January 15-23, 2008

Think About It

(Before it's too late)

I want to speak directly to supporters of Hillary Clinton. No, not speak... plead.

I remember the last time I wanted to reach out and shake a bunch of fellow progressives. It was back in 2000 when Ralph Nader was running for President. A lot of what Ralph was saying was true and attractive to long-suffering progessive voters. Meanwhile, Al Gore, had picked the worst possible moment in history to have an identity crisis and was proving to be a disappointment as a candidate -- to say the least.

Nevertheless many of us worried that Ralph could sap just enough votes from Gore to toss the election to Bush. And, with a little help from the Supremes, that's precisely what happened.

I have that same fear again. If McCain ends up the GOP candidate, rather than the more clearly flawed Romeny or Giuliani, Hillary Clinton will not sashay to the coronation she had once envisioned. Instead her built-in high negatives will drive many independents back into the GOP camp and she will re-energize a currently dispirited GOP rank and file.

Worse yet, Democratic voters, many of of whom simply cannot stomach Hillary Clinton, will simply not vote if their only choice is between John McCain and Hillary Clinton.

That's all it would take to tip the "Red state/Blue state" calculus to a McCain victory next November. And if that happens, and we end up with another Republican in the White House a year from January, the blame for that will lay directly in the laps of those of you who have been hypnotized into making Hillary the Democratic party nominee. Yes it will. And then, like those Nader voters of 2000 your only comfort will be your self-serving belief  that, "at least I did the right thing," even if contributed to the wrong outcome.

If that does not convince you that Hillary is a bad bet, ask yourself the following question:

What serious  person would serve as Vice President in a "Billary" administration?

I keep hearing Hillary supporters suggesting that a dream ticket would be a Hillary/Obama or Hillary/Edwards ticket. What are you guys smoking?  Edwards and Obama are serious fellas. Neither would want to serve four years as window-dressing while Hillary and her defacto VP, Bill, run the country from the White House family quarters.

Can you imagine that? Try. Because if you can get your heads around that one you will understand that Hillary Clinton is the worst possible of choices. Already we are seeing hints of the spousal dynamic that would play out if Hillary and Bill end up back in the White House. It will be four years of Bill and Hillary against -- everyone else, including members of their own party.

Just last week both Rahm Emanuel and James Carville -- both longtime Clinton loyalists, got into shouting matches with Bill over his bellicose defense of Hillary. Reportedly each man told Bill, in no uncertain terms, that he was splitting the party, alienating black voters and scaring the hell out of wavering white voters.

To paraphrase Bill's response, according to reports, "Bite me! Mind your own damn business."

Well, this IS your business. It's all our business. We've just paid a staggering price for ignoring these same warning signs eight years ago. Are Democrats really going to make that mistake again? 

I have warned from the start that there are only two possible outcomes if Hillary Clinton becomes the nominee of her party:campaign for President: She could lose, or she could win. Either outcome would thrust our already battered and exhausted nation into another four years of division and animus -- not to mention reruns of the "As The Clinton's Turn," spousal soap opera.

So, Hillary Supporters, think again. The nation would move forward under a President John Edwards. And the nation would be elevated by a President Obama. But a President Hillary Clinton would mean trading divisive George W. Bush for an equally divisive Hillary R. Clinton.It would mean four more years of Washington food fights. Four more years of the now all-too familiar,"your-mother's-so-fat" levels of debate. And four years of watching Hillary act like Margaret Thatcher on the world stage while channeling Eleanor Roosevelt here at home -- a schizophrenic balancing act even a shape-shifter like Hillary Clinton won't be able to pull off.

But so far that argument has not seemed to dissuade Hillary's supporters. So let me just leave you with this little mental exercise:

Our nation's founders didn't create the vice presidency as a ceremonial post. They lived in a time when folks regularly dropped dead at relatively young ages. So our founders created the post of vice president as a kind of constitutionally empowered spare, should something prevent the president from completing a full term in office.

So, if nothing else convinces you to reconsider your support of Hillary, close your eyes and try to imagine the kind of doormat of a person required to serve as vice president in a Hillary/Bill administration.

Then ask yourself if that's the kind of person you want as president-in-waiting. You should do this because voters certainly will imagine just that as their finger hovers over the candidate's name in the voting booth next November.

 

January 18, 2008

Memo

To: William Jefferson Clinton

From: Those of us with a memory

Yo, Bill;

Listen big guy, we really need to talk.

Over the last few weeks we've seen you lose your cool as you campaign for your wife.

Knock it off!

You need a long overdue reality check, dude. You are the last person in the country who should be indignantly lecturing anyone. Why?

Oh, let us count the whys:

1) In part -- how large a part we can argue another time -- the presidency of George W. Bush is your fault. That's right, your fault. By the time your second term was over your juvenile, self-indulgent, adulterous behavior had rendered you so radioactive Al Gore was unable to leverage the many positive things you did while in office. Your embarrassing behavior nearly got you impeached, invigorated the sheep on the religious right, virtually handing the keys to Oval Office to the Neo-cons we've had to endure for the past seven years.

Deny that at your own peril, Bill. Bush's margin of "victory" in 2000 says otherwise. No reasoning person could believe that tens of thousands of folks who would have voted for Gore didn't because of the stain (pun intended) your behavior left on the Clinton/Gore administration.

2) Your misbehavior also served to lower the bar to the US Presidency. Your behavior so diminished the grandeur of the office of President of the United States that a half-wit blowhard like George W. Bush suddenly became electable. He wasn't electable because he offered solutions, vision or substance, but  because he reassured voters he'd "restore dignity to the Oval Office."*

*(Translation: "I won't get hummers in the Oval Office from bimbo-interns.")

3) In late 1993 I was covering the White House for Mother Jones magazine for a story on campaign finance reform. I was invited to interview your point man on that issue, Michael Waldman. (Read that story here) Reforming the corrupt campaign finance system had been a central plank of your campaign and hopes were high that someone was finally going to do something about it. But when I got to the Executive Office Building to interview Mike I found his office empty. When I inquired where he was I was told he had been taken off campaign finance reform and transferred to the administration's current priority -- getting NAFTA passed. I could not even talk to Mike because he was sequestered in the White House "NAFTA War room."

So, great. We didn't get campaign finance reform but we did get NAFTA. Have you checked lately how that's worked out? Not well. Not well at all. We've taken note of that.

4) Hillary's failed healthcare reform efforts were directly related to the above. Even after NAFTA passed you guys didn't return, in any real way, to campaign finance reform. Why? And you guys also didn't return, in any real way, to healthcare reform either. Why? Because the healthcare and pharmaceutical industries let you know they'd gotten "the message."

What message?

The message that, if power in Washington is about anything, it's about the protection rackets. Big healthcare got that message and started paying you guys protection money. Proof? Today your candidate-wife is among the top beneficiaries of healthcare and pharmaceutical money in this campaign.

Coincidence? Forget about it. No one is going to buy that after one look at the hard (money) facts.  Any reasonable observer will conclude that that's why you two lost interest in reforming either the campaign finance system or national healthcare. As a result you and Hillary never took another real swipe at the healthcare/pharmaceutical industries.  And thanks to that no fewer than 10 million additional Americans are today without healthcare coverage.

Sure, you did a lot of good things during your two terms. You balanced the budget, fairly taxed the rich and left a surplus in the bank for the next guy. Had you not disgraced yourself during your second term you'd have every right to wag your finger and lecture others.

Instead you acted like a horny teenage boy, treating OUR Oval Office as though it was a private booth in some seedy porno shop. Then, when caught, quite literally with your pants down, you looked the whole world in the eye, your nose turned monkey-butt red, you shook your finger in our faces  -- and you lied.

True, unlike the lies of our current President, your lies didn't directly get anyone killed. But a reasonable argument could be posed that, in the run of events since, your lies did get people killed.  President Al Gore would not have taken us into Iraq. And, had Gore been able to enthusiastically associate himself with the sound economic and domestic policies of the Clinton/Gore years, he would have won the 2000 election -- likely with by a healthy margin to boot.

But Gore couldn't associate himself with your good deeds without being tarnished by your personal flaws. So we got George W. Bush -- and all the misery that has followed, and will follow for years, maybe decades, to come.

So, Bill, knock off the self-righteous crap. And stop popping off at reporters and commentators just because they refuse to obediently accept your first explanation of things you'd prefer not discussed during this campaign -- like your wife's attempt to suppress the youth vote in New Hampshire and the minority vote Nevada. Yes she did.

Put the anger away.  And don't you dare wag that finger in our faces again. You sir, live in a glass house -- and you've been pushing your luck. Knock it off. Knock it all off.

Thank you for your immediate attention to this matter.

Must Watch Video of the Day

http://blip.tv/file/520347

January 17, 2008

A 2-Step Solution

to Reverse the Bush Recession

Washington seems to have discovered what we've been talking about here for over three years -- that the Bush tax cuts for the rich didn't work as advertised. Of course, we knew they wouldn't work when they were passed way back in 2001

As I've written so many times my fingers cramp just thinking about it... economies are not stimulated from the top down, but from the bottom up -- by consumers, not producers. Very little of the money generated by tax cuts for top earners ever trickles down in ways that result in higher earnings and spending by consumers. 

