Sunday, March 15, 2009

Chas Freeman's Statement on Withdrawing from NIC Appointment

Charles W. "Chas" Freeman Jr.'s statement:

To all who supported me or gave me words of encouragement during the controversy of the past two weeks, you have my gratitude and respect.

You will by now have seen the statement by Director of National Intelligence Dennis Blair reporting that I have withdrawn my previous acceptance of his invitation to chair the National Intelligence Council.

I have concluded that the barrage of libelous distortions of my record would not cease upon my entry into office. The effort to smear me and to destroy my credibility would instead continue. I do not believe the National Intelligence Council could function effectively while its chair was under constant attack by unscrupulous people with a passionate attachment to the views of a political faction in a foreign country. I agreed to chair the NIC to strengthen it and protect it against politicization, not to introduce it to efforts by a special interest group to assert control over it through a protracted political campaign.

As those who know me are well aware, I have greatly enjoyed life since retiring from government. Nothing was further from my mind than a return to public service. When Admiral Blair asked me to chair the NIC I responded that I understood he was “asking me to give my freedom of speech, my leisure, the greater part of my income, subject myself to the mental colonoscopy of a polygraph, and resume a daily commute to a job with long working hours and a daily ration of political abuse.” I added that I wondered “whether there wasn’t some sort of downside to this offer.” I was mindful that no one is indispensable; I am not an exception. It took weeks of reflection for me to conclude that, given the unprecedentedly challenging circumstances in which our country now finds itself abroad and at home, I had no choice but accept the call to return to public service. I thereupon resigned from all positions that I had held and all activities in which I was engaged. I now look forward to returning to private life, freed of all previous obligations.

I am not so immodest as to believe that this controversy was about me rather than issues of public policy. These issues had little to do with the NIC and were not at the heart of what I hoped to contribute to the quality of analysis available to President Obama and his administration. Still, I am saddened by what the controversy and the manner in which the public vitriol of those who devoted themselves to sustaining it have revealed about the state of our civil society. It is apparent that we Americans cannot any longer conduct a serious public discussion or exercise independent judgment about matters of great importance to our country as well as to our allies and friends.

The libels on me and their easily traceable email trails show conclusively that there is a powerful lobby determined to prevent any view other than its own from being aired, still less to factor in American understanding of trends and events in the Middle East. The tactics of the Israel Lobby plumb the depths of dishonor and indecency and include character assassination, selective misquotation, the willful distortion of the record, the fabrication of falsehoods, and an utter disregard for the truth. The aim of this Lobby is control of the policy process through the exercise of a veto over the appointment of people who dispute the wisdom of its views, the substitution of political correctness for analysis, and the exclusion of any and all options for decision by Americans and our government other than those that it favors.

There is a special irony in having been accused of improper regard for the opinions of foreign governments and societies by a group so clearly intent on enforcing adherence to the policies of a foreign government – in this case, the government of Israel. I believe that the inability of the American public to discuss, or the government to consider, any option for US policies in the Middle East opposed by the ruling faction in Israeli politics has allowed that faction to adopt and sustain policies that ultimately threaten the existence of the state of Israel. It is not permitted for anyone in the United States to say so. This is not just a tragedy for Israelis and their neighbors in the Middle East; it is doing widening damage to the national security of the United States.

The outrageous agitation that followed the leak of my pending appointment will be seen by many to raise serious questions about whether the Obama administration will be able to make its own decisions about the Middle East and related issues. I regret that my willingness to serve the new administration has ended by casting doubt on its ability to consider, let alone decide what policies might best serve the interests of the United States rather than those of a Lobby intent on enforcing the will and interests of a foreign government.

In the court of public opinion, unlike a court of law, one is guilty until proven innocent. The speeches from which quotations have been lifted from their context are available for anyone interested in the truth to read. The injustice of the accusations made against me has been obvious to those with open minds. Those who have sought to impugn my character are uninterested in any rebuttal that I or anyone else might make.

Still, for the record: I have never sought to be paid or accepted payment from any foreign government, including Saudi Arabia or China, for any service, nor have I ever spoken on behalf of a foreign government, its interests, or its policies. I have never lobbied any branch of our government for any cause, foreign or domestic. I am my own man, no one else’s, and with my return to private life, I will once again – to my pleasure – serve no master other than myself. I will continue to speak out as I choose on issues of concern to me and other Americans.

I retain my respect and confidence in President Obama and DNI Blair. Our country now faces terrible challenges abroad as well as at home. Like all patriotic Americans, I continue to pray that our president can successfully lead us in surmounting them.

Saturday, March 14, 2009

Obama and the Markets

Obama is not responsible for the stock market’s daily ups and downs. Before this week, the pundits were blaming Obama for the stock market going down. This week they should be praising him because it went up, but the financial community is responsible for its own fate. Obama inherited a huge mess. He’s working to get out of it, but it’s going to take a while to dig out of the hole that the Republicans left for him. The financial executives just don’t want to take responsibility for their own failures.

Who knows why the market goes up or down. They claim it went up this week because big banks, starting with Citi, announced that they were making a profit so far this year. But what about all those toxic assets? They are still out there. Plus, as Jay Leno or somebody said, “Wow, we gave CitiBank $40 billion, and they made $8 billion profit.”

Plus, what’s going on in the rest of the world? If something goes wrong in some unexpected place, it may well affect the US market. On Fareed Zakaria, Niall Ferguson warned that the next problem might be the disintegration of Ukraine and some other eastern European countries that will allow Russia to reclaim some of its “near abroad.” Meanwhile, today China expressed concern about its investment in the US. To some extent we and China are tied together in a form of Mutually Assured Destruction because of the enormous amount we owe China. China can’t sell off its holdings without driving down prices and hurting itself, but it is certainly in a position to wreak havoc if it wants to.

Tuesday, March 10, 2009

The Jews Got Chas Freeman

This WSJ op-ed by Bret Stevens, formerly of the Jerusalem Post, is just one example of the Jewish attack on Amb. Chas Freemen, who was nominated to be head of the CIA National Intelligence Council. Freeman is a good, decent man who was maliciously maligned by the Jewish lobby. He's not bigoted, but even if he were, what do the Jews fear so much? Was it just to show their power? Do they know that Israel is involved in such dastardly activities that truthful intelligence about it would be greatly damaging in the world's eyes? I don't know, but I do know that the Jews screamed for blood and they got it. Freeman has withdrawn his name.

The following is more or less the text of an email I sent to my Colorado senators and my congressman:

I have just heard on CNN that Chas Freeman has withdrawn his name to be head of the CIA National Intelligence Council.

I served with Amb. Freeman at the US Embassy in Bangkok, Thailand, before I retired from the Foreign Service. I believe that he is a good man. I think it is terrible that he has been so viciously attacked by Jewish interests because he served as US Ambassador to Saudi Arabia and might be somewhat evenhanded in his consideration of the Arab-Jewish/Israel-Palestine-Iran-Syria-Egypt-Iraq-Jordan... issue. In essence, he was damned by the United States of America because he was not a Jew.

This is not why I fought in the Army in Vietnam or why I served almost 25 years as a Foreign Service officer. This was a witch hunt, just like the ones carried out by Sen. Joe McCarthy years ago. I am outraged!

The WSJ also earlier printed a letter from several ambassadors, one of whom I worked with, Amb. Tom Pickering. They supported the choice of Amb. Freeman.

Thursday, February 26, 2009

Raise Income Tax on the Rich

Obama said that he will limit CEO salaries. It's going to be hard to do. They get money so many different ways -- straight salary, stock options, bonuses, retirement largess, golden parachutes, etc. It's not only the bank CEOs that we are worried about anyway. It's all those obscenely compensated CEOs.

Plus, America has not in the past liked hereditary, moneyed royalty like the Rockefellers, Kennedys, Hiltons, etc. So, tax them when they make obscene amounts of money. A year ago some hedge fund guy named Paulson (not the Treasury Secretary) made over a billion dollars. Nobody needs to make more than say $50 million per year. After $50 million, increase the tax rate to 75% or more. From $10 million annual income the tax rate could be 50%, which is still less than it would have been 50 years ago. If most of the income goes to Uncle Sam, maybe CEO's won't work quite as hard to soak their shareholders, customers and employees. Another test would be the difference between CEO salaries and employee salaries. If a CEO makes more than 100 times what an average worker in his company makes, tax the overage at 100%.

Richard Perle's Ineffectiveness

While the WSJ on Wednesday was publishing the op-ed bashing Amb. Chas Freeman for not being Jewish, another columnist was ridiculing Richard Perle in the WSJ for an article in The National Interest claiming that the neo-cons had no influence on George Bush. Thomas Frank says Perle claims he cannot be "held responsible for the Bush administration's failures." Perle has had few rivals within the US government as a Jew who was one of the most hawkish defenders of Israel. Perle's article and his defense of it prompted the Washington Post headline, "Prince of Darkness Denies Own Existence." It's remarkable that men who were so powerful in George Bush's and previous administrations are now so thoroughly discredited. William Kristol, who was VP Dan Quayle's chief of staff, but who has now lost his column at the NYT, shares this distinction with Perle.

Richard Perle was at the pinnacle of power when he was Assistant Secretary of Defense under Reagan, where he and his minions were my nemeses, pursuing some kind of America-only foreign policy that abhorred any kind of treaty. There is a lot of schadenfreude felt here. Poor Richard! May you endure many more days of ridicule!

