reboot the republic daily July 15, 2010

The 24 Types of Authoritarians

Posted: 15 Jul 2010 03:03 PM PDT

Well Integrity Test Has Now Started, But Oil Industry Experts Ask “What the Hell Are They Doing?”

Posted: 15 Jul 2010 01:46 PM PDT

I hope this is wrong but I wouldn’t bet against the person who has been right on this issue all along.

From Washington’s Blog

Admiral Thad Allen just announced that the well integrity test has gotten a green light. For background on what this means, see this and this.

The test has already started. You can watch live here.

As I noted yesterday, BP suspended the “top kill” operation for 16 hours – because, according to numerous experts, it was creating more damage to the well bore – without even telling the media, local officials or the public that it had even delayed the effort until long afterwards.

Similarly, it took more than 5 hours for BP to publicly announce the delay of the well integrity test after the decision to delay was made.

More importantly, oil industry expert Rob Cavner – who has been right about virtually everything so far, previously explaining that there is damage in the oil well beneath the seafloor, and that BP has to let the oil spill keep on gushing to avoid further damage to the well bore until the well can be killed with relief wells (subsequently confirmed by BP) – now says that he is worried that the well integrity test could further damage the well bore and could blow out the entire well:

Recently-retired Shell Oil President John Hofmeister made a similar point today:

I think the fundamental issue… is there are serious concerns about the integrity of the casing that is the well itself.

And that by putting the cap on and doing the stress tests… that the integrity of the steel is insufficient to hold the pressure of the well.

And if you lose the casing its game over.

It’s like having a volcano on the bottom of the sea.

If you lose the casing and oil starts coming up on the outside of the casing you cant stop it.

There’s nothing you can do that would stop it…other than implode the well.

There are many in the industry that feel the casing must have been damaged because of the power of that well, the pressure of that reservoir.

Hofmeister stresses:

Let’s not do the “stress tests” until we’re ready to go with the relief wells… Better have relief wells up and operating before [you run any integrity tests].

And as Cavner points out today, the government and BP are fooling around instead of killing off this monster once and for all with the relief wells:

What? Well integrity test? I’ve looked back through all of my notes, blog entries, and reviewed BP’s and the Unified Command’s communications. I’ve even done multiple internet searches, and found the first mention of a “well integrity test” related to BP on this past Sunday, July 11. Certainly I could have missed something, but I don’t recall even a single mention of what I consider to be probably the most significant (and risky) operation BP has conducted since the much hailed, and utterly failed, top kill procedure that kept the masses enthralled during the Memorial Day weekend.


This morning, we learned that, even thought the stack has now been set for 3 days, they actually haven’t hooked up the two new valves. He also announced that yesterday, they pulled all of the ships off site to run a seismic survey, and, alarmingly, have stopped drilling the relief well, which is now only 4 feet away laterally from the blowout well. Since Dudley’s letter to Adm. Allen last Friday laying out the relief well timeline, they have made little progress and have only 34 more feet to drill before they get to casing point for the last string of pipe. 34 feet, and they stopped. They’re just sitting there circulating on bottom at 17,840. Just sitting there. Wells claims that they are doing that for “safety reasons” during the well integrity test. The one they’re not going to run for at least another 24 hours. What?

I’m sorry, but I have to ask, What the hell are they doing? We now have an ability to capture all the oil and stop this massive pollution of the Gulf (as well as measure it). We have great weather to get the relief well completed. We already know, without the “well integrity test”, that they have severe damage to the BOP and other surface equipment and casing. If that weren’t true, the damn thing wouldn’t have blown out in the first place. We also know that between the “capping stack” and the old BOP that there is a non-wellhead rated piece of equipment, known as the flex joint, along with the riser adapter, that we’ve talked about before. This piece of equipment, that normally sits above the BOP, is not rated to nearly those pressures encountered by wellhead equipment. All of the other components in this BOP are rated to at least 10,000 psi (new, off the shelf, and undamaged); this piece is by far the weakest link in the chain, especially since it took severe stresses as the rig sank and 5,000 feet of riser torqued it as it sank. Yesterday, Adm. Allen announced they were going to take the stack, including this flex joint, to as high as 9,000 psi for up to 48 hours. I have been unable to learn the model and rating of the flex joint here, but Oil States advertises their LMRP flex joints to be rated 600-6,000 psi, far below the 9,000 to which Adm Allen said they would potentially go; even with the 2,200 psi of hydrostatic pressure on the outside of the competent caused by it being in 5,000 feet of water, it’s still at least 1,000 psi differential pressure over the rating of the component.

