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What I Know About Honeybees

By: eCAHNomics Thursday April 21, 2011 2:28 pm

Since I acquired a honeybee hive in June 2009, there’s been a lot of interest in the subject both on FDL and from friends. I’ve typed the answers to Qs often, and it finally occurred to me to type them one more time, post it as a diary, and link to the diary when needed.

I am not a bee expert, so nothing I write should be regarded as definitive. I’ll provide some links but little science. I’ve learned from my organic beekeeper, Chris Harp, who’s been doing it for 20 years and maintains 200 hives for clients. He also teaches. He’s done a great job for me, so I trust what he says and does, but I might misinterpret or misremember what he has taught me.

The diary is divided by subjects. Rather than reading the full post, you can either scroll down to find what you are looking for or do a find.

My Hives and Their History

Chris brought me a hive (brood box on the bottom, 10” tall) and one super on top of it (6-7” tall) in early June 2009. The external dimensions are 16” across and 20” deep. The brood box and each super has 10 racks across, just far enough apart for the bees to build the hexagonal storage cell pattern, fill them with brood or honey or pollen, cap them, and still be able to navigate between them. It is dark inside the hive; no windows!

My original hive contained a queen (hives have only one queen and a hive colony is considered to be a kind of single organism because of the complete dependence of the bees on each other) and around 10,000 bees. There are two common varieties of honeybees: Italian (most of them) and Russian (mine and increasing choice of organic beekeepers). There are advantages to Russian; more under that heading.

Hive sits on top of, and is strapped to, big cement blocks, owing to bear problem. More details under Bear heading.

I named my original queen Victoria, as I was looking for an actual queen in history who had a lot of issue.

A mature hive at the end of the season (mid-Hudson region) will contain around 40,000, perhaps more, depending on how many supers they’ve been able to fill. The vast majority are female workers, with only a couple hundred to a couple thousand male drones. Here’s a website with some of the elementary facts.

Despite torrential rains in June 2009, which washed pollen off the flowers and diluted nectar (more about what these are used for under What Bees Do and Eat heading), making it a difficult first summer for the hive to get established, mine did well, one of the more robust ones Chris maintains. He had to treat the hive for varroa mites, and provide some supplemental feeding, but it survived the winter in fine shape and Chris assured me it would swarm in the spring. See Swarm heading.

It did swarm and we missed capturing it. So Victoria was gone with somewhat under half the hive in mid-May 2010 to establish a hive in nature, but her daughter Vicky (see Victoria’s children’s names here) stayed in the hive, went on her marriage flight and started laying her brood.

A week or two later, my yard guy, Roger, was finishing some work in the back, returned to the house around 6p to ask what was wrong with my bees, which were hanging out in a swarm on the lower branch of a Bradford pear tree I had planted a couple of years before. Turns out it was a second swarm from Victoria’s hive. I called Chris, who was at a client’s in Millbrook. He arrived around 9p, we went back, captured the swarm, shook it into a new hive, and thus I now have two hives, with Vicky queen of the first one and Alice, Victoria’s second daughter and third child, queen of the second hive.

Despite another difficult summer, this time a drought, which dried up the nectar in the flowers, both of my hives did well in 2010. Some varroa mite treatments and supplemental feeding, but both ended up with enough honey to get through the winter. Chris was able to harvest 14 pounds (one jar=one pound; a full rack of honey taken from a super weighs 5 pounds, so a full super weighs 50 pounds) from Vicky’s hive, which is the most delicious honey I’ve ever tasted. (Pasteurized store bought honey is a pale shadow of the real thing.) I’ve given much of it as gifts and am gradually finding and trying more recipes using honey. More under Recipes heading.

Alice’s hive, getting a later and smaller start, produced enough honey to get through the winter, but no extra for human consumption.

Despite the very severe past winter, both my hives pulled through. The girls are out gathering pollen for the brood (weeping willows and skunk cabbage are good sources right now), still feeding on last year’s honey. Soon there will be nectar and the girls can start making honey again.

Chris tells me that Vicky’s hive will swarm this year. He will try to divide it before that happens, with a queen. Rather than accumulating more hives, I’ll give the extra to my friends, the Simons. They are the couple who got me into the hobby and have had terrible luck with their hive. It has not survived for three winters in a row. I’m hoping that my seemingly stronger bloodline will give them a better experience in the future.

What Bees Do and Eat

Bees pollenate plants. You all know that, or can look it up, so enough said.

Bees collect pollen and nectar.

Pollen is brought back to the hive in pockets on their hind legs, looking just like bulging cargo pants.  Bees make pollen into bee bread which is fed to baby bees. And stored in cells in the hive.

Nectar is carried back to the hive inside the worker bee, and made into honey, by addition of some enzymes, but mainly by water content reduction of 80%, which is accomplished by evaporation and by bees fanning. Adult bees eat honey.

Bees make royal jelly, which is fed to worker and drone larvae and to the queen bee for her entire life, which is what makes her a queen.

