Perhaps I'm a Constitutional hipster, in-so-far as I was talking about section 4 of the Fourteenth Amendment before it was cool to do so. After it had become cool, I felt moved to explain

[The Fourteenth Amendment] is indeed [the law that empowers the President to increase the ceiling] — where the only way not otherwise in violation of the Constitution to pay debt that has come due is to borrow beyond the existing limit. If the debt can be paid in some other way, then no special authority can be found for the President in section 4.

[…] The President doesn't get to say that he or she must raise the limit to continue funding institutions to which he or she can apply profound and moving terms, unless those institutions are indeed Constitutionally mandated.

With talk of the President raising the borrowing limit by decree again heating-up, I feel moved to labor aspects of what I'd earlier explained.

As debt comes due, for which sufficient funding has not been allocated, the Federal government can do one or more of five things:

• Default.
• Increase tax collections.
• Decrease other expenditures to allocate more revenue for debt service.
• Liquidate assets.
• Engage in new borrowing to service the debts from previous borrowing.

Advocates of the President raising the ceiling by decree want to pretend that the Constitutional prohibition of the first of these five options empowers the President to effect the last of these options by decree. But there would be three other options; it is appropriate to ask why the President wouldn't instead be required to choose one or more of the other three.

And, if a decision must be made amongst some or all of the four options not prohibitted by section 4 of the Fourteenth Amendment, it is not evident that it is the President's decision to make, even if the Congress will not. In the absence of Constitutional guidance, there is no apparent reason that abdicated legislative responsibility should go to the executive branch as opposed to the judicial branch.

Without some basis in fact — without at least a basis in the recognized structure of reality on some general level — fiction would instead be gibberish. And most fiction involves considerable factual elements — it describes a familiar world and may even involve passing reference to specific, familiar, real-life persons. Some fiction makes more than passing reference.

Satire normally involves more literal truth than does ordinary fiction. because some element of the real-world is a target,[1] perhaps for purposes of commentary or perhaps merely as an opportunity for absurdity.

Harlan Ellison has sometimes asserted that he might be called a paid liar. He does, after all, state things as if they were true that he knows to be false. But his fiction doesn't quite fit the ordinary notion of lying. Under this notion, to lie is to make a statement which one knows to be false, and to make it with intent to deceive. Ellison makes false statements, but presumably expects his readers to identify the fiction as such, and hence not to be deceived. Backing-up, the key is not merely that the false statement is presented in just any way as if true, but in a manner that one might hope and expect to be presuasive. Even if we should insist that any statement that one knows to be false would constitute a lie, clearly there is an important difference between willfully false statements which are hoped to mislead and those which are expected to be treated as falsehoods.

Sometimes the author of fiction relies upon immediate context to indicate the work as fiction — the work is wrapped (as by the label novel). In other cases, the content is sufficiently at odds with expectations that it would not be believed by anyone with at least an ordinary degree of rationality.

Satire — genuine satire — reveals its fictional content, as distinct from its factual content, in that the fictional component is presented to amuse by violating established expectations, while the non-fictional component does not itself seem an attempt to be funny.

Unfortunately, this convention, like many social institutions, is not consciously discerned by most of those who rely upon it, and that lack of awareness creätes an opportunity to use ostensible satire as a vehicle for deception. If one insinuates false-yet-unamusing assertions within a work, these may be taken as part of the factual component by a large share of the audience. If someone should protest that false statements are being presented as fact, that someone can be dismissed as ignoring that the work be satirical. (This dismissal will be more effective if the work also has falsehoods that few would take seriously.) Few people will be positioned to respond that genuine satire does not present deliberate falsehood as fact is presented. And so purported satire becomes a vehicle for deliberately false statements made with the intent to deceive. Lying is labelled satire, and ordinary defenses fail against it.

The use of ostensible satire to lie has been very popular since the rise of the Baby Boom Generation. But it's not as if one can give a public lecture on how to lie in this manner without undermining the device. In consequence, a lot of people are using it to lie without quite understanding how and why it works; others, more oblivious, have concluded that all these falsehoods really have been amusing, and imagine that when they too string-together falsehoods, these must likewise be amusing.

