With control of legislative investigations in the hands of Republicans, the Democrats (outnumbered though they may be) are doing something smart. While their new investigative committee has no authority whatsoever, the key to getting an investigation really moving is to get some press coverage, which is exactly what they are trying to do.

One of the advantages the Republican's have in controlling both houses of Congress is not only that they get to set the legislative agenda, they also get control over the possibility of hearings and investigations that so plagued Clinton's two terms. With the Republicans in control of all three branches, the chances of any actual investigation into any malfeasance is slim to none. The Congress was even able to gloss over the President's initially staunch opposition to the 9/11 commission and any implementation of suggested changes. They were able to make the President's grudging acceptance of reality look like an open-armed embrace.

While there may be some grumbling by Republicans in the Congress, any defection or free enterprise is likely to be squashed early. The GOP leadership is ruling with an iron fist, the efforts to pass the intelligence reform bill in the House were a clear example of that. The GOP refused to let it pass unless every needed Republican vote was in. The bill could have passed with bipartisan support, plenty of Democrats supported it, but the leadership refused to let go to a vote until they had enough Republican votes to make any Democratic support unnecessary. The couple Republican holdouts eventually had their concerns heard and even a couple were responded to (tougher immigration laws for example), but it must have been a tough stand.

Most of the grease that moved the intelligence bill through the congress against the wishes of the White House was the overwhelming public pressure. It was too public and too tough a subject to drop the ball on. The Democrats hope to tap into public opinion to pressure Republicans into looking into subjects they should already be investigating.

In another move destined to increase public consternation over the handling of school reform here in St. Louis, the school board voted to spend $60,000 to hire a public relations consultant,

"services included creating "a supportive environment for our recent reform efforts."

The St. Louis Post-Dispatch also reported the fact that the consultant company, Unicom ARC is headed by Ed Finkelstein a long-time ally of former Mayor Vincent C. Schoemehl Jr. who was one of the board members who voted to hire the consultant.

If that isn't interesting enough, Unicom ARC was investigate by the Board of Alderman in 2001 for not producing an ad campaign after spending several hundred thousand dollars. Unicom also recently helped pass a $70 million bond issue for the Hazelwood school district this past election.

The problem is not so much that there are long-standing connections between the company and one of the board members. This particular board member is a former mayor and this company has been working for major groups and governments around the metro area. The problem is that this is yet again another coat of paint on a broken down building.

No amount of message massaging and focus grouping will improve the quality of the public school system in St. Louis. The system is broken from the bottom to the top, starting with inadequate materials and space for students, right up to school board members who act worse than the kids they are attempting to help.

There have been positive steps taken, as well as faltering ones, yet to make such a move which the board has to know will infuriate the boards most vocal opponents makes little sense. In a situation in which even slight changes can provoke challenges that can slow any process down to a crawl, it is even more important to pick your battles carefully.

The board needs to focus on effecting positive change. There has been some progress, the recent edition of the Arch City Chronicle (print edition) has an article on a new attempt to make some changes to the curriculum that has drawn some praise. Progress is slight these days for the school board so any, even a little, is welcome. They should focus on more real world solutions than in covering their corporate communications.

Dave Drebes handicaps the upcoming St. Louis Mayoral Race in The St. Louis Business Journal. Drebes also runs the excellent and indispensable Arch City Chronicle. It looks like this may be shaping up into another standard South vs. North vote split. It would certainly be nice to see a mayoral candidate that people on both sides of the divide could support. Instead we get the white/black split. Even Mayor Harmon, who garnered a good deal of support from South City and the white community, was seen by the black community as a bit of a sell-out, picked by the powers that be to put a good face on things.

Perhaps one day.

Although a bit of good news, perennial Mayoral Candidate, outspoken School Board Member, and former candidate for Showtimes American Candidate, Bill Haas is out running again.

Well, it was bound to happen here. There have been plenty of allusions by those on the right that the left leaning individuals in this country are helping our "enemies". Now, however, at least one member of the legislature from here in Missouri has equated the liberal groups in this country with the September 11th highjackers. From State Representative Cynthia Davis (District 19):

"It's like when the hijackers took over those four planes on Sept. 11 and took people to a place where they didn't want to go," she added. "I think a lot of people feel that liberals have taken our country somewhere we don't want to go. I think a lot more people realize this is our country and we're going to take it back."