Bees also make wax for the cell structure and propolis. Propolis is a kind of glue they use to fill in drafty spaces and keep the hive in order. It is a fascinating substance and humans are continuing to learn more about it.


During the winter, bees cluster around the queen. They keep the cluster temperature around mid-40s F., which is maintained by how much they eat and move. The inner bees in the cluster rotate out and vice versa.

The queen, who stopped laying in the autumn, starts laying again in February. At that point onwards, the cluster temperature must be kept in the 90s, which requires that bees eat a lot more. The interval between when the queen starts laying and when nectar becomes available, 2 or more months, is the most critical. If there is not enough honey stored in the hive, the bees will starve and the hive will die. There must also be enough pollen stored to feed the babies until it becomes available outside, a somewhat shorter period than for nectar.

Winter die-off of bees within a hive is substantial, and depends on the climate.

In my climate, normal organic hive failure rates during the winter are around 20-30%. This past winter, Chris guesses that, despite its severity, he lost only 15%, attributing the success to conservative honey harvesting, being overly careful to make sure they had enough to make it through.

Bees do not defecate in the hive. The outside temperature must be around 50 degrees before they can go outside to relieve themselves. This past winter there was not a single day meeting that criterion between December and March, meaning they held it in all winter. Chris thinks some of his hives that did not make it died of dysentery.


During the summer, the bees are busy collecting, making, storing, feeding, cleaning (bees are meticulous). As mentioned, they must have enough honey and bee bread stored to meet their needs for the coming winter. There must also be enough bees to maintain the temps in the cluster around the queen. Humans harvest the extra honey toward the end of the season. Honey lasts forever, kept in nonmetal containers in a cool, darkish place. It is antibacterial and can be used to sterilize cuts.

The queen can lay up to 2,000 eggs per day when she gets in gear and the conditions are right.

Summer bees work themselves to death in 4-6 weeks. Winter bees, somewhat different anatomically, and less physically active, can live 5 months.

After the queen lays the egg, fertilized for a worker, unfertilized for a drone, which are deposited in different size cells that the queen can feel with her legs so she knows which kind to release, the egg is surrounded with royal jelly for several days, then larvae are fed nectar and bee bread, then the larva spins a cocoon, which workers cap for the pupa stage. Queens, workers and drones emerge from capped cells after slightly different number of days when they are born. The whole process takes 16 days (queen), 21 days (worker), 24 days (drone).

The first thing workers do after emerging from their cells is clean them!

Queen cells are vertical, not horizontal, and as mentioned above, a worker becomes a queen by virtue of being fed nothing but royal jelly while developing.

When Chris opened my hive to inspect last May, we counted around 15 queen cells, which are easy to spot owing not only to vertical orientation but also because they are much larger. And we didn’t try to find them all. That is a very large number and attests to the health of my girls. Many of them were victims of regicide, whereby workers drill into the side and kill the developing queen. An opening on the end indicates the new queen got out alive, but is still vulnerable to regicide.

Swarming and Fertilization of the New Queen

Swarming occurs when a new queen takes over the old hive. The old queen leaves with about 1/3 of the adult bees, some of whom have been scouting around for a new home, like a hollow in a tree. It takes a day or so for them to find a good location for sure, during which time they hang out somewhere, like a tree branch, as a swarm. There is a photo on Chris’s website.

The new queen in the old hive is a virgin. After several days, she is ready for her first emergence from the hive, and one of the few in her life, her marriage flight.

Drones (fertilizers) hang out in a cloud at an altitude of about 500’ during the day. The virgin queen zooms up through them and they chase after her. The fastest male, often more than one, wins, and fertilizers her, which provides enough fertilized eggs for her lifetime, several years. In the process, the drone’s penis breaks off and he dies a few hours later.

Here’s a picture of a “successful” drone. Chris picked him up from a huge pile of dead bees at the base of my hive, cleaned out after the winter die-off. His experience allows him to see things that are invisible to me. I am going to have a graphic artist use the photograph to design a label, and call the honey from my hives Successful Drone Honey.

Lives of Queens, Drones and Workers

As mentioned, the queen lives 3-5 years, is fed nothing but royal jelly, and other than her virgin flight does not emerge from the hive except in a swarm. She lives so long because of her diet and also because she does not do the exhausting work of collecting pollen and nectar. She is the largest bee in the hive.

Drones are larger than workers, all eyes (the better to spot and follow the virgin queen) and do not have a stinger. They are not allowed to overwinter, as they do none of the grueling work, and in October are systematically excluded from the hive. I have seen Katie-Bar-the-Door when the drones try to get back in at evening time, and also their smaller sisters dragging them out and dropping them over the edge, where they starve.

Workers are infertile females. They go through stages during their lives. After they clean their cells, they become nursemaids, then a series of jobs until their bodies are mature enough to forage. After which they work themselves to death. It takes 10,000 worker bees to make a pound of honey. A single worker gathers 1/10 tsp. of honey in her life. Other fun and amazing facts about bees can be found here.

