Saturday, April 30, 2011

Why Aren't We as Brave as the British?

I apologize for the disjointed letter posted previously.

I was prompted to write it by the movie "Mrs. Miniver," which I watched a while ago. It is about an upper middle class family in England from the period just before World War II until well into the war. The movie was made during the war, and on TCM, the "The End" screen said something like, "America needs your money. Buy bonds." In the movie, before the war the British husband and wife are somewhat extravagant, the wife buying a silly hat and the husband a fancy car. But once the war starts they get serious like real Brits. They make sacrifices while keeping a stiff upper lip.

I thought that same attitude was somewhat illustrated during William and Kate's wedding. Queen Elizabeth is a living link to the sacrifices made by Brits during World War II and the London Blitz. Today Britain and the United States both face financial turmoil due to the sub-prime mortgage meltdown. The Brits under PM Cameron have elected to pursue a course requiring more sacrifice that the US has. That's more in the British character than in America's.

In Ben Bernanke's press conference, we saw the competing themes of fighting inflation versus reducing unemployment. The Brits are more willing to endure the hardship of unemployment in order to get their financial house in order than the US is. We see Americans unwilling to sacrifice anything, even small cuts to Medicare benefits on the one hand, or higher taxes on the other. We need spending cuts and higher taxes, but nobody is willing to make the hard choices that calls for.

I like Ben Bernanke because he is one of the few people in Washington facing these hard choices and doing something. People say he is just following in Greenspan's "easy money" footsteps, but I don't think so. He is facing a very different situation. I like Elizabeth Warren because she also seems to have the moral character, so lacking in Washington, necessary to face these hard choices. She has staked out a little issue, making businesses deal fairly with consumers, and has been met with a buzz saw of opposition from big business.

After I watched "Mrs. Miniver," I thought, "Well, I could buy some bonds." The Japanese do it. Their indebtedness is one of the highest of any major nation, but it is not like our debt to China, because the Japanese owe it to themselves. They buy their own bonds. So, why don't we? First, I found that it is hard to buy US savings bonds. You can't buy paper bonds anymore. You can only buy them electronically and store them on some Treasury web site. With changing email addresses, lost passwords, etc., that is a recipe for disaster for me. I don't mind electronic banking, as long as there is a real, brick bank somewhere that can send me a paper statement if I want one.

While it has gotten harder to buy savings bonds, it has gotten easier to buy Treasury bonds through a broker. That change illustrates how our economy favors the rich over average citizens. You can put thousands in your 401(k), but you can't buy a $25 savings bond for your kid's birthday. But, why not buy bonds anyway? Right now the problem is that the US Congress refuses to put the full faith and credit of the United States behind the bonds. They are going to bicker over raising the debt ceiling, and leave open the possibility that they will default on US bonds. If they were serious about solving the debt crisis, they would immediately raise the debt ceiling, if only by a little bit, so that there is no risk of default, and then begin the process of cutting spending and raising taxes. But some groups want to use the debt ceiling as a bargaining chip. It is sort of like saying, "If you don't agree to my terms, I will blow my brains out." The terms may be stupid, but no one wants to see someone else blow his brains out, especially if "he" is the country we live in. In Vietnam the old saying was, "We had to destroy the village to save it." Are we now going to say this about America?

Raise the Debt Ceiling Now

Letter to Congressman and Senators:

Right now I feel that there are only two people in Washington who have my best interests at heart, as a middle class citizen -- Elizabeth Warren and Ben Bernanke.

The fact that big business is so opposed to Elizabeth Warren indicates to me that she must be doing something right for average citizens. Normally, Ben Bernanke, as the head of the Fed would be the tool of big business interests, but I think he is genuinely concerned about average people, too. His low interest rates and QE2 are boons to big business, especially big banks, but they are the only tool he has. I think he really is trying to pursue policies that trickle down to ordinary people, even if most of the benefits go to big banks and industries.