Wednesday, February 25, 2009

Amb. Chas Freeman Attacked for Not Being Jewish

An op-ed in Wednesday's Wall Street Journal criticizes Obama's choice of Amb. Chas Freeman to head the National Intelligence Council because Freeman has "distincitive political views and affiliations, some of which are more than eyebrow-raising." One of these is his presidency of the Middle East Policy Council, which the op-ed calls "an influential Washington mouthpiece for Saudi Arabia," were Freeman was ambassador. One of MPEC's most egregious faults was to publish "an 'unabridged' version of 'The Israel Lobby and U.S. Foreign Policy' by professors John J. Mearsheimer and Stephen M. Walt." Of course the article by these well-respected professors has been published by others, such as the New York Review of Books, and expanded into a critically acclaimed book. The op-ed continues, emphasizing its core point, "Mr. Freeman has views about Middle East policy that differ rather sharply from those held by supporters of the state of Israel."

Amb. Freeman was DCM (#2) at the Embassy in Bangkok while I was there. He had zero interest in my job as embassy systems manager (head of IT), but he was completely professional and certainly not a bigot. His main qualification for the NIC job is no doubt his service as Ambassador to China, which is developing into our most important bilateral relationship. His service as Ambassador to Saudi Arabia, one of our most important oil suppliers, is also a good reason to name him. I have no doubt that he will be even handed and fair in all of his dealings with Israel, which may be the reason for the WSJ attack on him. The article by Mearsheimer and Walt points out how Israel is accustomed to preferential, not even-handed, treatment.

Hooray for Obama for pursuing honesty and integrity in intelligence analysis. Maybe if we had had more of that under Bush, we wouldn't have gotten all the hyped-up intelligence claiming that Iraq had weapons of mass destruction. It was certainly in Israel's interest to have us invade Iraq, at least that's what Israel thought then. In fact, the US invasion of Iraq has probably unexpectedly strengthened Iran to Israel's detriment.

Friday, February 13, 2009

Gregg Withdrawal, Patriotism and the Census

Obama has tried to form a team of rivals to deal with the national economic emergency, but the Republican rivals don't want any part of it. Until recently my main complaint has been about John McCain, who has been a particularly ungracious loser, fighting Obama tooth and nail. I have written this off to McCain's stupidity. He obviously doesn't understand economics, something he demonstrated when he left his campaign to devote all of his efforts to working on the first bailout bill. He was a disaster. He clearly doesn't understand the enormity of the problem, despite the fact that the most recent intelligence briefing listed the world economy as the greatest threat to the U.S., greater even than terrorism. You would think that McCain as an old military man would pay attention to intelligence warnings, but apparently if they contain numbers, he can't handle it.

Now Judd Gregg has come along to supplant McCain as the leading anti-American Republican. He decided that he can't work with Obama, despite the fact that America faces its worst economic plight in three or four generations. It looks like a patriotic American would want to do what he can to rescue America from its trials and tribulations, but not Gregg. He just wants to stick his finger in Obama's eye and make it more difficult for Obama to try to save America.

Interestingly, one of Gregg's main complaints was about the census. Apparently Republicans hate the census and see it as politically motivated. Joe Scarborough pointed out this morning that the 2000 census changed Georgia's congressional delegation from being predominately white Republican to predominately black Democratic.

So, apparently the census is just a political sham unrelated to the truth about the American population. Gregg and Scarborough would argue that when the census taker or the census form arrives at your house, lie! They argue that the census is a totally dishonest, politically motivated sham. It's another example of how Republicans hate America and discredit its institutions. Republicans don't want no stinking census, just like they didn't want no stinking regulation of the financial industry. As Ronald Reagan, their saint, said, government is the problem, not the solution. If American shot itself in the head, the Republicans think it would be much better off. Gregg didn't shoot America in the head, but he did stick his finger in her eye, and John McCain loves him for it.

More seriously, Gregg probably dropped out at least partly because of pressure from his Republican colleagues, like McCain, McConnell, Graham, Shelby and various other mentally challenged Senators, who are more concerned about partisan politics than about saving America. They are counting on the fact that their fat-cat supporters have enough gold stashed away in the Cayman Islands, Bermuda, Luxembourg, or some other foreign haven to take care of them when the U.S. craters as a result of their obstructionism.

Thursday, January 22, 2009

Obama Recognizes Vietnam Vets

Obama won me over, although I was already a supporter, when he mentioned Khe Sahn in the same breath with Concord, Gettysburg and Normandy in his inaugural address. Typically, Americans look down on Vietnam veterans, probably because most Americans, like George Bush and Bill Clinton, did not go. There are probably very few Vietnam vets on Wall Street. So, to mention a Vietnam battle in a positive context along with other famous battles is another ground breaking step by Obama. Thank you.

My impression is that he is much more concerned about our military and veterans than Bush was, although Bush was always very public about praising them. If he had really cared about them he would have done more to increase the size of the Army and Marines, would have shortened their tours in Iraq and Afghanistan, and would have increased their time at home between tours. Plus he would have done more to make sure they had the best equipment. Instead of raising taxes to provide better equipment, he and Rumsfeld just went to war with what they had. They didn't try to improve the forces. I think Obama takes his job as commander-in-chief seriously and will do more for the troops, as well as for veterans. Appointing Shinseki as VA Secretary is a good first step. Shinseki may not know much about medicine, but he cares about his troops. Thank you.

Take Over the Banks

I like the proposal for a central bank given in the NYT's Anonymous Banker's proposal. First of all, the analogy to a used car dealer is one I thought of myself. We would all think bankers were stupid if they bought cars that didn't run; instead they bought obscure securities that didn't have the value the bankers paid for them, which somehow seems less stupid, although it's probably more stupid because bankers are supposed to be experts on securities, but not on cars. The idea of buying "toxic assets" is good for taxpayers only if the government pays what they are worth, which won't help the banks. Bankers are screaming to get rid of the "mark to market" rule, i.e., the rule that makes them carry on their books only the actual value of their assets. They are saying that the current market value is too low. It's like students complaining about grades. If you're failing, you don't want grades; if you're doing well, you don't mind grades; you might even want them, so that other people, e.g., your parents, will know how well you are doing. The bankers are like failing students.

I hadn't really thought about shareholder value, but the idea of preserving shareholder rights, but keeping them on ice until the bank comes out of the "central bank" seems like a good one. I can see lots of bookkeeping problems, however, if the stock is on hold for 10 years. People will die, get divorced, etc., and figuring out who gets what when the bank re-emerges will be tough.

Since I proposed it earlier, I especially like the idea of limiting the size of the banks when they re-emerge and renewing Glass-Steagall, or something like it to prevent the banks from become too big to fail again. The government could create three, four or five roughly equivalent regions and then limit any bank to just one region.

Sunday, January 11, 2009

Break Up the Banks

In this huge Op-Ed in last Sunday's NYT about the financial crisis, I thought there was only one really good idea: Break up the banks that are too big to fail, so that next time they can fail without destroying the US financial system. We should probably allow interstate banking, but put some kind of cap on the size of banks.

Wednesday, December 31, 2008

Wall Street Was Ponzi Scheme

Both Paul Krugman and Tom Friedman have written columns along the lines that the whole Wall Street bubble over subprime mortgages, derivatives, credit default swaps, etc., was just like Bernie Madoff's Ponzi scheme. There was no "there" there. It was all smoke and mirrors. The money went to the people who came up with the schemes to sell worthless paper; they did not create any productive activity. The salesmen just got their commissions up front, before people realized that they were selling worthless paper, illustrated by this Washington Post article about AIG's descent into chaos.

Gaza Strip War with Israel

I think it's likely that Israel invaded Gaza now because it wanted to do so while Bush was still President. In a few weeks, Obama will be President, and although he has talked a good game in support of Israel, the Jews may be worried that he will not be as supportive as Bush. Bush as clearly given them the green light to do whatever they want. Hence the Israeli decision to invade while Bush is still in office.

Monday, December 22, 2008

Idiots in Charge of America and the World

The Financial Times columnist Munchau is right when he says, "I am sceptical of the Fed's new policy of quantitative easing. We do not have a liquidity crisis, but a solvency crisis...." There have been a lot of complaints from bankers about the "mark to market" requirement, which means they should carry assets on their books at the price at which they could be sold in the market. The problem is that their assets are junk, similar to but much worse than Michael Milken's "junk bonds."

What we have is a bunch of huge banks who went out to talk to the day laborers in front of Home Depot and said, "How would you like to buy a 5,000 square foot house? We'll give you a mortgage at 1% or even a negative percent, if you can't afford 1%." So, a lot of the day laborers and their friends took the banks up on their offer. They could buy a 5,000 sq. ft. house cheaper than they could rent a 1,000 sq. ft. apartment on a monthly basis. In theory they signed away their lives when then completed all the mortgage paperwork at the mortgage broker's office, but in fact because they put nothing down on the house and were not held to any standard of honesty for the background information on income, etc., that they gave; they incurred no obligation when they signed the documents. In essence what the banks got in return for lending trillions of dollars in such transactions were bunches of worthless IOUs for which there was no enforceability other than possibly getting the house back some day. The banks want these IOUs to be carried on the books at face value, but it fact they are worth only a few cents on the dollar. Because they are not negotiable in normal, open markets, nobody really knows exactly how much they are worth. Why are they not negotiable? Because they are a bunch of almost worthless IOUs with little legal enforceability. So, when the bank threatens to foreclose and take back the house, the day laborer says, "Fine, take it; I didn't like the color of the media room anyway."

