Libya vs. Iraq: Geopolitical Insight in a Robotic Monotone

An Xtranormal animation of two co-workers arguing in the break room highlights the differing standards by which Presidents Obama and Bush have been judged regarding their interventions in Libya and Iraq. The deadpan delivery of the computer-generated voices adds a humorous edge.

An excerpt of the dialogue:

He: “So Obama is killing civilians in a pre-emptive, unfunded war for oil, promoted by the dictators of the Arab League along with the UN, in support of some unidentified rebels who he’s never met with, and you are fine with all that?”

She: “He is a man of peace.  Did you know he even got the Nobel Peace Prize?  Just like Morgan Freeman.”

It’s 5:04 minutes well worth watching.


Astonishment at Obama’s War-Making Overwhelms Consideration of the Merits of It

Illustration by Brazilian cartoonist Carlos Latuff

I keep waiting for my opinion about the intervention in Libya to snap into place.  For? Against?  Too soon?  Too late? But every time I try to pin it down, my mind flies off on a different tangent, enthralled by the bizarreness of it all.

It was nearly three years ago that Senator Barack Obama won the Democratic nomination, in part on the strength of having the purest “surrender-at-any-cost” position on Iraq.  Who then could have predicted the following headline: “Nobel Peace Prize Winner Enters Third War“?

I blogged too quickly the other day about “Libya, Where the French Lead the Way” — although France fired the first shot, it quickly became a U.S.-led operation.  Obama has pledged to hand over leadership of the mission “in a matter of days, not weeks” — but hand it over to whom?

Here’s another great, ironic headline: “Gadhafi is Facing a Coalition of the Unwilling.”

The US government, wary of getting stuck in another war in a Muslim country, would like to hand control of the mission over to NATO, but the alliance is divided. At a meeting on Monday, NATO ambassadors failed to agree on whether the alliance should take control of the mission. NATO involvement would require approval by all 28 members. …

Britain and Italy want the alliance to be in charge of the operation, however. Rome has threatened to restrict access to its air bases, which are crucial to the mission, if NATO does not take over control. US Defense Secretary Robert Gates has suggested that Britain or France could also take control of the mission, but some NATO officials doubt if either country could handle the operation by itself, according to Reuters.

And what precisely is the mission that would be handed over?  Regime change, protecting Libyan citizens, degrading Gaddafi’s power to attack his people — the mission depends on whom you ask on which day.  Leslie Gelb, who has served in the departments of Defense and State under Democratic presidents, offers this explanation:

The reason why neither President Obama nor his coalition partners in Britain and France can state a coherent goal for Libya is that none of them have any central interest in the outcome there. It is only when a nation has a clear vital interest that it can state a clear objective for war. They’ve all simply been carried away by their own rhetoric.

Obama’s actions may be inconsistent with his prior record, but George Will’s opinions are consistent.  Will is a conservative anti-hawk who opposed the surges in both Iraq and Afghanistan.  Unsurprisingly, he thinks Libya is a bad idea, and I think he may be on more solid ground.

In Libya, mission creep began before the mission did. A no-fly zone would not accomplish what Barack Obama calls “a well-defined goal,” the “protection of civilians.” So the no-fly zone immediately became protection for aircraft conducting combat operations against Gaddafi’s ground forces.

America’s war aim is inseparable from — indeed, obviously is — destruction of that regime. So our purpose is to create a political vacuum, into which we hope — this is the “audacity of hope” as foreign policy — good things will spontaneously flow. But if Gaddafi cannot be beaten by the rebels, are we prepared to supply their military deficiencies? And if the decapitation of his regime produces what the removal of Saddam Hussein did — bloody chaos — what then are our responsibilities regarding the tribal vendettas we may have unleashed? How long are we prepared to police the partitioning of Libya?

I and many others are astounded and concerned by the fact that Obama has launched a military action so quickly.  Jonah Goldberg, another columnist with whom I more often agree than otherwise, argues instead that Obama acted too slowly:

Back in February when the Libyan revolution was fresh and had momentum on its side, even a small intervention by the U.S. — say, blowing up the runways at Moammar Kadafi’s military airbases or quietly bribing senior military officers — might have toppled Kadafi. Members of his government were resigning en masse. Pilots were refusing orders to kill fellow Libyans. Soldiers were defecting to the rebels. Libyan citizens openly defied the regime in Tripoli. Nearly everyone thought the madman’s time was up.

