Warner Less than Courageous

The George C. Marshall Foundation honored Sen. John Warner at this 2007 celebration of the 60th anniversary of the Marshall Plan. Winston Churchill praised General Marshall as the "organizer of victory." Looking at the war in Iraq, has Sen. Warner been an organizer, and has the US been victorious? No. Warner, as chairman of the Senate Armed Services committee, has presided over the destruction of the US military. Too few men and women were assigned too large a task in bringing a new government to Iraq. The military has been over-stretched and under-supplied, often lacking flack jackets and armored vehicles, even for the too few troops who were set there.

Now Warner has called for pulling out 5,000 troops of the 160,000 currently there, if the President wants to. It's almost nothing. It's too few to be noticeable, and probably too few to make a difference one way or another. It's symbolic, and that's something, but it's not much. What George Marshall did was more than symbolic. He took a small, peacetime military, much like America's today, and transformed it into a huge fighting machine that made the difference in World War II. He made hard choices; he replaced peacetime generals with generals who could fight. He drafted millions of men; he turned America's industrial base on its heels toward the production of military equipment. Bush and Warner kept their yes-man generals and gave huge tax breaks to the rich. They said, "Keep us in power and we'll give you lots of money and send some worthless farm boys and ghetto kids to die in Iraq. And we'll do it with generals who won't rock the boat." Their contempt for average Americans is boundless.

Warner may not be the worst politician in the Senate, but he certainly does not deserve to be mentioned in the same breath with General George Marshall.

Bush Criticizes Cowards on Vietnam, Injures Foot

By comparing Iraq to Vietnam, Bush shot himself in the foot, as chronicled by many commentators, including this WP op-ed. Bush would have had other, poorer, less educated, less beautiful people fight on for years in Vietnam, while he partied during his ignored National Guard service. At least we tried, putting at least 500,000 troops in Vietnam for a while. Why doesn't Bush try that in Iraq? He's afraid to. But he'll probably do his best to see that the career military gets blamed for losing another war that he tried valiently to win. He'll blame the military for not fighting hard enough and not supporting him enough.

Tax Cuts and Moral Hazards

The main recipients of Bush's tax cuts are the same people responsible for the turmoil in the financial markets. The rich are so greedy that they first made bad mortgage loans to people who couldn't afford them. But the bad mortgages created "paper" that they could then sell to more unsuspecting buyers. Thus they could get the bad mortgages off their books and pass them off to someone else. It was a game of musical chairs until the music finally stopped and someone ended up holding some bad paper. Some people are going to get stuck with some losses, but others have made out like bandits and will have huge profits with which to take advantage of Bush's tax cuts, which particularly benefit those in hedge funds and private equity, some of the main villains in the bad-paper game.

In discussing what to do about this situation, the concept of "moral hazard" gets mentioned occasionally, as it does in this Financial Times editorial. The moral hazard concept is that you should not bail out people who got themselves in financial difficulty. It certainly applies to the hedge fund and private equity types; it is less clear that it applies to the average homeowner who might lose his house because he got a disadvantageous mortgage. There should be a level playing field. The hedge fund types certainly knew what they were doing; most have MBAs. Homeowners may or may not have known; they may have been cheated by mortgage brokers who didn't explain exactly what they were getting into. But the homeowners should have been smart enough to understand that if it sounds too good to be true, it's probably not true.

In any case, the moral hazard argument is that we should not bail out those who profited from taking risks that have now come home to roost. Therefore, in general, the Fed should not bail them out by cutting interest rates. But the economy does have a problem if the market turmoil threatens to bring on recession. It's the old story, "If you own the bank $100,000 and can't pay, you're in trouble. If you owe the bank $100,000,000 and can't pay, the bank is in trouble." So, it's possible the hedge fund types have the Fed over a barrel. But certainly the Fed should resist the temptation to bail out the market losers, like Jim Cramer of CNBC, according to Barrons. Bush has already given them a ton of help by cutting their taxes to almost nothing. Bush works for them; maybe Bernanke doesn't. Maybe he works for America. We'll see.

