Tag Archives: gainesville florida

An Engineer Explains Trump’s Wall

My Comments: For many, a bigger and better wall to keep out undesirable people is a plausible solution. But sound bites are not enough; someone will have to design, build and pay for it. I left out the construction drawings to keep the message more simple, but if you want to see them, go HERE.

Ali F. Rhuzkan September 21, 2015

There are very few occasions in American political discourse that require the input of a structural engineer, but when Donald Trump took a question from Univision’s Jorge Ramos regarding his proposed United States-Mexico border wall at a press conference on August 25, I heard the clarion call:

RAMOS: How are you going to build a 1,900-mile wall?

TRUMP: Very easy. I’m a builder. That’s easy. I build buildings that are — can I tell you what’s more complicated? What’s more complicated is building a building that’s 95 stories tall. Okay?

No. Donald Trump is not a builder. Donald Trump could not build a doghouse. Donald Trump is a developer who pays what he would call “very, very smart people” to build things on his behalf. His response to Ramos’ question was meant both to exaggerate his understanding of construction and to downplay the challenges posed by his border wall project.

Though I would never classify the construction of a 95-story building as simple, it is a feat that has been achieved many times before. There are at least 30 buildings that have reached a height of 95 stories or more, according to the obsessively detailed database at SkyscraperPage.com, and there are even more in the design phase or under construction.

On the other hand, human beings have built a 2,000-mile-long frontier wall exactly one time. Once. And it was accomplished only through a centuries-long building campaign that necessitated the forced labor of millions of Chinese peasants.

The challenge of Trump’s border wall is not technical, but logistical. The leap in complexity between “building a wall” and “building a 2,000-mile-long continuous border wall in the desert” is about equal to the gap between “killing a guy” and “waging a protracted land war.” Trump’s border wall, if built as he has described it, would be one of the largest civil works projects in the history of the country and would face an array of challenges not found when constructing 95-story skyscrapers.

In order to adequately answer Mr. Ramos’ question, let’s first make some assumptions on the project’s scope: A successful border wall must be effective, cheap, and easily maintained. It should be built from readily available materials and should take advantage of the capabilities of the existing labor force. The wall should reach about five feet underground to deter tunneling, and should terminate about 20 feet above grade to deter climbing.

To be classified as a “wall” rather than a “fence,” the barrier must also be a continuous, non-porous construction. This distinction might seem purely semantic, but Trump has made himself very clear on the matter, saying, “A wall is better than fencing, and it’s much more powerful. It’s more secure. It’s taller.” So we’ll take him at his word: He wants to build a wall.

One of the biggest choices that a builder has to make is what material to use for his or her project. For Trump’s wall, I would first dismiss concrete masonry unit (commonly called cinderblock) construction because each block would have to be put in place and set in mortar by hand. The finished product would probably be acceptable, but construction would be outrageously labor intensive and therefore costly.

Next, I would dismiss steel wire mesh. While it is cheap and readily available, it can be easily penetrated by a pair of wire cutters, an angle grinder, an oxy-acetylene torch, or just a Chevy going really fast. Even though extant barrier sections along the border make use of wire mesh, the United States Border Patrol is constantly battling to repair breaches and, as stated above, this kind of barrier really falls into the category of “fence.”

That leaves concrete. A concrete wall would meet all of the basic project requirements, and as a bonus would also embody the gray-faced antipathy of America’s immigration policy. There are two major types of concrete construction:
• cast-in-place, where wet, plastic concrete is brought in trucks to a job site, cast into formwork, and then cured; and
• pre-cast concrete, where the concrete is cast in a controlled indoor environment, cured, and then shipped to the construction site for assembly.

The hot, dry climate in the border regions would complicate cast-in-place construction because high heat tends to screw up the chemical reactions that cause concrete to harden.

I drew up a quick design option for a pre-cast concrete wall, not dissimilar to many proprietary systems currently on the market. This design consists of I-shaped concrete columns spaced at 10 feet on center, with eight-inch-thick wall panels spanning in between them. In such a design, the only concrete that would need to be cast on site would be for the foundations. The columns would anchored to the foundations, and the wall panels are slipped in place from above.

If we assume a border wall length of 1,954 miles (there are 600 or so miles of existing border barrier, but much of this would not qualify for Trump’s wall), then we can make some estimates as to the volume of concrete needed for the project:
• Foundation: 6 feet deep, 18 inch radius = 42.4 cubic feet
• Column: 4 square feet area by 30 feet tall = 120 cubic feet
• Wall panels: 25 feet tall by 10 feet long by 8 inches thick = 166.7 cubic feet
• Total concrete per 10-foot segment = 329.1 cubic feet
• 1,954 miles = 10,300,00 feet = 1,030,000 segments (10-feet long each)
• 1,030,000 segments * 329.1 cubic feet per segment = 339,000,000 cubic feet = 12,555,000 cubic yards. (The cubic yard is the standard unit of measure of concrete volume in the United States.)