Davis made that statement to the New York Times in an article on Christian Conservatives growing focus on gaining power in statehouses. In particular Davis was pushing an agenda to remove state support for any sex-ed programs that taught anything other than abstinence only as well as requiring publishers selling biology textbooks to Missouri to include at least one chapter on alternative theories to evolution.

There are two issues here of course. Deciding which is more problematic is not so easy. Inflammatory rhetoric such as Davis' is not only out of line, as an elected official she holds a position which may help to legitimize such hateful characterizations. This line of attack has been in use since 9/11, when Pat Robertson, founder of the 700 club, stated that the country had brought the attack upon itself by tolerating gays, abortion and other "liberal" ideas. While it is easy to dismiss Robertson and his ilk who have a significant financial incentive to keep their membership agitated, when public officials espouse such ideas in the service of their work, it raises concerns that are not so easily dismissed.

The second problem is, of course, the effect that such flawed educational programs like the ones proposed by Davis will have on Missouri's future.

Scientific data has pretty much blown the idea that abstinence only works in reducing pregnancy and sexually transmitted diseases. While the basic point is true, if you don't have sex there is no chance of pregnancy or STDs. However, the whole of human history is a testimony to the fact that, well, people have sex. The responsible position is to educate individuals in the realities of sex while instilling a sense of personal respect so that they treat the issue with the seriousness is deserves. Simply giving a kid a condom doesn't solve anything, nor does simply telling them not to have sex.

The idea of introducing "alternative theories" to evolution has been tried on several occasions before here in Missouri. The pro-alternative ideas are mostly couched in the "intelligent design" rhetoric which basically states that life is to complex to occur by chance and that there must have been a hand guiding the development of life. The argument is that it is a theory and so therefore is just as qualified to be used in a biology program. What the "intelligent design" folks overlook is that their theory is not a scientific theory, but a philosophical/religious theory, inappropriate for a biology class. A scientific theory is a theory that explains phenomena, make predictions and can be tested. Evolution only attempts to explain scientifically by what process life has progressed on earth. If science were to develop a %100 error-free explanation of the development of life from the emergence of amino acids to how the brain communicates with itself, none of it would be in conflict with the idea of a creator. Recently a long-time proponent of atheism, British philosopher Antony Flew stated that after decades of study and thought, he believes there is a creator. While such a statement from a prominent atheistic scholar may have brought cheers from the religious, he followed his statement be saying that a creator may exist but he's not working in our live on a day to day basis.

The result of the success of such an anti-science agenda would be the downgrading of Missouri as a source of educated graduates to work in the increasingly technical fields of science and medicine. Theories in science are tools for better understanding. The greatest characteristic of a theory is that if something comes along to disprove it, its dismissed and a better theory is constructed and used until new evidence forces further change.

Change is not something many of these conservative groups desire. They often believe it threatens their very existence. Yet without progress and development we will be left behind. In addition, not using our faculties to the best of our abilities kind of removes the point of having them in the first place.

I have to take the time to point out a post by Kevin Drum over at Political Animal. He runs down the basic fallacy of the argument for privatization of social security put forward by the administration.

"This growth is lower than we're used to, but that's because GDP growth = population growth + productivity growth. Since population growth is slowing down, so will GDP growth.

Still, what if you assume that things will be a little more robust than this? If you project GDP growth of around 2.6% per year, you end up with Estimate I, and in that scenario Social Security never runs out of money. In fact, if you project GDP growth just a few tenths higher than 1.8%, Social Security stays solvent for the next century.

In other words, if GDP growth averages, say, 2.2% over the next 75 years, Social Security is in fine shape and we don't have to do anything. We only need to "fix" it with private accounts if GDP growth is less than that.

So here's the puzzler: for private accounts to be worthwhile, they need to have long-term annual returns of at least 5%, and 6-7% is the number most advocates use. But are there any plausible scenarios in which long-term real GDP growth is less than 2% but long-term real returns (capital gains plus dividends) on stock portfolios are well over 5%?"

I recommend checking out the whole post as well as going through some of the comments on Kevin's post. This is an extension of a point he has been trying to make for awhile, that Social Security is not in danger of imminent collapse and that small, rational changes can keep the program running for a good long time. Drum is not the only one who makes this argument of course, Berkley Economist Brad DeLong and Princeton Economist and New York Times columnist Paul Krugman have been poking holes in the administration and GOP's bad economic policy for years.

If you want an excellent explanation of modern economics and a helpful guide to avoiding the pitfalls of public statements of economic "facts" (often cited by the GOP and Bush administration to lure people to back their haphazard programs), Krugman's book, Accidental Theorist is something you have to pick up.

