2010 - %3, August

Myths and Realities About the Tea Party

| Fri Aug. 6, 2010 1:56 AM EDT

In his triumphant return to the Washington Post, Dave Weigel debunks five myths about the tea party:

  1. The tea party isn't a reaction to President Obama, it's a reaction to the bank bailouts.
  2. The tea party is racist.
  3. Sarah Palin is the leader of the tea party.
  4. The tea party is bad for Republicans.
  5. The tea party will transform American politics.

I think Dave is 90% correct. These are all myths, with the partial exception of #4. In the short term, he's right: "The tea party movement is giving Republicans a dream of an electorate, one in which surveys find more GOP-inclined voters enthusiastic about casting ballots than voters who lean Democratic. Democrats have done some damage to the tea party brand — its favorability has fallen in polls — but in general, the presence of a new political force that is not called Republican and is not tied to George W. Bush has given the GOP a glorious opportunity to remake its image, at a time when trust in the party is very low."

True. But in the longer term I think the tea party movement is more dangerous to Republicans than he lets on. There's a limit to how crazy a party can get and still win elections even occasionally, and the tea partiers are very rapidly taking the GOP to that point and beyond. It's probably a net benefit in 2010 — though even that's debatable — but beyond that I suspect it's almost pure millstone.

I'll have more on this in the next issue of the magazine. If I understand our production timetable properly, that shouldn't be too far off. But don't hold me to it. I might not have as good a handle on MoJo's print schedule as I think.

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The Month in Review

| Thu Aug. 5, 2010 8:25 PM EDT

Here's a rough recap of the past month in news hysteria:

Week of July 12: New Black Panthers
Week of July 19: Shirley Sherrod, JournoList
Week of July 26: Ground Zero mosque
Week of August 2: Birthright citizenship
Upcoming Week of August 9: Gay marriage? Michelle's vacation in Spain? Take a guess!

Quite a summer we're having, no? Am I missing anything? What have liberals gotten hysterical about lately?

Michigan Oil Spill: Recovery is Just Beginning

| Thu Aug. 5, 2010 6:40 PM EDT

As Kate Sheppard reported last week, July 26th marked the start of yet another oil spill in the US. A 30-inch pipeline owned by Calgary-based Enbridge Energy Partners burst in southwest Michigan, dumping more than a million gallons of oil into a creek feeding into the Kalamazoo River.

Now, the communities of Calhoun and Kalamazoo counties begin the process of cleaning up. Homes surrounding the site remain evacuated per the recommendation of the Calhoun County Health Department due to the airborne presence of benzene—a known carcinogen that is released when oil comes in contact with the air. Signs reading "Recent contamination as a result of the Enbridge Energy oil spill have made this river unsafe to use" line the Kalamazoo River.

Sort-of-good news came earlier this week: The oil had stopped flowing by the end of last week. And on Tuesday, Enbridge, having already launched a spill response website, offered to pay full market value for the more than 200 homes that lie within the spill "red zone," or within 200 feet of the river, that were already for sale.

But the picture is far from rosy. Eighty miles of the 160-mile long Kalamazoo River is already deemed an EPA Superfund site for PCB contamination caused by  paper mill, and reports now show that the oil has already reached this area of the river. The EPA disapproved a series of containment and recovery plans that Enbridge set forth last week, saying they were insufficient. But no matter how solid the plans, the clean-up is likely to take months.  

The EPA claims that it will seek full liability against Enbridge for the spill, which, under the Clean Water Act, could amount to $1,100 to $4,300 for each of the 24,000 barrels spilled. The company has pledged to pay all fines in full. But even its own spokesman Alan Roth admits that "there's still a tremendous amount of work to do." Jay Wilson, a biologist with the state of Michigan said, "We probably won't know the full effects for weeks or months or years."

 

 

Quote of the Day: Minutemen in Utah

| Thu Aug. 5, 2010 6:19 PM EDT

From Economist reporter Andreas Kluth, after visiting a meeting of the Minutemen in Utah:

I had expected to be slightly scared. I was not. Instead, the atmosphere was somewhere between that of an Alcoholics Anonymous meeting and a geriatric home.

Better than the opposite, I suppose.

Crop Circles on Wall Street

| Thu Aug. 5, 2010 4:36 PM EDT

You've all heard of the Mandelbrot set, right? It's the fractal image shown on the right. It looks pretty ordinary, but if you zoom in you start to see a lot more detail. Zoom some more, and there's even more detail. You can zoom forever, and you'll keep finding more detail no matter how fine a microscope you use, much of it surprising and unpredictable. (Try it!)

Well, it turns out you can do much the same with stock market trading charts. Take a look at the chart for a single day's trading and you'll see a pattern. Zoom in to a single hour and you'll see a different pattern. Zoom in again to a single minute, or a single second, and you'll see something different still.