In reality it works exactly the other way. Cut the payroll tax for working Americans. That immediately puts more money in the hands of people who are already having trouble making ends meet. Consumers spend most or all that extra money in each paycheck. That in turn generates more demand for goods and services, which spurs hiring at the companies that produce them. Those companies then have to hire more workers to profit off that increased demand, resulting in additional workers getting the benefit of the payroll tax cut, who spend that extra money. As companies profits increase due to increased consumer buying power, tax revenues will begin to refill federal coffers gutted by the Bush tax cuts.

All of which creates a self-sustaining virtuous cycle that benefits everyone up and down the food chain.

Now that we're in a mess that could have -- and should have -- been avoided, everyone in both parties is looking for a way out. And once again, everyone, in both parties, are getting it wrong.

Just look at some of the numbskull proposals being floated.

The Republican solution is another shot of the dog that bit us. They're using looming economic gloom to fear-monger us into agreeing to make the Bush tax cuts of 2001 permanent.  Of course that's so predictable from the party that fear-mongered us into other disasters  like wiretaps, Gitmo and torture. Now they are trying to scare us into setting those tax cuts for the rich into stone before the GOP gets kicked out of town next January.

Democrats have been no less predictable. Their solution is to just start handing out cash in the form of $300 to $600 one-time handouts to every taxpayer.  That's not going to solve anything. It will pay one month's heating bill for a working family in Detroit. Then what? It's a non-solution masquerading as a solution by candidates afraid of being accused of waging "class warfare" by opposing GOP attempts to make the Bush tax cuts permanent.

Democrats learned this little trick from Bush. He used the same trick back in 2001. He handed out the  same kind of "feel-good" money then to make us feel like we were getting a piece of his $1.4 trillion tax cuts. That was our piece... a one-time $300 to $600 check -- actually more a morsel than a piece -- suckers.  The biggest beneficiaries of Bush's tax cuts have been the top 1% of the nation's earners.

Estimates from the Congressional Budget Office and the Joint Committee on Taxation indicate that the cost of the tax-cut provisions the Tax Policy Center has analyzed would be $3.4 trillion over the 2008-2017 period, if these provisions are extended. Applying the Tax Policy Center estimates of the share of the tax cuts that would go to each income group to the CBO/Joint Tax Committee estimates of the tax cuts’ cost shows:

    * From 2008 through 2017, households with annual incomes of more than $1 million — a group that comprises the highest income 0.3 percent of the population — would receive $739 billion in tax cuts.  This represents 22 percent of the total value of the tax cuts over the period.

    * More than $1 trillion in tax cuts would go to the top 1 percent of households, a group with annual incomes above $400,000 in 2007.  The highest income 1 percent of households thus would receive nearly one third of the tax cuts’ total value.

    * The bottom 60 percent of households would receive 12 percent of the tax cuts’ value, or well under half the amount that would go to the top 1 percent.  (See Table 1; for year-by-year detail, see the appendix tables.) (Source)

So here's how we fix that "mistake" and, at the same time, revitalize the American economy. Don't reach for a pen and note pad, because this is so simple you could write the whole economic plan on the back of a matchbook:

1) Revoke the Bush tax cuts for the top 1%

2) Shift those cuts to reduce the payroll tax by the same amount.

That's it. A two-point economic stimulus package that will pump $1 trillion into the pockets of American consumers. And, rather than that money flowing into family trusts and other paper investments, it will get spent, piece by orderly piece, each week, every week, forever. So, if congress is itching to make a tax cut permanent, that's the one -- a payroll tax cut.

The beneficiaries of the Bush tax cut had their chance to prove the trickle-down theory, and failed -- just as they failed the last time it was tried by Ronald Reagan. Both attempts left America saddled by back-breaking deficits and debt. Both attempts enriched the already enriched at the expense of middle class working Americans.

They had their chance. Now give trickle up economics a chance. Revoke the Bush tax cuts for the top 1% and give them to working Americans.

Then, just so they feel like they're getting a piece of this new action, send each of America's top 1%  earners a government check for $300 as their share of our economic stimulus package -- with  our compliments.

January 14, 2008

 Sharper than a Serpent's Tooth

Let me start out by saying this column is going to really piss some people off. But I am calling it how I see it. And this is how I see it.

A couple of hundred years ago, back in the old South, white folk made a distinction between "good" negroes and the not-so-good negroes. "Good" negroes stayed in line, were deferential to whites and didn't make trouble. Those were the negroes whites assigned jobs in and around their houses, rather than in the fields. They even had a term for them -- though I have to clean it up a bit: "house negroes."

White's of the old South took it for granted that their house-servant slaves were grateful, loyal and even held genuine affection for their masters. So it was a rude awakening when, after Lincoln freed the slaves, those freed house servants packed up and left to strike out on their own.

Many whites were genuinely surprised, even hurt that their former servants, nannies and groundskeepers had turned their backs on them.  

A kind of grieving process then played out. First many former white slave owners were hurt at what they felt was a shocking display of ingratitude. Then came  dismay. After all, who was going to raise the kids, cook and clean now?

Then, as that reality sunk in, they became angry, striking out, saying and trying whatever they could to assure that lives of freedom their former servants sought would be as miserable, unfulfilling and unsuccessful as possible.

That was then. Now, 150 years later, we're watching a similar drama play out on the political stage.

The Clintons and their institutional Democratic Party old guard shocked, insulted, even hurt that black Americans might prefer upstart Barack Obama over the next in line, Hillary Clinton. The national Democratic Party machine had other plans for this election cycle. Democratic Party insiders were fixing to put the first white woman in the White House, not the first black man.

But then guess who came to dinner. Barack Obama, a smart, attractive and inspirational young black man stepped up and announced he'd like a shot too. Imagine their chagrin when blacks, joined by millions of white Americans, started voting for the black guy.

Until then the Democratic Party pointed with pride at the Obama candidacy as proof that the party was more racially open than the all-white GOP line up. That all changed when people actually started voting for him in alarmingly high numbers. Particularly worrisome was the growing number of black voters switching from Hillary to Barack.

No machine Democrat was more hurt and dismayed by this turn of events than the party's heir apparent,  Hillary Clinton. After Barack Obama beat her in Iowa, she let go of the hurt and moved straight on to anger. It was time to remind African-American voters not only which side their bread has been buttered on, and just who had buttered it "for them" in the first place.

"Dr. King's dream began to be realized when President Johnson passed the Civil Rights Act," she said, adding that "it took a president to get it done." (Hillary Clinton)

What she left out of that remark was inferred;  "and it took a white, Democrat President to get it done for y'all."

The same week Hillary dropped that bomb husband Bill took his own swipe, describing the Obama phenomena "the biggest fantasy I've ever seen."

The Clintons realized that they were losing their grip on a constituency they believed they owned. So Hillary quickly put her remaining black supporters front and center to put a black face back on the Clinton campaign, and to defend both her and Bill from the black backlash their remarks last week caused. 

Black Entertainment Televsions Founder Slams Obama

COLUMBIA, S.C. — Robert L. Johnson, the founder of Black Entertainment Television, who is campaigning today in South Carolina with Senator Hillary Rodham Clinton, just made a suggestion that raised the specter of Barack Obama’s past drug use. -- And to me, as an African-American, I am frankly insulted that the Obama campaign would imply that we are so stupid that we would think Hillary and Bill Clinton, who have been deeply and emotionally involved in black issues since Barack Obama was doing something in the neighborhood –­ and I won’t say what he was doing, but he said it in the book –­ when they have been involved.”(Full Story)

During those remarks -- which, had they made by a white businessman, would have caused a monumental uproar -- Hillary Clinton sat on stage expressionless. Had she disagreed with the thrust of Johnson's remarks she could have disassociated herself from them. But she didn't. Instead, when he was done she applauded and hugged him.

And why not. After all, he, a successful black man, had just  reinforced the subliminal message her campaign would not dare articulate itself. A message that went something like this:

    * - While blacks have moved into the American mainstream, they largely have white Democrats, like Hillary and Bill, to thank for it. 

    * - And that while blacks have made a lot progress over the years, they are still not "ready" to run the nation. 

    * - And, in case that didn't get you back on the Democratic Party plantation, remember  -- Obama was a druggie when he was younger.

Deeper in the bowls of the Clinton campaign, where hurt has turned to anger, a more dangerous strategy was emerging -- one designed to send a message to white Democratic voters.  If you thought only Republicans like Karl Rove still played the racist card, forget about it. When the chips are down -- and they are down now for Hillary Clinton -- the Clintons and their surrogates know how to push those buttons too.

 Many pundits wondered why the Clintons would risk alienating the black community on the eve of the South Carolina primary with their slaps at MLK and Obama. Others suggested that Bill told Hillary she needed her own Sister Soulja moment to show white voters, particularly in South Carolina, that she is not in the pocket of African-American interest groups.

And, in the process, also rekindle white working class fear and resentment towards a black candidate. Such a tactic might also appeal to the now disaffected working class Reagan Democrats who, after years of being screwed blue by the GOP were looking for a "safe" Democrat to vote for next November.

