March 2010 Bulk Dump

March 5, 2010 – 12:22 pm

The Do-It-Yourself Bailout

Hey, where’s our bailout? Wall Street got hundreds of billions in bailout help. The banks got hundreds of billions in bailout help.And what did average American homeowners get?  Hot air.  Change we could believe in. Assurances that, if we bailed out the banks and Wall Street they’d bail the rest of out in return. It’s the bailout version of “trickle down economics.” But haven’t we learned by now that, the only time any thing trickles down from above to us is the tab.So, isn’t it time we took matters into our own hands and fashioned our own bailout? Let’s call it our “do-it-yourself bailout.” Here’s how it works: – Do you have no equity in your home but are saddled with a mortgage so underwater that, even if you sold your home at full market value, you’d still owe the bank $50-000 to $100,000 – or more? Is that your problem? And, when you asked your bank  (you know, one of the banks you just helped bailout) for help the bank treated you like some kind of deadbeat? And instead of sitting down and working with you, they warned you to keep making the payments our they’d foreclose? (Banking’s version of kneecapping.) Is that what’s bugging you buck-o? Well then, just do-it-yourself. Put the keys to your house in an envelop and mail them to the bank with a note telling them that, since they think the house is worth what’s owed, they can have it as full payment.

Purchase money home loans are “non-recourse” loans. The lender can’t do a thing about it:

Definition
Loan agreement under which the collateral securing a loan is the ultimate source of repayment, and the lender cannot hold the borrower personally liable in the event of a default. The lender can seize (and sell) the collateral but cannot seize non-pledged asset or property.

No Help in Sight, More Homeowners Walk AwayNew York — Feb. 3, 2010 –In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040…“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?” ( Full Article)

Most of the banks we bailed out also run giant credit card arms (Citi, Chase, BofA, etc) Let’s not beat around the bush. With interest rates and penalty fees that would make John Gotti blush, these credit card arms are little more than legally sanctioned loan sharking operations.

Did you know, for example, that last year American consumers paid more in penalty fees to credit card companies than they spent on fresh vegetables? Did you know that if you owe $10,000 on a card and make the minimum monthly payment and don’t charge another dime, it would take you 48-years to pay it off? That’s not banking. That’s loan sharking by any sane (and moral) person’s definition.

So if you’ve gotten yourself stuck in this credit card tar pit debt, and the issuer refuses to negotiate a reasonable, mutually acceptable deal with you, then tell them to sue you for it. If they force you into a corner, file personal bankruptcy and let them see what they can get out of you… and the few million other former card holders who do the same.I know what you’re going to say: “But what about my credit score?”Friends, being captive to your credit score is exactly what they’re counting on. Credit scoring is the 21st century’s version of indentured servitude. For those with a bad score it’s the modern version of a Scarlet Letter. It’s slavery minus the plantation. Breaking those chains is not going to easy or entirely pleasant.

But freedom has always had it’s price. And I’m not saying that playing hardball with these behemoths is a pain-free exercise. And there’s also the emotional guilt of “whelcing on a contract.” But stop and think who’s on the other side of these transactions. They are enormous companies that themselves routinely break contracts when it’s in their bottom-line interest to do so.

What these companies are demanding you to do is to comply with a contract which, through no fault of your own, has become a suicide pact. They want to force/guilt-trip you into adhering to contracts that their own corporate shareholders would lynch them for if they did the same. In business — big business — contracts are renegotiated or broken every single minute of every work day. When conditions change rendering an existing contract a serious loser, the company CFO on the losing end picks up the phone, calls their lawyer and tells him/her to figure out how to get them out of the damn thing.Companies understand that there’s usually a price to pay for breaking a contract, of course. All they want to know is this: is the price of breaking the contract less than the price of fulfilling it. It’s a simple cost/benefit analysis. If they can get out cheaper, they get the hell out. Nothing personal. It’s just business.. hard ball business — smart business. All I’m saying is, isn’t it’s time we consumers — the draft horses of the America economy –  start measuring our ourselves the same ways corporations do … as a business enterprise responsible only to our stakeholders. In the corporate world those stakeholders are their bond and stock holders. In our lives the stakeholders are our wives, husbands, children and grand children. And we owe them the same unyielding fiduciary responsibility as companies owe theirs. Nothing more, and most certainly nothing less.

So, start by conducting your own cost/benefit analysis when evaluating your level of debt and the best (as in cheapest) way of getting that monkey off your back — and keeping it off. Will you have to pay a higher interest rate on future loans if you’re score drops? Sure. But if keeping sticking with debt that sinking you and yours, just to maintain a high credit score also means having to swallow a $100,000 or more in lost home equity, while continuing to pay on that outstanding balance… well, DUH!One more thing about this do-it-yourself bailout. Credit scoring tens of millions of consumers as either bad or good little earner for lenders is so yesterday. It gotta change. Credit scoring companies employ data modeling that fails to reflect – or purposely refuses to recognize – that when the economy crashed in 2008, everything changed. for their average cash-cow consumer. And credit scoring will have to change as well.After all, what do you think lenders will do for business in the future as the average credit score falls and falls and falls again – especially if enough people arrange their own bailouts. As the average credit score plummets, do you really think they’ll continue insisting that only those with 700 - 600 scores can get loans, or loans at affordable rates?  If they do they’ll simply put themselves out of business as fewer and fewer borrowers are able to qualify for credit.And what do you think the powerful and influential home building industry will have to say if lenders refuse home loans to millions of eager families wanting to get back into the home market, simply because they were victims of the “Great Recession” of 2008-201-?So, lenders — not to mention every other industry dependent on a active and fluid housing market  — will demand that credit scoring agencies lighten up and change their scoring models to reflect the enormous economic stress American consumers have endured.Listen folks. if you’re among the tens of millions of Americans still waiting for some of the trillion dollars in stimulus money to trickle down to you and your family, I have a news bulletin for you – it ain’t coming. Period. Never. Not a dime.The ONLY one who’s going to bail you out, is you.

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And Now

I Insult All My Friends.

He thinks he can use the jail for networking to be somebody.

John Leguizamo

I don’t know, maybe I’m an out-layer or maybe my 64-year old brain is starting to shut up shop, one shop at a time. But, after trying and trying and trying again, I’m just not getting it – this whole so-called “social networking sites” business. You know… Twitter, Facebook, MySpace, Linkedin etc.

And it’s not for lack of trying. After being “invited” and re-”invited” to “accept” invitations, I gave in and joined Facebook and Linkedin. But, after a couple of years of being connected (to more people than I care to know,) all I am “getting” is annoyed.

First Linkedin:

After 40 years in business, both for myself and covering the business world as a reporter, I understand success hinges, at least in part, on who you know. But “who you know” only works if those you know matter. If Linkedin could get Warren Buffet and I on the same wave length that would be something. But that’s not what Linkedin does for 99.999% of those on it. If you want to be “connected with” the kid in the mailroom or someone you don’t know but who knows someone you once knew at a company you no longer work for and probably hate, then you’ll love Linkedin.

So all Linkedin has done is devalue the entire notion of useful business networking. To confirm this just look at the average person’s Linkedin page. Instead of a list of “Whose Who” in business, they most likely look and read more like those phony baloney high school alumni-yearbook updates they hand out at 25-year reunions.

“John Smith has been promoted to Postmaster of the Titusville, Va. Post Office.”

The page goes on to list all the folks on John’s postal route John has bugged until they “accept his invitation” to be linked to him.

The minute I signed on to Linkedin my email box started filling up with requests from people who, for reasons only they could possibly understand, wanted to link to me. Jesus H. Christ people, I’m freakin retired. What possible use could it be to be linked to codger living quietly, in near seclusion, with his lovely wife of 40-years, a handful of chickens, two parrots and two dogs? It boggles.

At first I actually clicked on emails that alerted me that one of linkees had just updated his/her “status.” Which almost always resulted in earth shattering news such as, “Joan Snoozegrass,” (a connectee five times removed from someone I might have known once upon a time) “has left Smartass.com and become neighborhood coordinator for the Evensville Food Bank.”

And this is useful to me how? I now have a inside track to the Evensville Food Bank? And me knowing that, is useful to Joan, how? Maybe she can score some fresh eggs from my hens?

One final observation about Linkedin. It has a smell of desperate neediness to me. I don’t mean to be cruel. After all, these are difficult times and people need to find work and try, best they can, to improve their individual situations. But the whole mime behind Linkedin is that creating a shotgun scatter of connections can somehow vault you into big-bucks business success. When in reality it’s more like plantation slaves signing up for “Make money working from home” seminars. On Linkedin you’re simply never going to connect to anyone whose going to get you out of that cubicle and into the boardroom… any boardroom.

Then there’s the Mother of All social networking sites – Facebook.com

I held out higher hopes for Facebook. After all, I love tracking down people I grew up with and learning how their lives turned out. There were two promising aspects of Facebook for me:

1. There are people I really liked during school, but who I lost contact with. I really hoped they’d had wonderful lives and fulfilling careers and wanted to reconnect.

2. Then there was the other 92% – the a-holes I was forced by law to endure during high school. Were they getting their just desserts? (Which you can interpret any way you wish based on your own such longings for justice delayed.)

My Facebook page quickly populated itself, though not in the ways I had hoped.

Most of those who wanted to “befriend,” me were people I liked and had not lost contract with. So I went proactive, went searching for the a-holes. But, when I was able to find members of the much despised 92%, their pages were always restricted to those they had already “befriended.” Damn! Did they know I was on their trail?” Vexful little bastards right to the end!

This created a genuine dilemma for me. The last thing in the world I wanted was to give these putzes the idea I had any interest whatsoever in becoming one of the “friends.” But without sending them a friend request and having them (shudder, shudder) actually accept, I was not going to get a look at them. Are they morbidly obese? Are they bald as cue-balls? Did that arrogant prick, first string quarterback end up fitting sneakers at Footlocker?

What to do? Well, the one thing I was not about to do was to stoop to befriending these former enemies of my youthful self esteem just to satisfy what I readily admit is an unworthy and spiteful curiosity. (Damn!)

So, I was unable to scratch any of those decades-old curiosity itches via Facebook. Instead I ended up with a Facebook page that tells me nothing either useful or satisfying. Instead of satisfaction I get to know what my friends are reading, (I don’t care) what their kids are up, (so what?) what  web sites they’d like me to appreciate, (which they’d already emailed me,) that they have the flu, (do I look like a doctor?)

My Facebook page is like attending a non-stop community potluck with folks I already know, and in many cases neither need or care to know much more about. Now I get, in daily drips and drabs, what many (too many) used to send out in an easily discarded, lump-sum format just once each year in their, “Oh-what-a-wonderful-family-we-are- and-what-a-wonderful-year-our-wonderful-family-had!” Christmas letter.

Finally, (yes I’m not done) there’s those ads Facebook stick in the upper right hand corner of my homepage. When I try to delete them I get a pop-up box informing me that, before I can delete the ad, I owe them an explanation! They want me to help them fine tune their advertising pitches to me. Which is sorta like asking someone you’re about to waterboard if they prefer tap or bottled water.

While I can’t get rid of Facebook ads, I can get rid of those I friended and now just want to shut the hell up. So I began “hiding” posts by those I knew all too well already. One by one I sent them off to whatever purgatory Facebook stores such out of favor “friends.”

Now I’m down to just a handful of friends. But my favorite Facebook friend is not one person, but an entire profession. It’s called “Overheard in the Newsroom,” which posts comments by reporters and editors made during the heat of reporting and publishing. It’s a world I miss for it’s genuineness and sense of immediacy. It’s a world that’s about as real as real gets, filled with characters who treat life with a matter-of-fact realism and cynicism life so often so richly deserves. Here’s a taste:

Overheard in the Newsroom #2959: Crime Reporter: “Our briefs go ‘Man shot 6 times,’ ‘Man shot 7 times,’ ‘Man shot 8 times…’ What the f–k, is the Count on the loose?”

Overheard in the Newsroom #2957: Editor: “Headlines are better when they have the word ‘penis’ in them.”

Overheard in the Newsroom #2969: Reporter: “If I still have a job Monday, I am taking the day off.”

Overheard in the Newsroom #2939: Editor: “I hope I don’t libel anybody today. That’s my goal. It’s good to have goals, right?”

Overheard in the Newsroom #2933: Editor, on the phone with a Reporter’s significant other: “Unless he’s doing something sexual to you, I need to talk to him.”

Now, admit it, isn’t that a lot more interesting than;

“Sun came out today. Skipped work. Walked barefoot in the grass with Mr. Fluffy, my cat. See pics!”

Okay now, everyone out there I’ve just offended, de-friend me …. please. There’s only so much everyday trivia one person can absorb, and I’m saturated with the stuff.

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The State of the UnionThat Wasn’tThere in the front row were the Supreme Court justices in their black burkas, five of whom had just painted a giant “For Sale” sign on Congress. Over on the right sat Republican members looking all the world like they were being forced to sit through the funeral of someone they didn’t even know. On the left were the “majority” Democrats, clapping like trained seals as though they actually done anything to celebrate.But I will admit, the fella can capture even cynics like me. Man did that guy string together some stirring, inspiring and uplifting zingers last night.I loved it when he got right in the face of the Supremes. They had it coming, and they didn’t like it. Too bad. We didn’t like their ruling last week either. Maybe they get a guaranteed lifetime job, but nothing in the constitution says it comes with a “take it, like it and shut up about it,” clause.And I loved the part about how everyone in both parties are always running for re-election, and how that has completely jammed the wheels of government. True.And I liked that he threw a punch at his own party, telling Democrats that when the going gets politically dangerous you “don’t just run for the hills.” (Even though we all know, and he knew,  that’s exactly what they will continue doing.)But, after a couple of years of campaigning, and a year in office, this is what I’ve learned about this guy:An Obama speech is like the old joke about Chinese food. It tastes terrific. But a hour later I’m hungry again.Which explains why, as time goes on, fewer and fewer of us care what Obama says, even though he says it so well, Instead our focus is increasingly shifting what he DOES. And, frankly, so far, he hasn’t done much of anything. In the coming year I want to see his feet moving a lot more and his mouth moving a lot less.Yes, his victory was indeed a delicious moment. It filled us up with hope. But a year later, we’re all hungry again. So, going forward, we’d like something that really sticks to the bones.(Below is the speech he should have given)

My fellow Americans, I am here tonight to report the state of our Union. Let me be clear. The state of our Union is awful.

Of course, you knew that. But I must add to that the warning that the state of your government too is awful. It has, for all practical purposes, nearly ceased to function.

 

This is not the way I had envisioned my first State of the Union. During the campaign I promised change you could believe in. I promised to change the way Washington does business. I promised to end America’s reckless and counterproductive military occupations in Iraq and Afghanistan. I promised to close America’s gulag at Guantanamo. I promised to begin repairing the damage done by 8-years of Republican economic mismanagement and redressing the horrific damage those policies did to America’s once robust and growing middle class. And I promised to put the US at the forefront of protecting our endangered environment.

 

A year later those promises go largely unkept. Instead of leveraging the enormous political capital entrusted to me by voters to keep those promises, I made deals with some of the very people who caused the massive challenges we now face.

 

I took office believing if I was reasonable, the other side would be reasonable as well and, after establishing a foundation of trust and good faith, we could find common ground for the common good.

 

I was warned the other side had no intention of seeking common ground but instead were dedicated only to making certain that I and my fellow Democrats fail at whatever we try. And that’s exactly what has happened.

 

Now my party, just one year since voters entrusted their hopes, dreams and confidence to us, is exhausted and facing the prospect of defeat next November. The blame for that belongs squarely on my shoulders. Many of them resisted, but I insisted. I was wrong. They were right.

 

Now 35 million Americans may continue to have no health insurance. Taxes cuts continue to enrich the already rich while average Americans suffer. Hundreds of billions of dollars that we don’t have continue to be squandered in Afghanistan, Pakistan and Iraq. Washington continues protecting big banks and Wall Street brokerage houses while 15% of America’s workers remain unemployed, struggling to keep a roof over their family’s heads, even to provide their daily bread.

 

For these failings and others, for breaking my promises to voters, for managing from a distance rather than leading from the front — for all this, my fellow Americans, I take full and personal responsibility. When the history of my first year in office is written, historians will not be kind – nor should they be.

 

But that’s the past, a bell that cannot be un-rung. So I must look ahead. Not all is lost. I have three more years in office, and I intend to use every precious second of those years to redress those mistakes. So, enough with the mea culpas and onto tomorrow.

 

First let me announce that, effective February 1, there will be some personnel changes at the White House. Economic adviser, Larry Summers, will be leaving to return to academia. And Treasury Secretary, Timothy Geithner, will be leaving to return to Wall Street. I want to thank both these good men for for their service during the most difficult economic times in nearly a century. I wish them both God’s speed.

 

I will submit for Treasury Secretary the name of Paul Volcker, a man who requires no introduction and who’s qualifications for this difficult and critical position go with out question. I expect the Senate to confirmed him immediately. Mr. Volker will also serve as my economic adviser assuring that the policies decided in the Oval Office are carried out in the most expedient manner by Treasury.

 

Tomorrow I will ask the House of Representatives to vote within the next few days to accept, unchanged, the Senate version of health care reform. I understand that the Senate measure differs in many important ways from the House version. But, let’s be clear, the Senate version is the best we can get under current circumstances. Blame me for that if you wish, but we need to get this measure signed into law immediately as the forces of obstruction have seen their obstructionist tactics bear fruit at the ballot box. We no longer have 60 votes in the Senate. So get the Senate version on my desk and I will sign it into law. Then we will at least have a reform platform upon which to build, rather than trying to start from scratch in election year – and we all know what that would mean.

 

During the campaign I decried the reckless and, many would say, lawless way the previous administration treated the law, international laws and our own precious constitution. But I haven’t acted on those concerns. Instead I decided doing so would be seen as simply a partisan attack by the other party, complicating my domestic initiatives, like health care reform. That was wrong. Americans are rightly proud that in a land of law, not men, no one is above the law… or should be.

 

Therefore I have authorized the Department of Justice to pursue any legitimate evidence of wrongdoing by any member of the executive branch. And I have ordered all government agencies, including the CIA and Department of Defense, to fully and completely cooperate with any investigations the Attorney General authorizes. This includes, but is not limited to those who authorized torture, engaged in torture, lied or misled Congress or aided and abetted any of the above.

 

To ensure any such investigations are not deemed political, I have asked the attorney general to engage a unquestionably non-partisan prosecutor whose credentials and neutrality are beyond question. If no wrongdoing is uncovered, fine. The nation can move on. But if laws were broken, those responsible must be treated exactly the same way ordinary Americans are treated when they break the law. Because when America is no longer about equal justice for all, America is no longer.

 

Earlier this month the US Supreme Court issued a ruling which, if left untouched, would change our representative democracy in ways that would render it unrecognizable, not to mention un-democratic. Corporations and unions big enough to buy whatever they want, will be able to take everything they want as well. The ability to literally purchase a member of Congress, even future presidents, thanks to this shocking decisions, is now a reality.

 

Congress must soon find ways to legally neuter that wrong-minded decision. In the meantime I have instructed the IRS to work with Congress to formulate rules abolishing corporate deductions for purely political expenditures, retroactive to Feb 1, 2010. There is simply no socially or morally justifiable reason corporations and labor unions be allowed to harvest tax credits for purchasing legislation and legislators at taxpayer expense.

 

Furthermore, this new restriction, while in no way inhibiting the free speech rights of corporations and unions, will put company shareholders and union members on notice that their dividends/dues are being spent in ways that may not reflect their wishes or beliefs.

 

Let me now talk about re-framing homeland security in the 21^st century.

 

Much has been said and written over the past decade about the many dangers we face, but little thought has been given to how those dangers differ from Cold War times. No longer is America faced by any genuine strategic threat, as we were when we were toe to toe with the nuclear-armed former Soviet Union. Today we face a very different enemy, an enemy that employs the asymmetric threat, like the hit and run terror tactics of al Qaeda and similar groups.

 

Nevertheless, in the wake of the tragic attacks of 9-11 the previous administration framed these new enemies in the same existential and apocalyptic way we had previously viewed the former Soviet Union. Generals are often accused of “fighting the last war.” In this case it wasn’t the generals, but their civilian leaders, still steeped in Cold War thinking, who fought the last war.

 

That has proven to have been a fundamental, tragic and expensive mistake. Rather than reducing threats from abroad, our occupations in Iraq and Afghanistan, and our extra-judicial handling of prisoners from that region, have served only to foment more hatred of America and deeper distrust of our intentions in the region. In short, rather than reducing terrorist threats from that region, these outdated tactics have increased those threats as well as increasing terrorist ranks.

 

That is not to say terrorists don’t threaten Americans, they do. But, while terrorist tactics pose a serious threat to public safety, what they don’t pose is a strategic threat to America . In other words, there is no way al Qaeda can “defeat” America, in military terms, or “takeover America.” All they can do is threaten public safety as a way to scare – to terrorize – us. And when we allow them to scare us into doing things generations of Americans have rejected and our laws and constitution explicitly prohibits, we hand terrorists victories. In reaction to the 9-11 attacks, our deepest fears were exploited to justify spying on entirely innocent Americans, creating secret gulags, torture, imprisonment without representation and even possibly the summary executions of prisoners in American hands.

 

We must reverse this mindset, not just because it’s been ineffective and counter productive, but because it’s as un-American as anything since the nation sanctioned slavery and segregation. It’s time to engage the American public in an adult conversation about these new, asymmetric threats. First of all terrorists and terrorism will be with us just as hurricanes and earthquakes will always be a threats. That’s just a fact. Of course we must react to these threats, but not by soiling our constitution, or ignoring our laws or international law. Not by destroying the very America we claim to be trying to protect.

 

So, nation-states that harbor and/or finance groups or individuals who threaten America and Americans, will be aggressively sealed off from the civilized world. At first this will be done with aggressive financial and political sanctions. But if that fails I will authorize surgical military action against such rogue states.

 

If sanctions fail to change their behavior I will expand our use of armed drones and highly skilled special forces to eliminate any immediate threats. And yes, I will expand the role of civilian domestic and international law enforcement to further manage these threats.I already have done so in Pakistan and will do so without hesitation when justified in the future.

 

What I will not do is to continue sending tens of thousands of American men and women to fight in and occupy such those nations. I wish it were otherwise, but it’s not. And continuing to the truth of that, sentence America to a 100-years of wasted lives and wasted treasure.

 

Therefore let me reiterate my decision to withdraw our forces from Afghanistan in one year and to speed up our withdrawal from Iraq. Neither of these two nations can or will stand on their own feet until it becomes clear to their leaders that America is no longer willing or financially able to continue propping them up.

 

Even if we wanted to, we can’t continue propping up these troubled lands because, frankly, we’re broke. And not just broke. I wish it were only that. We are not only broke, but we’re in debt up to our collective necks. America and Americans are now treading in a sea of red ink. We owe trillions of dollars – some of it to competing nations that wish us ill and others just itching to eat our lunch, like China. And if we don’t get our fiscal house in order, and quickly, they’ll do just that. For example, while China invests in it’s civilian infrastructure, building a national network of high-speed trains, we can’t seem to even be able to keep our aging passenger trains on their tracks. If the 20th Century was the American century, the 21^st century could go down as Asian Chinese century, thanks entirely to our unsustainable burden of debt.

 

Which is why I am asking Congress to begin work immediately on legislation rolling back most of the Bush-era tax cuts for the top 1% of America’s earners. Those folks prospered during the very time the vast American middle class saw their net earnings decline, their jobs disappear and their homes foreclosed upon — by some of the very companies and individuals who prospered most under those tax policies. The time has come to re balance that equation.

 

I will propose that half the revenues gained from this change automatically flow to repay and reduce our national debt. Bill Clinton did this and, by the time he left office he had not only paid down the debt but left a surplus for his successor.

 

The other half of tax revenue raised by this change will used in its entirety to create jobs for working Americans. We will continue to incentivize the private sector to hire as well. But during such a deep recession it’s unlikely that, even with generous government credits, the private sector can create the number of new jobs we need to jump-start the economy.

 

Therefore I have asked the Department of Labor to recreat the Depression-ear WPA – the Works Progress Administration, which became the beating heart of recovery during the 1930s.

 

I take this action because I find it impossible to believe that there’s not enough meaningful work to be done. After all, America’s critical infrastructure, much of it built by Roosevelt’s WPA, is now crumbling. Hundreds of bridges need repairs, upgrading or replacement. Our roads and highways crumble beneath our vehicles. Toxic waste sites from coast to coast await cleaning. Hospitals and schools need billions of dollars in upgrading or replacement. And the new WPA will spearhead those projects if no private sector company steps up the plate. Because we need both a major infusion into our national infrastructure and we need the jobs such an effort would create. We will therefore get a double benefit from the money spent through this WPA by creating desperately needed job and preparing America’s infrastructure to compete with growing economies like China in the decades ahead.

 

Now let me be perfectly clear. To those on the right who object to any government-run jobs program I say this: then do it before we do it. Prove that you can create enough private sector jobs quickly. I’d prefer that. But don’t tell us the answer to jobs are more tax cuts for corporations and the rich. We already tried that and it didn’t work. In fact, it not only didn’t work, but since we tried that eight years ago we’ve seen a near-gutting of private sector jobs.

 

So, if that’s all you’ve, get out of our way. This has gone on for too long already. We have jobs to create, any way we can create them.

