Friday, December 30, 2011
Friday, December 02, 2011
Christine Legarde, and
When Barney Frank was discussing his legacy on PBS yesterday, one the things he emphasized was the consumer protection provisions of the Dodd-Frank law. Elizabeth Warren was largely responsible for that, and then when push came to shove, Obama abandoned her, clearly as a result of pressure from the crooks on Wall Street, led by Jamie Dimon of Chase Bank.
Christine Legarde did a good job as French Finance Minister and is currently sorely missed as France tries to deal with the European financial crisis. However, she will be able to help as head of the IMF. I trust her to do the right thing more than I did her disgraced predecessor, Dominique Strauss-Kahn.
Angela Merkel gets a lot of bad press from financial journalists and commentators, in part because they see her Germanic honesty as a rebuke to American dishonesty. People seldom mention that she is from the old East Germany, and grew up in conditions far different from the prosperous unified Germany that she now leads. She, more than others, remembers the trials and sacrifices that West Germany undertook to unify with East Germany. When they look at the sacrifices they are being called on to make for Greece, et al, the Germans can say, "Been there; done that." However, before the sacrifices were for fellow Germans; now the sacrifices are for countries and peoples with whom the Germans share much less. Although Europe needs to be saved, Merkel is right not to have Germany commit suicide to save its poorer partners.
Wednesday, November 09, 2011
This is also an example of the "beggar thy neighbor" policies pursued by many government jurisdictions, from nations to cities. One of the big Republican arguments for lower business taxes is that other nations have lower taxes; if we don't match their low rates, all companies will leave the US, they say. Within the US, companies move to the states with the lowest business taxes. Most big companies incorporate in Delaware because it has the most lenient laws governing corporations. In the Denver area, the Aurora suburb is bidding to take the annual stock show away from Denver proper by offering all kinds of tax advantages to it and the Gaylord hotel chain which would build a new hotel near the stock show grounds.
All of this takes money away from basic activities that governments perform, from defense to education to building and maintaining roads. Colorado just voted down a small increase in taxes for education, but it has millions to subsidize big corporations in "enterprise zones," or to get the stock show to move ten miles out of town.
Wednesday, November 02, 2011
He doesn't break down the doctors' incomes, but it's pretty well known that the richest doctors are the specialists, the heart guys, the bone guys, etc. Many of them getting rich on Medicare because old people have heart attacks, broken hips, etc. The general practitioners, who keep people healthy, rather than repairing them after they are sick, don't make nearly as much.
It's a system where the rewards are misallocated, and that threatens to destroy the whole American economy.
Thursday, October 13, 2011
They discussed Warren Buffett's release of his income tax. It shows he is correct that rich people who make most of their money from investments pay a lower percentage of their income in taxes than much poorer working people do. This country clearly hates people who work for a living, just like it claims to love veterans, but then won't give them a job when they come home from Iraq or Afghanistan. As a Vietnam veteran, I know that anybody who fights for this country for any but the most patriotic reasons is a fool. This country will kiss you on the lips while the TV cameras are on, and then stab you in the back when they go off. No one representing me in Congress is a veteran. When Senator John Kerry ran for President, George W. Bush's huge political apparatus "Swift Boat Veterans" reviled him (and every other Vietnam veteran) because Kerry was a veteran, Bush was not a real veteran. He spent the war getting drunk and becoming an alcoholic in the Alabama National Guard. Then after 9/11 he sent many National Guard troops to Iraq and Afghanistan, despite the fact that the National Guard has been his refuge from combat.
The best part of the "Morning Joe" clip above is the presentation by former Obama automotive czar Steve Rattner, which shows how badly income in the US has skewed toward the rich in the last few years. This is a corrupt government. Democrats and Republicans have betrayed the American people, by selling themselves to the wealthiest one percent. I have not joined the Occupy Wall Street protesters, but I am mad, too. This is a failed government run by cowardly, incompetent or evil people. The corrupt characters in HBO's "Boardwalk Empire" would be right at home in today's Washington.
On veterans again, I am very disappointed that the Army's Walter Reed Hospital has been closed and wounded Army soldiers transferred to Bethesda Naval Hospital. People like you don't understand that the Army and Navy are different. Or you probably don't care. But the Army and Navy have different cultures and traditions. It is truly insensitive to take someone who has spent five or ten years in the Army, and then when he gets badly wounded, to add to his problems by putting him in a Navy environment. No wonder so many of our troops have mental problems. But you don't care; you saved some millionaire ten dollars on his taxes.
Tuesday, October 11, 2011
According to the press, Awlaki encouraged other Americans to kill their fellow citizens and to oppose the US government, but it's not clear that he personally killed any Americans, or anybody else, for that matter. He was more an accessory to murder than a murderer. Secondly, its not clear that there was no other way to stop him than to kill him by remote control drone. That may have been the easiest way to kill him, but not the only way.
