Monday, October 29, 2007

Hillary as Evita

The election of the President's wife in Argentina brings to mind the story of Evita Peron, and makes you wonder about the election of a President's wife in the US. Is Hillary America's Evita? While Evita relied more on her husband than Hillary claims to, she was independent, and Hillary may rely more on Bill than she lets on during the campaign.

Sunday, October 21, 2007

Support the Troops

A great op-ed in the NYT points out the hypocrisy of the Bush administration, the Republican party, and politicians in general on the Iraq war. Nobody supports the troops, except their families. America is in party mode! Let those soldiers die! America doesn't give a damn!

As the op-ed says, a draft would sort things out. Let's have a draft now! Of course, that's a little problem for Bush and Cheney, both of whom dodged the draft during Vietnam. They don't believe in fighting for their country. They believe in sending somebody else to fight for the United States. That's why we have thousands of mercenary troops like Blackwater fighting in Iraq, in addition to our "volunteer" military.

Wednesday, October 10, 2007

AIPAC, Iran and Gravel

See this link to The Vineyard of the Saker for info on how AIPAC is trying to get the US to attack Iran, and how Presidential candidate Gravel spoke out about it.

Sunday, October 07, 2007

Regressive Income Taxes

A news article that the EU finance ministers are going to meet to discuss how US financial problems will impact the EU raised a question in my mind about how the US would fit into the EU.

Previously the Wall Street Journal printed an op-ed suggesting that the US join some larger currency scheme that would take the pressure off the dollar as an international exchange currency. The problem with that is that when you join such an international scheme, you have to conform to certain standards.

The above article on the EU says that EU countries must keep their budget deficit below 3% of GDP to meet Euro guidelines. That made me wonder if the US would qualify to join the Euro regime. It took me a while to find what appeared to be a reliable table giving budget deficit estimates as a percentage of GDP. Finally, I found this one by the Congressional Budget Office done in 2004, with projections for future years.

What surprised me was that we would meet the 3% guidelines overall, by taking into account the Social Security "off-budget" SURPLUS. The projected overall budget deficit for 2007 is only 2% of GDP. But the "on-budget" deficit is 3.6%. The 3.6% is the budget actually approved by the President and Congress. BUT, there is a 1.6% Social Security SURPLUS. So, the working people who fund Social Security through payroll taxes are in surplus, while the rich people, who got the huge Bush tax cuts and who pay no payroll tax on the millions they earn above the approximately $90,000 ceiling on income subject to the payroll tax, are causing a budget deficit in excess of the EU guidelines for good government.

This is truly a government of Robin Hood's Sheriff of Nottingham that takes from the poor and gives to the rich. A fat cat who paid social security payroll taxes on maybe 5 or 10 percent of his income during his earning years (as opposed to most salaried workers who pay the tax on 100% of their earnings), and who then retires and lives off of his investments, can collect 100% of his social security, while workers who still earn a salary after age 62 have their social security payments reduced by a formula linked to how much they continue to earn.

Neocons the New Liberals

Roger Cohen has my number in his NYT column on Neocons being the new L-word, instead of "liberal." He says with some contempt, "Neocon, for many, has become shorthand for neocon-Zionist conspiracy, whatever that may be, although probably involving some combination of plans to exploit Iraqi oil, bomb Iran and apply U.S. power to Israel’s benefit."

I think AIPAC played a large role in the policy making process that led to the US invasion of Iraq. Cohen may not, but look at those arguing for invastion: Perle, Adelman, Krystal, Wolfowitz, Feith, et al.

Friday, October 05, 2007

Obama Stops Wearing Coward's Flag Pin

It's indicative of the cowardice of George Bush and Dick Cheney that they lead the pack of lapel flag pin wearers, because they are draft dodgers from the Vietnam war. If they had fought in the war they would have had some kind of little ribbon to wear on their lapel, a bronze star, an Army Commendation medal, something. But they didn't serve; so, they wear a flag. It's a sign that they didn't serve their country.

Congratulations to Obama for ending the charade that wearing the flag pin somehow symbolizes patriotism. Where were Bush and Cheney on 9/11? Bush was reading "My Pet Goat," and then got in Air Force One and hid out for hours when he should have been leading the country. Cheney went into his spider hole in Washington and ran things from remote control because he was afraid to come out. Cheney and Saddam: the spider hole twins!