Yester-day and to-day, there was a fiasco on the American political left. First, Roger Simon made what seems an attempt to satirize the circumstances of Paul Ryan. The attempt was perhaps sincere, but it's hard to find much funny in it. And it was taken to be mostly factual by some of Simon's own tribe, including various prominent members. Tobin Harshaw is blaming this confusion on the literalism of Americans, but the primary cause is not so much literalism as it is the degeneration of the concept of satire.

(Of course, I expect those on the left who believed Simon's claims to attempt to excuse themselves by claiming that the political right has become so absurd that it is practically impossible to tell fact from fiction.)

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[1] The real thing satirized may be a story or idea of something that is itself unreal; but, without some real referent (such as a story or idea), one does not have satire.

And the truth is, it will take more than a few years for us to solve challenges that have built up over decades.

A decade is of course a period of ten years, so that decades would refer to twenty or more years. Now, perhaps President Obama was allowing that problems had continued to build-up during his term, though it would seem more likely that he meant to refer to twenty or more years before he took office; but, in any case, he must have been referring to a period that began no later than 1992.

I'm not seen the main-stream of the media nor the right-wing alternative take note of the implication here. President Obama has once again given part of the blame for the present economic situation to the 1993–2001 Administration of President Clinton.

During the 2008 campaign, I noted

There had been a sort of forced nostalgia for Bill Clinton, but once Obama came over the horizon, Democrats became more willing to look critically at Clinton and at his Presidency;

The base of the Democratic Party were imagining Barack Obama as a leader who would show, after all, that Clinton had been mistaken to declare The era of big government is over, that instead a considerably more humane nation and world could be shaped by extending still further the sort of management by the state of economic resources which had characterized the New Deal and the Great Society. As a candidate, Mr Obama had even at one point gone so far as to assert that some of the foundations of economic problems in 2008 had been laid by the Clinton Administration (though Mr Obama quickly retreated from that claim in the face of outrage from the Clinton camp).

But as the economic crisis continued through the Administration of President Obama, there has been a return to that forced nostalgia, noting of course that President Clinton were a Democrat, and not paying a great deal of attention to what had determined his policies.

(Mr Clinton ran as a New Democrat — one with a more skeptical eye towards state intervention. But, once elected, he tacked to the left. One of the political results was that the Democratic Party lost control of Congress in the next mid-term elections. It was after these losses that President Clinton gave the speech in which he declared the death of big government. For the most part, he thereäfter chose his policies by discerning where things were going, and running out in front, pretending thus to lead. One notable exception to this approach was in his support for adjustive discrimination (affirmative action), which appears to be something to which he had a genuine commitment.)

For his part, Former President Clinton has been glad to be called for help. William Jefferson Clinton enjoys the game of politics. He enjoys playing the game. He enjoys demonstrating, to those who can see what he does for what it is, how good he is at it. He very much enjoys coming to the rescue of Barack Obama, as proof that Mr Clinton is better at this game than is Mr Obama. Mr Clinton has not forgot that the Obama campaign and its allies treated the Clintons as, well, Republicans during the 2008 race; that Mr Obama took the nomination from Hillary Clinton; nor that episode of laying some of the blame for the economic crisis on Mr Clinton's door-step.

Mr Obama recognizes this motivation, and would resent his dependence upon Mr Clinton's greater present popularity even were Mr Clinton not seeking to rub Mr Obama's nose in it. And, while part of his reference to challenges that have built up over decades was simply because challenges that have built up over the previous eight years doesn't sound nearly so persuasive, there was a deliberate slap at Mr Clinton there. Mr Obama had already got a speech out of Mr Clinton, who would be unlikely to try, somehow, to take it back. And it wasn't Mr Clinton's best effort anyway.

On the other hand, as the Woman of Interest noted when I was talking about this slap, Mr Clinton may be many things, but he is not too stupid to see that what Mr Obama did. So it's not likely that there will be much more help from Mr Clinton, without some sort of profound obeisance from Mr Obama. Barack Hussein Obama may come to regret his act of petulence.

On 24 December, the Stratfor computer site was learned to be hacked; e.mail, e.mail addresses, and credit-card information were stolen. Initially, Anonymous couldn't agree within itself whether its members were responsible, but the deniers fell silent.