I think there should at least have been an effort to take him prisoner and return him to the US. I also think we should have tried to capture and return Osama bin Laden. The problem is that the US legal system is unable to deal with terrorists, because Americans are so afraid of them. Guantanamo should have been closed years ago, but Americans are afraid of the men there. There was some talk of a terrorist trial in Kentucky, and Sen. Mitch McConnell almost had a fit he was so scared. This is a man who refused to fight in Vietnam, and got his patron, Sen. John Sherman Cooper, to help get him out of military service during the war, although officially he got a medical discharge.
These legal niceties are what our troops are supposed to be fighting to protect, but we are afraid to apply them. In many ways Osama bin Laden won, because people like Barak Obama and Mitch McConnell are afraid to stand up for them. Of course, the real cowards were George W. Bush, who spent the Vietnam War becoming a drunkard in the Alabama National Guard, and Dick Cheney, who avoided service by churning out babies. These are men who liked running the country, but had no concept of what it was to serve the country. They were missing in action on 9/11. Bush flew away to Nebraska or somewhere, and Cheney retreated to a spider hole under the White House.
Monday, October 10, 2011
Meanwhile, the WP reported on the huge undertaking that the State Department is committing itself to by taking over in Iraq where the military is leaving off. After downsizing from hundreds of thousands of US military troops, about 50,000 remain in Iraq. Their functions will supposedly soon be taken on by the State Department Foreign Service. According to Wikipedia, there are about 15,000 Foreign Service officers total, staffing over 200 American embassies and consulates, as well as the State Department in Washington. Thus, the only way the State Department can even hope to cope with this mess is by hiring tens of thousands of contractors. The idea that State can manage tens of thousands of contractors, when according to the book mentioned above, it can't even manage the small scale programs it was running with its own officers , is ludicrous. Hillary Clinton is being the good soldier by taking on the mess left behind by the military, but it is bound to impact negatively on what in other countries is the Ministry of Foreign Affairs. State's expertise is political and economic analysis, not program management. The military managed not to lose in Iraq (at least not yet), but it is leaving a mess. The op-ed above says:
When my team tried to give away fruit tree seedlings to replant ruined orchards, a farmer spat on the ground and said, “You killed my son and now you are giving me a tree?”and
One Iraqi I met observed that the United States had sponsored expensive art shows in his neighborhood three years in a row, but did nothing about the lack of functioning sewers, electricity and running water. “It is like I am standing naked in a room with a big hat on my head,” he told me. “Everyone comes in and puts ribbons on my hat, but no one seems to notice that I am naked.”The WP compares the Iraq undertaking to the Marshall Plan, but after World War II, the US had clearly won. There was little danger of Americans being assassinated in Paris. The French and other Western Europeans still had competent bureaucrats to administer the American aid. Before the war, Western Europe had been more or less on a par with the US politically and economically. They shared similar cultures. None of that is true in Iraq.
It's possible that nobody really expects this to work. Maybe it's just a cover for the US to pull its military out of Iraq. But State will be left with egg on its face. And Iraq will still be a mess.
I don't think the US is serious about helping Iraq, especially when I look back at my experience in Poland after the fall of Communism. Newt Gingrich and the Republicans, with the cooperation of Bill Clinton and company, basically told the Poles, "You're on your own, unless there is some money-making deal we can line up an American company to get in on." Poland came out okay, but I think it's because the EU became Poland's Marshall Plan. America basically dumped Poland, but Western Europe came through. Maybe Turkey or China (or Iran) will come through for the Iraqis.
Monday, September 26, 2011
I had just gone through a similar situation in Warsaw when the US cut off funding for our joint science cooperation program years before the agreement was to expire. Once again, I was in the position of saying that the US would not fulfill its international agreements. I always did what I was told, but I was not a happy camper. I did not like representing an America that was a deadbeat dad, that made promises and then didn't fulfill them. I don't remember where I left this matter. The Italians were somewhat horrified that the US might default, and thus legally entitle North Korea to resume its proliferating ways. But I don't recall that they said definitely that they would help. I think we were only asking for about $2 million.
But I didn't like it. If I had wanted to do this kind of thing, I could have become a criminal lawyer or a bankruptcy lawyer. I wanted to be a diplomat for the greatest nation on earth; I didn't want to be like Hitler's German diplomats negotiating the Molotov-Ribbentrop Pact. The American government was too corrupt and dishonest for me, and so I left.
Helms-Burton and Children's Visas. Another nail in coffin of my career came late in my stay in Rome. I was at a reception for a satellite launching, celebrating a satellite that the US was going to launch for Italy. The launch did not take place as scheduled, but that wasn't the issue. At the reception I struck up a conversation with a man who worked on communications satellites for the Italian phone company. He said something like, "You must really hate me to deny a visa to Disney World to my daughter, just because I work for the Italian phone company." I was taken aback and asked him what had happened. He said his daughter had been denied a US visa under the Helms-Burton Act because the Italian phone company had some tenuous connection to Cuba through its cooperation with the Mexican phone company. Later I went and talked to the head of the consular section in Rome, and it sounded like this was indeed the case.
