THE VIEW FROM CHAOS MANOR
View 622 May 10 - 16, 2010
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May 10, 2010
The European mess continues, and no one in the Administration -- and few anywhere else -- seem to have noticed that the US Taxpayers are now part of the Greek bailout. The US is the largest single contributor to the International Monetary Fund (INF), and this European "fix" is one Big Deal, a huge loan that everyone knows but no one is saying, will never be repaid. This means that comes the day, the US taxpayers will be expected to contribute to paying the defaulted loans that enable Greece to pay its early retired civil servants. Greek civil servants, incidentally, already get fourteen months pay for a year's work, plus long vacations. And if there are any minor cuts in that they will burn the banks and set the cities on fire. Best to bribe them with German and behind that American tax promises.
Of course California is in almost the same mess. True, California teachers and civil servants don't have quite so good a deal as Greek civil servants, but it's pretty good. Early retirement, no or small employee contributions to pension fund and health care, and guaranteed pensions unrelated to the performance of the "funds". In order to hold down the appearance of debts, the pension funds -- which lost a great deal of money in the derivatives debacles -- officially expect to get 7.5% or more economic return on investment. They don't get that now, of course, but Real Soon Now. California has one half trillion dollars in unfunded pension obligations. This means that within a few years, California taxpayers will be spending a large part of their incomes supporting pensions for people who don't have to work. The political implications are pretty heavy: what did the French do in 1789 when they tired of working and paying taxes to support the aristocracy? But in addition the taxpayers will have to pay federal taxes to help bail out the Greek obligations.
And just as California is not the only well beyond bankrupt state in the Union, Greece is not the only European nation with obligations far beyond any possible GDP. When Greece defaults -- as it will, the only question being when -- the obligations will be about twice GDP. That can't be repaid. The only way to keep it going is with more "loans", only the loans are actually grants from productive taxpayers. Greece, California, other US states, and the socialist system in general has declared that the productive are obliged to support the government and its services; the teachers and their unions; the public employee unions which contribute to the legislative members who are supposed to end the problems.
It can't last; the question is what are some realistic scenarios for collapse? It won't be Atlas Shrugged. It may include famine. Imagine Detroit but with the welfare payments reduced or the welfare checks uncashable. Imagine inflation such as Brazil enjoyed for decades -- I used to have a two hundred million cruzero note I got in change after buying something with a twenty dollar bill. Imagine pensioners being paid with warrants that are not legal tender and do not have to be accepted by stores, landlords, possibly not even by utility companies and property tax collectors.
Can it come to that? In America? We're all sure it can't. But it has happened to other nations. China had an 8000 to one inflation overnight not long before Mao took over from Chiang.
But surely the smartest people in the world will find a way out of this. It can't really happen. Water runs downhill but it never reaches bottom. The cure for all this is to spread the wealth around, impose Value Added Taxes, squeeze the productive even more so that the pension and welfare checks don't bounce. It won't come to complete collapse for another generation in America. So we'll get to see what happens in Greece, and perhaps that will give us a clue. Incidentally, one feature of Greece is that no one feels any obligation whatever to pay any tax that can be evaded. We haven't got there yet in the US. Not quite yet. But we are a long way from the day when my professor of political science could argue, in class with discussion, that his tax dollar was the most productive dollar he spent.
We took Sable out to the veterinary hospital for her post op checkup this morning and on the way back found the Pizza Cookery, out at Ventura and Newcastle, which has a sign outside proclaiming Gluten Free Pizza. We stopped and bought one (and I bought a regular one) and found this is a good place, high quality regular pizza (considerably better than the chains except for DUO but up there with the best, and I think the best gluten free we have found in the region. Just happened to notice it as we drove past.
Sable is fine. Healthy, recovering nicely, doesn't need to go back until the stitches come out next week. More on that in "yesterday's" View which I did this morning. That View also has a short note about my walk in the hills yesterday afternoon.
Apologies: for an hour there I hadn't uploaded the pictures of blue bonnets and other plants. Taken care of now.
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|This week:||Tuesday, May
EUROPE BAILOUT LIFTS GLOOM, says the Wall Street Journal headline. The market has leaped up off the floor. The reason for all this is that the EU banks are buying Greek and Spanish debt. This is TARP from Europe. The result is a temporary return of confidence.