The credit-card information was used to make charitable donations, which subsequently had to be returned (at a net loss) by the charities. Those whose e.mail addresses were stolen had them publicly dumped (and thus made available to spammers), and were subjected to hoax mailings by Anonymous.

And we were told that the e.mail itself would be released, so that the world could see that Stratfor were really a malevolent force, which revelation would ostensibly justify the hacking.

After seven weeks, the e.mail that was supposed to expose the wickedness of Stratfor has not been released. There's more than one possible explanation. Perhaps the responsible members of Anonymous have obscure but compelling reasons to release the information all-at-once, and to organize it before doing so. Perhaps these members have been found and whisked-off to secret internment camps, along with anyone who might have reported their disappearances. Or perhaps the e.mail would reveal no more than that Stratfor communicates off-the-record with sources, some of whom could (reasonably or otherwise) be regarded as villains, and perhaps other members of Anonymous noted that almost any reporting and news-analysis service does the same thing, so that Anonymous would appear to subvert freedom of the press.

(I kinda favor that third explanation. Like many members of the Occupation Movement — who also like to claim the prerogatives but duck the responsibilities of association, and to wear Guy Fawkes masks and fantasize about being Vs — many members of Anonymous seem inclined to try to silence those whose views they find greatly disagreeable, but only so long as these members aren't made to recognize that they're engaged in censorship. [Up-Date (2012:02/27): It has now been announced that the e.mail is being released in coöperation with WikiLeaks.])

But, whatever may be the reason, the e.mail has not been released, and that failure or delay is itself a news story — which story you've not read in the Times (of London, of New York, or of Los Angeles) nor heard from the major broadcasters. Possibly that's because they're such lack-wits that it hasn't occurred to any of them that there's a story here. I rather suspect, however, that it's because they're scared. A group such as Anonymous could take-down pretty much any of these news services just as they did Stratfor.

In eartly August, I wrote of how most of the political left had lost its sense of conviction in the decades following the '60s, of how their ability to believe had been restored by the 2008 Presidential campaign of Barack Hussein Obama, but of how that sense of belief was disintegrating in the face of the actual Presidency of Mr Obama. Well, a large share of the left has since found something new from which to draw Hope — the Occupation movement.

It's widely noted that the Occupation movement lacks a programme. They've made it plain that they think that there's a 1% who are the Enemy; but, aside from the intention to somehow beat wealth out of this group,[1] the movement as a whole is short on specifics. Individual members or groups within the Occupation movement may espouse something more precise, but other members deny any sort of responsibility for those proposals. There isn't even meta-agreement within the Occupation movement on a protocol for agreement.

In lieu of a programme, what the Occupation movement gives us is a sort of attitudinal posture. That ought to remind people of something. In particular, it ought to remind people of Barack Hussein Obama in 2008. Granted that, in his case, the ambiguïty was a deliberate choice, whereäs in the case of the Occupation movement it results from collective indecision. Still, once again, a large share of the political left has invested itself in a cypher.

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[1] The urging of state action may not itself be immediately violent, but the whole point of using the state is to employ its capacity for violence, to threaten or worse.

[This post was delayed from yester-day, as my hosting service had a technical failure, and it took me rather a long time to persuade them of such.]

I read

This past week it was reported that the hacktivist collective known as Anonymous claimed credit for taking offline over 40 websites used for sharing pedophilia — and for exposing the names and identifying information of more than 1500 alleged pedophiles that had been using the sites.

But the actual list is of user aliases, not of personal names.

Not only are pædophiles not being exposed here, but non-pædophiles who've had the misfortune of pædophiles' using the same aliases (by chance or from malice) are going to come under suspicion by those who think that they recognize them on this list.

Further, if agents of law enforcement were themselves working to track-down the actual legal identities of the pædophiles, their investigation has now been severely compromised, possibly fatally so.

Once again, Anonymous has done less good than they have led the gullible to believe, and have caused more damage than they have acknowledged.

A financial bond or note is a promise to pay some fixed amount at some given date. Two things, beyond the promised amount of payment, determine the price of a such an instrument.

