their power is to reduce their legitimacy. How is this to be achieved? First, economists' outpourings should, as a matter of principle, be met with laughter, derision, benign paternalism. They should cease to be employed as media commentators. In the long term they should cease to be hired. Let them be pensioned off and die out. Extinction is a worthy end for a profession whose brief is rotten to the core."
-- Dr. Evan Jones, Economics Department, University of Sydney, 1991

"[The Chicago School of Economics is] a great center of contemporary scholasticism. The economists working there and produced by it are as important to the stagnation of useful thought as the Schoolmen of the University of Paris were at the height of the Middle Ages Like that of the Paris scholastics, their mastery of highly complex rhetorical details obscures a great void at the centre of their argument. A large number of America's economic problems could be solved by shutting down the Chicago School of Economics. The purpose of closure would be simply to disentangle a tendentious ideology from its unassailable position within contemporary power structures. The same sort of liberating shock treatment was applied to European civilization in 1723 when the Society of Jesus (Jesuits) was disbanded. The effect was to set free the ideas of the Enlightenment."
-- John Ralston Saul, 1994

gazprom recap and subtext...,

Eurasia Daily Monitor | Russia was supposed to resume pumping gas to the EU through Ukraine on January 13 following trilateral Moscow-Kyiv-Brussels talks, but the Russia-Ukraine gas row is far from over. Neither the issue of Kyiv’s debts, the very existence of which Ukraine denies, nor the conditions of gas supply to Ukraine in 2009 have been clarified. There are fears in Kyiv that Moscow wants to take control of Ukraine’s gas transport network. Meanwhile, Ukrainian industry, heavily reliant on gas, is grinding to a halt; and people are freezing in their homes in subzero temperatures.

Russia stopped delivering gas to Ukraine on January 1 in the absence of contracts for 2009; and it stopped gas transit through Ukraine on January 7, accusing Ukraine of siphoning off gas bound for Europe. Ukraine’s gas monopoly Naftohaz Ukrainy admitted that it had been withdrawing 20 to 25 million square meters of gas from the pipelines a day in order to keep up pressure in the pipe needed to pump gas to the EU. Gazprom agreed to resume gas transit only if inspectors representing the European Union, Russia, and Ukraine could verify that no gas was being siphoned off (Kommersant Ukraine, January 12).

A protocol stipulating the conditions of checking the pipelines in Ukraine was signed by the three parties from January 10 to 12 with the mediation of Czech Prime Minister Mirek Topolanek, who traveled between Moscow, Kyiv, and Brussels (Interfax, January 10-12). Ukrainian Prime Minister Yulia Tymoshenko tried to attach to the protocol a declaration that essentially shifted all the blame for gas transit disruptions on Russia saying that Ukraine did not steal Russian gas and that it had been a reliable partner in gas trade. This angered Moscow. It accepted the protocol only when Tymoshenko backtracked, saying that the declaration was unrelated to the protocol (UNIAN, January 12).

Although gas deliveries to the EU are about to resume, it is too early for the EU consumers of Russian gas to sigh with relief. Russian President Dmitry Medvedev warned that transit through Ukraine might be halted again if Ukraine resumed “stealing” gas (Interfax, January 11). Ukraine has never admitted to “stealing,” and it is still not clear which side will pay for the “technological” gas that Ukraine uses to maintain pressure in the pipelines. In the absence of contracts between Ukraine and Russia, new disruptions to the gas transit cannot be ruled out.

Russia insists that Ukraine owes $600 million for gas delivered in 2008, and Gazprom wants Ukraine to reimburse $800 million that it lost because of the transit halt (Ekho Moskvy, January 12). But the issue of the gas price for 2009 remains the thorniest. According to Kommersant, Ukraine has agreed to pay $250 per 1,000 square meters of gas, a price Gazprom offered at the end of December and Naftohaz rejected; but Moscow now wants “the market price” of $450, something that Kyiv simply cannot afford (Kommersant Ukraine, January 13).

It is feared in the Yushchenko administration that the gas row may result in Ukraine losing the gas transit network, which is probably the country’s most lucrative asset. Putin said in a recent interview that Russia was not against taking part in the network’s privatization (Interfax, January 11). The head of Yushchenko’s office, Viktor Baloha, accused Russia of “blackmailing” Ukraine in order to grab the network. According to Baloha, if Kyiv did not agree to Moscow’s conditions, Moscow expected an uprising against Yushchenko in the industrial east prompted by a stoppage of the local industry and freezing cold in homes as a result of the absence of gas (Ukrainska Pravda, January 10). Ukrainian laws forbid the network’s privatization.

Chávez Reopens Oil Bids to West

NYTimes | President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again.

Until recently, Mr. Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.