But Washington is all upset that their goal of getting everyone living in America, citizen or not, into a new, expensive house is threatened by the foreclosures. So, Ben Bernanke at the Fed says, "What do I have to do to get you back into this luxurious house? I'll push mortgage interest rates to zero. I'll forgive any negative equity that you have; we'll reduce your mortgage to whatever value an honest appraiser (who was missing in the original transaction) says it's worth, and we'll reimburse the banks for any loss they incur as a result."

So, Munchau is right when he says the problem is not liquidity (banks' unwillingness to lend) but insolvency (banks' lacking money to lend). Their assets are worth far less than the loans that they already are committed to; the banks have no assets to draw on to make additional loans. The Fed says, "No problem, we'll buy the worthless assets from Fannie Mae and Freddy Mac, so that they have real, Fed supplied assets to make new loans from." This is in essence what Hank Paulson originally proposed to use his $700 billion for. But then he followed Britain's example of just giving the money to the banks to shore up their balance sheets, leaving them their unmarketable toxic assets plus whatever additional capital the government gave them to make new loans from.

It's a house of cards, but Bernanke and Paulson are running around trying to close all the doors and windows to keep drafts from blowing all the cards down. I wish them luck, but why did the future of the United States come to depend on a house of cards? In the old days, they used to talk about investment bankers being the "smartest guys in the room." Now they look like the dumbest. On the other hand, they all became millionaires; they just did it by sucking the blood out of hard-working, ordinary Americans. Wall Street is the vampire capital of the world. Maybe that's why vampires are so trendy now.

Friday, December 12, 2008

Repercussions for Republicans?

Will there be any repercussions for Senate Republicans who blocked passage of the interim auto bailout bill two weeks before Christmas?  They basically said to America, we don't like you; so, we are going to put coal in your stocking for Christmas.  The White House, Treasury and the Fed may save the day for average Americans, or maybe not.  The Republicans apparently don't care if GM goes bankrupt on Christmas Eve.  Scrooge would be proud!  Mitch McConnell, Richard Shelby, and company plan to take Tiny Tim's crutch and beat him over the head with it.  Merry Christmas!

Monday, December 08, 2008

Auto Bankruptcy

The auto bankruptcy is too big just to use the regular bankruptcy law. These are not just any companies. The auto industry is the foundation of American industry. So why shouldn't Congress pass an industry specific bailout law that would contain many provisions of ordinary bankruptcy, which could also have specific requirements for executives' and workers' salaries, hybrid mileage requirements, etc. In addition, some people say the credit crisis will prevent normal bankruptcy from functioning as it should because there will not be sufficient credit available to allow the companies to operate under Chapter 11.

Thursday, December 04, 2008

Idiots on Wall Street

The Financial Times reports that the price of credit default swaps, insurance for corporate debt, has been going up again.  The FT interprets this as meaning that the credit crisis is worsening.  I interpret it as meaning that Wall Street, London's City, and the other financial markets are finally learning what they are doing when they make credit default swaps.  They are insuring that a company will pay its debts, and they are saying, "If that company doesn't pay, we will."  For years they have been blithely issuing these swaps as if they were just cheap ways to make money with no consequences.  The horrendous failure of AIG due to the issuance of these CDS's shows that they do have consequences.  Finally, after years of failing to understand the business model for CDS's, Wall Street is learning.  As a result, CDS's are becoming more expensive as they should have been for the last decade, or however long they have been around.  The markets may be bad, but for years the CDS's were priced incorrectly by idiots who did not know what they were doing.  The whole credit crisis was created not so much by the sub-prime mortgages, but by the ridiculously under priced CDS's sold to cover them, which now have the issuing institutions on the hook for trillions of dollars.  The banks don't have enough capital to stand behind these promises; so, the Federal Government has had to step in to prop them up.  

Friday, November 21, 2008

More Housing Pain to Come?

The stock market is now down about 50% from its recent highs. The stock market decline is supposed to be an effect of the housing market bust. Meanwhile, the prices of houses, which are much less liquid and slower to adjust, are only down about 25% from their highs.

This would indicate to me, even allowing for the fact that panic enters the stock market much more quickly than the less liquid housing market, that the worst is yet to come for housing.

I'm not pleased about a big 3 auto bailout, but if they go under, I think it might the tipping point that takes the US into something like a depression, certainly a serious, long recession. The old Mel Gibson Mad Max movies will in actuality take place in post-depression Michigan and Ohio, rather than in post-war Australia. But Congress says, we don't care; Honda, Toyota, BMW, VW and Mercedes will take good care of us. World War II is finally over, and the Axis won. Alabama's Sen. Richard Shelby is waving the white flag as hard has he can to help all those Japanese and German auto plants in Alabama.

Saturday, November 15, 2008

Rahm Emanuel Apologizes for Father's Anti-Arab Comments

Kudos to Helena Cobban for calling on Rahm Emanuel to repudiate his father's anti-Arab comments to the Ma'ariv newspaper, and for reporting that he has done so. Like her, I am not crazy about having a dual national Israeli-American as chief of staff to President Obama. I think he ought to renounce his Israeli citizenship. He should be be 100% loyal to America.

Sunday, October 12, 2008

Tom Friedman on Patriotism

Thank goodness that Tom Friedman has the sense to see that paying taxes is patriotic. I don't understand why Republicans don't want to pay to defend America, why they hate the troops fighting for them in Iraq and Afghanistan, why they don't want roads and bridges. clean water, sewers. I guess they want to privatize it all, have Blackwater fight our wars, private contractors build toll roads for profit, etc. But while McCain and Palin may hate the American government, there are people like Tom Friedman and me who love it and are willing to pay something for what it gives us. I can only imagine that the greedy SOBs who created the financial mess that we are in were mainly Republicans. Thanks Tom.

Wednesday, October 01, 2008

Rep. Shadegg Says McCain Killed First Bailout Bill

On CNN's Situation Room today Arizona Rep. Shadegg said that John McCain was responsible for torpedoing the first bailout bill. According to Shadegg, in the Cabinet room, McCain said that the bill was not a good bill and that the House Republicans had a good idea. He thus encouraged the House Republicans who did not like the bill to oppose it, rather than holding their noses and going along with it. What a horrible, horrible man, a man who clearly put his political campaign ahead of the country's good! He is a moral derelict. He made some points with the arch conservatives in his party, but at what a cost! He is willing to bring America to its knees in order to get elected.

The House Democrats have poked fun at the Republicans for saying that Nancy Pelosi's speech was the reason they opposed the bill. Barney Frank said they decided not to act in the best interests of the country because their feelings were hurt. But this is not the first time that has happened. Apparently Newt Gingrich shut down the US Government in the 1990's because President Bill Clinton made him disembark from Air Force One through the rear door. Newt was perfectly capable of punishing America for dissing him, and so are the House Republicans.

John McCain, Newt Gingrich, the House Republicans, and Ronald Reagan would never say those feared words, "I'm from the government, and I'm here to help." They say, "I'm from the government, and I'm here to punch you in the face."

Tuesday, September 30, 2008

Another letter to Congressman

I commend you for voting for the bailout yesterday.

I am disappointed at the stock market rise today (almost 500 points on the Dow), which essentially was Wall Street saying, “We don’t need no stupid bailout.” I think, though, that if the experts think there is even a 25% chance of a serious recession/depression, then the bailout is probably worth it.

I have become concerned about a new issue: bank size. With their recent acquisitions, properly done to help the economy in this crisis, several more banks are becoming “too big to fail,” as AIG was. JP Morgan Chase, CitiBank, and Bank of America have all swallowed up large, troubled banks, thus pushing themselves into the “too big to fail” category. Meanwhile, Wall Street darling Goldman Sachs has switched from being an investment bank to an ordinary commercial bank. Once this crisis is over, the government should look at the antitrust implications of these mergers, perhaps a partial revival of Glass-Steagall, or some other approach to limit the risk of these huge banks getting into trouble.

People say that the stock market is not a good indicator of the current problem with the economy, which is the credit market. However, the problem with the credit markets freezing up is that they might produce a recession/depression. By going up 500 points today, Wall Street is saying it expects continued good times, not a recession. One standard for judging a reasonable stock price is the price/earnings ratio. If earnings go down, then the price (and the Dow) should go down. Wall Street is saying that even if there is no bailout, it does not expect earnings to go down. That view certainly supports those who voted against the bailout.

I think we are fortunate to have experienced hands like Paulson and Bernanke at the helm of our economy, and if they still strongly support a bailout, then I say do it, although at the moment it seems to go against the majority opinion on Wall Street as well as Main Street.

Thursday, September 25, 2008

How Bad Is the Financial Crisis?

After listening to people talk about the crisis for days, I'm not so sure that it's as bad as I first thought it was. It should be pretty bad to warrant a $700 billion bailout. I thought people were talking about avoiding a depression; now they only seem to be talking about avoiding a recession. It it's a shallow recession, and there is no actual recession at all yet, then it may not be worth $700 billion. We've been through recessions before. We've only been through one depression in the last century. The fact that Bear Stearns, Lehman, Merrill Lynch, Fannie Mae, Freddie Mac, and AIG disappeared is unusual, but except for Lehman, they didn't really cease to exist; they just changed names or owners. Even part of Lehman was snapped up. So, how many jobs were lost? A few thousand at Lehman, and bonuses at some firms may be reduced a few million dollars. Nothing serious.