Unfortunately it reminded me of some books I had read when I first joined the Foreign Service. One of my friends from law school had been reading them, and said they had quite a lot about the Foreign Service. They were "The Winds of War," and "War and Remembrance" by Herman Wouk. They are a fictional account of several families, some American military officers and diplomats, and one a Jewish family living in Europe. A Jewish mother and child are trying to get out of Europe and go to Palestine, soon to become Israel, but she can't leave without a visa (shades of "Casablanca"). The German embassy in Rome is willing to give the mother a visa, but not her child. It was just too close to what America was doing to this Italian engineer. Punishing children for the crimes of their fathers is not something I am enthusiastic about, especially when the father's crime is just working for a company that has some weak connection to Cuba. I think by the time this happened, I had already decided to retire, but this made me glad that I had.
This was not Ronald Reagan's "shining city on a hill."
Tuesday, September 20, 2011
In addition, between by predecessor's departure and my arrival, the embassy had redesigned the science office suite. The way they had set it up, all of my assistant's visitors had to pass through my office to get to her office. The doors should have been arranged so that her visitors could enter her office directly from the reception area. I don't know what the suite had looked like before, but by the time I got there, the construction was completed.
Most importantly, the embassy did not want me. I had not realized that my assignment by the State Department was the result of a fight between the Embassy and the State Department headquarters in Washington. The previous Science Counselor had been a friend of the Ambassador's. He had been a political appointee in Ambassador Bartholomew's office, when Bartholomew had been an Under Secretary of State, and had traveled to Rome, when Bartholomew as assigned to Rome. However, the time he could serve as a political appointee, a Schedule C employee, ran out, and the State Department would not let him stay longer. I presume there was a big fight between the Embassy and Washington to try to get permission for him to stay. When that failed, the Embassy apparently decided that it wanted a particular Civil Service employee in Washington to replace him. The Foreign Service tries to look after its own, and apparently tried to block a Civil Service employee from taking a plum Foreign Service position in Rome. Thus, the call out of the blue to me in Warsaw asking if I would be willing to go to Rome. But after I arrived, it became clear that the Embassy had not given up and still wanted to get rid of me and get the Civil Service employee. Making my life difficult by not finding housing, for example, was part of that strategy. The Ambassador succeeded. I retired, and I think the State Department relented and approved the Civil Service employee as my replacement.
I guess I sound pretty weak in this description, not fighting the Embassy harder, but in my defense, ever since I didn't fight the draft and agreed to go into the Army and off to Vietnam, my desire was to serve my country, not to have my country serve me. I was willing to put up with hardships that were imposed by external forces, like the North Vietnamese Army, or living and working at an embassy in a poor country with few amenities. But I was not willing to accept hardships or mistreatment that were imposed by the American Government itself, in the government shutdown, or by the unwelcoming reception in Rome. It was not the government that I volunteered to serve.
I should add that in contrast to the unwelcoming official reception in Rome, several of the officers there were personally very welcoming, from the Deputy Chief of Mission (the #2 in the Embassy) to my assistant, who got furloughed when I got un-furloughed in order to travel from Warsaw to Rome during the shutdown.
One of the best parts of my job as Science Officer in various embassies was that I was the representative of NASA, and everyone loved NASA. In addition to being glamorous, NASA had stuff to give away, like observation time on the space telescope, rides on the Shuttle, etc. The local space agency always wanted to stay on my good side. When I came to Rome, I inherited an agreement under which the Shuttle would carry a tethered satellite for the Italian Space Agency. This satellite would be reusable. It would ride in the Shuttle cargo bay, and when the Shuttle was in orbit, it would be released on a long tether to collect data away from the pollution of the Shuttle. Then, when the Shuttle was getting ready to return to earth, the satellite would be reeled in, much like a fishing line would be reeled in. The satellite would be stored in the cargo bay and returned to earth until it was flown on another mission. It promised huge savings because satellites are so expensive to build, impossible to repair in space, etc.
On its first flight, however, the reel jammed, the tether broke, and the expensive satellite drifted off into space beyond the reach of the Shuttle. For a change, being the NASA representative was not so great. The crew of that Shuttle visited Rome, and while it was not billed as an apology tour for losing the satellite, that's basically what it was. Meanwhile, the head of the Italian Space Agency was in political trouble. While his problems were not directly linked to the failed satellite, losing the satellite did not help his position. I was unhappy, because I was feeling snake bit. I had had little to do with the mission, which had been planned long before I arrived in Rome, but I was there when it happened. It turned out that because I was retiring, the head of the Italian Space Agency and I left Rome about the same time. He was going to take some time off before moving on to his next venture. While my only fault was being in the wrong place at the wrong time, it added to the dissatisfaction I was feeling about the job. If the best part of my job, working with NASA, turned sour, there was not much left.