So last week the Clintons pulled out all the stops, sending their surrogates out to spread their subliminal-message attacks against Obama. Democratic New York Attorney General Andrew Cuomo waded in on Hillary's behalf last week as well, using language that could hardly have been accidental from a guy whose father is one of America's great orators:

"It's not a TV crazed race. Frankly you can't buy your way into it," Cuomo said, according to Albany Times Union reporter Rick Karlin. "You can't shuck and jive at a press conference," he added. "All those moves you can make with the press don't work when you're in someone's living room."

"Shuck and jive" is a term once used to describe blacks behaving innocently in the presence of an white authority figures, so as to lie and get out of trouble.

(Irony alert: Of course Hillary Clinton is married to the biggest shuck and jive artist ever to grace the Oval Office -- as displayed in his greatest hits -- "Now listen to me. I did NOT have sex with that woman...." and the all time classic -- "it depends what the meaning of 'is' is." It's a political art form  Hillary herself is no stranger to. Just ask her to explain her vote to give George W. the right to attack Iraq and her more recent vote on Iran if you want to hear some world class shucking and jiving. But I digress.)

Nothing happens by accident in a Clinton campaign. Last week was all about raising doubts about Hillary's young black opponent. More and more black voters are -- if you'll excuse the term -- taking a shine to Obama. The national polls show voters moving his way, at her expense

When things go wrong in a Clinton campaign the first thing they do is crunch and dissect the numbers. They now know that if Hillary is going to have a chance at beating Obama, they will have to beat him ---beat him up. They will have to say and encourage others to say, whatever it takes to scare as many of their now wavering black supporters back onto the Clinton plantation.

But they also know that many black Americans, likely a majority, will jump at the chance to make history. Not the first white woman President kind of history, but the first African American President kind of history. So, the numbers say to they also need to round up enough white voters to dilute Obama's surge among African Americans.

And how do you convince whites to shun a black candidate? Well some whites are already so inclined. For the rest the Clintons understand they need to cunningly leverage old racial stereotypes in order to raise doubts about Obama's character and abilities. To do that requires great skill and even greater deception and deceit. It requires a social/political witch's brew of connivance and hypocrisy:

    *  Repeatedly chant "he's not ready."

    *  Add a dash of "they (black Americans) couldn't have done it if we white liberals hadn't done it for them."

    *  Throw in some racially evocative slang like,  "He's just shuck and jiving you."

    *  Drop reminders, as Clinton campaign manager, Mark Penn did on Chris Matthew's show of past drug use while denying it matters:  "We are running a clean campaign," Penn told Matthew's, "We are not, for example, going to bring up Sen. Obama's former cocaine use."

    *  Wink and nod to white voters that Hillary is one of them and not in the pocket of African-American interest groups.  And what better way to do that than to diminish the role of Martin Luther King.

Are the Clinton's really that ruthless, that cunning, that conniving?

Yes. Yes they are. You can bet the plantation on it. 

January 5-14, 2008

No S....t

Yesterday, in a bid to reassure nervous investors, Federal Reserve chief, Ben Bernanke, announced that the central bank was going to try to put the toothpaste back into the tube.

The markets weren't impressed by Bernanke's hint that the Fed is ready to cut half a precent off the Fed Rate at the end of this month. There was a time, a couple of years ago, when the Fed could have made a difference, not by cutting rates, but raising them to cool the overheated housing market. But the Fed (and Federal banking regulators)  succumbed to pressure from the lenders, builders, Security dealers and Realtors who were feasting off the bubble easy credit had created.

Back then no one was interested in lectures from the Fed on sustainability or risk. Then was the time to reel them in, kicking and screaming and accusing the Fed of driving the economy into the tank with higher interest rates. If they had the market would not be in the tank, and heading into recession today.

Here's why Fed rates cuts now will not -- cannot -- work.

First here are the only choices the Fed has to choose from now:

1) Avoid a recession by sparking inflation

2) Avoid inflation by causing a recession

3) Have both at the same time -- stagflation.

Option 1) The Fed could try to avoid a recession by lowering interest rates and increasing the money supply. The idea would be to encourage more borrowing and another round of consumer spending. That would do it, at least in the short run. But that would just put things back where they were before the housing bubble burst. Consumers are already burdened by more debt than they can manage. And the combination of more borrowing and an economy awash in printed money would surely ignite raging inflation.

Once that happens everyone starts chasing their own tail. Workers demand a raise to keep up with the cost of living. Those higher wages spark more inflation. Consumers can feel their cash losing value in their wallets and purses and therefore exchange (spend) them for "stuff" because "stuff" at least is increasing in value. The demand for "stuff" thusly drives the price of "stuff" even higher .. and on and on it goes. (Gold hit $900 an oz. today, not because gold is intrinsically worth that, but because gold is the "stuff" of choice for investors when paper money starts losing value.)

Option 2) The inevitable surge in inflation would eventually force the Fed to increase interest rates. But raising rates would drive already debt-burdened consumers even deeper into trouble. Credit card companies tie their rates to benchmark rates, like the prime rate. Then they add their usurious mark up to that. So, when the Fed raises it's rate it trickles through the entire system. Credit card rates jump from an already unconscionable 20% to $25%. Be one day late on paying your monthly minimum payment and that rate can soar above 30%. (Eat your heart of out John Gotti.)

And then there's the already moribund housing market. Higher interest rates now would be like trying to cure a guy with cirrhosis of the liver by putting him on a straight moonshine diet.

Option 3) Stagflation is often described as getting hit with the worst aspects of a recession and runaway inflation at the same time. I lived through the last bout of stagflation, during the Carter administration. His predecessor, Gerald Ford, had left things in quite a hash, and it only got worse during the Carter administration. All Ford did was have a few lapel buttons printed up that read: W.I.N. -- which stood for "Whip Inflation Now!" Somewhere in the bowels of the Capitol or in a dark corner of the White House basement are boxes full of rusting and dusty WIN buttons.

At this point in time, stagflation this looks like the most likely outcome of the troubles that face the economy. If we get out of this mess with just a three or four years of stagflation, we should consider ourselves lucky because, with Options 1 & 2 clearly not a solution, stagflation is the only option standing in way of an old-time depression.

The markets know that too. Which is why Bernanke's rate cut promise yesterday was met this morning with a resounding vote of no confidence from Wall Street. That should be no surprise since Wall Street firms, having had a big hand in creating this mess in the first place, may be the only folks on earth who know where all the investment zombies they created are hidden.

As for Bernanke's promise that the Fed is ready to do whatever it can to head off recession, it's not that it's too little,  it's that it's too late. Fed inaction when they really could have had a meaningful impact, had now made the Federal Reserve all but irrelevant.  Bernanke is now just  another captive rider on the roll coaster with the rest of us. 

I wonder if he'll scream?

January 10, 2008

Ooooooh  S...T!

I am beginning to get the same feeling in my gut that I get when the roller coaster nears the top of the first drop.

Until then it had been all anticipation, anticipation that builds as the cars --- click,click, click -- inched up the steep incline towards the first crest. Then there's that singular moment, when the cars reach the top and I get the first look down the drop inches ahead. At that moment the cars seem to pause for second -- before they hurtle downward in an uncontrolled rumble.

That's how I feel right now about the economy. I've known for a long time that a helluva drop was coming. But the ride to the top has been so slow, so unthreatening and comfortable that the inevitable drop seemed more theoretical than than anything I had to worry about immediately.

But suddenly here I am -- here we are -- paused at the top for, who knows how long, peering down an abyss without a clear bottom in sight. And like that same roller coaster moment, we know it's too late to change our minds, too late to turn back. We are on for the ride -- the ride of our lives.

Okay, so enough with the metaphores. The roller coaster thing is really quite insufficient. At least on a roller coaster you know it'll all be over in a a couple of minutes and that no one is likely to get hurt. Not so when the economy goes bust. When an economy goes bust, "hurt" is the rule, rather than the exception.

Over the past couple of weeks the signs that "the end is near" have been abundant and clear. And this time, thanks to globalization, the pain will global as well.

UN Says U.S. Economy's Housing Slowdown Risks Global Recession

Jan. 9 (Bloomberg) -- Erosion of the U.S. housing market and a weaker dollar might drive the American economy into recession this year and stall world economic growth in 2009, United Nations economists said.

``There is a clear and present danger of the world economy coming to a near standstill,'' the UN's Department of Economic and Social Affairs said in an analysis released today in New York. ``The domino effect of a U.S. recession would be to knock down export growth from China, Europe and Japan, in turn reducing their demand for exports from developing countries.'' (Full)

 I'm not going to waste ink trying to convince neo-con dead-enders still in denial, because those folks will never admit the mess their careless and greed-driven ways are about to cause:

"Some argue that the push back against market forces is a momentary pause in a steady march toward unfettered capitalism. The libertarian Cato Institute recently issued a report in which it found that economic freedom — shorthand for smaller government and fewer regulations — has never been greater." (NYT: The Free Market: A False Idol After All? )

I have no beef with capitalism, per se. But unfettered capitalism is another matter. By "unfettered" folks like those at the Cato Institute and The Heritage Foundation, mean government should butt the hell out.  This is especially true when a bubble is forming, like it was during the 1980's after they succeeded in getting the feds to deregulate the savings and loan industry.