 

Finally, to those who would continue to obstruct rather than lend a hand, I say this.

 

I have three more years in office and whether or not I get re-elected to a second term is so far down on my string of worries I can’t even find it. All I care about now is carrying out the promises I made to voters. If you want to continue obstructing those efforts you’ll have to do so without my help from now on. And I will make sure the American public knows who you are. That goes double for members of my own party, those of you who’ve decide your own political futures are more important than addressing the dire problems facing American families who sent you here.

 

I apologize if this speech comes off as dismissive of Congress, or the quest for a more collegial and bipartisan process. I want that too and the Oval Office door will always be open to those who sincerely seek the same. But, we all know the old saying.. fool me once… and you know the rest. I tried the bipartisan course and it yielded nothing, giving me no incentive to put any of our legislative eggs in that basket again. Because time is running out. Our money has already run out. And now the patience of the American public is running out.

 

The state of the union is awful. One year from now I don’t want to be standing here giving the same report. That’s not why I was hired by the American people. And it wasn’t why they hired you either. Nothing less than the American Dream is threatened, and not by al Qaeda, but by us, those of us in this room tonight.

 

We owe the American people better. A lot better.

 

Thank you, and good night.

Posted in News For Real, Politics, economy | No Comments »

November/December 2009 posts

December 26, 2009 – 9:52 am

OPEN LETTER

Good Morning,

“Change we can believe in?” Great, sign me up, I said. I guess I could resurrect my 1960’s-era social activist naivete for the occasion. So I did.

Blinking in the sudden light of 2008 my naivete looked at me and stuttered, “What the hell’s happened over the last forty-odd years?”

“Well, it’s been just that – odd,” I replied.

First let’s note that we didn’t change to world. Not a bit. We got stoned, enjoyed great music, denounced the excesses of modernity, romanticized the simplicity of nature and denounced the evils of war. Based on these beliefs we also declared ourselves to be ever so much smarter and better than our parent’s generation.

Then we proceeded to out-do them in all things. We made more money, we bought more stuff, we lived in bigger houses, consumed more energy, created more trash and bought bigger cars, boats and RVs.

As the 1960s morphed into the 1970s, the 1980s and 1990s we “Flower Children” came to prefer FTD.

We got real jobs in real offices. Strawberry fields were replaced by 8′ x 8′ cubicles. We self-avowed free-range humans had rounded ourselves up and penned ourselves in — in return for being fed regularly by some of the very institutions we’d denounced just a few years earlier.

But, hey, it was job.

Then we had kids of our own, raised them, feed them and schooled them, and straightened their teeth. Now they’re off on their own trying to figure out how survive in a world far worse off than the one our parents handed to us.

So much for 40 years of Baby Boomer social activism.

Unless you haven’t gotten my point, I’m disappointed in us. We Baby Boomers moved through the demographics like a full-grown pig through a python — distorting and impossible to ignore. We misinterpreted our demographic heft for significance and became full of ourselves. We still are. No generation in history has had a less deserved option of itself than ours.

After all, let’s remember, it’s been on our watch that the ice caps began to melt, that Wall Street and big banks were allowed to repeatedly rape and pillage the national economy. And, it was on our watch that public health was allowed to become little more than an insurance company protections racket – “your money or your life.”

After hounding Richard Nixon and LBJ from office, we just gave up. We went on to tolerate dangerously mediocre leaders like Carter, Reagan, George 1 and George 2.

Then, when one of our own generation finally did became President, we where shocked, simply shocked, that he was indeed “one of us,” — a self-indulgent little prick willing to squander it all for a bit of nookie.

Helluva job, Boomers.

Which brings me to today. Why are we Boomers so surprised, so outraged, that Barack Obama has failed to deliver? After all, we didn’t.

I’ll tell you why were so angry, because Obama snookered us into dragging out our old idealism one more time, reminding us what we once believed in. But, since we’d already made fools of ourselves, his failure was salt in a wound we’ve worked so hard to hide for so long from ourselves.

So, like the whiners we’ve always been, we whine about it.

Which is precisely what I’m about to do, whine about it.

I admit it. I admit it all. We didn’t end war, even illegal ones. We didn’t change the business ethos one iota. Instead we jumped on board and rode that pony until it dropped. Then we gave it to our kids.

In August I turn 65, and I’ll belly right up to the old Social Security/Medicare trough along with the 80-million other members of my generation. (Slurp, slurp, slurp.)

Of course, to keep that trough full we’ll have lock the next two or three generations into a kind of indentured servitude. But hey, what-they gonna do? It’s either that or 80 million grouchy, whining geriatric cases abusing their meds and crashing on their adult children’s couches.

Which brings me back to today — we’re complaining - again. This time it’s about how Obama has let us down. Well, yes, he has. But, but as I’ve I said already, we should talk. What breathtaking chutzpah on our part.

And Congress has let us down. But duh,  they always do. As I’ve noted before, until we get the big-money out politics, big-money will continue buy the kind of politics it wants.

Finally let me say this; I’m pooped. I have nothing new to offer to the national conversation that isn’t already being said, and often better said, in other venues - HuffPost, Daily Kos, the Daily Show, Op-Ed News, etc, etc, etc.

Who knows, maybe this generation of activists will actually deliver on their idealism.

Me, - well, I’m gonna shut the hell up - pretty much. As I noted at the top, I may still post from time to time. Writing is a joy for me, and I will write again - just not as much. And when I do write again I will not be tilting at windmills of our own creation, because that’s just too weird, even for an old Hippie.

But the 60s were a blast. Too bad it all turned out to be just a bunch of generational window dressing.

Have a great Holiday Season
Steve,
Over  – and Out.

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Reality Check Time
Again

Let’s try to cut through some of the BS and, with congress getting down to the short strokes on health care reform, there’s going to be plenty of BS to cut through.

Forget all the extraneous noise and focus on just this:

1) Cost
2) National priorities

The cost of real health care reform – the kind with a strong public option – will be somewhere between $800 billion and $1 trillion over the next ten years.. or $80- to $100 billion a year.

Keep those numbers in mind as we move to No. 2 on our list, National Priorities.

Here’s what we spend now on things we consider national priorities:

Do notice that, as a percentage of total spending, both health care and education-spending were higher under George W. Bush than they are this year under Obama… a reflection of changing priorities in Washington.

The reason for that is evident in the next chart. It’s damn expensive being the world’s self-appointed hall monitor:

(Warning: Rant ahead)

I’ve had right up to here with Republicans who, during their 8-years at the helm, doubled the national debt, lecturing Democrats on fiscal responsibility. Not only did they already squarder at least the full cost of the health care reforms they now oppose just to fight an unnecessary war in Iraq, but they compounded that outrage by cutting taxes on the rich here at home at the same time. So here we are now borrowing nearly half of our annual national operating budget from the “communist” Chinese.  What little we do now collect in taxes then has to be parceled out thusly:

So, forget all the smoke Republicans will be blowing out there pieholes in the days and weeks ahead about how Obama’s health reforms are “too expensive.” The health of the American people is at least as important as their security or it’s not. If the Republicans want to argue that it’s not as important then let them explain that reasoning.  I mean being killed by a terrorist or dying from an untreated illness render the victim just as dead.

But hey, I’m willing to engage conservatives in that line of argument. In fact, I encourage it. So, how many Americans have been killed this year by international enemies/terrorists? Huh? A few dozen? Maybe, but only if you classify the Ft Hood shooting by that crazy psychiatrist’s a terrorist attack as opposed to just another nut “going postal” on co-workers.

So, that’s their number. Let’s see how that stacks up against my numbers…

Medically related Deaths in the US last year :

Total: Number of deaths: 2,426,264
Top Causes:

Heart disease: 631,636
Cancer: 559,888
Stroke (cerebrovascular diseases): 137,119
Chronic lower respiratory diseases: 124,583
Accidents (unintentional injuries): 121,599
Diabetes: 72,449

Looks to me like Americans need a helluva lot more “protecting” from illnesses than they do from Middle Eastern boogie men. Even counting the deaths of 9/11 — 3000 or so — that’s nearly 70,000 fewer Americans that die each and every year from just complications related to diabetes.

So, it all boils down to those two things:

Cost vs. National Priorities

What ARE our national priorities, really? If we are going to get ANY of that “Change We Can Believe In,” Congress will pass health care reform with a strong, no BS, public option. If not, then that says all that needs to be said about America’s national priorities, doesn’t it.

 

 

 

 

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Another Reality Check
(I got a million of them)

I’m a simple soul, so maybe the reason I worry so much is because I just don’t understand. I sure hope that’s it because, if my worries are based in reality, we’re so screwed.

Depending on your state of denial or sober reflection you can find in the news of the day anything that suits you. Either the recession is over, for those of you who are tired of this one, or it’s just beginning, for those like me who apparently can see that light at the end of the proverbial tunnel.

My skepticism doesn’t  stem from a deep understanding of marco economics, but rather a deep understanding of old math. You remember old math, where 2+2 still equals 4 and 2 minus 200 equals minus 198.

It’s that “minus thing” that’s got me fretting.

So, if you’re one of look-on-the-bright-siders, tell me where my math goes wrong. I just don’t see a bright side. And neither do some others who are simple souls. I’m not pulling these number out of my posterior region.

Let’s start with a speech given recently by Richard W. Fisher, president and CEO of the Federal Reserve Bank of Dallas. In his speech before the Commonwealth Club of California, Fisher laid out what can only be described as some breathtakingly startling numbers – all negative numbers, by the way. According to Fisher: (Full Speech)

Social Security’s unfunded liabilities:  $13 trillion.
(Size of the entire annual US economy:  $14 trillion.)

Then there’s Medicare funding. According to Fisher:
The unfunded liability for Medicare A: $34.4 trillion.
The unfunded liability of Medicare B:  $34.0 trillion.
The shortfall for Medicare D:  $17.2 trillion.

Total of just Medicare’s unfunded liabilities:
 $85.6 trillion

(That’s six times larger than the annual output of the entire U.S. Economy.)

But wait, there’s more. That’s just what we’re actually on the hook for.  On top of that are all the things we still need, to want, to spend money on. America’s infrastructure, for example, is crumbling after three quarters of a century of neglect. We now either have to fix it or learn to travel and live like we did before Roosevelt and Ike put it in place.

What’s fixing it gonna cost?

“The American Society of Civil Engineers, which assigned an overall D grade to the nation’s infrastructure and estimated that it would take a $2.2 trillion investment from all levels of government over the next five years to bring it into a state of good repair.” (Full story)

And there are yet more bills in the mail:

Annual interest payments on our $14 trillion national debt: $400 billion
Our annual defense budget: $350 billion

Then there’s the largely “off the books”cost of our two current wars, a moving target so go HERE to see what the bill is so far.

Oh yeah, then there’s those bailouts of bankers and Wall Streeters. How much is all that gonna cost us before it’s all said and done?

Bailouts could cost U.S. $23 trillion
“A series of bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23 trillion, the U.S. government’s watchdog over the effort says – a staggering amount that is nearly double the nation’s entire economic output for a year. (Politico)

All of which I might be able to view with less alarm if the recession – if that’s what you insist on calling it – were really over. But it’s not. To discover the truth about that you have to look beyond the pablum you get off  CNN and it’s cable news ilk:

It’s Still the Worst Deflation in US History
By David Goldman — Asia Times

This morning’s news that housing starts “unexpectedly” dropped by 11 percent month on month is consistent with my grim view of the American economy. The crystal-meth monetary policy at the Fed makes everyone feel better, until they don’t. The nonstop rise in the price of dollar hedges tells us that it can’t last forever. Large balance sheets attached to the Fed’s money pump can show profits, and the price of spread assets (as PIMCO’s Bill Gross keeps emphasizing) is stupid rich. But at the capillary level, through, the economy is dying and gangrene is setting in…A 20% decline year on year does not look like a recovery. In fact, it looks like nothing we have seen since the Great Depression. Commercial and Industrial loan growth lags the end of recessions, to be sure, but this extreme level of credit reduction suggests profound trouble. (Full Story)

Sorry to dump all this on you on day before your weekend, but my gut tells me we’re at the doorstep of something historians will be trying to sort out a century from now. How did the richest and strongest country on earth go from First World dominance to fiscal collapse in less than a decade?

Well, that’s easy. Anyone who’s lived off dozens of credit cards, until their house of credit cards collapsed, knows the answer. The only question I have is, why aren’t we hair-on-fire alarmed by all this? Here, maybe this little factoid from Fed president Fisher might ignite some hair:

” Let’s say you and I and every U.S. citizen who is alive today decided to fully address this unfunded liability through lump-sum payments from our own pocketbooks…. How much would we have to pay if we split the tab? Again, the math is painful. With a total population of 304 million, from infants to the elderly, the per-person payment to the federal treasury would come to $330,000. This comes to $1.3 million per family of four—over 25 times the average household’s income.”

So spare me “the recession is over” crapola. It’s the American way of life that’s over, at least as we’ve known it.

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Of Gooses and Ganders

As health care reform gets closer to passage with some form of public option, anti-reform forces are retreating behind their final line of defense – abortion.

Stupak wants no abortion funding in reform
WASHINGTON DC — Democrats in the US House Thursday rolled out their $894 billion health care reform package…It would extend medical insurance to millions more Americans and include a public option…But 1st District Congressman Bart Stupak says he won’t vote for it unless it expressly forbids using federal money for abortions.

“And we’re just saying maintain the law that’s been on the books for 35 years and let’s live up to the President’s word,” Stupak expresses.  “No public funding for abortion in the health care plan, and we’re all happy, and we can go away.”

It’s the conservatives equivalent of the nuclear option. They know that, when everything else fails — the lies, the distortions, the scare tactics — that dragging public funding of abortions in can gum up the works like nothing else. There’s nothing quite as distracting as accusing your opponents of, not only “killing babies,” but “killing babies with taxpayer money.”

If we know anything by now it’s that trying to reason with those who believe that is a waste of time. Even a bigger waste of time is trying to change the cynical tactics of conservative politicians who may or may not believe such nonsense but believe it got them elected and will get them re-elected.

There’s a better way to get past this final roadblock. Simply use their own stated reasoning to threaten federal funding of something they like. After all, it would be difficult to find an American taxpayer/voter who doesn’t object to the use of his/her tax money going to fund __________________ (fill in the blank.)

For example, I feel personally culpable every time my state executes a prisoner. No matter how richly deserved that punishment may have been, killing someone who’s already been captured, convicted and incarcerated is simply wrong. It’s not “justice,” it’s revenge — an eye-for-eye, residue of a brutal and primitive past.

So I, and millions of other Americans would prefer our tax money not be used to kill imprisoned, full-term, adults.

We understand that there are also millions of Americans who honestly believe that executions are just what the doctor ordered. And they believe their states should have the “choice” — life in prison or death.

But there’s plenty of taxpayers who don’t want that “choice” available because we believe it’s simply state-sponsored murder.

You see? If conservative members of Congress to use abortion to sink real health care reform, then the smart thing to do is to broaden the debate on the morality of federal funding. Each time an anti-abortion-funding amendment is floated progressives need to propose a “while we’re at it” companion amendment proposing restricting the use of public money for executions and the enactment of funding sanctions against any state that continues executing prisoners.

The great thing about this approach is that, once that Pandora’s Box is flipped open, there’s no end to the things people would prefer the government not fund.  So, if conservatives want to open a wide-ranging discussing about morality and use of public funds, bring it on.

- I bet tens of millions of Americans think it’s immoral to shovel hundreds of billions of their tax dollars into the pockets of the very Wall Streeters, bankers and speculators whose greed and malfeasance crashed the economy. Maybe congress should spend some time thinking out loud about that while they wring their hands over the $85 billion a year genuine health care reform would cost.

- We’ve already spent over a trillion taxpayer dollars killing Iraqis and Afghans, and congress is about to authorize billions more for more of the same. We’re talking hundreds of thousands of, not Iraqi and Afghan embryos, but walking around full-term folks whose deaths were, are and will be, financed with our tax dollars. Do conservatives want to open that can of moral worms as well? If so, give me a front row seat.

- What if government money were going to fund a school for abortion doctors? Conservatives would all over that like a Catholic priest a Boys Scout jamboree. Nevertheless, tax dollars from American pacifists go everyday to fund military boot camps where young men and women are trained to do one thing and do it well – kill full-term humans whose “right to life” has been revoked by the government.

Well, you see where I’m going with all this. If conservative members of congress to begin parsing the kind of stuff that can and cannot be funded with tax dollars, they may regret it. And if they insist on throwing the abortion-monkey-wrench into the health care debate progressives in congress have to make damn sure they do regret it.

THAT’S s how you deal with religious absolutists and the cynical demagogues in congress who play them like a fiddle.

 Two can play that fiddle.

So, where are our fiddlers?

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History:
What a Bitch

The history of modern man is replete with flat learning curves.

Plague in the mid-1300’s which wiped out an estimated 40- to 60 percent of Europe’s population, was cause by filth and the rats that feed on filth  – the dark ages version of man-made environmental pollution. Any lessons learned from that were clearly, and quickly, forgotten/ignored. Six centuries later the ice caps are melting.

Financial crises and panics have also punctuated every era of US history and yet the learning curve goes unchanged:

The Crash of 1819: The first actual financial depression marking the end of the economic expansion that had followed the War of 1812.  Banks throughout the United States failed; scores of home mortgages were foreclosed on and property values plummeted. Falling commodity prices severely hurt agriculture and manufacturing which, in turn, sparked a 75% jump in unemployment in parts of the East. Recovery did not come until late 1824.

The Panic of 1837: Our first official financial “panic.”It began banks stopped payment in gold and silver coinage after a run on the banks due to the closure of a major New York bank. The Panic of 1837 was sparked a five-year long depression leading to a large number of follow on bank failures, a bursting of a real estate bubble and record-high unemployment.

The Panic of 1873: This panic began in Europe, where cheap mortgages had created a residential real estate bubble. When that bubble went bust, London banks tightened credit, the shockwaves from which then triggered a twin crisis in the United States. U.S. Banks were vulnerable because they were overextended due to a binge in speculative loans they’d made to railroads and the railroad’s real estate. This time more than 10,000 businesses failed, and the U.S entered a three-year depression.

The Panic of 1895: This panic was the worst – so far. The 1880s had been a period of significant economic expansion, but it was driven largely by speculative investments. A growing credit shortage sparked this panic leading into yet another depression. When the dust settled no fewer than 15,000 businesses, 600 banks, and 74 railroads had failed causing another period of sky-high unemployment.

The Bank Panic of 1907: Also known as the “Knickerbocker Trust Panic, this one was caused by lax regulation on Wall Street. Losses on Wall Street then sparked a loss of confidence among bank depositors causing a run on banks. All that finally worked it’s way down the financial food chain causing liquidity to dry up. The stock market lost over 50% of it value. 

The Depression of 1929:  At the height of the Great Depression in 1933, 24.9% of the U.S. workforce (a total of 11,385,000 people), were unemployed. The 1929 Crash was preceded by the bursting of real estate bubbles in Florida and Southern California.

The Savings and Loan Crisis: 1987: Half the nation’s thrifts either failed or were taken over by the government. Easy lending, and illegal, lending sparked over-building in states like Texas and California and Florida. The crisis, caused by deregulation and failure to enforce remaining regulations, cost US taxpayers nearly $200 billion.

The Dot-Com Bubble of 2001: The bursting of the dot-com investment bubble wiped out an estimated $5 trillion in market value. Economists now believe that this set the stage for the next bubble, the housing bubble, as market players looked for a new way to inflate asset values.

The Current Housing Bubble Crisis: The bursting of this most recent bubble unmasked a host of other bubbles across the entire paper-pushing financial food chain. This time the “great fool theory” of asset inflating schemes had unmasked the biggest financial players to be the greatest of all fools. Banks alone were holding more than $2 trillion in worthless paper secured by now worth-less assets. And those were the lucky banks. Many financial institutions were holding paper back only by other pieces of paper, which were in turn backed by just more paper. Official unemployment stands at just a smidge below 10%, understating the real number of unemployed which is closer to 15%, and growing.

Nevertheless, the learning curve on the need for a strong and steady hand on the financial regulatory controls remains as flat as ever. No matter how much a mess these financial wizards create while lining their own pockets, they can always buy off enough politicians to defeat genuine attempts to regulate their repeatedly ruinous behavior.

Banks resist push for tighter regulations
Washington – Sept. 9, 2009 –  If you doubt that U.S. banks long to return to the days of impotent regulation, you need only look at one of the financial sector’s top legislative priorities: killing a proposed new agency that would be dedicated solely to protecting consumers’ financial interests. (Full Story) 

One more flat learning curve example is called for, considering current White House deliberations:

Afghanistan

“When you’re wounded and left on Afghanistan’s plains,

And the women come out to cut up what remains,
Jest roll to your rifle and blow out your brains
An’ go to your Gawd like a soldier.”
Kipling, 1895

Source:

Wars Affecting Afghanistan 945-1258

962 997-1030 999 1029 1040 1042 1150 1175 1192-1193 1215 1221

Begin of Ghaznavid Dynasty in Afghanistan Ghaznavid invasion of India Ghaznavids took Khorasan from Samanids Rayy (near Tehran) fell to the Ghaznavids (previously Buyid) Seljuk Turks defeated Ghaznavids, annexed Khorasan Seljuk Turks conquered Rayy area from Ghaznavids Ghurids destroyed Ghazna Ghurid invasion of India Ghurid Invasion of India, established Sultanate of Delhi Khwarizm Shah conquered Ghurid possessions in Afghanistan, eastern Iran Mongol conquest of Khorasan and Afghanistan

Wars affecting Afghanistan 1258-1501

1381 1398-1399 1451 1458

Sarbardar State in Eastern Iran, centered on Sabzavar, conquered by Tamerlane Tamerlane raided Northern India, sacked Delhi Qara Qoyunlu temporarily occupied Timurid capital of Herat Afghan Buhlul Lodhi established himself as Sultan of Delhi, ousting the Sayyid Dynasty

Wars of Afghanistan, 1501-1747

1504 1507-1508 1510 1522 1524-1537 1526 1545 1591 1598 1622 1638 1648 1709 1716 1722 1729 1732

Timuruid Babur conquered Kabul Uzbeks conquered Herat, Khorasan Safavids conquered Herat, Khorasan from Uzbeks Timurid Babur conquered Qandahar Repulsion of 5 Uzbek invasions into Khorasan Timurid Babur conquered Delhi, established Moghul Empire Safavid conquest of Qandahar, from Mughal Empire Safavids lost Qandahar to Mughal Empire Victory over Uzbeks; Herat regained Safavids gained Qandahar from Mughal Empire Safavids lost Qandahar to Mughal Empire Qandahar regained from Mughal Empire Safavids lost Qandahar to the Ghilzay Afghans Herat rebelled against Safavid rule Afghan conquest of Isfahan; Safavid Dynasty terminated Expulsion of the Afghans from Persia by Nadir Shah Persian ruler Nadir Shah took Herat

Wars of Afghanistan, 1747-1919

1738-1739 1740 1748 1751 1756-1757 1759 1761 1767 (1793-1800) 1809 1816 1816-1826 1819 1834 1836 1836-1838 1839-1842 1848-1849 1850-1855 1856-1857 1863 1863-1879 1878-1880 1884 1885 1896 1919 1919

Persian Invasion of Afghanistan, Punjab, sack of Delhi Persian Expedition against the Uzbeks Afghan Invasion of India Afghan Invasion of India Afghan Invasion of India Afghan Invasion of India, conquest of the Punjab Afghan Invasion of India, victorious over Maratha Confederation in Battle of Panipat Afghan Invasion of India Internal Strife; ruler of Herat conquered Qandahar, Kabul, ousted Shah Internal Strife; Shah ousted War with Persia Internal Strife (Succession Struggle) Kashmir lost to the Sikhs Peshawar lost to the Sikhs Afghan-Sikh War War with Persia First Anglo-Afghan War Second Anglo-Sikh War; Afghan forces, allied to the Sikhs, defeated Internal Strife Persian occupation of Herat Herat regained from the Persians Internal Strife Second Anglo-Afghan War Afghan conquest of Khanate of Maymana Russo-Afghan War Conquest of Kafiristan Palace Coup, followed by brief Internal Strife Third Anglo-Afghan War

Wars of Afghanistan 1919-1979

1924-1925 1928-1929 1953 1955-1957 1961-1963 1973 1978

Khost Rebellion Afghan Civil War Coup d’Etat Pakhtunistan Crisis Pakhtunistan Crisis; Border Conflict with Pakistan Coup d’Etat; Abolition of Monarchy Coup d’Etat

Wars of Afghanistan since 1979

1979-1991 1991-1995 1995 2001 2001-

Soviet Occupation, Afghan Resistance Civil War, country partitioned mong a number of warlords Taliban brought most of Afghanistan under their control; warlords held out in the north International coalition, Afghan allies ousted Taliban Resistance against Occupation forces, Democratic Regime

Here’s your flat learning curve moments:

Karzai’s brother said to be on CIA payroll - report
Tue Oct 27, 2009  WASHINGTON, Oct 27 (Reuters) - The brother of Afghan President Hamid Karzai has been getting regular payments from the Central Intelligence Agency, The New York Times reported on Tuesday, citing current and former U.S. officials…Ahmed Wali Karzai is a suspected player in Afghanistan’s opium trade and has been paid by the CIA over the past eight years for services that included helping to recruit an Afghan paramilitary force that operates at the CIA’s direction in and around the southern city of Kandahar, the newspaper reported.

