Hal O'Brien

Nate Silver reports that Washington's senate race may well have national implications this year:

"(T)he most important state of all (in assessing the Republicans' chances of gaining a majority in the Senate) was Washington. Republicans won Washington 88 percent of the time that they won the Senate by a single seat, but only 41 percent of the time that they fell one seat short. The difference there is 47 percent. Washington makes the difference between success and failure almost half the time."

Perhaps there are those who think the differences between the Democrats and the Republicans are no more significant than those between the Blues and the Greens in Byzantium.

I am not among them.

I have faith in the robustness of the American republic, and believe it can survive the turn of the wheel that must inevitably happen and return the Republicans to power eventually.

Still, I hate waste. If the waste of time, effort, blood, and treasure that will ensue after the Republicans' return can be held off legally and ethically as long as possible, through the strength of reason... I can only lend my voice to that call.

Please vote for Patty Murray, and then mail in your Washington ballot, if you're a voter in our state.

"Investors brace for dramatic accounting change. That sounds like a fantasy headline from one of the great geeky professions, but it's almost true."

That was the lead on the Lex column in the FT on Tuesday the 17th, when I started my new job. (We found a way to get a year's subscription to both the FT and the Economist using airline miles, so I'm reading them again.)

It's a fairly big deal. As Lex goes on:

"New rules announced yesterday on lease accounting will increase the average company's debt load by 58 per cent, according to PwC, the professional services firm, and Erasmus University.

The issue: with the right kind of lease contract, companies currently keep assets off the balance sheet that are both durable and vital to operations - for example airlines' aircraft and retailers' stores. But accountants are on the way to banning these operating leases. Almost all leases will see their assets and corresponding discounted present value of future payments put on the balance sheet. The result: the average retailer can expect a three-fold increase in debt levels. For Tesco, an extra £15bn of lease liabilities will be included into a pool barely £200m deep.

The results of the new rule, a joint project of the International Accounting Standards Board and the US's Financial Accounting Standards Board, may surprise many investors. But not lenders and credit rating agencies, which already make similar calculations. They will have to decide whether the new measure of the value of leases is better than their existing rule of thumb, multiplying rental expense by seven. PwC believes the official measure of the liability will be lower in more than nine out of 10 cases.

Uniform lease accounting will make balance sheet comparisons more accurate, but there is a wrinkle. The prevailing interest rate on which each lease's value is based will be set on the day the contract is signed. An unusually low discount rate translates into an unrealistically high liability for the duration of the lease, sometimes 25 years. In big portfolios, the distortions may cancel out. But investors reading financial statements still cannot afford to rest in lease."

There have been few "matchers" out there in the world. That is, few outlets have been picking up the story. One of them was Reuters, with this piece, estimating global impact at "$1.2 trillion in leased assets."

Another was this breathless piece at the Economist, describing the proposed changes as "shocking" in the headline. However they did make the timetable more clear: "(The changes are) up for public comment until December, but could be enacted as soon as June next year."

Why am I telling you all this?

Well, mostly because I can see political implications afoot. Mainly I see the possibility, if these changes take effect, that as corporate debt is then stated on balance sheets to skyrocket, we'll hear the refrain from the Republicans leading into 2012, "Of course Obama's bad for the economy! Look at how corporate debt has soared because of his policies!"

I want to plant my flag here and now, and tell you when you hear that, someone is either lying or misinformed. These changes are being driven wholly by the private sector, and reflect the market giving furtive borrowers their due.

Odds are I'm not exaggerating where I say this: You read it here first.

Malcolm Tucker is apparently alive, well, and giving interviews to Australians. Perhaps the best bit:

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Why did Labour lose the recent British election? Everyone lost the election. The Tories just lost less badly than we did. Don’t let these fuckers fool you – this is a coalition of people who weren’t quite good enough to win.

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{hat tip to gfrancie's Twitter feed}

...at least somewhat.

My letter to the editor regarding Rob McKenna's illegal law suit has been posted on their "Northwest Voices" blog. That's basically their letters overflow page. It's possible it'll be printed in the paper version of the newspaper, but it's unclear.