Later they advised the feds to keep their noses out of the dot-com boom of the 1990s. They claimed the feds were wrong to be nervous about all billions of dollars pouring into startups that lacked explainable revenue models. They said it was not a bubble but rather that the old business cycle had been eclipsed by this "new paradigm." What no one had the guts to say at the time is that there was nothing new about bullshit and wiseful thinking.

When the Bush administration came to office they crowed that the good Clinton economy had only been an illusion created by the dot-com bubble.  And that the nation was in recession because it went bust.

So, what did they do -- they loosened lending and oversight of banks and brokers and created a housing bubble to replace Clinton's dot-com bubble.

Now that bubble has burst, as all bubbles must.

In each case those hauling the big bucks in during those bubbles argued that government intervention would only gum up the works. They complained that government-types always wanted to fix something that wasn't broken in the first place.

And everyone would back off and let the "good times" roll on. (Remember when Greenspan had a moment of clarity, worrying outloud that he feared the dot-com boom was being fueled by "irrational exuberance?" Remember too how fast he back-peddled when Wall Street bankers, who were feasting off those dot-com losers dumped on him like a ton of gold bricks.)

In each of these bubbles the players would play the "let the markets work their magic" card until the bubble burst. Then they elbowed the naysayers away from the Capitol steps and began rattling their tin cups for help... government help.

They begged the Federal Reserve to pump more money into the system, to low interest rates. They begged  federal agencies to intercede in their behalf with creditors. They begged the federal judiciary to side with them against screwed shareholders. Claiming hardship, dumped their pension obligations on the federally run Retirement Benefit Guarantee Fund. And, when all else failed, the sought sanctuary in federal bankruptcy court.

Once the dust has settled and the victims limped off into obscurity, and memories faded, they dragged the old hymnal back out and, without a sign of irony or embarassment, returned to signing their "Oh Lord, give us tax cuts for the rich," and got right back on the old message again -- "Protect us from the evils of government regulation,"neo-con standards.

During my 62 years I've lived through three of these cycles, and "they" have gotten away with it each time. I don't just blame them. I blame everyone for it. Doesn't the driver who leaves the keys in a unlocked, parked car share the blame if the car is stolen?

And then there's the "Fool me once, shame on you. Fool me twice, shame on me," thing. "They" get us every time. We fall for the promise that, eventually we will all share in the goodies, if only we let the people who know what their doing, do it unfettered by bothersome rules and regulations.

 Suckers!

The flaw in the "unfettered capitalism" theory is so obvious that it staggers. Those who peddle it claim variations on this theme:

An unfettered capitalist will always do the right thing, because it's in their long-term self-interest to keep the economic system healthy and growing. So why burden businesses with a bunch of bureaucrat-cops who couldn't run their own businesses if their lives depended on it?  Why, they ask a successful business foul its own nest by abusing it?

Three times in the last 30 years we've gotten an answer to that rhetorical question:

Way too many of those folks will vigorously and enthusiastically abuse the system when it dawns on them that the enormous short-term gains they can make abusing the system eclipse anything they would make over the long-term toeing the line.

 Duh!

During the 1980s they looted their own savings and loans into insolvency, forcing the feds to step in and replace nearly $200 billion in stolen, federally-insured deposits.

During the 1990s they stuck shareholders with hundreds of billions in worthless dot-com stocks peddled by some of the largest brokerage companies in the country on behalf of venture capital clients.

And now a "credit crunch" has pulled the vail away form the phony-baloney housing bubble. Of course housing is actually just one card in a much larger credit house of cards that's about to tumble in a heap. Credit cards, auto loans, student loans, reverse mortgages, payday loans.

But wait, there's more. This time around government itself has finally actually lived up to the Cato types description as part of the problem. Since 2001 the federal government has been run by the Cato types. As a result its embraced the "unfettered" part of that philosophy. Borrowed money spent just the same as earned money, so what the hell, borrow away. And so it has come to pass.  Our federal government has become the biggest credit junkie on earth.

Things aren't much better here in the Golden State. Last night I listened as Gov. Arnold Schwarzenegger describe California's budget mess. And what a mess it is. After convincing voters a couple of years ago to let him borrow $38 billion to make ends meet, he seems to have come up $14 billion short for this year's bills. Now he wants voters to let him borrow a few more billion to keep the lights on, fund schools and pay for a healthcare insurance plan for the state's uninsured.

Maybe we need to change the way we describe borrowed money. Instead of calling it "borrowing" we could call it "renting." Because that's what credit really is -- renting money. People borrow stuff they never return all the time. But when you "rent" something you are keenly aware that if you don't pay the rent, shit happens. Imagine if the a governor, or company CFO announce he/she was "renting $40 billion." How would voters or shareholders react to that? Differently, I am sure. After all, no business class I ever took taught that a person could borrow themselves to (sustainable) wealth.

Anyway, it's too late now to do anything about what's already been done. We are at the top. Up til now, life's been good-- though fueled by borrowed money and on borrowed time. But time's up. The rent's due on trillions of dollars of this and that -- some of it real, way too much of it little more than wishful thinking.

There's a part of me that hopes this time the consequences will be so painful that ordinary Americans will finally get it. I hope that, once dust settles from this crash, we all can agree that, just as we need cops to keep people from speeding, we need federal regulators to keep "fetter" the unfettered capitalist just enough to assure they can no longer profit at the expense of everyone else. That they are only allowed to profit when they create real wealth, not hot air.

Mankind has been slow to learn this lesson though. Seems this has been going on long before the the term "capitalism" was even coined. St.Thomas More wrote over 400 years ago, words as true today as they were then:

"I can perceive nothing but a certain conspiracy of rich men procuring their own commodities under the name and title of the commonwealth. They invent and devise all means and crafts, first how to keep safely, without fear of losing, that they have unjustly gathered together, and next how to hire and abuse the work and labour of the poor for as little money as may be."

 St. Thomas More

So it's not capitalism that's the problem, but simple, and entirely predictable, human nature. Leave stuff laying around for the picking and, unless there's a cop on the beat to keep an eye on it, you'll discover there's no shortage of pickers waiting to relieve you of it.

Anyway, as I said above, it's too late to get off this ride now. So my friends,  keep your hands and arms inside the ride until it comes to a full stop. It's gonna be a wild ride.

January 4, 2008

Greased Pigs

Gee, I'd really like to let bygones be bygones, but recent events make that quite impossible. I want everyone to stop looking forward to January 21, 2009 just long enough to settle an old score.

This week it happened -- oil topped $100 a barrel. Back in early 2001 when Dick Cheney pulled together secret meetings with the nation's top energy producers to plot out the new administration's energy strategy, oil was selling for $26 a barrel.

What happened? And why? And whom do we have to blame for it? We still don't know.

Most of the activities of the Energy Task Force had not been disclosed to the public, even though Freedom of Information Act (FOIA) requests (since 19 April 2001) have sought to gain access to its materials. The organizations Judicial Watch and Sierra Club launched a law suit (U.S. District Court for the District of Columbia: Judicial Watch Inc. v. Department of Energy, et al., Civil Action No. 01-0981) under the FOIA to gain access to the task force's materials. On 5 March 2002 the US Government was ordered to make a full disclosure; this has not happened, pending appeal. In the Summer of 2003 a partial disclosure of these materials was made by the Commerce Department. This resulted in the release of documents, maps, and charts, dated March 2001, of Iraq's, Saudi Arabia's and United Arab Emirates' oil fields, pipelines, refineries, tanker terminals and development projects. That case eventually went to the Supreme Court and the ruling was to send the case back to the Court of Appeals.  (Wikipedia: Full article here)

We still don't know the "who, what and why" of those meetings. All we know is the result -- $3 gas and heating bills that will shove millions of Americans into deeper debt this winter.

There are only two conclusions we can draw from that, and neither reflects well on Cheney, et al.

1) This is what they intended all along. Oil company profits have soared, and will now go even higher. If this was the intended result, it worked. The administration has allowed oil companies to pillage and plunder, not only the American people, but other, less well-connected industries and small businesses now saddled with astronomically high energy bills.

Rise in oil prices a boon to drilling-equipment companies

Bloomberg News -- December 18, 2007

HOUSTON: Oil prices hovering around $90 a barrel are doing a lot more for shareholders of Cameron International and Baker Hughes than for investors in Exxon Mobil and Chevron. Halliburton, a large oil field contractor, will gain 30 percent in the next 12 months in New York trading, and Baker Hughes will advance 26 percent, according to the average of analyst forecasts compiled by Bloomberg. Exxon, in Irving, Texas, and Chevron, based in San Ramon, California, will appreciate less than 4.4 percent, the data show.An investor who took $10 million out of Exxon to buy Halliburton would increase his returns sevenfold to about $3 million (Full)

Or

2) This was not the intended outcome of the energy policies they cooked up behind closed doors, meaning that they not only failed the American public, but did so in the most spectacular fashion.

Either way, someone needs to pay. But before we can begin building the gallows, we need to know who had a hand in creating this mess. And, since this administration has proven good at one thing --- keeping inconvenient information out of the hands of journalists and even Congress, there seems only one way to get it out of them -- indictments. An indictment for conspiracy to fix prices, defraud consumers and investors and whatever else a room full of wingtip wearing class action lawyers can dream up,  naming Cheney and 100 John and Jane Does should be brought immediately. What grand jury of ordinary Americans wouldn't relish slapping their John Hancock on such an indictment?