That was the time to seize the moment, to give Kadafi a shove when he was already off-balance. If the dictator had been toppled when the rebels were gaining strength, America’s support would have been written off as incidental, with the Libyans taking credit for their own revolution.

But such an approach would have required America to run down the court alone, out ahead of its allies and the international community. For Obama the multilateralist, that would have been too much unilateral hot-dogging.

So Obama slowed things down to set up the play he wanted rather than the play the moment demanded. As a result, Kadafi regained his balance.

Sorry, Jonah, but as bewildered as I am with how fast Obama has moved, I can’t support the idea that he should have moved even faster.  At least his initial forbearance was consistent with his history as “Obama the multilateralist.”

A friend said to me on Facebook the other day, “So I’m not happy about this third war, but seriously, aren’t you hawkish types in favor of this sort of thing? And if not, why not?”

My difficulty in pinning down how I feel about the Libya intervention stems from being flabbergasted that we’re in the situation at all.  But let me take a shot at it.

I’m obviously not opposed in principle to the use of military force by the United States.  I’ve never stopped supporting the wars in Iraq and Afghanistan.  But we can’t fix every problem everywhere, we’re stretched financially and militarily now, and I think the Libyan intervention was probably a mistake.

But now that we’ve done it, I hope it’s successful. I don’t root for any American president to fail, especially not in his role as commander-in-chief.  “Success” would mean Gadhafi goes quickly and gets replaced by a new tribe that’s at least marginally more democratic, and the U.S. gets disentangled in “weeks, not months,” to use a more realistic version of Obama’s timeline.  It could happen that way, but I’m not optimistic.

Libya, Where the French Lead the Way

French air power

French air power

It’s like I’ve emerged from a coma into a parallel universe, where the United Nations takes a leadership role in a crisis, and the French — the French!back up their stern words with military action.

Where was this United Nations in 2003, when the time came to enforce 17 stern resolutions against an even badder bad guy?

A week ago, I wrote “the chance that this Administration will intervene militarily is close to zero.”  It didn’t even occur to me to lay odds on the likelihood of action by the UN and the French.  I guess I’m going to have to stop snarking about the “Freedom doors” that divide my church’s parish hall.

In that prior post, I quoted an Eliot Cohen op-ed that said “the lesson of decades is that NATO and the United Nations find it impossible to act without American leadership.” Are we going to have to learn a new lesson?

I don’t want to get ahead of ourselves here — as I’m writing this, the entire French offensive apparently consists of one missile strike on a tank.  And I’m not ready to concede that Obama has ushered in a new era of international solidarity.  But I also think that in the face of this, Obama opponents need to be careful about sneering at the administration for a lack of leadership.  As Max Boot wrote at Contentions, the Commentary magazine blog:

I have been critical in recent days of President Obama for lack of leadership on Libya but I part company with some of my colleagues on this blog in that I sense this is changing. True, he waited for the UN Security Council to come together before acting in Libya, thereby losing vital time. But the legitimacy the UN confers should not be underestimated—much as it may pain me (and other critics of the UN) to admit it. Having the Arab League on board is also a plus. There is even talk that Qatar, UAE, and Jordan may participate in a military campaign against Qaddafi—good news if true, although, as autocracies (if relatively benign ones), they are hardly shining exemplars of the “new Middle East.” Most important of all, France and Britain appear prepared to take on a major part of the military burden.

All in all, I give Obama credit for assembling an impressive coalition, and avoiding a Russian or Chinese veto at the Security Council. The question is what he does with the authority of Resolution 1973.

“He” — Obama — may or may not do anything.  But the French have stepped up, and given the reality of a war-weary America, that seems like a very positive development.

Update: Just a few hours later, it seems like the U.S. is back in the driver’s seat, although the game plan seems to be to put the French and British in charge once the Tomahawking is done.  Meanwhile, I wish I had come up with this brilliant headline: “Nobel Peace Prize Winner Enters Third War” (via Instapundit).