Saturday, September 17, 2011
Thursday, September 15, 2011
MTCR. Before the fall of Communism, there had been some security failure at the embassy in Poland, so that even after the fall, there was a lot of concern about security of classified material. As a result, there were a limited number of paper copies of classified cables, with few distributed to anybody except the office that had "action," i.e., that had to act on or respond to the cable from the Department of State. In other embassies, more people might have gotten "info" copies, so that they would know more of what was going on in the embassy.
Besides overseeing the science cooperation, which was cancelled, I also had responsibility for environmental issues and some nuclear related matters, one of which was export control matters such as the Zangger List, which controlled exports of items which might be used for nuclear proliferation. In that capacity, I often dealt with a Polish diplomat at the Foreign Ministry,. Ambassador Strulak, who worked on a variety of proliferation issues. One day while I was talking to him, he asked me if I could find out why the US had blackballed Poland's membership in the Missile Technology Control Regime (MTCR). This came as a shock to me, because I had worked on MTCR issues for years in the Department of State, and I had seen nothing about the MTCR in the embassy cable traffic. It turned out that the "action" on MTCR cables went to the political section, and I did not get a copy in the science section, although after years of working on the issue, I had to be one of the experts on the MTCR. In fact that is why Amb. Strulak had asked me about it. On one of his visits to Washington, he was asking around in the State Department about why Poland had been blackballed, and someone had told him to ask me in Warsaw, because I was an expert. Until then Amb. Strulak never knew that I had worked on missile proliferation as well as nuclear proliferation.
By then, however, I had been out of the loop for several years, working on other issues. However, I called back to my old office and talked to the man then running it, Vann Van Diepen. I had known Vann since he was in intern and I was an analyst in the State Department Bureau of Intelligence and Research. However, Vann told me there was nothing I could do, because President Clinton had personally decided to blackball Poland. It's not unusual for an issue that can't be agreed between agencies to go to the White House for decision. I also knew what the problem was: The MTCR was unwieldy because it basically operated on consensus. The US wanted to get a more controllable management structure before it got too big, and adding Poland would have made it bigger. On the other hand, the Poles wanted to cooperate so badly that they would not have been a problem in reaching consensus.
Anyway, I was disappointed that no one thought it worthwhile to consult me or even to inform me that this matter was on-going, when I had been the main working level person handling this issue a few years earlier in Washington. It was as if they didn't think the science office could handle a policy issue.
Skawina. Although they didn't think I should be involved in political matters, it was pretty much accepted that I handled environmental issues. This main mainly meant working with the Polish environment ministry, and supporting an organization called the Ekofundusz (or Eco-fund). The Ekofundusz was a non-governmental group funded by forgiven US debt. Instead of being repaid, the US authorized the Ekofundusz to finance environmental projects in Poland that it found worthwhile. I don't remember its budget, but most of the projects were relatively small, maybe in the tens of thousands of dollars.
For me one of the best things about the Ekofundusz was that it provided a refuge for liberal environmentalists who had supported the overthrow of Communism. In the mid-1990s when I was there, the old former Commies were back in power in many places, including the environment ministry. The Ekofundusz was like a Brookings Institution or Heritage Foundation, it gave the anti-communist environmentalists an office and a little salary until they had a chance to get back into government. This is the same kind of thing that the Maria Skladowska Curie Fund could have done for anti-Communist scientists and engineers, but by cutting off the funding, the Republicans cut them off at the knees. Fortunately, because of the vagaries of the law, the environmentalists' funds were not cut off.
In addition, USAID had a much larger environmental program as part of its agenda. One of its projects was to build a scrubber for an old electric power plant near Krakow, called Skawina. I frankly didn't pay much attention to it, although AID was better than the political section about keeping me informed. So, I knew we were building this scrubber, and we turned it over to the Poles. After a while, I began to hear from my Polish contacts that the scrubber didn't work. Basically, it blew exhaust from the power plant through a process in which lime stone was supposed to remove most of the sulfur from the gas. When I began to look into it, it turned out that it didn't work. The chemical properties of Polish limestone were not suitable for the process. It was somewhat galling, because the main Poles complaining were old Communist apparatchiks who were happy to see the US fail, but they were right that the system did not work. One took me to a much bigger power plant with working scrubbers; they were built by the Dutch, but were based on General Electric designs. I think that when I left Warsaw for Rome, Skiwina was still not working.