Twelve million, six hundred thousand cubic yards. In other words, this wall would contain over three times the amount of concrete used to build the Hoover Dam — a project that, unlike Trump’s wall, has qualitative, verifiable economic benefits.

Such a wall would be greater in volume than all six pyramids of the Giza Necropolis — and it is unlikely that a concrete slab in the town of Dead Dog Valley, Texas would inspire the same timeless sense of wonder.

That quantity of concrete could pave a one-lane road from New York to Los Angeles, going the long way around the Earth, which would probably be just as useful.

Concrete, of course, requires reinforcing steel (or rebar). A reasonable estimate for the amount of rebar would be about 3 percent of the total wall size, resulting in a steel volume of 10,190,000 cubic feet, or about 5 billion pounds. We could melt down 4 of our Nimitz-class aircraft carriers and would probably be a few cruisers short of having enough steel.

But the challenge is far greater than simply collecting the necessary raw materials. All of these hundreds of miles of wall would need to be cast in concrete facilities, probably project-specific ones that have been custom built near the border. Then, the pre-cast wall pieces would need to be shipped by truck through the inhospitable, often roadless desert.

The men and women doing the work of actually installing the wall would have to be provided with food, water, shelter, lavatory facilities, safety equipment, transportation, and medical care, and would sometimes be miles away from a population center of any size. Sure, some people would be willing to to do the work, but at what price? Would Trump hire Mexicans?

This analysis also ignores the less sexy aspects of large-scale engineering projects: surveying, land acquisition, environmental review, geological studies, maintenance, excavating for foundations, and so on. Theoretical President Trump may be able to executive-order his way through the laser grid of lawsuits that normally impede this kind of work, but he can’t ignore the physical realities of construction.

Trump’s border wall is not impossible, but it would certainly be a more challenging endeavor than he would ever lead you to believe. Maybe he should stick to 95-story buildings.

Ali F. Rhuzkan is the pen name of a professional engineer and unprofessional writer living and working in New York City. The author can be reached at a.rhuzkan@gmail.com.

Bernie Sanders Is About as Radical as Harry Truman

My Comments: I have only vague memories of Truman; I was just 12 when he died. My father didn’t have kind words for him, but then he didn’t have kind words for any politician.

For much of my adult life I’ve thought of myself as a rightward leaning Democrat, but as the country has drifted, I’ve found myself shifting more and more to the left. Or have I stayed still and world around me shifted? I used to think Barry Goldwater was a radical conservative.

These comments by Robert Kuttner add a new perspective to how I should view the political landscape. I’ve very mixed feeling about Hillary, abject revulsion for Huckabee, Trump, et al and question whether Sanders could actually be elected by a majority of voting citizens.

Robert Kuttner on October 4, 2015

The mainstream media continues to be shocked that Bernie Sanders keeps gaining traction against frontrunner Hillary Clinton. However, if you look at what Sanders actually stands for, it is well within the mainstream of what used to be the Democratic Party.

Ever since Jimmy Carter, it has been evident that much of the Democratic electorate, and for that matter much of the country, is more progressive in its core values than what Democratic presidents have been offering. As big money has crowded out grass-roots democracy, the policies that people crave are simply not on offer.

There is also the historical accident of which leaders arise at what moments. We have not had a large number of plausible progressives with national appeal.

In 2008, John Edwards, who looked to be a pocketbook progressive, turned out to be a phony. A lot of people who voted for Barack Obama thought they were supporting a more progressive candidate than Hillary Clinton, but they turned out to be wrong.

Go back through the history of the Democratic Party primaries for the past half-century, and look what happened to progressives. In 2004, Howard Dean rallied the popular hunger for someone “from the Democratic wing of the Democratic Party,” but he turned out to be a flawed candidate.

Paul Wellstone? Died in a plane crash. Bobby Kennedy? Assassinated. Fred Harris and Mo Udall, both progressives who ran in 1976, crowded each other out. As politics has been captured by elites, we have not had a rendezvous of the right leader with the right moment.

Meanwhile, the American economy has turned viciously against ordinary people. Banks, corporations, and the one percent have more power than ever, political as well as economic.

So there is a pent-up demand for a candidate who can articulate popular frustrations. The fact that a 74-year-old, self-described socialist transplant from Brooklyn to Burlington, Jewish no less, is the surging vessel of these demands only tells you how deeply felt they must be.

But Bernie is no more radical than, say, Harry Truman, FDR or LBJ (when he was thinking about domestic policies). My friend Peter Dreier, a few months ago, performed a real service when he compared key Sanders positions with public opinion generally.