My Favorite Sailor Spends His Birthday in Relief Effort Off the Coast of Japan

Sailors load relief supplies on a helicopter on the USS Ronald Reagan. No, Harry isn't in the picture -- at least I don't think so. Photo: Facebook

Aviation Boatswain’s Mate Third Class Harry Petersen turns 23 today, and he’ll celebrate by working his butt off all day long.  He’s one of about 5,000 Navy personnel on the USS Ronald Reagan, currently engaged in disaster relief efforts off the coast of Japan. I’ve previously written about my son here, here and here.

In olden days, families of seafaring men would hear no word from their sailors for months on end. That was before Facebook.  Harry doesn’t get to spend much time on the few internet-connected computers in the onboard library, but he managed a quick note shortly after the tsunami hit.  I had posted a link to a news story saying that the Reagan was headed for Japan, and Harry replied, “Yeah crazy stuff out there, i guess the news already said whats happening with the ship, we are safe. The water is really wavy, miss you guys thanks everyone!”

The Reagan’s commanding officer, Capt. Thom Burke, apparently has more internet access — he posted a lengthy message reassuring family members that everyone on the crew is safe.  This was in the wake of news reports that 17 sailors had been exposed to radiation from the Japanese nuclear plant.

As a nuclear-powered aircraft carrrier, we have extensive technical expertise onboard to properly monitor such types of risks, and if necessary, rapidly resolve the situation.

We have taken all the necessary precautions to ensure that everyone is safe. We have closely monitored spaces, evaluated everyone who has flown or worked on the flight deck and cleaned the aircraft.

I have not seen any levels of radiation or contamination that would cause me to have any significant concerns at all.

As we continue to assist Japan in this terrible catastrophe, our Sailor’s–and your loves ones’– safety will remain at the top of my priority list.

Be careful out there, son.  I’m proud of you.

Update: Harry has checked in again on Facebook.  His latest missive, in its entirety: “DEPLOYMENT BIRTHDAY!!!! WOOOOOOOOOO!”

Harry Petersen Yeah crazy stuff out there, i guess the news already said whats happening with the ship, we are safe. The water is really wavy, miss you guys thanks everyone!

No Easy Choices in Libya



I haven’t written much about Libya because I haven’t been sure how I felt about it.  I have no doubt that Libya and the world will be better off without Muammar Gaddafi in power, and I was glad to hear the Obama Administration say forthrightly that the man should go.  (But where was that resolve during the thwarted Iranian revolution in 2009?)

I’m sympathetic to the idea of a no-fly zone in Libya, to reduce the regime’s firepower in suppressing the uprising.  But while Obama has escalated in Afghanistan and declined to follow through on his campaign promise to surrender in Iraq, it’s hard to imagine this administration starting a brand new war.  And enforcing a no-fly zone is an act of war, regardless of whether it begins with the bombing of air defenses.

Even if we had a more hawkish President, there are meritorious arguments against establishing a no-fly zone.  It might not be enough to bring down the regime — and then where are we?  Do we consider sending in ground troops? Other than regime change, under what circumstances could we honorably discontinue the no-fly zone? Do we keep enforcing it for a decade or more, as in Iraq in the 1990s?

In the Wall Street Journal this weekend, former State Department official Eliot Cohen makes a strong case that the Obama administration has mishandled the crisis.  An excerpt:

Instead of seizing the opportunity, the administration made cumulative mistakes. It was slow in insisting that Gadhafi had to go—but is now committed to that end, exposing itself to humiliation if he does not. It allowed the Pentagon to publicly disparage military measures, reassuring Gadhafi and dispiriting the rebels, when a discreet and menacing silence would have done far less harm. It called for an international effort when the lesson of decades is that NATO and the United Nations find it impossible to act without American leadership. And when the French government showed strategic initiative and pluck, it undercut a major ally.

The moment has passed. The only question now is whether Gadhafi goes slowly, over months, or not at all. Senior American intelligence officials inconveniently observed the other day in front of Congress that the latter seems the likely outcome. What will happen if they are right?

Good question.  This blog is dedicated to the premise that “all that is necessary for evil to triumph is for good people to do nothing,” and on that basis my natural inclination is to intervene in Libya. But while America is by far the most powerful country in the world, it is not omnipotent, and does not have infinite military and economic resources.  We should stand against evil, but we can’t prevent every evil.

In the end it’s an academic debate — the chance that this Administration will intervene militarily is close to zero. (Oops!)