So how far down can you go? Last year's "flash crash," which saw the Dow plummet nearly a thousand points in a few minutes, was widely blamed on high-frequency traders who use computer algorithms to execute trades at very high speeds, and that made some folks at Nanex curious about what was really going on. Alexis Madrigal tells the story:

Most stock charts show, at best, detail down to the one-minute scale, but Nanex's data shows much finer slices of time. The company's software engineer Jeffrey Donovan stared and stared at the data. He began to think that he could see odd patterns emerge from the numbers. He had a hunch that if he plotted the action around a stock sequentially at the millisecond range, he'd find something. When he tried it, he was blown away by the pattern. He called it "The Knife."

....High-frequency traders do employ algorithms to look for patterns in the market and exploit them, but their goal is making winning trades, not simply sending quotes into the financial ether....The algorithms we see at work here are different. They don't serve any function in the market. University of Pennsylvania finance professor, Michael Kearns, a specialist in algorithmic trading, called the patterns "curious," and noted that it wasn't immediately apparent what such order placement strategies might do.

Donovan thinks that the odd algorithms are just a way of introducing noise into the works. Other firms have to deal with that noise, but the originating entity can easily filter it out because they know what they did. Perhaps that gives them an advantage of some milliseconds. In the highly competitive and fast HFT world, where even one's physical proximity to a stock exchange matters, market players could be looking for any advantage.

Donovan calls these patterns "crop circles," and he gives them all names: Castle Wall, The Waste Pool, Depth Ping, Boston Shuffle, BOTvsBOT, etc. Most of them involve sending out thousands of quotes per second, and you can see them all here. If Donovan is right, this isn't even high-frequency trading, which is iffy enough. It's high-speed quote stuffing and market spoofing designed primarily to screw up other traders, something that John Bates, a former Cambridge professor and the CTO of Progress Software, calls "algorithmic terrorism." That's a wee bit melodramatic, but it's still a nasty look at what's happening in our financial markets these days. This kind of behavior is hardly new, but it's certainly gotten a lot faster and a lot harder to detect.

A Win for Whistleblowers

| Thu Aug. 5, 2010 4:13 PM EDT

Whistleblowers scored a win yesterday when the U.S. Court of Appeals for the District of Columbia overturned a previous court decision that had significantly limited the ability of the government watchdogs at the Project on Government Oversight to defend themselves on the stand.

The case actually dates all the way back to 1997, when POGO worked with a whistleblower at the Minerals Management Service (now the Bureau of Ocean Energy Management, Regulation and Enforcement). The whistleblower brought to light a number of problems with the royalty in kind program, which basically allows companies driling on federal land to pay the government with oil rather than the royalties owed. POGO filed a False Claims Act lawsuit against the 15 biggest oil and gas companies for underpaying the government for drilling on public lands. POGO won, returning $440 million to the federal government, and shared the proceeds of a settlement from that lawsuit, $383,600, with the whistleblower who helped bring the fraud to light. The DOJ then went after POGO and the whistleblower, claiming that it violated federal law for a government employee to accept the award.

In the 2008 trial, testimony to the jury on why the money had been offered was barred, which POGO says made it impossible to defend themselves. (They weren't even allowed to use the word "whistleblower" on the stand.) Yesterday's ruling overturned that court decision, making it clear that the defendant's intent is crucial to determining whether the law was violated (more background here). This means POGO could now offer a more adequate defense should the Department of Justice decide to take up the case again.

"This is a total acknowledgment of the arguments we've been making for over a decade on this," said Danielle Brian, executive director of POGO. "Justice has been trying to demonize POGO's recognition of a whistleblower. We are hoping this is the end of this incredibly long ordeal."

As POGO points out, while the DOJ has been going after them on this issue, the department has declined to prosecute the two key players in the 2008 MMS corruption scandal, Greg Smith and Lucy Denett—even though the Interior Department Inspector General blamed the pair for some of the worst ethics violations in the sex, drugs, and oil scandals at the agency. (Regular readers will recall that years of corruption at MMS have come back to haunt the Obama administration in the wake of the Deepwater Horizon disaster.)

"We really are hoping that Department of Justice does look again at the decision not to prosecute those cases," said Brian. "It's demoralizing to the good guys at the agency to let them get away with it."

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Are Stronger Chemical Regulations Really Bad For Business?

| Thu Aug. 5, 2010 3:36 PM EDT

In April, Sen. Frank Lautenberg (D-NJ) introduced The Safe Chemicals Act, a bill that if passed would make sweeping changes to the 34-year old Toxic Substance Control Act. While the old law allowed chemicals to enter the market with little or no testing, the new one would force manufacturers to prove a chemical's safety before introducing it to the market.

Manufacturers worry that the Safe Chemicals Act would put US industry at an economic disadvantage, since other global players, like India and China, have fewer chemical regulations, meaning they don't have to spend as much money proving chemicals are safe for workers and consumers. The Society of Chemical Manufacturers and Affiliates, a trade group, says the act could endanger a sector that employs 800,000 Americans.