I certainly didn't see that coming. What I do notice is that there's still no reason to believe that any of the Greek debt will ever be repaid. We created a housing boom in the US with Fannie Mae and Freddie Mac by injecting a lot of money into the housing market. People bought houses. Their debt was packaged and sold. All was well so long as the people who bought the houses made their mortgage payments. Those who actually looked at the income structure of those buying those houses could pretty well see that there was no chance for many of them to make those payments but the boom might let them flip the houses which might be bought by someone who could make the payments, and anyway so long as the boom continued those who bought the flipped houses could sell for enough to get out from under. Water runs downhill but it never reaches bottom.
I look at Greece, where the unions are willing to burn the banks and destroy the tourist industry in their efforts to protect their 14 months pay for 12 months work and early retirement and the rest of it, and I keep wondering: is there any chance whatever that the Greek government will make enough money to make the payments on their new bonds and sold debt?
Back on page 14 the Wall Street Journal has what amounts to an op ed
column (although it's not labeled that) by David Wessel entitled "Greek
Drama Leaves a Global Audience in Suspense"
It's an interesting analysis on why the sudden hope and cheer in the market, but asks the question of how long can it last. On the same page is a news article "Fed to Defend Loan Plan" which explains that the Federal Reserve is defending a plan to loan tons of US dollars to the European Central Bank -- and of course the ECB is buying the Greek debt, which means that the US will be loaning money to a European TARP plan. Only the US doesn't have any money to loan, so we must borrow money to loan to Europe to loan to Greece, so that the market bubbles won't burst. Or won't burst just yet.
We live in very interesting times. There is a big market uptick because the ECB is protecting the Euro by buying Greek debt that is unlikely ever to be repaid. For a while that will keep things soaring, and people will get rich on the trades. Does it increase world wealth?
Wealth comes from growing and making stuff. Energy and freedom facilitates growing and making stuff. Does a European TARP to protect generous salaries, pensions, and benefits produce wealth? Or is all this joy in the market in anticipation of the US buying into the European TARP? And in the hope that the US will institute VAT, which will -- they think -- raise enough tax revenue to allow the US to stave off disaster a few more years -- long enough for those playing these games to get out safely, or come up with some other scheme, or just keep the game going and going and going... And will those who actually grow or make stuff ever catch wise?
We can hope that Greece collapses before California does so that we can see what happens there before it happens to us.
Look for new extensions of unemployment benefits. I recall when it was $26 a week for 26 weeks. With extensions we have had 99 weeks of unemployment benefits; look to see Congress extend that to even longer. The arguments from pity and sympathy are powerful. Those out of work didn't deserve a new depression. We have to tax those who still have jobs so that they will share the wealth with those who can't find work. And be sure to keep minimum wages high, startup business costs high, paperwork for starting a new business burdensome.
We live in interesting times.
May 12, 2010
Firefox may drive me mad with its insane update policies. Firefox wasn't open, because last night Windows updated itself and reset, and when I logged in again it opened Outlook automatically, but not Firefox. One email noted the passing of an old friend, so I opened Windows Live mail to go to the SFF newsgroup, and there was a link to the NYT obituary. I clicked on it, and immediately got a message that the link failed. Firefox meanwhile was opening itself, but of course it opened on an update page. Some add on, I think "clocks" that tells me what time it is in Tokyo, had updated itself and wanted me to decide if I wanted to install the update. I let it do that. Eventually Firefox opened, opening the a connection to Clocks as well as the NYT page, and offering me the opportunity to open a previous session. That all worked well. But then popped up a window telling me that my secure connection failed because the certificate wasn't proper or some such. I clicked cancel -- stupidly, I should not have done that -- and the same little window informing me that the certificate wasn't proper and my secure connection didn't go through, etc. This continued every time I tried to cancel. Eventually I closed the Clocks window and that stopped the popups.
This was sufficiently alarming that I opened Windows Security Essentials and told it to do a scan of the system. It wasn't that I really thought the system was compromised, but it was suspicious. All is well, and I am told that Firefox is the most secure browser (in that it is the toughest one to hack into) and I have never heard of an attack that comes in through a Firefox addon update, but it would be a clever way to go phishing for zombies. Nearly everyone says 'yes' to Firefox addon updates, and nearly everyone will "cancel" an annoying popup warning window, and ...
