Tuesday, September 30, 2008
For example, I find his position on the Russia/U.S. relationship troubling. In the debate last Friday evening, Obama put forward what I consider to be an outdated view of the Russian/United States relationship. Following the end of the Cold War around 1989, the Soviet Union fragmented into many pieces, the largest of which was the nation of Russia. A number of the Soviet Republics broke away and became independent nations. An agreement was made between the Russian and American leaders at the time that if Russia allowed this to happen non-violently, then the United States would not seek to take advantage of it by extending the Western security alliance called NATO. Russia kept their end of the bargain but the U.S. did not. Since then, not only have the captive Eastern European nations, like the Czech Republic and Poland, joined NATO, but also former Soviet Republics like the Ukraine and Georgia, which have an historical special relationship with Russia, have also been considered for NATO membership. Russia has taken a very dim view of this and felt like they were double-crossed. And as Russia has grown strong with oil revenue, they have begun to respond in their 'neighborhood'. The recent war with Georgia is a perfect example of this.
Now, what a lot of folks don't realize is that a lot of this 'doublecrossing' happened in the Clinton Administration, with a foreign policy establishment of Madaline Albright, Richard Holbrooke, and others. The foreign policy establishment over the last 15 years have all agreed with this. But many people think it is a major mistake and could lead to a new Cold War. In fact, some of the former Republican Secretaries of State like James Baker seem to have more sensitivity to this the Democrats.
I think the mistake we made was in treating Russia as a permanently poor and weak country, rather than the great power it continues to be, with a large number of nuclear weapons and a huge land mass with many natural resources. In the opinion of many, we needed to seek a more cooperative relationship with a no-longer-Communist Russia, rather than kicking dirt in their faces. But instead we wanted to be the unparalleled world hegemon, the world's 'top dog', and so we sought to weaken Russia by extending our influence and power to their very borders. (A large part of this seems to have been driven by our need for the oil resources of the Middle East and the Caucasus region of Georgia, Azerbaijan, etc.)
If we continue along these lines, as both candidates seem to be advocating to one degree or another, then we could wind up in a very dangerous new Cold War with Russia. And that is something we definitely do not need, not with our ability to blow each other up.
"Until Sarah Palin agrees to a full and open press conference, she should not even be considered as a possible vice-president of the United States. What has been going on with her and access to her is an outrage to democratic discourse and the entire electoral system. Since she was selected, Mahmoud Ahmadinejad has held more press conferences with American reporters than she has. Forget all this debate spin or pre-spin. Just give her a microphone, a roomful of inquisitive reporters and be done with it. If she were a man, this wouldn't even be debatable."
I suppose the debate tomorrow night will go a ways toward doing this, though it is only one interviewer.
Here you have a conservative, even fundamentalist, vice-presidential candidate whose daughter is pregnant out of wedlock, yet the Religious Right thinks that's just fine. I thought to myself when it first came to light, that if this were an Obama daughter, can you even imagine the firestorm that would have erupted on the Right? It would have been like the Dresden firebombing in its intensity, and would have probably doomed Obama's chances. But when it's one of their own, the Religious Right basically ignores it, or even gives it their blessing (hence Bristol's presence on the stage with her mother recently--within the last week).
Here's what I think, as a parent, a citizen, and a pastor. Having a teenager daughter in high school who is sexually active and not using birth control, and thus taking a major risk of getting pregnant, represents a breakdown somewhere in the parental oversight and responsibility. I speak from personal experience here. We paid very close attention to our daughter in this regard when she was in high school, for obvious reasons. My wife talked to her and had a good trusting relationship with her regarding that very important topic. She knew my views on the topic from sitting in the pew for years listening to my sermons! We had taught her the importance of being sexually pure during those adolescent years. Our church youth group reinforced that message. We also kept close track of who our daughter was dating and what the circumstances were, and that made a difference. And so on.
Now, I don't think a pregnant unmarried teenager is the end of the world, but it is always difficult and serious. She shouldn't be shunned or stigmatized, indeed she should be loved, especially by her parents. The day of sending kids to an institution during the pregnancy are over. But she shouldn't also be made into a hero or a model of proper moral behavior for other teens to emulate. In other words, and speaking very candidly, is it really necessary to have Bristol Palin regularly and frequently on display in political settings, sometimes with her boyfriend, as we watch her figure change as her pregnancy progresses? I find that to be indiscreet and unnecessary.
Let me add that the notion that the bailout bill lost because of a remark that Speaker Pelosi made about President Bush is ludicrous. I don't believe that that is the reason legislators vote (or don't vote) for something. Besides the Republican don't care for President Bush's policies and leadership either. After all, it is basically his bill they voted against!
Monday, September 29, 2008
I don't know. The stock market has just become a kind of magic box, where wealth is supposedly created and disappears, like ghost-like atomic particles in a cyclotron. That's not how it works, is it? Isn't real wealth produced in factories, like the new ones springing up in China and Vietnam (and disappearing in my town). Isn't it produced when something of real value is created, like a good plug-in electric car or a music CD that somebody actually wants to buy. Or a new drug that cures a disease. Or delicious fresh vegetables or good wine? Or a service that is desireable, like quality health care. Wasn't the real failure of Soviet Communism the fact that they just couldn't manage to produce things that people really wanted?
There's something about 'financial' wealth that just seems unreal or evanescent. Isn't the real long-term problem for America that we simply don't produce enough things that the world (or even our own nation) wants? But we keep wanting more things than we produce, so we borrow wealth from others until we're maxxed, but basic economics won't allow that. Isn't the real problem right now that we're totally maxxed out on debt (because we don't actually create many things people want) and we've hit a wall?
Creating things people want. Living within our means and not borrowing ourselves silly. Now that makes for real wealth. And real economic wisdom, too.
I hope that when Obama becomes President, he'll ask this wiseman (born in Durham, NC!) to be in a major position in his administration.
I'm sorry but this is simply adolescent, like a 17 year old who thinks his parents are stupid, old fuddy-duddies and don't know a damn thing. Well, most of us by the time we're 25 or 30 or so realize that, actually, our parents were pretty smart and we really don't know a whole lot. Palin approaches politics this way. She is a complete political novice and neophyte, yet she somehow thinks she is a God-anointed gift to the nation and world, ready to go take on Putin and that Iranian President whose name I can't spell! There has got to be some psychological term for this, like 'delayed adolescence syndrome.'