Surely, I’m missing something here, but all of this seems like reckless rope-a-dope in the tradition of Muhammad Ali in his best rope-a-doping days. Either that, or there are so many cooks in the kitchen that the pot is boiling over while the chefs all stand around arguing about spices. Boxing and cooking analogies aside, I don’t think anyone is actually in charge, and if anyone is, they are certainly not interested in giving any real information.


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Video: George Carlin Doesn’t Vote

Posted: 15 Jul 2010 11:21 AM PDT

Repeal the Drinking Age

Posted: 15 Jul 2010 08:26 AM PDT

From The Mises Institute

Somehow, and no one seems to even imagine how, this country managed to survive and thrive before 1984 without a national minimum drinking age. Before that, the drinking question was left to the states.

In the 19th century, and looking back even before — prepare yourself to imagine horrific anarchistic nightmares — there were no drinking laws anywhere, so far as anyone can tell. The regulation of drinking and age was left to society, which is to say families, churches, and communities with varying sensibilities who regulated such things with varying degrees of intensity. Probably some kids drank themselves silly — and we all know that this doesn’t happen now (wink, wink) — but many others learned to drink responsibly from an early age, even drinking bourbon for breakfast.

Really, it is only because we are somehow used to it that we accept the complete absurdity of a national law that prohibits the sale of beer, wine, and liquor to anyone under the age of 21. This is a restriction unknown in the developed world. Most countries set 18 as the limit, and countries like Germany and Austria allow 16-year-olds to buy wine and beer. In the home of the brave, the police are busting up teen parties, shutting down bars, hectoring restaurants, fining convenience stores, and otherwise bullying people into clean living. We read the news and think: crazy kids, they shouldn’t be doing this.

And yet every day, young people are finding ways around these preposterous restrictions that are hardly ever questioned, imbibing with their booze a disdain for the law and a creative spirit of criminality, along with a disposition to binge drink when their legal workarounds succeed.

On college campuses, the industry of the fake ID thrives as never before. It seems nearly true that almost every student believes himself or herself in need of getting one. Do the restaurants and bars know this? Of course they do. They have every interest in having these fake IDs look as real as possible to give themselves some degree of legal immunity if someone gets caught. The whole thing is a gigantic fakeroo, a mass exercise in open but unspoken hypocrisy, and everyone knows it.

If you think about it, it is the very definition of a state gone mad that a society would have a law of this sort spread out over an entire nation that tells people that they cannot drink before the age of 21 — even as most everyone in a position to do so happily breaks the law. In Virginia, in the colonial period, where the average lifespan was 25, this law would have provided only 4 years of drinking in the last fifth of one’s life (but what a way to go).

However, if you think about the history of this country in the twentieth century, one might say that the age of 21 is actually rather liberal, as strange as that may sound. After all, it was in this country, the “land of the free,” that the federal government actually added as part of its Constitution a total banning of liquor, wine, and beer from sea to shining sea (1920 to 1933). The 1920s roared, in any case, with organized crime, speakeasies, police corruption, rampant criminality, and alcohol abuse.

The mystery to me is not the failure of Prohibition but the sheer insanity of the attempt to do this in the first place. It seems utterly bizarre in a country that habitually proclaims its devotion to liberty and freedom that such a thing would have ever been attempted. But here is Amendment XVIII, passed in 1917, in the same epoch in which government was going to rid the world of despotism and stabilize all business cycle through scientific monetary policy:

The manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.