Foragers communicate the location of yummy stuff by the waggle dance, perhaps the only symbolic communication system known to exist in the nonhuman animal world.

One of the few specialized jobs in the hive is funeral director. Workers who do that job do no foraging, just keep the hive clean of bees that die inside.

Honeybees are sometimes referred to as semidomesticated in the sense that they are usually docile. They don’t like to sting, which rips their stinger out resulting in death a few hours later. Chris works with only a hat, no gloves, no netting, and I watch and help him similarly unprepped. I have been stung only once, when I tried to blow a bee out of the way. Nothing unique about my breath but they don’t like being blown on and one bit me in the neck. They also hate the banana smell, so I tell guests who I’m showing the hives not to carry their fancy banana laced cocktails over for the show & tell. The purpose of the hat is that if bees get into your hair, they get confused and tend to sting.

Bears and Other Critters

Pooh Bear notwithstanding, real bears are not primarily after the hunny. Bears are omnivores, but protein is what gets them through the winter. So they are after the larvae and honey is the icing on the cake. Autumn, pre-hibernation, when bears are bulking up, is the most vulnerable time.

I have not experienced a bear attack, nor seen any around, although there are plenty in my neighborhood. Keeping fingers and toes crossed.

Chris sets the hives on two 17”  high hollow cement blocks and uses two metal straps around the hives and through the hole in the cement block to keep them attached. That way, hopefully, in the case of a bear attack, the bear might push the whole assemblage over, but won’t be able to get inside. Makes the bees buzzingly pissed, but the hive can be righted, the girls calm down after awhile, and life resumes.

Bears are black, and humans wearing black clothing are warned not to come too close to the hive. Chris’s shepherd dog Maggie is all black and quickly learned the safe distance.

The other reason the hives are set off the ground is that it minimizes attacks by other critters like skunk.

Part of the winterizing process is blocking all but a small part of the slot where the bees come and go and stapling screening with bee opening sizes over the remaining opening so that mice can’t get in. That is removed during the summer as it is too restrictive when thousands of bee trips per day are happening.

Honey and Allergies

Eating a teaspoon full of local raw (unpasteurized) honey per day can, over time, reduce or eliminate allergies to local plants. Here’s a homey website that explains how it works. Note that the “treatment” must not involve heating the honey, so honey used in tea, or other cooking does not count.

Italians vs. Russians; Africanized Bees

Most honeybees in the U.S. are Italians. Russians have been used increasingly since the introduction of varroa mites in 1987 because they are more resistant. Here is a website [pdf] that explains the history and the differences.

Africanized honeybees are much more aggressive. Here’s the wiki, with the history and a cool map with the rate of their northward migration into southern U.S. They are not yet a problem in the mid-Hudson region.

Varroa Mites

These are one of the biggest threats to organic beehives. The wiki is here. As mentioned, it came into the U.S. in 1987. There is a piece of white foam core board underneath my hives that slides in and out. It needs to be checked for mites (a little bigger than a period at the end of a sentence) periodically. If more than a dozen or so drop out onto the board within a day, the hive needs to be treated. Chris uses a treatment made from thyme oil that sublimates, permeates the hive, kills the mites and has little influence on the bees. They don’t like it (he once opened the hive after putting in the packet, and the girls were congregated near the top), and the queen stops laying for about a week, but as the mites can kill the whole hive, the discomfort and interruption is worth the effort.

Other problems

There are plenty of other pests that can get into a hive. I haven’t had problems with them, and this post is long, so enough said.

White House Honeybees

Here’s a link with a neat video that shows how honey is harvested.


I haven’t done too much cooking with honey, never having used it before I got my hive, so I don’t have a lot of recipes to offer. My cookbooks do not contain many, perhaps because it’s much more expensive than white sugar or corn syrup.

I have made a pound cake using honey instead of sugar. The flavor was milder and more subtle.

I’ve found that using honey instead of sugar in salad dressing is a vast improvement. Ditto any kind of reduction sauce for meat dishes and sweet sauces for dessert, like fruit purees. Honey adds complexity to the flavor in those applications.

Here’s a website with lots of recipes.

Colony Collapse Disorder (CCD)

From what I’ve been able to learn, information is conflicting and nothing is definitive. I’ll stress what makes most sense to me, but nothing has been demonstrated to scientific satisfaction yet.

First, statistics on honeybee die-offs are all over the place. If one takes the most dire stats and compounds them for the number of years people have been talking about the crisis, there wouldn’t be any honeybees left.

Part of the problem is the normal bee and colony die-off in the winter, as discussed above. Hysterical emails that misuse stats get people who know nothing else all whipped up.

I also have no idea how soon the bee die-off would result in serious interruption of the human food chain, which is highly dependent on commercial (industrial) honeybee pollination. That is a critical consideration to be sure, but the tipping point is not known.

Organically raised honeybees do not seem to suffer from CCD. It seems concentrated in the commercial bee industry, those that are carted around the country by the millions on tractor-trailer trucks, to pollenate industrial orchards and other fruits and vegetables.