And, my all time favorite:

U.S. defense bill would pay Taliban to switch sides
WASHINGTON (Reuters) - The defense bill President Barack Obama will sign into law on Wednesday contains a new provision that would pay Taliban fighters who renounce the insurgency, Senate Armed Services Committee Chairman Carl Levin said on Tuesday.

Sounds to me like there’s more job opportunities in Afghanistan than here in the US. At least there some ordinary folk are getting some of that “job-stimulus money” we keep hearing about.

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Which “War of Necessity?”

It can be a bit discombobulating when a high-ranking politician in either party makes sense. That happened last week when Vice President, Joe Biden, said this, right out loud and on the record:

“Can I just clarify a factual point? How much will we spend this year on Afghanistan?” Someone provided the figure: $65 billion. “And how much will we spend on Pakistan?” Another figure was supplied: $2.25 billion. Well, by my calculations that’s a 30-to-1 ratio in favor of Afghanistan. So I have a question. Al Qaeda is almost all in Pakistan, and Pakistan has nuclear weapons. And yet for every dollar we’re spending in Pakistan, we’re spending $30 in Afghanistan. Does that make strategic sense?” (Newsweek)

No, it doesn’t make sense. So, why are we doing it? Never mind the other fact Joe didn’t mention, that all the Americans being maimed and killed in that crap-hole of region are being killed and maimed in Afghanistan. And for what? To keep a crooked “president” in Kabul in office so he and his drug-cartel leader brother can continue stuffing their off shore bank accounts with stolen US taxpayer dollars and drug profits.

There’s simply no longer any way to sugarcoat it. That’s really what’s happening. And Joe’s onto it. The only question is  this: will realpolitiks or commonsense carry the day?

Let’s weigh the two:

Realpolitik Reasoning:
If Obama pulls back in Afghanistan, out of power conservatives will savage him and fellow Democrats. With elections looming a year from now they will tag Democrats as “cut and runners,” who handed Al Qaeda a victory against the world’s last superpower leaving the US vulnerable to another 9/11 attack. A decision to pull back in Afghanistan may prove decisive in allowing the GOP’s goal to regain either or both houses of Congress in 2010, and maybe the White House itself just two years later. If the first should happen then the remaining two years of Obama’s term would prove even less productive than it’s already proving. That would layithe groundwork for the big defeat in 2012.

So, Democrats shouldn’t risk letting go of the Afghan tiger’s tail, least it turn and devour their political majorities. Of course, continuing to hang on won’t be a walk in the park either. And yes, more Americans will die in Afghanistan’s blood-soaked sand, but at least elected Democrats might be able to steer clear of the line of fire themselves.

Commonsense Reasoning:
The “generals on the ground,” report that there maybe as few as 100 Al Qaeda operatives still operating in Afghanistan. Whereas there could be as many as 10,000 operating in the tribal regions of neighboring Pakistan.

If the goal is defeating Al Qaeda, then Pakistan is field of play, not Afghanistan.

LAHORE: The Pakistan Army made a stark admission of the scale of the threat it faces from a nexus of the Taliban, Punjabi and Al Qaeda terrorists and whose attacks are increasingly coordinated, include soldiers in their ranks and span the country, British daily the Guardian said on Tuesday. (Full)

But wait, there’s more. Should Afghanistan fall back into the hands of the Taliban, what do they get for their trouble? They get a primitive, backward nation filled with un-educated/under-educated subsistence peasants scattered across a largely parched and rocky wasteland the size of Texas where the definition of cutting edge technology in most of the country is indoor plumbing. 

But what would Al Qaeda & Friends get should they successfully destabilize Pakistan? Nuclear weapons – as many as 100 thermonuclear devices, and the missiles required to reach out and touch someone with them.

One would think that since we’re hyperventaliting and spending so much political capital these days trying to stop Iran from developing nuclear weapons, we’d be at least as worried about Al Qaeda taking over a country that already has over a hundred of the damn things.


One would think. So, a commonsense person would figure that commonsense dictates we reverse our two policies: more attention, including the kind the Pentagon likes to call “kinetic attention,” on Al Qaeda in Pakistan, and less on whatever the hell we’re fighting against in Afghanistan. Instead of sending more US troops to Afghanistan, don’t. Just  let the Karzi ruminate on what would happen to him and his drug kingpin brother if US troops stopped protecting — or more precisely, enabling them. My guess they’d hightail it out of town PDQ to join their ill-gotten gains where they can spend the rest of their days on a sunny beach complaining to any reporter who’ll listen how the US “abandoned” and “lost Afghanistan.”

Now, don’t get me wrong. I’m not saying that the guys running Pakistan are any prize. They’re not. They never have been and I seriously doubt I’ll live to see the day when Pakistan isn’t run by the kind of people Tony Soprano would hire in heartbeat. All I’m saying is that, if we’re really worried about preventing murderous Al Qaeda mayhem, worry about Pakistan, not Afghanistan.

One last observation. US officials, including most recently Secretary of State, Hillary Clinton, keep assuring us that “Pakistan’s nuclear weapons are secure. We are not worried about that.” (Clinton: US Confident in Pakistan’s Control Over Nuclear Weapons)

Please tell me that’s a lie… I won’t be angry. On the contrary, in this case admitting that’s a  flat-out lie would be ever-so reassuring. I WANT everyone in Washington to be worried about Pakistan and Pakistan’s nukes.

Because I sure as hell am. (Security of Pakistan nuclear weapons questioned)

(See also, Not Good Enough)

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Worry, Worry, Worry

 

 

 

 

 

I look forward to the day when I can sit down at this keyboard in the morning and, looking ahead, write a column while humming “Zippity Do Dah, Zippity Day.”

Instead I find myself spending a lot of time worrying. Of course, that’s hardly news to regular readers. I am worrier – a persistent pessimist.

My condition is not inherited, but a learned response. At a young age I discovered a simple truth: pessimists are rarely disappointed, but often pleasantly surprised. Optimists, on the other hand, live the flip side of that rule.

I only mention this because lately the focus of my worries has been the economy. Not the US economy, but the global one. Since it became just that, “global,” just focusing on the US economy is like worrying about you tire pressure but never checking the oil.

And what I see has me about as worried as I get. Avoiding a lot of economic la de da, here’s what’s got me fretting:

* The value of the US dollar is dropping like lead turd – which is about how our creditors (read China) are see it these days

This is why the price of gold and other commodities (also known as “real stuff,” has soared in recent weeks. More and more countries, investors and those with “real stuff,” like oil, to sell are looking for other ways to price their stuff fearing that a dollar they take in payment today will w ether away in value before they can convert it into some kind of other real stuff.

All this is mighty dangerous for America, and Americans, right now. Sure a devalued dollar makes US goods and services cheaper overseas. And in normal times that can be a nice advantage to have. But not now. Not when pretty much half of every dime the government needs to fund everything from the military to health care to bank bailouts has to be borrowed from a handful of other countries… particularly China.

Which is why every time the dollar dips another few percentage points in value, Chinese finance ministers put out an emergency call for fresh underwear.  China is now sitting on more than three-quarters of a trillion in US, dollar-denominated, debt, and the last thing they want is to be repaid with dollars worth a fraction of what they bargained for when they lent us the dough.

And those worries could not come at a worse time for the US government. In 2008 the US budget deficit was $455 billion. But this year that deficit will be more than $1 trillion, and we’re gonna need to borrow a lot of that from an increasingly nervous China. (See Chart)

* Which brings me to devaluation.

Devaluation of national currencies has always been the refuge of last resort for nations that get themselves in over their heads. Simply reneging on an international debt would be fiscal suicide for a nation. But when world markets are allowed to discount a nation’s currency based on the fundamentals then the debtor nation can claim, “We didn’t do it. They did it.”

Too many nations got themselves in over their heads, not the US. And it often only takes a small disturbance to trigger an avalanche in conditions like these. Say hello to tiny Latvia.

Latvia’s Woes Rise as Auction Fails
Latvia’s halting austerity program and its proposal to modify mortgages are causing “another wave of distrust” to roll over the Baltic nation, the central bank said Wednesday, issuing a warning for the country hit hardest by economic strains across Europe… Under EU rules, countries must keep budget deficits below 3% of GDP. According to the commission, the EU’s executive arm, 20 of the bloc’s 27-member countries are on track to break that limit this year. The commission blamed falling tax revenue coupled with exceptional state spending to help the unemployed, prop up ailing banks and stimulate economic recovery.Latvia’s government is on the verge of giving up on a central tenet of its austerity program by allowing a devaluation. That could goose the economy by making exports more attractive, and it would eliminate the expensive process of buying lats to maintain the currency’s peg against the euro.

Devaluation would have serious consequences. The Swedish banks that made euro-denominated mortgages would see foreclosures surge as fewer borrowers would be able to make payments. Latvia also would likely lose any chance of being allowed into the euro zone soon. would make devaluation politically palatable, because it would ease the pain that Latvian households with euro-denominated mortgages would suffer if the lat were devalued.

Ah, if only it were only Latvia:

In addition to Germany and Italy, the commission warned Austria, Belgium, the Czech Republic, the Netherlands, Portugal, Slovakia and Slovenia about budget deficits. (Full Story)

Yep. The whole interconnected “free market” world is awash in debt owed to one another. And, as push comes to shove, they are increasingly eyeballing each other like gunfighters, unblinking, fingers twitching at their sides, waiting to see which country goes for it’s devaluation first.

Meanwhile oil producing nations, particularly the Saudi Sand and Oil Kingdom, are fixing to stop pricing oil in dollars, and replace it with the average of a “basket of currencies.” Which means that if you thing three bucks a gallon is high, get ready for $5 or even $6 or more.

But wait, you say, none of these worries make sense. Look at the stock market. The equities markets have boomed in recent months, edging to within snorting distance of 10,000 on the DOW.

I wish I could get all giddy about that, but the driver behind that has nothing to do with anything real, or anything helpful.

Over the past decade or so of laissez-faire global finance those who create value in the equities markets figured out how to profit even more without actually creating actual value. It’s been a period of fiscal alchemy in which they turned, not lead, but hot air, into gold – at least for them.

Here’s the problem in a nutshell:

Over the last couple of decades or so, the book value of assets —  stocks, bonds and bank deposits — exploded. They now represent four times the actual annual global gross domestic product.

The Mckinsey Global Institute estimates this trend peaked sometime in 2007 at  $194 trillion – compared to much more grounded and realistic levels such as $43 trillion in 1990 or the $94 trillion in 2000.

Which says to me that at least $100 trillion that’s been added to the world’s books since 2000 was largely if not entirely, hot air.

That hot air funded the last three bubbles.. the dotcom bubble, the housing bubble and the securities bubble. And it’s that $100 trillion in hot air, in search of the next bubble, that’s driving the equities and commodities markets upward.

“It’s not a matter of could it happen again; it’s a matter of when,” says Kenneth Rogoff, an economics professor at Harvard University and co-author of a book on bubbles, “This Time Is Different: Eight Centuries of Financial Folly.”

All of which, when taken together, has me deeply and profoundly worried. On one side we have a small group of individuals, companies and national and extra-national institutions trying to leverage that $100 trillion in hot air on their books into another few trillion in hot air – on which of course they pocket very real returns in trading fees, capital gains and Soprano Family-type relationships with others of their kind.  Because, after all, “their thing” has served them very well indeed.

On the other hand we have entire nations across the globe, not third world nations, but developed nations, flat broke, rattling their tin cups at one another while living in terror that no one will lend them any more money — and at the same time worrying that those who owe them money will devalue their currencies thereby rendering them even more fiscally screwed than they were already.

Back here in the US of A that tin cup has become a yawning 55-gallon barrel, as we need to borrow more and more to fill the holes left in our own institutions when those Soprano financiers pulled the plug on their Ponzi schemes. Just this morning we learned that even after bailing out Freddie and Fannie and AIG and BofA and …. that now we are going to have to borrow a few more billions to bail out the FHA as well. (Oh, and then there’s those two expensive wars someone believes we need to continue funding as well.)

It would be one thing if what we’re going through right now was just the collapse of the US financial system. But it’s not. This time it’s anyone who is anyone in the developed world – from the G8 right up to the G20.

Those Soprano Financiers were great lovers. They found the world’s G-spot.

Now we’ve all got the clap – or likely worse.

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Tale of Two Airplane Trips

Funny how objects can play repeat roles in history.

When President Truman flew to Wake Island in 1951 for a showdown Korean War policies with General MacArthur, the general had his pilot fly in circles until Truman’s plane landed. His intent was to keep the President of the United States cooling his heels on the tarmac until MacArthur was ready to grace him with his presence.

By that time Truman had had about all he was going to take from his most famous warrior:

“Truman was incensed at MacArthur’s rogue attempt to define and influence US policy; he decided MacArthur had to be fired. Truman did not act immediately, however, and as he waited, in early April of 1951, Congress approved NATO, a sign that Truman’s Europe-first policy had been accepted. By this time the incident of the ultimatum had become worn-out, and Truman needed another reason to fire MacArthur…Within a few months, MacArthur leaked news to a congressman that he planned to use Chinese Nationalist forces from Formosa in the Korean War. Such an act, of course, would only serve to further inflame the People’s Republic of China, and it again went against Truman’s diplomatic policies.” (More)

A couple of weeks ago either General Stanley McChrystal — or someone working with/for him — decided the best way to get what he wants in Afghanistan was to cut this Presidents’ legs out from under him by leaking dire warnings that the US will “lose the war in Afghanistan” unless another 40,000 US kids are sent over there PDQ.

Last week President Obama had his own showdown with his own general on war policy… the war in Afghanistan. That meeting was also held on a tarmac, this time in Copenhagen.

We know how that meeting between MacArthur and Truman went, but we still don’t know exactly how the President Obama/Gen. McChrystal went. But we can imagine:

Pres: Sit down General. Do you remember Harry Truman?

Gen. Yes sir.

Pres: You remember General MacArthur?

Gen. Yes sir.

Pres. Remember how that all turned out?

Gen. Yes sir.

Pres. Good. Well, our time’s up. Gotta fly.

Gen. Yes sir. By your leave sir. (Salutes and departs.)

That’s how I hope that conversation went, anyway. Or at least something approximating it.

First of all let’s get the terminology right for change. In a  counter-insurgency/nation building mission, terms like “winning”and “losing” are meaningless. Such absolute terms are only meaningful during absolute wars …. as in  REAL wars.

The Afghanistan operation and our so-called  “war on terrorism” are NOT real wars. Not even close.

Real war is when a nation is reacting to a genuine strategic threat to its very existence. Al Qaeda and the Taliban do not now, and never will, pose such an existential threat to America or Europe or any other part of the developed world.

True, they can be deadly and annoying and expensive. But what they can never be are victors over us. Never, under any imaginable scenario, can they defeat, occupy or have any significant, longterm impact on America or Americans at large. Even relatively spectacular attacks such as 9/1l, while emotionally jarring, achieve only limited and fleeting impact.

So we are not about to “lose” a war in Afghanistan. And we are not about to “win” it either.

If the generals want to call it a war then McChrystal should be suggesting something a lot beefier than 40,000 more troops. He should be asking for the resources to create total mayhem. For example during a real war concern over civilian casualties hardly registers on the “to do” list. In a real all-out war worries about who dies or how or at whose hands are tactical — not moral — decisions. Because, ya know, war.. real war.. IS hell.

In a real war areas believed to harbor enemy forces or resources are carpet bombed until “the rubble bounces.” Real wars are wars of attrition. Each side rains death and destruction rains down on other side until one side yells “uncle.” Until then, you destroy anything standing and kill anything that moves.

Thats a real war. And let it be said we’ve not seen real war since 1945. That’s a good thing. Maybe we’ve evolved beyond such barbarianism.  But having said that we need to understand that when politicians and generals start throwing around terms like “win” and “lose” they’re blowing smoke up our butts.

No matter how many more resources and troops we pour into Afghanistan or Pakistan we will never – NEVER – achieve anything resembling “victory.” The enemy will not been destroyed. And, since civilians in these contested territories were largely spared the true miseries of real war, they are  likely to side with the enemy rather than foreign “liberators.”  So that enemy will regroup, retrain and reestablish themselves once we declare “victory” and leave. After all, the Taliban and Al Qaeda live there, and always will. We don’t and we can’t.

Of course yanking the leash of a popular general in the middle of a conflict can be political suicide for any Commander and Chief. When Truman fired General MacArthur all hell broke loose for the man the right dubbed, “that little pipsqueak traitor.”

Headlines blared,  “Ouster Viewed by Republicans as 1952 Issue.” In a matter of hours after the firing Republicans in Congress were talking impeachment.  And Truman’s poll numbers plumbed historic depths. And when the fired MacArthur returned home he was greeted with parades and treated like a Roman general returning from wars of conquest.

Of course, Truman was in his second term and did not have to worry about reelection when he fired Big Mac. Obama does not have that luxury. He’s going to have to take the full heat if he decides to yank Chrystal’s chain. But, as time passed and cooler heads examined Truman’s decision to relieve MacArthur of his command, it all came down to this: civilian control over the military. It’s what’s made the US different from other countries since its founding. When push comes to shove, it’s the civilians in power who have the right and obligation to tell the generals how it’s gonna be.

That concept, that constitutional imperative, was reinforced when the Senate Foreign Relations Committee concluded that MacArthur’s dismissal was entirely justified. He’d crossed the nation’s civilian leaders one time too many. Even the man who succeeded Truman, Republican Dwight Eisenhower, had been stung by MacArthur one time too many and was more than happy he did not have to fire him himself.

One final observation here. The Vietnam war left America with plenty to think about, much of which we are still digesting. Still we wrestle with those two terms; “winning”  and “losing.”

On one side are those who claim that we should have just let the general do what they wanted to do in Vietnam and we would have “won.” That it was meddling civilians and politicians in Washington who “lost” that war.

Others say those generals got everything they requested, year after year; more troops, more air strikes, more Agent Orange, military strikes inside neighboring Laos and Cambodia. And that it was only after escalation requests escalated with no end in sight that the political machinery finally reeled the generals in bringing that unfortunate “war” to an end.

That argument, the Vietnam War, dragged on and on and on. We didn’t “win” and we didn’t “lose.” And all we have to show for it all is a black granite wall with 60,000 names of my generation on it. I wonder how many names will be on the Afghanistan wall, the Pakistan wall, the Iraq wall once we stop trying to “win” or avoid “losing” those wars.

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A Tale of Two Bankers

Yesterday Ken Lewis announced he was stepping down as Bank of America’s CEO.

Let me be the first to say, “good riddance.”

As a San Francisco native the Bank of America has been in my life and my family’s life for a century. My Italian immigrant grand parent’s grub stake in the American Dream came in the form of a loan from the bank, then named The Bank of Italy. It’s founder, who Ken Lewis is not worthy to even mention, was Amadeo Giannini Giannini started the bank in 1904 when he noted that existing banks were something less than thrilled with the idea of lending money to what they considered little more than a bunch of southern European peasants.

My grand father used those small loans to build two brick and stucco duplexes on what was then the outskirts of San Francisco, and to start his bricklaying business.

I only mention this because Giannini and Ken Lewis did have one thing in common – they were each at the helm when financial disaster struck. For Giannini it was the crash of 1929 and the depression years that resulted. For Ken Lewis it was … whatever the hell you call this thing we’re in now… another Great Depression or, as the guys who caused it prefer, “the Great Recession.”

But that’s where the similarities end. Because the way the two men, and the institution they headed, handled the crisis could not have been more different. My father, eleven-years old in 1929, recalled the hard times that followed well.

“When my father and others in our mostly Italian neighborhood started to have trouble keeping up with their mortgages and business loans, Giannini sent them a letter,” my father told. “In it he said he understood that it wasn’t the borrower’s fault and that the bank wanted to keep them as customers and help them get through the hard times, but that both sides had to pitch in.”

Giannini’s proposal was simple, fair and balanced;

“Forget making principal payments on your loan,” he told my father and others in the same boat. “If you can manage a few dollars every month towards principal, great, he told borrowers. But if you can’t, then just make the interest payments until you’re back on your feet.”

My father said Giannini’s wise strategy not only saved his family’s home and his father’s business, but those of scores of other families in their neighborhood. It also saved Giannini and his young bank the burden of repossessing properties that, due to the depressed conditions, could have only been an enormous loss to the bank.

Compare that with how the renamed Bank of Italy, now Bank of America – but really owned by Nation’s Bank of Charlotte – handled the mortgage meltdown. Just to say that Ken Lewis et al, handled the current mess exactly opposite of how Giannini handled his crisis, would be a gross understatement. Lewis & Co. not only went the opposite direction, but did so with the kind of gusto and enthusiasm normally reserved for the manically insane.

Here’s just a personal snapshot of what I speak.

Over the past six months I’ve been trying to help a young couple with their BofA problem. They took BofA up on an offer about four years ago, a first time homebuyer’s loan. They both had perfect credit ratings and both were employed. They got 100% financing from BofA. Then the market crashed and a few months ago their house was appraised. They now owed $100,000 more than what they paid and what they owed the bank.

Since they had zero equity I suggested they contact the bank and see if they could cut a deal to adjust the loan. They contacted the bank the same week BofA pocketed about $50 billion in taxpayer bailout dough. The bank treated these kids like deadbeats and told them to get lost.

I suggested they contact the bank and put it this way to them:

“I think you misunderstood our earlier letter. You thought we had a problem. No. YOU have a problem and we’re trying to help you out while getting some relief ourselves. Because if we walk away from this property YOU are going to have to take the whole $100,000 loss. So, let’s talk.”

Long story short – they weren’t interested in talking. “Keep paying on the underwater loan or we will foreclose on the property,” was their only response. (It reminded me of my favorite scene in a movie – Blazing Saddles, where the new black sheriff is surrounded by angry white townies, draws his gun and points it at his head a warns the advancing crowd, “One more move and the n…….r gets it!” )

So those young (former) homeowners are walking away from that house this weekend. Over the last two weeks they tried again to save the BofA time and money, offering to simply sign a deed in lieu of foreclosure.  The bank refused.

Then they tried to find someone at the bank willing to take the keys and secure the property so it does not join the hundreds of other vandalized abandoned homes already on the local market.

Nope. The bank wasn’t interested in securing the home either.

So the kids will simply leave, and the bank will…. well, who the hell knows what the bank will do. And at this point, who the hell cares?

The bank lost on so many fronts in just that one case; they lost the hope reducing their loan loss, they lost the chance to keep a modified but performing loan on it’s books, it lost the chance to avoid the expense and time of a lengthy foreclosure process and they lost the chance to secure what will soon become an asset on it’s already troubled books.

Oh, and they lost two future customers who are just beginning their earning lives. The kids closed all their BofA accounts and went with a local credit union.

Amadeo Giannini is doing cartwheels in his marble sarcophagus. And you and I, being the taxpayers we are, can only sigh and wonder why Ken Lewis - and his kind - are being bailed rather than jailed.

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History:
What a Bitch

I’m not here to praise the Afghanistan War, but to bury it. And, so doing, avoid burying another 60,000 American kids as we did 40 years ago. All in the the name of — what? Make-up sex? I mean, that’s what we did with Vietnam and, while all those kids who died to keep Vietnam from going commie are still dead, Vietnam is now one of our hottest hotties when it comes to trade and tourism.

At least Vietnam has some great beaches, lovely tropical landscapes and friendly people. What are we going to get in bed when the shooting stops in Afghanistan? Hot? You betchya it’s hot there. Hot weather and a millennium of hot tempers. But beaches? Forgetaboutit. Tropical nothing. If you like sand and goats, people who will stab you in the back if someone gives them a buck for it, or if you just like being within walking distance of your opium and heroin, well, Afghanistan might be your personal vacation paradise. Two-weeks of living dangerous — very dangerous.

I’m not saying that losing 60,000 Americans in Vietnam was worth it just because the place now has Five Star hotels. It wasn’t. War or no war Vietnam would still have Five Star hotels today because of where it is on the map, who it’s neighbors are, and what their culture demands of the individual.

Afghanistan will never be Vietnam. Never. Even if global warming turns the rest of the world into desert, Afghanistan will still be the world’s armpit. It’s surrounded by bad ass neighbors, it and those neighbors are peopled by populations with one foot in the 12th century and the other foot dipping in and out of the 20th century when it suits them.  (The 21st century to them it’s just the 12th century spelled backwards.)

To justify getting US kids killed halfway around the world again, Afghanistan had themselves an election. We demanded it.  Why? Because that worked so well in Vietnam?

http://www.britishpathe.com/record.php?id=70556

That would have been the Diem regime. A few weeks after that fixed election the CIA had him killed. Not because he fixed the election so much as because, like Afghanistan’s leader, Karszi, Diem and his brother were more interested in running their drug-trade rackets than running a democracy. How’d that work out for him — and us?

                   When we supported Diem                                             When he lost our support    

Are you paying attention Karszi? Because the similarities are a lot more than passing:

Reports Link Karzai’s Brother to Afghanistan Heroin Trade

So Afghanistan had it’s own elections recently. Elections are the fig leaf every US administration demands whenever they start getting US kids killed far from home. And, I can’t think of a time when these kind of shotgun elections were anything more than a fraud, a charade, an insult to the very idea of free and fair elections.

