Thursday, May 12, 2005

May 11, 2005

Nuclear Option – for China
As their certifiably crazy neighbor, North Korea, moves towards their first nuclear bomb test, China continues to play inscrutably stubborn. The US and Japan want to threaten trade sanctions on N.K. as the last non-violent option to get North Korea to drop development of nuclear weapons. China, as a member of the Security Council would have to agree, and they won’t.

China could fix this little problem on its own. Because, without the charity fuel and food North Korea gets from China the Nutty Kingdom would collapse in a matter of months.

But the Chinese won’t do it because it uses North Korea like a thug uses a mean pit bull on a leash. Whenever the US pushes China to do something it does not want to do, like revalue its currency or slow imports of cheap goods, China fingers it's NK leash as though they are about to let it slip from their grasp, and the US backs down. (Story Here)

But North Korea is not China’s only leverage over the US. They know better than anyone that their North Korean gambit could blow up, literally and figuratively, at any moment. So, even as they play that card for all its worth, they have another ace in the hole. US economists live in terror that, if clamp down on the Chinese, they will start dumping US bonds and stop buying new ones. In other words, they will stop lending us the money we need to fund our twin deficits – the budget deficit caused by Bush’s tax cuts, and the trade deficit caused by – well China.

What President John F. Kennedy do if faced with this same situation? North Korea smells a lot like the Cuba JFK faced, only less immediately dangerous. Cuba had real nukes and real missiles. N.K. is on its way there, but not quite there just yet. And Cuba, like North Korea had a half-crazy leader propped up, like North Korea, by a giant communist power, the Soviets.

We know what Kennedy did during the Cuban crisis, and I suspect he would do much the same now if he were in Oval Office. He would begin by calling China’s bluff, just as he called the Soviet’s. And, at the same time start to gear up for a crediable naval blockade of North Korea.

Then he would have the Secretary of State phone the Chinese trade minster and ask how he would like to lose Wal-Mart as a customer.

Time for talk is getting short. Yesterday North Korea announced it had finished removing over 8,000 spent fuel rods from a nuclear reactor. North Korea now has enough plutonium to make up to six bombs. How much do you think oil-rich Iran would pay North Korea for one or two of those babies? Would it be worth $100 million to Iran to be able to say to Israel, “go ahead, make our day.”

China’s cooperation is not just necessary right now but something the world should demand. If they refuse to get with it, and soon, then it’s time to tighten the economic screws on China. Without US trade China’s development would grind to a crawl, and they know it.

So, Cowboy George, do you have the same size balls as that bleeding heart liberal, JFK?

We’ll see.

(Memo to the Chinese: BTW, the place the North Koreans plan to set off their first nuke, Kilju, is right over the aquifer that supplies Southern China with fresh water. Just thought that was worth a mention.)

Check Please
The war in Iraq has now cost you $300 billion. Yesterday the Senate gave final passage to an $82 billion "emergency" war-spending bill. And you’re still not done paying for this little adventure. Army officials and congressional aides say more money will be needed as early as October. (Full Story)

Remember, this was the war that the administration assured us would cost us less than $50 billion, or even nothing at all since Iraqi oil would pick up the lion’s share of the tab. Call it “trickle up” economics and it’s working just as well as Bush tax cut “trickle down,” theory.

One reason the bill keeps going up is because private contractors continue to run barefoot through our national checking account. Chief among them is Halliburton, which has a special relationship with this administration. Even though Halliburton keeps getting caught shoplifting from taxpayers, they are able to not only stay out of jail, but are rewarded.

WASHINGTON (Reuters) - The U.S. Army said on Tuesday it had awarded $72 million in bonuses to Halliburton Co. for logistics work in Iraq but had not decided whether to give the Texas company bonuses for disputed dining services to troops. KBR's logistics deal with the U.S. military. In addition, investigators are looking into whether the Texas-based firm charged too much to supply fuel to Iraqi civilians... (Full Story)

I want a contract like that. One where I can screw my customer blue and get bonuses for it.

But wait, where are all those moralizing Christian fundamentalists in the administration when this kind Thou Shalt Not Steal, larceny is going on?

Oh. On the payroll of course.

Judges Agree -- It’s None Of Your Damn Business
Unless some enterprising Washington reporter is able to dig it up we will now never learn what advice Ken Lay gave to VP Cheney that now is part of the administration’s energy policies.

WASHINGTON, May 10 - A federal appeals court said on Tuesday that Vice President Dick Cheney did not have to divulge details about how the White House's energy policies were shaped, ruling in a case that touched on the constitutional separation of powers. The 8-to-0 decision, handed down months after the lawsuit became an issue in the 2004 election, was a victory for the executive branch in general and the Bush administration in particular. (Full Story)

Again I ask -- where are those conservative voices of outrage that condemned the secrecy of Hillary Clinton’s healthcare commission? Where are the congressional subpoenas that wrestled a blue dress and even Presidential DNA from Clinton?

None of your business, apparently.

It may be your government, but what it does behind closed doors is now officially none of your damn business.

Pension Pains
I wonder if Bush sees any irony in the ruling yesterday by a federal bankruptcy judge allowing United Airlines to dump billions of dollars of pension obligations onto the federal government?

The ruling releases United, a unit of the United Airlines, from $3.2 billion in pension obligations over the next five years. The federal agency that guarantees pensions, the Pension Benefit Guaranty Corporation, will assume responsibility for the plans. (Full Story)

Yes boys and girls, even as this administration touts the glories and riches to be had by privatizing Social Security, it is having to bail out a corporate pension fund. And why? Because it was mismanged - maybe even looted -- by the very company that now seeks federal bankruptcy protection from it’s own retirees.

It turns out that United Airlines’ pension fund is a little short on cash -- just under $10 billion. Apparently there was no lockbox at United.

Now that United has been allowed to dump it’s pension obligation on taxpayers, just wait and see how many other companies do the same.

And the administration wonders why voters don’t like their Social Security “reforms.”
How much would you like to bet that a decade or two after private accounts are allowed that those funds will come up short on the cash to pay their obligations and will be lining up in front of Uncle Sam’s ATM begging for taxpayer help?

You can bet on it. So, don’t bet on private accounts.

<> By Stephen Pizzo
Raconteur at Large

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