But faced with the plunge in prices and a decline in domestic production, senior officials have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world’s largest petroleum reserves, according to energy executives and industry consultants here.

Their willingness to even consider investing in Venezuela reflects the scarcity of projects open to foreign companies in other top oil nations, particularly in the Middle East.

But the shift also shows how the global financial crisis is hampering Mr. Chávez’s ideological agenda and demanding his pragmatic side. At stake are no less than Venezuela’s economic stability and the sustainability of his rule. With oil prices so low, the longstanding problems plaguing Petróleos de Venezuela, the national oil company that helps keep the country afloat, have become much harder to ignore.

Magic and Realism

NYTimes | One thing seems certain: The meltdown is going to hang over at least the first 18 months of the Obama presidency. The Treasury is bare. Americans are deluged in debt. Confidence has been Madoffed.

That’s the realism. But this 47-year-old man of mixed race, whose very name — O-Ba-Ma — has the three-syllable universality of a child’s lullaby, has always had something of the providential about him, a global figure who looks more like the guy at the local bodega than the guys on dollar bills. That’s the magic.

He needs this magic, which resonates in a voice with the solemn clarity of a bell. Smart power will not be enough. If it were, Americans would have elected Hillary Clinton president.

But in their abiding good sense, Americans intuited the imperative to reach beyond smartness for some ineffable quality, capable of unifying and inspiring at a time of national and global division.

Inevitably, the nation is looking back to 1932. “We have nothing to fear but fear itself,” Franklin Delano Roosevelt said in his first inaugural, with the economy devastated by the Depression. He also said: “This nation asks for action and action now.”

Action followed — a torrent of legislation and speeches in the first 100 days designed to kick-start the country.

Obama has been vowing a similar flurry, but has also been talking down expectations, saying things are going to get worse. That may be true, but he has to be careful. An excess of realism will undo him.

magical false positives...,

Warsocialism | “The human mind evolved to believe in gods... Acceptance of the supernatural conveyed a great advantage throughout prehistory, when the brain was evolving. Thus it is in sharp contrast to [science] which was developed as a product of the modern age and is not underwritten by genetic algorithms.” – E.O. Wilson

“Magical thinking” is defined as “non-scientific causal reasoning” or “correlation”. I define “political thinking” (which apparently has no formal definition) as trying to prove one’s assertions are true instead of trying to “falsify” them like a scientist or a good engineer.

We are genetically both “magical” and “political” thinkers. However, we can be specifically trained to use the scientific thinking in specific domains. Unfortunately, training in one domain does not mean we automatically use scientific thinking in other domains. The best scientists are just as likely as anyone else to use magic and politics in domains they haven’t been trained in.

Imagine yourself in Africa and you notice a herd of zebra staring intently at the trees. You stop and look at the trees, but you can not see anything. Suddenly a huge lion bursts out of the tree line, grabs an impala, and hauls it off. Every time after that, when you see zebras staring at trees, you will think “lions”. That is precisely the kind of magical thinking which would have kept our ancestors alive.

Political thinking co-evolved and was required to give magical thinking at least half of its value. Saving the lives of your fellows – by convincing them that a lion was nearby – was absolutely vital to your own survival. A few thousand years ago, almost no penalty would be attached to a “false positive” in this “lion in the trees” situation. Today, magical false positives on the part of social scientists are going to kill us all:

“Oil is a renewable resource, with no intrinsic value over and above its marginal cost... There is no original stock or store of wealth to be doled out on any special criterion... Capital markets are equipped to handle [oil depletion].” – M. A. Adelman

The social sciences employ magical (correlation) and political (proving oneself right) thinking. False positives on the part of economists (all economic theory) caused WW1 & WW2.

The “economic method” (correlation and “post hoc, ergo propter hoc”) is the opposite of the “scientific method”:

Hanson's Peak Capitalism Discussion - Day One

Is an "intentionally sustainable" human society to replace capitalism even possible, or are countries condemed to fight to the death over the remaining energy resources? 

This first day I want to introduce a couple of key points raised in Henry Plotkin's EVOLUTIONARY THOUGHT IN PSYCHOLOGY and also discuss "magical thinking" in the social sciences. It's literally impossible to understand the problems that confront us today if one's methodology is flawed! Widespread ignorance concerning these topics exists today in our universities (perhaps intentionally for political purposes). Hopefully, the following comments will explain why our universities are helpless in the face of our widespread social problems and lead to changes and solutions. 

Plotkin identifies the origins of evolutionary thought (and the nature-nurture debate) as beginning two thousand years ago in Plato's MENO: 

"Can you tell me, Socrates - can virtue be taught, or is it rather to be acquired by practice? Or is it neither to be practiced nor learned, but something that comes to men by nature..." 

