Thursday, November 29, 2012

Why Obama Failed Me

I didn't want to vote for Obama, but between Obama and Romney, Obama was the better choice. I was going to vote for a third party candidate, but ironically thanks to some Wall Street Journal Internet test of political positions, I found that both of the third party candidates were too radical for me. I have voted for Ralph Nader in the past, because I thought he was a good, honest man, unlike the major party candidates. This year however, I didn't know anything about the Green Party or the Libertarian Party candidates, and according to the Wall Street Journal they both espoused extreme positions. I often agreed with the Green Party on economic issues, but not on social issues. Similarly I often agreed with the Libertarians on social issues, but not on economic/financial issues. I think the Fed has saved the US from a horrible financial debacle brought on by Wall Street, which seems to be run by some of the worst people on earth. I think they are evil, but they may just be grossly incompetent.

So I was stuck between Obama and Romney, both of whom held more moderate positions on both social and economic issues, but I was closer to Obama.  However, I am unhappy with a number of things Obama did or did not do during his first term.
- He did not end the war in Afghanistan, which everybody thought was the "good" war, but it turned out that everybody was wrong (except Joe Biden).
- He did not close the Guantanamo prison, leaving the US with its own "gulag" like the old Soviet Union. It's like having a billboard that says, "The US is no longer a free, democratic country ruled by law." No wonder foreign students are going home when they graduate.
- He continued the Bush tax cuts. These tax cuts have badly unbalanced the US economy, contributing to our running up a trillion dollar deficit every year. They are unsustainable, especially when they undercut financing for the wars in Iraq and Afghanistan. That's one of the main reasons Rumsfeld said that you go to war with the Army you have, not the Army you want. The Republicans were happy to pocket a few thousand dollars in tax savings, although it meant many more troops would die in those wars because they did not have the best equipment.
- He did not try hard enough to get Elizabeth Warren approved as the first head of the Consumer Financial Protection Bureau. She created the bureau, and she should have been allowed to get it started. She would have faced fierce opposition from the Republicans in Congress, but Obama should have taken them on. It's possible that the big banks hated her so much that the bribed Obama and Democrats to desert her, too. I'm glad she was elected Senator, but I would have preferred to see her take on the banks in the bureau she created. Hopefully she will be able to do some of the same things as Senator. It will be interesting to see whether she gets on any relevant committees, or whether the banks will bribe the Democratic leadership to stick her in the boondocks somewhere.
- Obama did not give us single payer health care, i.e., Medicare for everybody. He have us expanded health care based on a Republican model that is a gift to the health insurance companies and the medical community. It means much higher costs that a single payer system would have meant.
- He has continued the Bush Administration drone strikes, which in many cases have killed innocent civilians and in some cases US citizens. This is like Guantanamo. It shows the world that the US is not longer an honest, decent, just country of laws.
I am hoping that Obama will do better in his second term. His first task is to do something about the fiscal cliff in a way that will reduce the outrageous budget deficit. So far, I am not optimistic. They may reach some sort of a deal that will allow us to muddle through, but will do little or nothing to redress the fundamental problem of the debt that is destroying America.

Defense Contractors Suck Taxpayer Money

The Republicans complain about all the individual citizens who rely on taxpayer, government money, and there are a lot of them.  But what about the defense contractors, whom the Republicans want to protect from going off the fiscal cliff?  Lockheed Martin works almost entirely for the government, although it sells some weapons systems to other countries, and thus has some income from other sources, but not much.  Yahoo says Lockheed annual revenues are about $47 billion.  Some of its competitors, companies that also make money largely from government contracts funded by the taxpayers include Northrop Grumman with revenues of about $26 billion, Raytheon with revenues of about $24 billion, General Dynamics with revenues of about $32 billion, and Boeing which is only partially a defense contractor has total revenues of $79 billion, perhaps half of which are from defense sales to taxpayers, about $40 billion.  This amounts to an annual taxpayer expense of around $169 billion.  Although we are talking about budget overruns of about $1 trillion, this is a meaningful portion of that. 