As Dreier reported, overwhelming majorities of Americans support a higher minimum wage: 74 percent think corporations have too much influence; 73 percent favor tougher regulation of Wall Street; 58 percent support breaking up big banks; 79 percent think the wealthy don’t pay their fair share of taxes; 85 percent favor paid family leave; 80 percent of Democrats and half the public generally support single-payer Medicare for all; well over 70 percent of Americans support workers’ right to unionize; and on and on.

No wonder Sanders is gaining ground.

Republicans have been disparaging Democrats as socialists — even centrist ones like Barack Obama — ever since FDR. So if this be socialism, let’s make the most of it.

Sanders and Clinton are both rock solid on civil rights and on LBGT rights. But it’s on the pocketbook issues that Bernie out-flanks Hillary. The fact that he raises his money mainly from small donors while she gets it from the usual suspects underscores the difference.

The press also likes to compare Bernie Sanders with Donald Trump. Superficially, both reflect mass frustrations with economic unease and political blockage. But Trump represents know-nothing celebrity politics, while Sanders is actually serious about ideas and policies. What they have in common is the threat that they pose to politics as usual and to the bipartisan elites.

It’s not at all clear that Sanders can be nominated, much less elected. But he does create major problems for Hillary Clinton. The idea that Joe Biden could get into the race and save the day for what passes for the Democratic center is preposterous. Biden would dilute the Clinton vote, not the Sanders vote.

Some of us have argued that Elizabeth Warren could be a more electable version of Bernie Sanders, but it’s hard to imagine a scenario that gets her into the race.

And the more Sanders keeps gaining appeal, the less likely it is that he would get out of the way for Warren.

Leaving aside the horse-race aspects, which are hard to resist, here’s the point: Sanders represents the pent-up demand of rank and file Democrats to get their party back.

Half a century ago, such ideas as full employment, a strong labor movement, national health insurance, investments in early childhood, free higher education, ending poverty in the richest nation on earth, progressive taxation, large-scale public infrastructure outlay, effective consumer regulation, and full enforcement of civil rights were utterly mainstream. Guess what? They still are.

Robert Kuttner is co-editor of The American Prospect and professor at Brandeis University’s Heller School. His latest book is Debtors’ Prison: The Politics of Austerity Versus Possibility.

Big Oil Is Changing It’s Mind

Oil drilling in AlaskaMy Comments: For me, economics is a fascinating subject. For you, probably not so much.

Environmentalists are cheering the announcement by Shell they are abandoning their efforts to drill for oil in the Arctic waters for which they own the rights. Some will attribute this to media pressure about the likely environmental costs, but I suspect the reality is an accounting issue.

Time and again, the human experience has been to adapt. More and more of us are living in cities, meaning we tend to drive smaller and more efficient cars. New sources of energy are coming along; wind power, solar power, and if a recent article I saw is to be believed, small scale fusion reactors.

All of this implies opportunities for the rest of us as we invest our money so that when the time comes for us to retire and stop working for money, there will be money somewhere working for us.

Nick Butler September 28, 2015

One hundred and fifty miles from the Alaskan coast lies what must be the most expensive oil well ever drilled. Shell’s decision to abandon the Burger J prospect, along with its entire Arctic exploration campaign, marks an outcome that many at the oil major must have dreaded since it bought the leases in 2008.

That is not because of the cost — enormous though it is — of setting up remote platforms and drilling into rock that lies beneath 140ft of water. Shell is reckoned to have spent about $7bn on the exploration effort; some estimates put the figure even higher. But its balance sheet is strong enough to absorb the loss.

Nor will the public ill-will generated by years of exploration in pristine Arctic waters last for ever. Indeed, for some senior executives at Shell, the prospect of success in the Arctic was more worrying than the possibility of failure. Building the permanent facilities needed for actual production would have been far more contentious than the limited (if sometimes hapless) exploration work. Among the people on record as opposing Arctic drilling is Hillary Clinton, the frontrunner for the Democratic nomination for president. That is a battle that Shell will no longer have to fight.

More worrying, from Shell’s point of view, is the prospect of a declining reserves base. In common with several of the other oil majors, it is pumping oil faster than it can book new reserves of bankable assets. This was the reason for pushing on in the Arctic against public criticism and deteriorating economic prospects for so long. If, as some of the company’s executives believed, the Chukchi Sea blocks held about 35bn barrels of oil, Shell’s reserve base would have been secured and much effort would have been devoted to winning hearts and minds and pushing down costs. As it stands, the reserve base will continue to decline. Shell’s $70bn purchase of BG Group, if completed, will bring access to some identified resources — for instance off the coast of Brazil — but the cost of development is high and success is very uncertain.

