Article 43


Friday, March 17, 2006

Net Neutrality Regulation

By Caron Carlson
March 14, 2006

Investment analysts who were called to Capitol Hill to testify on the telecommunications market lent their support to the incumbent telephone companies’ lobbying agenda for reduced regulation.

The chairman of the Senate Committee on Commerce, Science and Transportation, Sen. Ted Stevens of Alaska, said that he plans to introduce a bill on telecom reform toward the end of April.

The legislation will attempt to update the 1996 Telecommunications Act, addressing such questions as the telcos’ rights in entering the video market and “net neutrality.”

At a hearing March 14, Stevens asked four financial analysts what Congress can do to encourage investment in the telecom sector.

Kevin Moore, analyst and managing director at Wachovia Securities, said that lawmakers should minimize the investment community’s need to constantly reevaluate the regulatory environment by introducing minimal and flexible regulation.

“We want regulatory stability and certainty,” Moore said, adding that the bill should not be overly application-specific. “The key thing for regulators is to do no harm.”

Much of the congressional debate on telecom reform will focus on “net neutrality,” which Craig Moffett, vice president and senior analyst at U.S. Cable and Satellite, Broadcasting, noted has become a catch-all term for numerous competing agendas.

Consumer advocates and large online content providers, such as Google, Yahoo and, are urging lawmakers to stop the Regional Bell Operating Companies from charging extra for premium delivery, fearing that such a tiered pricing system would empower the carriers to block content.

The Bells argue that the large content providers use a large portion of bandwidth and therefore should help pay for the cost of network upgrades.

Stevens asked for Wall Street’s perspective on whether the network operators could get away with blocking access to sites such as Google’s or Yahoo’s.

“I think that would be very difficult to sustain,” said Luke Szymczak, vice president at JP Morgan Asset Management. “It would always allow an opportunity to the fellow not blocking it to take customers.”

In general, the analysts backed up the Bells’ stance on net neutrality.

Click here to read more insight about net neutrality.

Aryeh Bourkoff, managing director at UBS Investment Research, said that the carriers should provide equal access to content at a defined capacity level, and above that level implement a tiered pricing structure.

Cautioning that strict rules on net neutrality could dampen the return on the telcos’ network investments, Moffett said that preventing carriers from prioritizing traffic for a fee could have the unintended consequence of leaving consumers to foot the bill.

Wall Street’s perspective on telecom regulation comes as no surprise on Capitol Hill, perhaps explaining, in part, why only two members of the committee, including Stevens, attended the hearing.


Posted by Elvis on 03/17/06 •
Section General Reading
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Thursday, March 16, 2006

Novus Ordo Seclorum - Not Bushs New World Order

By Cicero
Special to Huntington News Network
March14, 2006

The Latin phrase Novus Ordo Seclorum, meaning “New Order of the Ages”, which appears on the reverse of the Great Seal of the United States and on the dollar bill, is taken from the fourth eclogue of Virgil from the line, “Magnus ab integro seclorum nascitur ordo,” referring to a prophecy regarding the fate of the Roman Empire.

Here is the question: Is President George W. Bush’s New World Order also a prophecy on the fate of the United States? We see ample evidence that suggests this administration is marching down the same path as traveled by the Roman Empire, with all its ambition to impose its ideals, culture and form of government on others. And similar to what happened to the Romans, this would almost inevitably lead to revulsion by other nations and eventually the downfall of this great nation. If we never want to learn, are we prepared for the day when we are domed to meet Romes fate?

It is now obvious to most U.S. citizens and clearly the rest of the world that the U.S. invasion of Iraq was an ill-fated venture based on incorrect assumptions and possibly personal ideals and objectives of the Triumvirate of Bush, Cheney and Rumsfeld. Yes, no one could disagree that Saddam Hussein was a great despot who was persecuting his own people and posing a potential regional threat, but so to a potentially larger extent is the ruler of North Korea, so why Iraq? Could the answer be oil and hatred because Hussein had tried to destroy Bush’s father, instead of an easily accepted but perverted sense that we have the only viable answer, our form of democracy?