Little Genuine Support for the Troops in Iraq

The Army doesn't see much genuine support from the American public for the troops in Iraq. A NYT story on American troops in Germany being reassigned to Iraq says their commanding general told the families not to go back home to the States, because they wouldn't find much support there. They would find more support at their Army base in Germany. The article said:

One thing General Hertling pointedly did not suggest was for the families of the soldiers to return to the United States. The Army’s goal is to create a support network strong enough that the spouses will decide to wait out the deployment on the base in Germany, a country that many of them scarcely know and that pointedly declined to take part in the Iraq war. “We tell them, ‘You will not get the support you think you will, if you go back home,’ ” he said in an interview.

But it also demonstrates, General Hertling said, how the gap between American society and its volunteer military has widened as the Iraq war has dragged on. “Many people there have just moved on,” he said.

The extension of the last deployment — which came at the last minute after some troops had already reunited with their families in Germany — strained relations between the families and the Army. “There have been so many changes in what we’ve asked soldiers to do, that we may have put spouses in a position where they question what comes next,” said General Hertling, who has had two sons and a daughter-in-law serving in Iraq.

For most Americans, supporting the troops means putting a bumper sticker on their car, or watching a program about the Army on TV. The real way to support the troops is to enlist in the Army or the Marines to go fight. Because nobody does that, those in the service go back to Iraq again and again. Bush and Cheney don't care. They were both draft dodgers during Vietnam who have contempt for the military; to them, serving in the military is something that poor, stupid people do who can't get a real job working for Halliburton or the Texas Rangers.

To me an example of contempt for the military is that the last two Democratic candidates for President, Al Gore and John Kerry, were both Vietnam veterans. The public said, "Naw, we don't like veterans. We didn't serve, and we don't trust those do-gooders who did serve. Give us a draft dodger." And the public got what it deserved: cowards who were afraid to fight in Iraq, who got us into a horrible war that will destabilize the Middle East because they were afraid to fight hard enough to win. Why? Because they would have to raise taxes and re-institute the draft to get enough soldiers to fight and win the war they started. Cowards! Republicans, draft dodger Rudy Giuliani included, are cowards, except for John McCain, Chuck Hagel, and a few other veterans.

I'm not happy with Sen. John Warner, who was Republican chairman of the Senate Armed Services Committee during the invasion of Iraq and during the first years of the war, although he is a veteran. He did not support the military, and has let Bush and Cheney virtually destroy the military by not providing the necessary manpower and equipment to fight the war in Iraq. Warner just got an award from the George Marshall Foundation, but instead of an award he should have gotten a censure for doing the exact opposite of what Marshall did to build up the Army to win World War II. It's time for Warner to go. He has failed his country.

Congress' Disdain for National Security

The word is that the Democratic Congress (Senate and House) passed the revision to the overseas wiretapping law requiring FISA review because it was afraid it would be labelled weak on national security by Bush if it didn't. Maybe it would have been, but the questionable law it passed opens it up to the same criticism, albeit not from Bush, but from freedom loving Americans. The NYT reports that the new law may give Bush more latitude for spying than he had, and not only for wiretapping. It didn't just correct an oversight, it opened new loopholes for the Administration to drive through.

The bad thing is that the Congress cared so little about what the law said that it passed it without debating it, without even reading it closely, if at all. The lesson: August vacation is more important to Congress than America's national security. Congress is a national disgrace!

China's Economic Nuclear Option

There has been talk of China using it's economic "nuclear option" against the US, that is dumping its US dollar holdings, thus killing the value of the dollar against other currencies, as for example in this report. But this would be sort of mutually assured destruction, a MAD economic doctrine. The US would be hurt, but so would China. It would lose its best customer, the US, which would no longer be able to afford all the stuff it now imports. Plus, it would be hard for China to dispose of all of its US dollar denominated assets before the dollar started to crash; so, China would take a big loss on whatever it got caught holding as the dollar tanked. In addition, as the article points out, the US has been trying to get China to increase the value of the yuan relative to the dollar, albeit not by so much; so, China would be to some extent doing what the US wants it to do, delink the yuan from the dollar and let the yuan float up versus the dollar.

In short, this seems like something that it would be very unlikely for China to do. It would hurt the US, but at a great price for China. The only scenario might be if there was a huge financial crash in China, so that adding to it would be relatively unnoticeable; then China might say, "If I'm going down, I'll take America with me."

Iraq War Czar Considers a Draft

CNN reports that Iraq war czar General Lute said that restoring a military draft should be considered as an option to provide enough troops to maintain the US military's ability to fight the Iraq war.