Yes, it really happened, right here in the good ol’ USA, and I’m grateful to Mark Thornton for documenting the politics and economics of the whole sad affair in his book The Economics of Prohibition. In a rare case of reversion and admission of error, the same constitution was later amended again: “The eighteenth article of amendment to the Constitution of the United States is hereby repealed.”

But the habit of prohibition was already ingrained. For the state, it was two steps forward and one step back. For the rest of the population, what was previously a very normal part of life — drinking potentially intoxicating liquids, something integral to normal living from the Paleolithic era forward — took on a special ethos of hipness and derring-do. The father of our country might have been the largest distiller of whiskey in the late 1700s, but after Prohibition, liquor took on associations of decadence and bad behavior generally. A distiller today wouldn’t be elected to the city council much less as the US President.

Now, it wasn’t too many years ago that the laws tended to be a bit more reasonable, with the drinking age starting at 18. But that was changed with a universal law for the age of 21, and many people remember what this was like: for two years, a person was able to order a beer with a burger and, then one day, doing the same thing was a criminal act.

Digging around for explanations about these silly laws, there is one overarching argument: driving. We don’t want drunken teenagers on the road. These laws have saved thousands, millions, of lives, and the desire to change them is the equivalent of harboring a death wish for a generation. Now, one libertarian response might be: then get rid of the public roads and let road owners manage whether and to what extent its drivers drink. That’s a principled position but a bit impractical. The biggest problem with that response is that it concedes too much.

The closer you look at these studies, the fishier they appear. It turns out that most of the declines in binge drinking among high-school kids, according to a trends in drug use report,Download PDF took place before the change in the law, and, according to researchers Jeffrey A. Miron and Elina Tetelbaum, the changes in trends after are heavily biased by data sampling from a single state. Therefore, data on drunk driving, whatever the trends, cannot be statistically attributed to the national minimum-drinking-age law.

In any case, “underage” drinking is still sky high, even with the law, making cause and effect even more difficult to trace. As to why drinking is still high among college students, the National Institute on Drug Abuse offers the following polite reason: “Campuses provided some insulation from the effects of changes in the drinking age laws that took place during that interval.” You can say that again. Human beings are remarkable things: when they want to do something, no amount of tyranny, even that of jail, can stop them.

Still, it is impossible to silence the screams of the prohibition advocates, who trace every car accident among teen drivers to alcohol. I find this all fascinating to read because it bears so much in common with the Prohibition literature from the 1910s and 1920s. Their propaganda blamed alcohol for the destruction of the family, the persistence of poverty, the high rate of crime, the problem of illiteracy, and the ubiquity of sin generally. Clearly, their arguments were widely accepted even though it is all a big and fallacious mix-up of cause and effect. It’s not that liquor caused all these terrible things; it’s that the people who engage in terrible behaviors tend to also be drinkers. Abolishing the drink won’t fix the problems of the human heart.

So it is with teenage drinking. With the two thirds and more of people under the age of 21 reporting that they have consumed alcohol in the last year, it should be obvious that the law is doing nothing but providing a gigantic excuse for arbitrary police-state impositions on human liberty, and also socializing young people in a habit of hypocrisy and law breaking. It’s like the old Soviet-style joke: they pretend to regulate us and we pretend to be regulated.

Still, shouldn’t it be illegal for young people to drink and drive? Murray Rothbard sums up the libertarian point in For A New Liberty:

Only the overt commission of a crime should be illegal, and the way to combat crimes committed under the influence of alcohol is to be more diligent about the crimes themselves, not to outlaw the alcohol. And this would have the further beneficial effect of reducing crimes not committed under the influence of alcohol.

We’ve just been through our annual celebration of Independence Day, the day on which every radio and television commentator gives pious speeches about the glories of American liberty and all the sacrifices that have been made to preserve it.

Do we really believe it? The founders would have never imagined such a thing as a national law regulating the age at which beer, wine, port, and other alcoholic beverages are consumed. If we are serious about embracing their vision of a free society, as opposed to just blathering about it, let’s start with something that is supremely practical and would have immediate effects on an entire generation: repeal the national minimum-drinking-age law.