The talking heads are saying that agreement on a bailout bill is close today. At the moment, the stock market is up almost 300 points. On CNBC they have been saying that the credit markets are still acting badly. I'm not sure what that means, although some of it seems to be that banks are still demanding big interest rate spreads to loan money.

So, now I think this bailout may be overkill. Bush did not scare me sufficiently.

And John McCain is politicizing this crisis, if in fact it is one, for all it's worth, which may not be as much as I thought a few days ago. It's pretty clear that his plan was to attack Bush and the Republican leadership in Congress as soon as they approved a bill. The Republicans called his hand on it, because they don't want to go into elections with their party leader, McCain, calling them traitors to the Republican Party. So, instead McCain now claims to be riding to the rescue of the plan, rather than keeping hands off to attack it later.

One thing he is not doing: he is not putting country first. He's putting John McCain first. He has a tough choice. He has been a free-marketeer all his life. Now, does he violate all of his principles and support the bailout bill socializing Wall Street, or oppose it and run the risk of being responsible for the ensuing depression, if there is one? Obama has clearly been more presidential by taking Paulson and Bernanke at their word and pledging to support them with some caveats.

Although as a private citizen I am now skeptical, if I were in a position of power, and Paulson and Bernanke told me there was a genuine chance that the US could fall into a depression, I would support the bailout bill.

Tuesday, September 23, 2008

Another letter to congressmen re financial bailout

I think we have to do something to prevent the US financial system from self-destructing. Therefore, I support doing something along the lines recommended by Sec. Paulson and Fed chief Bernanke. However, it seemed to me from their testimony this morning that their plan is to have the US government buy mortgage-backed securities from troubled firms for much more than their current market value in order to keep the banks solvent. So, I expect the US to lose a lot of money and the banks to make a lot of money. It is welfare for rich people, but the alternative is poverty for everyone.

Nevertheless, the $700 billion plan is highly inflationary. Bernanke has apparently given up worrying about inflation, which is understandable. It’s sort of like saving someone’s life today by giving them a drug that will kill them in a year or two. Most people would choose to live until tomorrow.

We know the solution for inflation – high interest rates and high taxes. We can’t institute those now, but we should promise to institute them as soon as the recession/depression ends. I would recommend that as a down payment you get Bernanke to promise to raise the Fed rate by 0.25% now and that you raise income tax rates by 1% now, just to remind people that there is a huge bill coming due.

You should not ignore the fact that Paulson was CEO of Goldman Sachs, the troublemaking institution (by dealing in these questionable securities) that has so far come out smelling like a rose. This goes double because Pres. Bush lied to us about WMD in order to get the US to invade Iraq. As a politician, you should remember that Sen. Clinton probably lost the Democratic presidential nomination because she was duped by Bush’s war justification. Although I don’t trust Bush, I think that Paulson and Bernanke are patriots and not purposefully misleading the American people, although these issues are so complex that probably no one understands them completely.

Monday, September 22, 2008

No More Superpower

The economic collapse on Wall Street may be the beginning of the end for the United States’ superpower status, coming about 15 years after the Soviet Union lost its superpower status, also mainly because of economic failures. The US will continue to be a powerful country, and will maintain parity with the EU and other large countries, but will eventually cede its leadership position to China. A sad day for America. Wall Street traders are short term winners, but America as a country is a long term loser. Some time soon it will be time to pay up, mostly to China, and it will be painful. I am particularly saddened because I don't feel that I participated in the excesses that led to this debacle. If I'm going to help pay for an extravagant gambling trip to Las Vegas, I should at least have been there.

America's real loss of prestige and power will probably not become apparent until inflation runs rampant, which is on the horizon, although exactly when is hard to say. Inflation will produce its own winners and losers. I saw this first hand in Brazil a few decades ago, but the country will be a loser. Perhaps we can take comfort from the fact that Brazil after its bouts with inflation is still out there striving to become a great power. The old saying still holds, however, that "Brazil is the country of the future, and always will be." Perhaps the US will become the country of the past that is always trying to regain its stature.

The only good news is that Republican laisse-faire economic theories have been totally discredited. The Republican icon Ronald Reagan turns out to have been wrong. We had a baby boomer generation of good times freeloading on the hard work of World War II's greatest generation.

Friday, September 19, 2008

A Bridge Loan Too Far

Paulson and company have decided to insure money market accounts up to $50 billion. That's too much for me. Granted, a couple of money market funds have "broken the buck" and have lost so much money that they can't return a dollar for every dollar invested. So, Paulson will make up the difference. And in the process he will destroy regular, hometown commercial banks. Why would anyone keep money in a low interest bank account when higher interest money market accounts are guaranteed by the government? Just debit your money market account once a month to some credit card and pay all your bills over the Internet using the credit card. Destroying local banks will, of course, move almost all banking activities to Wall Street, to the people who created this crisis through their poor management. Paulson will destroy conservative local bankers to help his risk-taking friends at Goldman, Sachs. He is truly turning the banking industry on its head, destroying the strong to help the weak.

The problem with bailing out the money market funds is that this is problem that they and their investors created themselves. There are many kinds of money market accounts: some which buy questionable corporate bonds (close to junk bond status) and pay high rates of return, and others which buy government bonds or only high quality corporate paper, and which pay lower interest. One of the funds in question is in trouble because it bought Lehman bonds. Why did it buy Lehman bonds? Because Lehman was in trouble and had to pay higher interest to get people to buy its bonds. So this fund knew it was buying risky bonds; the high interest was a dead giveaway, and the investors in the money market fund knew that they were taking a risk, because the fund was paying higher interest. Everybody involved could see there was a risk, and they decided to take it.

Now the government comes along and says, "You poor dears! Never mind your mistake, we'll give you the money you lost." These weren't people who were tricked; they were just a little too greedy. They should not be bailed out, especially when it means the end of local banking as we used to know it.

So, now Paulson and Bernanke have lost my support. They are just going nuts with the government credit card. They are saying that they don't care a whit about inflation. America is doomed to becoming a banana republic. Paulson saved his buddies at Goldman, Sachs, and he saved his own fortune which is no doubt closely tied to Goldman, Sachs fortunes. I'm guessing that Bernanke will quit the Fed soon and his Jewish friends on Wall Street will take care of him in grand style for bailing them out. America be damned!

But Nancy Pelosi can continue to wear her diamonds and South Sea pearls, and John McCain can continue to flit around in Cindy's private Cessna Citation jet, because Paulson and Bernanke will make sure they don't suffer any financial losses. Well, maybe Pelosi did take a $500,000 hit, but she probably won't have to sell her pearls.

Biden Is a Patriot, McCain Is Not

John McCain has attacked Biden for saying that is patriotic to pay your fair share of taxes. McCain lost me totally, because I agree with Biden. McCain is against supporting the troops in Iraq. It's tax money that buys their flack jackets, their armored humvees, etc. McCain would let them die so that he and Cindy can buy another mansion and a private jet. Poor America!

Thursday, September 18, 2008

Letter to the President

I have just read that the government is going to bail out AIG. At this point there may be no alternative if our financial system is going to survive. But you have presided over a massive transfer of wealth from the middle class to the super-wealthy upper class. Under the Bush administration taxes were reduced on the upper classes to the lowest rates in generations, beginning the transfer of wealth. What thanks did we get? The rich virtually destroyed the financial system. But to (hopefully) avoid the total destruction of the financial system, the government has undertaken a further massive transfer of wealth to the rich to bail out their investments. As they say, you have privatized the gains and socialized the losses. You have negated “moral hazard.”

The United States is significantly weaker than it was before the financial crisis. By failing to control the greed on Wall Street, you have undermined our national security, while poor rednecks are fighting two wars far from our shores. The government has betrayed our soldiers. Because of low taxes, particularly on dividends, capital gains, and other investments, the rich didn’t even contribute their fair share to fighting the wars. This bailout is now being done with money borrowed from China, the Middle East, and Europe, most of which will have to be repaid by our children and grandchildren, although I suspect that at some point the government will let inflation run wild so that we can repay today’s huge debts with tomorrow’s worthless dollars.

The government’s further contribution has been to run an expansionary fiscal policy of low taxes and deficit spending during years when the economy was not so bad. The Bush administration inherited a budget in surplus. Now, with the economy in shambles, it will probably be difficult to raise taxes for years to come, making the obscenely wealthy even more obscenely wealthy and virtually destroying the middle class. The entire burden of dealing with the financial debacle has fallen on monetary policy managed by the Fed and Treasury, because corruption and incompetence have destroyed the usefulness of fiscal policy.

On 9/11/2001 Osama bin Laden tried to destroy the U.S. financial system by attacking the World Trade towers. He failed. In September 2008, you finished the job for him. I’m sure Osama is rejoicing and thanking you in his cave.

I am outraged. You have failed America! You should hang your head in shame!

Wednesday, September 17, 2008

Letter to Congressman and Senators

I have just read that the government is going to bail out AIG. At this point there may be no alternative if our financial system is going to survive. But you have presided over a massive transfer of wealth from the middle class to the super-wealthy upper class. Under the Bush administration taxes were reduced on the upper classes to the lowest rates in generations, beginning the transfer of wealth. What thanks did we get? The rich virtually destroyed the financial system. But to (hopefully) avoid the total destruction of the financial system, the government has undertaken a further massive transfer of wealth to the rich to bail out their investments. As they say, you have privatized the gains and socialized the losses. You have negated “moral hazard.”