Maybe we should institute psychological testing for our presidential/vice-presidential nominees. Wouldn't be a bad idea. We do it for Methodist clergy, and we can't blow up the world, just preach a bad sermon or act like a fool at a covered dish supper.
"[Israeli] Prime Minister Ehud Olmert said in an interview published on Monday that Israel must withdraw from nearly all the West Bank as well as East Jerusalem to attain peace with the Palestinians and that any occupied land it held onto would have to be exchanged for the same quantity of Israeli territory."
"He also dismissed as “megalomania” any thought that Israel would or should attack Iran on its own to stop it from developing nuclear weapons, saying the international community and not Israel alone was charged with handling the issue."
Now, that is being frank.
What we need in the White House is a cool, calm, confident, smart, steady-as-she goes, non-ideological, well-educated, brain-in-full-gear, inspiring leader. Now who might that be?
Andrew Sullivan experienced relief. "My instinctive response upon hearing that the bailout failed was relief. I know the dangers of a meltdown. But I also know the dangers of perpetuating the toxic combination of denial and debt that has characterized the last eight years."
I'm not sure how I feel, I'm so torn.
"Alex Gibney's new documentary on the legalization and authorization of torture by the Bush administration debuts this weekend at the Tribeca Film Festival. See the trailer here. It's a well-crafted piece of work and a devastating exposure of the denial that still runs rampant in some quarters about what has actually been done in the name of the American people these past few years. Longtime readers of this blog know all too well many of the details - but this film does what a parasitic blog cannot, and what even all the innovative reporting on the subject has not yet been able to do. It puts it all together. It represents a moment in this war when we can actually stop and look back from rising ground, and see how far we have come from the civilized norms of warfare that the United States represented in the last century. Bush and Cheney and Rumsfeld tore off that civilized veneer and repudiated that long and honorable history. From the details of approved interrogation techniques replicated by scapegoats at Abu Ghraib to the self-conscious attempts to dissemble and deceive about the Rubicon we've crossed to the simple facts of the percentage of captives at Gitmo who were actually seized by U.S. forces - a small fraction of the total - you see conscious, orchestrated sadism at work. It's a film that enrages and shocks. But it has all been in front of our noses."
"I watched the whole thing intently and quietly to the end. But its final coda contains a small clip of Gibney's late father, a longtime military interrogator, and his views on what has been done to his honorable profession by the Bush White House. Alone, it made me weep. It struck a chord that still resonates: of one thing mainly, and one thing still unavoidably. Shame. Almost unspeakable shame."
Really? The U.S. government is sound? For how long? Just because it can tax and spend, print money, send the navy anywhere to show the flag? Isn't there a point where a country, and its government, becomes so debt-ridden and fiscally irresponsible that everyone, including its own people, turn away from it in disgust? We may not be there yet, but on the other hand, it may be closer than we think.
"It's odd to watch the talking heads on CNBC this morning, parsing endlessly over the latest minutiae of the latest deal for CitiGroup to land on Wachovia like a giant amoeba and begin the gruesome process of digesting its innards. The TV heads are just like the medieval monks trying to explicate the labanotation of x-number of angels dancing on the head of the pin. Religion really is the only metaphor left to discuss the epochal disaster underway right now, because God alone knows where this will take us."
That's right. The conventional wisdom (CW) is often wrong, and it may be time for a 'paradigm shift' in economics. Long overdue.
But please, in the process, don't forget the looming ecological and energy crises, as well as the forgotten moral wisdom of the past, because unless these aspects of reality are taken into consideration, any new economic paradigm won't be worth two cents.
"Goldman is the firm that other Wall Street firms love to hate. It houses some of the world’s biggest private equity and hedge funds. Its investment bankers are the smartest. Its traders, the best. They make the most money on Wall Street, earning the firm the nickname Goldmine Sachs. (Its 30,522 employees earned an average of $600,000 last year — an average that considers secretaries as well as traders.)"
Is that what Paulson is trying to save? Does he really care about the average person? Has he repented of his high-flying ways, so as to want to do what is best for you and me, rather than just for his rich pals in New York? I honestly don't have a clue right now, and therefore am not sure whether Congress ( and therefore we the people) is being taken to the cleaners right now.
Sunday, September 28, 2008
I hope that this fundamental wisdom carries the day from now on. (I don't how that would play how in terms of this bailout, which seems like just more borrowing and spending.) But I'm not optimistic because no one wants to hear it. And any politician that talks that way (the last one to do it was Jimmy Carter) will not get elected (or reelected).
So how do we begin to move out of this debt-ridden dilemma? I think it may take the refusal of foreign countries to fund our national debt. And then our government would have to balance the budget, because there would simply be no one lending us anymore money (that we're never going to pay back). Or we just print money that can only lead to increased inflation and a weakening dollar, both of which are very bad and the equivalent of having less money than before, as if we had raised taxes or reduced spending, but only worse in its consequences.
These things may happen sooner than we think. (That almost sounds apocalyptic, doesn't it. I really don't mean it to. I don't view history or Revelation that way. Think more Old Testament prophets like Amos or even Jeremiah.)
Meanwhile, is it just an accident that my mail has been lighter the last few days, with perhaps fewer credit card applications? That alone would be a true blessing.
Saturday, September 27, 2008
Here was one person's take:
"I think people really are missing the point about McCain's failure to look at Obama. McCain was afraid of Obama. It was really clear--look at how much McCain blinked in the first half hour. I study monkey behavior--low ranking monkeys don't look at high ranking monkeys. In a physical, instinctive sense, Obama owned McCain tonight and I think the instant polling reflects that."
A psychotherapist friend of mine said that he thinks it reflects a split in McCain's psyche...and that's all I understood...Lee, could you run that by me again?
But I think he is going to do it, which really blows my mind. I believe it will be the most exciting time in America since the election of Ronald Reagan. And perhaps just as fraught with peril and challenge, both internationally and domestically.
He is just the national leader we need for such a time as this. May God protect him from the forces of evil out there who would wish him harm.