Update: Ross Douthat offers another conservative cautionary note on Libya:

If we did supply the rebels, who exactly would be receiving our money and munitions? Libya’s internal politics are opaque, to put it mildly. But here’s one disquieting data point, courtesy of the Center for a New American Security’s : Eastern Libya, the locus of the rebellion, sent more foreign fighters per capita to join the Iraqi insurgency than any other region in the Arab world.

And if the civil war dragged on, what then? Twice in the last two decades, in Iraq and the former Yugoslavia, the United States has helped impose a no-flight zone. In both cases, it was just a stepping-stone to further escalation: bombing campaigns, invasion, occupation and nation-building.

None of this means that an intervention is never the wisest course of action. But the strategic logic needs to be compelling, the threat to our national interest obvious, the case for war airtight.

With Libya, that case has not yet been made.

A Scary Road Ahead for the U.S. Economy

Bond investor Bill Gross

In the midst of the coverage this past week of the various pathologies of Muammar Gaddafi, the Wisconsin legislature and Charlie Sheen, some of the most ominous news was largely overlooked.

  • Pacific Investment Management Co. (Pimco) confirmed that billionaire Bill Gross, manager of the world’s largest bond fund, had completely eliminated U.S. Treasury Bonds from his flagship portfolio.
  • About the same time, the bipartisan co-chairs of President Obama’s deficit reduction commission were telling a Senate Budget Committee hearing that the United States faces “the most predictable economic crisis in history” within just one to two years, unless drastic steps are taken to bring the government’s spending in line with its revenues.

It’s hard to overstate the iconic status of U.S. Treasury Bonds as a safe haven for investors.  For generations, the Treasury’s 30-year “long bond” was the talisman of the debt markets, although that role in recent years has been taken over by 10-year Treasurys.  Think of Treasurys as the debt-market equivalent of the Dow, only more so.

In National Review’s The Corner, where I first saw these two events linked, Cornerite Andrew Stiles explains the danger:

If fewer people are willing to lend us money, the more we’ll have to shell out in higher interest payments. And if bond buyers lose confidence in our ability to make good on that debt, things could get really ugly, really fast. Much more on this from Kevin Williamson here.

As Sen. Tom Coburn (R., Okla.), who served on the deficit commission and supported its recommendations, pointed out at a press conference this week, the United States has, historically, paid an average of 6 percent interest on its debt. It currently pays about 2 percent. If rates were to return simply to that historical average, it would involve an increase to our overall interest bill of $640 billion — to be paid immediately. “An impossible situation,” in Coburn’s words.

He quotes Gross on CNBC:

“We’ve moved into Brazil and Mexico and moved money, yes, at the margin into Spain, which has a better balance sheet than the United States,” Gross told CNBC. [emphasis added]

We’re quickly moving toward a situation where the combination of net interest payments and spending on entitlements (Medicare, Medicaid, Social Security, etc.) will absorb all of the government’s revenue.  The Ponzi scheme known as Social Security probably is the easiest part of the equation to solve.  But the Obama Administration, which made the problem much worse with its bloated and dishonest “Porkulus” legislation,  has made clear that it does not think Social Security has a problem.

In the early days of the Clinton Administration, Clintonista James Carville famously said, “I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.”  I fear a new generation of politicians is going to have to learn the hard way that the intimidation is appropriate.

Victory for Gov. Walker, and for Wisconsin Taxpayers

Gov. Scott Walker and Wisconsin Republicans used a parliamentary maneuver to pass union reforms without the 14 state Senate Democrats who have disgracefully abandoned their responsibilities for nearly three weeks. It’s certainly easy to understand why the unions feel threatened; here’s CNN:

[Walker’s] bill, which already had passed the state Assembly, would bar public workers other than police and firefighters from bargaining for anything other than wages.

Raises would be capped to the rate of inflation, unless state voters approve. The legislation also would require unions to hold a new certification vote every year, and unions would no longer be allowed to collect dues from workers’ paychecks.

I’ve been a union member twice in my life now — first the Newspaper Guild, where we did not have payroll deduction for union dues, and, briefly, the United Food and Commercial Workers union, where we did.   Sure is a lot easier to collect union dues if the company is forced to take them out of workers’ paychecks.