The United States is significantly weaker than it was before the financial crisis. By failing to control the greed on Wall Street, you have undermined our national security, while poor rednecks are fighting two wars far from our shores. The government has betrayed our soldiers. Because of low taxes, particularly on dividends and other investments, the rich didn’t even contribute their fair share to fighting the wars. This bailout is now being done with money borrowed from China, the Middle East, and Europe, most of which will have to be repaid by our children and grandchildren, although I suspect that at some point the government will let inflation run wild so that we can repay today’s huge debts with tomorrow’s worthless dollars.

Congress’s further contribution has been to run an expansionary fiscal policy of low taxes and deficit spending during years when the economy was not so bad. The Bush administration inherited a budget in surplus. Now, with the economy in shambles, it will probably be difficult to raise taxes for years, making the obscenely wealthy even more obscenely wealthy and virtually destroying the middle class. The entire burden of dealing with the financial debacle has fallen on monetary policy managed by the Fed and Treasury, because Congress’s corruption and incompetence have destroyed the usefulness of fiscal policy at this point.

I am outraged. You have failed America! You should hang your head in shame!

Thursday, September 11, 2008

Wall Street Hates America

This Reuters article describes how Wall Street helps foreign investors avoid paying taxes on money made in the US. Clearly they don't care about 9/11, and the poor GIs fighting in Afghanistan and Iraq because of it. No need for them to fund the GIs. To them those dead people in the World Trade Center are just long dead and buried; let the good times roll! Show me the money! Greed is good!

Wednesday, September 10, 2008

What Did McCain Do In The War?

I've about had it with McCain's incivility. The latest is attacking Obama for using the phrase, "Lipstick on a pig," referring to the McCain campaign's attempt to hijack the theme "Change." McCain tried to imply that Obama was calling Palin a pig, when Obama wasn't even talking about Palin. CNN found an example of McCain's using the "lipstick on a pig" phrase referring to Hillary Clinton's campaign.

OK, so McCain what did you do in the war? How many missions did McCain fly over Vietnam? According to this perhaps biased website, he was shot down in 1967 on his 23rd mission. He then spent 5 1/2 years as a POW. No doubt his years as a POW were awful, but his battle in prison was basically a personal battle; he did not do anything to help the US win the war against North Vietnam. The referenced column by David Hackworth, written in 2000, probably during the campaign when I supported McCain, also says that the many medals received by McCain upon his return from being a POW were basically boilerplate citations, not awards for individual acts of heroism.

So, what did McCain do for America during those 5 1/2 years? Not much. He spent much of it in bed due to his injuries, or in solitary confinement after he recovered enough to get out of bed. Those are extraordinary personal triumphs, but they don't win wars.

So, enough McCain! Shut up about being a heroic POW! Shot up about lipstick!

Speaking of POW. Basically, McCain used his celebrity as a returning POW to win his way into the House and Senate. His Navy career essentially ended when he was shot down as a lieutenant commander, far below his father's and grandfather's rank as four star admirals. He got some subsequent promotions when he was released, but like his medals, they were proforma promotions for any POW. His Navy career was respectable, but not a great success, especially for someone who graduated from Annapolis. However, the fame he acquired when he returned advanced his career outside the Navy.

It no doubt helped him woo Cindy Hensley, the Paris Hilton of her day. She was a rich heiress with a hot body. McCain dumped his old wife, who waited years for him while he was in prison, to marry Cindy and her money. His old wife never speaks; I think it's because he paid her off with some of Cindy's money. He has taken care of his children with his first wife, most recently illustrated by the fact that his son Andrew was a director of a bank that recently failed, and is also a big shot in the Hensley beer business.

Then with Cindy's money and his POW celebrity status, McCain won a House seat in Congress from Arizona, later upgraded to a Senate seat.

In Congress, McCain has been a maverick, which he can afford to be because Cindy has made him extremely wealthy. He doesn't have to worry about kowtowing to the big money lobbyists to get re-election money, which is good. But what about the big deal he makes about earmarks. Sure they are bad and McCain doesn't use them, partly because he has Cindy's money for re-election and doesn't need the dirty money that other politicians get for earmarks, e.g., Ted Stevens. But earmarks are basically an inside the beltway Congressional issue. Why hasn't he done something about them while he has been a Senator. He says he will veto any bill with earmarks, but we know from experience that the earmarks will be inserted in a bill containing appropriations for the troops in combat, or some other essential function. Will McCain be willing to veto that? He should be talking about some serious issues, like the wars in Iraq and Afghanistan, health care, the budget deficit and the national debt, the stability of our financial system, etc. The Republicans have poor records on all of these issues, so McCain avoids the issues and talks instead about personalities, in particular personally attacking his opponents. It works for the election, but it's not good for America and illustrates that McCain doesn't really care about America, despite all his hypocritical campaign slogans like "Country First." McCain is not putting his country first.

Tuesday, September 09, 2008

McCain Bank Fails

I think it's odd that there hasn't been more talk about the fact that a bank connected to John McCain failed last Friday. Until shortly before its failure John McCain's son Andrew had been a director of the Silver State Bank. Only the Financial Times and the WSJ had brief articles about it. The WSJ implied that the FDIC may have been delayed in closing the bank by Nevada regulartory authorities, giving Andrew McCain time to quit as a director before it was closed.

Thursday, September 04, 2008

Hometown Girl or Trailer Park Trash?

Everybody has certainly fallen in love with Sarah Palin. What does it mean?

CNN Showbiz Tonight this morning had a segment on how Sarah has become a bigger celebrity than Obama. Does that mean McCain will have to disavow those commercials comparing Obama to Paris Hilton? Would it be more accurate to compare Sarah to Paris, or to Britney, or to Britney's mom, since Britney's little sister has gotten pregnant?

Unmarried, pregnant, teenage daughter? No problem, "it just makes her more like you and me." Really? Well, we all have problems, but that doesn't mean it's a good thing. People shoot their neighbors on a daily basis, but by and large they don't get congratulated for it. There are a lot of shotgun weddings, and a lot of unmarried, single mothers, but that doesn't mean it's society's ideal. It's a little suspicious that there was apparently no urgency for Bristol to get married to her baby's father until her mother got named vice presidential candidate. Does that mean they didn't care, that they didn't really like the boy, or what? Apparently the religious right in the Republican party says it's okay for teenage girls to have sex and get pregnant, as long as they don't get an abortion. That's a pretty low moral standard. I'm not sure there's a lot of Biblical support for that position, and maybe some criticism, like the Commandment not to commit adultery. Kids today reading Hawthorne's Scarlet Letter probably have no idea what the fuss is about.

In sum, while Sarah may have been an okay governor, she was a less than completely successful mom.

Meanwhile we have the black candidate, Obama, who comes from a tradition where black men routinely desert the women having their babies, but who has tried to have a traditional family relationship with his wife and kids. His wife says she tries to do only campaign day trips so that she can be at home with her kids afternoons and nights. Did Sarah do that while she was working on her career? Or did her career come first, ahead of her family?

Finally, besides wanting to know what Sarah knows about foreign policy, what else does she cares about. She didn't go to a big name school, no elitism there. But does she read? Does she know anything about Plato, Locke, Samuelson, Shakespeare? What music does she listen to? Does she have in-depth knowledge about the economy, or does she get everything in sound bites? Is she more interested in hockey than war and peace? It doesn't take much effort or intelligence to be a hockey mom. It takes more to be vice president, or at least it should. I would like the Vice President to be someone with a little culture, refinement and background. My impression is that in terms of upbringing and social status, she's no Margaret Thatcher.

The problem with people with little education and experience is that they tend to reinvent the wheel, even if they are smart. They don't know what other smart people have thought about similar problems before, and what solutions worked and what didn't. Those who don't know history are doomed to repeat it. While Obama has relatively little executive experience, he is well educated, and so far, no matter what you think of Harvard and elitist institutions, they do tell people important things, and if you learn well, it helps in life. Bush's problem is that he went to Yale but made a point of rebelling against it, as McCain did at Annapolis. Remember that Cheney flunked out of Yale; maybe we should have paid more attention to that before we put him in a position to start a war with Iraq and order the torturing of prisoners.

McCain's Risky Foreign Policy

Gideon Rachman of the Financial Times says McCain would be a risky foreign policy maker. He says McCain is too prone to take risks, as illustrated by his selection of Sarah Palin as his VP. His risk taking may work sometimes, but there is the potential for tremendous damage if it comes out wrong, which is possible when dealing with Russia, which he dislikes. Thus McCain is not the "safe" choice for commander-in-chief. Rachman sees the possibility of an even more aggressive foreign policy than than pursued by Bush.

Wednesday, September 03, 2008

McCain's Intelligence

While this Mother Jones article raises several disturbing issues, for me the worst is the connection between McCain's main foreign policy adviser, Randy Scheunemann, and Ahmed Chalabi. This article says that Scheunemann was one of Chalabi's acolytes, along with Cheney and Rumsfeld among others, in his effort to get the US to invade Iraq. Chalabi wanted to replace Saddam Hussein, but ran into too much opposition. He has remained a central figure in the new Iraq, although usually just below the public appearance level. The last I saw he was the head of rebuilding Baghdad, a job that gives him lots of money to siphon off to his Swiss bank accounts.