These companies are very focused on lobbying.  They often succeed in getting Congress to authorize money for defense projects that the Pentagon wants to cancel.  When Republicans talk about preserving the military budget, many are mainly worried about keeping the money flowing to these companies, who have cleverly located factories and offices in many key congressional districts.  The service men and women stationed in Afghanistan and around the world are secondary to man of these congressmen and senators.  The servicemen are a drain on congressional resources, asking for better medical care, etc., while the defense contractors give the congressmen and senators lots of money for their campaigns, etc. 

One of the biggest concerns about the fiscal cliff is that it would mandate reducing payments to some of these welfare gluttons who suck up taxpayer money.  We'll see how clever their lobbyists are in keeping the money flowing. 

Wednesday, November 28, 2012

SAC Insider Trading

It looks like insider trading is the rule rather than the exception on Wall Street, most recently illustrated by the SEC case against SAC involving its head, Steven Cohen.  It probably extends to anywhere there is insider information to trade on, the entertainment industry in Los Angeles, for example.  Charlie Gasparino of Fox Business News says that insider trading is a victimless crime.  But the victims are potentially every other stock trader, who because they don't have insider information sell or buy at a price that hurts them and benefits the person with insider information, who knows that the stock is going to go up or down.  In essence, the insider is stealing money from those without inside information.  It's like selling fake Rolex watches while claiming they are genuine and charging the full retail price of a real Rolex.  You think you are buying a good stock, based on all the information available to you, but it's not a good stock and the man selling it to you knows that it's not, because he has nonpublic, inside information. 

Martha Stewart went to jail for what seemed to be a common practice among high-level business people.  Another story in the Wall Street Journal about executives who routinely made money trading in their own companies' stock illustrates that problem. 

It only reinforces the terrible impression created by Wall Street in the great subprime housing derivative fiasco that created the worst recession since the depression.  These guys are crooks.  They are mafioso in suits who will destroy America for a buck.  And it all the big shots who run the financial industry, which Warren Buffet said on the Daily Show last night is responsible for about 20% of the US GDP.  This is basically the figure presented by the government Bureau of Economic Analysis.  And Michael Lewis says that one reason the Germans got suckered into the housing mess was that they thought the derivative salesmen from Goldman Sachs and the other big American banks were honest, when in fact the salemen were lying through their teeth. 

In a Vanity Fair article, Lewis says, quoting a German banker:
“For 40 years we didn’t lose a penny on anything with a triple-A rating,” he says. “We stopped building the portfolio in subprime in 2006. I had the idea that there was something wrong with your market.” He pauses. “I was in the belief that the best supervised of all banking systems was in New York. To me the Fed and the S.E.C. were second to none. I did not believe that there would be e-mail traffic between investment bankers saying that they were selling … ” He pauses and decides he shouldn’t say “shit.” “Dirt,” he says instead. “This is by far my biggest professional disappointment. I was in a much too positive way U.S.-biased. I had a set of beliefs about U.S. values.”
The global financial system may exist to bring borrowers and lenders together, but it has become over the past few decades something else too: a tool for maximizing the number of encounters between the strong and the weak, so that one might exploit the other. Extremely smart traders inside Wall Street investment banks devise deeply unfair, diabolically complicated bets, and then send their sales forces out to scour the world for some idiot who will take the other side of those bets. During the boom years a wildly disproportionate number of those idiots were in Germany. As a reporter for Bloomberg News in Frankfurt, named Aaron Kirchfeld, put it to me, “You’d talk to a New York investment banker, and they’d say, ‘No one is going to buy this crap. Oh. Wait. The Landesbanks will!’ ” When Morgan Stanley designed extremely complicated credit-default swaps all but certain to fail so that their own proprietary traders could bet against them, the main buyers were German. When Goldman Sachs helped the New York hedge-fund manager John Paulson design a bond to bet against—a bond that Paulson hoped would fail—the buyer on the other side was a German bank called IKB. IKB, along with another famous fool at the Wall Street poker table called WestLB, is based in Düsseldorf—which is why, when you asked a smart Wall Street bond trader who was buying all this crap during the boom, he might well say, simply, “Stupid Germans in Düsseldorf.”