Blackwater Perils

I recommend the editorial in today's (10/4/07) Financial Times, "Blackwater and the outsourcing of war." A web link is:

http://www.ft.com/cms/s/0/94bc0252-71dd-11dc-8960-0000779fd2ac.html

Two main points are:

"...Privatising war is, in reality, financially, politically and militarily very expensive," and

"Neither [the Senate's nor the Pentagon's efforts to control Blackwater] has a chance, much less moral validity, unless the US and its allies adhere to the rule of law they claim their forces are there to defend."

Sunday, September 30, 2007

Failed Bank No Big Deal?

I was surprised that the failure of Netbank in the US, coming on the heels of the run on Northern Rock bank in England, did not attract more attention. It failed during the day on Friday, and the stock market seemed not to notice. It apparently has been in trouble for a while, but its failure seems to be linked to the sub-prime mortgage mess. So, doesn't that indicate that there are some pretty shaky things out there?

We're approaching the 20th anniversary of the 1987 stock market meltdown, not that that means anything. The stock market seems very happy with its .5% rate cut; maybe that means they expect the Fed to bail them out of any problems, like failed banks, not to mention failed hedge funds.

Friday, September 28, 2007

US Promotes Speculation and Debt

In an earlier post, I noted that John Stewart had pointed out that the Fed's .5% rate cut had helped stock market investors, a.k.a. speculators, and had hurt ordinary savers with interest bearing savings accounts. I omitted one other class, borrowers or debtors, whose interest rates will also be cut.

So, the Fed action aided speculators, hurt savers, and aided debtors. So, it's encouraging borrowing money to speculate in the stock market. That's definitely the behavior we want to encourage -- NOT!

Thursday, September 27, 2007

Worry About Inflation

FT columnist Martin Wolf argues that the Fed can't ignore the risk of inflation as it fights recession. It says:
To critics it is now the "Bernanke put" - the belief that, as under Alan Greenspan, the US Federal Reserve will always ride to the rescue of Wall Street. The jubilant response of traders to the Fed's 50 basis point cut in the short-term interest rate might justify this suspicion. But saving Wall Street from its follies is not the Fed's objective. It is an (unfortunate) by-product of the attempt to do its job.
The "unfortunate by-product" reference is similar to Alan Greenspan's reply to Jon Stewart on the Daily Show. Stewart asked Greenspan why it was that the Fed 50 basis point interest rate cut sent the stock market up over 300 point, thus benefitting the rich, while it meant that banks would pay less interest to the ordinary people who had savings accounts in banks, rather than stock market investments. Greenspan responded that this was an "unintended effect."

I agree with Wolf that one inflationary risk the US runs is that the dollar's value will decline against other currencies (as it has already), thus making everything imported more expensive. However, inflation is the easiest way for debtor nations to try to get out from under their debts; as the dollar's value decreases, the absolute value of the debt decreases, too. So, you pay off your debt in cheaper dollars. This is usually only attempted by pariah states, currently Zimbabwe comes to mind, but George Bush has such contempt for the international community that it is not beyond possibility that he will try it. He may think it will help him pay off his Iraq War debt. As Wolf describes the situation:
Externally, the US is a huge net debtor. A large dollar devaluation is then a far less painful way to turn it into a net creditor than running current account surpluses, since its liabilities are denominated in dollars.

Given these facts, it is going to be an enduring struggle for the Fed to convince those who have put their faith in the dollar that it is safe. This is not some remote danger. In financial markets, the future is now. If holders of the dollar conclude it is no longer a secure store of value they will dump both the currency and assets dependent on its future value. If that were to happen, the Fed would confront a dreadful dilemma - whether or not to cut rates as the dollar plunged and long-term interest rates soared. Its freedom of manoeuvre would be gone, as in 1979, when Paul Volcker became chairman.
In retrospect it looks as if Volker may have been a better Fed chairman than Greenspan, if only because Volker had more difficult issues to deal with.

Wednesday, September 26, 2007

Chinese Buy Rothschild Jewish Conspiracy Theory

The Financial Times reports on a best selling book in China, Currency Wars, which claims that the Rothschild banking dynasty controls money issuance. According to the article:

...the US Federal Reserve remains a puppet of private banks, which also ultimately owe their allegiance to the ubiquitous Rothschilds.

The thing that most shocked [the author, Song Hongbing], he says, was his “discovery” that the Fed is a privately owned and run bank. “I just never imagined a central bank could be a private body,” he says.

The Fed does describe itself “as an unusual mixture of public and private elements”. While its seven governors are all appointed by the US president, private banks do hold shares in its 12 regional reserve banks.

But Mr Song ignores the government’s role and argues that the Fed’s key functions are ultimately controlled by five private banks, such as Citibank, all of which have maintained a “close relationship” with the Rothschilds.