The arrogance of the Triumvirate is no longer a secret, but the problem remains that we have only ourselves to blame for electing Bush and Cheney, who then hired Rumsfeld to manage the Legions. While we cannot rewritethe past, we should nevertheless still manage to learn a costly lesson from it and take some serious efforts to solve the existing problems posed by a potential civil war in Iraq.

We have to realize that almost as many Iraqis have died due to the war as were killed by Hussein during his horrible tenure, and that the families of the dead do not differentiate how their loved ones were killed only that they were killed. In fact, our actions in Iraq have caused an increase in the breadth and strength of the radical fundamentalists who are all our enemies. Please, our enemy is not the Iraqis, the Sunni or Shia sects or followers of the Muslim religion, but only those criminals who use it as a guise to gain power, basically the anarchists of the twenty-first century. Instead of focusing our efforts on dealing with the real criminals, we have been using terms like “War,” “Crusade,” and others that we would never really use on criminals but only on enemy nations. Words are powerful things which can cause even friends to become alienated and repelled. It is indeed time that his nation starts rethinking our approach to coping with the anarchists and not continues to serve as their publicist.

Throughout history, many despots as leaders of different nations have attempted at instigating a New Order: Napoleon, Hitler, Mussolini, Lenin, and the list goes on. I wish people would laugh when any politicians talk about setting up a new world order, as we should know better now than believe that whatever order they are trying to bring us could be anything more than disorder, death and ruined economies.

All these politicians think they know all the factors that govern our world or nation, well we should yell to them that they can never know all, not even a micro portion of the millions of factors that govern this complex world in which we live in. Small things can destroy big nations, societies, economies, and individuals, if you just remember that a micro virus can kill an individual as swift as a bullet, and so can the slightest of their ill-advised actions be devastating to us all.

Vietnam, Iraq, and other mislaid actions by our government in the last decades have resulted in untold hardships and deaths without providing a modicum of safety or benefits to anyone except contractors, suppliers, lobbyists and their assorted friends.

Such misplaced actions following misguided decisions by our leaders always start out with high sounding themes but looking beneath the rhetoric one can not find any real substances that could provide a decent justification for any of them. The U.S. Congress is supposed to serve as a balance to the Executive, but unfortunately we do not see this happening in these cases. Instead they bend like the wind and whip right back into their leisurely lifestyle in Washington with their friends - the lobbyists.

Seeing how the Bush Administration is step-by-step turning this nation into a controlled society so they can build their New World Order, I’m frightened at the thought that George Orwells classic on dictatorships 1984 might be George Bush’s bedtime reading as a young man at Yale, hoping against hope that. President Bush would read more of the history of the world and contemplate how his actions may be leading us down a difficult path with the same outcome as that befell and destroy Rome.

At least, we can take comfort in the thought that in three years we will have a chance to scrutinize those seeking to become our next President and Vice President and try and pick some real leaders who share our belief in the basic principles that established this nation. But before we do that, let us all ask ourselves the question that Marcus Tullius Cicero once asked: “What is the end, the final and ultimate aim, which gives the standard for all principles of right living and of good conduct?”

Editors Note: In the 1952 movie Five Fingers,” James Mason played the valet of the British ambassador to neutral Turkey during World War II. He was a German spy who went by the code name Cicero. His intelligence information - including the date of D-Day was excellent, but fortunately for the Allies, the Germans didn’t believe him, thinking him a double agent. The film was based on real events. The alternate title of the movie is Operation Cicero. The Roman political figure, orator and philosopher Cicero was a champion of the traditional institutions of the Roman Republic and the enemy of autocracy, including the politics of Julius Caesar and Pompey.