Michael Sheuer, former CIA analyst and author of the controversial "Imperial Hubris" has a commentary in yesterday's L.A. Times about the CIA and why he resigned recently.

In the piece he cites frustration over good work and opportunities to get bin Laden in the late 90's being wasted. He is also frustrated that the intelligence service as a whole is getting the blame for what the decision-makers at the top decided. His frustration echoes some of Thomas Powers' commentary on the tendency to point fingers at the intelligence community as the source of the failure when, in general, they were getting it right.

Also via TPM, a worrisome editorial about the falling dollar:

"…This time round, it is a bad sign that everybody is trying to point the finger of blame at somebody else. America says its external deficit is mainly due to sluggish growth in Europe and Japan, and to the fact that China is pegging its exchange rate too low. Europe, alarmed at the “brutal” rise in the euro, says that America's high public borrowing and low household saving are the real culprits.

There is something to both these claims. China and other Asian economies should indeed let their currencies rise, relieving pressure on the euro. It is also true that Asia is partly to blame for America's consumer binge: its central banks' large purchases of Treasury bonds have depressed bond yields, encouraging households in the United States to take out bigger mortgages and spend the cash. And Europe needs to accept, as it is unwilling to, that a weaker dollar will be a good thing if it helps to shrink America's deficit and curb the risk of a future crisis. At the same time, Europe is also right: most of the blame for America's deficit lies at home. America needs to cut its budget deficit. It is not a question of either do this or do that: a cheaper dollar and higher American saving are both needed if a crunch is to be avoided.

Simple but harsh

Many American policymakers talk as though it is better to rely entirely on a falling dollar to solve, somehow, all their problems. Conceivably, it could happen—but such a one-sided remedy would most likely be far more painful than they imagine. America's challenge is not just to reduce its current-account deficit to a level which foreigners are happy to finance by buying more dollar assets, but also to persuade existing foreign creditors to hang on to their vast stock of dollar assets, estimated at almost $11 trillion. A fall in the dollar sufficient to close the current-account deficit might destroy its safe-haven status. If the dollar falls by another 30%, as some predict, it would amount to the biggest default in history: not a conventional default on debt service, but default by stealth, wiping trillions off the value of foreigners' dollar assets.

The dollar's loss of reserve-currency status would lead America's creditors to start cashing those cheques—and what an awful lot of cheques there are to cash. As that process gathered pace, the dollar could tumble further and further. American bond yields (long-term interest rates) would soar, quite likely causing a deep recession. Americans who favour a weak dollar should be careful what they wish for. Cutting the budget deficit looks cheap at the price."

The chances of any real attempt to reduce the deficit are slim under the current administration. The administration is set on cutting taxes and increasing borrowing. Most if not all commentaries regarding the dollar look to reducing the deficit as a necessary step to reduce the dollars slide, yet the administration is set on increasing the deficit by financing its social-security debacle by borrowing the money, to the tune of billions of dollars. The idea of keeping the transition costs off the books entirely has been floated, which would put the Arthur Anderson slight-of-hand to shame.

The administration needs to change its fiscal policies and focus on the realistic solutions to the looming problems.

Josh Marshall over at Talking Points Memo reports on a piece in the Financial Times:

Thank President Bush (from the FT...)

Oil exporters have sharply reduced their exposure to the US dollar over the past three years, according to data from the Bank for International Settlements.

Members of the Organisation of Petroleum Exporting Countries have cut the proportion of deposits held in dollars from 75 per cent in the third quarter of 2001 to 61.5 per cent.

Middle Eastern central banks have reportedly switched reserves from dollars to euros and sterling to avoid incurring losses as the dollar has fallen and prepare for a shift away from pricing oil exports in dollars alone.

Private Middle East investors are believed to be worried about the prospect of US-held assets being frozen as part of the war on terror, leading to accelerated dollar-selling after the re-election of President George W. Bush.

Thank you, thank you, a thousand thank yous.

-- Josh Marshall

Thomas Powers has a great article in the recent issue of the New York Review of Books on the role of the intelligence community in the lead-up to 9/11, the lead up to the Iraq war and the CIA's potential future.