I have read 2 books on CCD, A Spring Without Bees and Fruitless Fall.

CCD involves mysterious emptying of hives, with no dead bodies in sight. Meaning bees go out to forage but can’t find their way home.

Neither author is a scientist but both try, mostly honestly I think, to assess the scientific evidence. Their chief culprit is insecticides, especially the more recently developed neonicotinoids, which are also the active ingredients in the most effective household pet flea and tick repellents like Frontline.

The hypothesis is that chemical is sublethal to bees but affects their navigation system. Thus, they leave the hives to forage, they are sensorily impaired, and can’t find their way back.

The major problems with this approach are twofold. One is the onset of usage in some countries and government regulation/prevention of usage (France) of those insecticides does not coincide easily with the onset/lessening of the CCD problem, though suggestive.

The other, more common and disgusting one, is that the chemical companies, no surprise, vigorously funds opposition research/propaganda, muddying the water to the maximum degree, including buying off scientists (academics too, not just scientists who work for chemical corporations) who might otherwise try to do honest work.

The EPA colludes with the chemical companies.

The PBS program linked at the end of this section points out that a virus might play a role.

The stresses of monoculture are an important factor.

To take the most extreme example: almond crop in California (eat almonds with maximum guilt after you read this). Almond trees are the first that must be pollenated in the season, February. Remember that is when the queen starts laying again and stores in the hives must sustain the colony. Almond trees contain pollen but no nectar. For reasons I don’t remember, almond trees are particularly difficult to pollenate so bees work harder than normal.

Bees by the millions arrive, already stressed by the winter, to do a particularly difficult task. Nothing but 300 miles of monoculture almond trees with not even a hedge row to give a poor bee a break. They work their little hearts and wings out, and survive only on corn syrup (think genetically modified too), fed by their owners, which is less nutritious but cheaper than honey.

Meanwhile industrial bees are being born, fed on nothing but monoculture. Chris likens it to a pregnant woman eating only one food for nine months (maybe Cheetos for pregnant bloggers) because the bee gestation period is so short and so much of it is spent in a single monoculture environment. This cannot help but weaken the genetic strain.

On top of that stress come insecticides and herbicides used in endless quantities to treat the crops.

What’s a poor bee girl to do.

In any event, regardless of the scientific reality, the real reality is that the stresses on the commercial/industrial honeybee population are extreme.

While there are a lot of other plant fertilizing insects, none exist in the numbers required to feed humans the variety of vegetable and fruit crops now available. Other crops that are big users of industrial honeybees include but are not limited to, all tree fruits, blueberries, cranberries. All are raised in the U.S. in monoculture settings.

Here’s the link to PBS program on CCD.

Here is the trailer for Queen of the Sun, a recent award winning documentary about honeybees with emphasis on CCD. The reason the bees accumulate (swarm) on the dancer is because there is a queen somewhere in that mass. That the dancer can perform with bees on her and that so many organic bee keepers work without protective clothing attests to their docile nature. Bees’ acute sense of smell also makes them familiar with humans who frequent the hive and are known for being gentle.


Comments and corrections are welcome. They’re open for 2-3 days and I’ll check back regularly to respond.

Please provide links and bona fides when appropriate.

Readers remember that unless the links and bona fides in the comments seem strong, you should regard all the information, both in my post and in comments, as hypotheses, not as conclusions. Also, chemical companies, EPA, might send trolls to disrupt the thread.

I love my bee girls. I never expected such a small hobby with such serendipital beginnings to develop into such an emotionally satisfying experience. As Chris says: It’s not about the honey. It’s about the bees.

He does not allow us to leave a visit to or inspection of the hives without saying “Thank you girls.”


What I Asked Paul Krugman

By: eCAHNomics Tuesday October 5, 2010 7:25 am

Prof. Krugman received the New York Association for Business Economists’ Annual William R. Butler Award at a luncheon on October 4. There were about 100 in attendance.

Prof. Krugman spoke from notes and did not have a formal title for his speech. But as the orientation of the association is forecasting, that was the general direction that his remarks took. He is pessimistic about the outlook, not only for the U.S. economy, but more generally for developed countries’ economies. In the process, he made a central point about the inadequacy of the policy responses. According to him, both U.S. monetary and fiscal policy responses have been less robust than Japan’s response after its real estate bubble burst. So a long period of very little growth is the outlook Prof. Krugman expects. The in-joke is apparently renaming the Chairman of the Federal Reserve Benanke-san.

A key phrase he used in his evaluation of the policy response to the economic crisis was “failure to rise to the occasion.” My question, the first in the Q&A, was in keeping with the theme of his remarks.

In December 2008, you were at a book salon on firedoglake. In the thread, three of us pressed you strenuously on why you thought that President Obama’s economic team: Summers, Geithner and Bernanke, architects of the economic disaster, would be the right people to salvage the U.S. economy. You’ve clearly changed your opinion. Can you go back over what you missed back then and what has now led you to evaluate them as failures to rise to the occasion?