And so it was with the recent elections in Afghanistan. Now I’d come to expect the Bush administration to lie and to try their best to hide those lies in such circumstances. But this time it’s our fella doing the truth-bending. When the UN’s No. 2 in Afghanistan tried to blow the whistle on massive voter fraud, he was muzzled — then sent back to the US to get him out of Afghanistan before someone either killed him or started to listen to him:

US diplomat ‘forced out’ over stance on Afghan election fraud
Peter Galbraith removed from UN post after pressing for inquiry into results heavily favoring Karzai

I only mention all this because I’m 64-years old, and I have a stubborn memory. I’ve — we’ve — been here -- exactly here, precisely here… here, here, here –  before. This is a national IQ test. No, it’s more than that, it’s a national sanity test. As they saying goes, the “definition of insanity is doing the same things over and over and, each time, expecting a different outcome.

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Time To Solve Everything Again

Do you get the feeling that, lately, no one can seem to solve anything any longer? Finding solutions, to even our most pressing and potentially deadly problems, has been replaced by processes only Franz Kafka could appreciate — but only during a Mad Hatter’s Tea Party.

Which is why, from time to time, I like to remind myself that there are solutions just laying around waiting for someone to champion them. Here’s my top picks today:

Afghanistan
George W. Bush was right once, and it was during his 2000 campaign for President. “America should never get involved in the nation-building business.” Then he promptly proceeded to try to rebuilt two of the most dysfunctional regions on the planet;  Iraq and Afghanistan. I call them “regions” rather than nations because they aren’t nations, never were, never will be. They are each artificial creations of imperial Britain. They were basket-cases then, and drawing borders around them only made them basket-cases with names.

Now a window of opportunity has opened a crack and, if we’re smart, we would fly out that window like a flock of homing pigeons. Our original strategy was to chase down and kill or capture the Al Qaeda thugs that orchestrated 9/11, and we should get back to doing that and leave the Afghans to their own religiously  poisoned, primitive tribal machinations.

As for Al Qaeda, and any other terrorist group that threatens to threaten us, we should turn the skies dark with armed drones and whack them if they leave their hut or cave to so much as take a leak. And if the crooked governments of Pakistan and Afghanistan don’t like that – because they understandably prefer us sending them our kids and our billions of dollars instead  –  they can sue us.

Israel & the Palestinians
These two don’t want to get along... ever. If that hasn’t become clear to everyone by now I don’t knowwhat it would take to convince the doubters. So, let’s just try leaving them, both of them,  to their own devices. No more phony-baloney, kabuki dance “peace talks.” They’re not fooling anyone with that carp any more. Both Israel and the Palestinians share the same two bottom-line goals:

• To never give an inch to the other side
• To milk Uncle Sap out of as much as they can get by pretending to be serious “this time.”

Sure all hell will break loose if we disengage. So what? For decades we’ve had creeping Hell. So, instead we’ll get wholesale Hell. And who knows, maybe that’s what it will take, or at least the threat of that, to get these two to knock it off for good.

Anyway, we’ve tried everything else, and it hasn’t worked. As they say, the definition of insanity is “doing the same things over and over and expecting a different outcome.” I’m tired of paying to enable crazy.

Health Care Reform
You might have heard that we have “the best healthcare system in the world.” And that’s true, if the only measure you use is cost. We certainly have the most expensive healthcare system in the world on that basis.  Otherwise it sucks – to be precise, it’s a blood-sucker of a healthcare system, and it’s going to get a lot suck-e-er in the years ahead unless we reorganize it the whole damn thing.

Obama ought to brush aside the objections of conservatives – and those handful of bought-and-paid-for Democrats –  and simply demand there be a strong public option based on, and maybe even adhered to, Medicare. You know, a national health insurance, like every other civilized nation on earth has.

Everything else is detail; how to pay for it, what role private insurance companies will be allowed to have in the new system and under what rules.

Of course, all hell will break loose, as vested interests and free-market dead-enders scream “socialism,” and “communism” even  “fascism.” So, let-em scream. Five years later the new healthcare system will have become the new  “third rail” of government. No politician, right, left or center, will dare say a word against it, and many who voted against it will claim they were “for it, before they were against it.” Because people will like it – a lot. That’s what happens when government works for the people. Voters like the stuff they do for them rather than having to  waste their time protesting. For proof of this look no further than the far-right wacko “Tea Parties” where you don’t see signs that read: “Please Take Away My Medicare.” or “STOP sending my Social Security check.” No siree.

Global Warming
Give auto makers five years to end production of all non-commercial internal combustion-only vehicles. That’s Step One.

Step Two involves alternative forms of mass transit.

After WWII Eisenhower created the interstate highway system. He didn’t do that for our convenience. He did it because, during the war, he was impressed by how quickly the Germans were able to move troops and materials over their new autobahn – the world’s for national freeway system. For Ike the interstate highway system was a nation defense issue, and that’s how he sold it to Congress.

Obama should take a page from Ike’s playbook. Defense annalists have already declared global warming a security threat to US interests. So let’s build an interstate high-speed rail with light-rail feeder lines in every sizable city and its suburbs.

Now, is that so freakin’ complicated?

Of course each of the above solutions would unleash as shit-storm of its own. But at least, unlike the shit-storms we are suffering now over incremental change, we’d be having shit-storms over things that really matter, and could actually change the course of history — for the better.

But each of the above solutions suffer one thing in common – they  ain’t gonna happen until someone in the White House and many someones in Congress, strap on a pair and lead us into that battle. Lead us, I said. Not calibrate their leadership by polls, or the next election, or their own political prospects. Lead us, like Spartan generals lead their troops into battle, right up front, first into fight, first to die, no defeat, no retreat.

Remember, it’s about “profiles in courage.” (Oh, yeah, it’s been a long time, so you might of forgotten.)

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July/August posts

August 17, 2009 – 10:23 am

The GOP Warns
Be Afraid — Please

America is in a real pickle. No, actually in a jar of pickles — deadly pickles. If the terrorists don’t get you, your own government will track you down and have your doctor kill your ass.

All this is true. At least, that’s what Republicans want you to believe. Let’s look at the new national threat level:

The Terrorists are Coming, The Terrorists are Coming!

Quick! Round up the towns folk. Get the old shotgun off the wall and jump in the pickup ready for action. Because, according to Republicans, Obama is going to import terrorists into the US! How many? Well, maybe as many as 229 of the little buggers. And the GOP wants you to worry about that. No wait, not just worry, they want you in a white-knuckle panic over it.

These prisoners would be held in a recently decommission super-max prison in Michigan and the maximum security portion of our premier military prison in Ft. Leavenworth, Kansas. These are the kind of places that hold dozens of mass murders, including some nut who bludgeoned his mother to death then ate her brains. So far none have escaped and gone on a killing/brain-eating bing.

Right now these 229 accused terrorists are held at Gitmo, a hastily-built holding facility where prisoners are kept in the kind of chain-link enclosures you might find at a high-security petting zoo. Of course, they are surrounded by military guards, but even so, for all it’s grim press, Gitmo ain’t no super-max prison. Yet none of them have managed to escape and turn Cuba into an al-Qaida base.

Nevertheless, Republicans have jumped at an opportunity to push their favorite button – the fear button.

“To the House Republican leader, it’s an “ill-conceived plan” that would bring terrorists into the U.S. despite opposition by Congress and the American people. “The administration is going to face a severe public backlash unless it shelves this plan and goes back to the drawing board,” said Antonia Ferrier, spokeswoman for Rep. John Boehner, R-Ohio.”

While all this nonsense is designed to gin up the GOP’s growing full-mooner base, it has also scared more than a few Democrats in Congress. These Dems are not afraid of the al-Qaidians. Hell, only a a complete fool would live in fear of 229 guys locked down behind bars, concrete walls, surrounded by electric fences and razor wire. No, the Dems are afraid that the GOP scare tactic will work, as it has a depressing number of times in the past. These Dems live in terror, not of terrorists, but you, the voter.  Which, by the way, means they also believe you’re stupid enough to buy into this GOP nonsense.

So much for Democratic Party leadership.

The Government is Going to Murder Granny!
Kiss your granny and grandpa goodbye if the administration gets it’s way with health care reform.

Because, even though America can afford a trillion bucks to fight two wars halfway around the world, we can’t afford to keep geezers alive past their sell-by dates. (A date, by the way, which will be determined by groups of heartless, and apparently granny-less, government bureaucrats.)

I know this because I heard it from a GOP member of congress:

On the House floor yesterday, Rep. Ginny Brown-Waite (R-FL) became the latest conservative to claim reform would kill people. “Last week Democrats released a health care bill which essentially said to America’s seniors: drop dead,” said Waite. Watch it:

For those of you guys out there hoping they are talking about your mother-in-law, sorry. There’s not a syllable of truth in the charge. What the GOP has done is to glom onto a single clause in one of the bills that would simply allow Medicare (which largely covers the elderly) to pay for a once-every-five-year consultation with their doctor on end of life care issues, such as a living will and advance medical directives. Both of which anyone with half a brain has — which might a clue.

When confronted by this fact, GOP fear-mongers have a comeback:

“Yeah, they’ll advise them alright. They’ll advise them to die and stop costing their children and society money and bother.”

Well, I don’t know about you, but if I went to a doctor to get well, and he or she told me to drop dead instead, I’d find me a new doc. But again, the GOP’s strategy is based on the premise that you’re stupid enough to believe some pretty stupid claims. Like that the medical profession would embrace such an anti-Hippocratic oath directive, and that our elders, who have clung to life through depressions, wars and multiple Republican administrations, would obediently check out upon request.

Fortunately my family is chuck full of greatest generation elders. And I can tell ya, I’d want to be well out of tesicular-kicking range if I were to even suggest such a thing.

Environmentalists: The Handmaidens of Satan!

Did you know that God hates environmentalists? Sure does. In particular He’s all hot under the almighty collar over all those lies they tell about global warming. It’s all a plot to, to, … well to something. Republicans are not quite clear what the whole global warming thing is about, but they suspect that socialism is lurking in there somewhere. Oh, and smaller cars and – gasp – mass transit, which is just socialism on wheels.

Remember Dick Army? Well he’s on the case:

“What I’m suggesting is we have a sort of an eco-evangelical hysteria going on and it leads me to almost wonder if we are becoming a nation of environmental hypochondriacs….Let me say I take it as an article of faith if the lord God almighty made the heavens and the Earth, and he made them to his satisfaction and it is quite pretentious of we little weaklings here on earth to think that, that we are going to destroy God’s creation.” (Full)

That’s right… God isn’t about to destroy His own work… except of course New Orleans. But in that case He was just smiting the holy hell out the gays down there who. by the way, were asking for it dressing like that. And about those polar icecaps –  He was never happy with the way that turned out. So, all that melting is just a bit of Almighty redecorating.  Then there’s those poor polar bears –  well even God can’t make an omelet without breaking a few eggs, right?

Anyway, the GOP wants you to know that everything is unfolding just as intended. After all, even if it turns out to be true that human activity is turning the planet toxic to humans, this is not out of character. God has a history of waking up on the wrong side of the cloud from time to time and going all cranky on mankind, with the smiting, floods, plagues, infestations, oozing sores and such.

So, if it happens, we had it coming.

In the meantime the GOP wants you to know they have the environmentalists pegged for what they are; socialist dupes and handmaidens of Satan… which are, of course, one and the same.

Obama: Anti-Christ or Manchurian Candidate?

This wouldn’t be the first time that life imitated art. I speak, of course of the vintage film, The Manchurian Candidate. And now it’s happened for real. We’ve elected a “feriner,” President of the United States of America.

Here’s how it worked. (Make sure your tinfoil hat is on tight.)

So, this baby was born in Kenya back in August, 1961. The kid was half black and half-white and was recognized immediately as The Chosen One. This was known because, on his birthday a star appeared over Kenya — a liberal star. (They knew this because it was a blue star.)

The “they” have yet to be identified, but there are indications they were from a shadowy group that goes by the acronym, ACORN.

They knew that no child born outside the US territories could be The Chosen One. So they secretly sent envoys to Hawaii to plant a fake birth certificate in government files. And then, (and this was real genius) to cover all their bases, they planted two birth announcement ads in local papers, all 47-years ago.

Talk about foresight! If Joseph and Mary had had this level of foresight, stealth and secret agents, their kid would have grown up to rule the entire Roman Empire, instead of getting nailed.

Now, one might figure that a story like this was so, well, “out there,” no one in public office would touch it with a ten-foot vaccinated crowbar. But alas, not so. GOP members of congress, fearful that all the nut-jobs they’ve attracted to their mad hatter tea parties, will become suspicious of their representative’s nut-jobish bona fides. So, when asked about their birther supporters they say things like, “Well, there are questions that should be answered.”

Yeah. I have one. “How the hell do low-rent intellects like you get elected to public office?”

Oh hell, that’s enough of all that. There’s more, but it all makes my head hurt to even write about it. I don’t know if the rise of factless GOP-cultivated fear mongering on some of our times most dangerous and critical issues is a reflection of our poor educational system, or Darwinism has been thrown in reverse or, hell,, who knows, maybe conservatives were right about the dangers of fluoridation of drinking water. Maybe we’ll all end up dumb-asses with good teeth.

But there sure seems to be an over-abundance of ignoramuses around these days, and no shortage of handlers eager to parade them around in public like circus ring-masters.

Print this and mail it to your member of Congress

Republican Freak Show

Has it gotten weird enough for you yet? I mean, hardly a day goes by lately that we don’t learn something new about those holier-than-thou folks on political right. And I’m not talking about those crazy “Repent, the world’s ending” folks carrying sandwich signs on street corners. No, I’m talking about men and women of breathless ignorance who’ve achieved high public office.  It’s becoming a freak show of sorts. No, wait. Where’d the “of sorts” come from?  These folks on the Christian right, are about as freaky as it gets.

Step right up ladies and gentlemen and witness the amazing Rep. Michelle Bachmann, originating from the genus, “moronus-rediculous.” Hailing from the northern reaches of Minnesotta, she’s half woman, half jackass. Listen to her warning that government spies are coming soon, disguised as census takers. Hear her chilling tale of how Democrats caused the swine flu outbreak. Please, folks, she looks harmless, but do not try to engage this creature in any way. It bites when confused, and it’s confused most of the time.

Now  take a mind-bending peak into the tent of Senator Jeff Sessions, genus “crackerous-alabamus.” This creature is currently also appearing at the confirmation hearings for Sonya Sotomayor where he accused her of being racist. Here comes the real freaky part. Sessions was himself rejected for a seat on the federal bench in 1986 because of  comments he made like; “I didn’t think the Ku Klux Klan was not so bad until I found out that some of them smoked marijuana,”  and referred to the NAACP and ACLU as “un-American” and “Communist-inspired” because “they forced civil rights down the throats of people,” and, while serving a lawyer in his home state of Alabama, accused a fellow white lawyer of being “a disgrace to your race,” for representing African-American clients.

Step right up to the next tent and, for the low, low cost of just 3 of your IQ points, you can experience the wonders of the Gorilla from Wasilla. She walks. She talks. And, if you disagree with her, she crawls on her belly like reptile. While many of these freaks are one-of-kind, the species “Palinwasillica” breeds constantly, even in captivity. (If this is your lucky day, for no extra cost, you may witness a breeding or birthing.)  Even their young breed with apparent reckless abandon.  Despite their rapacious birthrate scientists have yet to indentify a single evolutionary reason for their existence.

Next join me in glimpsing the elusive Appalachious-Argentinus, known here at the show as Governor Sanford. Half-man, half-boar, this creature mates for life but has been spotted extraordinary distances from his mate apparently trying to avoid mating for life. Please ladies and post-pubescent girls, keep your hands, arms and breasts well inside the car until we are safely out of this creature’s reach.

Whoa, wait! Where ya going folks, we have more. Follow me deeper into the freak show and meet Senator John Ensign, a creature that originates in the hot, dry and apparenlty lonely, stretches of the Nevada desert. From the species, “hypocriticous-maximus” this creature’s natural prey comes from within his own herd, as he lures the mates of fellow hypocriticous into his lair. Alpha male members of this species spend much of their time, when not busy rutting, hiding their activities from other members of their herd. Please, do NOT get this creature started, it’s way too weird, even for a freak show like this.

From today’s HuffPost: Senator John Ensign belongs to a Pentecostal denomination, the International Church of the Foursquare Gospel, that promotes a new health care paradigm in which both physical and psychological maladies can be cured through the casting out of demons. In the new approach, individuals can even heal themselves by exorcising their own demons, through a process that a 2003 Associated Press story characterized as “do it yourself exorcism”. (Full Story)

There’s more freaks but I figure by now you’re freaked-out.

The only question Americans should be asking themselves as they watch and listen and learn more about these elected right-wing freaks is this: How the holy hell did these people ever get into public office? And, in a world that’s becoming increasingly disfunctional and dangerous, can we afford wasting a single public office on freaks like these?

Holy chit. I’m just sayin’

No Public Option No Re-election
NO KIDDING

No one on the right wrung their hands and worried, “how will we pay for this,” when they enthusiastically passed George W. Bush’s $1.6 trillion in tax cuts for the wealthiest Americans. Instead they said, “not to worry,” that the cuts would have “a tremendous multiplier effect,” as they “trickled down” through the economy. Well, if what we’ve got now is an example of that “multiplier effect,” it’s the strangest form of math I’ve ever seen.

When Bush decided we absolutely had to invade Iraq, no one asked “but how are going to pay it?” A trillion bucks later, and counting, we still don’t have an answer that one, and that war goes on.

And few in Washington worried about “how are we going to pay for this,” when the Bush administration bailed out Bear-Sterns, and laid the groundwork for the mulit-billion financial sector bailout that would come to fruition under the new Obama administration.

And few in Washington tried to put the brakes on the GM bailout just because no one had figured out how to pay for it.

Now, don’t get me wrong, I’m all for balanced budgets and, generally speaking, all for debt-free living. I only point all this recent spending history out because, suddenly every Republican in Washington, and a few Blue Dog Dems, are holding up health care reform because it suddenly dawned on them that we don’t have the money to pay for it. Well, we didn’t have the money to pay for the other stuff either, so why this sudden conversion to fiscal tightwaddishness?

The answer is simple… and, strangely it’s the same answer I’d give if you asked me just how the Bush tax cuts, Wall Street and banking bailout and the GM bailout were passed: it’s all about the money, honey — it’s ALWAYS about the money, honey.

In the case of the Bush tax cuts, contributions from those with the most, who wanted even more, got that passed. “How do we pay for it?” Not to worry. It would magically pay for itself, we were told. And that was good enough for Congress.

In the case of the Iraq war, it was manna from heaven for defense firms like Halliburton and Lockheed/Martin, Blackwater, et al. And, of course, they shared their blood-soaked bread with members of Congress.

In the case of the Wall Street/bank bailouts, it was contributions from the very banks and Wall Street firms that had pissed away their depositor/investor funds chasing phony baloney crap investments, that won the day. “How do we pay for it?” No one cared. It needed to be done or things would get worse, we were told. It got done, things still got worse, and they still can’t answer the question, “how we gonna pay for this?”

In the case of the GM bailout it was money from both labor and industry that put the wheels on that cart.

Which brings me to health care reform, and why, rather than the easy sledding these other issues enjoyed, is instead dying a death of a thousand cuts.

Again, it’s the money, honey — in this case money from the an industry that’s become nearly as politically powerful as the defense industry, when it comes to getting what it wants out of politicians. They like things just the way they are. And wouldn’t you if you could insure only those least likely to get sick, leaving the walking wounded for taxpayers to deal with. Heads they win, tails we lose. Such a deal. I wouldn’t want any changes either, if I were on the receiving end of a deal like that. And neither do they. And they’re paying up mightily right now to make damn sure very little changes. (Go to www,opensecrets.org to see how much money your members of Congress have gotten… so far.)

Anyway, “how are we going to pay for this,” is a question that, under our campaign finance system, always (ALWAYS) takes a backseat to another question: “Who’s going to contribute most on this issue?”

I don’t know “how we are going to pay for,” health care reform. All I’m saying is that the big fish got taken care of over the last eight years of so, and without regard to how we’re going to pay for all those goodies. Sooner or later we’re going to have to pay for it all, and it ain’t gonna be pretty when all those IOUs are presented. But while we’re at it, why not give ordinary Americans the same care and regard already shown for Wall Streeters and Bankers, Automakers and Unions. Give us health care everyone can afford. At least that’s something we’d be happy to “pay for,” down the road, long after all the war profits, and bailout funds are gone and forgotten.

One more observation and I’ll let you go:
The neolithic GOP base has found a new boogieman to replace the now defunct “commie threat,” — those pinko “Yuro-pee-ans.” Europhobia is all the rage at Tea Party gatherings. It’s also been front and center whenever the issue of government involvement in the nation’s health care system is discussed.

For those who’ve never been to Europe, hearing the right’s warnings about “old Europe,” they must believe that Brussels, Paris, Madrid and Rome are dark, oppressive Orwellian hell holes. This leaves those who have spent time in western Europe scratching their heads. Maybe we visited the wrong parts of “Old Europe,” but we just didn’t see a problem. Exactly what is it about Europe Americans should fear? Is it the pastries, the clean streets, the seemingly well-fed, the lower murder rates, all those   mostly happy, well-governed citizens – many of whom worry that “Old European” is becoming too much like “New America.”

Right now we are suppose to fear Europe’s health care systems, conservatives warn. They must be dropping like flies over there. And why? Conservatives say it’s because European countries don’t allow private health insurance companies to suck the life blood out of their citizens, businesses and government coffers.

That’s why.

Well, since we can’t cart every provincial, tea-bagging, knuckle-dragging right-wing-nut off to Europe to show them the truth, they should at least read the story that follows.

No public insurance option
No re-election
NO KIDDING.

Healthy examples
Plenty of countries get healthcare right.
By Jonathan Cohn  |  July 5, 2009

“I DON’T WANT America to begin rationing care to their citizens in the way these other countries do.”

That was Arizona Senator Jon Kyl, speaking last month about healthcare reform. But it could have been virtually any other Republican, not to mention any number of sympathetic interest groups, because that’s the party line for many who oppose healthcare reform. If President Obama and his supporters get their way, this argument goes, healthcare in America will start to look like healthcare overseas. Yes, maybe everybody will have insurance. But people will have to wait in long lines. And when they are done waiting in line, the care won’t be very good.

Typically the people making these arguments are basing their analysis on one of two countries, Canada and England, where such descriptions hold at least some truth. Although the people in both countries receive pretty good healthcare - their citizens do better than Americans in many important respects - they are also subjected to longer waits for specialty care and tighter limits on some advanced treatments.

But no serious politician is talking about recreating either the British or the Canadian system here. The British have truly “socialized medicine,” in which the government directly employs most doctors. The Canadians have one of the world’s most centralized “single-payer” systems, in which the government insures everybody directly and private insurance has virtually no role. A better understanding for how universal healthcare might work in America would come from other countries - countries whose insurance architecture and medical cultures more closely resemble the framework we’d likely create here.

Last year, I had the opportunity to spend time researching two of these countries: France and the Netherlands. Neither country gets the attention that Canada and England do. That might be because English isn’t their language. Or it might be because they don’t fit the negative stereotypes of life in countries where government is more directly involved in medical care.

Over the course of a month, I spoke to just about everybody I could find who might know something about these healthcare systems: Elected officials, industry leaders, scholars - plus, of course, doctors and patients. And sure enough, I heard some complaints. Dutch doctors, for example, thought they had too much paperwork. French public health experts thought patients with chronic disease weren’t getting the kind of sustained, coordinated medical care that they needed.

But in the course of a few dozen lengthy interviews, not once did I encounter an interview subject who wanted to trade places with an American. And it was easy enough to see why. People in these countries were getting precisely what most Americans say they want: Timely, quality care. Physicians felt free to practice medicine the way they wanted; companies got to concentrate on their lines of business, rather than develop expertise in managing health benefits. But, in contrast with the US, everybody had insurance. The papers weren’t filled with stories of people going bankrupt or skipping medical care because they couldn’t afford to pay their bills. And they did all this while paying substantially less, overall, than we do.

The Dutch and the French organize their healthcare differently. In the Netherlands, people buy health insurance from competing private carriers; in France, people get basic insurance from nonprofit sickness funds that effectively operate as extensions of the state, then have the option to purchase supplemental insurance on their own. (It’s as if everybody is enrolled in Medicare.) But in both countries virtually all people have insurance that covers virtually all legitimate medical services. In both countries, the government is heavily involved in regulating prices and setting national budgets. And, in both countries, people pay for health insurance through a combination of private payments and what are, by American standards, substantial taxes.

You could be forgiven for assuming, as Kyl and his allies suggest, that so much government control leads to Soviet-style rationing, with people waiting in long lines and clawing their way through mind-numbing bureaucracies every time they have a sore throat. But, in general, both the Dutch and French appear to have easy access to basic medical care - easier access, in fact, than is the American norm.

In both the Netherlands and France, most people have long-standing relationships with their primary care doctors. And when they need to see these doctors, they do so without delay or hassle. In a 2008 survey of adults with chronic disease conducted by the Commonwealth Fund - a foundation which financed my own research abroad - 60 percent of Dutch patients and 42 percent of French patients could get same-day appointments. The figure in the US was just 26 percent.