Wisconsin’s union reforms are a good first step toward eliminating public sector unions altogether.  Politically powerful public unions back Democratic politicians by rallying campaign works and contributing millions of dollars.  Every dollar the public union has comes from taxpayer money, so unions are a mechanism for charging all taxpayers for the campaign expenses of the party of big government.  Then at the bargaining table, both labor and management have a stake in bigger government.

On National Security, Obama Eventually Tends to Get it Right

War is different from crime-fighting.  Prisoners of war logically should be treated differently from people accused of crimes.  No battlefield reading of Miranda rights while the gunfire continues.  No presumption of innocence, no standard of “guilty beyond a reasonable doubt.”

President Obama, to his credit, recognized this reality again yesterday in signing an executive order providing for the resumption of military tribunals and a system of indefinite detention for some of the prisoners housed at Guantanamo Bay in Cuba.

The executive order recognizes the reality that some Guantanamo Bay detainees will remain in U.S. custody for many years, if not for life. The new system allows them the prospect of successfully arguing in the future that they should be released because they do not pose a threat.

No mention in the order or in Obama’s statement about the ill-fated promise to close Gitmo within a year of becoming president.  I’m opposed to just about everything the Obama is doing domestically, but on national security matters, he tends to end up in the right place, despite some initial missteps.

I just finished reading Bob Woodward’s Obama’s Wars on my Kindle.  The downside of the Kindle is that I now do not have a hardbound copy of the book to display next to my copies of Woodward’s four books on the Bush administration.  But as with the Bush books, or three of them anyway, I came out of the book feeling better about the President than I did when I started reading.

I criticized the President for announcing a drawdown date at the same time he announced the much-needed escalation of the war in Afghanistan.  But the book makes it clear that although electoral politics certainly played a role, the primary purpose was to put pressure on the Karzai government to step up its efforts to take responsibility for the country’s security.  And the administration immediately began to make clear that July 2011 would be an inflection point, not a withdrawal date.

I’m opposed to pretty much everything Obama is doing domestically, but on national security issues he tends to eventually get it right, despite some initial missteps.

(Note: I’ve added Obama’s Wars to my Amazon widget in the right-hand column. If you order that or any book after clicking into Amazon through my widget, I supposedly get a tiny cut of the action.  I’m just sayin’.)

They Looked at a Hillside and Envisioned a Church

Tom Savoth and Cheryl Notari, Wardens of St. George's

Outgoing Senior Warden Tom Savoth shares a quiet moment today before the service with his fellow Warden at St. George's Episcopal Church, Cheryl Notari. Note the aura of gravitas descending on Cheryl as she prepares to become the Senior Warden.

Nearly nine decades ago some citizens of Maplewood, New Jersey came together in a spirit of faith and community to begin planning a major new Episcopal church on a wooded hillside off of Ridgewood Road.  The parish traces its roots back to just after the Civil War, but the cornerstone for the current building was laid in 1925.

Generations of Maplewoodians have enjoyed fellowship and sanctuary in the years that followed.  The Web Goddess and I were married there in 2000, shortly after we became members, and we held our reception in the then-decrepit Parish Hall.  Ten years later we stood up in the middle of a Sunday service to renew our vows in front of God and a community that has sustained us through some very difficult times.

During that decade, the Web Goddess earned her moniker by teaching herself HTML, then building and launching the St. George’s website.  She has lovingly maintained the site ever since, through two major redesigns, while honing her skills as a photographer.  Virtually single-handedly she has built into what almost certainly is the largest website in the 108-parish Episcopal Diocese of Newark.  The website marks its 10th anniversary this month, and if there is a larger, more robust, more professional church website built strictly on a volunteer basis anywhere in the country, I want to see it.

Her online evangelism quickly led to an elected position as a member of the parish Vestry.  When she stepped down because of term limits six years later, I stepped up.  I’m now entering my fourth year as head of the Property Committee, a role that keeps me busy caring for an aging physical plant.  Along the way we’ve both become full-time, professional Episcopalians — she as Director of Communications and Technology for the Diocese of Newark, and me as Parish Administrator of Grace Episcopal Church in Madison.