Plato's student, Aristotle, had a profound effect on Western thinking because his teachings were adopted and taught by the Catholic Church. One of Aristotle's major achievements was the invention of formal deductive logic which consisted of four forms of "causation." We are concerned here with Aristotle's first and last causes: the "material cause" and the "final cause." 

MATERIAL CAUSE 

The "material cause" of a book would be the physical processes used in making the book. For example, making paper from trees, making ink, running the paper through the printing press, etc. In other words, Aristotle's material cause would be cause and effect as a scientist would describe it. 

FINAL CAUSE 

The "final cause" of a book would be the "goal" of the book. For example, educating the public. This is also known as "teleological thinking" and is fundamentally unscientific because it places effects before their causes. Nevertheless, Aristotle's 2,000 year old final cause is still used by social scientists today. 

EXAMPLES OF SCIENTIFIC VS TELEOLOGICAL THINKING (or "Magical Thinking") 

Suppose one were playing pool and attempted to hit the ONE ball with the CUE ball. When the cue ball was struck, a scientific thinker would explain the behavior of the CUE ball in scientific terms: Hooke's Law, Newton's Second Law, and so on. However, a teleological thinker would explain the behavior of the CUE ball in terms of goals: the CUE ball wanted to hit the ONE ball. In other words, the teleological explanation places the effect before the cause. 

Suppose a man was driving to work. Suddenly, a dog ran in front of his car. The man swerved to avoid the dog. A scientist would explain his avoidance behavior in terms of photons striking his eye, the signals being sent to the proper areas of his brain, neurons recognizing the image, (and so on): cause before effect. A social scientist - a teleological thinker - would say that he wanted to avoid the dog: effect before cause. 

"Magical thinking" is the common term for the teleological thinking which social scientists use to explain our social world. If you haven't already done so, please view this video  

Over the next couple of weeks, we are going to discuss the issues introduced in this first post. Teleogical thinking is worthless for discovering how the human brain works.

recriminations...,

Guardian | Russia accused the US last night of "orchestrating" Europe's gas crisis as gas deliveries to the EU were halted hours after they resumed, amid venomous exchanges of accusations between Moscow and Kiev.

Gazprom, Russia's gas company, said its pumping stations began sending gas through Ukraine early yesterday, following a monitoring deal signed in Brussels on Monday. But hours later, Gazprom said Ukraine was blocking the flow of gas - adding that the US was to blame.

The EU said "little or no gas" flowed yesterday to countries in central and southern Europe suffering acute energy shortages. Gazprom said Ukraine had stopped shipments and prevented Russian observers from entering its gas stations. Ukraine said Russia had "provocatively" sent the gas the wrong way, and compared Moscow's actions to the Nazi siege of Leningrad.

"We believed yesterday that the door for Russian gas was open but again it's been blocked by the Ukrainians," said Gazprom's deputy chairman, Alexander Medvedev. "It looks like ... they are dancing to the music which is being orchestrated not in Kiev but outside the country."

Falsification

World News | Nearly 70 years ago, in the course of the Second World War, a heinous crime was committed in the city of Leningrad. For more than a thousand days, a gang of extremists called "the Red Army" held the millions of the town's inhabitants hostage and provoked retaliation from the German Wehrmacht from inside the population centres.

The Germans had no alternative but to bomb and shell the population and to impose a total blockade, which caused the death of hundreds of thousands.

Some time before that, a similar crime was committed in England. The Churchill gang hid among the population of London, misusing the millions of citizens as a human shield. The Germans were compelled to send their Luftwaffe and reluctantly reduce the city to ruins. They called it the Blitz.

This is the description that would now appear in the history books - if the Germans had won the war.

War - every war - is the realm of lies. Whether called propaganda or psychological warfare, everybody accepts that it is right to lie for one's country. Anyone who speaks the truth runs the risk of being branded a traitor. The trouble is that propaganda is most convincing for the propagandist himself. And after you convince yourself that a lie is the truth and falsification reality, you can no longer make rational decisions. Falsification

eulogizing the news...,

NPR | Fresh Air from WHYY, January 12, 2009 · After 44 years as a newspaperman, former Washington Post executive editor Leonard Downie Jr. is making his debut as a fiction writer. His new novel, The Rules of The Game, features an investigative reporter on the beat of a hotly contested presidential election.

Downie joined the Post as an summer intern in 1964, and retired in Sept. 2008 after serving 17 years as the paper's executive editor. In his last year as editor, the paper won six Pulitzer Prizes for work done in 2007 — the most it had ever earned in one year.