Then send the FBI to interview Cheney, who will likely not have forgotten what happened to his former aid, Scooter Libby, when thought lying to the FBI was a no-brainer. Let Cheney spend some of his own money on high-price DC lawyers, like Robert Bennett, who've become rich defending political scum caught red handed up to no good.

And there's work for Congress to do as well. Before Democrats regained control of Congress hearings were held on surging gas prices. But at the time Sen. Ted Stevens, R-Alaska, chaired the Senate committee. Stevens is not only one of the most crooked politicians in DC -- he's currently under investigation for taking bribes from energy producers in his home state -- but he is also in the pocket of Big Oil. Consequently he would not allow the swearing in of any of the oil company execs who testified. In other words they had a liars free card.

Now that the Democrats chair the relevant committees it's time to haul those executives back up to the Hill, and this time put the little bastards under oath, just as Rep. Waxman did with the tobacco executives over a decade ago.

I've said it before, but it needs to be repeated and repeated -- America cannot let the evil-doers in this administration simply slip out of town next January as though they didn't do anything wrong. Their list of misdeeds reads like something you'd expect in some third world banana republic, not America. At least not my America. They must face the music. They must.

Otherwise the message sent ahead to future administrations will be that if you bury the evidence deep enough, stonewall long enough and dissemble well enough, do whatever the hell you want while in office. Because once you leave town no one will bother coming after you.

Relevant Quote of the Day

"So God help me, I can perceive nothing but a certain conspiracy of rich men procuring their own commodities under the name and title of the commonwealth. They invent and devise all means and crafts, first how to keep safely, without fear of losing, that they have unjustly gathered together, and next how to hire and abuse the work and labour of the poor for as little money as may be."

Of the Religions in Utopia, St. Thomas More

January 2, 2008

Borrowers:

Victims or Accomplices?

Capitol One asks, "What's in your wallet?" Of course, they really don't care what's in your wallet, as long as it's a Capitol One credit card -- and only that. The less real cash in the wallet the better. That way you'll have to use their credit card to buy the stuff they know you'd buy if only you had the dough.

Who needs cash anyway when they'll lend it to you, at 18%. Be late on  a payment and they'll jack you ass up to 32% annual interest. (That's $320 annual interest on every $1000 owed, for the math-impaired.)

Over the past decade those offering fast, easy and expensive credit have proliferated faster than Indian Casinos. Everyday they crowd our mail and email inboxes with pre-approved lines of credit in the thousands of dollars.

As a result Americans now owe these plastic peddling John Gotti's an average of $8000 per household. Meanwhile the American savings rate has dropped to minus 1%. Which means a shocking percentage of Americans no longer even live paycheck to paycheck. They have to borrow before that next paycheck.

Then there are the mortgage lenders from hell. Thanks to the Capitol Ones of the world, all those cash-strapped Americans were still able to load up on wide-screen TVs, all kinds of furniture, leaf blowers and surround sounds systems, they now also "deserved" their own home to put them in.

But first lending standards that had, since the end of WW II, had made America the homeowners capitol of the world, had to be chucked. Lenders didn't want the herd culled down to just traditionally "qualified borrowers." No siree, they wanted to lend to all comers.

When we bought our first home back in 1971 no bank would loan one cent more than 80% of the appraised value of the home. That required the buyer to have a 20% interest in the property the day the loan closed. Why? Duh!

But such rules limited the pool of borrowers that could qualify for a loan. So the lending industry sent healthy doses of dough to Washington and got the rules loosened, then loosened again, then again. After all, the Republicans were in charge now, and they believed "government was the problem." And, next to the taxman, federal banking regulations and the regulators that enforced them, were the biggest drag on the economy of all -- or say they said.

The first offspring of those efforts were so-called "low-doc" loans. The industry had argued that all the paperwork required before the advent of computers was clogging up their automated systems and slowing loan fundings. So the low documentation loan was born. Borrowers were required to provide fewer and fewer documents supporting their contention that they could actually afford, and are likely to repay, a loan.

Once the housing bubble began to really puff up, lenders even bristled under the minimalist restrictions of low-doc loans. They whined about it and, once again, Bushite banking appointees shrugged and said, "what the hell."

And so were born "No-doc" loans... referred to in the lending industry itself as "liar loans," because a borrower could claim anything and not have to prove it.  It was the lending industry's version of "don't ask, don't tell."

The rush was on. Home sales boomed. Online applications allowed borrowers to refinance their homes on a whim, while drunk or on the toilet. Lenders hauled in lending fees by the billions.

But another limiting obstacle loomed.  Once they lent to finance a home purchase, lenders could no longer actively milk that borrower. That's when lenders decided that the old "home improvement" loan needed some modernizing as well. In the "stupid old days" lenders required that borrowers use home improvement loan money on -- are you sitting down? -- home improvements. That way if the borrower defaulted the lender would have security for their loan in the form of capital improvements.

That limitation had become a roadblock, keeping lenders from tapping into the rising value of homes already owner occupied. So the home improvement loan was killed off and replaced by the "home equity loan." That put lenders were in the ATM business, encouraging homeowners to tap what equity appeared in their home to purchase whatever they felt entitled to; cars, boats, more TVs, vacations... spare the lender the details. The lender didn't care.

So the old-fashioned American dream morphed before our eyes into a frenzied binge of lend & spend, lend & spend, lend and spend. What our parents would have called a "spend-thrift" lifestyle, Republicans pointed to as proof  "the American economy is on a roll."

But rolling to where? Anyone with a measurable IQ could tell that it wasn't a sustainable path. It was something more recognizable as ski jump, than a highway. Tallyho! Sooner or later borrowers were going owe more than they were capable of repaying. Or the underlying assets securing those property loans would decline in value, becoming worth less than the amounts owed. Or, more likely, both things would happen. And now they have.

Just yesterday I was reading one of the many sob-story articles that are popping up all of a sudden, bemoaning the fate of America's debt-ridden consumers. This article told of a couple that still owed $9500 on their SUV, but really, really, really wanted a new big-cab pickup.

And, surprise, surprise, they found a Dodge dealer more than willing to help them have it their way. Yes, they drove home in their new truck and the helpful dealer and sub-prime lender arranged the whole thing. They simply took the SUV in trade and added the $9500 the couple still owed on it to their new 7-year loan.

Now the couple was now having trouble making the payments on their new $45,000 auto loan.

How am I supposed to feel about that couple? Sorry? Forget about it. The lender, dealer and their  numb-nuts victims deserve one another. The lender deserves to take the loss of a repossession, and the couple deserves to lose their shinny new, gas guzzling big-cab pickup. Darwinism demands a price for stupidity.

The same goes for the folks who bought homes with 100% financing -teaser rated- negative-amortized- adjustable-later- double-mocha- double-sugar-moron home loans. Had those people developed even a passing relationship with a pocket calculator they would have known better. So, back to being renters.

And to all those homeowners that decided it was smart to scratch every life-style itch with equity from their domicile residence, a pox on them too. Their parents and grandparents generations had mortgage burning parties the day they made their final home loan payment. They were smart. Too many of their offspring somehow did not get those genes. Instead of paying down their mortgages they increased them, then spent the money on wasting "assets." Why die with a positive bank balance when you can go out soaked in red ink. Heirs? Let-em eat cake.

Then there's America's lenders. If I were a prosecutor I'd have a great circumstantial case proving that, even as lenders were pushing loans, they knew better than to hold them themselves. Someone was going to get the mother of all screwings, and they didn't want it to be them.

Which is why they "securitized" those loans. They bundled up thousands of loans into packages, mixing in the good, the bad and the ugly, and sold them to investors in heat for higher returns. 

Of course those investors should been a little suspicious of the lenders, "take our loans, please," offer. They should have done their due diligence. Instead they couldn't see -- or didn't want to see -- past the high returns. Anyway, they figured, what could possibly go wrong with America's housing market?  (You see, in the credit world the list of suckers is not limited to just the borrowers.)

As for those lenders that filled our TV screens with ads peddling pure, unadulterated fiscal crack, let them to die -- let them die slowly, painfully and publicly. Let their shareholders sue and then scramble among lending company bones for what pocket change remains.

Lenders, borrowers, investors... I haven't an ounce of sympathy any of them. Borrowers should have done the math, and if they couldn't do simply adding, subtracting, division and multiplication, they were likely unqualified for the loan(s) they got in the first place.

Lenders should have stuck to tried and true lending standards. Instead they embraced a self-serving, "consumers are asking for it spending like that," philosophy. Once respected lenders, like Countrywide,

devolved into the equivalent of child molesters: "Hey there little girl, want a nice teaser rate?"

(An Aside: Now that the mortgage markets are in free fall, lenders have found two new pigeons to roast: students and the elderly. Which is why those "refinance your house," ads have been replaced by ads touting student loans and so-called reverse mortgages.)

All of which answers the question posed above.  They were co-conspirators - one and all. The New Year will see them all singing a new tune. No longer is it, "Happy Days Are Here Again." The new song is more like;

"Bad loan, bad loans -- whatschya gonna do,

 whatschya gonna do when they come for you?