It was a win on points, not a KO. But it was a clear victory that should give the Obama ticket a shot in the arm. The immediate polls afterward seem to agree with this assessment.
Friday, September 26, 2008
But the interesting thing is that McCain has not been intrinsically populist in any area of policies, at least prior to about two years ago. In his foreign policy, he has been as Neo-Conservative as Bush and Cheney, hawkish in support of the Iraq invasion, an attack on Iran, defending Israel and in favor of what is essentially a new cold war with Russia. In economic policy, he has favored the rich and powerful with his consistent deregulation stance. In social policy, until the last year or two, he had been very moderate, almost like a Rockefeller Republican of 30 years ago, not very pro-life, derisive toward the Christian Right.
So how you go from that to a Republican 'pitchfork' populist, well, it's hard to imagine. He's tried very hard, of course, from the visits to Bob Jones University in South Carolina and apocalyptic firebrand preacher Rev. John Hagee in Texas, to his pick of ultra-right, moose-hunting creationist, Sarah Palin.
So, as I've said before, who knows what John McCain believes. Maybe he doesn't know himself. Or is it simply a matter of getting elected? If so, that is pretty disgusting.
"So what we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch.
As a friend said last night, we’ve become a banana republic with nukes."
I refer you to similar remarks I made a week ago. Okay, who's reading my blog in New York?
...the USA now has more financial obligations than assets. It is, effectively, broke. Nevertheless, the debit side of its ledgers grow heavier and heavier. This year’s US government deficit will add about half a trillion. The US trade deficit is about $700 billion. The U.S. bailout plan will probably cost at least $1 trillion more.
Where will the government get that kind of money? There are only two possibilities – one honest and depressing, the other corrupt and alarming. Whether it borrows the money, or prints it up, the world enjoys no net increase in financial resources. Borrowing takes resources from projects that might have been worthwhile and diverts them to the losers. Interest rates rise, as a consequence of the extra borrowing; higher rates generally worsen the economic picture. And while the U.S. borrows, long term, at almost 5%, it lends at barely 2%. It’s like a bank that has gotten its business model badly mixed up. The more it borrows and lends, the faster it goes broke.
If, on the other hand, it merely prints the money – or if it creates it “out of thin air,” to use Lord Keynes’ handy phrase – the results are even worse. Inflating the money supply with new currency, a la Argentina or Zimbabwe, wipes out debts. But it destroys faith in the dollar and brings down the whole world’s money system.
Sooner or later, this is just what will probably happen. Not because capitalism doesn’t work – but because it does. Capitalism is doing just what it should do – it is separating fools from their money. But the fools vote. After a big bubble, there are more fools than sages...and, in the United States of America, more debtors than creditors. Sooner or later, Americans will realize that they are better off destroying their own money than preserving it...and that they would prefer to stiff their creditors rather than pay their bills. That is when deflation will gives way to inflation...and the world’s post-’71 dollar-based money system comes to an end.
That's a long way of saying that it is simply unpatriotic--it's an insult to flag, country, and all the things that McCain claims to hold dear--for McCain to hold this financial crisis hostage to his political ambitions. McCain doesn't know a thing about finance and is no position to help work out an agreement. If we do suffer a serious bank run, or a run on the dollar, it can be laid directly at his feet. As I said to friends last night, if McCain had been president at this point, I would have wanted to impeach him.
That brings me back to David Brooks' column. David thinks that beneath the surface of McCain the craven campaigner, that the man who nominated an ill-prepared Sarah Palin as his possible successor and has lent his energies to blocking a financial bailout, there still sits a "real McCain" who could govern fairly and effectively as president. I doubt it. I really doubt it. Whether because of age or overreaching ambition, McCain has become the kind of man he earlier railed against. He has become the Bush of 2000 against whom he campaigned or the Senate and House Republicans whom he despised. His defeat is now imperative.
She writes, "I’ve...noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted."
This is significant, I think, perhaps the first in a cascading series of conversions. Sarah Palin will, I think, not survive.
Who might replace her? It would have to be someone on the Christian right. How about Huckabee? That's my guess: he's vetted, he's a Baptist pastor, he's well liked, he's articulate.
Neo-Cons profess to love Abraham Lincoln, but apparently don't agree that America has a government that is "of the people, by the people, and for the people." Truth be told, they seem to prefer the political movement toward investing nearly total power in the Presidency, which is a despicable betrayal of our basic Constitutional and republican principles.
Krauthammer, Kristol, Brooks, and their friends in the Bush Administration like Wolfowitz, Cheney, Feith, Bolton, who have done so much to take us down into this 'dark valley' these last eight years, have a lot to answer for.
Now, either way you go, Senator McCain either lied (because he had read it) or was unbelievably negligent (because he actually had not read a three-page document).
This is not edifying at all.
Brooks goes on to try and make some kind of a political case for McCain, admitting that he is fundamentally split in his fundamental identity, between the small-government Western conservative and a Teddy Roosevelt kind of progressive/reformer. And then he makes the following prediction.
"If McCain is elected, he will retain his instinct for the hard challenge. With that Greatest Generation style of his, he will run the least partisan administration in recent times. He is not a sophisticated conceptual thinker, but he is a good judge of character. He is not an organized administrator, but he has become a practiced legislative craftsman. He is, above all — and this is completely impossible to convey in the midst of a campaign — a serious man prone to serious things."
The faith that Brooks has in McCain (I remember well that McCain was the Neo-Conservatives' initial favorite in 2000--the Weekly Standard where David Brooks worked then endorsed McCain as a 'national greatness' conservative) is undiminished , despite the recent months of the campaign. And though I really hope he is right if McCain ends up winning the election, yet his argument is not convincing at all, because to have picked Sarah Palin as the next Vice-President, the most important decision McCain will have made in this campaign, can hardly be said to demonstrate "a good judge of character." All the evidence points to the fact that she is the single most unprepared, unqualified VP candidate ever. Add to that McCain's recent erratic behavior and willingness to say anything to win--no matter how different from his previous positions--and you have a very disturbing, very self-contradictory and erratic pattern of behavior.
Is it possible that we could be proven wrong in that conclusion? I suppose that anything is possible, but every day seems to add to our initial judgment. This man should not be elected President, especially in this time of growing national and international crisis. And Brook's attitude here is not faith, but rather strained credulity.
