Say What?

Ratio of WIA to KIA: 16. That means that almost 80,000 US soldiers were wounded in the Bush folly (the Pentagon counted 29,000 wounded in combat, the others were not wounded in combat or were wounded lightly). PTSD doesn't require physical injury, of course, hence the much larger 185,000 soldiers that have already broken down strong institutional and cultural barriers and asked for assistance. Of those, 52,000 were actually diagnosed with PTSD.

At which point is this going to be worse than anything a ragtag bunch of terrorists could do to the US? I'm guessing that point was reached a long time ago.

Lost in translation - subtleties

Western media everywhere are having a good chuckle at the expense of Ahmedinedjad's Bushism "there are no homosexuals in Iran". Ah, funny. The best research available shows something between 1% or 2% of humans everywhere are homosexual, and that it is at least partially genetic in its roots. No reason to believe that this is any different in Iran.

But wait a second. Ahmedinedjad didn't actually say that, did he? He spoke in Farsi, not in English. His words were simultaneously translated. Simultaneous translation is tricky, heck, it's hard to translate if you have time to think about what is being said. So what did he really say? I don't speak Farsi, so beats me. But I've read that he actually said "In Iran we don't have the problem with homosexuality that you have here", or something to that extent, in several places. But that is entirely different. There is no problem with homosexuality in Europe either: it's accepted and the questions are only at the margin. Crucially, it isn't a political hot button, it isn't a cultural touchstone, it does not dominate public life like it does in the US. In the US, the twin issues of abortion and gay rights are crucial distinctions between the only two parties that play a national role. It's a crazy way to run a country, but it is baked into the system for now.

So I'm not even sure whether Ahmedinedjad's answer even qualifies as a Bushism. If he was just prefacing his answer (before being rudely cut off by the audience) by explaining that homosexuality just isn't a political issue in Iran the way it is here, fine. If he was just trying to explain that homosexuality isn't a cultural issue in Iran because it is universally condemned, then he's just pointing out the obvious.

Again, I don't know what he actually said, but simultaneous translation isn't reliable. The crowd reaction may have thrown him for a complete loop, if he was simply trying to explain something about Iranian politics or Iranian culture, on which the audience was simply not knowledgeable. It's hard to take an audience seriously after they react like that, but then again, Bollinger sort of set it up this way. This conversation would have been much interesting if it had been a discussion between Ahmedinedjad and a few Iranian dissenters, in Farsi, with transcripts available afterwards.

Incidentally, homosexuality is illegal in 70 countries, punishable by death in several countries, such as Saudi-Arabia, for instance, as well as Yemen, the UAE, Sudan, Somalia, parts of Nigeria, Chechnya [for repeat offences]. It is punishable by life in prison in Bangladesh, Guyana, India, Maldives, Myanmar/Burma, Pakistan, Qatar, Sierra Leone, Tanzania and Uganda. We have a long way to go before the world grows up about sexual preference, although - to be honest - several of these countries didn't criminalize homosexuality until they fell under the British empire (and the infamous section 377 of the penal code).

Keynes was wrong

You can't just spend your way out of a recession. That was proven conclusively by Japan, which tried to do exactly that. Of course the Japanese were able to test it relatively safely because they had a huge savings rate, so their public debt is held internally. Much of the US public debt is already in foreign hands. The effect of creating more public debt is now a weakening of the dollar, because the additional money has to go oversees. So in the US's case, it's not really an option.

Critical debt levels

The US needs to start living within its means. What that means is made painfully clear by the French PM this week. With a population (a tad over 60 million) and GDP (around 2 trillion USD) about one fifth of the US, it runs a deficit of around 50 billion USD, a level which the prime minister calls "critical". Of course, the US runs a bare public deficit of 250 billion USD (federally), proportionally the same.

Keep in mind that the US is still at a huge demographic advantage over France, with the baby boomers still being at prime earning potential. So it is obvious that the US national debt is beyond critical. One of the ways that this can be made more apparent is to look at the deficit without the surplus in social security: about 430 billion USD last year. Add to that the fact that the US states run deficits as well (California ALONE ran a 6 to 7 billion USD deficit last year, but it has run deficits as high as 30 billion USD in recent years), as do US households (total consumer debt expanded by about 60 billion USD in 2006, of which 25 billion was run up on credit cards), and you see the extent of the problem. Incidentally, total US household credit runs at well over 90% of GDP (including mortgages and such).

It's fun maxing out on credit while it lasts. And it's a hard habit to break. But how long can it persists?

Blowing bubbles

Bernanke says the losses in the housing sector are worse than anyone would have thought, and that it's going to take a while to work through it. Indeed, judging by the repercussions of Japan's real estate crisis, at least a decade, with lasting effects on the psyche (and treasury). So that is not really what the Fed is planning to do. Just as with the last bubble deflation, financial policy is geared towards keeping everything moving along. That means, running the nation on credit as there are no untapped reserves of cash (savings) to be spent. But to do that, one can't just deflate an asset bubble - it brings into question the very basis on which credit is extended - another bubble needs to be created. That's how the soft landing after the stock market crash was created - by creating (or at least aggravating) the housing bubble. Except that there really isn't that much else you can create a serious bubble on. Perhaps bonds?