He gave much the same answer that he gave in 2008, namely that he knew those men and he thought they were smart, understood the problem, and flexible enough to advance the right policy measures. Scanning the record, he did not use the word flexible in 2008. The implication of using it in his evaluation of what he missed, is that he has, upon reflection, decided that the economics team is NOT flexible. That was exactly our point in 2008. All three had a long record before Obama chose them, and nothing in it suggested they would do anything but continue to support corporations at the expense of citizens, voters, consumers.  . . .

Ranking of 20th Century U.S. Presidents by Ludwig’s Political Geatness Scale

By: eCAHNomics Tuesday April 13, 2010 6:00 pm

As promised in Sunday’s (April 11) Book Salon, with Prof. Arnold M. Ludwig’s King of the Mountain—The Nature of Political Leadership, here is the ranking of U.S. presidents on Ludwig’s Political Greatness Scale (PGS). These measures characterize the lives of the immortal greats, like Caesar, Napoleon, Darius, Alexander the Great, Washington, Lincoln and others of their historic status. Do not confuse the term ‘great leader’ with a leader considered to be good for his country. Eleven scalable (usually 0 to 3) factors are included (pp. 276-77): Something from Nothing; More Than Before; Staying Power; Military Prowess; Social Engineering; Economics; Statesmanship; Ideology; Moral Exemplar; Political Legacy; Population of Country.

1 Franklin Delano Roosevelt, 1933-1945 30 top
2 Woodrow Wilson, 1913-1921 24 top
3 Theodore Roosevelt, 1901-1909 23 top
4 Harry S. Truman, 1945-1953 23 top
5 Ronald Wilson Reagan, 1981-1989 22 top
6 William McKinley, 1897-1901 20 top
7 Dwight David Eisenhower 1953-1961 18 top
8 Lyndon Baines Johnson, 1963-1969 18 top
9 John Fitzgerald Kennedy, 1961-1963 15 top
10 George Herbert Walker Bush, 1989-1993 15 top
11 William Jefferson Clinton, 1993-2001 15 top
12 Calvin Coolidge, 1923-1929 14 top
13 James Earl Carter, Jr., 1977-1981 14 top
14 William Howard Taft, 1909-1913 12 middle
15 Richard Milhous Nixon, 1969-1974 11 middle
16 Gerald Rudolph Ford, 1974-1977 11 middle
17 Herbert Clark Hoover, 1929-1933 10 middle
18 Warren Gamaliel Harding, 1921-1923 9 bottom

The column of numbers is the numeric PGS. By way of comparison, of all leaders of all countries in the 21st century, FDR is surpassed only by Atatürk, 31, and is tied for second with Mao, as shown in the original post. The third column is the place of the president in the top, middle, or bottom third of all leaders in the world, or at least that robust subset of 377 leaders for whom there were enough autobiographical data to be included in this ranking.

It is to U.S. credit that 13 of the 18 rank in the top third, I suppose. Living through half of them, it doesn’t seem that they are so respectable. But perhaps they look good in comparison to scores of incompetents and fools in other countries. YMMV.

What I Asked the CEO of the Federal Reserve Bank of Atlanta

By: eCAHNomics Thursday March 4, 2010 8:25 am

Dennis P. Lockhart, President and CEO of the Federal Reserve Bank of Atlanta, [here's his wiki] spoke at a New York Association for Business Economists luncheon on March 3, 2010. In his role, he also serves on the Federal Reserve’s chief monetary policy body, the Federal Open Market Committee (FOMC).

The speech was pro forma for such events. He talked about the economic recovery (sluggish), new financial regulation (as little as possible despite popular outrage), and long-term balancing (get rid of federal government and trade deficits, boost savings).

My question, the second of the Q&A: Do you know why the Federal Reserve is being granted more regulatory authority when it failed miserably in its regulatory role?

He tried to brush it off by stating that it was an opinion, not a question, but I persisted.

His answer will sound familiar because it contains just about every talking point on the subject rolled together.
• Mistakes were made.
• The FRB’s 3 roles of lender of last resort, monetary policy, and financial regulator are inseparable.
• FRB is only organization that can look horizontally across all types of financial institutions.
• Can’t start over with financial regulation.
• Looking forward, the FRB internal reforms will allow it to do a better job, especially to judge systemic risk from financial innovations.

I asked him to go into detail on FRB internal reforms, and the only thing he mentioned was do more stuff like the “stress test,” to which he attributed magical powers of having reassured the global financial system.

Well, at least someone said it to his face. There were some press in attendance, but I don’t know which organizations.

Goldman Sachs Forecast for the U.S. Economy

By: eCAHNomics Thursday January 21, 2010 10:47 am

On Wednesday, January 20, 2010, the New York Association for Business Economists held its annual forecasting meeting. The speakers were Jan Hatzius, Chief U.S. Economist at Goldman Sachs and Stephen Gallagher, Chief U.S. Economist at Societe Generale on their forecasts for the U.S. economy, and Joyce Chang, Global Head of Emerging Markets and Credit Research at JP Morgan.