If Congress were serious, it would raise the debt ceiling now, if only by a small amount. The fact that it is playing chicken with the debt ceiling indicates that it does not have the best interests of the United States at heart. Failure to put the full faith and credit of the United States behind our bonds will mean higher interest rates for everybody and probably a return to a deep recession. Conservatives, playing the hand of big business and big banks, will use the crisis to get spending cuts without tax increases, generally hurting average people, and particularly benefiting the very rich.

To reduce the problem with the national debt and the fiscal deficit, I would propose to cut all Federal salaries by 10 percent (including yours) and all Federal pensions (including mine) by 10 percent. Perhaps you could cut all Social Security pensions by 10% above a certain level, say $1,500 per month. For Medicare and Medicaid, perhaps you could cut payments by 10% for all procedures that cost more than $1,500.

I would propose removing the mortgage interest deduction as a start for raising tax revenues. This deduction had a very perverse effect during the housing crisis. Before sub-prime mortgages, when people still had to make a large down payment, the deduction was not so bad. But with no down payment and mortgages allowing interest-only payments for the first few years, buyers basically became renters, who are now walking away from their homes. Real renters got no deduction, but sub-prime buyers had a big Federal subsidy. It was not fair, and it encouraged an unsustainable housing bubble. It's bad policy which creates economic dislocation. Get rid of it. You could start off limiting the deduction to $10,000, and then reduce it $1,000 per year.

I don't really expect anything to happen. This government is dysfunctional. I lived in Brazil for several years as an American diplomat during its bad years, and saw people who wallpapered some rooms with the old Cruzeiro currency. That's where the dollar is heading. Brazil shows that you can recover from that, but only if you get serious. The US is not serious, yet. People used to say that Brazil was not a serious country. Now that epithet applies to the United States. After the game of chicken we just played on shutting the government down, the new game of chicken on the debt ceiling, and the decision during the Congressional lame-duck session not to raise taxes on anyone, especially the very rich, I have become one of those in the recent poll who has a very dark view of the American economy and even of America in general. As a Vietnam veteran, a retired Foreign Service officer, and a former attorney for the Veterans Administration, totalling nearly 30 years of government service, I am very disappointed in where the US is heading.

Saturday, April 23, 2011

People Who Walk Away from Their Houses

The Washington Post reports a new trend of people walking away from houses that they own. It misses the whole point, however. The problem is that these people paid little or no money down. Their mortgage payments were just rent payments, and unlike real rent payments, these were subsidized by the US government in the form of the mortgage interest tax deduction. People didn't do this years ago because they had skin in the game, starting out with about a $30,000 loss for walking away from a $150,000 home. Now they have nothing to lose except their credit rating for a year or two. They'll go from owning a four bedroom single family house to renting a two bedroom apartment that they can afford. No big deal, except for the banks that made these stupid mortgages and the investors who bought them. The heads of these banks, like Jamie Dimon at JP Morgan-Chase, are either very stupid or crooks. I don't think they are very stupid. But it's good when you can bribe (lobby) the lawmakers to make your immoral shenanigans legal.

I still think Tim Geithner, Hank Paulson and company deserve a lot of credit for avoiding another Depression, but now I think Geithner, who was head of the New York Fed, is too close to his old buddies whom he bailed out. Wall Street is evil. It almost destroyed America and much of the rest of the world with it. Somebody needs to pay for what they did.

Friday, April 22, 2011

MTCR 2011 Meeting

I look at the Missile Technology Control Regime (MTCR) as sort of my legacy from my days at the State Department. I was one of the main links between the idea to create a missile non-proliferation regime during the Carter presidency, and its actually coming into existence under Reagan.

So, I'm happy to see that it still exists and is functioning, as reported by this press release from its 2011 meeting.

Thursday, April 21, 2011

Libya and Israel

The New York Times reported that Bernard-Henri Levy takes credit for persuading French President Sarkozy to enter the Libyan civil war on the side of the rebels. So how did that happen?

Part of the answer is what has been discussed in the press: The West -- particularly Hillary Clinton, Susan Rice, and Smantha Power -- felt guilty about how long it took for the US to interview in the genocide in Bosnia and Rwanda. They didn't want more genocide on their watch. Sarkozy is politically weak at home in France; some saber rattling would probably increase his favorability rating. I'm guessing Britain just went along with the US and France, and probably had some concerns of its own about genocide.