Mr Song is defensive about his focus on the Rothschilds and what the book depicts as their Jewish clannishness.

“The Chinese people think that the Jews are smart and rich, so we should learn from them,” he says. “Even me, I think they are really smart, maybe the smartest people on earth.”

No New York Candidates Please

All the fuss over Ahmadinejad's visit to the UN in New York has reinforced my dislike of any Presidential candidate from New York, and there are at least two and one-half of them: Hillary, Rudy and Mike Bloomberg (the 1/2).

I was inclined to dislike New York anyway because:
  1. The families of New Yorkers killed on 9/11 got millions in compensation from the US government, while those killed in the Oklahoma City bombing got nothing. It might show the power of the New York congressional delegation, but more likely it shows the greed of New Yorkers, compared to regular people who live in Oklahoma.
  2. Wall Street's stock market continued to go up during the worst of the Iraq War, which according to at least one explanation (0f many given by Bush), was in response to 9/11. I saw no gratitude on the part of New Yorkers for the sacrifices that young people from middle America, including Oklahoma, were making for New York when they died or were injured in Iraq.
  3. Now with the Ahmadinejad visit, New Yorkers have shown their contempt for the Constitutional guarantee of free speech, not to mention the fact that they should be grateful that their city is the site of the UN which must invite all types of world leaders if it is to advance the cause of world peace. New Yorkers reviled the assertion that if Hitler were invited, he should be allowed to talk. But wouldn't that talk have been worthwhile if it could have avoided the Holocaust, not to mention the tens of millions of gentiles who died in WW II. One problem in the lead up to World War II was that the League of Nations had ceased functioning.

There are lots of other candidates not from New York. Why not choose one of them. Of the New Yorkers, the least objectionable is probably Bloomberg, not least because he is fondly spoken of by Senator Chuck Hagel, whom I respect.

Ahmadinejad and the New York Jews

The conduct of Columbia University's President Bollinger while introducing Iranian President Ahmadinejad was reprehensible. It made him and the university look foolish. Why did he do it? I don't know, but I would guess it was for money, in particular money from New York Jews, who have a lot of it. Bollinger probably got a message from some big Jewish donors that his invitation to Ahmadinejad put their future contributions to Columbia in jeopardy. So, Bollinger decided that if he insulted Ahmadinejad sufficiently while introducing him, he might keep his donors under control.

The New York Times' report on the incident closed by saying:

It remains unclear whether Columbia’s leaders were able to mollify critics through their critical treatment of Mr. Ahmadinejad. But they made some headway: the American Israel Public Affairs Committee sent out an e-mail message shortly after the speech with the subject line, “A Must Read: Columbia University President’s Intro of Iran’s Ahmadinejad today.”

Inside was a transcript of Mr. Bollinger’s introduction.

Saturday, September 22, 2007

My Letter to Condi Rice

I am concerned about the State Department’s use of Blackwater Security to protect State Department officers in Iraq.

As a US Army veteran of the Vietnam War and a retired Foreign Service Officer, I believe that it is important for the United States to hold the moral high ground. Recent revelations about Blackwater’s activities in Iraq raise questions about whether the State Department is undermining its honor and credibility by continuing to employ Blackwater. How can we call on Iraq to adhere to the rule of law when our own contractors flout the rule of law in Iraq? It certainly does not help us overcome our image, in Iraq and around the world, created by Abu Ghraib and other atrocities.

In addition, I do not like the fact that the State Department is promoting the use of mercenary soldiers by the US Government. As an Army veteran, it offends me that the State Department refuses to rely on the US military to protect it. The State Department and the Marine Corps have a long tradition of Marine Security Guards protecting American embassies overseas. Yet, when there is a real security threat, the State Department says, “We don’t trust the Marines to protect us.” It’s ironic that Ambassador Crocker appeared before Congress with General Petraeus to praise the performance of the American military in Iraq, but Ambassador Crocker says by his actions, “I don’t trust the US military to protect me personally.”

Thursday, September 20, 2007

Do Republicans Read Books?

Did anybody in the administration or the Pentagon read Tom Friedman's book From Beirut to Jerusalem? It might have given them some clue about what to prepare for when they invaded Iraq. Chapter 4, "Hama Rules," says that "politics in the Middle East is a combination of three different political traditions all operating at the same time."

One is "tribe-like politics." "You had to make sure that if someone violated you in any way -- even the smallest way -- you would not only punish them but punish them in a manner that signaled to all the other families, clans, or tribes around that this is what happens to anyone who tampers with me."