As I said, all is well, but it's not a great way to start the morning. And of course:
I didn't know him well, but I met him at conventions sometimes, including an early ComicCon where I was one of the guests of honor (this was before ComicCon became enormous). He was part of a pleasant group of ComicCon guests who met in the lounge one evening. His 1966 "Conan the Adventurer" cover of Conan standing on a heap of corpses, served as the inspiration for the Robert Tinney cover of one of my early computer books. He was primarily a fantasy illustrator and I never had the pleasure of having him as the artist for a cover; books with Frazetta covers sold extremely well, and his original art works are worth millions now. A highly successful artist whose works gave pleasure to millions. He got some critical approval in spite of being popular and successful, which is astonishing in these times. RIP
"How to Prevent Another Trading Panic" by Larry Harris is fairly technical and offers yet another approach to the problem of computerized electronic trading. I recall doing a BYTE column sometime in the 1980's on how computerized trading could trigger mass market movements, and of course Cordwainer Smith and others wrote stories in which a smarter computer was able to fool the other computers and thus gain fabulous wealth -- one boy ends up owning Earth in fee simple.
Harris wants to prevent stop loss market sell orders, by having computers convert them into limit orders. He doesn't explain just how the limits would be set: that is, a trader can say "sell unless it drops below" some number (that's a limit sale) but if the trader doesn't specify the limit and just says sell, it's not at all clear who sets the limit and how.
Professor Harris concludes
I'm not sufficiently wise to have a fixed opinion on this, but I would be astonished if there were a simple fix that would prevent computerized panic cascades. Perhaps someone who knows more than I do can explain it to us. I do know that "turning off the F*ing computers" is not going to happen.
1455: Niven and I hiked up to the top of the hill, then had lunch at the Midori all you can eat Sushi place on Ventura near the first LASFS clubhouse. (LASFS sold that place and bought the present clubhouse about twenty years ago.) We had a great session and came up with new characters and plotlines for Lucifer's Anvil. A very good day.
A few photos from the hike. Niven among the thistles on the lower trail; a kingsnake hoping we'll think he's a rattler and leave him alone; and a blue bonnet, one of the last of them, thrives.
It was one good hike.
May 13, 2010
The Los Angeles City Council has decided to boycott Arizona because Arizona has new legislation allowing -- yea, mandating -- Arizona law enforcement to enforce Federal immigration laws.
The Arizona law in essence says that illegal immigrants will not be affected unless or until they legitimately come to the attention of the police; which is what I had thought was a pretty broad consensus in the US. It is not a series of raids with random stops and demands for "your papers, please." Federal law already requires "papers" be carried by all legal immigrants to the US. Those who don't are subject to arrest and possible deportation. All states require "papers" of those driving a car, or for that matter catching a flight on an airplane, and from time to time it is proposed that one must show "papers" to board a train although we have not yet got there.
The Arizona immigration law was either good or bad public relations: which is not yet clear. Forcing people to take sides on a touchy issue, and focusing attention on that issue, shows just how people feel. In Arizona the new law has more than 66% approval, with majority approval even in many -- I've heard most -- Latino areas. In other states people are being forced to make up their minds. Is enforcement of immigration laws "racist"? For that matter, are borders and border control "racist"? California by initiative attempted to restrict welfare benefits to citizens and legal immigrants, and that was held unconstitutional (by a California court). It is not clear what the sentiments of California are now. Los Angeles City Council and Mayor Villars have made their positions clear, but the news has been rather silent on poll data here, or perhaps I have missed it.
Meanwhile, the trillion dollar Euro-TARP that gives the United States a share of Greek debt (we get to buy Greek bonds; the probability of those ever being repaid at full value is rather low) continues. It's nice to think that Americans who pay taxes get to support the Greek civil service lifestyle of 14 month years (work for twelve months with 3 - 6 weeks off for vacation, get paid for 14 months). Some tell me perhaps it's a good thing for Americans to relax and not work so hard, take more time off, and get used to the 10% unemployment that Europe enjoys. It's good for the Earth, it's good for everyone. Slow down the pace of life, take time to smell the roses, enjoy life.