Wednesday, November 21, 2012

Zionism Is Racism

The recent dust up between Israel and Gaza reminds us that Israel is a racist state.  Although it allows some role for non-Jews in Israeli politics, for all practical purposes it is a Jewish state that discriminates against non-Jews, sometimes in small ways, sometimes in huge ways.  Israel may argue that its isolation of Gaza, for example, is necessary for security reasons, but the origin of the security problem is racism. 

Israel is justified in protecting itself from attack by Palestinians and other Arabs, but it should work seriously to reduce the oppression that produces those attacks.  The problem is that the Palestinian Arabs were in Palestine first.  After World War II, the British protectorate ended and the United Nations turned Palestine over to the Jews despite fierce opposition from those living there, mostly Arab Muslims. 

In some respects, it is not unlike what the United States did to the Indians when Europeans came to North America.  However, North America was mostly empty land, occupied by a relatively small population of Indians.  Palestine, on the other hand, was pretty much completely occupied by Arabs, who had to be displaced by the Jews to Jordan, the West Bank, and other neighboring countries.  The Jews have shown zero interest in granting the Palestinians land of their own, while the Palestinians, mainly from force of superior Israeli arms, have largely acquiesced in Israel's occupation of the majority of historical Palestine, although Jews were largely absent from Palestine for 2,000 years.  The Jews lost Palestine shortly after Jesus's time, apparently moving mainly to Europe in the diaspora, although the virtual absence of non-European Jews in Israel makes one wonder whether there is not a form of Israeli racism against non-Europeans.  Palestine was not a Jewish homeland in the 500s, the 1000s or the 1700s.  Jews did begin to return in the 1800s, but before the UN's creation of the state of Israel, they were a relatively small part of the population. 

A Huffington Post article discusses the racism in Israel directed by the European Ashkenazi Jews against the Middle Easrern Sephartic Jews.  It says that for many years Middle Eastern Jews Have lived as stigmatized citizens of Israel.   Although the populations of the two groups are about equal in Israel, the Ashkenazi rule the country.  Furthermore, many Sephartic Jews also come from Europe, but from Spain and Portugal, rather than Germany or Poland.

So, Palestinians have deep-seated, legitimate grievances that Israel refuses to acknowledge, and thanks to the enormous wealth and political influence of US Jews, the US has similarly refused to acknowledge the plight of the Palestinians.  It sometimes pays lip service to Palestinian claims, but meanwhile supplies Israel with hundreds of millions of dollars of military aid with which to kill Arabs. 

We Need Another George Marshall

An email from the George Marshall Foundation says:
In his new book The Generals: American Military Command from World War II to Today, Tom Ricks says that accountability among our highest military leaders has gone missing. Generals are rarely fired today for poor performance, and he thinks the new standards for evaluating generalships have changed in a disturbing fashion. "During World War II, top officials expected some generals to fail in combat, and were prepared to remove them when they did. The personalities of these generals mattered enormously, and the Army's chief of staff, George C. Marshall, worked hard to find the right men for the jobs at hand," he writes. But not so today, he says.
Gen. Petraeus personal failures are a devastating blow to the American military.   The general officer/flag officer corps is hollow.  The military usually varies between peacetime generals and wartime generals.  In the past, when a war started, the peacetime generals who were good at pushing paper and politicking failed and were removed, replaced by generals who could fight wars.  Today because of the new structure of the military, that has not happened. The paper-pushing generals have gone on the lead troops in war, with poor results, documented by Tom Ricks. 