I think we need a draft. Too much is being asked of our all volunteer Army. Bush and Cheney, two draft dodgers, would never propose to restore the draft, although their war is the reason we need to do so. They are perfectly happy to destroy the Army, for which they have no respect, and let their successor figure out how to defend the US. We need to start planning for the future now, and the all volunteer Army won't meet the needs of the future unless we get out of Iraq now and let it start recuperating.

Insider Trading Common on Wall Street

The Financial Times did a study that showed that insider trading is common on Wall Street. This should be no surprise, given that Wall Street is populated by greedy, dishonest people. I was already mad with Wall Street because of its disregard for the war in Iraq. The Dow Jones index went through the roof as more and more Americans and Iraqis died in the war. Wall Street didn't care although to hear George Bush tell it, we went to war for Wall Street, because of the 9/11 attacks, despite the fact that smarter people have found no connection between Saddam Hussein's Iraq and the 9/11 attacks. The attacks on the World Trade center were directed at the US financial district. Since we can't find Osama bin Laden, we don't know exactly why, but part of the the reason was probably to make a high visibility attack that would get the world's attention, and part of it was probably because of the large role played by Jews in America's financial district.

In any case, the Financial Times study tends to reinforce the negative impression of Wall Street. The violent fluctuations currently going on in the market no doubt allow savvy traders, maybe not doing anything illegal, but just using their intimate knowledge of how trades are made these days by computer programs, to make money when the market goes up or down. Add to this the fact that many staffers, high and low, in banks and brokerages are aware of merger and acquisition (M&A) activity, and can probably do some small trades using their inside knowledge that will not show up on the SEC's radar screen, but may show up on the overall statistical study done by the Financial Times.

Cowardly Democrats

Caving in to President Bush on the warrantless wiretapping law was total cowardice on the part of Democrats. Bush threatened to hold them in session unless they passed his law. They had the same choice the Iraqi Congress had -- work for national security or go on vacation during the month of August. The US and Iraqi Congresses chose to go on vacation, rather than try to better their countries.

Bush is worthless, but the Democrats are also worthless. I guess politicians are worthless. I'm particularly surprised that Diane Feinstein, Jim Webb, and my Democratic Senator Ken Salazar voted for the bill.

The bill may be okay, but it may not be. The quick vote was unseemly and showed that the Congress wanted to go on vacation more than it wanted to protect the US. Yesterday, two people debated the law on PBS and they had diametrically different ideas of what the bill actually said, much less what it meant.

Unoptimistic about Middle East

Condi Rice is doing her thing, supposedly bringing peace the Middle East, but I don't believe it. She's not a terrible Secretary of State, but she is not a good one either. She parades around and says the right things, but she doesn't back them up. She doesn't fight for anything. Christopher Hill got the North Korean nuclear agreement. She did support him, which is more than Colin Powell did on the issue. She was probably able to support him only because she got rid of John Bolton at State, and Don Rumsfeld and his allies were gone from Defense. Nick Burns negotiated the Indian nuclear deal, but that was much less successful than the North Korean one. The Indian deal is more likely to undermine US security than to improve it, because it undermines the whole nuclear non-proliferation regime by rewarding one of the holdouts of the regime.

While her subordinates have been out doing things, Condi has been giving interviews and making appearances around the world. But she is not going to make any tough decisions. Any progress in the Middle East will require getting Israel to make some sacrifices, and she won't do that because she and Bush won't, or don't want to, stand up to the Israel lobby, AIPAC and company. Thus, her initiative is doomed from the start.

The idea of shoring up Abbas and Fatah is unlikely to lead anywhere. Fatah meant something when Arafat headed it. The Israelis assassinated Arafat, and I think they will live to regret it. The Israelis may not have assassinated Arafat by actually killing him, although they may have. The reasons for his death given by the French hospital where he was treated were never very clear; he could have died from some virus or poison wafted into his ramshackle headquarters by Israel. Or he may have died simply because of the squalid conditions that Israel forced him to live in. In any case, he was a leader of the Palestinians who could actually follow through on promises he made. Abbas does not have they power. He is a puppet of Israel and the US and is perceived as such by the Palestinians and other Arab and Muslim states. The US money and weapons given to Fatah may help him stay in power, but it won't help him bring peace to the region. It would take a leader with more power than Abbas to do that.