But I think there is more.

Levy is Jewish and proud of it. Sarkozy is something like one-quarter Jewish. The US is always under heavy pressure from Jewish lobbying. Israel would like to see instability in the Middle East countries that give it a hard time. Leading this category are Syria and Iran. Egypt and Mubarek, whom Israel liked, had already gone down the tubes. When Libya and Bahrain stood up to their protesters, it looked like the Middle Eastern spring opening might be in danger of being stopped before it could spread to countries where Israel wanted to see it overthrow the rulers, like Syria. So Israel encouraged the West through people like Levy and Sarkozy to stop Libya from putting down the protests there.

The NYT says that Levy was visiting Egypt and decided to go to Libya. Why? I think it's likely that the Mossad suggested he go, and set up the trip for him, which ultimately led to his meeting with Sarkozy, which led to the NATO/UN/West decision to support the rebels.

It's working. Protests are going strong in Syria, although the government continues to try to stop them. Assad may or may not survive. Not much has happened in Iran, but the protests throughout the Middle East put some pressure on it. It's not clear what effect the continuing civil war in Libya will have on Jordan and Bahrain, but they are lower priorities for Israel. Thus, to some extent, I think we are fighting (or giving air cover or whatever we're doing in Libya) for Israel. I think to a similar extent we partially fought the war in Iraq for Israel. Iraq with Scud missiles and possible WMDs was much more of a threat to Israel than to the US.

Wednesday, April 20, 2011

What About the Budget Deficit and the National Debt?

Anybody serious about solving the national debt/budget deficit problem has to consider both expenditure cuts and revenue increases. We should cut back some government programs, and we should increase some taxes. Until there is a serious debate about what to cut and what to tax, there is no serious effort to reduce the deficit/debt. S&P is right; the US is on a slippery slope towards bankruptcy.

On the expense side, people talk about Medicare and Medicaid, but they never mention doctors themselves. Many doctors are basically government employees with fees set by Medicare, but they earn much more than the average government employee, around $200,000 annually for doctors, compared with about $75,000 for federal government employees and about $50,000 for state government employees. Doctors who specialize in hot areas like cardiology or neurosurgery earn much more, often more than $500,000 annually. As a result, it is hard to attract doctors to lower paying, but more important areas like family practice. Somebody needs to come up with some original ideas for dealing with that, for example, using more nurse-practitioners to do triage, take care of simple things, and refer more difficult cases to specialists. Part of the problem is the cost of medical school. You can't ask students to incur thousands of dollars of debt for lengthy, expensive education and then take lower paying jobs. Government programs could subsidize medical education in return for an obligation to be a family practitioner, see "Northern Exposure." Also, one of the most expensive programs is the new drug assistance program under Medicare part D, passed under Bush. It is basically just a subsidy for the giant drug companies.

It's true that there is some unfairness about taxation. Some things are unquestioned duties of government: national defense, police, firemen, etc. Some are generally accepted and have been for a long time: public school teachers. Others are relatively new: extensive welfare programs. However, a legitimate comparison is how much people used to pay for these services and how much they pay today. Today, in general, federal taxes are much lower than they were fifty years ago, although they are higher than they were 100 years ago. A hundred years ago, people were still drinking milk with formaldehyde in it, starving to death if they fell on hard times unless some neighbor helped. If we are not rich enough to provide these services anymore, we need to have a debate what the most important services are and how we can maintain them. One area that has taken an enormous hit in recent years is education, particularly higher education, which has become more and more expensive. By cutting off universal access to higher education we are dooming ourselves to second class status among the nations of the world.

Wednesday, April 06, 2011

Wealth Distribution in America

This study on "Wealth, Income and Power" by University of Santa Cruz sociology professor William Domhoff contains much of the data that I was looking for regarding how wealth distribution has changed historically in the US. It has a political viewpoint, because in another study Professor Domhoff says UC Santa Cruz is "the most liberal public university in the country." My kind of place! He even uses the word "liberal," although in other places he uses the less lovely "progressive." I prefer a "liberal arts" education to a "progressive" education. Anyway....