The contrast with after-hours care is even more striking. If you live in either Amsterdam or Paris, and get sick after your family physician has gone home, a phone call will typically get you an immediate medical consultation - or even, if necessary, a house call. And if you need the sort of attention available only at a formal medical facility, you can get that, too - without the long waits typical in US emergency rooms.

This is particularly true in the Netherlands, thanks to a nationwide network of urgent care centers the government and medical societies have put in place. Not only do these centers provide easily accessible care for people who use them; they leave hospital emergency rooms free to concentrate on the truly serious cases. Tellingly, a Dutch physician I met complained to me that waiting times in her emergency room had been getting “too long” lately. “Too long,” she went on to tell me, meant two or three hours. When I told her about documented cases of people waiting a day, or even days, for treatment in some American emergency rooms, she thought I was joking. (In a 2007 Commonwealth Fund survey, just 9 percent of Dutch patients reported waiting more than two hours for care in an ER, compared to 31 percent of Americans.)

Dutch and French patients do wait longer than Americans for specialty care; around a quarter of respondents to the Commonwealth Fund survey reported waiting more than two months to see a specialist, compared to virtually no Americans. But Dutch and French patients were far less likely to avoid seeing a specialist altogether - or forgoing other sorts of medical care - because they couldn’t afford it. And there’s precious little evidence that the waits for specialty care led to less effective care.

On the contrary, the data suggests that while American healthcare is particularly good at treating some diseases, it’s not as good at treating others. (In some studies, the US did pretty well on cardiovascular care, not so well on diabetes, for example.) Overall, the US actually fares poorly on measures like “potential years of lives lost” - statistics compiled by specialists in an effort to measure how well healthcare systems perform. In a 2003 ranking of 20 advanced countries, the US finished 16th when it came to “mortality amenable to healthcare,” another statistic that strives to capture the impact of a health system. The Dutch were 11th and the French were fifth. These statistics are necessarily crude; diet, culture, and many other factors inevitably affect the results. But, taken together, they make it awfully hard to argue that care in these countries is somehow inferior. If anything, the opposite would seem to be true.

Critics of health reform frequently point to cancer as proof that American healthcare really is superior. And, it’s true, the US has, overall, the world’s highest five-year survival rate for cancer. But that’s partly a product of the unparalleled amount of government-funded research in the US - something healthcare reform would not diminish. Besides, it’s not as if the gap is as large or meaningful as reform critics frequently suggest. France (like a few other European countries) has survival rates that are generally close and, for some cancers, higher. Much of the remaining difference reflects differences in treatment patterns that have nothing to do with insurance arrangements and everything to do with idiosyncratic medical cultures. This is particularly true of prostate cancer, where a staggeringly high survival rate in the US seems to be largely a product of aggressive US treatment - treatment that physicians in other countries, and increasingly many specialists here, consider unnecessary and sometimes harmful.

None of this is to say that either the Dutch or French systems are perfect. Far from it. In both countries, healthcare costs are rising faster than either the public - or the country’s business interests - would like. And each country has undertaken reforms in an effort to address these problems. The French have started to introduce some of the managed care techniques familiar to Americans, like charging patients extra if they see specialists without a referral, while developing more evidence-based treatment guidelines in the hope that it will reduce the use of unnecessary but expensive treatments. The Dutch overhauled their insurance arrangements a few years ago, to introduce more market competition and reward healthcare providers - that is, doctors and hospitals - who get good results.

But cost is the one area in which France and the Netherlands are a lot like Canada and England: They all devote significantly less of their economy to healthcare than we do. The French spend around 11 percent of their gross domestic product on healthcare, the Dutch around 10. In the US, we spend around 16 percent. And, unlike in the US, the burden for paying this is distributed across society - to both individuals and businesses - in an even, predictable way.

Of course, reforming health insurance in the US isn’t going to turn this country into France or the Netherlands overnight, any more than it would turn the US into Britain and Canada. The truth is that the changes now under consideration in Washington are relatively modest, by international standards. But insofar as countries abroad give us an idea of what could happen, eventually, if we change our health insurance arrangements, the experience of people in Amsterdam and Paris surely matters as much as - if not more than - those in Montreal and London. In those countries, government intervention has created a health system in which people seem to have the best of all worlds: convenience, quality, and affordability. There’s no reason to think the same thing couldn’t happen here.

Jonathan Cohn is a senior editor of The New Republic, where he writes a blog called “The Treatment.” He is also the author of “Sick: The Untold Story of America’s Health Care Crisis - and the People Who Pay the Price (HarperCollins, 2007).

© Copyright 2009 The New York Times Company

First, this:

Former Defense Secretary Robert McNamara dies

WASHINGTON (Reuters) - Former Defense Secretary Robert McNamara, the architect of US involvement in the Vietnam War, died in his sleep at his home on Monday, his wife Diana said. He was 92. “His age just caught up with him,” his wife Diana told Reuters. “He died peacefully in his sleep.”

I’m a McNamara survivor. Over 60,000 of my contemporaries were not so lucky.

They didn’t die in their sleep. Mostly each died, wide awake, in pain and in terror.

And they were not fortunate enough to die at home, in bed, surrounded by loved ones. No, they died in a steamy jungle, 6000 miles from home, surrounded by their own killers.

Robert McNamara is finally dead. Good riddance.

That leaves just Henry Kissinger, the second most blood-soaked insult to humanity. Like McNamara, Kissinger got to live to a ripe old age, unlike the kids in my generation he sent off to senseless slaughter. All that’s left of them are names on a cold, black granite wall. But Henry too is old now and, with any luck at all, we’ll soon be done with the likes of him as well. Swine flu would be an appropriate agent passing for Henry.

Both men richly deserved a different fate. Each should have been charged, convicted and jailed by the world community for war crimes. Lots of war crimes; Napalm, massacres, Agent Orange, assassinations, Laos, and more — more than the normal, well-adjusted mind could stomach.

But they weren’t held responsible. Instead we allowed them to go on and live among the innocent, the civilized, the famous and, in Kissenger’s case, the powerful.

That sent a message, a clear message; if you’re too big have to admit you failed, you’re also too big to be sent to jail.

That message was surely fresh in the mind of Dick Cheney. After all, Dick had been a witness to much of it all and so, when it came time to launch an illegal, unprovoked war against Iraq, Cheney had no reasons to hesitate. He did what had been done without consequence by McNammara and Kissinger. He lied, kept lying and keeps lying, because lying worked before. And he engineered war crimes, because he’d seen those who did so before him escape any repercussions.

And lo and behold, it seems Dick Cheney was right. Another American war criminal, and his cohorts, have been allowed to rejoin polite society as a members in good standing. He is invited on TV talkshows, to concerts and paid large sums of money for speeches. And we allow it.

Somewhere in the bowels of government, or at its fringes, are some young Robert McNammars, Henry Kissengers and Dick Cheneys, taking note.

Robert McNamara, may he rot in hell.

Posted in News For Real, Politics, economy | No Comments »

A compliation of post

June 22, 2009 – 1:34 pm

Dying for Change

Where the hell I have been the last couple of weeks? Ah, thanks for asking.

Well, my wife, Susan, and I have been right up to our chins in elder-care issues. My father is 90, my mother is 87 and Sue’s mom is 99 heading straight for the century mark.

We’re not complaining, mind you. We are so lucky that, at our stage of life, (we’re no spring chickens either,) that we still have three out of four of them still with us.

But it’s also been a real eye-opener.

We can’t complain. Thanks to the fact that both parents were successful and thrifty during their productive years, they have the money necessary for good supplemental health coverage and can pay out of pocket for in-home care. But even so, the intersection of old age and the American health care system has been enough to drive the most loving and loyal offspring straight into anti-depressant-land. To put it mildly, the American health care system is simply not geezer-friendly.

With all we’ve been through with our parents over the last couple of years, from broken hips, to abdominal surgeries to mobility issues to trying to find qualified and trustworthy home-care workers, I have no clue how families that do not have our resources cope. Even at our modest, but comfortable level of financial security, the whole thing has been emotionally and physically exhausting. For those without adequate health coverage, and just making ends meet or less, old age can only be a terrifying glimpse into the bowels of hell itself.

Now, I, at a mere 64 years of age, have a ways to go before I get unceremoniously tossed into the ranks of Metamucil-For-Lunch-Bunch. But we’re heading in that direction at what seems and increasing rate of speed. But Sue and I are merely 2 of the 80-million Baby Boomers trucking down that road. And America is simply not ready for what’s about to slap it upside the head.

We Baby Boomers are, regrettably yet proudly, the most spoiled and demanding generation to ever cast a shadow on this planet. We grew up during a time of post-war super-abundance. We have become accustomed to near-instant results. And that goes triple for when we’re ailing. If we wear out a part we expect a doctor to fix it no later than 3 p.m the next day.  If they can’t, we start taking names.

So, can you even begin to imagine what it will be like when 80- or 90-year old Boomers begin hobbling into emergency rooms across the nation, demanding someone fix their crumbling basketball-abused knees, tennis elbows and golf-wrists? Then there are the usual parts that wear out naturally; eyeballs, vertebrae, prostates and the ever critical sewage disposal sub-systems.

Aside from that there will also be mushrooming mobility issues. Boomers are used to freedom of travel, freedom of movement. Twenty years from now there’ll be 80 million (grouchy) codgers jockeying for room on our sidewalks and grocery store isles in their red and blue electric scooter-chairs — the bumper-car generation from hell.

Dark humor aside, America and Baby Boomers are on a collision course. America’s elder care infrastructure sucks. The only thing that has prevented a bloody geriatric revolt so far is that our parent’s went through the Great Depression and fought and won a world war. Consequently their expectations still reflect the “Life is hard. Don’t whine. Just-suck-it-up,” grit that not only got them through all that, but in the process contributed to creating the richest most powerful nation on earth. But, in the process they also raised a generation that has come to consider abundance and quick results a birthright. And, as we Boomers age, we will also consider dignified end-of-life care a right as well. (Call it a death-right.)

I only mention all this because it’s on my mind these days. As I watch our parents struggle to maintain the independence and dignity that has been the hallmark of their lives, I know one thing for sure: something has to change, and soon.

Because, what good is a nation that can spend trillions on weapons to “keep us free,” if being free means that at the end of our lives we have less rights and less dignity than a terminally ill family pet.

We won’t stand for it.

Call us selfish. Call us spoiled. We have surely been both. But we are also the generation that marched and fought in the streets to put an end to segregation. We are the same generation that marched in and fought in the streets to put an end to an illegal and immoral war in Vietnam.

So, spoiled and selfish, yes –  but also imbued with deep and enduring sense of right and wrong, justice and human dignity. And no where is justice and human dignity more deserved than after a long life of work and family and community. As the Obama administration and Congress struggle with fixing the American health care system, elder care and end of life care needs special attention.

Otherwise, who knows, we Boomers might have to hit the streets again. And, I don’t know about you, but the idea of tens of thousands of aging former hippies and radicals marching, polyester pants bulging with adult diapers, dragging IV rigs and oxygen bottles chanting, “Hell no, we won’t go,” is more than I can bear.

Intervention

What’s the right thing to do when a long-time friend becomes more trouble than you can tolerate?

What do you do when that friend returns your friendship only so long as you support everything he does, even the things you’ve repeatedly asked him not to do?

And, what’s the right thing to do with a friend, like the one described, whose behavior and your support of it, poisons your relations with scores of other friends and potential friends?

This is the very question President Barack Obama is struggling with this month. And, if he gets it right, he will be the first post-war president ever to do so.

That friend, by the way, if you have not already guessed, is Israel.

Repeatedly we, and almost every other country on earth, have asked, even pleaded, with Israel to stop building settlements on Palestinian land and to stop expanding those already built.

And just as repeatedly one Israeli government after another have thumbed their nose at those pleadings.

Now, don’t get me wrong. I’ve always supported Israel and Israel’s right to exist, and still do. What I have never supported though is Israel right to use 5000-year old biblical title reports to expand beyond its 1967 borders in order to lay claim to real estate that does not belong to them.

Yet this naked thievery continues apace. Yes, I said thievery – a strong word indeed, and one that is certain to outrage my Jewish and Israeli friends. But, just as Americans had to accept the hard truth that “enhance interrogation techniques” really meant toture, I  can no longer pretend that what Isreal calls “settlements” are anything but thievery.

Believe me, I understand all the arguments Israelis use to justify the unjustifiable; the holocaust, never again, hostile neighbors, terrorism, etc. But the strategic situation has changed remarkably since Israel’s formative years. Israel is a nuclear-armed nation with the strongest and most efficient military in the region – as it has demonstrated to its hostile neighbor’s chagrin more than once.

Should Israel’s survival ever be really threatened she could wipe that threat away – once and for all  – with the push of a button. Even Israel’s most ardent foes have no illusions about that. Should they ever genuinely threaten Israel’s existence, there’d be a holocaust,  and this time it would not be the Jews on the  receiving end.

As the years have passed it’s become harder and harder to accept Israel’s stated justifications for it’s expansionist policies as anything other than cynical obfuscations. By expanding West Bank settlements and creating new ones Israel has been, piece by piece, preemptively dismembering any would-be Palestinian state.

And, by expanding these settlements Israel is also hoping they can push into the next century a loudly ticking demographic time bomb. Palestinian birth rates far outstrip the much slower Jewish population growth. Even within Israel’s original borders, Israeli Arab voters will, at some point down the road,  outnumber Jewish voters.  What then? Disenfranchise any citizen with Israel who is not Jewish? Deport all non Jews? Create an system of apartheid for only true democracy in the Middle East?

None of those solutions are realistic or acceptable in modern times. So, by expanding settlements and establishing new ones, Israel hopes Jewish immigration from Eastern Europe and elsewhere can at least for the a while, hold off the day when Israeli Arabs become Israel’s new voting majority.

Look, here’s the bottom line. In the weeks ahead President Obama needs to make it perfectly clear that America’s friendship with Israel is about to be rebalanced. We will still support Israel, but no longer on long-standing,“Israel, right or wrong,” status quo. Like America, Israel faces very real dangers from very real foes. And both nations will continue facing those dangers for the foreseeable future. But that fact is not a greenlight to break the law or commit human rights offenses under cover of national security. We just got done learning that hard lesson here in America and nows the time to communicate it to our friends in the Middle East, including Isreal.

Now it’s time to lay down the law for the other hooligan in this never-ending pissing match. Israel needs to:

* Stop all settlement construction and expansion. Dead stop. Not another nail, not another brick.
* Except for the large settlements right on or within stones throw of the West Bank/Israel border, Israel must begin dismantling of all settlements deeper within West Bank territories. Sure that’s going to mean uprooting tens of thousands of Jewish “settlers,” but the wages of sin are rarely pleasant.
* As for those settlements straddling that border, they can stay in Israeli hands, but only if Israel provides Palestinians an acre for acre swap for those lands. These in-kind lands must be adjacent to Palestinian lands on the West Bank border or Gaza.
* Israel must begin serious negotiations with Palestinians on the final status of the historically blood soaked “holy city” of Jerusalem. That final status must include a genuine possibility of  Arab control of a portion of the traditionally Arab sector of Jerusalem.

Now none of this will be either easy or painless for Israel. In fact it could spark an armed rebellion from Israel rabid right wingers who, all the holocaust rhetoric aside, simply hate Arabs, all Arabs. Israel’s right wingers are that regions equivalent of our southern crackers during the civil rights years of the 1960s, or Afrikaners during apartheid in South Africa. They can’t be changed, only controlled and contained and, when they act out, imprisoned.  (The exact same goes for members of Hamas and Hezbollah. Ignorant, racist, crackers, one and all.)

To make matters even more complicated Israel’s new leader, Benjamin Netanyahu, can best be described as Dick Cheney in yamaka. His power is derived through creating and maintaining fear – fear of Arabs, fear of terrorism. Now no one in their right mind would suggest that Israel is not Target One for every Middle Eastern terrorist, the USA being Target Two.

But neither the US or Israel face anything even close to an strategic threat from terrorism. Neither country is going to be defeated, occupied and taken over by al Qaida, et al. It just ain’t gonna happen – ever. But like Dick Cheney, Netanyahu would have Israelis and the rest of the world believe that that’s precisely the threat his nation faces. It worked for Cheney – if not for his nation. Because, when belligerency is peddled as the only alternative to death and destruction, belligerency becomes, not just policy, but policy married to patriotism. The last remaining element needed to create a full-blown disaster is an ambitious demagogue. (H. L. Mencken  defined a demagogue as “one who will preach doctrines he knows to be untrue to men he knows to be idiots.”)

Anyway, by now it should be clear to any sane person that, when it comes to Palestinians and Israelis there’s never been a shortage of either demagogues or idiots to follow them. It’s long past time for the rest of the world to draw red lines in the sand.

But this time it’s gotta be TWO lines, not just one. There’ has to be one clear line for Hamas and their ilk, and, for the first time, another clear line for Israel.

Because when a friend becomes self-destructive and more trouble than he’s worth, there’s really only two choices; desert your friend, or organize an intervention. Real friends intervene.

P.S. Okay, now you can email me and accuse me of being an anti-semite. (Which of course, I am not. I’m just fed up, right up to here, with both sides. I’m not anti-anything except anti-prick. So, an aside to  both sides: Stop being such giant, swaggering, unrepentant pricks.)

Capitalism’s Greatest Hits

As Americans we’ve have had it drilled into our heads that there are only three kinds of economic models:

Capitalism: Which we’ve been been Pavlovianly conditioned to accept as “the best, most productive and most democratic economic system ever devised. (The current meltdown we are assured is the simply that exception that proves this rule.)

Communism: Which has repeatedly proven itself the least inefficient and least productive economic system ever devised by man,

Socialism: Which fans of unfettered capitalism assure us is simply communism in a dress.

I only bring this up because today the Republican National Committee, meeting in a spider hole somewhere where they will, in the next few days, demand that the Democratic Party rename itself the, Democrat-Socialist Party.

Well, most of Europe is run by “Social Democrats;” and they seem to doing okay. I mean, no one is doing great these days, but at least Europeans don’t have to worry about being unemployed AND uninsured.

But if the RNC wants to make it’s case against the Democrats socialist tendencies, they first have to make a better case for their unfettered capitalist tendencies. Is pure capitalism really all that efficient? And if so, at what human costs are these “efficiencies” attained?

Fortunately history provides report card on American capitalism. And, if it were, say a bus, that broke down every 20 miles or so and left its passengers to hoof it into town, I suspect we’d of replaced this thing with something more efficient a long time ago. Here’s that report card:

October 12, 1837 - The Panic of 1837 (sparked by over-extended credit/defaults.) The House sanctioned the use of Treasury notes for a bailout, provided that they didn’t exceed $10 million; Congress’s efforts to stabilize the nation’s currency failed to lift the depression which lasted seven years.

August 24, 1857 – Panic spared by the failure of New York branch of the Ohio Life Insurance and Trust Company which had loaned $5 million to railroad builders, had been swindled out of millions by the manager of its New York branch and was unable to pay extensive debt to Eastern bankers.

September 24, 1869 - “Black Friday” crash of gold prices as Grant administration foiled attempts by financiers Jay Gould and James Fisk try to corner the gold market. Several brokerage firms went  bankrupt; national economy was severely disrupted for months.

September 18, 1873 – The Panic of 1873 began with collapse of Jay Cooke and Co., one of the country’s most reputable brokerage houses of it’s time, known as the “financier of the Civil War.” The Panic of 1873 exposed over-speculation which continued to wreak havoc on the nation’s economy for months. The New York Stock Exchange closed for ten days to wait out the worst of the crisis. The secretary of the Treasury pumped $26 million of new currency into the economy, swelled the amount of paper money in circulation to $382 million. Panic did not subside, economy continued its slump through the end of the decade.

May 5, 1893 – Panic was once again sparked due to reckless speculation and over-leveraging. Panic swept the New York Stock Exchange and the stock market crashed; by year’s end the country was in a severe depression.

November 9, 1903 - Panic of 1903 (known as the “Rich Man’s Panic”) reached its low; Dow dropped to 42.15; stocks of industrial companies fell to single-digit prices; fiscal crisis dragged on for the rest of the year, took severe toll on banks, many steel and iron producers.

October 1, 1907 - The nation plunged into the Panic of 1907 which lasted for a year – sparked by a run on Knickerbocker Trust in New York, which lacked resources to pay out to the demanding public, ultimately toppled the economy; President Roosevelt enlisted the aid of his one-time enemy, financier J.P. Morgan, who capitalized on his considerable reputation to borrow $1 million in gold from European countries. Outside U. S. Subtreasury building at Wall and Broad St. in October 1907

October 24, 1929 - “Black Thursday:’ stock prices plummeted, a record  12,894,650 shares traded on the New York Stock Exchange Followed by “Black Tuesday” the markets tanked. Thousands of investors were wiped out as America’s Great Depression began; 1932 - stocks were worth only about 20 percent of their value in the summer of 1929; 1933, nearly half of America’s banks had failed, and unemployment was approaching 15 million people, or 30 percent of the workforce.

1985-89 - The Savings and Loan collapse… $167 billion in federal bailouts required.

October 19, 1987 - The stock market crashed as the Dow Jones Industrial Average plunged 508 points, or 22.6 percent in value - its biggest-ever percentage drop; inflation and rising interest rates, the announcement of a surprisingly steep trade deficit and news of an American attack against Iran were both blamed for Wall Street’s woes.

1998 – The Long-Term Capital Management failure.  The Fed had to  intervene to avoid sparking a worldwide panic over the condition of giant hedge fund companies like LTCM.

2000 – The Dot.com bubble crash

2007 – The housing bubble crash

2008 – The “Toxic Assets, Market Crash

Anyway, that’s what the history books say. I don’t cook it, I just serve it.

One final thing. If you want a taste of just how bizarre the RNC’s demand the DNC change it’s name really is, just watch this short video.

Serious Lapse of Judgement
Indeed

Here’s a bit of change we didn’t bargain for:

DOJ: Torture Memos Just “Serious Lapses of Judgement”
New York Times — An internal Justice Department inquiry has concluded that Bush administration lawyers committed serious lapses of judgment in writing secret memorandums authorizing brutal interrogations but that they should not be prosecuted, according to government officials briefed on its findings. (Full Story)

If this DOJ judgement stands, civics and political science textbook publishers will only have until Fall to correct their texts to reflect this new measure of bad behavior. Among the events currently treated by history books as crimes and crimes against humanity requiring a serious downgrade to simply “serious lapses of judgement include such events as:

Japan: Ordering the “Rape of Nanking”
Germany: Ordering the “Final Solution”
Iraq: Ordering the gassing of the Kurds
Rwanda:  Ordering the Rwandan Genocide
Vietnam: Ordering the My Lai Massacre
Palestinians: Ordering the Munich Massacre
Bosnia: Ordering the Srebrenica Genocide

Of course, it’s a lot easier to change the judgement of history than to apologize to the dead but, if the DOJ’s newly minted criminal behavior yardstick for those in charge sticks, we’ve got some apologizing to do to.  Because we executed or sent to prison a whole lot of folks after WW II for ordering actions the DOJ’s would now apparently consider just “serious lapses of judgement.”

For example:

“After Japan surrendered, the United States organized and participated in the International Military Tribunal for the Far East, generally called the Tokyo War Crimes Trials. Leading members of Japan’s military and government elite were charged, among their many other crimes, with torturing Allied military personnel and civilians. The principal proof upon which their torture convictions were based was conduct that we would now call waterboarding.”… As a result of such accounts, a number of Japanese prison-camp officers and guards were convicted of torture that clearly violated the laws of war.” (More)

And, hey, if Richard Nixon’s actions, now known as, “Watergate,” weren’t “serious lapses of judgement,” I don’t know what is. So we need to set that injustice right as well.

Gawd, I don’t know if the DOJ realized what a Pandoras Box of past injustices they opened with this new standard. The list of the people we’ve wronged over the years is almost endless; poor Bill Clinton and Monica, Scooter Libby, OJ Simpson, Blogo, Charles Manson, John Edwards’ cancer-free mistress, Halliburton/KBR’s  serial taxpayer screwings, Charlie Keating, Bernie Madoff — each guilty only of “serious lapses of judgement” yet we treated them like common criminals. Shame on us.

And of course there’s the MOTHER OF ALL SERIOUS LAPSES OF JUDGEMENT — ordering the 9-11 terrorist attacks. ( We can only breathe a collective sigh of relief that poor, besieged Osama bin Laden survived long enough to benefit from DOJs new thinking on such matters)

Finally, just as it took a staunch anti-communist conservative, Richard Nixon, to soften America’s views of Red China, it took a liberal Attorney General, Eric Holder,  to soften America’s views of crimes against humanity. (I mean, imagine if a Republican AG tried this! We’d all be up in arms about it.)

Anyway, I feel a great weight lifted from my shoulders. Because, even though I’ve never personally committed anything even close to the kinds of “lapses of judgement,” listed above, who knows? Shit happens.

Whose
“Day of Reckoning?”

Here’s a question to ponder this morning. It’s one I’ve been pondering for some weeks now:

Is it worth your time and effort trying to engage in rational discussions with the increasingly nutty and frantic mouth-breathers on the political right? Or are were they all genetically wired at birth to become hybrids of Grandpa Simpson and Mr. Burns?

The only reason I mention this is that last night, as is my ritual, I settled in with the Wall Street Journal for my daily recon-mission into conservative “Neverland,” – a blame-free zone where the words, “Wow, we were sure wrong about that!”are never uttered.