In the long run, this is little short of an existential challenge. Can the existing reserves base be replaced with resources that can be developed commercially? Or is a period of corporate decline inevitable? For the past three years Shell has failed to find sufficient resources to replace production despite heavy exploration expenditure. In 2014 it replaced only 26 per cent of its oil and gas production. Over the past three years the figure is just 67 per cent.

The problem is not a shortage of oil and gas. The problem is access. Over the past decade, according to the BP Statistical Review, global oil reserves rose 24 per cent, despite 10 years of growing production, and gas reserves climbed 20 per cent. But the majors do not have access to much of it. Saudi Arabia and Venezuela are closed to foreign ownership. Much of Iraq is a war zone and politics limits access in areas such as Kurdistan even for the boldest independents. Libya is in a state of civil war. Iran is walled off by sanctions, which the nuclear deal only partially removes. Russia is also subject to sanctions. There are significant volumes of oil and gas to be developed from shale rocks in the US and elsewhere but the economics do not look good at $50 a barrel.

For understandable reasons companies do not like the idea of shrinkage and decline. So acquisition becomes a powerful temptation. Those in the sector with cash and the ability to raise capital will now be in predatory mode. No doubt there are bargains — even if BG at the offered price is not one of them. But many are cheap for good reasons.

For all these reasons, some will wonder whether Shell’s retreat from the Arctic was premature. Exploration is a risky business, and first impressions can be misleading. Oil and gas might never have been developed in Iran, Alaska or the North Sea if the industry had given up after initial wells drilled were unsuccessful. A single hole in the ground tells you only about a narrow slice of geology within an area of thousands of square miles. The success of Eni, the Italian group, in the Barents Sea shows that the Arctic does contain resources. Were it not for the political uncertainty surrounding Arctic drilling, Shell might well have carried on.

Still, the Arctic debacle is a salutary reminder to oil majors that their old business model is reaching the end of its life. Change might mean a different energy mix — taking the lead in the global transition away from hydrocarbons. Or it might mean accepting new relationships with the state-owned companies that control the world’s remaining resources. Only one thing is certain — the oil majors will have to change, or accept decline.

The writer, formerly an executive at BP, is a visiting professor at King’s College London. He writes an FT.com blog

More Market Mayhem On Its’ Way

My Comments: History does typically repeat itself. Whether its human frailty or the laws of physics, the past is usually a glimpse into the future. Cries of ‘this time it’s different’ usually prove to be false. It’s not what happens that has a critical effect on your financial future, it’s how you manage the inevitable. I’ve been at this for almost 40 years now, and while I’m far from perfect, there are ways to mitigate the risk.

26 Sep 2015 Richard Dyson

Earthquakes and volcanoes rarely strike once only to vanish. A number of smaller episodes precede and follow the main event.

The same appears true of market routs, where a series of dramatic falls cluster within a period of several weeks, or more often months, sometimes signalling an entire change in the market’s direction.

Black vertical lines in the chart, above, show the number of days per month in which the FTSE 100 index has fallen by more than 3% – from opening to close – in the past 20 years.

While falls of that magnitude often capture front-page headlines, they are relatively uncommon.

If all such falls over the past two decades were spread out evenly, they would occur on average every 78 trading days, or once a quarter, according to broker AJ Bell which processed the data for Telegraph Money.

But they rarely occur in isolation.

On only 12 occasions since 1995 has there been just a single day within a calendar month where the market fell by more than 3%. Instead the bad days clump around wider market events, usually global in origin.

The first cluster of lines marks the crises in the late 1990s beginning in Thailand and spreading across Asia and from there to Western markets.

The two biggest concentrations of falls – including single months where there were six and seven days in which the FTSE fell by more than 3% – came in the desperate years of 2003 and 2009.

The first marked the final end of the protracted sell-off of the technology bubble. The 2009 cluster marked the trough at the end of the financial crisis.

By contrast the correction suffered since last month’s “Black Monday” (August 24) has been comparatively minor.

If the past patterns of the data are to be repeated, further days of sharp sell-offs are to be expected in coming weeks.

Russ Mould, investment director at AJ Bell, said: “If anything, the story here is the comparative absence of turmoil in the past 18 months up to August.”

He points out that downward market movements are more abrupt. This means days of 3% falls far outnumber those where the market gained 3% or more. “Markets tend to rise serenely and lose ground quickly, which again is what can make bear markets such a shock.”

Preparing for opportunities

With further falls likely, investors are eyeing sectors where the greatest value is likely to emerge – and building cash reserve in preparation.

Based on a number of measures of value including price to earnings ratio, yield, and “Cape” – the cyclically adjusted p/e – Telegraph Money identifies European and emerging markets as “prepare to buy” areas, with commercial property, bonds and gold as sectors to trim back as a way of raising cash ahead of future falls.