Posted by Elvis on 03/16/06 •
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Monday, March 13, 2006

The Next Recession

By Thomas I. Palley
Tom Paine Common Sense
March 13, 2006

To quote Yogi Berra , It’s tough to make predictions, especially about the future. Many (including myself) expected that the bursting of the stock market and Internet bubbles in 2001 would cause a deep recession owing to large excesses of borrowing and spending by both the household and corporate sectors. Now we know that the recession of 2001 was fairly mild and of short duration, though the economic recovery has also been the weakest since World War II. After having been wrong once, it’s either brave or foolish to make a second prediction that the next recession will be deep and difficult to escape.

But the facts point to it being just thatdespite the optimism of the Federal Reserve. This is because the economic factors that helped escape the last recession have been largely exhausted, and will not be available to fight the next recession.

The main reasons why the last recession was so relatively mild are the federal budget and interest rates. In fiscal year 2000 the federal government ran a budget surplus of $236 billion dollars, but within three years this had reversed to a deficit of $378 billion. The overall budgetary U-turn was therefore $614 billion dollars, equal to about six percent of the economic output (gross domestic product). This turn provided an enormous injection of spending that helped prevent a deeper recession and jump start recovery.

The role of government spending in damping the recession and driving the recovery is evident in the employment statistics. From March 2001 (the beginning of the recession) to January 2006 government employment rose by 4.5 percent (one million jobs) to 21.9 million jobs. Over the same period, private-sector employment rose by just one percent. Government, which accounts for just 16 percent of total employment, has created almost half of all new jobs. The private sector, which accounts for 84 percent of total employment, has created the other half. Moreover, a portion of the increase in private-sector jobs involves government contract and defense-related work, so that the governmentגs overall job contribution is even larger. In effect, increased government employment has masked persistent private-sector weakness.

This fiscal stimulus was accompanied by an extraordinary extended period of monetary ease that kept interest rates at unprecedented lows. In 2000, the year before the recession, the Federal Reserves target interest rate (the Federal funds rate) averaged 6.24 percent. When the recession began, the Fed cut this interest rate aggressively, lowering it to 1.67 percent in 2002 and 1.13 percent in 2003. Moreover, the Fed then held interest rates at historical lows three years after economic recovery had officially begun, so that the Federal funds rate was only 1.35 percent in 2004. Only since late 2004 has the Fed reversed itself and started systematically raising short-term interest rates.

There are three significant features about this monetary easing. First, it contributed importantly to warding off the recession and generating recovery. Second, the weakness of the private-sector recovery, despite the extraordinary scale of the fiscal and monetary stimulus, points to the underlying fragility of the private-sector economy. Third, the monetary easing has promoted massive consumer indebtedness and a housing price bubble, a combination that poses grave future threats.

The Fed’s lowering of interest rates to forty-year record lows served to spur the recovery. It inspired a mortgage re-financing boom, providing immediate relief to households who were able to spend their mortgage interest savings. Lower interest rates also made houses more affordable, triggering a house price bubble that contributed significantly to escaping the recession.

Higher house prices have increased homeowner equity, and many owners used this increased equity as collateral to borrow against. Their borrowing then financed consumption, which significantly explains the consumer-spending boom. Higher house prices have also allowed some existing homeowners to cash out and some have spent part of their windfall. Meanwhile, homebuyers have financed house purchases with loans, which has increased the money supply.  Lastly, rising house prices have also created enormous profit margins for builders, providing an incentive to build new homes and spurring a construction industry boom.

The problem now is that these special conditions are largely spent. The projected federal budget deficit for fiscal year 2006 is $423 billion, approximately 3.3 percent of national output. With the budget already in deficit, this leaves less room for the type of U-turn that occurred in the last recession.

With regard to interest rates, the federal funds rate now stands at 4.5 percentso there is room to lower it. However, lowering it is likely to have far smaller effects than last time. Why?

Homeowners have already significantly refinanced so that the stock of high interest rate mortgages available for refinancing has been depleted. Consumers are borrowed to the hilt, leaving less access for further borrowing. House prices are already at all-time highs by every measure - so lower interest rates are unlikely to spur another price boom, with all its expansionary effects. Instead, house prices could actually start falling as new supply continues to come on to the market, and this effect could be amplified by recession-induced job losses that trigger mortgage defaults by workers losing their jobs. Future interest rate reductions are therefore likely to be akin to pushing on a string.