This MJ article sheds some light on my concern that there may be some truth to the Russian allegations that Bush and the Republicans encouraged Georgia to invade South Ossetia in order to help John McCain's campaign. McCain apparently shares my view that there is no love lost between the CIA and President Bush, and perhaps by extension other Republicans, including McCain. Thus, I think it's unlikely that there would have been an official CIA operation encouraging Georgia to invade. I'm less sanguine about the military, and the MJ article says that's where McCain wants to shift intelligence responsibilities. That would certainly reinforce suspicions that if there were some kind of clandestine effort to foment a war in Georgia to help McCain, the effort would have been led by the US military, not the CIA.

I doubt that the US did anything official to foment war in Georgia, but Scheunemann's connection to Chalabi makes him even sleazier than I thought he was before. He may well have done something to stir things up through his unofficial contacts with Georgians. It also helps explain McCain's rabid stance in favor of the Iraq war. If looks like if you vote for McCain, you're also buying Scheunemann and all his lobbying clients.

Terrible Campaign

I'm disappointed with myself for the previous posts criticizing McCain's POW experience. I don't think they are wrong, but I am mad when others, such as the Swift Boat Veterans, criticize Vietnam veterans for their service. Now, I'm criticizing McCain for his service. But it's tough on veterans. I was thinking tonight watching the Republican convention praise the military to the heights, that a very small percentage of the US population serves in the uniformed military. But the vast majority is motivated to praise them, because the majority doesn't want to serve. It wants to make money. So, while it praises military service, the majority thinks, "Please let those fools keep going to Iraq and Afghanistan, so that I don't have to."

What has gotten me so mad at McCain & company is the dirty campaign they have been waging. One of the first things that set me off was McCain's accusation that Obama cancelled his visit to wounded troops in Europe because the military would not let him bring press. There seems to be no basis for that claim; it's just another way for McCain to call Obama unpatriotic.

Tonight, Lieberman, the former Democratic vice presidential nominee attacked the current Democratic presidential nominee at the Republican convention. As some of the CNN commentators said, it was questionable, but perhaps forgivable, for Lieberman to speak for McCain, but it probably crossed the line when he attacked the nominee of what is supposed to have been his party. Now the Washington Post says that one of his charges was probably baseless. Obama did not vote against funding for the troops, as Lieberman claimed. Again, like the claim about not visiting the wounded troops, the false claim attacks Obama's patriotism. This strikes me as extremely low and sleazy. It illustrates that McCain and Lieberman have poor moral character. Here are two United States senators lying about one of their Senate colleagues. The Senate is truly a nest of filthy snakes! Poor America!

Tuesday, September 02, 2008

Sarah Palin's Daughter

The almost universal hesitancy to criticize GOP VP nominee Sarah Palin and her daughter for the daughter's pregnancy while in high school raises questions about how Republicans (and Americans in general) feel about women. One the one hand, Palin's selection by McCain seems to indicate that Republicans think women are ready to govern. On the other hand, by saying that it's okay to get pregnant in high school, they are saying, "We like our women barefoot and pregnant. Women don't need no education. Just keep turning out them babies." But if they happen to get through high school and college, then they are qualified to be vice president.

Which is it Republicans? McCain might say, "Hey, women don't need education. Just look at Cindy. She's a total airhead. All women need is a big inheritance. I dumped my first wife because she didn't have one, and she wasn't as hot looking as Cindy."

I'm glad Obama doesn't say impolite stuff like this, but I am sincerely disappointed that McCain has turned out to be such a sleazebag.

McCain's Nasty Campaign and POW Status

Obama's statement yesterday refusing to comment on Sarah Palin's daughter's pregnancy shows the distance still remaining between his campaign and McCain's. McCain's negative attack ads dragged Obama down somewhat, but he is still far above McCain in the decency of his campaign.

The Economist this week talks about McCain's bio in an article entitled "No Surrender." It says, "After failing to dodge [a surface-to-air missile], he ejected from his plane, broke three limbs and fell into a lake. He was dragged out by a mob, stabbed in the groin and beaten nearly to death." It does not comment on the the major decisions in that sequence: to have ejected from the plane, not to have fought to the death despite his injuries, or not to have committed suicide before the mob captured him. It is arguable that the honorable thing for McCain to have done, especially in light of the fact that his father was the senior Navy commander in his theater, would have been to go down with his plane. Allowing himself to be captured placed his father in a terrible position. His father dealt with it, perhaps appearing callous, but perhaps he felt that his son had failed to live up to the family's naval tradition. McCain had a horrible career at Annapolis; then unlike the majority of his cohorts, he got shot down, and when he got shot down, he allowed himself to become a POW. It's not a sin to become a POW, but it's not heroic either. It became more heroic for Vietnam war POWs because it was one of the few things that the country embraced, probably because they were freed only when the war was over, and thus there was no need to use them to oppose the war. The regular veterans came home to contempt from their civilian counterparts, who saw them as tools used by the government to pursue a war that civil society opposed, and therefore as war criminals regardless of whatever courage and decency they may have displayed in combat.

Ironically, Vietnam POWs probably got treated more like heroes than POWs from previous wars, while ordinary veterans got treated worse. McCain came to believe the hype surrounded his return, deserved or not, and now is basing his presidential campaign on it.

I'm guessing he failed to live up to the standards of his four-star admiral father and grandfather, and in response tends to downplay their service. It order to portray Obama as an elitist, he tends to portray his four-star father as something only a little better than a bag-boy at Safeway. In reality, McCain was a failure by his father's standards.

Fortunately, Obama is too polite to say anything like this.

Friday, August 29, 2008

Putin Says Bush Pushed Georgia To Attack for McCain

Putin obliquely accused Bush of encouraging or helping Georgia attack South Ossetia in order to help John McCain get elected, according to a CNN interview reported in the NYT. I was already worried in an earlier blog that McCain had helped foment the war in Georgia.

Putin seemed to imply that an American military or CIA officer was directly involved. I doubt this. If a CIA officer was involved, it was probably some rogue agent like those who worked in the Watergate break-in, not one working in a CIA operation. I think there is no love lost between the CIA and Bush. Bush has made the CIA's failures the scapegoat for his failure on 9/11, and by reorganizing the intelligence community has weakened the CIA significantly. It's unlikely that the career leadership of the CIA would undertake an operation mainly to support McCain's candidacy. It's also unlikely that SecDef Gates would risk starting a war for partisan politics, although I'm not so sure about some of the wild men in the special forces command; I just don't know enough about them.

Although I'm dubious that the US government would have encouraged Georgia to start a war to help McCain, I think the USG probably encouraged Georgia to tweak Russia's nose for its own foreign policy reasons, however stupid they may be. And I think that McCain used is own foreign policy contacts to encourage Georgia to be aggressive, particularly his chief foreign policy adviser, Randy Schuenemann, who is a lobbyist for Georgia. He basically gets paid to foment a war that advances McCain's campaign. McCain's connections are obvious; he and Saakashvili claim to talk several times a day, with Schuenemann's lobbying firm picking up a little commission every time they do. Plus, McCain has sent his own envoys to buck up Georgia's aggressiveness -- Sen. Graham, Sen. Lieberman, and his wife, Cindy McCain. No doubt they all said something like, "Don't give up," but the questions is how far they went in promising military aid either now or after "President McCain" is elected.

Wednesday, August 27, 2008

McCain Hides Behind POW Experience

I've had it with McCain's touting of his POW experience as the answer to every question, particularly to how many houses he has. Jay Leno was the final chapter for me, when McCain said he wasn't concerned about how many houses he had because he didn't have a house while he was a POW. Maybe not, but he had a wife, and he dumped her for Cindy not long after he got back. Cindy was the Paris Hilton of her day, an heiress with a hot body. McCain latched on to her pretty fast, before he got around to divorcing his first wife.

But what about being a POW? It's honorable, but several levels below the highest sacrifice for one's country. Obviously the greatest sacrifice is to die for your country. Why doesn't McCain talk about the pilots who died when they were shot down over North Vietnam? Maybe because that makes him look bad. Then there are those who don't surrender. They don't end up as POWs. They probably end up dead, too. Finally there are the POWs who try to escape. Maybe it was impossible from McCain's prison, but it should have been an objective. Being a POW is not an option for most Army soldiers and Marines who are face to face with the enemy, as opposed to flying miles above it. For most of them surrender is not an option. What about Gen. McAuliffe's reply to the German demand for surrender at Bastogne during World War II? "Nuts." Becoming a POW was not an option. While many Army Air Corps troops became POWs during WW II, many also escaped and worked with the resistance in France and other occupied countries.

McCain's father and grandfather were four-star admirals. By their standards, McCain's Navy career was a failure. He became a senator after he took over Cindy's money, but he couldn't cut it in the Navy. Maybe he sees becoming commander-in-chief as a way to redeem himself in the eyes of his father and grandfather.

McCain might be the first president to have surrendered in combat.

Friday, August 22, 2008

Is McCain Just Another Worthless Vietnam Veteran?