Thursday, September 25, 2008
About six years ago, I began to read about the strategic bombing campaigns of World War II that my father had been a part of as a B-17 pilot. I came to realize that the atomic bombings of Hiroshima and Nagasaki represented only the tip of the iceberg of the destruction our Air Force had brought to our enemies in that war.
The bombing of Dresden late in the war has long been seen as an isolated instance of such bombing, when in fact, it was a fairly routine mission in the last two years of the war, when many dozens of cities in both Germany and Japan were leveled by saturation bombing. Vonnegut was present in Dresden as a prisoner of war and describes in this linked article what he experienced.
My interest in these things was piqued when I discovered that one of the last bombing missions that my own father flew was the mission over Dresden, on February 14, 1945.
It is no wonder that there is incredible outrage out in the country over this bailout. Most people instinctively feel that the banks, Wall Street, and related industry have been calling the shots in Washington for a long time, and may still be doing so, even in the midst of this crisis.
When we will get our democracy back? Probably when we somehow get serious about campaign finance reform and get most of the big money out of politics. But we probably also shouldn't hold our breath.
"American exceptionalism, taken to extremes, leaves you without the allies you need (Iraq), without the influence you want (Iran) and without any notion of risk (Wall Street)."
His point is that the McCain/Palin ticket represents an extreme form of American exceptionalism that needs to pass away, while the Obama/Biden candidacy is a form of international cooperation that recognizes distinctions but in a more equitable way. Read the whole column, please.
"'John McCain is energy illiterate,' Simmons is saying. 'He's just witless about this stuff. As a lifelong Republican, I'm supporting Obama.' A dozen oil and gas men sitting around a conference table in Lafayette, La., chuckle nervously as he continues. 'McCain says, "Oh, we're going to wean ourselves off foreign oil in four years and build 45 nuclear plants by 2030." He doesn't have a clue.'"
"'What a hypocrite,' says Simmons, who supported McCain's rival Mitt Romney in the primary - no surprise given Simmons's history with the Romney family. 'Here's a man who for at least the past 15 years has strenuously, I mean strenuously, opposed offshore drilling. And now it's 'drill, drill, drill.' And he doesn't have any idea that we don't have any drilling rigs. Or that we don't have any idea of exactly where to drill.'"
Here's a few more quotes from a different site:
For the record, Simmons has been advocating more drilling off the coast of the United States since the early 1990s, but now he says that treating it as our salvation is misguided. "I'm not saying we shouldn't do it," says Simmons. "We should, and the sooner the better. But we shouldn't think that it'll have any impact for a decade or two." The exception, he says, is the reservoir in the hotly debated Arctic National Wildlife Reserve. "ANWR," he says, "is the only place that we could drill right now and it might actually make a difference in a year or two."
As for some other currently voguish sources of fuel coming to the rescue, he's dismissive. Oil shale? "Buck Rogers stuff. It just can't work." Ethanol? "It's a joke. The numbers just don't add up."
Simmons believes that a radical change in the way we live is inevitable. "We should basically be going back to creating a village economy, so that we really reduce the energy intensity of how we live," he says. "We need bigtime conservation, not feel-good conservation.
At any rate, right now I'm mourning the loss of a good friend, Mildred Ann Raper. She was a church member, but she was more than that to me. Every once in a while, a member comes along with whom you develop a closer relationship than normal, and Mildred Ann was one of these. She was a kindred spirit. She died last night in the hospital, from heart problems. Fortunately, I had been able to spend about 45 minutes with her yesterday, talking about all kinds of things. And we had a good prayer to end our time together. I will miss her.
So, if they're serious about this bailout, why don't they just flat-out apologize for misleading us into the Iraq War? Admit they were wrong and stupid and fools. Ask forgiveness from us, from the families of our dead and wounded soldiers, from the families of the hundreds of thousands of dead Iraqis, from God.
Maybe, just maybe, some of us might be willing to forgive them and believe them now. Maybe.
Wednesday, September 24, 2008
As I wrote a couple of days ago, if Henry Paulson would consider contributing just half of his vast fortune of $500 million made on Wall Street, then those of us of, ahem, lesser means would look more favorably toward the proposed bailout.
"The smartest sage on all of this, William Grieder of The Nation, has the best possible fallback position. 'We should make one simple demand: If taxpayer money is used, we want the same deal Buffett got.' (Buffett's deal was preferred stock with 10% annual return and the right to convert to stock if the stock takes off after the bailout. Taxpayers should get the same deal.)"
In his Washington Post column today, Robert Samuelson also brings up Nixon's wage and price controls as an even bigger intervention in the economy than the proposed Paulson bailout plan. That's an interesting point.
His other main point is one that we increasingly hear about this Paulson plan: it is being put together too quickly and could backfire just as easily as Nixon's wage and price controls.
"The rescue is being constructed so hastily that it may include all manner of flawed provisions: too much power for the Treasury secretary; authority for bankruptcy judges to modify mortgages. Congress faces a wrenching dilemma, imposed on it by financial markets and Paulson. If it dawdles, it may invite the panic that Paulson has brazenly predicted. But if it acts quickly, it may create a monster whose full implications emerge only with time."
Instead he and his administration did absolutely nothing. So why should we believe him now? What makes us think that he can see things correctly in terms of a proper solution, when he had no interest or knowledge what-so-ever?
I don't trust this administration in virtually anything they do. So I am totally skeptical about this plan, especially when it involves an unprecedented amount of government (taxpayer) money. For me, the smaller the plan, the better. Plenty of economists are presenting other ideas that make as much sense. It's hard to see how we proceed at this point.
Tuesday, September 23, 2008
The press is beginning to resist the incredibly sexist handling of Palin by the McCain campaign. There is a simple point here: any candidate for president should be as available to press inquiries as humanly possible. Barring a press conference for three weeks, preventing any questions apart from two television interviews, one by manic partisan Sean Hannity, devising less onerous debate rules for a female candidate, and then trying to turn the press into an infomercial for the GOP is beyond disgraceful.
Fight back, you hacks! Demand access. Demand accountability! It's our duty. If we cannot ask questions of a total newbie six weeks before an election in which she could become president of the country, then the First Amendment is pointless. Grow some!