These adverse domestic economic conditions will be echoed globally. The 2001 recession was business investment-led, with little consequence for China and East Asia. This is because those economies export consumer goods and the American consumer kept spending. However, a consumption-spending-led recession will quickly spill over into East Asia, triggering job losses and a decline in investment spending in those economies. Consequently, a U.S. recession will quickly ricochet around the globe.

This is not about predicting when the next recession will happen, but rather about its character. The when game is impossible. As Nobel Prize-winning economist Paul Samuelson once quipped, Economists have correctly predicted nine of the last five recessions.” However, it is possible to anticipate future difficulties and proscribe possible remedies.

First, the Federal Reserve should be very careful about over-shooting with its rate hikes, and at this time it should take an inflation chill pill. Second, the current recovery has been extraordinarily weak, which should finally discredit the notion that tax cuts for the rich drive growth and job creation. Third, the speculative financial market paradigmwhich has ruled the policy roost for twenty-five yearsחis out of gas. It is time for a new paradigm that links growth to rising wages, rather than to asset price boom-bust cycles.

Thomas Palley runs the Economics for Democratic and Open Societies Project. He is the author of Plenty of Nothing: The Downsizing of the American Dream and the Case for Structural Keynesianism. His weekly economic policy blog is HERE.


The Next Recession
PART 1 - PART 2 - PART 3 - PART 4 - PART 5 - PART 6 - PART 7 - PART 8 - PART 9 - PART 10 - PART 11 - PART 12 - PART 13 - PART 14 - PART 15

Posted by Elvis on 03/13/06 •
Section Dying America • Section Next Recession, Next Depression
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Sunday, March 12, 2006

US Battle Plans

Doesn’t this scare you MORE THAN A LITTLE?
Read the full document HERE.

Joint Publication 3-12: Doctrine for Joint Nuclear Operations

Final Coordination (2)
15 March 2005


1. Scope

This publication provides guidelines for the joint employment of forces in nuclear operations. It provides guidance for the employment of US nuclear forces; command and control relationships; and weapons effect considerations.

2. Purpose

This publication has been prepared under the direction of the Chairman of the Joint Chiefs of Staff. It sets forth joint doctrine to govern the activities and performance of the Armed Forces of the United States in operations and provides the doctrinal basis for interagency coordination and for US military involvement in multinational operations. It provides military guidance for the exercise of authority by combatant commanders and other joint force commanders (JFCs) and prescribes joint doctrine for operations and training. It provides military guidance for use by the Armed Forces in preparing their appropriate plans. It is not the intent of this publication to restrict the authority of the JFC from organizing the force and executing the mission in a manner the JFC deems most appropriate to ensure unity of effort in the accomplishment of the overall objective.

3. Application

a. Joint doctrine established in this publication applies to the commanders of combatant commands, subunified commands, joint task forces, subordinate components of these commands, and the Services.

b. The guidance in this publication is authoritative; as such, this doctrine will be followed except when, in the judgment of the commander, exceptional circumstances dictate otherwise. If conflicts arise between the contents of this publication and the contents of Service publications, this publication will take precedence unless the Chairman of the Joint Chiefs of Staff, normally in coordination with the other members of the Joint Chiefs of Staff, has provided more current and specific guidance. Commanders of forces operating as part of a multinational (alliance or coalition) military command should follow multinational doctrine and procedures ratified by the United States. For doctrine and procedures not ratified by the United States, commanders should evaluate and follow the multinational commands doctrine and procedures, where applicable and consistent with US law, regulations, and doctrine.

The US does not make positive statements defining the circumstances under which it would use nuclear weapons. Maintaining US ambiguity about when it would use nuclear weapons helps create doubt in the minds of potential adversaries, deterring them from taking hostile action. This calculated ambiguity helps reinforce deterrence. If the US clearly defined conditions under which it would use nuclear weapons, others might infer another set of circumstances in which the US would not use nuclear weapons. This perception would increase the chances that hostile leaders might not be deterred from taking actions they perceive as falling below that threshold.