As I used to do what Hatzius and Gallagher are doing, I can critique their presentations. For those who are unfamiliar with how the macroeconomic forecasting community works, I’ll put it in context toward the end. I have little experience with emerging markets, but Chang made a very interesting point that I’ll convey.

I focus on Hatzius’s presentation because he approached the forecast as I would. He also had a nice set of charts and tables. I no longer have access to the databases and other tools that are necessary to make good judgments so I appreciate his work.

Hatzius is forecasting U.S. real GDP growth in 2010 of 2.6%, lower than the consensus of 2.9%; little or no growth in employment, meaning the unemployment rate peaks around 11% late in the year. The Federal Reserve leaves the policy interest rate near zero, i.e., no Fed tightening.

The economy rebounded to 2.2% growth in the third quarter, and an estimated fourth quarter of nearly 6% (first official estimate for the fourth quarter will be Friday, January 29; but much partial data is available, so it is an accounting estimate, not a forecast). The entire explanation for the upturn involves the contribution of fiscal stimulus and the accompanying reversal of the inventory drawdown. Fiscal stimulus added two percentage points in the second quarter of last year, three in the third, down to 2 in the fourth through second quarter of this year. The end of fiscal stimulus (assuming no new packages) turns the federal government sector into a drag on the economy in the fourth quarter of this year.

The inventory cycle, which subtracted from growth in the first half of last year, added about a percentage point in the third quarter and a large 4 percentage points in the fourth quarter, down to about a percentage point in the first half of 2010, after which the inventory cycle is neutral.

The combined contribution to growth was 4 percentage points to the third quarter’s 2.2% (meaning the economy would have declined in their absence), and all of the 6% expected for the fourth quarter.

Technical note: The inventory cycle would not have reversed were it not for fiscal and monetary stimulus, but presenting the figures this way allows for clear accounting of how the economy turned around.

The reasons for sluggish growth have been well discussed at FDL and acknowledged by Hatzius.

1. Little or no growth in employment, as in the first years of the two prior recoveries, and the inability of consumers to borrow in light of underwater mortgages, foreclosures, etc., a reluctance of financial institutions to lend.
2. A weaker-than-normal rebound in homebuilding owing to the continuing mess in that sector.
3. State and local government budget pressures.
4. Constraints on lending to small business; problems in commercial real estate which are in their infancy.

My question, which I didn’t get a chance to ask, is why any growth at all? Why not a double dip after the stimulus, and its indirect influence on the inventory cycle, wears off?

The answer involves some fine calculations about household income which I no longer have the tools to do. In an after-meeting conversation with a friend who does do those calculations, she told me that you can get some growth in aggregate income by noting that weekly hours of those at work start to rise in advance of employment. That is accurate. It hasn’t happened yet, but it’s probably around the corner.

I remarked that the economy is poised on a knife edge, and she agreed. The modest growth in income that is projected could easily be counterbalanced by a rise in the household savings rate. If that happened, consumer spending, the economy’s engine, would decline, taking the whole economy with it.

Gallagher has a forecast that is slightly more optimistic than consensus, growth a bit above 3% this year. His arguments were unpersuasive, some of them circular. For example, employment growth was only stagnant in the first years of the past two recoveries because the economy was sluggish he noted. But the economy was sluggish because of the lack of employment growth. He also asserted that to have a really sluggish recovery means that you’re saying “this time it’s different,” a frequent mistake that economists make. But even his forecast is well below what would be a “normal” first year, over 5% in the recoveries before 1991. And it was “different” in the past two cases: 2.6% in 1991, and 2.2% in 2002. (Factors like the degree of monetary and fiscal stimulus, larger now than in the prior two cases, and the effect of 9/11 in the last case, should also be considered.) The “optimistic” case is weak and not very optimistic anyhow.

Chang’s presentation on emerging markets made a big deal out of the fact that emerging markets in aggregate weathered the global financial storm much better than G3 (apologies to Iceland and a few others). My words, not hers, but it seems she thinks they’ve learned about disaster capitalism. Resource producers have set up funds when resource prices are high to tide them over when prices drop. Accumulation of a gigantic amount of reserves (think China, India, but apparently it’s more widespread) insulates them from financial market gyrations and allows them to thumb their noses at IMF and World Bank dictates. It is certainly a sad state of affairs when the poor have to double-save to protect themselves against predation from the rich, while the rich squander. But a better state of affairs than if they didn’t do that.

Some context for economic forecasts coming from financial institutions. Anticipating questions about the honesty and self-serving nature of these forecasts, economists’ forecasts are a different animal from those made by analysts who cover stocks. I experienced no pressure to forecast one thing or another. It’s been nine years since I did that job, and Wall St. has changed dramatically for the worse since then. But economists’ forecasts have no direct bearing on the business of the corporation, so no reason to pressure them. And Hatzius approached the exercise much as I would have; he passes my smell test.