The shift in wealth and income in America is not as great as I had thought, but it's significant. I like graphs, so here's one from the study:

It shows the current distribution of wealth between the top 1% and the lower 99% as about the same as 1920. It got worse in 1930, probably as a result of the Depression, and then went up considerably to 1950, probably as a result of recovery from the Depression and World War II. One effect of both factors was that the government virtually took control of the economy during that period -- first to help prevent poor people from starving and going homeless, and later to devote all productive resources to the war effort. Then there was a big surge in the 1960s and 70s, probably as a result of the government's war on poverty and civil rights efforts. The distribution started getting worse again in the 1980s when Reagan was elected. Reagan changed government policies and tax rates to favor the rich.

Government policies are very important. Both Republicans and Democrats understand this. Republicans like the general slope of the curve since Reagan began favoring the rich. They plan to fight to keep it moving in a direction that favors the rich. I don't think this is good for America. It makes America different from the country that I grew up in during the 1960s and 70s. I still believe that part of the goodness of America during that period was that all members of the "Greatest Generation," rich and poor, had fought together in World War II, which had imposed some self-restraint on the greed of the leaders of the country, a restraint that does not exist today. Significantly, Reagan, although he served in the military during WW II, did not fight; he just continued to make movies in California, albeit for the military while in uniform. George H.W. Bush was a much better representative of the Greatest Generation than Reagan was.

The fight over where we go from here may lead to a government shutdown. But from the looks of this graph, the last shutdown did not have much effect.

Goldstone's Reversal on Israel's War Crimes

Richard Goldstone has reversed himself on whether Israel committed war crimes. In an op-ed in the Washington Post, he says that investigations by the Israeli military "indicate that civilians were not intentionally targeted as a matter of policy." He blames his now-recanted criticisms of Israel on Israel's failure to cooperate with his investigation.

He seems to say that since Israel would not cooperate with him, he just made up accusations of war crimes. Now that Israel has begun to investigate them, according to a new report by Mary McGowan Davis, everything is okay. If Goldstone just made up the accusations and lied to the UN to start with, why should we believe anything he has to say now? He is totally discredited.

This is of course what Israel wants. Israelis hate Goldstone with a passion seldom seen elsewhere, even in Israel, a country founded on, and consumed by, hatred. I don't know her background, but I suspect that Mary McGowan Davis was chosen because the Israelis were confident that she would issue a report in their favor. Why is there even a follow-up report? Why did the Israelis cooperate with her and not with Goldstone? Apparently she accepted Israeli assurances unquestioningly, although the investigations that she accepted at face value are not finished and have not resulted in any punishment or changes in Israeli policy. She was much more of a patsy for the Israelis than Goldstone was, but she now provides a means for Goldstone to try to appease the Israelis and decrease the Jewish threats against himself and his family.

Fortunately, we don't need Goldstone to tell us that Israel is a corrupt nation of hate-filled racists. It's disgraceful that American Jews (and many evangelical Christians) defend and support such a vile, godless, despicable country. They sully their own image.

Government Shutdown

I am very unhappy with the threat of a government shutdown. The last shutdown is one of the main reasons that I retired and left the Foreign Service. It is irresponsible for the government to abandon people it has sent to foreign countries and tell them that they now have to fend for themselves when they wouldn't be there unless the government had sent them there.

As part of the then Republican retrenchment, the government cut off funding for two programs I was working on. One, the Maria Sklodowska Curie science cooperation fund, would have provided income for Polish scientists who lost their Polish government funding when Communism fell. Cutting of their funding was sort of an anti-Marshall Plan. The Poles took Reagan's advice to overthrow Communism, and Gingrich and the Republicans turned their backs on them.

I didn't like it then, and I don't like the shutdown now, but at least now I'm not representing the dishonest, unreliable US government.

Monday, April 04, 2011

Old Prophecies Regarding Israel

Thousands of years ago, Jeremiah prophesied the following regarding Israel (Jeremiah chapter 2):
Thus saith the Lord, What iniquity have your fathers found in me, that they are gone far from me, and have walked after vanity, and are become vain?