Thursday, September 08, 2011
Brazil Space Program. One of the first serious things that went wrong was years before I retired, while I was serving as the science officer in Brasilia in the 1980s. NASA was a great asset for the US in relations with other courntries. Because I was the embassy's representative for NASA, I had good relations with the Brazilian space agency, INPE. INPE wanted to build some satellites and ground stations to monitor them with, to survey the Amazon. The US bidder on the ground stations, Scientific Atlanta, for some reason failed to get its bid in on time and lost to a Japanese company. I persuaded INPE to reopen the bidding, and as a result, Scientific Atlanta won. Then the Defense Department, I think the office of Steve Hadley (who went on to be NSC chief), denied the export license for the ground stations. My friends at INPE were livid and my good relationship ended. I think Hadley was a Richard Perle acolyte in the Pentagon, and Perle hated Brazil.
Polish Science Fund. In the 1990s I went to Poland as embassy Science Counselor, where my main job was to oversee science cooperation beteen the US and Poland under a joint fund called the Maria Sklodowska Curie Fund which was to continue for five years. After about two years, the Republicans under Newt Gingrich were elected, and cut off funding for the cooperation under a clause in the agreement allowing either side not to fund it if funding was impossible. This was clearly inserted into the agreement for Poland, which faced many financial challenges as it emerged from Communism, but the US used the clause instead. For the rest of my tour, I was periodically called into the Polish Foreign Minsitry by a senior official and berated for the US not fulfilling its commitment. Meanwhile, Polish scientsts who had lost most of the government funding also lost what would have been an American lifeline, a sort of anti-Marshall Plan. As an added insult, the Ambassador eliminated my science office in the embassy, because there was no more joint program to oversee.
Government Shutdown. Meanwhile, the State Department asked me if I would like to go to Rome, because the Science Counselor there had been fired for some other budgetary reason. I agreed, but on the day I was leaving Warsaw with the car packed, Embassy Rome called and said don't leave because the government shutdown meant there was no money for travel. However, my wife and I then had no place to live. The house the embassy had rented for us was empty and was being returned to the owner. The idea that the US government would put us out on the streets of Warsaw was so abhorrent to me that it was pretty much the straw that broke the camel's back, as far as continuing to work for the US. I was usually the good soldier, doing as I was ordered, but this time I was so mad that I called Rome to see if I could get their order reversed. I did, and we started driving to Rome, but for me the damage was done. The US government had said, "Hey, you're expendible. You and your wife can die freezing on the streets of Warsaw. We don't care."
Vietnam War. It reminded me of the day I arrived in Vietnam, and the Army assigned me to Dong Ha on the DMZ, so close to North Vietnam that the dot on the map for Dong Ha projected into North Vietnam. I went where the Army told me to go, but for the State Department to do that to me and my wife was, I thought, beyond the pale. There have been a lot of Foreign Service officers assigned to Iraq and Afghanistan (without spouses), but hopefully, the State Department didn't drop them off in some God forsaken village and say, "Hey, we can't afford to come back for you. You will have to walk back. Try to avoid the Taliban." When I was at an artillery firebase near the Laotian border, Firebase Barbara, we had no American infantry support because we were turning over the war to the Vietnamese. We had two American "dusters" assigned to protect us, old anti-aircraft guns that fired 40 mm rounds with every round a tracer, firepower that tended to inspire some awe in the North Vietnamese. One night when there was a alert that we might be attacked because of activity spotted by an intelligence fly-over, our battalion headquarters said, "Don't give any gasoline to the dusters. Their supply people are lazy and incompetent. We don't want to help them out." Of course the alternative was to have the dusters not shoot to protect us. We gave the dusters the gas they needed. They blew away several square kilometers at the base of the mountain, and we were not attacked. Did the penny pinchers in Washington really want us to die? Probably not, but did they really care? Probably not. Did they really care about us in Warsaw? Probably not.
When we got to Rome, things did not get any better for me from a policy perspective. More on this later, Some topics:
Rome: Fisheries. Constitutional responsibilities and Ambassador's letter.
Rome: Tethered Satellite. Firing of space agency chief.
Rome: Help on North Korean Nuclear Proliferation.
Rome: Denial of Visas to Children. Helms-Burton and "Winds of War."
Friday, August 26, 2011
It is not unlike what Paul Krugman says in his NYT column. He said Bernanke is less likely to move aggressively to support the US economy if Rick Perry is going to call him a traitor for doing so.
Tuesday, July 26, 2011
As a Vietnam veteran I ask, because press reports, including a recent email from the American Legion, indicate that this Congress wants to drastically cut veterans benefits.
It sounds like Chairman Miller is from the Pensacola area. When I was growing up, the Pensacola Naval Air Station was one of the most important things around Pensacola, but I find it is not mentioned in the Chairman's bio. I grew up in Mobile, Alabama, and my mother and I used to shop at the Naval commissary while my father was serving in the Army in Korea during that war.
It is terrible that this Congress is attacking veterans as dead and wounded veterans come home from two wars in Iraq and Afghanistan and some kind of military action in
Wednesday, July 20, 2011
I have seen in the news that Elizabeth Warren is considering a run for the Massachusetts Senate seat held by Scott Brown. I can't imagine why a woman with her high moral character would want to join a corrupt, dysfunctional body like the US Senate, but she could only raise its standards. Nevertheless, she surely would have been more useful as head of the consumer agency.