Band loan, bad loans..."

December 20-January 3 2008

Pearls For Swine?

There's this newspaper clipping that's been sitting among the flotsam of my desktop for the last week or so. I tore it out of the December 20 Wall Street Journal because it struck me. Struck me how? Well, that's pretty much what I've been trying to figure out since then.

Having lived through the last seven years of you-know-what, I figured I'd been rendered immune further from shock or awe. And I was sure I'd exceeded my lifetime supply of irony-spotting.

Then I saw the story in question. It couldn't have been considered very important by WSJ editors, because it was buried on an inside page. But it sure jumped out to me. The headline asked:

Who Bought the Magna Carta?

The story answered it's own question:

"Talk about your historic takeovers. David Rubenstein, co-founder of the private-equity firm Carlyle Group, bought a 710-year-old copy of the Magna Carta for $21.3 million on Tuesday. "(Full Story)

If you've put up with my rants for any time at all, you know I'm no lover of conspiracy theories. And so that's not where I;m going with this. The Carlyle Group has replaced the Trilateral Commission as the conspiracy-minded's invisible hand of all things devious and evil. I don't see it that way at all. Instead I see the Carlyle Group for what it is -- America's preeminent conduit of the fruits of crony capitalism.

Founded in 1987 with $5 million, the Washington-based merchant bank controls nearly $14 billion in investments, making it the largest private equity manager in the world. Carlyle doesn't dabble in investments. It buys and sells entire companies the way most other investment firms trade shares of stock.

I'm not saying that the Magna Carta's new owner, David Rubenstein, is a bad man. I did some research and he gives a lot of (tax deductible) money to worthy charities. But then, why not? If members of this exclusive group have anything in excess, it's money.  At any point in time, Carlyle and it's investors have vested interests virtually any thing important that's going down in the world. 

Wars are bullish for Carlyle. Which is why Carlyle's board of directors and advisor's has read like a Who's Who of all things that go BANG -- and KA-CHING.

Oh, and all things Bush too.

Former president George H.W. Bush is a Carlyle adviser, as is former British prime minister John Major who heads its European arm. Former secretary of state James Baker is senior counselor, former White House budget chief Richard Darman is a partner, former SEC chairman Arthur Levitt is senior adviser -- the list goes on.

Carlyle has, from time to time, played the role of power-legacy incubator, as it did when asked to find a no-work job for George H. Bush's good-for-nothing son, George W. George and Barbara Bush are close to the Rubensteins. David, his wife and three children tagged along on an African safari with Barbara Bush.

Four years before George W. Bush's first run for Texas Governor, Rubenstein was asked to find a soft spot for Georgie to cool his heels and earn some easy money. Carlyle had just purchase Caterair, a company that provided food service to the airlines. A Bush family confident came to Rubenstein and pitched young George.

"...we were putting the board together, somebody [Fred Malek] came to me and said, look there is a guy who would like to be on the board. He's kind of down on his luck a bit. Needs a job. Needs a board position. Needs some board positions. Could you put him on the board? Pay him a salary and he'll be a good board member and be a loyal vote for the management and so forth...We put him on the board and [he] spent three years. Came to all the meetings. Told a lot of jokes. Not that many clean ones. " (David Rubenstein)

(Irony alert: Fred Malek received his 15 minutes of fame in the 1970s as deputy director of CREEP (Committee to Re-elect the President), the Nixon White House operation behind Watergate.)

Did Carlyle's managers laugh at George's jokes? Hard to say. More likely they just grinned and bore it, which paid off a decade and half later:

April 2003: Directors of one of the world’s largest armament companies are planning on meeting in Lisbon in three weeks time. The American based Carlyle Group is heavily involved in supplying arms to the Coalition forces fighting in the Iraqi war.

It also holds a majority of shares in the Seven Up company and Federal Data Corporation, supplier of air traffic control surveillance systems to the US Federal Aviation Authority. The 12 billion dollar company has recently signed contracts with United Defense Industries to equip the Turkish and Saudi Arabian armies with aviation Defense systems.

Top of the meeting’s agenda is expected to be the company’s involvement in the rebuilding of Baghdad’s infrastructure after the cessation of current hostilities. Along with several other US companies, the Carlyle Group is expected to be awarded a billion dollar contract by the US Government to help in the redevelopment of airfields and urban areas destroyed by Coalition aerial bombardments. (Full Story)

And, talk about being in on the ground floor of the "War on Terror:" On September 11, 2001, the day two planes crashed into the World Trade Center, the Carlyle Group was hosting an investors conference at the nearby Ritz-Carlton, a conference attended by none other than Osama bin Laden's brother. George H. Bush attended the conference the day before and had met personally with the bin Laden kin.

No, I'm not siding with the 9/11 conspiracy folks. I still think they're nuts. I am simply making the point that when it, if it's big, or promises to be big, the Carlyle Group makes sure it has an arm lock on good hunk of the action. 

Former Secretary of State James Baker is (of course) a member of Carlyle's inner circle and he bristles at the notion that the company somehow manipulates world events.

"I say that's bullshit, and you can print it!" Baker snapped at a reporter. "Somebody would say, 'well, you had one of the bin Laden brothers as an investor.' Well, that's exactly right," he says, adding that the bin Ladens are one of the wealthiest families in the Middle East and have disowned Osama.

(Duh Alert: After 9/11 Rubenstein announced he had returned the bin Ladens' $2 million investment.)

Rubenstein has stopped trying to deny the benefits of his company's toady hyper-connectedness:

"We've actually replaced the Trilateral Commission" as the darling of conspiracy theorists,"  Rubenstein jokes.

 (Irony alert:  Rubenstein is also a member of  said  Trilateral Commission.)

So there we are. The new owner of one of the most important documents in mankind's march towards democracy has been purchased by Carlyle co-founder David Rubenstein. His new acquisition will be housed and conserved, at taxpayer expense, at the National Archives. 

The value of Rubensteins copy of the Magna Carta is sure to continue to rise, even as the paradigm-shattering rights it was the first to enshrine into law slip, one by one, from our lives today.

Which brings me to the next story that caught my interest:

From: Privacy International

Each year since 1997, the US-based Electronic Privacy Information Center and the UK-based Privacy International have undertaken what has now become the most comprehensive survey of global privacy ever published. The Privacy & Human Rights Report surveys developments in 70 countries, assessing the state of surveillance and privacy protection.

The most recent report published in 2007, available at http://www.privacyinternational.org/phr, is probably the most comprehensive single volume report published in the human rights field. The report runs over 1,100 pages and includes 6,000 footnotes. More than 200 experts from around the world have provided materials and commentary. The participants range from eminent privacy scholars to high-level officials charged with safeguarding constitutional freedoms in their countries. Academics, human rights advocates, journalists and researchers provided reports, insight, documents and advice. In 2006 Privacy International took the decision to use this annual report as the basis for a ranking assessment of the state of privacy in all EU countries together with eleven non-EU benchmark countries. Funding for the project was provided by the Open Society Institute (OSI) and the Joseph Rowntree Reform Trust. Follow this link for more details of last year's results.

The intention behind this project is two-fold. First, we hope to recognize countries in which privacy protection and respect for privacy is nurtured. This is done in the hope that others can learn from their example. Second we intend to identify countries in which governments and privacy regulators have failed to create a healthy privacy environment. The aim is not to humiliate the worst ranking nations, but to demonstrate that it is possible to maintain a healthy respect for privacy within a secure and fully functional democracy.

This study and the accompanying ranking chart measure the extent of surveillance and privacy. They do not intend to comprehensively reflect the state of democracy or the full extent of legal or parliamentary health or dysfunction in these countries (though the two conditions are frequently linked). The aim of this study is to present an assessment of the extent of information disclosure, surveillance, data exploitation and the general state of information privacy.

Invasion of Privacy -- At a Glance

What Now?

Benazir Bhutto was a dead-woman walking the day she set foot back on Pakistani soil. It was only a matter of time, and that time came today.

While I'd like to lay at least some blame for Bhutto's assassination on Bush administration meddling in Middle East politics, I can't. Instead the blame for this latest regional bloodletting lands squarely and exclusively in the lap of what I have come to think of as "Muslimocracy" -- the primacy of Islamic law, or Sharia, which is still deeply rooted in the souls and minds of the people of that ever-troubled region.

Muslimocracies view the non-Muslim world as their an enemy, and anyone within a Muslim nation who does not share that view,  is viewed as a friend of their enemy.  That is what got Bhutto killed today.

I rarely agree with George W. Bush on anything, but he was right once. It was when he was running for President the first time. Back then he warned against wasting US lives and resources on "nation building" efforts abroad.

Then he got elected and embarked on the most audacious, aggressive and illogical nation building effort in modern history. As a result the world got to see the wisdom of Bush's original position and the folly of his current one.

Today, when someone criticizes Bush for trying to bring democracy to the backward Muslim nations in the Middle East, he scolds them for displaying "the soft bigotry of low expectations."

Well, sometimes low expectations are not the product of bigotry, but data. As a self-described country boy Bush surely must have heard some crusty old farmer remark, "You can lead a horse to water, but you can't force it to drink."