You say that this is unthinkable? I say that you don’t really believe in human liberty.


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Shameless Sovereignty giveaway: Obama Opens up US Budget and Bank compensation to International Peer Review

Posted: 14 Jul 2010 06:23 PM PDT

From Economy Policy

Barack Obama has agreed and signed a document which allows other countries to look at our budget and give recommendations based upon debt, taxes and spending. How much do you want to bet that other countries will tell us that our taxes are not high enough and that we don’t spend enough money on health care or social programs?

The group that oversees the process is the Financial Stabiilty Board(FSB) which started out small but could become eventually as powerful as the IMF or World Bank with the power to propose regulations and taxes. You probably haven’t heard of this program, but in the future you will.

The fourth pillar from the full text of the G8 Summit, via G20 Summit declaration:

22. The fourth pillar is transparent international assessment and peer review. We have strengthened our commitment to the IMF/World Bank Financial Sector Assessment Program (FSAP) and pledge to support robust and transparent peer review through the FSB. We are addressing non-cooperative jurisdictions based on comprehensive, consistent, and transparent assessment with respect to tax havens, the fight against money laundering and terrorist financing and the adherence to prudential standards.

I added the emphasis as prudential standards typically means taxing and spending policy, but, like the general welfare clause in the consitution, is vague enough to allow a very broad interpretation.

There is more on the peer review them from the FSB website:

40. We will undertake a FSB thematic peer review of actions taken by national authorities to implement our Principles and implementation standards. We will assess whether these actions have had their intended effect and propose additional measures as required. This review will be completed in March 2010.

41. These actions are in addition to our call for banks to conserve capital by limiting bonus payments today and so be in a better position to meet future additional capital requirements.

51. Within this framework, we are also developing a system of peer reviews among FSB members, based among other evidence on the findings of IMF and World Bank assessments, and will report on their outcome. These will comprise both single-country and thematic reviews to assess our implementation of international financial standards and of policies agreed in the FSB and determine whether additional steps are needed to reach the intended results. Both modalities will be developed in parallel. Actual reviews will start by end-2009 with the thematic peer review on the implementation of the FSB compensation principles.

So now how banks choose to compensate their employees not only is subject to US regulators but now international scrutiny by the FSB.

I’m not the only one that has come to this conclusion. Read the assessment of the group’s decision to allow “Peer Review”. Do we really want France or China to review our budget? I don’t think it is a good idea if we want to maintain our unique position in the world, via Globe and Mail:

Against significant odds, the Group of 20 is moving closer to its goal of rebalancing the global economy.

In a surprising show of faith in an institution that has met only four times, leaders from countries as disparate as Germany and Saudi Arabia agreed Sunday in Toronto to subject their domestic economic programs to peer review within the G20.

By this fall’s Seoul summit, countries have promised to explain in some detail how their domestic policies are helping to achieve the G20’s goal of reducing the excessive mismatches in spending and saving that exacerbated the financial crisis. Then, with the help of the IMF and its expertise in economic modelling, the other members will assess whether each partner is doing enough.

The commitment is historic.

The promise by each leader to agree to put his or her cards on the table adds a level of transparency and credibility that the process lacked until now. While economic co-ordination has been tried before, it has been with lesser officials or the International Monetary Fund as the arbiter. Now, the accountability rests at the highest levels. Where previous failures could be blamed on bureaucratic deadlock, global economic co-operation is now a political imperative in the hands of presidents and prime ministers.

The increased transparency could even encourage competition among members to implement policies that curry favour with investors.

Since the review remains a voluntary exercise without penalties, success will depend on G20 members taking the process seriously, both by submitting credible policies and showing the courage to offer tough, but fair, criticism. Given how these countries allowed the global economy to get so out of whack in the first place, there is reason to be skeptical they have what it takes to deliver, especially as the economy improves.

Still, “it’s a pretty significant step,” said Tim Adams, managing director at the Lindsey Group consultancy in Fairfax, Va., and a former undersecretary of international affairs at the U.S. Treasury Department. “It creates the potential that this will become a serious exercise.”


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