The consensus seems to be that Congress will come up with some way to raise the debt ceiling, whether the minimalist Mitch McConnell approach to raise the ceiling but do nothing about the budget, or the gang of six maximalist approach to make huge modifications to the budget. Because I have no confidence in Congress, and because Congress has dithered until the last minute, I do not expect anything important to come out of this mess. I don't see how it can reform Medicare, Social Security and the tax code in less than two weeks.
I am hopeful that the ceiling will be raised somehow so that the US does not default on its debt at the same time that Europe is facing much more substantive debt problems. Europe has to deal with the future of the entire Euro zone, while the US is tied up in knots over a simple procedural issue. But the two together could bring down the world economy, or at least transfer world leadership from the West to China.
Wednesday, July 13, 2011
Thursday, June 30, 2011
The Huffington Post reports that the Republicans will keep both the House and the Senate in session. Basically, Obama asked for this yesterday. The question is whether they will do anything. Huff Post thinks somebody will just appear on the floor every few days and make some meaningless statement to keep the session active. If so, it will be meaningless for the debt crisis.
Another result, however, will be to prevent Obama from making recess appointments, in particular of Elizabeth Warren. I find it significant that the Republicans and big business are so afraid of her. I think she is just someone who supports the average American. It means to me that the Republicans and big business must really hate the average American. They succeed by following P.T. Barnum's saying that "There's a sucker born every minute."
Monday, June 20, 2011
Yesterday, former Reagan budget chief David Stockman called for reform of the capital gains tax on Fareed Zakaria's GPS program on CNN. He said that it made some sense when inflation was high, so that capital gains merely reflected inflation and not an increase in the real value of an asset. But today, there is virtually no inflation. The other justification is that it encourages new business. There is some basis for that. Perhaps, people who start their own businesses and true venture capitalists should get some kind of tax break to encourage them, although most venture capitalists are multi-millionaires. But someone who buys Apple stock at $200 and sells it a year later for $300 hasn't really encouraged entrepreneurship. A favorable view is that he made a good investment; a less favorable view is that he was just gambling and made a winning bet. Why should this country encourage gambling over doing a hard day's work as an engineer or waitress?
Earlier, I wrote you suggesting the gradual elimination of the home mortgage tax deduction, because it unreasonably favors homeowners over renters, especially if the homeowners paid no money down and have no equity in their homes. They are essentially renters, but get a homeowner's tax break. It might be fair to continue the deduction for people with substantial equity in their houses. Building up equity is the saving which the deduction was originally intended to encourage. But the subprime housing crisis illustrated the economic dislocation that the tax deduction helped create.
Wednesday, June 15, 2011
Wednesday, June 08, 2011
This Reuters article says the Chinese are concerned. It would seem that we should be concerned, too, if only because the Chinese hold $1 trillion of our debt. In theory we have the Chinese over a barrel because of the old MAD theory (Mutually Assured Destruction). If the Chinese destroy the US dollar, they lose their trillion dollar investment. But in this case, the US is threatening to take the first MAD step by destroying the value of its own currency.
The Republicans say that maybe nothing bad will happen, that the US can stop paying interest for a few days or weeks and then, when the budget negotiations are finished, it can start paying again like nothing ever happened. Maybe. But the Chinese analogy to playing with fire is apt. We don't know for sure what will happen, and we might burn our own house down. Why would we want to even risk the possibility of that?
Another possibility is that Treasury would take the money to pay interest on the debt from Social Security and government pension funds. As a retiree this really ticks me off. As a Vietnam veteran, I support shared sacrifice, but this is like the draft during the Vietnam war and voluntary military service in Iraq and Afghanistan now. There is no shared sacrifice. Only the fools sacrifice because of some insincere patriotic appeal, like Sarah (Paul Revere) Palin's. Sarah Palin gets rich, while the redneck grunts in the Middle East die. In this case, the ordinary retirees will sacrifice so that we can pay interest to Chinese millionaires and American billionaires in New York who wouldn't lift a finger to defend the US, although they were the ones attacked on 9/11.
Wednesday, May 18, 2011
Saturday, April 30, 2011
I was prompted to write it by the movie "Mrs. Miniver," which I watched a while ago. It is about an upper middle class family in England from the period just before World War II until well into the war. The movie was made during the war, and on TCM, the "The End" screen said something like, "America needs your money. Buy bonds." In the movie, before the war the British husband and wife are somewhat extravagant, the wife buying a silly hat and the husband a fancy car. But once the war starts they get serious like real Brits. They make sacrifices while keeping a stiff upper lip.
I thought that same attitude was somewhat illustrated during William and Kate's wedding. Queen Elizabeth is a living link to the sacrifices made by Brits during World War II and the London Blitz. Today Britain and the United States both face financial turmoil due to the sub-prime mortgage meltdown. The Brits under PM Cameron have elected to pursue a course requiring more sacrifice that the US has. That's more in the British character than in America's.