Use of nuclear weapons within a theater requires that nuclear and conventional plans be integrated to the greatest extent possible and that careful consideration be given to the potential impact of nuclear effects on friendly forces. JP 3-12.1, Joint Tactics, Techniques, and Procedures for Theater Nuclear Planning (S), forthcoming, will provide theater planners the nuclear weapons data necessary to determine troop safety information such as minimum safe distances, collateral damage distances and least separation distances.



Posted by Elvis on 03/12/06 •
Section Revelations
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Saturday, March 11, 2006

Broken Unions, Depressed Pilots

In the wake of airline busting of unions, wages and benefits have been cut for airline employees.

Airline Pilots Still Flying, but No Longer Quite So High
By Matthew L Wald
NY Times
March 10, 2006

WASHINGTON, March 9 Within the world of aviation, airline pilots used to be one step down from astronauts. Now they feel one step up from bus drivers.

With half the seats in the nation’s airliners run by companies either in bankruptcy or limping out of it, even the pilots at the top the ones who are within a few years of mandatory retirement at 60, flying the big planes and earning top dollar ח are facing a new world.

Their pay and pensions have been cut, and they work more hours to earn them. In another concession to the airlines, their days are interrupted more than ever by long hours of unpaid idleness.

They say they try hard not to let these things break their concentration or interfere with their work, flying passengers by the scores or hundreds, flawlessly, around the country and the world. They have piloted their planes to a record 40 million safe takeoffs and landings across the country in the last five years, whether the airline was solvent, bankrupt or just squeaking by.

Still, the boardroom blues are working their way into the cockpit.

“My philosophy right now is, I just go to work,” said an American Airlines captain who, before his company’s troubles, loved to fly. On one recent trip, he flew a 6 a.m. flight from Newark to Miami, then piloted a plane from Miami to Los Angeles the next evening, then a flight back to Newark, accumulating 15 paid hours for three days on the road.

The Federal Aviation Administration limits commercial pilots on domestic flights to eight hours a day, measured from pushback until arrival at the gate. The limits are 30 hours in seven days, 100 hours a month and 1,000 hours a year. The airlines do not exceed those limits but many now schedule much closer to them.

The F.A.A. rules do not address the amount of time between flights, so a pilot could be in uniform 12 hours or more to accumulate the day’s hours. Eight hours of rest time every 24 hours is required, however. And pilots feel acutely the difference between getting a month’s work in 14 days versus 18 days.

“They kind of bleed us out,” the American Airlines captain said, on condition he not be identified for fear of losing his job. Pilots for major airlines said they expected to be fired if they were publicly candid on the new challenges of their jobs.

One veteran United Airlines captain, who laments that when he retires in a few years his pension will be about one-fourth what he expected, said he had to shut it out of his mind to prevent the distraction from affecting his work.

After a recent takeoff from California for the long flight across the Pacific, that was all his first officer wanted to talk about. The captain said he snapped back: “You know what, can we not talk about United Airlines? All it does is cause me frustration and anger and there’s nothing I can do about it. It churns my stomach.”

So the two, flying in one of the world’s most automated, advanced airplanes, talked about a hobby they had in common: flying single-engine planes on their days off.

The dissatisfaction at the top has not changed some basics of the field: young people still dream of flying, and people who fly small planes still aspire to fly bigger ones. Legions of laid-off pilots hope to be hired back, even at reduced pay levels.

“They must love it,” said Arnold I. Barnett, a professor of management science at the Sloan School of Management at the Massachusetts Institute of Technology. He said airline pilots were reacting with more fortitude than other professionals might in the same circumstances.

“I cannot fathom how faculty would react if M.I.T. abolished tenure, increased teaching loads and cut salaries by 35 percent because market conditions had changed,” he said.

But senior airline pilots, in dozens of interviews, spoke about feeling depressed and struggling not to let it affect their performance.

