Homeland Security Update

Homeland Security spokesperson Craig Fenson (played by Robert Deniro) provides an SNL terrorism update. He was introduced by Homeland Security Secretary Tom Ridge (that scene was deleted from the video for security reason) who raised the terrorism threat level to MAGENTA before Mr. Fenson provides the "Most Wanted" list. The full transcript appears below:

 Tom Ridge: Good afternoon! Before we begin today's briefing, I wish to announce that, on the basis of change in the nature of Al-Queda chatter, we are changing the current threat level to Magenta. Let me repeat: the threat level is now.. Magenta. What is Magenta? It's a darker maroon. It's not quite an ox blood. It's more plum color than.. say.. a crimson. How serious is it? [ sighs ] I honestly don't have an answer for that. We'll try to have that for you by early in the week. In any case, I'd like to introduce Craig Fenson, the new senior spokesman for the office of Homeland Security, and he'll be happy to take your questions.

Craig Fenson: Good afternoon. In the past few weeks, through our national hotline, we have collected hundreds of names of suspected terrorists, and I'm proud to say that most of the calls have come from high school and college students nationwide. In fact, we received over 475 calls alone regarding this man: M'Balz Es-Hari. We also received information on such nefarious terrorists such as Graabir Boubi, and Haid D'Salaami and.. let this be a message to you, Haid D'Salaami: we will not play your dangerous games We are also currently searching for a man we believe to be a Al Queda leutinant: Hous Bin Pharteen, his cousin I-Bin Pharteen, and their close companion I-Zheet M'Drurz. Question over there?

 Reporter #1: Is there a way to identify Hous Bin Pharteen?

 Craig Fenson: Ah.. our operatives have picked up his scent. Also, according to our intelligence, he is targeting gas refineries, fertilizer plants, and, oddly enough, baked bean canneries. He is a silent, but deadly killer.

 Reporter #2: What can you tell us about I-Zheet M'Drurz?

 Craig Fenson: We're told that, when he was fleeing the scene of his last attack, he left skidmarks. He is extremely dangerous. Our sources say that he is planning on attacking the New York City sewer system with what we believe it is to be a dirty bomb.

 Reporter #3: Do you have any other names you're willing to release?

 Craig Fenson: Yes! Please call our hotline at once if you have any information on the following men: Shaif Hirboush.. Al-Suq Akweer.. Mustaf Herod Apyur Poupr. I hope I got that right! Awan Afuqya.. Yul Strokheet Al-Wauch.. Apul Madeek - who we believe will be targeting adult bookstores sometime in the near future. And this man, the notorious Yuliqa M'Diq, A.K.A. Uwana M'Diq, A.K.A. Usuqa M'Diq. Uh.. thank you, that is all, and, "Live, from New York, it's Saturday Night!"

 Thanks to Charles Spivey for this transcript!

Causes of The Deficit: Republicans Acting Responsibly

I am fortunate enough to have Ron Johnson, R-WI, as my US Senator. He is one of the freshman class aligned with the Tea Party movement. I have been tweeting Senator Johnson suggesting that he seriously consider raising the US Debt Ceiling. My basic argument is that the current deficit was causally related to actions taken during the Bush II administration. Being a Republican, Senator Johnson should be willing to take responsibility for these actions.

In the event that Senator Johnson would be interested in a more detailed explication of my causal argument, I've provided the following path diagram (click to enlarge) developed from Chapter 10 of the book This Time is Different: Eight Centuries of Financial Folly by Carmen Reinhart and Kenneth Rogoff.

Reinhart and Rogoff's own explanation is pretty straight forward (p. 172-173):

When a country experiences an adverse shock--due, say, to a sudden drop in productivity, war, or political or social upheaval--naturally banks suffer. The rate of loan default goes up dramatically. Banks become vulnerable to large losses of confidence and withdrawals, and the rates of bank failure rise. Bank failures, in turn, lead to a decrease in credit creation. Healthy banks cannot easily cover the loan portfolios of failed banks, because lending, especially, to small and medium-sized businesses, often involves specialized knowledge and relationships. Bank failures and loan pullbacks, in turn, deepen the recession, causing more loan defaults and bank failures, and so on.

Earlier in Chapter 10, Reinhart and Rogoff explain that recessions, bailouts and foreign wars (Iran, Afghanistan and the War on Terror) all lead to increases in the deficit. All these causes of increasing US debt are the direct result of actions taken during the Bush II administration, to include the lax attitude toward regulation of the financial sector that led to the Subprime mortgage crisis itself (the shock in the path diagram).

Notably missing from this causal explanation are entitlement programs, Obama care, public sector unions, high taxes (taxes were cut during the Bush II administration) and other right wing fixations. Senator Johnson will certainly see the sense of my air-tight causal argument. The rational policy response, which he will also certainly appreciate, would be to end foreign wars and the war on terror in addition to increased regulation of the financial sector. And, since the wealthy do not seem to know how to spend tax reductions on anything other than speculation, a tax increase on ill-gotten gains would also help reduce the deficit.

Technical Note: The upper part of the path diagram above is a positive feedback loop (negative signs multiplied together become positive as in basic algebra). The positive feedback effect explains why financial crises last so long and are so resistant to policy interventions.