I have a proposal. We will all agree to speak approvingly of his bailout plan, if he will in turn offer half of his vast, ill-gotten fortune back to the taxpayers as a good-faith gesture. Surely he can live the rest of his life, and pass on a tidy fortune to his heirs, with the remaining $250,000,000.
Now, when things have turned bad (very, very bad), we have the Bush administration wanting to nationalize much of the economy and proposing the Mother of all bailouts with taxpayer's money (actually borrowed money). Are we going to hear Bush say, "We're all socialists now"?
Is it the poor sap who took a mortgage for a house which he really couldn't afford, even though the mortage lender didn't bother to check his income? Is it the mortgage lenders who lent money to any Tom, Dick, or Harry, just so they could take the fees and then happily sell off the mortgage itself to someone else?
Is it the Wall Street moneymen, like Henry Paulson and his pals, along with their financial whiz-kids, who made their millions and even billions coming up with all kinds of instruments of debt that now threaten to drown us all? Is it the Ayn Randist Alan Greenspan, who dominated the financial throne at the Federal Reserve for 19 years and refused to regulate the banks and made credit so easy to get, that debt at all levels ballooned and we had how many bubbles now?
Is it a Congress (mostly Republican since 1994) that was uninterested in provided oversight or regulation, because of ideology or self-interest or both? Is it the three Presidents--Bush, Clinton, and Bush--who appointed and reappointed Greenspan and other deregulators to high office, not thinking about the highwire act of defying economic gravity that they were undertaking?
Is it you and me, who were very happy to take our high returns from our stockmarket portfolios and to take out house equity loans to spend on all kinds of things, without wondering if it was a little too good to be true?
I guess the blame has to be shared by all of us (not that we've all gained equally from it). And now comes the price to be paid, the 'punishment for sins committed', for mistakes made. Or do we think that we can continue our undisciplined, irrational ways and that there will be no consequences, that we can get something for nothing, that we can simply fix everything within a couple of days by throwing at the problem tons of money we'll have to borrow from someone else?
I see a lot of flailing around at the highest levels, looking for a happy ending, a door from which to escape the looming judgment, a way to wakeup from this nightmare. You know the stages of grief? We're still in the stage of shock and denial. It is not a pleasant sight but perhaps to be expected.
So when are we going to come to our senses? When are we going to start living within our means? When are we going to start obeying the fundamental laws of economic life?
George Will, the current dean of conservative columnists, was blistering in his column today toward John McCain. He used words like "flustered rookie", "childish", "unpresidential", "shallowness", "impulsive", and moralistic. And then he ended with this zinger:
It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?
as economists puzzle over the proposed details of what may be the biggest financial bailout in American history, the initial skepticism that greeted its unveiling has only deepened. Some are horrified at the prospect of putting $700 billion in public money on the line. Others are outraged that Wall Street, home of the eight-figure salary, may get rescued from the consequences of its real estate bender, even as working families give up their houses to foreclosure.I am both horrified and outraged.
The common denominator to many reactions is a visceral discomfort with giving Treasury Secretary Henry Paulson Jr. — himself a product of Wall Street — carte blanche to relieve major financial institutions of bad loans choking their balance sheets, all on the taxpayer’s bill.Duh! Let's see, the foxes have been raiding the henhouse, leading to a shortage of chickens. So now we ask the head fox to take all of the rest of the chickens and.... Right.
But an underlying source of doubt about the bailout stems from who is asking for it. The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress.Patriot Act. Iraq invasion. Abu Ghraib. Guantanamo. Illegal domestic surveillance. And they want us to trust them with $700,000,000,000? I don't think so.
Why should we trust someone like Paulson when he was one of the guys making the bad decisions, and making millions upon millions of dollar doing it just a few years ago? Why should we trust him now, when we've heard nothing from him about the dangers building up? I've been nearly hysterical for years now at the looming danger of our national fiscal irresponsibility. Where was he?
I'm sorry. I've got zilch confidence in this man and his boss. You can't have anymore of my tax dollars (or saddle my kids with more debt).
Monday, September 22, 2008
It feels too much to me like the decision to invade Iraq or to pass the Patriotic Act. Please, no more 'take it or leave it'. No more 'now, now, now'. This is too important. The order of the day should be slow, deliberate, careful.
Mike Whitney, writing in Counterpunch, puts the same point in a bit more flamboyant way.
Don't let the prospect of a national crisis trick you into giving up your liberty, America. The people behind this scam are the same landsharks and flim-flam men who polluted the global marketplace with their snake oil and toxic sludge. These are the fraudsters who manufactured the crisis to begin with. Be resolute. Don't budge. Our economic foundations may be crumbling, but or determination is not. This is our country, not Goldman Sach's. The people who destroyed America must be held to account. Their time is coming. Justice first.
What we will become is yet to be seen (to paraphrase St. Paul).
Last week's ripe moment turned out to be the Thursday night Washington photo op when Treasury Secretary Paulson and Fed Chief Bernanke emerged from a huddle with House Speaker Nancy Pelosi and just about every other legislative eminentissimo in an attempt to reassure the nation that its financial system had not turned into something like unto a truckload of stinking dead carp. I don't know about you, but I got two distinct vibes from the faces in that particular tableau: 1.) abject fear, and 2.) a total lack of conviction that they knew what they were doing.
The product of that huddle was a cockamamie scheme for the US treasury to absorb all the losses from a twenty-year binge in which Wall Street created and retailed the most complex set of swindles ever seen on this planet Earth. The background music to the tableau was the whoosh of a several trillion dollars exiting the US financial system never to be seen again.
The logic of the crisis seems to call for an intervention, not at step 4, but at step 2: the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place.
That’s what happened in the savings and loan crisis: the feds took over ownership of the bad banks, not just their bad assets. It’s also what happened with Fannie and Freddie. (And by the way, that rescue has done what it was supposed to. Mortgage interest rates have come down sharply since the federal takeover.)
But Mr. Paulson insists that he wants a “clean” plan. “Clean,” in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency,” and this adds up to an unacceptable proposal.