Some final notes. There was a lot of talk about how amazed they were at the speed of recovery in financial markets, but did not dwell on that. One questioner asked about the next bubble and Chang noted some real estate possibilities in Asia. There was NO talk about the U.S. political implications of the forecast.

Introducing The Secular Coalition for America

By: eCAHNomics Monday December 14, 2009 8:04 am

The Secular Coalition for America (SCA) is an organization whose mission is lobbying the U.S. government on issues involving separation of church and state and for the inclusion of nonbelievers into the public discourse. Its member organizations can be found on its website.

I am newly acquainted with this organization, and with New York City Atheists so this diary, as the title says, is an introduction, not an endorsement.

On Sunday, December 13, 2009, its Executive Director, Sean Faircloth, spoke in Manhattan at a meeting sponsored by New York City Atheists, Inc., not one of SCA’s member organizations.

Rather than railing against the inclusion of the work “God” in pledges, on currencies and buildings, the bulk of Mr. Faircloth’s speech concerned the pitfalls of exempting religious organizations not only from taxes, but broad sets of other laws. For example, several children have died in religious day care centers that are exempt from local regulatory laws for secular day care centers. A much higher percentage of infants of faith healing believers die than in the general population because they are exempt from all the rules about child endangerment and neglect. Mr. Faircloth told a particularly gruesome story of a 15-year-old daughter of believers in faith healing who suffered months of excruciating pain owing to the growth of a tumor on her shoulder, eventually to the size of a basketball, at which point she died. Mr. Faircloth refers to such behavior as faith torture and faith killing. It would never be allowed outside the “religious” context.

Mr. Faircloth is young and enthused about his work. He spent 10 years as a state representative in Maine. He was frequently lobbied by religious interests, but not once in a decade by secularists, humanists, atheists. He points out that legislators respond to the voices they hear.

He also had priceless quotes from Thomas Jefferson and James Madison. These Enlightenment era men of learning and vision could never be elected in the 21st Century United States of America.

The U.S. government has become entirely too religious for my tastes. I’m looking for some force on the other side that might start to turn back the religious wave.

I’m hoping the SCA might become that organization. Its budget is tiny, so great things cannot be expected soon, but Mr. Faircloth might be the right person to spearhead the effort.

Check out the website. Click the “sign up” button in the upper right—it’s how Mr. Faircloth’s speaking engagements get rated. Note some of its successes, like having language removed from the health care reform legislation that would have covered the spiritual care of individuals with religious objections to medical care, which had previously been included.

Two loosely related developments. First, NYC Atheists report that their advertising campaign on city buses has brought many new members and is being used as a model in other cities.

Second, NYC Atheists is joining with a Roman Catholic priest to sue a bishop in Brooklyn over his robocalls in support of a political candidate. At issue is the parish’s tax exempt status. The lawsuit will be announced on Thursday, December 17.

Sibel Edmonds Finally Speaks Out

By: eCAHNomics Wednesday September 30, 2009 8:19 am

Sibel Edmonds was an FBI translator in Turkish and Farsi for about seven months from mid-September 2001 until April 2002. She was translating audio recordings of phone calls (owing to lack of FBI expertise in these languages, some of the material had been archived and went back to 1996) relating to suspected spy operations conducted by Turkish and Israeli agents, mainly it seems their U.S. lobbies. They were, according to the material Edmonds translated, paying off U.S. members of congress, through campaign contributions and/or promises of lucrative positions post government service. Or through attempted blackmail. High ranking officials in the State Dept. (Mark Grossman allegedly started when he was ambassador to Turkey and continued when he was number 3 in the State Dept.) participated. So did high ranking members of the Defense Dept. Edmonds names Air Force Major Douglas Dickerson, Richard Perle and Douglas Feith.

I am no expert in this case but the extent of the corruption, if these allegations are true, is astounding. The purpose of this diary is to encourage wider distribution of Edmonds’ story.

She was fired for complaining that a member of a Turkish organization had infiltrated into the translation section of the FBI. Edmonds has subsequently been the most muzzled person in contemporary U.S. history. However, she was recently able to give a four hour deposition in a defamation lawsuit by U.S. Representative Jean Schmidt (yes that one) against her political opponent, David Krikorian, who accused her of taking $30,000 in bribes from Turkish interests.

That seems to have unmuzzled her, as a result of which Philip Giraldi, a reporter and former CIA agent, has now published an in-depth interview here. It is a must read. A few excerpts below. In addition, there is a long interview of Giraldi and Joe Lauria here, the latter having published earlier articles on the Edmonds’ story in the Sunday Times of London. The interview has a long discussion of how to think about Edmonds’ credibility, the conclusion being that she is certainly credible enough for her allegations to be investigated further.

Since the alleged corruption is at very high levels of the U.S. government, the story demands additional exposure. Not only read it yourself and pass it along, but also if you have any connections in MSM, try to get them to pick it up. Apparently the FBI investigation has been scotched, but it could be reopened if there is enough publicity.

Here are three illustrative excerpts.