PPACA and Premium Increases

healthcare reformMy Comments: 40 years ago I cut my teeth as a financial advisor, selling health insurance policies to local families. Many of them were employed at the University of Florida and all paid exactly the same premiums. Older folks were effectively subsidized by younger folks, which meant that if what I sold was age sensitive, and you were younger than the average, you could get the same coverage for less money from me than if you bought through payroll deduction.

Over the years I’ve watched the industry change, sometimes dramatically, but a constant was the annual increase in premiums caused by inflation in drug prices, bills charged by hospitals, by physicians and of course, the need by insurance companies to make more money. Twenty years ago it was obvious something had to change because the upward trend in annual premiums charged would eventually reach 100% of the Gross Domestic Product, or GDP.

State governments did nothing, Hillary tried to do something back in the 90s, but got shot down. And now we have ObamaCare, which while not perfect, is a dramatic improvement over the status quo. I can’t tell you how pissed off I get about Congressional efforts to kill it, without offering any meaningful alternative. Much of that comes down to allowing drug companies, the hospital and insurance industry to re-write the rules to first benefit themselves at our expense.

Margot Sanger-Katz   SEPT. 22, 2014

In the Affordable Care Act marketplaces, which now serve 7.3 million Americans, some premiums are going up while others are going down. Based on data available so far, we reported last week that the average premiums for last year’s most popular plans would rise 8.4 percent, but that people willing to switch plans could get much better deals — an average 1 percent increase, and even decreases in some markets.

But is 8.4 percent an alarming increase or a good deal for a plan you like? Is a 1 percent increase a disappointment or a terrific bargain? To put both increases in context, we’ve assembled some historical data on insurance markets that existed before the Affordable Care Act.

None are a perfect comparison group — there are many reasons the new marketplaces and the people shopping there are different from customers in the older markets. But, taken together, they can give us some sense of whether the health law is giving customers a good deal on insurance.
The overall assessment: By nearly any comparison, the average 1 percent premium increases available to consumers willing to switch plans is remarkably low. We are in a period of record-low health-care spending growth. But even in this period, premium increases lower than inflation are unusually good news.

Even the average 8.4 percent increase for people who renew in the most popular plans falls within the range of historical increases in the individual market. It’s not on the low end, but it’s not in the category of runaway premium growth that many critics of the Affordable Care Act warned might be coming.

Recall that back before January, when the marketplace plans launched, the individual insurance market was a very different place. Insurance companies were free to exclude customers with previous illnesses. People tended to cycle in and out of coverage very frequently as their income and employment status changed.

And regulations in some markets limited the amount that insurers could vary premiums by age, making products unaffordable for many young, healthy customers.

But the old individual market still remains the best comparison group for the new individual market — the Affordable Care Act marketplaces. By that standard, even an 8.4 percent annual increase looks pretty good.

A Commonwealth Fund study conducted by the M.I.T. economist Jonathan Gruber this summer found that, before the Affordable Care Act passed, premiums were rising by higher rates: 9.9 percent in 2008, 10.8 percent in 2009 and 11.7 percent in 2010. Those are average rates. As in the current marketplaces, there was a lot of local variation in price increases.

The employer market has seen smaller recent increases, but that market has not seen an average 1 percent increase in recent memory. The Kaiser Family Foundation recently published its 16th annual survey of employer health plans. It found that 2014 was a year with a record-low premium increase for family plans: 3 percent. That number makes 8.4 percent look less rosy. But the 1 percent available to marketplace switchers looks good.

By Medicare standards, an 8.4 percent increase seems absurdly high. Medicare, the public insurance program for those 65 and over and the disabled, is enjoying a period of unusually slow growth. In that program, per capita spending is quite flat, and looks to be going down over the next few years.

Medicare’s spending numbers are helped by demographic changes. The baby boomers began aging into the program in 2011, pulling down the average age of beneficiaries and making the population in the program healthier. Since 2006, when the Medicare Part D prescription drug benefit went into effect, annual per capita spending growth has been less than 5 percent — and in the last two years, it’s been less than 1 percent.

The Fed’s Dilemma

moneyMy Comments: Last week the Fed board of governors met and nine of the ten voted to NOT raise the Federal Funds Rate. That’s the rate charged to commercial banks who borrow money from the Federal Reserve. It’s the fundamental tool used by the central bank to influence the economy.

For those of you who are confused, the only other tool available to the government to help or hinder the economy is called ‘fiscal policy’. This is when the Congress chooses to spend or not spend money. It’s in our best interest as consumers and citizenry to limit the potential for massive ups and downs that disrupt lives and lead to social chaos. It’s far from perfect, but no one has yet found a better way to make it happen.