In the comments section:

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"If you are truly a conservative, then you must be appalled that for the 1st time in 200+ years, the Federal Government is forcing everyone to purchase a product from a private business."

But those previous times Congress did force everyone to purchase a product from a private business are instructive, especially since they're from early Congresses composed of many of the Framers of the Constitution.

There's the Militia Act of 1792, which mandates every male citizen, "provide himself with a good musket or firelock..." and various other supplies. This was not provided by the government; the citizen had to buy it on his own from private vendors.

Then there's the Act for the Relief of Sick and Disabled Seamen from May 1802, which establishes both a government mandated insurance program and the first payroll tax in America.

Many say they respect the Founders; few act like they do when the Founders disagree with them.

James Fallows of The Atlantic has an extraordinary post today about bipartisanship in Congress, or the lack thereof. Money quotes are at the top and bottom:

I got this note from someone with many decades' experience in national politics, about a discussion between two Congressmen over details of the stimulus bill:

"GOP member: 'I'd like this in the bill.'
"Dem member response: 'If we put it in, will you vote for the bill?'
"GOP member: 'You know I can't vote for the bill.'
"Dem member: 'Then why should we put it in the bill?'

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(T)he US now has the drawbacks of a parliamentary system -- absolute party-line voting by the opposition, for instance -- without any of the advantages, from comparable solidarity among the governing party to the principle of "majority rules." If Democrats could find a way to talk about structural issues -- if everyone can find a way to talk about them -- that would be at least a step. And the Dems could talk about the simple impossibility of governing when the opposition is committed to "No" as a bloc."

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I mentioned to akirlu that I'd lately begun to wonder if someone had taken pictures of the hike up Diamond Head and posted them online. I went to Hawai'i on a business trip some years back, and did the climb, but didn't have a camera.

Sure enough, courtesy of Flickr:

A stitched panorama from Diamond Head. The hotel I was at was not on Waikiki, but rather the rightmost of the cluster of beachside buildings at the left of the photo. Surprisingly quiet.

A set of the hike itself, showing the long staircases, the tunnel, and the gun emplacement you have to crawl through. These fortifications aren't from WWII, as you might think, but WWI.

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I knew there was something I wanted to add:

The New York Times has a great interactive graphic on the proposed US Federal budget. Perhaps not quite as snazzy as WallStats' "Death and Taxes" for last year's budget that Brad Hicks pointed to a while back, but still very informative.

Ilya Somin writes at that well-known hive of collectivism, The Volokh Conspiracy:

If you define “state-created entity” narrowly, then it won’t include most corporations. But if you define it broadly as any legally defined status that carries government-granted rights or privileges, then pretty much every important private organization is a state-created entity. Individual citizens may be “state-created entities” as well, and naturalized citizens certainly are. Going down this road would destroy constitutional rights for just about everyone.

As I just commented:

...and thus, you’ve demolished the distinction between “public sector” and “private sector,” and invalidated most strict laissez-faire arguments.

I guess we really are all socialists now. Well done.

From a tip I just sent to Josh Marshall at TalkingPointsMemo.com:

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Josh and crew:

Given coverage on TPM about the TeaPartyNation.com folks, I decided to check out their page.

The first thing that caught my eye was a banner ad for someone named George Noel in the lower right corner of the browser window. It shows a fighter plane against a sky-blue background:

http://www.flickr.com/photos/hal_seattle/4266511796/

If you click the banner, Mr. Noel uses his whole home page for the same image:

http://www.flickr.com/photos/hal_seattle/4266513056/

Why is that odd? Well, the fighter in the photo that Mr. Noel uses so prominently isn't an American USAF fighter. It's the "Eurofighter."

http://en.wikipedia.org/wiki/Eurofighter_Typhoon
http://www.flickr.com/photos/hal_seattle/4265767503/

So I guess TeaPartyNation.com and Mr. Noel endorse the idea of outsourcing our defense to Europe. Or having European air forces take over our skies. Or something.

-- Hal

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All I can say is, these people wouldn't be allowed to fly on Air Canada, by God!

The story of Michaele and Tareq Salahi of Virginia, the couple who crashed the state dinner between President Obama and Prime Minister Manmohan Singh of India, continues to unwind.