Hath a nation changed their gods, which are yet no gods? but my people have changed their glory for that which doth not profit.

Thine own wickedness shall correct thee, and thy backslidings shall reprove thee: know therefore and see that it is an evil thing and bitter, that thou hast forsaken the Lord thy God, and that my fear is not in thee, saith the Lord God of hosts.

As the thief is ashamed when he is found, so is the house of Israel ashamed; they, their kings, their princes, and their priests, and their prophets,

Saying to a stock, Thou art my father; and to a stone, Thou hast brought me forth: for they have turned their back unto me, and not their face: but in the time of their trouble they will say, Arise, and save us.
This prophecy could just as well apply to the country named Israel today.

Thursday, March 31, 2011

Jews Attack Jew for Attacking Jews

The BBC reported that Sir Gerald Kaufman, a Jew, had to apologize for a "Jews" remark in Parliament. The remark came while Parliament was debating its war crimes law. A Jewish MP, Louise Ellman, was trying to water down the law so that it would be harder to accuse Israelis of war crimes, prompting Sir Gerald to say, "Here we are, the Jews again."

We should be grateful that Jews are not a unified bunch, but there is a strong contingent of Zionist Jews who are very pro-Israel, often being more concerned about Israel than their home country, whether Great Britain or the United States.

It's typical of Israel, a morally bankrupt state, that its citizens would be in jeopardy of being tried for war crimes in Great Britain. And its typical of Jews that they would attack their home country for allowing that possibility.

Joe Lieberman, are you listening?

Wednesday, March 30, 2011

UN Chief Criticizes Israel

UN Chief Ban Ki-moon criticized Israel's occupation of Palestinian land as morally and politically unsustainable. For me the key word is "morally." The Israelis, as the expounders of the Ten Commandments and as the victims of the Holocaust, should be moral in their dealings with others, including the Palestinians. Instead they spit on the Bible or Torah, or whatever they call their holy scriptures, and they curse God. Many, maybe most, Jews in Israel are non-believers. They are ethnic Jews, but not religious Jews. They are like the Jews who left Egypt with Moses, and as soon as he went up into the mountain to receive the Ten Commandments, the Jews returned to the pagan idols they had worshiped in Egypt, melting down their gold jewelry to make a golden calf. Today, Jews have exchanged God for the new golden idol of materialistic wealth. Perhaps Jews are cursed by being so good at making money; it makes them forget their God. They should remember their own first commandment: "Thou shalt have no other gods before me." For their sins against God, the Israelites who left Egypt were condemned to wander in the wilderness for forty years, so that those who rebelled against Moses could not enter into the promised land. Today's Jews may suffer a similar fate. They may live in a country called Israel, but it is not the promised land. They have not proved themselves worthy of the promised land.

Monday, March 21, 2011

Fox News vs. Public Broadcasting

Fox News has become the dominant cable news channel. Its main rival is Public Broadcasting. The major networks -- ABC, CBS and NBC -- have basically given up on news. They have almost no overseas bureaus. Richard Engel seems to be covering three wars single-handedly now. Their half-hour national news program focus disproportionately on "happy" news, even when something terrible like the Japanese earthquake or the Libyan civil war takes place. The New York Times -- and to a lesser extent the Washington Post and the LA Times -- are about the only other counterpoint to Fox News. If Fox News can destroy PBS, it will rule the airwaves.

Fox News of course is not "fair and balanced." It's a propaganda mouthpiece for Republican right wing views. Stalin would be pleased that the Reagan Republicans who criticized the old Soviet Union so severely now have emulated the Soviet propaganda machine; Fox News is the American Pravda. Thus, it's not surprising that the Republicans are introducing bills to cut off funding for NPR. It would eliminate Fox's main competition. It's a two-fer. Fox makes more money because it becomes more prominent, and the Republican viewpoint has less competition.

Wednesday, March 09, 2011

Yogi Berra, World War II, and Unemployment

It's great that Yogi Berra interrupted his baseball career to serve in World War II, including participating in the D-Day invasion. It was pretty common then; Ted Williams, who served as a pilot in both World War II and Korea, is another example. It's unlikely to happen today. The only example that comes to mind is Pat Tillman, the Arizona Cardinals football player who died in a friendly fire incident in Afghanistan.