A decision by the Fed to increase interest rates is going to happen. The bigger question is when. It’s impact will be felt globally for the next two decades, at the very least.

September 15, 2015 – Guggenheim Partners

As appeared in the Financial Times global print edition, September 15

Twice in the past 30 years the US Federal Reserve has faced the prospect of prematurely abandoning tightening during market turmoil. Today, global currency devaluations, market volatility and plunging commodity prices have trapped the Fed in a similar policy dilemma.

In 1987, the central bank aborted rate rises and reversed course after a stock market crash. Again, in 1998, after the failure of Long-Term Capital Management, a highly leveraged hedge fund, the Fed abandoned its planned rate increases to stabilize markets and avoid a global crisis. In both cases, the unintended result of delaying was inflated asset prices, which ultimately destabilized the economy and led to severe financial consequences and recession.

In 1986, inflation slowed as oil prices collapsed, raising serious concerns about US economic expansion following the worst postwar recession up to that time. Policymakers were slow to raise rates, allowing for a surge in equity prices in early 1987 as energy prices rebounded.

After falling behind the curve, aggressive Fed actions to address inflation inadvertently pricked the stock market’s speculative bubble. In October 1987, US equities plummeted more than 30 per cent. The Fed quickly reversed course and reduced rates.

By mid-1988, markets stabilised and the Fed again raised rates to head off inflation. By this time, more than four years of accommodative monetary policy had led to a commercial real estate boom with a glut of new properties. As the economy tumbled toward recession in 1990, a sharp decline in property values caused defaults and the failure of financial institutions. The government-sponsored Resolution Trust Corporation was set up in response to resolve troubled banking assets.

After the ensuing recession and another period of accommodation, the Fed again raised rates in the mid-1990s. During this time, many Asian nations had pegged their currencies to the US dollar. By 1997, the pressure to maintain these pegs amid rising US rates became too much for some. Thailand was first to break its peg, allowing the baht to collapse and increasing pressure on neighbouring economies in a dramatic round of competitive devaluation.

By 1998, contagion from emerging markets reached the United States, pressuring domestic markets. A collection of 14 major financial institutions convened by the Fed intervened to stem the collapse of the LTCM hedge fund that threatened the solvency of the global financial system.

Once again, the Fed aborted plans to raise rates, allowing equity prices to skyrocket. When the Fed finally tightened, stocks began a long, deep slide. Numerous companies that flourished amid the speculative wave failed.

Today, policymakers are caught in this familiar dilemma. Labour markets are moving toward full employment, and declining energy prices and a stronger dollar have resulted in languishing inflation. Still, questions remain about the viability of sustained economic expansion in the United States and around the world, and volatility is rising.

At the same time, currency devaluation, particularly in Japan and the eurozone, is putting pressure on countries to devalue to improve export competitiveness. Those countries slow to devalue, like China, are feeling economic pressure at home, driving down asset prices and increasing deflationary pressures, escalating the risk of financial contagion abroad.

The Fed is hard-pressed to justify a rate increase based on its self-prescribed metrics, which include rising inflation and an improved employment situation with clearly rising wages.

At best, policymakers can argue that the prospects for wage growth and inflation are improving, but clear evidence is lacking.

A pre-emptive rate increase seems risky and opens the Fed to potential criticism given the fragility in financial markets and the prospect that rising US rates could exacerbate foreign economic turbulence. But while prices and wages remain tame, the risk of another asset bubble is increasing. If policy remains highly accommodative, the likelihood grows that asset classes including commercial real estate, equities or certain categories of bonds could become dangerously overvalued.

Regardless of the path the Fed chooses, after seven years of accommodation and now facing volatile global markets, the likelihood of regret is high.

An Unheralded Force Shaping US Policy

108679-bruegel-wedding-dance-outsideMy Comments: I’ve been registered to vote since about 1960. During these 55 years, I’ve managed to cast a vote in almost every election held for which I was eligible. Some of the time, my votes have been positive and others negative. But I’m convinced my participation was meaningful and remains meaningful today.

This article suggests there is a movement afoot that will reinforce the notion that the US is a democracy, something all of us should embrace, never mind our personal beliefs in the ideology involved in any particular contest. At our core as a nation, it’s imperative that as many people as possible become and remain engaged in the process and not be discouraged if your particular bent fails to carry the day.

Ben Wikler 09/17/2015

At midnight tonight, the clock stops. The congressional review period for the Iran nuclear deal expires, and the opponents of the deal officially lose their chance to torpedo the landmark foreign policy achievement of the Obama era. Thanks to 42 Democratic and Independent Senators, the GOP-driven sabotage bill never even reached the president’s desk, and the United States has moved off the path to war with Iran.