During the Great Depression unemployment rates rose from 8% to nearly 25%, falling in two years to about 8%. In those days the "unemployed" meant only those looking for work who couldn't find it; our today's 9% or so does not include those who have given up and are taking time to smell the roses or otherwise occupy their time. Note also that in the Great Depression homemakers were not considered unemployed. These would mostly be women. An unemployment category of "displaced homemaker" was added to the mix sometime in the New Deal era; this mostly meant widows and divorcees, who no longer had a home with income to keep.
The point here is that for most of human history, it was considered proper for people mostly to live in families, with one member of the family -- almost always women -- managing family affairs, keeping house, and generally making a home. There was a time when "women's liberation" had the goal that women would not be required to work outside the home. Those times are largely forgotten. The early editions of Jacques Barzun's indispensable Teacher in America has a chapter on the education of "marriageable girls"; it was written in a time when it was assumed that most American women went to college to earn "the Mrs. Degree". That was also a time when divorce was generally considered a last resort. People were expected to live in families, with one of the family members being the provider and the other the manager.
That had a big effect on local government. Much of local government was done by volunteers. Under Boss Ed Crump Memphis was a city of commissions such as the City Beautiful commission, all positions filled by unpaid volunteers, almost all middle to upper middle class women. It all seemed natural enough to me when I was growing up. During the War, many women did go to work, and things changed a lot. Everyone cheered the changes, despite some nostalgia -- see the movie "Since You Went Away" -- and a brief period in which it was thought that a "return to normalcy" with women as homemakers was the way to go.
That's no longer the case. Last year more women than men graduated law schools.
I point all this out because a shift in America to a system more like Europe, with lower incomes, more leisure, and acceptance of 10% or more unemployment as normal, has many implications, and I doubt we have come close to understanding the long term consequences.
A reader notes:
"Thieves Flood Victim's Phone With Calls to Loot Bank Accounts."
I can't explain this simply, but it's worth a read:
DDoS while looters make off with your money. It's a rough world out there.
As you imply, complicated. Worth reading for those with electronic accounts worth looting. Interesting to the rest of us.
Thank you for pointing me at that. I was initially against the Google Settlement -- I called it the Google Grab as most will recall -- but I have changed my view. I believe it is necessary and import. The Settlement pays authors a nominal fee for the insult -- that is, for copying their copyrighted works without permission. It then allows copyright holders to opt out of the rest of the agreement which establishes Google's right to publish the works, collect money, and pay fees to authors.
The result will be to make available a large number of works still in copyright whose owners are not known. Those works are vanishing now. Google's goal, to make available as much as possible of the total written work of mankind, is a worthy goal, and I see no other way to accomplish that. I don't know another way they could have accomplished that. I believe that Google and the Author's Guild have come to a reasonable and worthwhile agreement, and I think it ought to be accepted. I understand that puts me in conflict with a number of my fellow authors, and I don't take the position lightly; but after giving it a lot of thought, I urge my readers and colleagues to support this settlement.
The cost to authors is a couple of days of work laying claim to the nominal compensation, and opting out of the provisions whereby Google can offer the work for sale (and pay a stipulated fee to the copyright holder). That is onerous but not fatal. The compensation is nominal but it is not trivial. The result will be the preservation of a great number of orphaned works.
May 14, 2010
I'm told the snake in my Wednesday picture is a gopher snake, not a king snake. I expect that's right. King snakes tend to be more colorful. We do have king snakes here, along with a bright blue very fast snake. When I was young in Tennessee we had a snake we called the blue racer, but I don't know if that's what I've seen here. It's a very bright, almost electric blue, very slim, and the ones I saw were about five feet long. Some of our king snakes, though, are fairly dull in color, with diamond markings.
In the hills above my house there are a lot of snakes, the rattlesnake being the most common. Our rattlesnakes are dull in color; most do have a diamond shaped pattern. I have seen a few of the brighter colored diamond backs, but not recently. There are fewer snakes of all kinds now than in the past, probably due to the lack of rain; all but a very few springs up in our hills have dried up. On the other hand, there seems to be no lack of gophers.
Of course snakes lay about thirty eggs each year, and only two of those over the snake's lifetime have to grow up to keep the population stable. Normally most of the small snakes are eaten by the crows within days of hatching. There are far fewer crows now. Fewer hawks too. This is due to West Nile disease which has become endemic in Los Angeles.