Valyrie Laedlein, elected today as Junior Warden

My role as Property Poobah at St. George’s is what led to these musings, as today was our Annual Parish Meeting, a time of transition for several very dear friends.  Tom Savoth stepped down as Senior Warden after seven years of Vestry service, including four years as Warden.  Joining Cheryl Notari as Warden is the newly elected Valyrie Laedlein, and they’ll work closely with the Rev. Bernie Poppe, who is only the seventh Rector in the church’s 106 years as a full-fledged parish of the Diocese of Newark.  The Rector and Wardens oversee a small, mostly part-time staff and a legion of volunteers, some of whom have been attending services there for five decades or more. St. George’s is fortunate to have leaders of the quality of Bernie, Cheryl, Valyrie and Tom, and the Web Goddess and I are blessed to be able to call them friends.

The Rev. Bernie Poppe, Rector of St. George's

Our beautiful building is feeling its age, and I had the dubious honor today of telling the parish that I’ve spent $13,000 of their pledge money in the past five weeks making emergency repairs to the heating system.  We’re not done — fortunately the temperature outside is in the 50s today, because while the church itself was overheated, there was no heat in the Parish Hall.

The meeting marked the start of a parish-wide conversation about the heating system that will continue for many months, and much work will be done by many people.  There’s time enough for that, and time for this blog to resume its normal fare of cranky political commentary.  But once in a while I use this forum for a more personal message.  Just for today I want to pause long enough to give thanks for a group of good Christian people in the 1920s, who looked at a wooded hillside and envisioned a church.

Photos by Kirk Petersen (with a cellphone!) and the Web Goddess.

Mary Meeker, Entitlements, Wikipedia Drift, and Why It Takes Me Three Hours to Write a Blog Post

Mary Meeker

Mary Meeker, the early Internet visionary who endured derisive criticism when she (correctly) predicted that Ebay’s stock would soar to more than $400*…

No, that doesn’t sound right.  Off to Wikipedia to refresh my memory.

I’m a huge Wikipedia fan, btw, and I have no patience for whining complaints to the effect that “Wikipedia isn’t authoritative because anybody can change it.”  In anticipation of such whining I rarely cite Wikipedia as an authority, but Jimmy Wales’s* brainchild is a global treasure nonetheless. It’s easy to get distracted following one link after another, but Wikipedia is a far better starting point for most research than Google is. It’s no accident that Wikipedia shows up on the front page of most many** simple Google searches.

Where was I?  Oh yes, Meeker — I’m writing a post about her recent epic analysis of America’s financial statements, the blandly titled* “USA Inc.: A Basic Summary of America’s Financial Statements“.  And wow, Wikipedia just saved me from TWO mistakes in a single scene-setting introductory clause.  The stock in question wasn’t eBay*(capitalization corrected), it was Amazon… and it wasn’t Mary Meeker making that prediction, it was Henry Blodget.

(Here’s an example of why Wikipedia should be the starting point, not the ending point, for any serious research.  Although I had the wrong company and the wrong person, I clearly remember the hubbub around Blodget’s 1998* prediction that a prominent Internet stock — already considered vastly overpriced by Internet skeptics — would soon soar to $400.  Blodget’s Wikipedia entry, however,  says* this: “In October 1998, he predicted that’s stock price would hit $40 (which it did a month later, gaining 128%).”

Now, I know the number was 400, not 40, so I figure there must have been stock splits totaling 10-for-1 (not 10-“to”-1) since then.

Hm, I wonder how Blodget’s prediction has held up over the years on a split-adjusted basis?*

Let’s start by fact-checking my 10-for-1 split theory. Whoa… Amazon’s investor relations site* says the stock has split three times in the company’s history: 2-for 1, 3-for-1 and 2-for-1.  Repeated stock splits have a multiplicative effect — hey, I learned a few things in 15 years as a Wall Street corpcomm gumby — and there is no combination of those three stock splits that multiplies to 10.  Turns out the first stock split was before Blodget’s prediction and the other two were afterward.***

So that implies a total of 6-for-1, and the $40 price isn’t split-adjusted, it’s just wrong. I’m a Wikipedian — I should go correct it! Except you’re not supposed to do original research for a Wikipedia article.

And I’m not confident about the 6-for-1 factoid.  Nothing affects a stock’s cost as dramatically as a split, but other events can tweak the cost-basis calculation — buybacks, special dividends, etc.  I don’t know how to do the calculations**, but I know how to find someone who does.  On May 23, 2007*, the New York Times’s respected**** “DealBook” column stated:

Henry Blodget, the former Internet analyst, is taking some pride from a little-noticed milestone … shares of Amazon have risen back above $400.