Let's get things straight here: I'm very sceptical this is the first time this has happened at a state dinner. In fact, my bet is such crashers have been at many such events, probably at least one per Administration. Rather, in the age of Facebook, this is the first time such crashers have posted pictures of their deed online. Not unlike 9/11, this should be a true surprise only if you're ignorant, naive, or both.

All that aside, though, more than anything the whole fuss reminds me of a long quote by Leopold Kohr in The Breakdown of Nations. It's spot on, especially so today:

A citizen of the Principality of Liechtenstein, whose population numbers less than fourteen thousand, (in 1957 when Kohr was writing) desirous to see His Serene Highness the Prince and Sovereign, Bearer of many exalted orders and Defender of many exalted things, can do so by ringing the bell at his castle gate. However serene His Highness may be, he is never an inaccessible stranger. A citizen of the massive American republic, on the other hand, encounters untold obstacles in a similar enterprise. Trying to see his fellow citizen President, whose function is to be his servant, not his master, he may be sent to an insane asylum for observation or, if found sane, to a court on charges of disorderly conduct. Both happened in 1950... You will say that in a large power such as the United States informal relationships such as exist between government and citizen in small countries are technically unfeasible. This is quite true. But this is exactly it. Democracy in its full meaning is impossible in a large state which, as Aristotle already observed, is 'almost incapable of constitutional government'. (pg. 99-100)

Good: A large, faceless, bureaucratic institution that has no competition called an "insurance company."

Bad: A large, faceless, bureaucratic institution that has no competition called a "government."

Good: Paying an annual sum of $6,000 a year per person in a transfer called an "insurance premium."

Bad: Paying an annual sum of $6,000 a year per person (or, whisper it softly, less) in a transfer called a "tax."

Good: Aggregating the total cost to the nation and employers if paid in "taxes."

Bad: Aggregating the total cost to the nation and employers if paid as "insurance premiums."

Good: Rationing health care using dollars.

Bad: Rationing health care using medical advice.

Good: Not being able to "choose your own doctor" through price constraints and insurance company policies.

Bad: Not being able to "choose your own doctor" through resource constraints and government policies.

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Good: Having a substantial percentage of the population uninsured.

Bad: Having the overwhelming majority of the population insured.

Good: Having high absenteeism and lost productivity due to poor employee health.

Bad: Having low absenteeism and optimal productivity due to good employee health.

Good: Having only private companies who have themselves grown to be large, faceless, bureaucratic institutions that have no competition be able to afford insurance premiums for their employees.

Bad: Having private companies who have themselves grown to be large, faceless, bureaucratic institutions receive competition from smaller, more nimble, more agile companies who are now able to afford health care for their employees.

Good: Having US employers at a competitive disadvantage to employers in countries that insure their citizens.

Bad: Giving US employers a level playing field in the global marketplace.

Good: Having citizens, employees, and small business owners who are lucky enough to be covered in the first place, live in constant fear of losing that coverage, either for themselves or their employees.

Bad: Having citizens, employees, and small business owners covered, and unafraid of losing that coverage, either for themselves or their employees.

Good: Having retirees fear losing their health care if their former employer goes bankrupt in a way that reneges on their fiduciary commitments.

Bad: Having retirees assured they'll never lose their health care.

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Or, in sum:

Good: Fear.

Bad: Confidence.

From a thread I've posted to:

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Using "fascist" as a "bad word" to show your displeasure, when you don't know what it means, is not unlike a virgin saying "fuck."

For the record, according to the Oxford English Dictionary:

"Fascist, n. and a. -- One of a body of Italian nationalists, which was organized in 1919 to oppose communism in Italy, and, as the partito nazionale fascista, under the leadership of Benito Mussolini (1883-1945), controlled that country from 1922 to 1943; also transf. applied to the members of similar organizations in other countries. Also, a person having Fascist sympathies or convictions; (loosely) a person of right-wing authoritarian views. Hence as adj., of, pertaining to, or characteristic of Fascism or Fascists."

No party in America matches that description. No elected official in America matches that description. To think otherwise would be the epitome of "blaming America first."