I was doing fine, until I reached Neverland’s dark heart, the WSJ Editorial Page – a  vortex of swirling nonsense where cocksure neo-cons rhetorically goose step in a tight clockwise circle – much like that roiling red spot of hot gas on Venus that roils madly but never seems to move or change.

In yesterdays editorial the editors were wringing their hands over all things Obama, in particular his budget and related economic rescue spending. Here’s how they ended that piece:

“Mr. Obama is more popular than is policies, and sooner or later the twain shall meet. For now, we are living in another era of unchecked liberal government. The reckoning will come when Americans discover how much it costs.”

That’s when I spit my evening brandy out of my nose. I mean, really?! The sheer chutzpah of it staggers the mind of anyone not on heavy doses of anti-psychotic drugs.

Where does a sane person, one with a functioning memory, even begin?

First, these are the same people  over at the WS Journal who supported the hyper-conservative GW Bush administration. You know, the guys who left us a world economy in near-depression, two unwon wars, and ice caps melting faster than Joe Lieberman and Arlen Specter can change their spots.

So, if as the WSJ editors warn Mr. Obama faces an inevitable day of “reckoning” over his spending, shouldn’t they first “reckon” with the trillions of dollars in debt their friends in the Bush administration left taxpayers holding? Shouldn’t they first ask, “how much did Bush’s policies cost us?”

Well, let’s see. If they can’t or won’t do it, we can. After all we have all the receipts, and we’re still getting bills for stuff we didn’t even know about until now. But we can make a start:

The first thing the WSJ’s friends did when they got in office eight years ago was to eat through the nation’s entire supply of seed corn, stored for them by those damn liberals, the Clinton administration. When Poppa Bush handed Bill Clinton the keys to the White House he also handed him a $290 billion deficit.

Eight years later, when Bill Clinton handed the keys to Sonny Bush he hande him a $231 billion budget surplus — the greatest surplus in U.S. History.

Not only did those damn Clinton liberals manage a budget surplus but were at the same time able to pay down the national debt by a staggering 2.4 trillion.

Within two years the budget surpluses were gone, and the national debt was on it’s way back up as the Bushies began borrowing again to make ends meet. By the time they left office they’d add another $5 trillion to the national debt.

Then, once the seed corn was gone, the Bushies started to borrow and spend and cut taxes too boot since, to quote Dick Cheney, “deficits don’t matter.” Suddenly now, the WSJ editors and their  dwindling army of dittoheads are all atwitter over “Obama’s mounting deficits.”

Then there’s the cost of Bush-era deregulation. Those expenses all came due just as George W. Bush was hightailing it out of Dodge last January – just in the nick of time. The full cost of failing (or just plain refusing) to police corporate America, especially the financial services sector, has already cost us trillions of dollars, and the full cost may not be known for a decade. because all those chickens haven’t come home to roost yet. But they’re on their way.

Not to pile on but, then there’s the cost of all the environmental degradation that occurred on their watch. Instead of addressing the mounting evidence they took a page from Big Tobacco’s playbook, first using phony science  to deny global warming was even happening. Then, once it became impossible to deny it any longer, they changed their argument to “Sure, but there’s no proof than human activities have anything to do with global warming.” It was an argument designed to preclude even trying to do anything about global warming, and it worked. (Unfortunately we can’t sue them like we did Big Tobacco.)

Then there’s the war in Iraq. That little mistake cost us $12 billion a month for more than five of Bush’s eight years in office – in all nearly a trillion bucks down a sandy rat hole, and counting.

In Afghanistan they spent a small fortune unseating the Taliban and trying to kill or capture the actual people who planned the 9-11 attacks. On the very verge of success though the Bushies lost interest,  turning their attention to Iraq before they achieved those goals in Afghanistan. In the end all the billions of dollars, (and hundreds of  US soldier’s lives) spent in Afghanistan achieved nothing. All they did was  allow the Taliban and al Qaida to infect neighboring Pakistan, regroup and re-engage in Afghanistan, where they now control most of the country once again. Hundreds of billions of dollars down the drain there too, and also, still counting.

All that money the Bush administration spent, wasted, misappropriated, and, in the end, what did we get for those trillions? Well, we  got partial ownership of Iraq, full ownership of Afghanistan, and a growing ownership share in nuclear-armed, Taliban/al Qaida infested Pakistan.

Such a deal. Yet during all that no one at the WSJ predicted  Bush would “face a day of reckoning when Americans found out how much it all cost.”

Obama’s spending is also at historic highs. But there’s “spending” and there’s “spending.” Governments, just as households, face two kinds of spending decisions: discretionary spending and capital-investment spending.

Discretionary spending satisfies the “I may not need it but I want it” reflex. Capital spending is money invested in things that promise to generate a return over time. Home improvements, are good example of household capital spending as they increase the value of a family’s main asset, their home. That big screen TV, on the other hand, is discretionary spending.

The Bushies did very little capital investing and a whole lot of discretionary spending. For example:

Obama  is investing in education, because it’s going to be educated, uneducated or mis-educated, children who will shape America’s future. And  right now our schools are turning out an demonstrably inferior product.

Obama is investing in emerging technologies that hold the promise that someday will free us from the nut-hold of those smarmy phony Saudi “Princes.” And, will begin the process of cleaning up the environment, before the environment decides to do the job herself  – by getting rid of us.

Obama is restructuring the tax code, so that those who actually go to work, and actually provide services or real producing stuff real people really need, get to keep more of what they make.

That’s the opposite of what the Bush administration did when they funneled tax breaks to those who already were doing just fine, thank you very much, while producing little more than paper, much of which has turned out to be so worthless you can’t even pay anyone to take off our hands.

I won’t belabor the point. But for the WSJ editors to posit that voters will soon be aghast at the cost of Obama’s policies, couldn’t go unnoticed. Because they sure didn’t notice the ruinousness policies of the Bush administration when they could have, and when they should have.

And finally, of all people on earth who should know the difference between out of control discretionary spending, and wise capital spending, it should be the guys and gals running the newspaper a friend of mine refers to as “capitalism’s racing form.”

But of course, the do know the difference. But they are to mainstream American politics what the Taliban are to mainstream Islam: not just wrong, but crazy-wrong.

Who You Callin’ a Minority?

If there’s one characteristic that best describes a conservative is that they not only live in the past, but are willing to fight for the right to live in the past, even when it’s not in their own long term interest.

I only mention this today because of this:

A Turning Point for Voting Rights Law
The Supreme Court hears oral arguments today on the constitutionality of a central provision of the Voting Rights Act, considered one of the most effective civil rights laws passed by Congress…. Conservative legal activists who mean to liberate the mostly Southern states that bear the biggest burden under the Voting Rights Act…The Supreme Court will hear arguments this morning in one of its biggest cases of the year, a suit that seeks to declare unconstitutional a key provision of the voting act. It is considered the most severe federal intrusion on state autonomy, but none of the states subject to it has joined the fight. (Full)

The conservative-leaning Court has slowly chipped away at this landmark legislation, under constant prodding from white conservative groups and organizations. Which leads me to issue this warning:

Memo to White Conservatives: Better be careful what you wish for, you may just get it.

The Voting Right Act was signed into law by President Lyndon Johnson back in 1965 to assure minority American citizens had the same voter protections as whites. There was at the time a well-documented history of minorities — most non-whites – being kept from the polls through a variety of legal, illegal and down right brutal schemes and tactics. Gerrymandering was one of the legal ways to marginalizing non-white voters. But there were other ways, dozens, hundreds of ways, because, the racist mind is never at rest when it comes to race.

Finally it proved necessary that Congress step in and enact a set of nationwide legal standards that assure d that every American who wanted to vote, could do so.

Which is why today, nearly 45-years later, we have a black President in the White House and men and women of all shades serving in elected office across the nation.

Now, let’s get to why white conservatives are not only wrong (again) in their campaign to gut the Voting Rights Act, but are fixing to shoot themselves in the foot. Here’s their “Oh s–t moment:”

Whites To Minority in U.S.
WASHINGTON, Feb 11 (Reuters) - Non-Hispanic whites will become a minority in the United States by 2050, with immigrants and their children driving 82 percent of U.S. population growth in coming years, a new study said on Monday. Non-Hispanic whites would account for 47 percent of the total in 2050, it concluded. By that time, one in every five Americans will be a foreign-born immigrant, compared to one in eight in 2005.

While the white population, with its lower fertility rate, ages, the Latino population, the nation’s largest minority, will triple in size. Latinos will be responsible for 60 percent of the population growth until 2050. They will account for 29 percent of the population, or 128 million in 2050, up from 14 percent now, the study said. “The number of whites will increase, but only by 4 percent,” said D’Vera Cohn, one of the report’s authors.

Get it? Within the lifetimes of younger conservatives whites, they will no longer be making the rules, but rather blacks, Hispanics and Asians. They will be the new majority. They will be deciding how voting districts are carved up. They will be making the rules for who can and cannot vote, choosing where polling stations will be setup and what languages ballots will display.

In short, the shoe will be on other feet — white feet. Whites will be the new American minority group. From that day forward, when someone refers to minority voters, they will be referring white voters.

You don’t need to be a descendant of Nostradamus to predict what will happen when that day arrives. White voting groups, many the very conservative groups currently attacking the Voting Rights Act, will be the ones screaming “descrimination,” and claiming their voting rights are being violated. White voters will file their voter registration applications with black or brown elected registrars of voters. At polling stations whites will be asked for identification by poll workers of color. And, since former minorities will by then be the majority, most polling stations will be located in their neighborhoods.

All of which will stoke white conservative’s racial already too robust xenophobia and racial paranoia. Race-based conspiracy theories will consume conservative talk radio and the Internet as the color of Congress goes from white, to beige to brown as voters of color do what white voters had been doing for 250 years.

Now, that’s going to happen. The only quesiton conservatives should be asking themselves right now while they still have a majority say in such matters, is whether this demographically inivitable racial shift in politics will proceed legally or illegally.  Will politicians of color win honest races, in honestly drawn congressional districts, without any hint of voters suppression? Or will they play the same kind of racial gerrymandering and voter suppression games whites played with such vigor and skill before the Voting Rights Act made them illegal?

And, once whites are the minority, will white candidates have a fair crack at electoral office. They could, and they should. But there’s only one thing guarantees they will — a national law protecting minority voting rights.. the very law they are currently trying to get the Supreme Court to strike down as you read these words.

So, my conservative friends, the writing is only wall. (In fact it’s right there on the White House mailbox, if you just look. “Mr. & Mrs. Obama.”)

Which is why we should all care what our conservative-leaning Supremes do with the latest, and most severe, challenge to the Voting Rights Act. Will the Court protect those rights for every minority voter, including whites? Or will they gut the Voting Rights Act, leaving the white minority in the near future at the whim of their new, racially mixed, majority?

But I’m not optimistic. After all, white American conservatives have shown they are more than willing to point a gun to their heads when they don’t get their way and threaten, “One wrong move and the Sheriff gets it.”

What’s in Name?
Only Everything.

Hey, did ya hear the latest idea from Republicans to revive their moribund party. Here it is:

Demand that the Democratic National Committee – AKA, the Democratic Party – change its name to – are you ready for this?

The Democrat-Socialist Party.

Republicans Ask Democratic Party to Change its Name
Republican National Committee member James Bopp Jr. says President Obama wants “to restructure American society along socialist ideals.” He and others in the RNC have drafted a resolution to rename the Democratic Party the “Democrat Socialist Party.” The proposed resolution … calls upon the Democrats to be truthful and honest with the American people by renaming themselves the Democrat Socialist Party,” said Bopp. He compared the branding to Reagan calling the Soviet Union an “evil empire.” (Full)

After I stopped laughing I thought to myself, “Hey, wait, those guys may be on onto something.”

Stop and think about it for a second. First, there’s no question that most Democrats believe the primary job of government is to provide for the welfare of those they govern. Democrats want to provide all kinds of public services; medical care, education, unions for workers.

So I say let’s do it. Let’s change the name of the DNC to the Democrat-Socialist Party. But only if the RNC changes it’s name as well. To what? Well, since it’s the socialistic impulses of Democrats that apparently requires this “blackbox warning” right within their name, then the same must be true for Republicans.

Therefore, Democrats will agree to this “truth in party branding” if the RNC changes its name to:

The Republic-Fascist Party.

Now listen, I’m not trying to be a smart-ass here. Each party has it’s leanings. Neither is all one thing or the other, but they each lean in a given direction. The Democratic Party is not really a bunch of pure socialists, nor is is the Republican party filled with fascists. I’m just following the lead of the RNC folks who thought this idea up. It’s “tendencies” we’re operating on here, right?

So, we know that fascism, in its purest form is a government that favors militarism over diplomacy, corporate rights over individual rights, will resort to inhumane measures (also known as “torture) when dealing with real or perceived enemies of the state, and fascists also like to give their countries nicknames like, “the Fatherland,” “Motherland,” or “Homeland.”

Bingo.

So, fellas over at the RNC, I’m on board with your proposal for truth in party re-branding. So let’s do it, and get this done before the 2010 mid-term elections. Because, I agree entirely with you that, when voters go to the polls, they have a right to know exactly what are the underlying tendencies that motivate each of the two party candidates on the ballot.

And what could be more clear and unambiguous than boiling the decision down to a choice between a socialist and a fascist?

Finally, a GOP idea I can get behind.

Cartoon of the Day

Too Big To WHAT?

It was an expensive lesson… at least $2 trillion so far, and the meter continues to click off additional billions every day.

The lesson, of course, was not to allow financial institutions to grow like tumors until they depart the mortal realm and become  “too big to fail.”

Or maybe more precisely, the lesson we should have learned is that to go ahead and let them grow as much as they want, as fast as they want. Let them take all the risks they want with money provided them by gullible and/or greedy investors. Then, when they get in trouble — as they always do –  let the bastards fail. Doing so would deprive these losers of their final and most valuable tool of extortion.

I don’t mention this in order to launch into another diatribe about the inequities of Washington’s Wall Street/bank bailout. Rather I was musing over my morning (mourning) coffee about the similarities between the damage done by institutions consider “too big to fail,” and the constitutional/moral damage America faces now that we’ve apparently adopted another “too big” class — those in this country who are “too big to jail.”

“…Mr. Obama’s chief of staff, Rahm Emanuel, made a pretty unequivocal statement that these lawyers should not be targeted….”Those who devised policy, he believes that they were — should not be prosecuted either,” Emanuel told ABC’s George Stephanopolous.” (Full)

So, it’s come to this; to quote from the very lips of Richard Nixon, “If the President does it, it’s not illegal.”

My, my, my.

But wait, there’s more.

Among the crimes the previous administration is accused of committing is one that strikes at the very heart of our legal system – politicizing the Department of Justice. The White House told Attorney General Alberto Gonzales who should be hired, who should be fired, who should be prosecuted and who should be left alone.

Those comments by the new White House Chief of Staff, coming as they did even though the stench of Bush administration corruption lingers at DOJ, shocks and saddens those of us who thought last November, we’d voted for “change we could finally believe in.”

Apparently not. Because, here again, was the White House speaking for the Department of Justice. No, they will not prosecute former Bush administration officials for authorizing torture, Emanuel said. Implicit in that unequivocal pronouncement was that they won’t even investigate those alleged mega-crimes. This, not out of the mouth of our top cop, the new Attorney General, but from the White House — again.

As a former professor of constitutional law, President Obama should know that the White House is NOT supposed to meddle in DOJ’s decisions over who, what, where or how to investigate alleged crimes. Period.

“You have to firewall politics out of the Department of Justice. Because once it gets in, people question every decision you make,” the former U.S. Attorney from Arkansas, Bud Cummins, told the Los Angeles Times in March.”

I know Barack graduated from Harvard, but there’s also a pretty good law school over at Yale, as well. Apparently Yale’s teachings on executive branch obligations under the constitution were a bit more precise:

“…there is something about the modern presidency that overwhelms the rule of law. That something is the White House staff, hundreds of bright and ambitious loyalists constantly struggling on the president’s behalf. This ongoing struggle has sometimes generated an “us against them” mentality that supported the repeated assaults on legality over the past generation…Eric Holder.. must take effective action to restore the professionalism of his badly demoralized department. He must insulate the department’s Office of Legal Counsel from political pressures..” (Restoring the Rule of Law to the White House —- Bruce Ackerman. Yale Law School, Class of 1967)

But nevertheless, we are where we are. And here’s where we are: The concept of “too big to fail,” rather than of fixing the system, is simply feeding and keeping alive the very tumor-like institutions that landed us in fiscal intensive care to begin with. And that in turn simply sets the stage for another future round of taxpayer-funded chemo. (It’s feels like being mugged then finding out the mugger bailed himself out jail on your credit card.)

But I guess we can live that. I mean, it might kill our 401ks but it won’t kill us. Much more dangerous though than “too big to fail,” is the creation of a class of individuals in America considered virtually untouchable, more equal than others, and therefore effectively “too big to jail.”

At least Nixon left one positive legacy. His rock-hard conservative credentials allowed him to open the door to Communist China. And history has recorded that deed.

Will history now record that it took a liberal Democrat, President Barack Obama, to close the door on 200 plush years of equal justice for all?

That ball’s in your court, Barack.

P.S. Oh, and  Eric Holder  – here’s a proposition for you to meditate upon as well; will you go down in history as another Alberto Gonzales?  If so, at least you’ll have the peace of mind knowing you too have transcended the mortal realm rendering yourself too big to jail.

Posted in News For Real, Politics, economy | No Comments »

A week’s compilation of posts

March 12, 2009 – 7:45 am

A Real Stem-Cell Twister

So, Obama reverses Bush’s ban on funding fetal stem cell research and the religious right (along with  the sycophantic pols whose only vote-getting trick is to pander to them) came out of the woodwork.

Because, you see, using these 150 cell-bundles (blastocysts) for research is “killing babies.”

Let’s just let that huge cognitive absurdity pass. We all know how both sides of that argument goes already. Boy, do we.

No, what I want to focus on today is this; where have all these blastocyst savers been over the last 25 years? Oh sure, they’ve been harassing women trying to get family planning services at Planned Parenthood clinics, but that’s just one place where the “murders” were occurring.

Let me explain.

The fetal cell tissue Obama will now allow to be used in research comes from some of the 600,000 fertilized eggs, frozen and stored at fertility clinics. That’s how many of the unused frozen fertilized eggs are disposed of – an unceremonious burial in red plastic bags marked, “medical waste.”

So, where were these self righteous protectors of the blastocyst while all that was going on?
I’ll tell you where they weren’t – they weren’t protesting outside fertility clinics, that’s for damn sure.  All these years, all those protests in from of family planning clinics, a not a single right to lifer protesting the 600,000 blastocysts dumped in medical waste bags and deposited in the trash — year in, year out – and it didn’t seem to phase them one little bit. (When was the last time you read of a right-to-lifer taking a shot at a fertility clinic doc or harassing women going in to one to have their eggs fertilized and frozen — of which some will almost certainly be destroyed later?)

In fact the so-called “pro-life” community didn’t even get around to acknowledging the whole fertility clinics thing until pro-choice forces pointed out this humungous contradiction. That’s when their holier than thou leaders, like the obsequious Tony Perkins, cooked up the idea of “Snowflake Babies.”

The idea was to encourage infertile couples to “adopt” these unwanted frozen blastocysts and save them for destruction. . (Unless of course you’re a gay couple — in which case they prefer the red bag instead.)

So, how’s the whole snowflake campaign going? After almost eight years there’s now just a tad over 300 snowflake children. It’s a number that is statistically insignificant as that would number would have been met anyway, since egg donation was a trend that predated the whole flaky “snowflake” diversion.

During the years the Bush administration accommodated these anti-science morons they remained reasonably quiet. But they were back in full force this week when Obama lifted that ban.

Their argument, once again, is that every fertilized egg deserves “the right to life,” by which I assume they mean a full-term, walking around, eating, driving a car and voting kind of life. And how do they propose to secure life’s Full Monty for the frozen cells at fertility clinics?

They want the ban Obama lifted yesterday, reinstated. Never mind that means 599,700 of their imaginary frozen humans will be “disposed of” every year. Or that along with them will go any scientific knowledge those cell-bundles may carry that could save the lives millions of non-imaginary, full-term humans in the future. They don’t care. What they care about is reinstating the ban on federal funds being used for something they find morally objectionable.

(Never mind that a whole lot of us out here found equally objectionable the use of federal funds to attack Iraq, killing Iraqi civilians by the tens of thousands many of them children. Or that many of us find the use of state and federal funds to execute full-term, walking, talking, feeling humans, equally objectionable. The religious right has less of a problem killing full-term humans than they do using blastocysts for research. Ah, but I digress.)

Since the Snowflake ruse seems to have fallen short by, oh say, a lot, what will the protectors of the blastocyst do now? Maybe they might split off a few dozen of their dead-fetus-sign carrying bots and send them over to the nearest fertility clinic. After all, by their definition of human life, those fertility clinics are virtual blastocyst Auschwitz’s.

But don’t hold your breath. Because it’s not about killing babies. For our Christian Taliban, it’s about killing choice. Because the religious right is perfectly okay with a single, unemployed, emotionally challenged young woman to spit out 14 kids,  but foursquare against sending a frozen blastocyst off to do valuable medical research.

Maybe the religious right’s objections to research that tries to read the mysteries of life within DNA of these otherwise doomed blastocysts need a catchy slogan. I suggest they go for pinpoint accuracy in their slogan.

How about, “Better Dead Than Read.”

How to Stop Foreclosures
A simple plan for complicated times.

Sometimes there’s a fairly simple answer to what appears an unsolvable problem, and it’s right in front us. The foreclosure crisis is Exhibit A.

First let’s describe the problem:

Stressed homeowners: Millions of Americans have been – and are being –  thrown out of their home because they could not afford their loan payments. Some of those folks bought more expensive homes than they should have, some lost their jobs, some were sold teaser loans that started out with a low monthly payment but have since doubled, or even tripled. As the housing crisis deepened the balance on those loans are now, more often than not, higher than the actual current value of the property itself.

Stressed lenders: With their own capital depleted and real estate valuations continuing to fall, banks are reluctant to make new loans. They are  equally reluctant to renegotiate what loans they still hold since any downward valuation of loans on their books would only further deepen the bank’s losses. On the other hand, foreclosing and repossessing homes results in losses as well, on average of about $60,000 per property in most states, but in California can be closer to $100,000 loss for the bank per foreclosed property. So, for lenders, they face loses any way they turn.

But there is a way to mitigate these loses and, for stressed homeowners, reduce the fear of eviction from their own home.

Here’s how – what I modestly call, The Pizzo Plan – would work:

A homeowner who has been faithful in his/her payments over time, has lost one of the family’s two jobs and is now three months in arrears on their  $3675/month  payment on their three-bedroom suburban home, because they just lost their job.

The lender contacts the borrower with an offer; the lender will renegotiate their relationship with the borrower so that the borrower can stay in the home.

The process begins with the homeowner signing a quitclaim deed temporarily relinquishing their ownership claim to the property to the lender.

In return the lender signs a lease/purchase agreement with the borrower. Under the terms of this lease the purchaser’s monthly payment would be adjusted downward to match market rents for similar homes in their market area. (After all, if the bank throws this family out the home they will have to rent one to replace it. So the assumption is that, if they’re going to rent another vacant home anyway, why not keep them in their own home where they have a stake in the future.)

Moving the defaulted borrower from loan payments to rent should cut their average monthly payment by nearly half  — and in some cases even more than that.

The homeowner/lessee’s new, lower monthly “rent payment” would be divided into two parts; one third of it would be put in a special, interest bearing escrow account at the bank where it will build up over time. When the homeowner/lessee gets back on his/her feet, and is able to resume their mortgage payments, the money built up in this escrow account could be used to reduce the outstanding principle on the original loan, or used to supplement their loan payments going forward.

The other two-thirds of their lessee payments would go to the bank to reduce their loses on the loan.
(At the time of reinstatement the bank and borrower will have an opportunity to renegotiate the terms of the original loan as well, further reducing the likelihood the borrower might default again.)

There would, of course, be the usual kind of landlord/tenant mutual responsibilities, with a few differences due to the unique circumstances. The tenant/owner would be required to maintain the property in good condition, but would also have to pay to fix anything that breaks during the lease period. In fact the only material change in the homeowner/lessee’s life would be the lower monthly lease payment.

The lender would, to some extent, have to become a property manager, a role bankers despise. But, at a time when REOs (Real Estate Owned — repossessed homes.)  already litter lender’s portfolios, and more are on the way, they’re going to end up managing properties anyway. The only question is, will they be occupied or vacant. And will there be a tenant there to take care of the yard, or will the lender have to pay a gardener to do it instead.

No one is going to get everything they would like out of this. The homeowner would not be bailed out, the bank (or Freddie & Frannie) would still have to sustain loses, just less.  And, not every defaulting borrower will even be able to afford the market rate rent and will end up being evicted.

On the other hand, it would help millions. And everyone would gain something. If widely adopted it would produce significant benefits, financial, emotional and fiscal. It would make the current down turn less painful, less destructive and shorter in duration, because:

* Millions of Americans would be able to stay in their own homes.
* Banks would avoid being saddled with tens of thousands of vacant homes.
* Banks could avoid having to absorb the large, painful and the inevitable loses associated with REOs
* Millions of foreclosed properties would not be dumped to become a glut on an already staggering housing market, properties that would only drive home values further downward causing even more loses for lenders down the road.
* Neighborhoods would not become vacant-home ghettos, destroying the sense of community that’s so vital to healthy families and healthy local economies.