The American military suffered a similar decline after World War I.  Marshall was able to assemble a group of war-fighting generals, such as Eisenhower, Bradley and Patton, who were ready to step in and replace the peace-time generals when World War II came.  Petraeus appeared to be a possibility to fill the George Marshall role, but not now. 

Colin Powell has been the closest to following in Marshall's footsteps, including by serving as Secretary of State, but while he was able to serve President George H.W. Bush well during the first Iraq war, he was shabbily treated by George W. Bush during Iraq war II, especially by being sent to present a false report on Iraqi weapons of mass destruction to the United Nations, as well as by Bush's ignoring Powell's advice on how to fight the second Iraq war. 

Powell and Gen. Schwarzkopf worked well together to fight the first Iraq war in a workmanlike way, but the bloodthirsty Republicans wanted to kill Saddam Hussein, and were upset that Bush I, Powell, and Schwarzkopf had not done so.  They got their bloodthirsty wish from Bush II, Rumsfeld, Tommy Franks, and company, but ended up strengthening the anti-American regime of the Iranian mullahs. 

Bush II not only failed to win the second Iraq war, he also destroyed the general officer/flag officer corps, leaving the US military in dire shape. 

Monday, November 19, 2012

Petraeus and the Trouble with Generals

Tom Ricks has an article in the current Atlantic Magazine on the widespread failure of American generals.  I am surprised that there has not been more discussion of it along with all the gossip about General Petraeus's romantic peccadillo's.  Ricks does not list Petraeus as one of his failed generals; Petraeus does not come in for the same criticism as Generals Franks and Sanchez, but by pulling himself down, Petraeus undercuts the status of the whole general officer corps.  In addition to Ricks deep criticism that many generals are incompetent to lead troops and fight a war, others are pointing to the perks that generals enjoy. 

Petraeus became an intellectual darling because of the success of his counterinsurgency strategy in Iraq.  But yesterday on one of the Sunday talk shows, some revisionist historian pointed out that his surge in Iraq happened to coincide with a Sunni tribe's decision to ally with the US and oppose the more radical Sunnis, that may have done more to quell the violence than the surge.  See this article in the Washington Quarterly

If the leading American general has no clothes (referring to the emperor tale, not his personal conduct) or feet of clay, what does that say about the rest of the generals and the American military establishment? 

Thursday, November 08, 2012

Republican Senate Is The Problem

It's not clear who is responsible for the gridlock in Washington.  No doubt there is blame for all involved -- House, Senate, President, Republicans, and Democrats.  From my point of view, however, the main culprit is the Republican minority in the Senate.  This is because they are thwarting the will of the Democratic majority.  They are using parliamentary tricks, mainly the filibuster, to block majority rule, which I think goes against the Constitution.  If the Constitution wanted to require a 60% majority to pass any legislation in the Senate, it would have said so.  It already says that it requires a two-thirds majority to start the process to amend the Constitution.  It could have spelled out other times when a super majority was required; the fact that it did not, indicates that the founding fathers did not intend to require a super majority for conducting the ordinary business of the Senate. 

The Senate has imposed this new super majority requirement on itself.  The Democrats and the Republicans have both used it, but the Republicans have used it much more than the Democrats. 

The Republican use of he filibuster super majority bodes ill for the "fiscal cliff."  The Republicans can block any attempt to resolve the crisis that they do not like.  In a recent "60 Minutes" interview, Mitch McConnell indicated that he was not inclined to compromise.  He said that what the Democrats were doing in terms of running up debt, etc., was bad, and he would try to stop it.  That may be, but the problem is that doing nothing may be worse than doing what the Democrats want.  McConnell can try to limit tax increases and expand budget cuts, but that requires some kind of compromise.  If he lets the nation slide off the fiscal cliff, very few will benefit.  His extremely wealthy friends and supporters will suffer less than most; some will probably figure out how to make money from the disaster, but most people will suffer.  He is very short sighted to destroy America just to enrich a few of his friends and supporters.