In World War II almost everybody served -- rich, poor, athletes, bookworms -- maybe not so much black or white, Japanese or Anglo. But most everybody served. I think that because so many served together it unified the country after World War II. The country was booming because it was almost untouched while much of Europe and Asia was decimated. Business executives had the same chance then that they have now to pay themselves huge salaries in comparison with their employees, but they didn't. Part of the reason was that unions were stronger, so that CEOs were in a relatively weaker position viz-a-viz their employees. And the top tax bracket was around 90%; so, it hardly made sense to pay yourself millions if you only got to keep ten cents on the dollar.

But I think that the universal service in World War II built a sense of national camaraderie. Many times, the workers had served under someone like their bosses in the Army. And the bosses, if they had been officers in the military, would have come to know and respect the men who served under them in much more intimate and trying conditions than they would ever confront in industry.

While there are still rags to riches stories today of CEOs who come from humble beginnings, it's the exception rather than the rule. Often those who make it to the top from the bottom do it by stepping on their poorer colleagues. The more usual route is for CEOs to come from relatively well off families, go to good schools (often Ivy League), and then parlay those connections into a good job. As a result, the CEOs have little connection with or feeling for their employees. The CEO sees himself as working for the "stockholders," which really means himself, because he pays himself richly in stock options.

Thus, it makes no difference to the CEO whether his employees are in China, India, Vietnam, or America. He just wants to put his product out for the lowest possible cost, and if his employees have no health insurance, that's tough. It was the World War II generation that made health insurance possible for average workers, maybe because executives thought it was the right thing to do. Maybe they went a little overboard because of union pressure. But I think that in general, they cared much more for their works as human beings than CEOs and other executives do today.

Today there is no more military draft. In general, children from nice families do not go into the military. And we have the growing rift in America between the rich and poor, making it extremely unlikely that the conditions of World War II will be repeated. It may be a good deal for the rich, but it is the country's loss. We read it everyday in casualty reports from Afghanistan and Iraq, in the unemployment statistics, and in the degrading quality of life in America -- politically, intellectually, culturally, and financially.

Progressive Democratic Gentleman

Listening to the political news, the use of three words bothers me: gentleman, democratic, and progressive.

My complaint about "gentleman" is not so much political, but general usage. Gentleman used to mean a man who was polite, educated, well-dressed, and generally a decent sort of chap. Today it seems to be used like the word "alleged" to give the benefit of the doubt to criminals, and to avoid libel suits against the news media. So, we hear them talk about a serial murderer, saying that the "gentleman" might be moved to a new prison. Part of the misuse is intentional because "gentleman" conjures up an image of a past time in which most people were much kinder and more thoughtful than they are today, So, they undermine that image by associating "gentleman" with the worst kind of things today.

A year or two ago the Republicans started referring to the Democratic Party as the Democrat Party, presumably because it has a coarser, more grating sound, but also perhaps because "Democratic" called up better images of democratic government in the Athenian tradition, than "Democrat" which in the US generally means a person who is Democratic politician or supporter. However, "Democrat" is a noun, while "Democratic" is an adjective. So, it's grammatically incorrect, but the main appeal for the Republicans is probably that it sounds harsher and thus it's easier to make "Democrat Party" sound insulting.

Finally, I don't like the term Progressive. To me the Progressive movement is something that happened in the first half of the twentieth century, limited to unions, social reform, etc. On the other hand, "liberal" is a term that again goes back to the ancient Greeks. It speaks of freedom; we have (or used to have) "liberal" education. Liberal speaks of freedom, of issues that are important to every civilization, while progressive is more economic and limited to certain mundale issues, times and places. I much prefer being a Liberal than a Progressive.

To the extent that the Democratic Party tries to make me a Progressive, rather than a Liberal, I feel less like a gentleman.