"The fate of the agency is no minor matter to intelligence professionals who have spent their careers trying to serve both presidents and the nation; all know that these two masters are often at odds, and many have been forced to hire lawyers, face grand juries, and risk jail for what they did, or for failing to describe truthfully what they did, for presidents unable or unwilling to take the stand themselves. There is no easy way to reconcile these divided loyalties. But there are good reasons for trying to understand what has now brought the stresses to breaking point, especially for the analytical side of the CIA."

Here I think Powers hits on a point that has been often left unmentioned in public discussions, that the CIA and the intelligence community in general was correct in its assessment of the Iraq threat and the threat posed by bin Laden and Al Qaeda. In the rush to lay blame the CIA became the public whipping boy because the lop-level administrators went along with the President's wishes. Public and classified reports have long since backed up the point that the analysts were passing up good information, it just wasn't what the administration wanted to hear.

" But too little in my opinion has been said about what the CIA and Richard Clarke in the White House both got right—the numerous warnings delivered to the President and his national security advisers. Condoleezza Rice has said that these warnings were too vague and the President has said that he would have moved heaven and earth if he had only known when and where the terrorists planned to attack. The White House was paralyzed, the official version goes, because the intelligence organizations of the United States had failed to connect the dots....

But the fact is that the intelligence analysts who provided warnings to the White House connected a great many dots—they anticipated the use of commercial aircraft, they knew that al-Qaeda cells were operating inside the United States, they knew that Ramzi Yusef, the field commander of the first attack on the World Trade Center in 1993, had hoped to bring the towers down, and had promised an FBI debriefer after his arrest that another attempt would be made. They knew that al-Qaeda wanted to strike inside the United States, and they knew that al-Qaeda was approaching the operational climax of a new effort. In a sense all the most important dots had been loosely connected except for the last two or three.

The question then is whether an alert administration, anxious to protect the country, knew enough to do something—to give a dynamite charge to intelligence chiefs, or summon the officials responsible for public safety and disaster relief, or prod the Federal Aviation Administration to beef up security at airline gates, or ask the Immigration and Naturalization Service if borders were secure, or suggest to the FBI that suspected terrorist cells should be put on notice that they were being watched. Best might have been an attempt to put all those officials in a windowless room for a day with orders to report to the President personally before the sun went down. Presidents do not normally find it hard to get the attention of government offices, and bureaucrats all know how to put on a show of frantic activity. That, at the very least, is what we should have found when the lights went on after the attacks of September 11."

The difficult truth of the matter is that the administration failed to act on intelligence it was given. A year before Bush's inauguration, an attempted terrorist attack on L.A.'s airport was broken up (the so-called "millennium" plot) through good intelligence and a sharp-eyed border guard. To try and say, as the administration did, that they were unaware of the threat posed by these groups or that the information they did have means they were either unconcerned or incompetent. Deciding which is worse is hard to say. Since the top-level anti-terror specialists were all concerned and tried to make their voices heard, we can conclude that the information was right at their fingertips.

I don't think it would be fair or just to say that the administration's failures allowed 9/11 to happen. There is no way they could have predicted the time and place of the attack. Yet due to the existing threats and compelling intelligence their should have been some sort of plans in action, FAA warnings, greater surveilance, etc. As Powers points out, none of this was the case. Terrorism simply wasn't on the administrations to-do list.

Why the dollar is remaining fairly stable and there has been no general dumping of the dollar remains a mystery to Brad DeLong and, I assume, everyone else.

(1) Given all the reasons for the dollar to decline, who in their right mind is buying the current flow of dollar-denominated securities held overseas needed to finance America's current-account deficit? (2) Given all the reasons for the dollar to decline, why haven't all the private-sector overseas holders of the enormous stock of dollar-denominated assets dumped them yet? Kash provides an answer to question (1): his answer is, "Asian central banks." But the answer to question (2) remains a mystery to me--and to everyone else.

Perhaps the larger question is why has the administration not made any real attempt to forestall the coming dollar dive? There was some speculation that the administration was secretly hoping the weakened dollar would help its account deficit. Yet the largest deficit is in trade with China whose denomination is pegged to the dollar, so no help there. The general thought seems to be that the Asian countries have so much tied up in the dollar that even a slightly weaker dollar is better than a more volatile alternative. Yet the Financial Times is reporting continued talk by Asian banks considering trading in dollars for Euros or Sterling.

The dollar rebounded a bit today, so talk of a crashing dollar may be premature. Yet until the administration starts working on paring down the deficits, investors will continue to shy away from the dollar. Given the President's stated goals for Social Security and the creative accounting they are going to use to achieve their ends, its doubtful there will much of a rally.