Which brings me back to Pakistan -- et al. You can lead them towards democracy but you can't make them democratic.  And, in the rare instances where they apparently relent, they use democracy to enshrine Sharia law, which is to democracy a lynching is to justice. (Remember how the Palestinians  embrace of democratic elections resulted in the elevation of Hamas. And, if free and open elections were held today in Egypt the fundamentalist Muslim Brotherhood would be swept in to power.)

As I've noted in more than one previous post, Pakistan is not our ally in the war on terror. Neither is Iraq. Nor is Egypt. And most certainly not Saudi Arabia. Those countries are our allies the same way a cobra is an ally of its snake charmer.

Unreconstructed Islam has been and remains Muslim country's kryptonite against super-power strength. The Soviets learned that the hard way when they tried to occupy Afghanistan. The US is now locked in the same futile exercise of imperial hubris in both Afghanistan and Iraq, and possibly soon in Iran and Pakistan. It was a lesson learned a century earlier by the British, as immortalized by Kipling:

Now, it is not good for the Christian's health

 to hustle the Aryan brown,

For the Christian riles, and the Aryan smiles

and he weareth the Christian down;

And the end of the fight is a tombstone white

with the name of the late deceased,

And the epitaph clear: "A Fool lies here,

who tried to hustle the East."

Of course somethings have changed over a century. In particular, nuclear weapons, of which Pakistan possesses as many as 100 air and missile-mounted nukes.  If one or more of those active nuclear weapons falls into the hands of al Qaida we can be assured they will used it to demonstration just how much Allah hates non-Muslims. You don't have to be a Neo-con to believe that.

Which begs the question -- in light of the latest democracy-farce being played out in Pakistan, how should we treat the kind real threats posed by a radicalized Muslim Middle East?

In a word: containment.

We won the Cold War largely by containing the Soviet Union's expansionist ambitions. And we won that long war without the level of bloodshed we've already experienced in Iraq, or the amount of bloodshed we will incur if we continue trying to force these people to drink from the democratic pond.  Instead we told the nations of the Soviet bloc that, if they wanted communism, fine, it was all theirs. But, we made clear, don't look for any financial, political or military help from us. In essence we let them stew to death in their own dysfunctional communist pots.

The Muslim Middle East is currently addicted to its own dysfunctional social/religious philosophical code, unreconstructed Islam. And that will continue to poison almost any relationships they try to form with the non-Muslim modern world. Christianity had to re-calibrate hundreds of years ago in order to survive and coexist with scientific and social progress. Islam has yet to do so and is therefore hopelessly out of step with modernity.

In the Muslim Middle East today, half-educated Mullahs have more influence over what their people know and believe than anyone inside or outside their countries. And much of what they believe is the very reason their countries are backward, violent places. For example, half their population  -- women -- are barred from contributing to their society's governance, commercial or even social development -- a shocking waste of human capital for countries that need all the human capital they can get. But it was exactly that kind of misogynistic ignorance that played a role in Bhutto's death today.

There is only one cure for addiction, be it addiction to a substance or a crippling ideology, and that's to let the addicted hit rock bottom. The addicted must be ready to shake their addiction. Until then they are nothing but blackholes for charity, advice or other efforts to save them from their themselves. Western military and financial aid to nations like Pakistan and Iraq are like financing a saloon for alcoholics.

Instead the west should treat the nations of the nations of Muslim Middle East the same way we treated the nations of the Soviet Bloc. Those nations in the Middle East that refuse to disengage their governments, military, security forces, schools and financial institutions from the yoke of unreconstructed Islam should be held at arms length by the rest of the word. In other words, they should be contained and isolated.

Bush keeps saying that we need to believe terrorist when they say they want to destroy us. Fine, so we also need to believe them when they say they want Sharia law. Well fine, so get the hell out of the way and let them have it -- let them have Sharia law in spades.

But what about those nukes in Pakistan, and maybe someday in Iran? The west has to get this one  right -- and the first time. The west should be ready to use its military assets, but with a kind of care and  precision that's been woefully lacking of late. The only national interest the US has in that region should be defined as containment and doing whatever needs doing to insure that those nukes in Pakistan can never be used, by anyone, against anyone.

No one can say exactly what that means in what the military likes to refer to as "kinetic action." But blunt force bombing -- the first choice among Bush administration hawks -- must be reserved should the day ever arrive when everything else has failed. Instead the Pentagon and CIA should use some to the $60 billion a year we give them for intelligence activities to get their hands on those nukes and get their hands on the key individuals in those countries who produced and/or proliferated them. And frankly I don't give fig how they go about getting that done - just that it gets done. Because when it comes to nuclear weapons it only takes one to ruin your day, and the day of a few hundred thousand close friends and relatives.

Finally, what about oil? If we contain the nations of the Muslim Middle East we can kiss our oil supply from there goodbye.  What about that? Well the day was coming when the US would have to get off Middle East oil one way or another. We could have -- should have -- done so slowly, methodically and in ways that did not cause widespread hardship. But we didn't, so now we will just have to bite the bullet, declare a national energy emergency and do what we have to do to get by for a while. Sorry. But sometimes there are no sacrifice-free options in the world of realpoliks.

If we haven't learned these lessons yet we surely will.  The only question is how many more US troops and treasure will have to be wasted beating our heads against that Islamic wall before we figure it out. They don't want democracy, at least not yet. And they won't want it until they get an industrial dose of what they keep telling us they want, Sharia (Islamic) law.

Which is why I say to them, "bon appetite." Give us a ring when you've had a belly full.

The News For Real Wiki

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A clean and well-lighted place to blow off steam

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December 19, 2007

What an Annoying Year!

Whew, has this been an annoying year, or what! I figure 2007 has been the most annoying year of my 62. I even did up a list of just the top 20 things I became sick and tired of during the past year.

Here they are, in no particular order:

1) I'm sick and tired of being bombarded by TV ads with American Indians telling me that their casinos are making life better for everyone, not just the ten members of their tribe. Have you ever been in one of those casinos? Just how are casinos making life better for the bus loads of gray-haired codgers who upload their meager Social Security checks into Chief Wampum's slots? And what about all those already over-extended, mortgage-poor, credit card maxed out working stiffs so desperate their last remaining hope to hit a progressive-slot jackpot? How is the spreading plague of Indian casinos helping those folks?

So knock it off with those phony feel-good ads and replace them with something that at least approximates the truth. Something like this would be more tolerable:

"We had a sweet thing going before Europeans showed up, uninvited, and mugged the living crap out of Indian tribes from coast to shinning coast. Well that hunk of Karma has come home to roost at our Indian Casinos where we are now happily, and profitably, doing the same thing to you. We even have a name for you... The White Buffalo."

Now, that's at least true, and defensible. I can live with that. But even white-guilt has its limits and those spoken-with-forketh-tongue, Indian-casinos-are-good-for-us TV ads have pushed that limit well beyond the breaking point.

2) I'm sick and tired of all things bimbo. Paris, Britney, Lohan...and all those like them. The only time such appaulingly stupid people should appear on my evening news is if they should stumble in front of the Presidential limo, get run over but survived and, once out of a coma, scribble out the solution to Einstein's unified field theory. Otherwise I never want to hear their names or see their vacant faces on the news again. They are nature's most useless and annoying creatures. CNN and MSNBC -- don't waste another electron reporting on these people because electrons have more important things to do -- and so do you.

3) I'm sick and tired of having to pretend that Christian fundamentalists are entirely sane when they announce with straight faces that the earth was created in six days, and is not billions of years old but actually just 6000 years old. And that dinosaurs and humans coexisted because, "In fact, at Answers in Genesis, we call dinosaurs 'missionary lizards.' No sane literate person would -- could -- hold such utter nonsense to be true. Such pronouncements should be treated for what they are -- evidence of ignornace, mental illness or both.

Because they are provably false. They are NOT a equally valid scientific theory. They are the product of mass-hysterical-crazy thinking -- viral nonsense. People who believe such things, and try to get others to believe them, should be treated the exactly how we treat people who walk city streets shouting at things only they can see. And when one of these zombies shows up at a school board meeting demanding religious mythology be taught in science class, they should be politely asked to either shut up or leave. If they refuse then someone needs to call the cops to remove them to the nearest psychiatric facility and placed on a 36-hour hold. (Except in Texas, which we all know is a lost cause.)

4) I'm sick and tired of every politician running for election or re-election testifying that they, too, "believe." Believe what? Well, they keep that kinda of fuzzy. Politicians understand that, when you're seeking the votes of people who believe crazy things, you've gotta stay vague. That's because metaphysical-crazy comes in more flavors than Baskin-Robbins. No two crazies are the same, but they do all have one thing in common; they believe crazies of a different flavor are ... well, crazy. Which is why politicians play their "crazy belief cards" close to the vest. Instead of risking losing crazy votes by getting specific about precisely what kind of metaphysical things they may or may not believe in, they vaguely reasure them with a wink, wink, nudge, nudge -- "Just trust me folks. I'm at least as crazy as you."