More precisely, they broke $400 after being adjusted for stock splits: the online retailer’s shares were trading at $71.61 at midday Wednesday. That’s the price target that Mr. Blodget set for the company back in 1998, in what may be the most famous stock call in history.

OK, so assuming** there have been no other cost-basis-affecting events since 2007, we’ll use $71.61 as our new cost basis. (Note that $400 is pretty close to 6 times $71.61!!)  Since touching that level in mid May 2007, the stock rose to near $100 before collapsing (along with everything else) in 2009 to below $40*.  The stock has more than recovered since then, closing at about $189 earlier this month*.

So let’s see… $189/$71.61 equals about 2.6*, so apply that multiplier to Blodget’s original $400 price target, and we see that with a long enough time horizon, Blodget could have justified a price target of more than $1,000.***

(Hm… digging up that factoid took well over an hour, and it’s tangential at best to my topic.)

Onward! Meeker’s early claim to fame was as lead author of a groundbreaking 1995* primer that was blandly titled  “The Internet Report.”

Wikipedia’s fairly brief entry on Meeker yields the following nugget*, which seems pertinent to this post:

Meeker was characterized by Andy Serwer in Fortune magazine in 2006 as “absolutely first rate when it comes to spotting big-picture trends before they come into focus. She gathers massive amounts of data and assembles it into voluminous reports that, while sometimes rambling and overambitious, are stuffed with a million jumping-off points.”

“Massive amounts of data” and “voluminous reports”: Check, and check.  “The Internet Report” was 322 pages*, and the spark of an idea for this blog post was when I noticed that a key chart in her latest masterpiece is part of a slide deck totaling a bizarre 447* slides.

Meeker has applied her background as a securities analyst to examine the federal budget and balance sheets as though the U.S. were a company.  Here’s slide # 49:

Note the red line around the three huge pie pieces to the right.  They represent spending on entitlements — Medicare, Medicaid, Social Security, unemployment insurance.  Entitlements collectively are nearly three times the size of defense spending, and entitlement spending is only going to accelerate as Baby Boomers move into retirement.  In fact, Meeker writes* (Slide 14): “Within 15 years (by 2025), entitlements plus net interest expenses will absorb all — yes, all — of USA Inc.’s annual revenue, per CBO.  That would require USA Inc. to borrow funds for defense, education, infrastructure and R&D spending.”

I came across the chart on FaceBook via the blogger TigerHawk — I am FaceBook friends with his not-so-secret identity.  He linked to an article about the analysis by Henry Blodget — hey, maybe that’s how I got confused!

Unlike me, TigerHawk “gets” blogging.  Here is the full text* of his post about the chart:

I propose a new rule: Any federal politician of either party who claims to care about our fiscal condition who is not also proposing steep reductions in entitlements is transportingly disingenuous and ought to be voted out of office.
More here. The link explains why “the U.S. is screwed,” but we are only screwed if we lack the courage to tame this monster. Until this problem is solved, no federal politician should ever again leave a meeting with constituents without having to answer the question “what is your proposal for reducing entitlements?”

Ah yes, brevity.  Maybe next time.

* Indicates a place where I interrupted  the flow of writing to do more research — often just confirming a fact or spell-checking.  After more than 400* substantive blog posts over two and a half years, I’ve realized that I just don’t “get” blogging.  The whole point is to make quick observations, right?  Some famous blogger (Andrew Sullivan?) once said that an average blog post should not try to make more than one point.  Check my headline: Fail!

**Indicates a place where I talked myself out of doing additional fact-checking.

*** Indicates a place where I feel entitled to more asterisks because I actually did quite a bit of research.

**** Meaning, I respect it today because it’s helping me make a point.

I propose a new rule: Any federal politician of either party who claims to care about our fiscal condition who is not also proposing steep reductions in entitlements is transportingly disingenuous and ought to be voted out of office.

More here. The link explains why “the U.S. is screwed,” but we are only screwed if we lack the courage to tame this monster. Until this problem is solved, no federal politician should ever again leave a meeting with constituents without having to answer the question “what is your proposal for reducing entitlements?”