They both tell a good joke, and have a folksy way about them. They are both legacies, in that they had famous parents who enabled them to get places they wouldn't otherwise have gotten: Bush's father was Oil Man (with grandfather as Senator), Congressman, CIA Director, Vice-President, and President, while McCain's father and grandfather were Navy Admirals. Bush went to Yale, while McCain went to the Naval Academy, where they both were very mediocre students (McCain was fifth from the bottom). They both were boozers and womanizers, rebels who defied their parents. They both have a hard time making a good speech. They both are very good at invoking patriotism as a means of gaining political support. I hear they both have a volatile temper and frequently use profanity.
As I've told a number of people, if you liked the last 8 years, vote for McCain. If not, don't.
Actually, Paul Krugman is against it too. Any plan that has both Kristol and Krugman against it, as opposite a pair of thinkers as I can imagine, has a real big problem!
I'm with them.
You know the press is impotent at unmasking this truthiness when the hardest-hitting interrogation McCain has yet faced on television came on “The View.” Barbara Walters and Joy Behar called him on several falsehoods, including his endlessly repeated fantasy that Palin opposed earmarks for Alaska. Behar used the word “lies” to his face. The McCains are so used to deference from “the filter” that Cindy McCain later complained that “The View” picked “our bones clean.” In our news culture, Behar, a stand-up comic by profession, looms as the new Edward R. Murrow.
As someone who knows a little something about both Christianity and Islam (I've been studying the first for 40 years and preached something like 1,400 sermons, and I studied world religions under the great scholar of world religions Huston Smith in a Ph.D. program and read the Koran cover to cover), all I can say is, that's just ignorant.
The man is clearly a devout Christian, who can articulate his faith far better than his opponent. Don't I recall some scandal about his Christian pastor?
Wasn't it Benjamin Franklin who said something like 'It's a republic, if you can keep it.'? And isn't it a given that freedom requires a basically educated, responsible citizenry? I would say that we're in deep, deep trouble.
GET ANGRIER! Call them liars, because that’s what they are. Sarah Palin didn’t say “thanks but no thanks” to the Bridge to Nowhere. She just said “Thanks.” You were raised by a single mother on food stamps — where does a guy with eight houses who was legacied into Annapolis get off calling you an elitist? And by the way, if you do nothing else, take that word back. Elite is a good word, it means well above average. I’d ask them what their problem is with excellence. While you’re at it, I want the word “patriot” back. McCain can say that the transcendent issue of our time is the spread of Islamic fanaticism or he can choose a running mate who doesn’t know the Bush doctrine from the Monroe Doctrine, but he can’t do both at the same time and call it patriotic. They have to lie — the truth isn’t their friend right now. Get angry. Mock them mercilessly; they’ve earned it. McCain decried agents of intolerance, then chose a running mate who had to ask if she was allowed to ban books from a public library. It’s not bad enough she thinks the planet Earth was created in six days 6,000 years ago complete with a man, a woman and a talking snake, she wants schools to teach the rest of our kids to deny geology, anthropology, archaeology and common sense too? It’s not bad enough she’s forcing her own daughter into a loveless marriage to a teenage hood, she wants the rest of us to guide our daughters in that direction too? It’s not enough that a woman shouldn’t have the right to choose, it should be the law of the land that she has to carry and deliver her rapist’s baby too? I don’t know whether or not Governor Palin has the tenacity of a pit bull, but I know for sure she’s got the qualifications of one. And you’re worried about seeming angry? You could eat their lunch, make them cry and tell their mamas about it and God himself would call it restrained. There are times when you are simply required to be impolite. There are times when condescension is called for!
Sunday, September 21, 2008
I anticipate that the percent will be going down for the graduates of 2009. That may be the best news to come out of this crisis yet, as they now have to go make a more honest living.
What's so amazing is the moderation we are hearing from them. They are all in favor of high level negotiations with Iran, in favor of working with Russia on the big issues while also supporting the right of Russia's neighbors to be independent, in favor of providing world leadership on solving the climate change issue, which they all agree is a largely man-made problem.
James Baker: "We need to beef up the elements of soft power in our relationship with Pakistan." In other words, military action cannot do it all. Christopher Warren: "We have more lawyers in the Pentagon than foreign service officers...We need more soft power." Of the five, I was most impressed by Colin Powell and James Baker, which is somewhat surprising for this Democrat, to put it mildly.
On these things, they all seem to differ from the hawkish positions of John McCain, who has argued against talks with Iran, and who has favored shutting down our relationship with Russia (by, for example, throwing them out of the WTO). Anyone who knows Obama's positions, as I do, knows that he represents this moderate, centrist, dare I say bipartisan, position.
Saturday, September 20, 2008
Now some clever fellow has taken a picture of Sarah Palin from 1995 in her Wasilla City Council office (that was given by the Palins to the Associated Press) and determined that the magazine sitting on the desk in front of her is The New American. Now I know that magazine, because I read it many times in my parent's home. It is the primary magazine of the John Birch Society, an organization to which my father belonged for many years. (Please, click on the link and read more about the JBS.) And I can tell you that it is one very radical organization. It is so far to the Right on the political spectrum that the Godfather of movement conservatives, William F. Buckley himself, once condemned it, declared it 'outside the pale', and would not publish authors from the JBS in his National Review magazine. Now that is far-Right.
So we're starting to get a picture of what it is that Sarah Palin might really believe, and it is not a pretty picture. Republicans--the party of Lincoln, Eisenhower, and Reagan--do you know what you're doing?
In other words, there must be a balanced budget, at whatever level of government you choose (as well as in our personal life). If the nation chooses to go to war in Iraq, then pass the higher taxes to pay for it, don't put it on the federal credit card for the next generation to pay. The government is not paying its way with this war, so the current administration's claim to be 'fiscally conservative' is simply false. Now my fundamental objection to the War in Iraq was on different grounds, but this makes the war even more of a fraud, deception, and immoral.
If, on the other hand, the nation chooses, through its democratically elected representatives, increased government services domestically, whether its universal health care, more college assistance, or what ever, realize that you're probably not going to get a 'tax cut'. How can anyone, including Obama, promise middle class tax cuts while at the same time promising the moon and the stars to everyone? Indeed, with the debt levels we now have, how can we reasonably expect anything but a tax increase?
It is personally and socially immoral to expect something for nothing. Furthermore, pursuit of this as a personal or a national habit will inevitably lead to increasing penury and dependency.