First, there is the associated danger of a default. A possibility of default turns the bond or note into a sort of lottery, in which the actual pay-off could be the full, promised value, or nothing, or anything in-between (at least, anything reaizable in terms of the minimum division of the payment), or even some new pledge, promising a later payment of some sort. Each of these outcomes has some associated plausibility, and the lottery is valued accordingly.

Second, there is also the fact that the instrument is a promise of future payment; since pay-off cannot itself be put to immediate use (as consumption or as investment), its price is discounted to reflect time-preference and the forgone productivity of assets used to buy it.

Just to get the gist of that clearly, imagine that the value of a lottery were simply that of the mathematical expectation of its pay-off. The price of a bond would then be discounted expected pay-off.

So far, the causality here is just flowing one way. Possible-pay-offs and their probabilities determine an expectation or something like that, and then time-preference and productivity determine the present value of that expectation or expectation-like value, and that's the price of the instrument. And if the pledge were issued by a private institution, that would generally be it.

On the other hand, when such instruments are issued by a state, politics can make things interesting.

The Greek state is going to default on repayment of its borrowing. Its citizens are simply not willing to accept the costs to them of full repayment. In fact, they're not willing to fully repay what remains after politically possible subsidies from other states. Those who have lent money to Greece will receive less than they were promised.

The price of bonds issued by the Greek state already reflects the expectation of default. This reduced price is going to be used against bond-holders, both against those who are paying it now, and against those who paid a higher price and have held onto their bonds even as value dropped (as they gambled that the Greek state would not default or at least not default as much as some expect). What will happen is that populists, anti-rentiers, and opportunists will argue as if all bond-holders had paid that steeply discounted price, and as if those who paid that price lose nothing if they only recover the nominal purchase price.

And what makes that interesting is that it means that causality should now be flowing cyclically, where present price pronouncèdly affects the relative plausibilities of possible pay-offs, even as these continue to affect present price.

I've not sat down to work-out a formal model. But, while I don't expect that the equilibrium price of a Greek bond would be zero, I don't know that one can rule that out. (On the other hand, while economic equilibria are useful in understanding and approximating, the world is never in equilibrium.)

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I do think that something might be said here about the ethics of sovereign debt.

It isn't heads of state or of government, or treasurers, or legislators as such who repay this debt. It isn't voters as such who pay-off this debt. It is tax-payers as such who pay-off sovereign debt (except where it is paid by selling assets such as territory and state enterprises). Sometimes the tax-payers weren't even born when the state went into debt. Moral claims against them for repayment are thin at best. I once read buying sovereign debt compared to buying shares in pirate ships (which one could at one time do openly in some places, and can still do quietly in some places), and I think that comparison quite apt.

On the other hand, it is plain that most of the Greeks protesting against austerity measures are signally unconcerned about the welfare of the Greek tax-payer; they just want any resources drawn from him or her to be directed to them.

Sometimes a person or group of persons will present a system of lies that they know to be unsustainable, with the intention of gradually abandoning the pretense. The purpose is largely to pay the costs of truth in installments which, by virtue of their distribution, are more bearable than would be the cost if borne more immediately. (There may also be the hope of identifying a point at which the lies remaining are sustainable.)

This is how the Clinton Administration handled its sex scandal (calling the process telling the truth slowly) and how John Edwards seems to have handled his.

It is now how world leaders are handling the disintegration of the European Monetary Union.

The prevailing rates of time preference and understandings of the nature and origin of wealth vary markèdly amongst the cultures within Europe. By comparison with northern European nations, southern European nations tend to have very high rates of time preference and have less reälistic understandings of wealth, so that they are relatively less willing to save and to invest.

Under a union of shared fiat currency, if fiscal policy remains at the discretion of each state, then some states are able to adopt an otherwise unsustainable fiscal policy which other member states become obliged to support in order to support the shared currency.