Government Fails in Banking Crisis

One of government's main functions is to provide security for its citizens in the form of police, courts, military defense, etc. It has failed to do this in the banking crisis. Government did ameliorate the crisis by preventing a depression era scenario where many major banks fail. The banks not only did not fail, they recovered quickly and their chieftains are making millions. On the financial side, government worked.

On the police side, government failed. Not one of the culprits responsible for bringing America to its knees has suffered any criminal prosecution. Just recently the criminal case was dropped against Angelo Mozillo, the head of Countrywide, and one of the worst offenders in the sub-prime mortgage banking meltdown. Apparently his old company, now part of bank of America, is still the object of a civil suit by some of the people who lost millions because of his actions, but the government says everything he did is okay.

This partly due to government corruption. The banks lobbied heavily for little or no regulation, and continue to do so. The main policing organization, the SEC, failed miserably under its chairman Christopher Cox, who should be criminally libel for his failure, but of course is not. The public seems more upset about his failure to catch Bernie Madoff than about his failure to prevent the worst financial crisis since the Depression. Of course, Congress got paid well by the banks' lobbyists to keep any laws from interfering with the banks evil deeds.

I like the book All the Devils Are Here because it criticizes many of the major players in the financial crisis for doing bad things. It doesn't take the position that "bad things happened," but nobody was responsible. People were responsible, and many of them continue to hold positions of power, including Lloyd Blankfein at Goldman Sachs and Jamie Dimon at J.P. Morgan Chase. The Morgans and the Rockefellers must be saddened that someone of Dimon's low moral integrity has dragged the names of their institutions through the mud.

Tuesday, March 08, 2011

Fiscal Policy A Shambles

American fiscal policy is in total disarray. Taxes are too low; spending is too high. Spending should be more stimulative and less for old people. Social Security and Medicare need to be reformed, in particular to be more to incomes, both on the taxing and paying ends. Rich people pay a much smaller amount of their earnings into Social Security and end up getting too much when they retire. Medicare takes care of the elderly, but until the recent health care reform, there was no general program to take care of workers. Congress is totally ignoring this problem. They pat themselves on the back if they cut a million dollars from education or the Pentagon budget.

Meanwhile, the Fed is pursuing a serious monetary policy with no help from Congress. Congress just criticizes the Fed's quantitative easing program (QE2), while doing nothing itself. If we get out of this recession it will be largely thanks to the Fed. Ironically, the Fed, which is usually seen to be the friend of the big banks, has turned out to be much more of a friend to ordinary people than Congress has.

Wednesday, March 02, 2011

Companies, Not Fed to Blame

On Bloomberg, David Malpass says the Fed is failing because the Fed in giving money to US business by keeping interest rates low, but US business is investing in Asia. So, the Fed is just giving American money to Asia. Although there is truth in this, I would say the problem is American business that doesn't support America. CEOs and other senior executives of “American” companies outsource American jobs to China and India. The CEOs get rich by destroying American workers.


Tuesday, March 01, 2011

Impolite Politicians

Political discourse has become so bitter, it's hard to see how anyone can remain civil.

Last night I was shocked at how impolite Sen. Orrin Hatch was to Judy Woodruff on PBS' Newshour. He insulted HHS Secretary Sebelius, saying, "She just doesn't know what she's talking about." He was sarcastic, responding to one of Judy Woodruff's questions with, "Oh, isn't that wonderful?" And, "That's what I call bull corn." And later, "I see a middle ground.... They ought to trash the bill and get rid of it."

Interestingly, the New York Times had a tongue-in-cheek op-ed today on a civility course on Arizona. If there were such a thing, Sen. Hatch and his colleagues should enroll in it.

Friday, February 18, 2011

Government Shutdown Coming?

The NYT reports that talk on Capitol Hill is increasing the odds of a government shutdown. This brings back some bad memories of my experience in Poland, when the Republicans shut down the government on the day I was being transferred to Italy, leaving me stranded with no place to live and no income.

I wonder what the reaction will be to a government shutdown. Perhaps people will welcome it. I won't because I think there is a better way to resolve these problems of the deficit and the debt. The Congress and the administration should work out some sort of a compromise, either temporary or permanent, without shutting down the government.