This plan would not save every homeowner, every lender or eliminate all loses for all involved, including taxpayers. What it would do is reduce loses, reduce stress, reduce hardship, reduce homelessness, reduce suicides and reduce the impact and duration of the current depression.

What it won’t do is satisfy the appetite of that yawning black, sucking hole that has become the mortgage backed securities and related derivative markets. They won’t like The Pizzo Plan one little bit. But then, do we really give a fig what they think, the very people who caused, aided and abetted and profited by perverting mortgage securitization markets?

(Yes, that was a rhetorical question.)

Chicken Little Turns Community Organizer

The criticism I get most often is that all I talk about is how bad it’s going to get but never offer alternatives.

I plead guilty.

I got a call yesterday from a local retired bank executive. She reads this blog and wanted to know if I’d be interested in speaking to local progressive activists about what they can do in the midst of the first full-blow depression in three quarters of century.

I was stumped. I told her it was too late to do anything, that the time to prepare for this was two or three years ago. But now we’re all on for the ride, wherever that may take us.

But after I hung up I started thinking. That was wrong. There are things we can do, things we may have to do, and soon. My focus, like most others who spent their working lives focused on national politics, was on what should be done in Washington. I realized that it’s also too late for that as well. The trouble, how bad it will be and how long it will last – all that, is already baked into the cake.

So it’s not only too late for ordinary Americans to do much, but too late for Washington to do much either, other than do things (like printing money and running up more debt) that may resolve our current problems but only by trading them for bigger problems down the road — like hyper inflation. When that hits, your house will be worth a lot more but the money you can get for it will be worth less, if not worthless.

That’s the bad news. But there is better news. (I can’t say it’s “good news” because none of us would choose any of what I am about to suggest if we had the choice. But I don’t believe we may have that choice.)

So here we go. First, forget “thinking globally.”  There’ll be time for that again later. Right now you better start acting locally — and with a vengence. By the numbers:

1) First you’ll have to define what “local” means to you, based on where you live.  In really small towns, local can mean the entire town. After all, you likely know everyone, or most everyone, anyway. In larger towns it could mean a geographical area you consider your “stomping ground.” In cities it may mean a city block, a large housing complex or development.

2) Call a meeting of the folks living in the area you define. The goals of this meeting should include:
-  compile a phone and email contact list
- compile a list of skill sets within that group, such as mechanics, doctors, nurses, teachers, contractors, farmers, etc.
- compile an inventory of tools that can be shared among the group, like tractors, circular saws, welders, trucks, etc.
- create a garden produce exchange, in which individuals agree to grow extra rows of certain produce in exchange for others sharing their excess produce of a different sort, like tomatoes in exchange for carrots, etc.
Who has fruit trees? Those of us who do know that most of our excess apples, oranges, end up rotting on the ground.

3)Memorialize/formalize your neighborhood group. This should include regular monthly meetings, a weekly newsletter, emailed or snail mailed. Facebook has just launched a “Friends Marketplace” function that allows people to create a craigslist-type section where friends can sell or give away items among their known and trusted friends, or post “wanted” items to that list. Your neighborhood group might consider using this free service. Whatever you do you must maintain the group. Maintaning any kind of affinity group’s integrity and cohesiveness is difficult as people tend to lose interest in such communal efforts over time unless they are affected by their membership regularly.

Even before you form your neighborhood group, you need to take care of yourself and your family. So;

1)Buy a little gold bullion. You can get it directly from Credit Suisse on the web. Why? Because we are first experiencing a short period of deflation. That’s happening now. But once the trillions in stimulus money hits the fan inflation should take off like a bottle rocket. A couple of ounces of gold bullion not only provides an inflation hedge but, in the event inflation gets so bad people are reluctant to accept paper money, some gold can get you through. But buy the stuff in very small denominations, 1 gram bar-etts to 3 gram bar-etts. Because if you ever really need this stuff it will be impossible to “get change” for a $2000 hunk of gold.

2)This one is going to lose me some readers. If you don’t already own a handgun, get one. And don’t get a pee shooter, get something with a punch. Just for the record, I’m no gun nut, don’t belong to the NRA, don’t even like them. But, let me ask you a question: do you have a fire extinguisher at home? Wouldn’t you feel pretty stupid if you had a fire but no fire extinguisher, and you house burnt down? Sure you would. Well, that’s how I view a gun, as a kind of  fire extinguisher. I hope to heaven I never have to use the damn thing, but that’s also how I feel about the three fire extinguishers I have scattered around the house. So, let me ask you, wouldn’t you feel pretty foolish – or worse — if one of the growing number of desperate folks out there, kicked your door in one night and all you had to protect yourself and your family was a surprised expression? Home invasion robberies are on the rise. You and your family are “soft targets,” an easy hit, compared to a bank or armored car. Just how “soft” depends on you.

(I was speaking to a local gun store owner just yesteday. He said the demand for both guns and ammunition have surged to such a point that he cannot get all the ammo he orders for his store. “If I order 200 boxes of 9 mm ammo,” he said, “my suppliers can only send me 20 boxes. They just can’t keep up with demand right now.” Who do you think is buying all tose guns and ammo? I don’t know, but there are only two possiblities; crooks or would-be crooks, and ordinary folks worried about those crooks or would-be crooks — or, most likely, both.)

Nevertheless, I understand some folks would rather have a skunk under their bed than a gun. I respect their objections. I just don’t share them. While I’ve never had plug a bad guy, I did have to drop a pit bull that was trying to attack my two young sons many years ago. The kids were sure glad I had the necessary tool at hand for that job. (The pit bull — not so much.)

One more thing communities could/should consider is setting up a community micro-lending non-profit. Micro-lending, in times like these, is far more important, and effective than traditional banks when it comes to keeping local small businesses in business and funding at home startups. For example, an out of work mother could get a $3000 micro loan to purchase a long-arm quilting machine to make and sell quilts. (Read more about micro lending here.)

So, there. My constructive suggestions.

Fortunately I live in a rural, farming area where I know most of my neighbors already. We routinely lend one another tools and a hand, whenever needed. We already pawn off our excess produce, fruit and eggs off on one another (especially those three-foot zucchini we let go too long before picking, and which even the goats and chickens won’t eat it, but you don’t have the heart to throw out, so you leave it on a neighbor’s doorstep in the dead of night like an unwanted orphan. Not that I’ve ever done such a thing.)

Maybe things won’t get that bad. I hope they won’t. After all, I have two sons just starting their working lives and families. I want them to have what I had. So we can home that, maybe the stock market crashing from 14,.000 to 6600 in the near flicker of an eye isn’t a sign that “the end is near,” after all. Maybe it’s just one of those  “corrections,” Wall Streeters declare whenever they lose money for their investor clients. Maybe.

After all, this is America, not some third world nation. When Americans need or want something they get in their car, drive to Target or Wal-Mart, buy it and drag it home – hunting and gathering, American style.

The very thought that times could so bad that all that “stuff” might become scarce,  prohibitively expensive – or both – is, well,  like crazy talk.

Nevertheless, I’m hedging my bets. If I’m wrong the worse that happen is I get stuck with two boxes of ever-so-slow rotting MRE’s and some gold I’ll have to have melted down into jewelry for my wife so she stops asking “did you make money on that stuff or what?”

Oh, if I’m wrong, and everything gets back to normal, maybe I won’t have to return all those tools I “borrowed” from my trusting neighbors during the dark times. Because, when it comes to tools, I have a real Bernie Madoff streak in me.

More Chicken Little-ish reading

(Permalink for this post)
Follow The Numbers

Let’s talk about numbers. Big numbers. Huge numbers. Numbers that have gotten so humongous Carl Sagan could build a PBS show around them, if he were still alive.

They’re so enormous that nothing in our everyday lives allows us to get our heads around them, so we we just let them wash over us as they rush at us from our media of choice.

But get our our heads around them we must. Because the right wing disinformation machine that gave us Newt and Rush and George haven’t gone away. They are still out there and these unfathomable numbers are manna from heaven for them. After all, their base is made up largely of folks who like to consider themselves defenders of capitalism against the forces of socialism, while maintaining a standard of living most supposed “European socialists” would consider perilously subsistence.

In other words, they’re even bigger suckers than Berny Madoff’s “clients.”

But I digress.

Numbers. Back to those those numbers.

The ubber-talkers of the looney right, Limbaugh, Hannity, O’Reilly and the hundreds of right wing talkers from Los Angeles to Dog Patch, are telling their nuance-challenged listeners that the Obama budget is a socialist budget. And, that it will add $4 trillion to the national debt.

Now, $4 trillion is a helluva big number, to be sure. It’s four thousand billion dollars. Scary, huh?

And scare them it has. The right wing herd is already shifting nervously in their pens, bleating out the message, “Obama bad. Obama socialist. Obama take guns away. Obama

So imagine what the herd would do if Rush et al told them about this number:  $1.14 quadrillion.

No, that’s not a made up word. A quadrillion is one thousand trillion dollars. Not $4 trillion, but $1000 trillion –  and change.

That’s how much money the people Rush and O’Reilly think should be in charge of the natiopna and economy – and who were in fact, in charge until recently – piled up in unregulated derivatives.

Here’s the breakdown, according to the International Bank of Settlements, which acts as banker for the world’s central banks:

1) Listed credit derivatives stood at USD 548 trillion;
2. The Over-The-Counter (OTC) derivatives stood in notional or face value at USD 596 trillion and included:

a. Interest Rate Derivatives at about USD 393+ trillion;
b. Credit Default Swaps at about USD 58+ trillion;
c. Foreign Exchange Derivatives at about USD 56+ trillion;
d. Commodity Derivatives at about USD 9 trillion;
e. Equity Linked Derivatives at about USD 8.5 trillion; and
f.  Unallocated Derivatives at about USD 71+ trillion.

No, Rush et al didn’t mention any of that. But it’s precisely that, not Obama budget, or those “tax and spend liberals,” who are to blame for the worldwide systemic economic collapse we are experiencing. It’s the residue of all that Bernie Madoff, smoke and mirrors, wink and nod, cash for trash, phony-baloney, air-asset faux capitalism that’s collapsed on everyone.

By comparison Obama’s $4 trillion looks downright under-achiever-ish.

So, with that figure put in perspective, we are left to reconsider the right’s criticism of Obama’s spending decisions.

First, who’s right? The Right, or Obama? Still don’t know?

Let’s start with what we do know, because it’s already happened.

We know cutting taxes on the wealthiest Americans and companies doesn’t work, because it didn’t work. None of the nearly $2 trillion of those tax cuts ever trickled down to the rest of us. And we know it didn’t create millions of jobs –  at least not here in America.

We also know that slashing regulations and regulatory oversight of the US financial services companies doesn’t work, because that didn’t work either. Rather than using all that extra cash and regulatory freedom to do the kind of things that create long term growth, they “leveraged it” to create a kind of  imaginary parallel universe, populated by imaginary (unregulated) investment instruments, which they flipped between themselves creating imaginary assets, imaginary profits, but strangely no imaginary loses.

Because in their parallel universe they could not lose — as long as everyone else did.

(Sidebar link: Here are a few of my favorite  — “derivative investments.”)

So, that’s what we know. And we know it because we’re living the consequences right now.

That leaves us the Obama way.

I can’t speak for conservatives, but when they charge that Obama’s policies will “ruin the economy and the nation,” I have to assume they mean Obama will ruin them in different ways than their policies have already ruined it.

Well, I don’t know about you but, after what we’ve been through, I’m ready for different.

So, while the dethroned right wails in the desert about how Obama is about to turn America towards European socialism, I say, fine. At least while we dig ourselves out of the tar pit of phony capitalism the right gave us, we’ll be able to go to a doctor when sick and, while we might never be able to retire, we’ll at least have Medicare and Social Security (which, please recall, the right wanted to offer as a sacrifice to the Wall Street volcano gods back in 2001.)

Oh, and please note those numbers above. Send them along to your favorite Rush/O’Reilly fans –  $4 trillion vs. $1.14 quadrillion.

Of course they won’t get it. If they could get it, they would have switched off those right wing propagandists years ago. And you can bet your bottom dollar — if you still have one — that when their own house goes into foreclosure or they lose their job, they’ll blame who? Obama and the Democrats, of course.

Because stupid isn’t skin deep. Stupid goes right to bone.

Republicans are counting on it.

More on this here

I Can’t Even Think Up
A Headline For This Post

So there I was last night, sipping my after-dinner brandy while reading the day’s Wall Street Journal (or as a friend of mine calls it, “The Racing Form of Capitalism.”) The TV news droned on in the background. Being a sailor my attention was immediately drawn to the TV when the newsreader mentioned that someone was giving away a whole ship.

That someone, it turned out was you and I, via the US Navy. It seems they had a black elephant on their hands, a floating taxpayer funded money pit named, “Sea Shadow.” Never heard of it? Well of course not, because it invisible.. .or at least was supposed to be.

The Navy got a bad case of stealth-envy when the Air Force developed the stealth bomber, so they decided they needed a stealth thingy too. Their answer was the Sea Shadow. But somewhere between 1983 and last year, and somewhere between  $0 taxpayer dollars and $200 million taxpayer dollars, it apparently dawned someone that we already had stealth ships. They’re called submarines.

Of course the Navy knew that already. Nevertheless, money for all things stealthy were up for grabs and they wanted their hunk. They knew the if the Sea Shadow was going to compete with submarine financing it had to be able to disappear too, you know like submarines. But how to do that without turning the Sea Shadow into just another submarine, thereby negating it’s very existence?

The answer the Navy came up with:  hide this ship inside another ship.

BRILLIANT!

So, when prying eyes were around the stealthy Sea Shadow would be stealthy by donning its cape of invisibility – by hiding within the bowls of another ship the size of the freaking Hindenburg.

Who would ever guess? (If only the Twin Towers had been hidden inside a Not-The-Twin-Towers building!)

Anyway, that 25-year long funding farce apparently ran its course and now the Navy is trying to give this gold-plated piece of worthless crap to anyone willing to maintain it as a tourist attraction… a $200 million tourist attraction. So far, no takers, not even Six Flags.

My morbid curiosity was sparked. So this morning, I looked up the Sea Shadow project on the web. One thing led to another, as is the case with Internet research, and a pattern developed.

The Sea Shadow was a Lockheed/Martin project. According to what little the Navy has revealed about this particular boondoggle,  construction of the Sea Shadow took place inside the barge, apparently between 1983 and 1985.  Tests were conducted in 1986, but then  resumed in 1993-1994.  A new round of spending on the thing came in the wake of 9/11.

Now Sea Shadow is a $200 million of useless and unwanted piece of  junk. If I were the CEO of an enterprise and some of my middle managers blew $200 million on something this stupid, I’d fire them. Then, being the vengeful Sicilian that I am, I’d sue them. Then I’d find the person who thought up the idea to begin with and park the Sea Shadow in their front yard with a sign that reads, “I blew $200 million of your money on this thing,  and all I got was this lousy ship.”

But wait, there’s more to this tale than meets the eye. The Sea Shadow was a creation of Lockheed, now Lockheed-Martin. This defense contractor has an unbroken history of wasting our money by the bushel billions.

The Sea Shadow may have out lived its fiscal funding usefulness, but, fear not, Lockheed-Martin has other “we’re-all-gonna-die-if-you-don’t-buy-this-from-us” projects in the pipeline.

For example, only last week we learned what it would cost us to  replace the President’s helicopter, Marine One. Now, I understand that helicopters tend to be more expensive than fixed-wing aircraft of the same size. But the cost of the new Marine One choppers, which carry 14 passengers, have soared to that of a NASA space craft… $11.2 BILLION.

Costs for Marine One have risen to the point where the price of each helicopter exceeds that of the presidential Boeing 747’s known as Air Force One.  They even sport an oval shaped cabin inside to mimic the Oval Office. Hooza.

And whose at the receiving end of funding for these flying limos? Well, our stealth boat folks over at Lockheed-Martin, of course.

But wait, there’s more. If you order these choppers right now, you get to buy more F-22 Raptor supersonic jet fighters too, at the rock bottom price of just $191 million each. We can’t offer this rock-bottom price all day, so act now. Operators are waiting. (Must be over 18 and possess the IQ of common road gravel to qualify.)

The total price tag for F22 Raptors the military wants comes to around $66 BILLION. They say they need the Raptor because it’s a supersonic dog fighter, the first of its kind. And, of course, we all know that al Qaida is working on one of their own.

Okay, I made that last part up. The point is, in the 21st century,  just who are we supposed to be supersonic dogfighting with? I mean, really, besides dogs, who dogfights anymore?

And who’s behind the F22? Yes boys and girls, those Jabba the Hut money munchers over at Lockheed-Martin. And how does Lockheed-Martin get away with such sweet deals, year after year, decade after decade?

Duh
Between Lockheed and four associated F-22 contractors, over  $65 million was spent on lobbying just last year,  according to the non-partisan Center for Responsive Politics.  And there was a lot of bundling go on too. Employees of the companies ponied up another $11.3 million in political contributions to both parties, according to the center’s data.

Lockheed-Martin makes damn sure it keeps congressional backers, in both parties, well fed.  And when money doesn’t do the trick, they hire them. Lockheed-Martin’s rooster is a virtual Who’s Who of former members of Congress, retired generals and former Pentagon officials. Their job is to make sure current members of congress, the military and DOD, know how sweet life can be, if they vote the right way –  the Lockheed-Martin way.

“The F-22 is just one example of probably a half dozen,” says Keith Ashdown of the watchdog group Taxpayers for Common Sense. “This is why it’s so hard to ever cut anything. Every weapons system that the administration has a bull’s-eye on, there’s a fleet of lobbyists and companies organizing to stop that. Decisions to make military investments should be based on the need of the war fighter, not the politics of who benefits.”

So, Obama says he’s going to go through the budget, “line by line.” Good. Someone should have been doing that all along, but better late than never. I just hope it’s not too late.

After all, it was a Republican president, Ike, who warned against the rise of a “military/industrial complex,” which he warned could grow so fast and become so powerful that it could become a defacto shadow government. You know, like a government that can’t (won’t)  provide health care for 50 million Americans, but can justify blowing $11 billion on flying oval offices and “stealth” ships that are so not-stealthy they have to be hidden from view inside another not-stealthy ships.

I’m just sayin’

Memo:

To: US Attorney General, Eric Holder
US Dept. of Justice
Washington, D.C.

From: The Rest of Us
Out Here, USA

Eric,

I heard your speech the other day, you know, the one in which you accused Americans of being  “cowards when it comes to discussing race.”

Here’s what I have to say about that:

Shut up the “f” up and start prosecuting.

Allow me to elaborate.

I’m not going to argue with your basic premise — that Americans still have trouble talking openly to one another about race and race-related issues. It’s a process and, well, we’re still progressing.

But cowards? I don’t think so. After all, we have a black President of the United States of America sitting in the formerly all-White House. We have a (gorgeous and wickedly smart) black First Lady. Our new ambassador to the United Nations, Susan Rice, is black.  And, (you might want to grab a mirror here) we have our first black Attorney General of the United States of America.

That’s hardly the work of a nation of racial “cowards.”

The choice of the term “cowards” was so wrong. You might have substituted other very real American traits; independent, difficult, cranky, myopic, provincial, skittish, in denial…  any one or combination of which would have fit better than “cowardly.”

That’s exactly the kind of race-based whining that landed Jesse Jackson in irrelevancy-land. And if you keep talking like that, you’ll be joining him.

Besides, you have far more important jobs on your plate right now than lecturing us on the kinks that persist in our racial relations. If racial justice is what you’re  looking for, repair your own Civil Rights Division, which the Bush folks gutted then filled with creeps, liars, morons and barely-closeted racists.

That’s your job, not giving us lectures on who we hang with, or don’t hang with, on weekends.

But there’s even more important work you should be consumed by right now – the work of reestablishing the rule of law in the USA.

Never in the history of the Union has an attorney general taken office with such a wealth of evidence of criminal activity – much emanating from you very own agency – littering the very ground upon which you stand. Pick it up. Get it on the record, and get it under oath.

Then start indicting people, beginning with your predecessor, Alberto “I don’t recall” Gonzales, and his covey of sycophant lieutenants.

As the old Norwegian saying goes, “A dead fish starts to stink from the head first.” And we can still smell the stink coming from he Department of Justice. Ought you not tend to that first before you start to stink too?

Once you get your own house in order, then turn your attentions to the mountains of stomach turning, well-documented evidence of high crimes, felonies and war crimes committed by the former occupants of the White House. You know, all those news stories you might have read about exposing the Bush administration’s torture of POWs, illegal wiretaps of innocent Americans, kidnapping, and yes, murder.

Out here we assume that, if reporters found out about these crimes then certainly trained law enforcement investigators and those thousands of law school grads you employ, should be able to nail down at least a few high profile Bush administration prosecutions.

Are we wrong about that?

I understand you’re new to the job.  So if you are having trouble finding the evidence of which I speak, I’ve collected a hunk of it and posted it here. (http://www.bushproject.com) Feel free to dip in and take what you need. But I don’t have subpoena power. You do. So use those powers to fill in any gaps.

Then take these cases before a grand jury of regular Americans and see what happens.

Eric, you have no shortage of things that need immediate attention  – critically important things, alleged crimes that 71% of Americans want you to pursue.

Oh, and there’s the rest of the world, they’re watching too. They’re watching you and Barack Obama. They are watching to see if America is still a land of “laws, not men” – or not.  They are waiting to find out whether America’s stated core values — justice for all, no one is above the law, etc. — are the real deal, or just jingoistic bumper sticker slogans. (Something a growing number of Americans have begun to wonder themselves.)

Your call, Eric.

But almost nowhere is the rest of the world laying awake night wondering whether or nor American’s weekend barbeque’s have become touchy-feelie, racially focused 12-Step discussion groups.

Thank you for your immediate attention to these matters.

Sincerely,
The Rest of Us.

Posted in News For Real, Politics, Uncategorized, economy | No Comments »

Follow the Numbers

March 2, 2009 – 10:45 am

Let’s talk about numbers. Big numbers. Huge numbers. Numbers that have gotten so humongous Carl Sagan could build a PBS show around them.

They’re so enormous that nothing in our everyday lives allows us to get our heads around them, so we we just let them wash over us as they rush at us from our media of choice.

But get our our heads around them we must. Because the right wing disinformation machine that gave us Newt and Rush and George haven’t gone away. They are still out there and these unfathomable numbers are manna from heaven for them. After all, their base is made up largely of folks who like to consider themselves defenders of capitalism against the forces of socialism, while maintaining a standard of living most supposed “European socialists” would consider perilously subsistence.

In other words, they’re even bigger suckers than Berny Madoff’s “clients.”

But I digress.

Numbers. Back those those numbers.

The ubber-talkers of the looney right, Limbaugh, Hannity, O’Reilly and the hundreds of right wing talkers from Los Angeles to Dog Patch, are telling their nuance-challenged listeners that the Obama budget is a socialist budget. And, that it will add $4 trillion to the national debt.

Now, $4 trillion is a helluva big number, to be sure. It’s four thousand billion dollars. Scary, huh?

And scare them it has. The right wing herd is already shifting nervously in their pens, bleating out the message, “Obama bad. Obama socialist. Obama take guns away. Obama

So imagine what the herd would do if Rush et al told them about this number:  $1.14 quadrillion.

No, that’s not a made up word. A quadrillion is one thousand trillion dollars. Not $4 trillion, but $1000 trillion –  and change.

That’s how much money the people Rush and O’Reilly think should be in charge of the natiopna and economy – and who were in fact, in charge until recently – piled up in unregulated derivatives.

Here’s the breakdown, according to the International Bank of Settlements, which acts as banker for the world’s central banks:

1) Listed credit derivatives stood at USD 548 trillion;
2. The Over-The-Counter (OTC) derivatives stood in notional or face value at USD 596 trillion and included:

a. Interest Rate Derivatives at about USD 393+ trillion;
b. Credit Default Swaps at about USD 58+ trillion;
c. Foreign Exchange Derivatives at about USD 56+ trillion;
d. Commodity Derivatives at about USD 9 trillion;
e. Equity Linked Derivatives at about USD 8.5 trillion; and
f.  Unallocated Derivatives at about USD 71+ trillion.

No, Rush et al didn’t mention any of that. But it’s precisely that, not Obama budget, or those “tax and spend liberals,” who are to blame for the worldwide systemic economic collapse we are experiencing. It’s the residue of all that Bernie Madoff, smoke and mirrors, wink and nod, cash for trash, phony-baloney, air-asset faux capitalism” that’s collapsed on everyone.

By comparison Obama’s $4 trillion looks downright under-achiever-ish.

So, with that figure put in perspective, we are left to reconsider the right’s criticism of Obama’s spending decisions.

First, who’s right? The Right, or Obama? Still don’t know?

Let’s start with what we do know, because it’s already happened.

We know cutting taxes on the wealthiest Americans and companies doesn’t work, because it didn’t work. None of the nearly $2 trillion of those tax cuts ever trickled down to the rest of us. And we know it didn’t create millions of jobs –  at least not here in America.