A system of enforceable fiscal policy rules was not adopted at the time of the monetary union. The states of all of these nations are representative democracies of one sort or of another, with a strong sense in each nation that popular will must ultimately be obeyed, so that unpopular regimes would be quickly over-thrown; and national sovereignty is important in most or all of these nations. Additionally, few state officials are keen to lose their own power, and therefore most resist a surrender of power to the European Union unless they imagine themselves either as retiring or as moving on to positions within the Union as such. Under these circumstances, a monetary union could not be founded with sufficient mechanisms to compel southern European states to behave like northern European states, especially as northern European states wanted an ability to stray at their own discretion from their norms, during extraordinary circumstances; so, instead, the union was formed based upon wishful thinking.

Rather than behaving as many wished, some member states acted as was feared and as should have been expected.

The peoples of the southern European nations might like best to be bailed-out by the tax-payers of other nations; but failing that option, with their rates of time-preference and with their illusions about wealth, they would rather leave the monetary union than adopt the habits of northern Europeans; they would certainly not be willing to subject themselves to the rule of German bankers, regardless of what their states might want. Meanwhile, whatever northern states might want, their peoples are not willing indefinitely to subsidize the vacations and retirements of southern Europeans. And the democratic impulse will bend the wills of these states to those of their respective peoples.

The political leaders of the European Union are acutely aware of the beliefs and powers of the peoples of their respective nations. Most leaders of Western-style democracies understand the situation as well. (Officials of states such as that of the PRC are, however, likely to stare with a sense of outraged bewilderment.) Yet virtually all are maintaining the pretense that the EMU may plausibly be saved.

Nor is it merely state officials who are doing this. Newspapers and magazines have been confronted with explanations of why the Monetary Union cannot be fixed, but most choose to pass over them in silence. The financier George Soros, who has been insisting that the EMU must be preserved, has more recently spoken of the desirability of Greece and Portugal leaving it; yet he is aware that Italy will almost certainly default, and that Spain is very likely to do so as well.

It may be that these leaders are stalling with absolutely no Plan B, but I believe that the real point of present discussions ostensibly on how to save the Monetary Union is actually to buy time to develop and agree upon a plan to unwind it, with a minimum of political fall-out and of economic damage. The unstated objective is to preserve as much as possible of the existing political and economic order, with most or all of the same people in its ruling class.

Back in May of 2010, I posted an entry about the Fourteenth Amendment to the US Constitution and the national debt. I'm not sure that readers found that entry particularly interesting at the time, but it gets an ever-increasing number of hits, as the United States approaches default, and as parts of the political left have begun drawing attention to the Amendment. More specifically, parts of the political left have claimed that the Amendment actively requires Congress to increase the debt ceiling, and other parts have claimed that the Amendment empowers the President to increase the debt limit without consent of Congress. It's that latter claim that I will now examine.

Let's return to the actual language of section 4:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

(Underscores mine.) Now, an important phrase here is authorized by law; the question is of how a debt as such comes to be authorized by law.

The Constitution itself is law, superior to any-and-all further legislation. It is the Constitution that creätes the Presidency. Before and after the Fourteenth Amendment, the Constitution does not invest any law-making authority in the Presidency beyond what can be said to exist in ability to negotiate treaties with foreign powers (and these treaties must be ratified by a two-thirds majority of the Senate), and Congress has not delegated to the Presidency the authority to increase the debt ceiling.

So the question truly is of whether and when the Fourteenth Amendment might, as parts of the political left claim, be itself exactly the law that empowers the President to increase the ceiling. And the answer is that it is indeed that law — where the only way not otherwise in violation of the Constitution to pay debt that has come due is to borrow beyond the existing limit. If the debt can be paid in some other way, then no special authority can be found for the President in section 4.

And there is the rub. The President doesn't get to say that he or she must raise the limit to continue funding institutions to which he or she can apply profound and moving terms, unless those institutions are indeed Constitutionally mandated. The political left will find none of its distinguishing programmes amongst these institutions. (And, should they bother to read what's actually there, the political right would find that many things that it regards as essential are not actually required by the Constitution.)

As the stories being told by the White House and by the Pakistani state continue to evolve, to contradict each other, and to contradict themselves, and as the conspiracy theories breed and mutate like irradiated fruit flies, I cannot resist noting that Ossama bin Laden is an anagram for anomalies and B.S..

(Yes, I take advantage here of the ability to transliterate أسامة in more than one way.)