It’s a moment worth marking: the visible sign of a tectonic shift in the politics of American foreign policy.

The Iran deal’s political survival means many things at once. It signals the decline of AIPAC and the Likud lobby, a masterfully executed vote-whipping operation driven by the White House, Dick Durbin and Harry Reid in the Senate, and Leader Nancy Pelosi, Rep. Jan Schakowsky, Rep. David Price, and Rep. Lloyd Doggett in the House.

But it also means something more, something largely missed in the many write-ups of how the victory was forged. The success of the Iran nuclear deal marks a crescendo of a politically mature constituency for peace and diplomacy. It’s a milestone in the ascendancy of a grassroots movement stirred to action by the Iraq war that has been building steadily since, a force that will shape the politics of war and peace in 2016 and the years beyond.

In mid-July, when the seven-country negotiations finally ended and the Iran Joint Comprehensive Plan of Action was unveiled, today’s moment of victory was anything but assured. A front-page New York Times story detailed a $20 million campaign plan, backed by the American Israel Public Affairs Committee (AIPAC), to sink the deal. Former Republican Sen. Norm Coleman helmed another $10 million attack, while neoconservative hawks ranging from Joe Lieberman to Dick Cheney geared up to join the fray. The deal’s opponents promised — and pundits expected — a 2009 Tea Party-style uprising during the August congressional recess that would send members of Congress running for cover.

As the Washington Director of MoveOn.org, I experienced the D.C. effort to support the deal from the inside. On paper, the pro-diplomacy coalition looked hopelessly outgunned. The coalition of nuclear policy experts and peace advocates who were lobbying Congress couldn’t come close to matching the resources of the hawks. The widespread assumption was that the GOP would pass a resolution of disapproval through both houses of Congress. Our modest and urgent goal, then, was to retain enough Democrats to sustain a presidential veto. I remember a fierce private debate about whether we should give up on the Senate entirely and focus all of our energy on the House.

And as for the grassroots, out beyond the D.C. bubble? The prevailing wisdom was captured well by Peter Beinart in a piece this April: “It’s notoriously hard to mobilize Americans against wars until those wars begin.”
What few realized, however, is that the war had already begun — in 2003.

Millions marched against the war in Iraq. In the wake of that disastrous conflict, a network of new and newly revitalized organizations arose, groups capable of channeling public outrage about a war-first foreign policy into concrete political power. The energy of this movement coursed through the Howard Dean campaign, sparked the primary challenge to Joe Lieberman, and helped electrify the fight to send Barack Obama — a candidate vocally opposed to needless war and ready to take heat for his commitment to diplomacy with Iran — to the Oval Office. As it turned out, those anti-war marchers from the Bush era had never given up. In fact, they fundamentally shifted the center of gravity of the Democratic Party.

Yet conventional wisdom held that AIPAC and its allies were unbeatable. In fact, the anti-war grassroots had helped defeat them only last year, in a largely unnoticed skirmish that presaged this year’s Iran fight. From late 2013 to early 2014, insiders were caught off guard as an AIPAC-backed bill intended to derail the Iran nuclear negotiations was itself derailed by, as the National Journal put it, “the re¬sur¬gent pro¬gress¬ive move¬ment.” Alerted to the moment by groups like MoveOn.org, J Street, DailyKos, and CREDO Action, grassroots activists poured hundreds of thousands of petition signatures and more than 10,000 phone calls supporting diplomacy into congressional offices, backed up by constituent meetings in Washington, D.C. and across the country. Soon, even co-sponsors of the bill backtracked on their support, and it died on the vine.

This summer’s showdown was even bigger. Per the final tally tracked by Win Without War, a 37-group coalition of which MoveOn.org is a member, grassroots supporters made 141,631 phone calls to Congress after the deal was finalized on July 14. We sent 288,990 emails to congressional offices and collected 1,181,307 petition signatures supporting the deal.

And we took to the streets. On a single day of action in August, local supporters organized 207 public events attended by thousands of people. To counter the threatened Tea Party outbursts at local events, pro-deal activists traded notes on 258 upcoming August recess public appearances by members of Congress, turning out supporters to town halls, debates, and farmer’s markets from coast to coast. And vocal constituents visited hundreds of congressional offices in their home districts and in Washington, D.C. to press their case.

The deal’s opponents haven’t released their numbers. But from all available indications, despite their vast war chest, they were out-organized. At 87 percent of the events we tracked (and we tracked all we could), Iran deal supporters outnumbered opponents. Meanwhile, congressional offices have indicated that the volume of phone calls from each side roughly balanced out — but not all calls are created equal. One Senate staff assistant told me that during anti-deal calls, she could often hear phone bank operators telling confused callers what to say before patching them through.