Two is "authoritarianism -- the concentration of power in a single ruler or elite not bound by any constitutional framework." It comes in two flavors: gentle and brutal. The Ottoman Turkish empire was gentle. Two examples of the brutal variety were Hafez Assad of Syria and Saddam Hussein. They survived "not only because they have been brutal (many of their predecessors were just as brutal), but because they have been brutal and smart. They have no friends, only agents and enemies...."

Three is the modern nation-state imposed by Westerners. "What happened in the twentieth century when these new nation-states were created was that in each one a particular tribe-like group either seized power or was ensconced in power by the British and French -- and then tried to dominate all the others."

So, after the invasion of Iraq, one would have thought that someone would have thought it important to suppress tribal rivalries and to assert authority when looting broke out after the fall of Baghdad, for example. By the Middle Eastern standards listed by Friedman, the US looked woefully weak the morning after.

Thursday, September 13, 2007

US Suffers Decline in Prestige under Bush

The Financial Times reports that the US has suffered a significant loss of power and prestige under Bush. The International Institute for Strategic Studies survey found:
  • Failure in Iraq meant the Bush administration had reduced power domestically and internationally, for example the failure to pass an immigration bill in the US, and "scant regard paid to US efforts to influence Israeli-Palestinian developments";
  • Adversaries of the US believe "they will prevail if they manage to draw the US into a prolonged engagement";
  • Iran is flexing its muscles in the Middle East;
  • Iraq has caused the US to fail to focus as much as it should on other parts of the world.

Bush Abandoned by Oil Patch

Bush has been abandoned by his Texas oil patch buddies. Hunt Oil has signed an agreement with the Kurds that ignores the central Iraqi government in Baghdad, according to the Wall Street Journal. So, Texas oilmen have no confidence in George Bush's ability to get an oil law through the Iraq parliament that would put the federal government in charge and require sharing of resources. Right on cue, the New York Times reports the Iraqi compromise on the oil law is collapsing.

So, Bush's old buddies in the oil patch correctly have no confidence in, or respect for, him.

Wednesday, September 12, 2007

Abe Resigns. Bush Destroys Another Ally

As I predicted, another one bites the dust. Linking up with Bush is the kiss of death for foreign leaders. Reuters reports Abe resigns.

Tuesday, September 11, 2007

America and Rome

The head of the GAO, David Walker, has been writing and speaking about how American risks repeating the fate of the Roman republic. I think it's an important insight. Just for the record, here's an article in the FT, and here's a transcript of a talk he gave.

Among the points he makes in the FT article:
  • While short-term federal deficits are coming down, they are still too high, and
  • Longer-term, the Medicare prescription drug benefit has increased Social Security and Medicare liabiities from about $20,000 billion to $50,000 billion.

Like Rome, in the US:

  • There has been a decline in moral values and political civility;
  • The military is overextended; and
  • There is fiscal irresponsibility.

George Washington said that we should avoid "ungenerously throwing upon posterity the burdens that we ourselves ought to bear."

Iraq's Army & the Nazis

The NYT op-ed by Jerry Bremer on how he did not personally make the decision to dismantle Iraq's army rings true. What happened is about historical perspective. Other than Bush and Cheney, the main proponents of war with Iraq were Jews, who have always been critical of the US and the other allied victors for being too lenient in dealing with some of the Nazis after World War II, allowing them to escape or remain in low profile positions in Germany. Thus the American Jews who ousted Saddamn Hussein were determined to get rid of all traces of his Baathist party colleagues. They did not want to repeat what they saw as the mistakes of the US after World War II. Bremer specifically mentions coordinating his de-Baathification strategy with Paul Wolfowitz and Doug Feith, both Jews. They of course had a large Jewish back-up network including Richard Perle, William Kristol, Ken Adelman, et al., who were well plugged into this administration's defense policy machinery.

He also says he coordinated it with Jay Garner, his predecessor, who in interviews in Woodward's State of Denial claims that he did not like the de-Baathification proposal, but I suspect that at least some of Garner's comments are self-serving, made after the strategy had begun to fail. Garner was himself very close to the Israelis, which is why I thought he was chosen for the job before he lost it to Bremer.

I don't know why Bremer got the job. At the State Department, I remember him mainly as being the ultimate staff assistant, the head of S/S, the Secretary of State's secretariat, who made sure all the briefings, decision memos, etc., were properly prepared on time. He went on to be an ambassador, a reward for his staff work, but I don't think that's how he made his mark. Ironically, maybe he was chosen because he was known to be a staffer who would not go off on his own, but would do a good job of implementing the policies of his bosses.