Last evening I was home, but my mind was whipsawed from trying to follow the week's economic news, and I had nothing to say here that sounded right. I wonder if others are turning away from the financial market turmoil, not only because it's just too abstract and theoretical still, and therefore hard to get your mind around, but because it seems like a movie or something, without any personal pain. With 9/11, you had those collapsed buildings staring you in the face. Here and now, all we have are talking heads on TV, saying how bad things are. Blah, blah, blah. Doesn't connect.
That's part of the reason it's happening in the first place, so much has gone on 'behind the screen', with the average person not knowing anything about it. It's just too opaque. That doesn't give me much hope for a real solution, just another attempt to eliminate the symptoms. I think what's happening now in the government is just another attempt to shove the whole thing back underground when it's threatening to pop up its ugly head. Can the goverment just buy all of this bad debt, just like that? That sounds too simple, like the Soviet Bolshevik's thinking they could create a modern industrial economy by fiat and government decree. All it ends up doing is creating a big monster that can't work and only making things worse in the long run.
I saw an interview on Bill Moyer's Journal last evening with writer and social critic Kevin Phillips, who has one of the most honest and accurate views of our situation that I know of. You can watch it here. He's a conservative (worked for Nixon) who's grown increasingly jaded by the wars and financial shenanigans of the last 25 years. I'm not sure what he'd label himself now politically, but he's a wise observer of the nation and world.
Friday, September 19, 2008
Now this is interesting. Paul Krugman says in his NYT column today that the big bailout in the works has been inspired in part by none other than Sweden.
"We don’t know yet what that 'comprehensive approach' will look like. There have been hopeful comparisons to the financial rescue the Swedish government carried out in the early 1990s, a rescue that involved a temporary public takeover of a large part of the country’s financial system. It’s not clear, however, whether policy makers in Washington are prepared to exert a comparable degree of control. And if they aren’t, this could turn into the wrong kind of rescue — a bailout of stockholders as well as the market, in effect rescuing the financial industry from the consequences of its own greed."
"Furthermore, even a well-designed rescue would cost a lot of money. The Swedish government laid out 4 percent of G.D.P., which in our case would be a cool $600 billion — although the final burden to Swedish taxpayers was much less, because the government was eventually able to sell off the assets it had acquired, in some cases at a handsome profit."
Who would have thunk that we would be imitating that Mother of all Social Democratic countries! (Sweden is the beloved homeland of my ancestors, so I am very proud at this moment.)
“It is hard to see whether it will bring back the confidence in the long term,” Mr. Popper said “We had so many false recovery beginnings already. One has to be prepared for some storms ahead. I don’t think this is the turning point. We still have the restructuring of the entire industry ahead of us.”
My concern is this: the proposal seems to be to create a new government-owned corporation that would buy distressed mortgages from banks and and other financial institutions. In other words, this is an enormous bailout, the biggest yet, whose burden will fall upon the American taxpayer.
Now, we American taxpayers won't actually be asked to pay more taxes. No, that's taboo in our political culture. So, it just goes 'on the tab', that accumulation of fiscal liabilities in the trillions of dollars. When will we actually pay that tab? When inflation wipes us out (one of the results of financial irresponsibility), or when America truly goes bankrupt and no foreign countries come to our aid with foreign capital by buying our Treasury Bonds. That will then be the true repayment, because you and I know that we're not going to be asked to sacrifice to pay back all of that debt. We probably couldn't do it even if we were asked and agreed. But believe me, no politician will ever ask us to do that, because they wouldn't get elected or reelected (just ask Jimmy Carter).
When inflation or bankruptcy (or both) eventually wipes us out, then we'll be essentially a very large banana republic, with one exception: we'll have the largest military machine in the world. A poor but militarily powerful country. Let's see: who does that remind me of? Which, if I were the rest of the world, would scare me very much.
But until then, it looks like we might be able to go back to our old ways for awhile: spending more than we make, borrowing more than we save, consuming more than we produce, and putting the debt on our descendents to pay when we're no longer on the scene. No sacrifice required, no change in our bad habits, still in denial. Let the good times roll (again).
I guess I'm not that impressed with the plan. Hmmm, this is very good coffee.
Thursday, September 18, 2008
It is Petraeus, and not necessarily the 'Surge', that has accomplished the pacification of Iraq, such as it is. (Check out this article describing General Petraeus' work in Iraq.) A large part of the result is due to the 'Sunni Awakening', whereby the local leaders of the Sunni Muslims west of Baghdad were encouraged, and in many cases, paid to turn against the Al-Qaeda and work, at least temporaily, with the Shia-led government. The divide between the Sunni and Shia, as well as the Kurds in the north, continues and will probably prove to a big, big problem for Iraq in the future.
This doesn't mean that the Iraq War was a just war or the right thing to do. (I publicly opposed it before we invaded, which is where I agree with Obama and admire his judgment.) But for now, things are much better and much of the credit has to go to General Petraeus.
So, you never know. But as someone said today on NPR, "we're only about half way through this." In other words, any worsening has been delayed, but 'the fundamentals' are still fundamentally weak.
"During the late, lamented Wall Street boom, America's leading investment institutions were plenty bullish on China's economy, on exotic financial devices built atop millions of bad loans, and, above all -- judging by the unprecedented amount of wealth they showered on the Street -- on themselves. The last thing our financial community was bullish on was America -- that is, the America where the vast majority of Americans live and work."
"My only other comment as a moderate, I beg for avoiding using overly bombastic language when referring to your political foes. I for one tire of the demonization that both sides make of the other....and I personally don't find it helpful when trying to sort through the issues. In fact, I find it tiresome."
I plead guilty to this, especially in my earlier posts. It's definitely a political temptation that one has to fight. But since his plea, I've tried to be careful, as I hope you can see. I do actually try to base my own political perspective (and vote) on objective reality, not just impressions or emotions. So this should be possible for me to do (without at the same time being too boring, in which case no one will read my stuff). I will do my best.
"The leverage party’s over for the masters of the universe. Shed a tear. When you trade pieces of paper for other pieces of paper instead of trading them for real things, one day someone wakes up and realizes the paper’s worth nothing. And Lehman Brothers, after 158 years, has gone poof in the night."