Though I don't think it was the intention of either the interviewer or the interviewee, what I heard in this exchange was an account of the end of newspaper journalism and the obsolescence of the business model and the distribution media (print/online) undergirding traditional journalism in America.

occupied territories

Next Steps

Washington Post | Officials and analysts say Israel's top three political leaders disagree over how the remainder of the war should play out. Prime Minister Ehud Olmert is said to favor an expansion, while Foreign Minister Tzipi Livni and Defense Minister Ehud Barak are believed to be more hesitant. Barak has aggressively pushed the talks in Egypt; Livni has said that Israel can soon declare victory and withdraw. The three run the country together and must achieve consensus before Israel can act.

Olmert spokesman Mark Regev acknowledged that Barak, Livni and Olmert don't always see eye-to-eye, but said they have agreed on the war's aims. "It's probably a very good thing that we don't have group-think at the top levels of the Israeli government," he said.

In an interview with Israel Radio on Monday, Livni said Israel had succeeded in proving to Hamas it is serious about deterrence.

"Israel is a country that reacts vigorously when its citizens are fired upon, which is a good thing," she said. "That is something that Hamas now understands, and that is how we are going to react in the future if they so much as dare fire one missile at Israel." Israel and the United States consider Hamas a terrorist organization.

reagan's real revolution...,

Our Future | Our current economic meltdown may finally have ended the era that began when Ronald Reagan became President. Now a new study — from the Congressional Budget Office — helps us understand the inequality that has us melting. Americans in the overall top 1 percent, the 2007 CBO data showed, did quite well in the Reagan era's first quarter-century. Their average incomes, after taking inflation into account, essentially tripled, rising 201 percent.

But these top 1 percent stats, the new CBO data help us understand, hardly tell the full story. The truly stunning income increases over recent decades have gone to the tippy-top of the U.S. income distribution, not the top 1 percent, but the top tenth — and top hundredth — of that top 1 percent.

The higher up you go on the income ladder, in other words, the sweeter the Reagan era.

Between 1979 and 2005, the bottom half of the top 1 percent saw their average incomes only double, after inflation. These incomes increased 105 percent. The next highest four-tenths of the top 1 percent somewhat raised the income bar. Their average incomes, after inflation, rose 161 percent.

That brings us to the top 0.1 percent of Americans. Their incomes, from 1979 to 2005, rose a staggering 294 percent after taking inflation into account. Not bad at all. But the top 0.01 percent did even better. The 11,000 households in this rarified air took home an average $35.5 million in 2005, a 384 percent increase over average top 0.01 percent incomes in 1979.

Need some perspective here? Let's compare Americans at the top to Americans in the middle. Between 1979 and 2005, the average income of America’s statistical middle class — the 20 percent of Americans in the exact middle of the U.S. income distribution — rose, according to the CBO figures, a mere 15 percent. That's less than 1 percent a year. [...]

And that brings us to about the only hopeful news we can take, of late, from the Congressional Budget Office. No one on Capitol Hill has spoken out more clearly on the noxious consequences of preferential treatment for capital gains income than Peter Orszag, the CBO director until last month.

Taxing capital gains at a lower rate than other forms of income, as Orszag has testified to Congress, “creates opportunities for tax avoidance and complicates the tax system.”

As CBO director, Orszag couldn’t do much about capital gains tax breaks for mega millionaires. Now he can. President-Elect Barack Obama last month named Orszag his choice to direct the Office of Management and Budget, the federal government’s most powerful fiscal agency.

no quick fixes...,

GlobeandMail | In November, The New York Times asked a number of prominent energy experts to assess president-elect Barack Obama's chances of ending American dependence on imported oil. Vaclav Smil, the prolific environmental thinker at the University of Manitoba - he's written 25 books - was one of these experts. The only way that Mr. Obama could significantly advance this objective, he said, would be with the help "of a deep and lasting recession." Otherwise, he said, "there will be precious little of any rapid change." As for Mr. Obama's promise to enact a cap-and-trade regime to discourage the use of fossil fuels, "it will only further cripple America's industries."

Why so bleak, Prof. Smil?

"Energy systems are inherently inertial," Prof. Smil said. "Energy transitions take decades to accomplish. Anyone who expects Mr. Obama to transform the world will be disappointed [and] the degree of disappointment that must follow such naiveté will be phenomenal."

Prof. Smil expands on these blunt judgments in the December issue of The American, the business magazine published by the American Enterprise Institute, where he describes in precise detail the time-consuming process of "energy transition." He notes that humans relied almost exclusively on biomass for millennia - wood, charcoal, straw, supplemented everywhere by muscle and here and there by wind (sail) and waterwheel.

In many parts of the world, Prof. Smil notes, humans still relied on these ancient energy sources until the middle of the 20th century - "and in large parts of Africa and Asia the grand energy transition from biomass fuels to fossil fuels has yet to be completed." He identifies 1882 as "the tipping point" in the United States, the year in which Americans first burned more coal than wood. But the global "tipping point" didn't occur until the turn of the century.