In Ben Bernanke's press conference, we saw the competing themes of fighting inflation versus reducing unemployment. The Brits are more willing to endure the hardship of unemployment in order to get their financial house in order than the US is. We see Americans unwilling to sacrifice anything, even small cuts to Medicare benefits on the one hand, or higher taxes on the other. We need spending cuts and higher taxes, but nobody is willing to make the hard choices that calls for.
I like Ben Bernanke because he is one of the few people in Washington facing these hard choices and doing something. People say he is just following in Greenspan's "easy money" footsteps, but I don't think so. He is facing a very different situation. I like Elizabeth Warren because she also seems to have the moral character, so lacking in Washington, necessary to face these hard choices. She has staked out a little issue, making businesses deal fairly with consumers, and has been met with a buzz saw of opposition from big business.
After I watched "Mrs. Miniver," I thought, "Well, I could buy some bonds." The Japanese do it. Their indebtedness is one of the highest of any major nation, but it is not like our debt to China, because the Japanese owe it to themselves. They buy their own bonds. So, why don't we? First, I found that it is hard to buy US savings bonds. You can't buy paper bonds anymore. You can only buy them electronically and store them on some Treasury web site. With changing email addresses, lost passwords, etc., that is a recipe for disaster for me. I don't mind electronic banking, as long as there is a real, brick bank somewhere that can send me a paper statement if I want one.
While it has gotten harder to buy savings bonds, it has gotten easier to buy Treasury bonds through a broker. That change illustrates how our economy favors the rich over average citizens. You can put thousands in your 401(k), but you can't buy a $25 savings bond for your kid's birthday. But, why not buy bonds anyway? Right now the problem is that the US Congress refuses to put the full faith and credit of the United States behind the bonds. They are going to bicker over raising the debt ceiling, and leave open the possibility that they will default on US bonds. If they were serious about solving the debt crisis, they would immediately raise the debt ceiling, if only by a little bit, so that there is no risk of default, and then begin the process of cutting spending and raising taxes. But some groups want to use the debt ceiling as a bargaining chip. It is sort of like saying, "If you don't agree to my terms, I will blow my brains out." The terms may be stupid, but no one wants to see someone else blow his brains out, especially if "he" is the country we live in. In Vietnam the old saying was, "We had to destroy the village to save it." Are we now going to say this about America?
Right now I feel that there are only two people in Washington who have my best interests at heart, as a middle class citizen -- Elizabeth Warren and Ben Bernanke.
The fact that big business is so opposed to Elizabeth Warren indicates to me that she must be doing something right for average citizens. Normally, Ben Bernanke, as the head of the Fed would be the tool of big business interests, but I think he is genuinely concerned about average people, too. His low interest rates and QE2 are boons to big business, especially big banks, but they are the only tool he has. I think he really is trying to pursue policies that trickle down to ordinary people, even if most of the benefits go to big banks and industries.
If Congress were serious, it would raise the debt ceiling now, if only by a small amount. The fact that it is playing chicken with the debt ceiling indicates that it does not have the best interests of the United States at heart. Failure to put the full faith and credit of the United States behind our bonds will mean higher interest rates for everybody and probably a return to a deep recession. Conservatives, playing the hand of big business and big banks, will use the crisis to get spending cuts without tax increases, generally hurting average people, and particularly benefiting the very rich.
To reduce the problem with the national debt and the fiscal deficit, I would propose to cut all Federal salaries by 10 percent (including yours) and all Federal pensions (including mine) by 10 percent. Perhaps you could cut all Social Security pensions by 10% above a certain level, say $1,500 per month. For Medicare and Medicaid, perhaps you could cut payments by 10% for all procedures that cost more than $1,500.
I would propose removing the mortgage interest deduction as a start for raising tax revenues. This deduction had a very perverse effect during the housing crisis. Before sub-prime mortgages, when people still had to make a large down payment, the deduction was not so bad. But with no down payment and mortgages allowing interest-only payments for the first few years, buyers basically became renters, who are now walking away from their homes. Real renters got no deduction, but sub-prime buyers had a big Federal subsidy. It was not fair, and it encouraged an unsustainable housing bubble. It's bad policy which creates economic dislocation. Get rid of it. You could start off limiting the deduction to $10,000, and then reduce it $1,000 per year.
I don't really expect anything to happen. This government is dysfunctional. I lived in Brazil for several years as an American diplomat during its bad years, and saw people who wallpapered some rooms with the old Cruzeiro currency. That's where the dollar is heading. Brazil shows that you can recover from that, but only if you get serious. The US is not serious, yet. People used to say that Brazil was not a serious country. Now that epithet applies to the United States. After the game of chicken we just played on shutting the government down, the new game of chicken on the debt ceiling, and the decision during the Congressional lame-duck session not to raise taxes on anyone, especially the very rich, I have become one of those in the recent poll who has a very dark view of the American economy and even of America in general. As a Vietnam veteran, a retired Foreign Service officer, and a former attorney for the Veterans Administration, totalling nearly 30 years of government service, I am very disappointed in where the US is heading.