"For years, accountants, rating agencies and Wall Street executives decided to shoot craps and collect fees. Regulators, taking their cue from a distracted President Bush, took a nap. The two M’s — Money and Me — became the lodestones of the zeitgeist, and damn those distant wars."
"The biggest single-day market drop since 9/11 reminded me that when trading reopened on Sept. 17, 2001, and the Dow plunged 684.81 points, some executives backdated their options to reprice them at this postattack low to increase their potential gains."
"So that’s what “financial killing” really means. No better illustration exists of a culture where private gain has eclipsed the public good, public service, even public decency, and where the cult of the individual has caused the commonwealth to wither."
"That’s the culture we’ve lived with. It’s over now. Some new American beginning is needed."
I'm sorry. This is not remotely believable. This kind of veering wildly from position to position is a sign of desperation, or worse. It is also not appealing in the least, for who wants a candidate who will apparently say anything to get elected. What is there left to believe about him?
Yes, John McCain was a war hero and suffered as a POW. We all honor him for that. But speaking personally now, my deceased father Lennart Lindquist was also a war hero (as a pilot, he flew 35 missions over Germany in a B-17), and my uncle Carl Lindquist was killed in a B-17 crash in 1944, suffering the worst possible fate in war. But that wouldn't have qualified either of them to be President in 2008. And my father and I never agreed on politics. He was, to put it plainly, a member of the John Birch Society. I honored his military service and disagreed with his politics. One can do both of those things at the same time.
It simply takes more than heroic military service to be an effective President.
Also, have you ever looked up information about Hank Greenberg, long-time CEO of AIG on Wikipedia? He was a close confidante of Henry Kissinger, and he followed the foreign policy guru around the world, making economic deals after Kissinger made the political deals. This is the kind of stuff that feeds the conspiracy theories of the John Birchers, who think the CFR and the Rockefellers run the world. (You're not going to believe this, but Hank Greenberg is a leading member of the Council on Foreign Relations, a member of the Rockefeller Foundation, and was chairman of the New York Federal Reserve Bank. Talk about a 'Master of the Universe'!)
“'I fear the government has passed the point of no return,” said Ron Chernow, a leading American financial historian. “We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams.'”
"In France, where the government has long supported the creation of 'national champions' and worked actively to protect select companies from the threat of foreign takeover, politicians were quick to point out the paradox of what is essentially the nationalization of the largest American insurance company."
"National economies are entering an era where we have much more regulation and where the public and the private sector will mix much more.”
As I said yesterday, the economic and political philosophy that became our bipartisan orthodoxy in Washington for almost three decades now has got to be jettisoned, as we recover a true conservatism that is prudent and fiscally responsible.
“'I do not believe in U.S. financial institutions anymore; I don’t think any U.S. bank is safe anymore,' said Wang Xiao-ning, a Hong Kong homemaker. Even after the Federal Reserve had taken control of A.I.G., she waited in line with dozens of other anxious policyholders at one of the insurer’s customer service centers for the chance to close her investment account."
"Asia’s savings have, in essence, bankrolled American spending for decades, and an Asian loss of confidence in American financial institutions and assets would have dire consequences for both the United States government and American taxpayers." (NYT)
One has to ask whether the outcome of the election will make a difference in Asian confidence. Obama is up a little in the latest polls, indicating that he gains when the economy is frontpage rather than 'lipstick on a pig.' Given his popularity overseas, would this help the US to gain some confidence with foreign investors? I know it would make me more confident in the future.
One of the reasons I had been pulling for Obama over Hillary since last fall, is the sense that he represents the future, and the chance for the next generation of Americans to take their turn at moving America into a better future. I believe that is going to take change in the way we do things. It's either transform or decline. We simply cannot keep doing the 'same old, same old.'
McCain's insistence that he is the candidate of real change is simply not credible, at least to me. More on my Obama preference later.
Wednesday, September 17, 2008
"The financial crisis entered a potentially dangerous new phase on Wednesday when many credit markets stopped working normally as investors around the world frantically moved their money into the safest investments, like Treasury bills," says the New York Times. "The stunning flight to safety, away from other kinds of debt as well as stocks, could cause serious damage to an already weakened economy.. ..Everybody is rushing to the door....Clearly, as a collective action, it is a disaster.”
Could this be a replay of the Great Wall Street Crash of 1929? Consider the following from that great 'website of record', Wikipedia.
"The Roaring Twenties was a time of prosperity and excess in the city, and despite warnings against speculation, many believed that the market could sustain high price levels. Shortly before the crash, Irving Fisher famously proclaimed, 'Stock prices have reached what looks like a permanently high plateau.' The euphoria and financial gains of the great bull market were shattered on Black Thursday, when share prices on the NYSE collapsed. Stock prices fell on that day and they continued to fall, at an unprecedented rate for a full month. After the crash, the Dow Jones Industrial Average recovered early in 1930, only to reverse again, reaching a low point of the great bear market in 1932. The Dow did not return to pre-1929 levels until late 1954."
Here we are, 79 years later, and things look hauntingly similar. We were taught in school that the government has put safeguards into place to guard against a repeat of the Great Crash of '29. Hmmm. In that crash, the Morgan and Rockeller families, who dominated finance and industry in those years, did their best to stem the tide by conspicuously buying stock. It didn't work. President Hoover basically took a hand's off approach.
I don't hear any big wealthy families trying to do that now. Warren Buffett pulled out of the market many months ago. I have no idea where Bill Gates' wealth is invested (other than Microsoft, which is down about 30% this year, so not so good.) Now, it's the Fed and the Treasury trying to do it, by basically nationalizing three of the biggest financial institutions--Fannie Mae, Freddie Mac, and AIG. But it doesn't seem to be working.
We forget that the Dow also dropped about 22% in one day on October 19, 1987. Could a drop of that magnitude happen soon? That would be a loss of about 2,300 points on the Dow? (Okay, I'm going out on a limb. My prediction for tomorrow: the Dow down 1,000 points or more. But I really hope I'm wrong.)
We shall see. Tomorrow could be very interesting on Wall Street. I'm glad the Methodists invest my pension fund conservatively and very wisely. So far I've only lost about 6.5% since the high a ways back. That's still a lot, but from what I hear, others have lost a lot more.