This article by a fellow POW of McCain's on why he will not vote for McCain gives me conflicting feelings. On the one hand, it's good to know that you don't have to fall down and worship McCain because he was a POW. On the other, it's disappointing that no one seems to have come out of Vietnam with a good reputation. The war tends to destroy those who served in it whether they were a "hero" like McCain or a poor grunt just trying to survive long enough to get back home. At least part of this is because the American elite did not serve and in order to make themselves feel better about avoiding service, they belittle the service of those who went to Vietnam.

As a Vietnam veteran, I am disappointed at veterans denigrating other veterans, whether it's "Swift Boat Veterans" running down John Kerry, or another POW running down McCain. When I came back, all any civilian wanted to hear was whether you killed any babies or committed some other atrocity in Vietnam. One book I remember reading was called "No Victory Parades." One problem for John McCain is that he missed all that. He came back praised as a hero rather than reviled as a criminal for his service. His tour of duty was a lot tougher than most, but his reception was a lot better than most. That may be one reason he is so ready to go to war, whether against Iraq, Iran or Russia. I liked him in 2000, but that was before he became such a warmonger. I think his defeat by Bush changed him for the worse. This article at least raises questions about how much people should bow down to McCain's POW experience. He uses it for everything, most recently defending himself for not knowing how many houses he has. His spokesman said something like, "He lived in only one house for five and half years, in prison" Maybe he should cool it on the POW stuff for a while.

Thursday, August 21, 2008

Are We Winning in Iraq?

John McCain is hyping the line that the surge was successful in Iraq because violence has gone down drastically. It's good that violence has gone down, but does that mean we are winning? Basically we have set up al-Maliki and a few others as successors to Saddam Hussein. Are they our friends, or Iran's? Or, are they just in it for the money, like Ahmed Chalabi? Maliki has opened up to the Sunnis who are fighting for us, but is that going to be a lasting alliance? The Iraqis and Iranians in general don't like each other, but some dislike each other more than others. Where does Maliki fall on this spectrum?

Some Americans who are well plugged in to the Iraqi scene probably know the answers to these questions or have educated guesses, but if so, they are not talking. Basically all we know is that violence is down. Much of that seems to be due to the decreasing threat from al-Sadr's militia. But again, is that due to his being defeated by forces friendly to the US and to the westernization of Iraq, or is simply a tactical move intended to get the Americans to expedite their withdrawal.

We misjudged Iraq so badly during the invasion, expecting to be welcomed with flowers and candy, that it's unlikely that even the best analysts know exactly what will happen when we leave, although hopefully they are better informed than they were before the war. Of course, one problem is that many of the "experts" sent to Iraq by the Bush administration were just Republican political hacks who didn't speak Arabic and who had no knowledge of Iraqi society. Their time was largely wasted, although they made good money paid by American taxpayers.

My bottom line is that despite the drop in violence, we don't really know whether we are winning, and we probably won't know until after we leave Iraq and it's too late to do anything about it. I have a gut feeling that Maliki and his cronies are a lot friendlier with Iran than Saddam Hussein was, and that we are likely to see Iraq pulled into the Iran/Shiite orbit when we leave.

Wednesday, August 20, 2008

Supreme Court Problems

Rick Warren asked the two candidates which Supreme Court justices they would like to get rid of. Obama said he would get rid of Clarence Thomas, my choice exactly. The problem with Thomas is not his political philosophy, although I disagree with it. The problem is that he is a second rate lawyer. He's not smart enough, hard working enough, or something enough to be on the Supreme Court. The justices should at least come from the first rank of lawyers and judges. Clarence Thomas would be okay on a state appeals court or something, but not on the US Supreme Court. He's just not up to the job.

Thomas is an example of the fact that Republicans like stupid people in government. Exhibit 1 - George W. Bush. Exhibit 2 - John Bolton. Exhibit 3 - Ronald Reagan. Reagan? I think he was somewhat senile for the latter part of his time in office. He thought things were true that weren't, e.g., Cadillac driving welfare moms. It might have been true, but it wasn't. He couldn't name names. Republicans don't like law. They don't like treaties because treaties assume that nations have some respect for international law, and Republicans don't. They don't like to pay taxes. They don't like anything that hinders their options. This is not new. It's basically how the warlords in Afghanistan operate and how despots have operated for years. The West moved beyond this, but now we're going back to the Middle Ages, led by George W. Bush and Clarence Thomas.

When McCain was asked which justices he would get rid of, he just named all the liberal justices. He showed no real thought, and that's what Republicans like. They like McCain better in 2008 than in 2000 because he's more senile. He won't stand in the way of their unbounded greed and selfishness.

Did McCain Encourage War to Advance His Campaign

John McCain's main foreign policy adviser, Randy Scheuneman, was (and maybe is) a paid lobbyist for the nation of Georgia. Did McCain get paid for promoting Georgia? Did he get special access to the President Saakashvili because of the lobbyists on his campaign staff? During one of the many visits and phone calls that he has touted on the campaign trail, did he encourage Saakashvili to invade South Ossetia, resulting in many deaths, as described in today's NYT by Mikail Gorbachev.

McCain probably didn't do anything unethical regarding Georgia to promote his campaign, but having a lobbyist for Georgia on his staff certainly raises ethical questions. It certainly gave him better access to Saakashvili than Obama had, if only because of Scheuneman's rolodex.

The Rich Are Different From You and Me

F. Scott Fitzgerald's famous line, "The rich are different from you and me," was met by Hemingway's rejoinder, "Yes, they have more money." Today, the rejoinder could be changed to say, "Yes, they don't pay taxes."

Included in an LA Times article on Rodeo Drive, is the following:
An Internal Revenue Service report obtained by the Wall Street Journal in March showed that the 400 richest Americans -- those with incomes of at least $100 million -- controlled 1.15% of the nation's wealth as of 2005, or twice the amount of a decade earlier.

Thanks to President Bush's tax cuts, though, the average income tax rate for the mega-wealthy fell to 18% from nearly 30% over the same period.
The Wall Street Journal often complains that the rich pay too much in taxes, that a small number of taxpayers pay a high percentage of the total taxes collected. However, the reason is that those taxpayers receive a high percentage of all the income received in America, and for the amount of income they receive, their taxes are relatively low. Although the dates don't exactly match up, one study says that in 2005 the top 1% of taxpayers received 21.8% of all income. A Treasury press release says that in 2002 the top 1% paid 33.7% of all taxes. This doesn't seem disproportionately high.

Much of their income is taxed at a low rate, such as the taxes on dividends and other "investments." One argument for low taxes on dividends is that the company paying the dividend has already paid taxes on its income. But an article in the NYT recently said that two-thirds of businesses do not pay income tax.

Wednesday, August 13, 2008

Russia 1, US 0

Surprisingly (given its conservative bias), the Wall Street Journal says that Russia "gave the U.S. a bloody nose" in the Georgia dust up. But if Bush got a bloody nose, then John McCain got a broken nose and lost a few teeth as the most conspicuous friend and promoter of Georgia, as I noted previously.

Of course, Condi Rice didn't come out too well either. The NYT reports that in a recent visit to Georgia, Condi's public stance was one of "defiant support for Georgia in the face of Russian pressure," while she claims that privately she warned Saakashvili "not to get into a military conflict with Russia that Georgia could not win." Maybe Condi should not have been so shy about publicly warning Georgia not to get into a fight with Russia.

Did McCain Start the Russia-Georgia War?

According to the Washington Post, John McCain's principal foreign affairs adviser, Randy Scheuneman, is a lobbyist for the country of Georgia. On the one hand, McCain is well briefed on Georgia, on the other, has he been too hawkish in encouraging Georgia to tweak Russia's nose? Thanks to his lobbyist/adviser, he has talked to the Saakashvili numerous times, but what has he told him? The neocon Republicans hate Russia and want to bring it down. Did they see Georgia as a tool in their attempt to destroy Russia? Will Georgia be destroyed as a result? Is John McCain the leader of the use-Georgia-to-destroy-Russia bloc of neocon Republicans?

Republicans Hate America

CNN reports that the US is using contractors in Iraq more than any previous administration in any previous war. It's because Republicans don't like the government, and they love to give money to their political contributors, like Halliburton. But it you hate the government, you hate the basis on which the country was founded. Republicans would prefer that their wars be fought by Blackwater, paying over $100,000 per combatant, rather than by the US military, who would be $30,000-$50,000 per combatant And the people getting $100,000+ would be firmly Republican.

Republicans will fight for money, but not for the flag. When a country relies on mercenaries to defend itself, it's on shaky ground.

Monday, August 11, 2008

What's Up Between Russia and Georgia

No doubt what Russia did in fighting Georgia was bad, but to offset the hue and cry of "Let's go to war against Russia to save Georgia," remember the following:

-- Georgia started the war by sending troops into South Ossetia, which admittedly is part of Georgia, but there was no shooting until Georgian troops started shooting;

-- In spite of George Bush's professed love for Vladimir Putin, he has stuck his finger in Putin's eye on numerous occasions, such as:
-- Abrogating the ABM treaty with Moscow,
-- Encouraging former Soviet states to join NATO, including Georgia,
-- Encouraging pro-Western, anti-Russian, political movements in former Soviet states, such as the failed Orange Revolution in Ukraine,
-- Forcing the separation of Kosovo from Serbia, viewed as an insult by the (pro-Russian) Slavs,
-- Proposing to install ABM systems in Poland and the Czech Republic.