We used to have several flocks of forty crows in Studio City. They'd all assemble at one place at twilight, not often the same place two days in a row. You'd see them all flying, in flocks and families and even as individuals, heading in a straight line toward that evening's assembly area. They'd sit there and talk for a while, then all fly back to their respective territories. In the daytime sometimes two large flocks would settle into trees on opposite sides of a street. They would then have what I called a "cawing contest": each flock would shout and crows would go from one flock to the other. At some point one would win and all the crows would go to the winner's tree. They'd shout for a while and disperse.
That never happens now. Twenty crows is a very large flock and rare. More usual is about eight, and mostly we see smaller family groups of three to five. I was told by one of the bird watching societies that there were as many crows in 1990 as there had been when America was colonized, but I don't know if that's true. I do know there are far fewer now. Far fewer birds of all kinds. Except, perhaps, blue jays: there has been a family of California Scrub Jays living in the oleanders across the street since we moved here in 1968. I have fed them peanuts most days, and they now expect them, to the point that the family patriarch will sit out on my balcony and scold me until I bring out some peanuts and bird seed. The local family seems to consist of about six jays -- that's as many as I have seen at one time anyway. My handbook says they live about nine years, and the oldest known lived to fifteen years. I haven't really noticed the succession: there are always a few of them, they are always nearly tame (to the point that for their own safety I don't encourage any further friendliness). There's always one who is a bit larger and more aggressive than the others and is first on the scene when the peanuts come out. I try to find raw peanuts for them. They hide the nuts they don't eat, sometimes in carnation and geranium planters on the balcony, and every now and then we'll have a peanut plant.
The jays and the squirrels have a relationship of mutual loathing. The jays are faster than the squirrels, but the squirrels are much more powerful. If a squirrel comes for peanuts the jays will cooperate, one distracting the squirrel while the others grab the loot. I presume they share after the battle is over, but I've never seen that.
I suppose I am rambling. I have had a case of the flu for two days now, and my brain isn't working very well.
The chatter over the oil spill continues. Offshore oil rigs are inherently risky, and just about everyone knows that. An oil separation tax used to create a spill control service which will spend most of its career doing nothing (except research into spill recovery techniques) would, I'd think, be the proper solution to this problem. I've done a first cut at the numbers, and the costs of such a service are lower than the costs of the runaway oil spill. Of course there are other factors such as the Iron Law, but it looks to make sense. Fire departments are mostly useless until there's a fire: with modern construction techniques urban fires are much more rare then they were forty years ago. Firemen mostly spend their careers waiting for something to happen: but when it does, having them with their expertise and dedication prevents many minor disasters from becoming major ones. I have in mind something of the sort for an off shore oil recovery service. But I've said all this before. I am not sure why it is never seriously considered. Reagan took the suggestion seriously in 1967 when I made it, but it wasn't implemented in large part because we don't expand the off shore oil development here.
The US sends a trillion dollars a year to the Middle East. That's just to buy oil. Foreign policy and war costs are extra.
One would think that more domestic oil production would be attractive to all political parties. Real wealth is created. The money stays in the United States. Jobs are created. Even a very modest separation tax would generate a lot of revenue.
Low cost energy and freedom are the keys to economic growth and prosperity. Everyone knows that, but it doesn't seem to do any good to know it.
Congress and the regulatory agencies are finally turning some attention to the ratings agencies, but they don't seem to be terribly serious about it. As far as I know, the BIG FOUR are written into the public law -- you must buy a rating from one of them. Yet you pay them for your rating, which means that if you get a bad one you won't be back. The conflict of interest seems built it -- and obvious. I have read a lot about this, and I don't understand the logic here. You must go buy a rating in order to issue bonds. You shop for the best rating. This makes so little sense that I feel I must be overlooking something obvious.
I'll continue to study the situation. I'd appreciate enlightenment, because the current system seems so obviously subject to temptations of corruption that I can't understand how anyone can defend it.
May 15, 2010
I am reminded to count my blessings. I just spoke with Norman Spinrad, one of my oldest friends. He's in Sloan Kettering in New York with a form of stomach cancer, and in the middle of chemo therapy developed an intestinal blockage. We talked for a while on the phone and he sounds good, and they hope to get him out of there and back on chemo next week. Norman was Vice President of Science Fiction Writers of America the year I was President, and later served two non-consecutive terms as President. He used to live just over the hill from me when he lived in Los Angeles. After he moved to Paris we didn't see him a lot but Roberta and I had dinner with him in Paris a few times when we went there.