Union leaders, though, disagree. They argue that poorly regulated chemicals actually endanger the labor force, since they represent a major health risk to factory workers.

Breitbart's Latest

| Thu Aug. 5, 2010 2:36 PM EDT

Meet Dr. Kevin Pezzi, the latest addition to Andrew Breitbart's stable of internet stars. Seriously. Click the link. You want to meet this guy. You can thank me later.

What They Know

| Thu Aug. 5, 2010 2:22 PM EDT

The Wall Street Journal is running a good series this week on privacy in the digital age called "What They Know." This is from their piece today on cell phone tracking:

Global-positioning systems, called GPS, and other technologies used by phone companies have unexpectedly made it easier for abusers to track their victims. A U.S. Justice Department report last year estimated that more than 25,000 adults in the U.S. are victims of GPS stalking annually, including by cellphone.

....There are various technologies for tracking a person's phone, and with the fast growth in smartphones, new ones come along frequently. Earlier this year, researchers with iSec Partners, a cyber-security firm, described in a report how anyone could track a phone within a tight radius. All that is required is the target person's cellphone number, a computer and some knowledge of how cellular networks work, said the report, which aimed to spotlight a security vulnerability.

The result, says iSec researcher Don Bailey, is that "guys like me, who shouldn't have access to your location, have it for very, very, very cheap."

If you don't want to be tracked and think you might be, remove the battery from your phone. That's what domestic-violence shelters do: "As soon as victims arrive at shelters run by A Safe Place, 'we literally take their phones apart and put them in a plastic bag' to disable the tracking systems, says Marsie Silvestro, director of the Portsmouth, N.H., organization, which houses domestic-violence victims in secret locations so their abusers can't find them."

More generally, though, what do they know? The answer is: a lot. Probably more than you think, and the Journal's series is a good reminder that if you care about privacy, you should care at least as much about the private sector as you do about the government. Beyond cell phones, the Journal uncovers plenty of other good stuff too. For example, here's a story about the skyrocketing use of browser cookies to track your movements across the internet, and here's a graphic that shows which sites are the biggest abusers. The winner? Dictionary.com, with msn.com and comcast.net not far behind. Wikipedia is the only site they surveyed that uses no tracking cookies at all.

There's plenty of other good stuff at the main site, including advice on how to avoid being tracked (or, at least, how to avoid being tracked as much). It appears to be 100% accessible to nonsubscribers and it's well worth checking out.

This Week in National Insecurity

| Thu Aug. 5, 2010 1:59 PM EDT

Whichever side of the fence you land on, chances are you agree that America's not a very secure nation these days: economically, electorally, and of course, physically. So we grabbed our lensatic compass, rucksack, and canteen, then mounted out across the global media landscape for a quick recon. Whether you're scared because our military isn't good enough—or you're scared because it's too good—here's all the ammunition you need, in a handy debrief.

In this installment: Mike Hastings, martyr; dealing with Iran; what mosques and married gays have to do with homeland security, allegedly; old Iraqi enemies; new Al Qaeda enemies; soldiers on hippie drugs; WikiLeaks groveling; and Taliban gangbangers. Word.

The sitrep:

The United States government's national threat level is Elevated, or Yellow. You're welcome.

  • After military overseers in Afghanistan yanked his embed reporting assignment this week, Rolling Stone's Michael "I write everything down" Hastings went on TV. The gist of his argument: He wasn't denied access because he got Gen. Stanley McChrystal fired, but because the war sucks, the war's media guys know it, and the last thing they need is more bad press. All true, but depressing. Mikey needs a Bud Light Lime. (MoJo/Yahoo News)
  • WHAT! Sanctions work on Iran? Holy ayatollah! Unless..."sanctions" is a euphemism for really big frickin' US and Israeli bombs, right? (Time)
  • Remember Tariq Aziz, Saddam Hussein's old foreign minister? (You'll recognize when you see him.) The now-imprisoned Ba'athist gave an interview cursing the US for invading Iraq in 2003...and cursing the US for wanting to leave Iraq in 2010. But apparently he's always been a little confused: The Nation's Iraq war expert, Jeremy Scahill, tweeted today: "when i met tariq aziz in baghdad in 1998, he went on and on about how he loved james baker and donald rumsfeld." Um, so...in this mutual admiration society, was there a goat sacrifice involved? (The Guardian)
  • Al Qaeda's North African outfit has decided its mortal enemy is not the Great Kenyan-American Satan, but rather Europe's refuge for cheese-eating surrender monkeys, the kingdom of Sarkozia. Apparently Al Qaeda is stunned that French commandos killed some members of the terrorist group in a vain attempt to rescue a Gallic aid worker. Not stunned that the French killed their colleagues, just stunned that they have commandos, 'cause hey. France. (Al Jazeera English)
  • How do you keep corn-fed, all-American flatlands soldier boys from passing out while they do their thing in Afghanistan's high-altitude areas? Drugs. Lots of 'em. Who says Pentagon research isn't totally hip? (Danger Room)