Saturday, April 23, 2011
Friday, April 22, 2011
Thursday, April 21, 2011
Wednesday, April 20, 2011
Wednesday, April 06, 2011
The shift in wealth and income in America is not as great as I had thought, but it's significant. I like graphs, so here's one from the study:
It shows the current distribution of wealth between the top 1% and the lower 99% as about the same as 1920. It got worse in 1930, probably as a result of the Depression, and then went up considerably to 1950, probably as a result of recovery from the Depression and World War II. One effect of both factors was that the government virtually took control of the economy during that period -- first to help prevent poor people from starving and going homeless, and later to devote all productive resources to the war effort. Then there was a big surge in the 1960s and 70s, probably as a result of the government's war on poverty and civil rights efforts. The distribution started getting worse again in the 1980s when Reagan was elected. Reagan changed government policies and tax rates to favor the rich.
Government policies are very important. Both Republicans and Democrats understand this. Republicans like the general slope of the curve since Reagan began favoring the rich. They plan to fight to keep it moving in a direction that favors the rich. I don't think this is good for America. It makes America different from the country that I grew up in during the 1960s and 70s. I still believe that part of the goodness of America during that period was that all members of the "Greatest Generation," rich and poor, had fought together in World War II, which had imposed some self-restraint on the greed of the leaders of the country, a restraint that does not exist today. Significantly, Reagan, although he served in the military during WW II, did not fight; he just continued to make movies in California, albeit for the military while in uniform. George H.W. Bush was a much better representative of the Greatest Generation than Reagan was.
The fight over where we go from here may lead to a government shutdown. But from the looks of this graph, the last shutdown did not have much effect.
He seems to say that since Israel would not cooperate with him, he just made up accusations of war crimes. Now that Israel has begun to investigate them, according to a new report by Mary McGowan Davis, everything is okay. If Goldstone just made up the accusations and lied to the UN to start with, why should we believe anything he has to say now? He is totally discredited.
This is of course what Israel wants. Israelis hate Goldstone with a passion seldom seen elsewhere, even in Israel, a country founded on, and consumed by, hatred. I don't know her background, but I suspect that Mary McGowan Davis was chosen because the Israelis were confident that she would issue a report in their favor. Why is there even a follow-up report? Why did the Israelis cooperate with her and not with Goldstone? Apparently she accepted Israeli assurances unquestioningly, although the investigations that she accepted at face value are not finished and have not resulted in any punishment or changes in Israeli policy. She was much more of a patsy for the Israelis than Goldstone was, but she now provides a means for Goldstone to try to appease the Israelis and decrease the Jewish threats against himself and his family.
Fortunately, we don't need Goldstone to tell us that Israel is a corrupt nation of hate-filled racists. It's disgraceful that American Jews (and many evangelical Christians) defend and support such a vile, godless, despicable country. They sully their own image.
As part of the then Republican retrenchment, the government cut off funding for two programs I was working on. One, the Maria Sklodowska Curie science cooperation fund, would have provided income for Polish scientists who lost their Polish government funding when Communism fell. Cutting of their funding was sort of an anti-Marshall Plan. The Poles took Reagan's advice to overthrow Communism, and Gingrich and the Republicans turned their backs on them.
I didn't like it then, and I don't like the shutdown now, but at least now I'm not representing the dishonest, unreliable US government.
Monday, April 04, 2011
This prophecy could just as well apply to the country named Israel today.Thus saith the Lord, What iniquity have your fathers found in me, that they are gone far from me, and have walked after vanity, and are become vain?Hath a nation changed their gods, which are yet no gods? but my people have changed their glory for that which doth not profit.Thine own wickedness shall correct thee, and thy backslidings shall reprove thee: know therefore and see that it is an evil thing and bitter, that thou hast forsaken the Lord thy God, and that my fear is not in thee, saith the Lord God of hosts.As the thief is ashamed when he is found, so is the house of Israel ashamed; they, their kings, their princes, and their priests, and their prophets,Saying to a stock, Thou art my father; and to a stone, Thou hast brought me forth: for they have turned their back unto me, and not their face: but in the time of their trouble they will say, Arise, and save us.
Thursday, March 31, 2011
We should be grateful that Jews are not a unified bunch, but there is a strong contingent of Zionist Jews who are very pro-Israel, often being more concerned about Israel than their home country, whether Great Britain or the United States.
It's typical of Israel, a morally bankrupt state, that its citizens would be in jeopardy of being tried for war crimes in Great Britain. And its typical of Jews that they would attack their home country for allowing that possibility.
Joe Lieberman, are you listening?