1. Marc Grossman’s role and other actors

EDMONDS: Grossman became a person of interest early on in the investigative file while he was the U.S. ambassador to Turkey [1994-97], when he became personally involved with operatives both from the Turkish government and from suspected criminal groups. He also had suspicious contact with a number of official and non-official Israelis. Grossman was removed from Turkey short of tour during a scandal referred to as “Susurluk” by the media. It involved a number of high-level criminals as well as senior army and intelligence officers with whom he had been in contact.

Another individual who was working for Grossman, Air Force Major Douglas Dickerson, was also removed from Turkey and sent to Germany. After he and his Turkish wife Can returned to the U.S., he went to work for Douglas Feith and she was hired as an FBI Turkish translator. My complaints about her connection to Turkish lobbying groups led to my eventual firing.

Grossman and Dickerson had to leave the country because a big investigation had started in Turkey. Special prosecutors were appointed, and the case was headlined in England, Germany, Italy, and in some of the Balkan countries because the criminal groups were found to be active in all those places. A leading figure in the scandal, Mehmet Eymür, led a major paramilitary group for the Turkish intelligence service. To keep him from testifying, Eymür was sent by the Turkish government to the United States, where he worked for eight months as head of intelligence at the Turkish Embassy in Washington. He later became a U.S. citizen and now lives in McLean, Virginia. The central figure in this scandal was Abdullah Catli. In 1989, while “most wanted” by Interpol, he came to the U.S., was granted residency, and settled in Chicago, where he continued to conduct his operations until 1996.

GIRALDI: So Grossman at this point comes back to the United States. He’s rewarded with the third-highest position at the State Department, and he allegedly uses this position to do favors for “Turkish interests”—both for the Turkish government and for possible criminal interests. Sometimes, the two converge. The FBI is aware of his activities and is listening to his phone calls. When someone who is Turkish calls Grossman, the FBI monitors that individual’s phone calls, and when the Turk calls a friend who is a Pakistani or an Egyptian or a Saudi, they monitor all those contacts, widening the net.

EDMONDS: Correct.

2. Perle’s & Feith’s roles

EDMONDS: Absolutely. And we also had Pentagon officials doing the same thing. We were looking at Richard Perle and Douglas Feith. They had a list of individuals in the Pentagon broken down by access to certain types of information. Some of them would be policy related, some of them would be weapons-technology related, some of them would be nuclear-related. Perle and Feith would provide the names of those Americans, officials in the Pentagon, to Grossman, together with highly sensitive personal information: this person is a closet gay; this person has a chronic gambling issue; this person is an alcoholic. The files on the American targets would contain things like the size of their mortgages or whether they were going through divorces. One Air Force major I remember was going through a really nasty divorce and a child custody fight. They detailed all different kinds of vulnerabilities.

GIRALDI: So they had access to their personnel files and also their security files and were illegally accessing this kind of information to give to foreign agents who exploited the vulnerabilities of these people to recruit them as sources of information?

3. And the inevitable role that sex plays

EDMONDS: Yes, and in 2000, another representative was added to the list, Jan Schakowsky, the Democratic congresswoman from Illinois. Turkish agents started gathering information on her, and they found out that she was bisexual. So a Turkish agent struck up a relationship with her. When Jan Schakowsky’s mother died, the Turkish woman went to the funeral, hoping to exploit her vulnerability. They later were intimate in Schakowsky’s townhouse, which had been set up with recording devices and hidden cameras. They needed Schakowsky and her husband Robert Creamer to perform certain illegal operational facilitations for them in Illinois. They already had Hastert, the mayor, and several other Illinois state senators involved. I don’t know if Congresswoman Schakowsky ever was actually blackmailed or did anything for the Turkish woman.

The banality of it all. For example, in another part of the scheme, they were able to place recent PhDs at think tanks like Rand and Sandia, who would sell U.S. secrets (including nuclear) for a few thousand dollars (an unintended consequence of education inflation, no doubt), which were later resold for hundreds of thousands of dollars.

Spread the word.

Employment Update – February 2009 Data

By: eCAHNomics Friday March 6, 2009 7:27 am

This report represents an update of the employment/unemployment data that the government releases at 8:30amET, usually on the first Friday of the following month, depending on holidays. The original diary, explaining the data, can be found here.

The February employment data continued the labor market disaster. The headline unemployment rate jumped to 8.1%, from 7.6% the month before and the highest rate since December 1983, over 25 years ago. Payrolls plunged 651,000, and the prior two months were revised downward. Job losses during 2008 were 3.0 million, the largest for any year in the post-WWII period. But by shifting the period by just two months, to February 2009 versus February 2008, employment plummeted 4.4 million.

Employment declines of more than half a million per month obviously worsen the outlook for the economy. Cutting interest rates to zero has not stimulated the economy, though the Federal Reserve would point out that the situation would be much worse if it hadn’t eased aggressively. The fiscal stimulus already enacted is far from sufficient to stem the decline in the economy and jobs.

The most comprehensive rate for labor underutilization is called U-6 (see original diary for the definition). It leaped to 14.8% in February from 13.9%