Academics have noticed a change. “The pilots are not a happy group right now,” said Paul S. Fischbeck, a professor of engineering and public policy at Carnegie Mellon University in Pittsburgh.

Dr. Fischbeck, who flew in the Navy and has colleagues who went on to fly for the airlines, said that the change in financial circumstances and job security were good reasons to be unhappy.

But Dr. Fischbeck and others pointed out that the industry culture is such that pilots must face the hardship on their own. Other workers with health plans might seek professional counseling. With pilots licensed by the F.A.A., however, “as soon as you sign up for it, it’s on your record, and you’re toast.”

A US Airways pilot echoed that sentiment: “If it gets reported to the F.A.A., you can forget it, you’re not coming back to work, until you go through a lot. The system requires us to deal with it ourselves. That makes it very difficult to go through what we just went through.”

Maxine E. Lubner, director of the Aviation Institute of York College, at the City University of New York, said that eroding morale, along with problems like “the distraction of not knowing where your pension is,” could not help safety.

Neither could working longer hours, which pilots for many major airlines are now doing because of contract concessions both in the number of hours flown and the number of hours they can be made to wait on the ground between flights. Some are also flying more hours to offset their pay losses.

“I would say morale and attitude are all in that mix,” Dr. Lubner said. The morale effect is probably small, she said, but “we know fatigue in itself will create poor attitude and lack of motivation and irritability.”

“And there’s no question that something that’s a distraction is a safety threat,” she said.

But she agreed there was no empirical evidence supporting that theory. Statistically, the airlines are in one of their safest periods ever, with about one fatal accident for every 15 million flights.

“With the economic turbulence that’s being experienced by U.S. carriers, bankruptcy, the price of oil on every page, it’s a testament to the aviation industry stakeholders and the U.S. government that we are reaching those safety levels despite enormous challenges,” said Marion C. Blakey, the F.A.A. administrator, in a speech to an aviation safety conference that her agency organized last fall.

There are some warning signs, however. NASA recently told the F.A.A. of numerous reports of errors by ground personnel, a category of worker that has had heavy turnover. It also warned of reports of planes loading too little fuel.

A Northwest pilot described his own forgetfulness. “There are certain things I’m supposed to do to set up my part of the cockpit,” he said. “We do the stuff first, then go back with the checklist and double-check it,” he said. And in double-checking, he once found a set of switches he was certain he had set, but had not. “I thought I had turned those on,” he recalled thinking. “I hadn’t; I just wasn’t as sharp. I’d lost my edge.”

Airline executives say they do not know how to measure the effect of morale. At US Airways, Carlo Bertolini, a spokesman, said, “No one’s going to deny that US Airways employees have been through a tough time, with layoffs, changes in work rules and steps lowering costs. A lot of these sacrifices came from employees.”

But “we all have a stake in the safety of the airline,” he added. “We’re definitely confident that all employees always have safety at the top of their mind.”

Pilots say the same but add that the change in schedules often means more fatigue. “You can feel yourself getting to a point where you’re beginning to make more little mistakes,” a senior captain at US Airways said.

“Most of the mistakes are caught very quickly, and most are very minor errors,” he said. But “at that level of fatigue, after weeks or months of this without a break, it’s easy to make major mistake.”

Not everyone agrees that the longer working schedule is a problem.

“It’s hard for me to feel sorry for them,” said Capt. Jeffrey R. Hefner, the safety chairman of the union that represents pilots at Southwest Airlines, who have always flown longer hours than pilots at older airlines.

“They’re a bunch of spoiled brats,” he said. “Historically, this has been a really cushy job once you get to the majors. You make a lot of money and you don’t have to fly a lot. But there had to be a market balancing at some point.”



Posted by Elvis on 03/11/06 •
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Some people come into our lives and quickly go. Some people move our souls to dance. They awaken us to a new understanding with the passing whisper of their wisdom. Some people make the sky more beautiful to gaze upon. They stay in our lives for awhile, leave footprints on our hearts, and we are never, ever the same. - Flavia Weedn


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