Arguably, Bush never liked or trusted Putin and the Russians and thus he decided to make hay while the sun was shining on the US, encouraging more and more former Soviet citizens to be pro-West and anti-Russian. The question is, did these anti-Russian policies produce the current Russian belligerence, or was Russia going to do this in any case? I think Russia's belligerence is due at least in part to the anti-Russian policies pursued by the US. If Condi Rice had managed her Russian portfolio better the world might be a safer place today. But there is the argument that Russia was always evil and that Condi was right to continue the cold war policies she grew up with.

Pickens Looking for Government Handout

Just to follow up on my previous blog, an article in the Denver Post points out that Boone Pickens is counting on government subsidies for his share of the natural gas part of his wind/gas energy plan. Like every other businessman he's looking for corporate welfare.

Saturday, August 02, 2008

Fannie Mae and Freddie Mac

The turmoil around Fannie Mae and Freddie Mac is emblematic of the greed and corruption that permeate the American government and business community. If we were to let the Republicans' beloved free market system operate normally, their likely failure could destroy the national or possibly the world economy. So, in the short term a bailout is probably necessary. But Harvard's Larry Summers summed up the situation in an interview the other day saying that we may privatize Fannie's gains and socialize its losses, transferring the losses to the taxpayer. Of course, because the Republicans do not pay taxes, the actual losses will be transferred to our children and grandchildren. But we'll take care of them by letting inflation run wild, so that a trillion dollars will be nothing to them, just like it is in Zimbabwe's currency.

It's interesting that when the legislation dealing with the mortgage/housing crisis starting moving through Congress, it dealt mainly with a bailout for people who were being foreclosed, but when it finally passed the big winners were the financiers on Wall Street, in the form of the Fannie and Freddie bailout. The financiers get trillions, the homeowners only get billions.

More Tax Cheats

The latest example of rich Americans betraying the troops fighting in Afghanistan and Iraq is the report that they avoided $100 billion annually by hiding income and assets off shore. The most recently exposed hiding place is Lichtenstein. The Financial Times plays up the German connection, but many Americans were caught in the operation as well, many of them working through the Swiss bank UBS.

It would be interesting to know how many of these rich people who hate America are Republicans and how many Democrats. I would guess most of them are Republicans, since rich people tend to be Republican, and since rich Democrats tend to be more willing to pay taxes to support do-gooder stuff like education and health care, if not to support the wars in Iraq and Afghanistan. The Republicans have their shills like George Will, Charles Krauthammer and Fox News, who rail at the government and shout for free enterprise, which really means, "Let me keep all of my obscene wealth to myself! Let my neighbor starve and freeze in the dark!"

The Republicans say they love America but hate the government -- the petty, little bureaucrats who do the everyday stuff like monitor statistics, send out policy notices, etc. Reagan's famous statement was something like, "The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'" But if you hate the people who work for the government, you essentially hate the government. The Republicans have tried to get around this by hiring private-sector contractors to do as much as possible. They pay their buddies in these private firms much, much more than a bureaucrat would make, and their buddies in return make generous political contributions to Republicans. See Sen. Ted Stevens, or Cong. Tom Delay, or Cong. Duke Cunningham, or Jack Abramoff, or many other corrupt examples! It's a nasty, unethical, little arrangement.

Boone Pickens, Windmills and Swift Boats

In his proposal to build windmills, Boone Pickens does not have have America's best interests at heart. He cares about Boone Pickens and nobody else. I don't know what his scheme is, but it's not to help America. He epitomizes selfishness and greed. By supporting the Swift Boat veterans who attacked John Kerry for serving his country in Vietnam, he showed his contempt for America and for military service. His bio in Wikipedia does not mention any military service by him, although he would have been of draft age back when they had the draft.

Thursday, July 31, 2008

MTCR Still Alive and Well

The Missile Technology Control Regime (MTCR) which I helped create and to expand is still alive and well. This Commerce Department notice shows it's still in force and operating. The MTCR could have been a lot stronger if it had not been opposed so strongly by Richard Perle and his minions at the Pentagon. They wanted it to prevent developing countries from doing anything in the space launch field, and as usual, the best was the enemy of the good, and we got some least common denominator because other countries, mainly the Europeans and Japan were unwilling to agree to the draconian provisions forced as the US position by the Defense Department.

But, hey, at least we got something.

Saturday, July 26, 2008

Obama Wins v. Bush

Obama's triumphal tour of the world shows that foreigners don't hate Americans; they hate George Bush and maybe most Republicans. Bush likes to stick his finger in other nations' eyes. Remember the invasion of Iraq? Remember ignoring the UN investigation of WMD in Iraq? Remember freedom fries? Remember old Europe? Remember Abu Ghraib? Bush, and maybe a lot of Americans who support him, hate foreigners.

Bush is low-class, trailer park trash, ill-bred, impolite, not a man you would like to associate with, unless you were going to grab somebody off the street and torture them. He's not stupid, but he's lazy, which is worse. You can't help being stupid; you can work hard.

McCain has accused Obama of being willing to lose a war in order to win an election. I don't think that's true about Obama, but I think Bush has already done that. I don't know whether the war will be Afghanistan or Iraq, but we are not doing very well in either. Things are going better militarily in Iraq, but Iraq just got kicked out of the Olympics because of its political system. That's not good. Our troops have fought bravely and well, but Bush doesn't care. If he did, he would do something to give them more time at home between tours overseas. He would take better care of the wounded.

Saturday, July 12, 2008

Franklin Raines and Fannie Mae

With all the talk about the possible collapse of Fannie Mae and Freddie Mac, there is little said about the departure under a cloud in 2004 of Fannie Mae CEO Franklin Raines. Raines was accused of cooking the books to hide losses so that his take-home pay would be higher by millions. In 2004 the real estate market was hot, maybe not as hot as it was a year or two later, but plenty hot enough for Fannie Mae to play fast and loose with the rules.

In 2004, USA Today reported: "In the financial arena, detractors say, Fannie Mae has grown out of control. It's the No. 2 debtor in the country, after the U.S. government, with $989 billion in debt. Some have even called Fannie Mae a giant hedge fund, since it uses derivatives and other potentially risky investment tools."

When Raines "resigned," USA Today reported: "Franklin Raines, the powerful and politically savvy CEO of Fannie Mae, was forced out Tuesday night by the mortgage finance company's board of directors, bringing an end to a contentious, three-month public brawl over the quality of Fannie's financial statements. That restatement of earnings is likely to wipe out $9 billion — or about one-third — of Fannie Mae's profits — since 2001. But analysts say that shouldn't have any effect on mortgage rates. To make up the anticipated $9 billion shortfall, Fannie Mae probably would have to sell part of its portfolio of mortgages, raise fresh capital by issuing stock or cut dividends — and its spectacular growth of recent years could be curtailed. The company was ordered by the regulators in September to boost its capital cushion against risk by some $5 billion by mid-2005."

So, Fannie Mae was already in trouble before the mortgage tsunami hit.

Wednesday, July 09, 2008

US and Israeli Interests Not Identical

Col. Pat Lang's blog has an excellent posting on the fact that Israel's and America's interests are not identical. Unfortunately it's true that many Americans see Israel as a 51st state. This worries me, because people perceive politicians who are fervently pro-Israel, such as Joe Lieberman, as fervently pro-American, but those stands may not be reconcilable.

John McCain should be careful about embracing Lieberman too closely; he may be embracing anti-American interests. It would be ironic if McCain, who holds himself out as the ultimate American patriot, were actually subjugating America's best interests to those of another country -- Israel. This is not an academic exercise. We probably invaded Iraq at least in part because of Israeli/Jewish/AIPAC influence. George W. Bush's hatred of his father and desire to show up Bush I's failure to depose Saddam in the first Iraq War was certainly another important factor. Now will we invade Iran, or support an Israeli attack on Iran, because of the same Israeli pressures? McCain is a hawk on both Iraq and Iran. While these beliefs are certainly genuinely held by him as in America's best interest, is he being hoodwinked to believing that everything in Israel's best interest is also in America's? McCain may be too gullible; as Lang points out, Israel and America have different interests.

Wasted Lives in Vietnam

An op-ed in the WP by Harold Meyerson laments the embrace by American business of manufacturing in Vietnam because the quasi-Communist government there keeps wages low. What was the point of fighting for democracy there, if we prefer a non-democratic government? The Republicans talk a good game of loving democracy, but a dollar trumps politics for a Republican any day.

A lot of Vietnam veterans have embraced the new Vietnam, but there is a difference between loving your enemies and making a buck off of them because they are being kept in poverty by their government. On the other hand, the lives of many Vietnamese are clearly better today than they were years ago.

We've been through this before, when both Germany and Japan came back from defeat in WW II to challenge the US economically. But in that case we defeated the governments, and the challenge came from western style government that we liked. That's not the case in Vietnam.

For Vietnam veterans, an additional cut is that the people making money from Vietnam tend to be people or children of people who avoided service in Vietnam. I guess this proves to them that they were right -- that the war was evil and that Vietnam veterans were sadistic baby-killers. But as a Vietnam veteran, I don't think that was the case. In most cases those who went to Vietnam were just submitting to the rule of law by submitting to the draft. Others believed the idealistic vision of stopping Communism and creating a better world. Both are being stomped on by American businessmen today. They wear American flag lapel pins and profit from the hardships imposed by the government that defeated America because these money-grubbing businessmen opposed the war and would not serve. They and their children by and large do not serve in the military today in Afghanistan or Iraq.