Norman's latest word on this is "I am not at death’s door, but the situation is serious, scary, and very unpleasant and unconfortable."
Dona is camping out with him at Sloan Kettering, which is certainly one of the best places he could be. I told him the most important thing is to keep his spirits up. About all I can do except say a prayer or two. And count my blessings.
I note that Leo Laporte has cancelled his Facebook page, because Facebook makes public everything you post there unless you explicitly restrict its circulation. I've never had a Facebook page. I suppose if I did it might generate more traffic here, but I only have so much time, and I am sure a Facebook page requires maintenance on a regular basis. I really don't need one more darned thing to worry about. I suppose it might be a good place to put up some note I think may have lasting value, such as the Death Valley Adventure which turns out to be scarier now than it was then. It wasn't well organized because it was done back in the days when many of my readers had only modem connections, and even thumbnails took a while to download, so I put the pictures on another page (but there's a link to the pictures in the report). I can think of other pages here that few ever see because they can't find them and I could I suppose organize a Facebook page so that they would be easier to find.
For those who haven't looked lately, some of the hidden assets of this site are summarized on the Reports index page.
In poking around here I also found another reports summary page. It has links to yet more riches.
The problem of finding new readers for a place like this is not simple. It's not a big problem for me, because we have a lot of readers and subscribers (thanks to all those who responded to the recent pledge drive) and they tend to recommend the site to those they think will appreciate it. Of course I have a good claim to have had the first blog, and I started this place when BYTE was still one of the essential computer magazines. I haven't a least idea how one would start a place like this, although clearly many have done so and surpassed me in circulation. Of course many of the tools they used are no longer available to anyone, now that the big places are buying up search phrases and names. When your site gets a lot of hits, the big ones buy that phrase. At one time a search for Jerry Pournelle got half a dozen places that would offer to sell you Jerry Pournelle at the lowest price; they weren't book stores, either. It's not quite that bad now, but I keep hearing about small outfits who find that phrases they used to come up number one on are now all taken by big companies who don't even sell competing products: yet they get the first listing.
The Los Angeles city budget farce continues, as the Mayor tries to avoid layoffs by proposing salary cuts. It's pretty well broad farce, and the likely result is more frantic dodging, using up special funds to get past another year, borrowing more money and insuring that the problem will be worse next year and the year after that and... There will also be attempts to raise taxes. And of course we are supposed to boycott Arizona. Water always runs downhill but it never gets to the bottom, and you never run out of other people's money to spend.
No one is examining what happens when the city defaults. Of course that's a race with the State of California which has yet to take any kind of realistic look at the situation. It too keeps trying to stave off disaster for another year. If the city defaults the state won't be far behind, and vice versa. I haven't seen any serious study of what happens next. We live in interesting times.
In poking around here I also found another reports summary page. It has links to yet more riches. Most of that is older stuff and probably of not a lot of interest, but there are exceptions including my impressions of Japan about the turn of the century. It's clear that chaos rules in Chaos Manor. I may or may not be able to reorganize. Probably not.
I had reason to look back at old mail (mail347) as it happens), and once again there's a wealth of stuff in there. It's of course not organized.
May 16, 2010
If you are looking for something else to worry about, we are up to more than 100,000 deaths per year due to bacterial infections acquired in hospital; and we have just about run out of anti-biotics that will work on them.
We are not generating new anti-biotics. The bacteria are generating new species. Bacteria outweigh humanity by a factor of 100,000 or so. If the trend continues we will be unable to continue our medical miracles because our advanced techniques spread infections we cannot cure. So says a medial professor at UCLA. We survived for millennia without anti-biotics; perhaps we shall have to learn to do so again.
If the latest flue had killed 50,000 people we would declare an emergency. We are losing 100,000 people a year to this. Recall when everyone knew: hospital very bad. Many go in. Few come out. Have we come back to that again? Not yet, perhaps; but how inevitable is it?
The main reason that new antibiotics are not being developed is current regulation, which makes it unprofitable to do and test new anti-biotics. It ain't superbugs, so much as widespread demonstration of evolution in action.
Wash your hands. Live healthy. Stay out of hospitals. Many go in. Few come out.
See Brad Spellberg Rising Plague
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