As they say, there are some things money can’t buy. Authentic grassroots intensity is one of them.

To win, our effort had to be broad as the public’s support for an alternative to war. The coalition spanned peace and security groups, veterans, faith groups, civil rights organizations, the netroots, and beyond. MoveOn staffed up an election-style field program, with nine full-time No War With Iran organizers supporting local activists in key states. J Street, the pro-Israel pro-peace group, pulled out all the stops, organizing speaking tours with pro-deal Israeli generals and commissioning polls showing wide support for the deal among American Jews — puncturing specious claims by opponents. After hundreds of thousands of members of 24 national groups signed a joint petition coordinated by CREDO Action, leaders of the Congressional Progressive Caucus stood outside the Capitol to receive it in person and pledge their support for the deal. The Ploughshares Fund, the National Iranian American Council, Democracy for America, Friends Committee on National Legislation, Peace Action, Council for a Livable World, VoteVets, and dozens of other groups all poured time, resources, and effort into the fight. And an extraordinary array of nuclear scientists, retired generals and ambassadors, and other experts and authorities took the time to answer every question and debunk every myth as soon as it arose.

Thanks to the ferocious grassroots response, even the opposition’s greatest coup backfired. On August 7, New York Sen. Chuck Schumer announced his opposition to the deal. As the Senate’s presumptive Democratic Leader-In-Waiting, Schumer could have triggered a wave of defections. But the lightning response to Schumer’s move was so scorching, and so visible, that almost no other Democrats followed in his footsteps. MoveOn members launched a “donor strike,” vowing to withhold $42 million in political contributions if Democratic votes undercut the Iran deal — and then deployed the “SchumerMobile,” a billboard mounted on the back of a truck depicting Schumer, in the style of a high school yearbook, as the Senator voted “Most Likely to Start a War.” As more and more activists and groups voiced their anger at his decision, joined with aggressive pushback coming from the White House, journalists began wondering aloud if Schumer’s bid for Democratic Leader might be imperiled by his alienation of the party’s grassroots base.

It wasn’t just a message to Sen. Schumer. It was a message to all Democrats that opposition to the Iran deal would invite accountability from the grassroots. Primary voters and progressive activists across the country had worked to elect Senators and Representatives who would prevent the next Iraq war, and they wouldn’t take betrayal sitting down.

It worked. Word on the Hill was that every Senator noticed what happened to Schumer–and that some offices who had been poised to oppose the deal pulled back to avoid the same fate. Ultimately, the vast majority of Democrats in both houses of Congress supported the deal–with more than enough votes to protect it in either chamber.

This was the rare political fight where, on the progressive side, everything seemed to click. Just a few months before, grassroots progressives and the White House were utterly at odds over the Trans-Pacific Partnership. That conflict will flare up again — but on Iran, there was no daylight between the grassroots and the Oval Office. Similarly, any supposed gulf between the administration and its congressional allies was nowhere to be seen. And in sharp contrast to Hill negotiations where policy experts watch in horror as one after another key detail disappears amidst political horse-trading, this–the most comprehensive anti-nuclear proliferation accord ever negotiated — remains fully intact.

This win had many authors. Tremendous credit has been rightly accorded to President Obama’s team and to the leaders of the pro-deal effort in both houses of Congress. We all owe a debt of gratitude to the technical experts who helped shape the deal and communicate its contents. And it’s true that the deal’s opponents made a series of strategic missteps, particularly by making the opposition to the deal so bleakly partisan. You don’t win Democratic votes with rallies outside the Capitol helmed by Glenn Beck, Ted Cruz, and Donald Trump, or with transparently partisan speeches to Congress by foreign heads of state invited without consulting the President.
But if the analysis ends there, without mentioning the crucial role played by grassroots activists, then we lose sight of one of the most significant consequences of the Iran vote.

In the coming year, candidates for House, Senate, and the Presidency will be crafting their agendas. Lists of potential nominees to foreign policy posts will be compiled. As the Iran fight demonstrated, anyone seeking to build a winning coalition around a vision for America’s role in the world would be remiss to forget the power of the progressive grassroots.

Today, foreign policy is not the sole domain of insiders. It is not controlled by a small group of lawmakers, think tanks, and check-writing, lobbyist-hiring interests that don’t share the American public’s belief that war should never be a first resort.

The day before the vote, I visited undecided Democrats in Congress with a group of people who knew the price we paid for getting this wrong before. Retired generals, combat veterans — and a Gold Star mom, whose son had died in Iraq on Memorial Day. Each had a personal story, and personal plea, of extraordinary power.

Their voices were heard. Their voices won’t go away. On profound matters of war and peace, the public will not stop paying attention — which means that future decisions, like the Iran deal, will be subject to that most fundamental of political powers: democracy.