We also know that slashing regulations and regulatory oversight of the US financial services companies doesn’t work, because that didn’t work either. Rather than using all that extra cash and regulatory freedom to do the kind of things that create long term growth, they “leveraged it” to create a kind of  imaginary parallel universe, populated by imaginary (unregulated) investment instruments, which they flipped between themselves creating imaginary assets, imaginary profits, but strangely no imaginary loses.

Because in their parallel universe they could not lose — as long as everyone else did.

(Sidebar link: Here are a few of my favorite  — “derivative investments.”)

So, that’s what we know. And we know it because we’re living the consequences right now.

That leaves us the Obama way.

I can’t speak for conservatives, but when they charge that Obama’s policies will “ruin the economy and the nation,” I have to assume they mean Obama will ruin them in different ways than their policies have already ruined it.

Well, I don’t know about you but, after what we’ve been through, I’m ready for different.

So, while the dethroned right wails in the desert about how Obama is about to turn America towards European socialism, I say, fine. At least while we dig ourselves out of the tar pit of phony capitalism the right gave us, we’ll be able to go to a doctor when sick and, while we might never be able to retire, we’ll at least have Medicare and Social Security (which, please recall, the right wanted to offer as a sacrifice to the Wall Street volcano gods back in 2001.)

Oh, and please note those numbers above. Send them along to your favorite Rush/O’Reilly fans –  $4 trillion vs. $1.14 quadrillion.

Of course they won’t get it. If they could get it, they would have switched off those right wing propagandists years ago. And you can bet your bottom dollar — if you still have one — that when their own house goes into foreclosure or they lose their job, they’ll blame who? Obama and the Democrats, of course.

Because stupid isn’t skin deep. Stupid goes right to bone.

Republicans are counting on it.

More on this here

Posted in News For Real, Politics, economy | 1 Comment »

The Federal Bank of Chernobyl

February 10, 2009 – 11:56 am

I have sympathy for Treasury Secretary, Timothy Geithner. As I listened to him unveil the latest iteration of the bank rescue plan this morning an image flashed into my head. It was the image of Soviet troops, dropped by helicopter onto the smoking roof of the Chernobyl reactor, furiously dumping ton after ton of sand onto the molten reactor below.

Like those poor Soviet troops, the last guy who held Geithner’s job, was so politically radio active by the time he got off that roof he’ll probably glow in the dark for the rest of his life.

Now it’s Geithner’s turn.

Eventually the Soviets got the fire out, but the mother of all toxic waste dumps remained. And, assuming Geithner can get control of the banking meltdown, he too will have even a bigger, and more difficult, job on his hand – dealing with the trillions of dollars in toxic waste those under-regulated banks pumped into the world’s fiscal food chain.

Rather than trying to get the old Chernobyl reactor up and running again, the Soviets ended up doing the only thing they could  – encasing the entire toxic mess in a lead-lined concrete sarcophagus – forever and day.

But Geithner thinks he can convince private sector investors to take a lot of his toxic waste off his hands by purchasing it with some government guarantees. Good luck with that, Timothy. After all, much of that stuff is so toxic it qualifies for burial at Yucca Mountain. And who would know that better than the folks in “the private sector” who created most of it themselves? Private investors will cherry-pick assets they figure will perform and leave the worst of the worst for taxpayers. And they’ll do it knowing that, even if they do end up with a few bad investments, the government guarantee guarntees they won’t feel a thing.

So, what would I do if I were Geithner?

The first thing I’d do is announce that “the era of capitalism, is back.” To wit, that from this day forward all forms of private enterprise will again be subject to Capitalism Rule No. 1:

The higher the potential rate of return, the higher the implied risk.

We are in this mess today because everyone, from Wall St to Main Street to home owners on Elm Street, violated that rule with impunity. Attracted by the real estate bubble, homebuyers took out loans they could not afford if the slightest thing went wrong. Banks, chasing loan fee income, made non-recourse loans to those under- or un-qualified borrowers. Wall Street bundled all that crap up into securities and sold them to investors seeking a piece of the real estate bubble goodies.

The only missing element was the “risk” part of the equation. Homebuyers who got in trouble could just walk away for their loans, since they were “non-recourse.” The banks themselves had passed the burn along to Wall Street investors.

When those Wall Street firms hit that wall, they turned to taxpayers and got rescued. When the bank’s house of cards collapsed, they turned to taxpayers and got $350 billion in help, with another $350 billion on the way. Now homebuyers are about to get some form of rescued as well.

The bottom line: In a capitalist system, when no one is allowed to fail, eventually everyone loses.

In other words, if we don’t allow those who fail, to fail, they will continue on. When they take risks and win, they get to keep their winnings. Even the individuals who ran these failed banks and investment firms can’t seem to fail no matter how big a mess they make of things.  Instead, with straight faces, they argue their salaries and bonus’ should not be cut because folks with talents like theirs deserve the big bucks.

So, when they take enormous risks in pursuit of enormous returns, but lose, taxpayers cover their loses. Heads they win, tails we lose. I’d like that kind of deal, wouldn’t you? Who wouldn’t?

Consumers also will need to change their mindset. Over the last three decades credit became a commodity. Credit is NOT a commodity, it’s a financial tool. Homebuyers borrow to buy a house in their price range. Then they –  (are you sitting down for this?) – they repay the loan.

And equity in a home is NOT a commodity either.  It’s part of a family’s estate. You don’t eat it as it appears, you bank it, and later you live off it in retirement. And, if you’re heirs are lucky, you pass on what’s left to the next generation as seed money so they can repeat the process. That’s not only good personal financial hygiene but forms the basis of a sustainable economy.

Now, don’t get me wrong,  there are government guarantees that serve a useful purpose. Deposit insurance, for example, is a good thing as it protects the modest fortunes of average folks. In fact, it should probably be increased from $100,000 to $250,000. But federal deposit insurance (FDIC) is a risk taxpayers know about as it’s an explicit government guarantee. But what we are learning now is that in   fact taxpayers underwrite the entire private banking system in the US. Because when it goes sideways in a big way, as it has now, we end up covering their loses.

We did NOT sign up for that. There is not a single piece of legislation that designates institutions “too big to fail.” Not one word. (And by the way, “too big to fail almost also always translates into “too big to jail. I’d change that too. In fact, that would be my very first change.)

Any bank that requires significant federal assistance just to survive, should be put under federal conservatorship until such time it can be repaired and sold to the private sector, or liquidated.

Then, rather than dumping all our sand into the vaults of failed banks, we should use it to create more jobs in the privates sector. Those workers will, in turn, spend some of that money stimulating the economy and save some of that money bolstering the asset base of the remaining banks.

Holy Adam Smith, Bat Man! Is that REALLY so hard to figure out?

Posted in News For Real, economy | No Comments »

Panetta: Just following orders okay

February 6, 2009 – 10:11 am

“This above all: to thine own self be true…”

Shakespeare, we have a problem.

The problem is that at least two of the West’s most fabled democracies, the US and Great Britain, have utterly lost their ability to be true to themselves, about themselves and about the crimes they committed together in recent years.

Let’s start with this Associated Press story today:

UK: Releasing Guantanamo documents hurts security
LONDON (AP) — Disclosing confidential U.S. intelligence documents about a former British resident held at Guantanamo Bay would hurt Britain’s national security and its relations with allies, Foreign Secretary David Miliband said Thursday….Miliband told lawmakers that a court had been right to block the release of documents about the treatment of detainee Binyam Mohamed….He said making the information public against U.S. wishes would “cause real and significant damage to the national security and international relations of this country.”

Mohamed, 31, was arrested in Pakistan in 2002 and claims he was tortured there and elsewhere. Charges against him have now been dropped, and British officials expect him to be released from Guantanamo soon.

The real reason the documents were not released, of course, had nothing whatsoever to do with the security of either country. The real reason is the documents document crimes – domestic and international crimes – committed by both countries.

First Britain shipped this poor guy to Morocco along with a list of questions British intelligence wanted the Moroccans to get answers to any way they chose. Then he was hauled off to Gitmo for the US version of Moroccan hospitality. All of which is documented in the documents the British court (and US authorities) refused to release.

It’s all about the growing disconnect between the stated values the West believes it personifies, and its own recent behavior. It’s the very same kind of behavior the West is quick to condemn when it occurs in countries we don’t like. But the West now seems able to rationalized that same behavior as justified when conducted under the rubric of “national security.” When we do it, the reasoning goes, we are doing it in furtherance of higher goals — Godly goals even.

(Or, as Barry Goldwater might put it if her were around today, “Torture in the pursuit of freedom is no vice.”)

But, even as they claim these kind of activities are legal when we do them, they are embarrassing as hell, apparently. Because neither the US or GB wants anyone to know precisely what they did in the name of “protecting and upholding” western interests and values. Fascism

And now they’ve even corrupted system of Western justice itself in the pursuit of keeping a lid on it all. From the US Dept of Justice to the courts, justice is not being done. Not even close.

The election of Barack Obama held out hope that this cynical, dishonest and felonious trend would be reversed. It now looks like it will not exactly reverse. I suspect some of the worst behavior will either end or moderate. There will be less torture, less detention and more legal rights.

But what there apparently will not be is more openness and a return to the key premise that what set Western democracies aside from tyrannies is that no one is above the law. Incriminating government documents will continue being withheld from public or court review. And investigations into alleged illegalities committed by the last US administration will go uninvestigated, at least if the past and current administrations or Congress have any say in the matter.

If you doubt that, you need only to have listened to the confirmation hearings for Obama’s CIA director, Leon Panetta:

CIA nominee Panetta: ‘We’ve got to move forward’
WASHINGTON (AP) — The man nominated to head the CIA, Leon Panetta, says it’s time for the agency to move ahead, not to dwell on the harsh treatment of foreign detainees in the previous administration….Panetta is appearing in his second day before the Senate Intelligence Committee. He told senators Friday that he doesn’t intend to “to go to the past.”

Panetta will oversee the end of “enhanced” interrogation and the closure of secret CIA jails. But he says the Obama administration will not prosecute those who participated, because they were acting on the legal authority of the Justice Department…Panetta says those who were following the legal opinions provided by the Justice Department at that time shouldn’t be investigated or prosecuted.

Let me put that in terms those of us of a certain age will find familiar: “Give them a break. They were only following orders.”

Yes, 65 years after we hung Germans for carrying out crimes under orders, we have now decided that “just following orders,” should in fact have been a legitimate defense after all.

So, let me get this straight; we are not going to prosecute the guys who issued the orders, and we are not going to prosecute the guys who carried out those orders. I see.

It seems now that the Obama administration going to accept the Bush administration’s well-planned alibi. There was a reason they put Alberto Gonzales and John Yoo at DOJ. They were both yes men of long repute. They were told to provide the mother of all CYA legal opinions giving Bush administration officials and those at the CIA and DOD legal cover for their illegal activities.

“Hey, we had lawyer letters saying it was okay,” is what those who issued the orders to torture and detain now claim. Those orders were issued and now the Obama administration says that, since those who actually conducted torture, kidnappings and the such, should not be prosecuted because “they were just following orders.”

(Kafka, eat your heart out baby. You lacked imagination compared to these guys.)

Finally we got another dose of “when we do it, it’s not wrong,” from Dick Cheney this week. No longer in power, and no longer privileged to daily intelligence reports, Cheney nevertheless wanted us to know that he knows something we don’t know:

Cheney Predicts ‘Probability’ of Attack
WASHINGTON — In an interview two weeks after leaving office, former Vice President Dick Cheney predicted a “high probability” of a nuclear or biological attack in the next few years and said the Obama administration was approaching a “tough, mean, dirty, nasty business” of keeping the country safe from terrorists too timidly. (Full Story)

So, boys and girls in civics class, lets review the new set of “Western values:”

1. When countries like Venezuela, Rwanda, Iran, Cuba and others we don’t like, flaunt international laws, it’s wrong and their leaders need to be exposed, deposed and prosecuted. But when the US or Britain do many of the same kind of things, we are doing them for such a high purpose it’s not wrong. In fact, in some cases it merits a medal.
2. Even though it’s enshrined in the code of military justice that a soldier is not only allowed to refuse an illegal order, but required refuse, and liable for prosecution if he/she follows that order. But there’s now a footnote that allows them follow illegal orders if it’s done in the name of “national security.”
3. The concept that “justice is blind,” used to mean that, only truth, not position or status, mattered in a court of law. It now means justice can turn a blind eye to official law breaking, as long as the accused claim their crimes were committed in the pursuit of “national security.”
4. Those who claim the facts prove their innocence, are now allowed to keep those facts secret and therefore impossible to confirm or refute. (Another shout out here to Franz Kafka.. hey dude.)

Too cynical, you think? Well, since I can’t get my hands on those documents either, I can only go by what I read in the paper. And so far it’s not looking good for those of us who still believe all that gushy stuff we learned about the Magna Carta and the US Constitution, and the Bill of Rights and Habeas Corpus and the Rule of Law in civics class.

And it’s going to continue getting worse, not better, until the US and GB follow Shakespeare’s sage advice.

This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.

(See also, The Bush Project) http://www.bushproject.com

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Failed Banks Wants MORE Porridge?

January 28, 2009 – 1:04 pm

So there I was yesterday, sitting in front of my computer innocently opening freshly arrived email. That’s when this 48-point bold headline smacked me right between the eyes:

Bank bailout could cost $4 trillion
Banks don’t have enough capital to fix their problems, which means the Obama administration may need a lot more money to clean up the financial mess.

NEW YORK (Fortune) — The cost of the bank bailout is likely to be much higher than $700 billion…. “The amount of working capital you’d expect the government to take into this would be around $3 trillion to $4 trillion,” said Simon Johnson, a senior fellow at the Peterson Institute for International Economics..”

My neck snapped back and I channeled Jon Stewart with a mighty, “Whaaaaaaa?”

Four trillion? Get outta here. I spent a quarter century reporting on financial institutions and the people who run them, and I gotta tellya, there ain’t nothing there worth $4 trillion of yours and my dollars. Nada, Ziparino.

If that’s what it will really take to put these pinstriped accidents waiting to happen back in action again, then I say, no. No, no, no, NO!

Instead of solving a problem of their own making, why don’t we instead solve the problem they created for us instead? And start by letting them go so they can, as they say in human researches parlance, “pursue other opportunities.”

In short, for far less than $4 trillion the Treasury could put every troubled bank in federal receivership. The banks would maintain their individual branding, except all their names would include the word “federal.” (i.e. Federal Bank of America)

Then, before any taxpayer money starts flowing, crack teams of management experts would review each banks existing management team and decide who stays and who goes. That decision would be based on how much each executive had to do with the decisions that led to the institution’s problems. (Criminal referrals would also be sent directly to the DOJ when appropriate.)

Federalizing these troubled banks would, of course, wipe out shareholder equity immediately. Stock in those banks would be worthless. Good. Because if we are going to continue adhering to a capitalist model then risk – real risk, rather than academic risk – needs to be reinstitution into the system. No company, no bank, no brokerage firm, no ice cream stand, can ever again be considered, “Too big to fail.” (BTW, “too-big to fail” seems to also to translate to — “too big to jail.” )

Risk is the key ingredient in capitalism’s secret sauce. It’s the governor that assures the capitalist engine does not race out of control, (i.e. bubbles.) It does this my putting the genuine fear of loss into the hearts and minds of anyone putting skin in the game.

Bailing out failures defeats the risk-governor, setting us up for inevitable rounds of bailouts down the road. (This is the biggest “DUH” in economics, yet we persist in getting it wrong every time. Instead of letting giant failures fail, we treat them like someone drowning who deserves our best rescue efforts. This is wrong… dead wrong. Let them drown, right in front of those on the beach see it.)

I also should note that the biggest failing banks are so loaded down with risky derivatives that they cannot be saved no matter how much federal dough Washington pounds up their butts. Look at this US Treasury chart: (Source)

chart

Your eyes are not deceiving you. It says that those five giant banks have $10.5 billion in non-derivative assets, and nearly $176 billion in crap they couldn’t sell if they provided buyers 72 virgins with each sale.

Of course conservatives will scream “bloody socialism” the second anyone suggests nationalizing these troubled institutions. But what do they want to do instead? They want to give these giant, bonuses taking failures, $4 trillion of your money and mine and our great grandkids. To Republicans that apparently, is not “socialism.”  Go figure.

But enough of what Republicans think — and yes, we’ve had quite enough thank you very much — back to what we think. We think severely troubled banks should be put in federal receivership - “nationalized” - and put into the hands of turnaround experts who would dispose of troubled loans and assets the same way the Resolution Trust Corporation did with troubled S&L’s.

Once stabilized these institution’s would be sold back into the private sector. Those banks that can’t attract bidders would be merged with more attractive candidates for sale. Who knows, maybe their old management teams will scrape together what’s left of their last bonuses to buy back their banks. But if they do they’ll know for certain that if they run them into the ground again no one is going show up with bags of money to save their asses. Oh, and their would-be shareholders will be watching them like hawks – thousands babysitters with one finger on the “sell” button.

Memo to Congress:
Look boys and girls on The Hill, we know you hate making these kind of “black or white” decisions. Rather than clearly deciding whether to shit or go blind, you run around with one eye shut farting. But you’re not going to get away with that kind of risk adverse, passive aggressive behavior this time around. Because when it comes to economic models, we can’t be a little bit pregnant. We’re either a “free enterprise” capitalist economy in which rule No. 1 is “the higher the potential profit the higher the potential risk,” is enforced, or we’re not a capitalist economy. If the government is going to provide welfare to failed private businesses, and the people who failed them, then that fits NO definition of capitalism.

Now, don’t get me wrong,  I really don’t give a fig one way or the other. I just want you folks up there to make up your minds which it’s going to be, capitalism or socialism, so I can plan my life accordingly. (I mean, socialism is no panacea either, but at least I’d get free healthcare.)

Anyway, right now all I see is that lots of folks I know have lost their jobs or, if “lucky”  having only had their salaries and/or working hours slashed. That at the same moment you guys are fixing to hand up to $4 trillion to the people who created all this misery, and let them keep their jobs and, if you’re a Republican member of Congress, you want to give them yet another round of tax cuts.

Call me crazy, but I just don’t get it.

P.S. Question for Barack – Do you get it?

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Orangutans Don’t Like Changes in Their Cages

January 6, 2009 – 10:48 am

If Barack Obama’s economic team wants to make changes in how American businesses do business, there are two relatively simple changes that, if made, could change everything.

I’m no economist, but  I do understand accidents waiting to happen when I see them. And, I think now that even the most committed free-marketeers would agree that accidents have happened under the current scheme of things. And those accidents have happened before — and happened and happened again. Obviously something has to change.

While there will be furious opposition to the two changes I write about here, keep in mind that one definition of “crazy” is doing the same thing over and over and each time expecting a different outcome. But those who will oppose these two changes are crazy alright, crazy like foxes. Because they’ve benefited mightily under the rules as they are. Even when they cost others billions, they do fine, thank you very much.

If we want to be in the same fix we’re in now a decade down the road, or likely a worse one, then don’t make these changes. Just add a few more federal regulators to the beat, who will, as they have in the past, be quickly marginalized by heavyweight corporate lawyers. And let the games begin anew.

Or enact these two fundamental changes:

Change No. 1: Stop letting the foxes hire the chicken coup guards.

One of the mysteries I and my coauthors of Inside Job sought to answer was just how so many savings and loans could have been looted into insolvency right under the noses of their own “independent” accounting firms. The answer became almost immediately obvious.

Under current rules governing federally-insured financial institutions and publicly traded companies, each submit an independent audit each fiscal year. Such audits are conducted by accounting firms like  Pricewaterhouse-Coopers LLP, Deloitte & Touche, Ernst & Young LLP and such. These are independent companies, the idea being that they have no dog in the fight and will produce an objective report on these company’s true financial condition.

But the law then defeats its purpose by requiring companies and financial institutions pick the accounting firm they want, and pay them like any other subcontractor. The larger the institution to be audited, the larger the paycheck for the accounting firms. Also these auditing companies also offer a host of other for-fee services to companies, from financial consulting to human services. The audit job is a foot in what could be leveraged into a lot of other fees unassociated with that firm’s audit functions.

Lincoln Savings crook, Charles Keating, was famous for offering lucrative jobs to auditors or their spouses once their audit is completed.

Getting the picture?

I could go on for pages with tales like that. But here’s my point. There’s a very simple fix to this obvious flaw, and here it is:

Rather than having companies hire their own auditors, they should instead be required to purchase audit insurance from companies formed to provide just that kind of coverage.

This audit insurance would protect shareholders and taxpayers in the event that an audit misses insider fraud or overly risky investments, Madoffishness  etc, that later creates significant loses. The cost of these audit insurance policies would be priced like any other insurance product, based on the risks being insured. Right there companies would have a new incentive to keep risk under control as it would lower the cost of their policy.

It’s all about incentives in business. Create incentives to do the right thing because it saves or makes money, and they’ll do the right thing. Create incentives to do the wrong things because that makes money, and they’ll do the wrong thing. Audit insurance creates the incentive to do the right things – keep risks under control. Duh.

The second flaw audit insurance would solve is the most obvious one –  companies would no longer hire and pay their own auditors. Instead the insurance company sure as hell would. Insurance companies would not write a policy for tens of millions, may hundreds of millions of dollars for an  unknown entity filled with unknown risks. These insurance companies would either have their own in-house accountants comb the books of those seeking a policy or they would  hire one of the established accounting firms. But this way those independent accounting firms would now have a completely different set of incentives. Rather than trying their best not to alienate their corporate client, they would be anxious not to let down their new client, the audit insurance companies. The last thing one of these giant accounting firms would want is to give a company a clean bill of health only to have it fail months later costing their new client, the audit insurance company, a bundle.

Got it? Simple. Easy. So, duh. Double duh.

Change No.2: Bonding home loans

The Economist had a good piece this week on the Danes way of funding, originating and securing home loans. And it completely does away with the kind of “mortgage securitization” that has now spread so much misery and damage across the US and world economy.

Under the Dutch model when a bank makes a home loan it must create and sell a bond of the same face value, same duration and same terms. That bond, secured by the property, is sold and the money provided to fund the purchase of the home.

Now, why is this different and why is this better than Wall Street securitization? The Economist explains:

“The Danish system has two characteristics that change it almost completely. The first is that the issuers of mortgage bonds remain responsible for making payments on them. This avoids a flaw that was so painfully exposed in America’s mortgage market: lax lending is encouraged when the link is broken between those who sell mortgages and those who bear the risk of default.

The second feature of the Danish system is that mortgage-holders can also buy the bonds in the market and use them to redeem their mortgages. This is useful if a rise in interest rates (or a fall in house prices) causes mortgage-backed bonds to trade at a discount. Redeeming their bonds allows homeowners to reduce the amount they owe. In America, for instance, mortgage-backed securities have fallen far below their fundamental value in thinly traded markets, partly because the people who would benefit most from buying them have no mechanism to do so.

“Everybody can buy that bond at a discount except that one guy who is most involved with the loan, the homeowner,” says Alan Boyce, a mortgage expert who has worked with George Soros, an investor and philanthropist, on promoting the Danish model in emerging markets. In Denmark, by contrast, a fall in the value of mortgage bonds usually encourages homeowners to snap them up to redeem their own mortgages, as is happening now.” (Full article here)

As with the change the conditions that govern corporate audits, switching to home loan bonds would change the incentives. Moral hazards abound under both schemes right now, which is why we are in them mess we’re in. Whenever the care and feeding of other people’s money is involved one has to make damn sure that those caring for that money do not have any incentive to cut corners, fudge inconvenient facts and then sell steaming turds to investors lulled into complacency by the stamp of approval of some compromised accounting firm.

There. Now was that so hard?

We’ve just begun repairing the damage done by the current rules governing how firms are audited, how mortgages are funded, made and sold on Wall Street. Those repairs are being made, as they were in past disasters like this, which the application of hundreds of billions of taxpayer dollars, being handed out to banks and other financial institutions that failed following and/or manipulating current rules. More often than not the rules they have played under are rules these industries themselves lobbied for, paid for, and got. Now we’re paying for them. And we’ll pay and pay and pay for them again, unless those rules are changed.

I understand the odds of getting anything like these two proposals passed range from slim to none. I recall a meeting I had with Senate Banking staffers back in 1991. At the time Congress was debating whether or not to repeal the Glass-Steagal Act, passed in the wake of the Great Depression barring federally insured banks from co-mingling their operations with Wall Street investment banks. The staffers listened to my arguments then one of the senior staffers spoke up.

“Listen Steve, banking industry is contributing mightily to get this legislation through. Now, just who do you suggest would contribute to defeat it.”

She wasn’t trying to shake me down. She was simply schooling me on the facts of life that govern most of what happens in that town.

But really now, would it be too much to ask the politicians in charge of the leading capitalist nation on earth, to implement laws that walk that walk. Key to achieving that is first creating rules that allow the marketplace to really operate as Adam Smith envisioned – with incentives… but the right kind of incentives.

And the only way to do that is to make damn sure that risk… risk … risk… is always, always, always, part and parcel of every business transaction on both sides of that transaction. And to insure that that risk is always, always always, aimed straight between the eyes of the party(s) responsible for every single  decision that involves the care and feeding of other people’s money … particularly taxpayer money.

But I understand, it won’t be easy to change the way business is done in America. As the old Simon & Garfunkel lyrics go:

Orangutans are skeptical
Of changes in their cages,
And the zookeeper is very fond of rum.

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