5) I'm sick and tired of my country listing among our "friends and allies" creepy, unsavory, smarmy, self-indulgent, utterly despicable regimes -- to wit -- Saudi Arabia and the Saudi "royal" family. John Gotti's family had more royal blood in it than the 7000-odd dictatorial, misogynistic sheiks that run Saudi Arabia. If they weren't squatting atop lakes of oil the only kingdom they'd be lording over would have horns and require milking twice a day. If there's a more despicable bunch of mobsters masquerading as leaders today, I can't think of it. And I'm sick of seeing our moron of a President walking hand in hand with these cross-dressing, lying, cheating, terrorist-financing, rape-victim-lashing Arab home-boys, at the same time we continue embargoing Cuba and shaking a threatening fist at Iran.

6) I'm sick and tired of hearing about how Pakistan is a "valuable ally in the war on terror." No they're not. Hell, they're not even a real democracy anymore. Also everyone knows that the Pakistan army and intelligence services are lousy with al Qaida and Taliban sympathizers. Calling Pakistan an ally is like declaring George W. Bush one of America's most accomplished Presidents. The day Pervez Musharraf fired the whole Supreme Court and replaced them with handpicked Clarence Thomas' and Anthony Scalia's, we should have given NATO troops in Afghanistan the green light go into Pakistan's tribal regions and do whatever needed doing there. The other thing we should have done a long time ago is to dispatch a team of Navy Seals to snatch A.Q. Khan -- the guy who spread nuclear bomb technology from North Korea, to Lybia and Iran. Khan is currently under "house arrest" in Pakistan. Snatching him and bringing him to justice would send a message to anyone thinking of peddling nukes that they'll never live to spend the money.

7) I'm sick and tired of "Billery." Bill and Hillary Clinton have worn out their welcome in my head. I appreciate Bill's accomplishments as President. But fine, can we move on now? I didn't appreciate the Bill and Hillary soap operas the first time around. But now the nation and world are too much in crisis to restart that kind of unhelpful diversions. Hillary is a smart and viciously accomplished pol. But rather than president, her skills could be put to better use as Senate Majority Leader. Ditch the nearly comatose Harry Reid and put Hillary in that important post. Because, unlike Reid, Hillary knows how to jerk leashes -- and actually likes it.

8) I'm sick and tired of the global warming deniers. They should be treated with the same sense of anger and disgust as Holocaust deniers... just more so. Denying the Holocaust only denies the murder of six million humans. Denying global warming and it's causes threatens to sentence hundreds of millions, maybe billions, of humans to slow, painful untimely deaths. I can't punch global warming deniers, though I'd like to. But if they persist they and their families should all be required to relocate to the lowest laying atoll in the Pacific.

9) I'm sick and tired of Wall Street and government "economists" blowing smoke up my ass about the state of the economy. I cut my journalistic teeth on financial crisis, so I know one when I see one coming. And one is coming. In fact, it's just now arriving. Don't tell me the "underlying strength of the US economy is strong." Bullshit. Consumer spending accounts for 70% of the US economy, and those consumers are tapped out. They can't even mug another dime of equity out of their now over encumbered homes. Even those usurious credit card companies won't lend them anymore until they pay off their overdue balances. Hello.....

The truth is we are heading into the worst case of stagflation in a quarter century. So, economists, spare me the happy talk. That crap might buy you some time by creating sucker rallies on Wall Street, but you are about to run out of suckers. Do you have a plan for that? If so, that's what what I want to hear from you... and quickly please.

10) I'm sick and tired of defense contractors, like Lockheed, running TV ads trying to convince me that everything they do is "for our troops in harms way." Gag me with a rocket launcher! Everything defense contractors do is in pursuit of billions of defense tax dollars. That's why they do it --- the ONLY reason they do it. They never seem to mention in their ads that every year... without exception...every year, they are each one caught red handed lying, cheating and stealing hundreds of millions of dollars more. And that, even when caught, not one of them has spent a day in the slammer for it. So, shut up with the "we do it all for our troops," crap, will ya? It makes me wanna reach through the TV and Blackwater your asses.

11) I'm sick and tired of teachers absolving themselves of any responsibility for the dismal state of American education. When I sat on a school board I suggested we grant teachers even more in pay raises than they were requesting. I only had one condition; that we be allowed to bypass teacher union roadblocks when we wanted to reward exceptional teachers and could promptly fire the well known loser teachers on our staff. Their response -- "No way Jose." You would have thought I'd asked them to undress or something. No personal accountability for teachers, not even if we paid them for it. If private industry had those kind of rules America would look like Somalia today -- which is why our education system nearly does.

12) I'm sick and tired of hearing that the US has "the best health care in the world." First of all my wife is a health care professional, which means I hear the real scoop every day she returns from work. Tales that curl the blood. We don't have the best health care in the world, we just have the most expensive health care in the world. It's a system run by a bunch of blood sucking private insurance companies that cherry pick the actuarial pool. They insure only those unlikely to need medical care, and reject anyone who just might. Those they refuse to insure eventually end up getting medical care on the public nickel. Wouldn't you love a business deal like that, one where you get to shove your risks off on the government allowing you to pocket all that low/no risk gravy? I sure would. I'm sick of it... pun intended.

13) I'm sick of paying a higher percentage of my adjusted gross income than Bill Gates and Warren Buffet. The Bush tax cuts have been a bonanza for the already super rich, and a big lump of coal for everyone else. For our national infrastructure the Bush tax cuts were a "who needs public infrastructure anyway!" The truth is that the rich got rich largely thanks to Americas generous, reliable and efficient taxpayer funded infrastructure -- roads, bridges, airports, ports and such. Therefore they should pay taxes that adequately reflect and reimburse the nation for that. At the end of the day, every road is a toll road, and the rich are nolonger paying their fair share of tolls.

14) On the same subject, I'm also sick and tired of hearing Republicans spout the nonsense that if you cut a rich person or corporation's taxes they will use that extra money to "create jobs for working Americans." No they won't. And no, they haven't.

What they have done with their Bush's tax cut bonanza is sock it away in tax-protected family trusts and then lobby Congress to eliminate the estate tax so their heirs can keep every dime of it. If any of that extra money does end up getting invested in a job-creating enterprise you can bet your low-wage bippy those jobs end up in China or someplace like China. So, spare the "trickle down" crapola fellas.

15) I'm sick and tired of spending $60 billion a year on intelligence services that aren't.

16) I'm sick and tired of Neo-con, lap-dog Republicans who have defended and aided administration officials who openly champion views of governance so un-American they border on neo-fascism.

17) I'm sick and tired of conniving, weaselly, cowardly Democrats who could have obstructed our nations slide toward totalitarianism -- but didn't -- and still haven't.

18) I'm sick and tired of hearing American auto makers whine about how they can't possibly meet higher fuel economy standards while the Japanese clean up doing just that. The last time this happened, back in the 1970s, the Japanese whipped Detroit's sorry ass by making higher mileage small cars while Detroit keep spitting out 8-cylinder behemoths. Then Uncle Sam ended up having to bail out Chrysler and put import quotas on Japanese cars so we didn't have to bailout the out GM and Ford as well. The Big Three dinosaurs are at it again, addicted to selling Hummers and gas-guzzling SUVs and fighting every effort to get them to switch to higher millage and alternative fuel vehicles. Maybe if we hadn't bailed them out of their last self-inflicted wounds they'd have come out with a Prisus before the Japanese this time. If GM had an ounce of sense it would change it's name from General Motors to Green Machines and get with the frigging program. I'm sick and tired of rewarding and enabling such stubborn, corporate stupidity and public and social malfeasance.

19) I'm sick and tired of soap-opera news stories that have runs longer than most Broadway plays. The next time some guy's wife goes missing, and authorities suspect he killed her and dumped her body someplace, don't tell me about -- at least until they solve the crime and actually know what happened. Even then such stories are for local news, so why are they on the national news in the first place? I'm sick and tired of these long, drawn out tales of dysfunctional relationships turned deadly. Nothing about these tales matters to anyone except the poor people directly involved, their families and immediate neighbors. There's absolutely no national news value to running these stories night after night, except a sick "entertainment" value. So, unless these sad cases are being caused by some communicable virus that's spreading at an alarming rate and heading my way, I don't want to hear about them -- it's not "news I need" -- or even want.

20) I'm sick and tired of these new "Christians are being persecuted" TV ads. You know, the ones where some Chinese kid narrates how she was forced to walk barefoot through the snow to a detention center because she wrote stuff about Jesus ... blah, blah, blah. The truth is the overly religious thrive on claims of persecution, real or Madison Avenue-imagined. Nothing stirs up the religiously enthralled like a ripping, tear-jerking tale of persecution. More importantly, nothing opens up the wallets of the herd faster either. One might suggest to them that maybe if fundamentalist Christians tried to be a little less "up everyone's nose," every time we turn around these days they might face less persecution. That assumes, of course, they really are being "persecuted" every time they make the claim -- which I doubt. Often what they view as persecution is simple, non-violent, rhetorical push-back from those of us who've heard quite enough about their supernatural pretend friend(s) of choice. They consider such push back "persecution." We call it self-defense.

So there, my top 20 list of things I got sick and tired of in 2007. Send me your list and I'll add it in the best ones in days ahead. Listing them probably won't change anything, but it's very cathartic.

Readers "Sick Of's"

Posted on our new News For Real Wiki page: HERE

(And don't be shy about posting your own list there as well. It's easy. Just click the "Easy Edit" button and go to town.)