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.

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.

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!

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.

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.  

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.

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.

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.

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."

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.

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.

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.

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.

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!

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!

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!

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!

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.

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.

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.

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!

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Swift Boat Veterans Still An Issue

The Swift Boat issue refuses to go away, probably because of Obama's decision to refuse Federal campaign funding, as the NYT reports. The Swift Boat 527 probably played a big role in defeating Kerry in 2004, and Obama doesn't want to get caught in the same bind, without money to challenge whatever the Republican dirty-tricksters come up with to attack him.

It still rankles me as a Vietnam veteran that Kerry's service in Vietnam was used against him. He may not have been the best example of a veteran, but at least he went, unlike George Bush, Dick Cheney, Bill Clinton, and many other leading politicians. Ironically, Al Gore also served in Vietnam; so, clearly this country hates veterans. It can kiss up to veterans now, because without the draft no one is in danger of going to Iraq or Afghanistan unless they volunteer. But McCain's opposition to the new, improved GI Bill of Rights shows that caring about veterans is not widespread.

I can only conclude that Swift Boat veterans are unpatriotic, America haters. It's probably an over generalization, but the image of a whole group of veterans has been sullied as far as I am concerned.

Anschutz Like Plato's Unjust Man

In the Republic, one of Socrates' students, Thrasymachus, argues that the "unjust" person is more successful:

"My most simple Socrates, you must see that a just man always comes off worst than an unjust. Take first, the case of commercial dealing, when a just and an unjust man are partners. At the dissolution of the partnership you will never find the just man with more than the unjust, but always less. Then in politics, where there are taxes to pay, out of equal incomes the just man pays more, the unjust less; where there is money to be got, the just man gets nothing, the unjust much. Then, again, when they are in office, the just man, apart from other losses, ruins his own business by neglect, while his justice prevents his making a profit out of the public; and in addition he incurs the dislike of his kinsfolk and acquaintances by refusing to be unjust for their advantage. With the unjust man it is the opposite in every particular."

But Socrates, like the Bible, doesn't think that acting unjustly works out in the end.

Not only does Anschutz not pay taxes, as noted previously, but he spoiled the retirement of many Qwest workers, who had spent most of their careers working for US West, by destroying the value of Qwest stock, which many of the retirees held.

The Rich Don't Pay Taxes

The Bush tax cuts greatly reduced the taxes that the rich have to pay, but apparently not enough. Phil Anschutz is in trouble with IRS for some tax scheme that avoids his recognizing a taxable gain (and then having to pay taxes on it) for years and years, according to a number of papers, including the Rocky Mountain News.

The rich who balk at paying taxes are mostly Republicans. Rich Democrats, like Warren Buffett, tend to say the rich should pay more taxes. Thus, it's the Republicans who object to paying for government, including things like the wars in Iraq and Afghanistan and the soldiers fighting them. No armor for troops if it means you have to share your private jet!

People will argue we have to reduce American taxes because we are competing for business headquarters with other countries, like the Cayman Islands, who have lower taxes. It's a race to the bottom. I say, let them go. If Anschutz wants to move to the Canary Islands, good riddance to him and his filthy money. He can go join (Clinton Democrat) Marc Rich in Switzerland, but don't let him come back here to stay at some luxury vacation home or spa. He's scum, a traitor. We don't need people like him. It will be a tough adjustment for America to lose wealthy freeloaders like Anschutz, but while we're having a recession, let's bite the bullet and take on a little more misery to clean up the country.

I have been down on the New York Wall Street types for living large off of America without paying their fair share, and now it turns out that one of the worst offenders is right here in Colorado.

Hooray for the Supreme Court Decision on Guantanamo

Just a note to mention how great it is that the Supreme Court recognized the Constitutional right of habeas corpus for detainees in Guantanamo. If the US is to remain a great country, it must maintain a respectable legal system. I believe that the restraints on habeas corpus and the idea of having some kind of kangaroo courts in Cuba, rather than real civil trials in the US were due to cowardice on the part of the administration. Sure, trials will test the US, perhaps slightly increase the risk of further terrorist attacks, but that's what freedom is all about. Draft-dodgers Bush and Cheney were so frightened by 9/11 that they lost all respect for law, if they had any earlier. Thank goodness for the courage of a slight majority on the Supreme Court!

Wall Street v. Europe

Interesting that with all the talk on Wall Street about the benefits of globalization (for Wall Street, not for jobs on Main Street), one of the reasons that the stock market is supposed to be up today is because Ireland rejected the new EU constitution, which will throw the EU into a stew. So, Wall Street's attitude on this seems to be, "Europe's loss is our gain." I think that is ironically a shortsighted view. Wall Street should welcome a stronger, more unified Europe, but on the other hand should be more concerned about outsourcing American jobs to overseas firms.

Speaking Out on Guantanamo

Most of the news outlets covered the beginning of the trials (or whatever they are) of accused terrorists at Guantanamo. I think they are kangaroo courts. This administration does not like the legal system; it wants to appoint non-activist judges who will allow the administration to do anything it wants, like hold Communist-era show trials without legal protections like habeas corpus that have been part of the Anglo-American legal system for hundreds of years. For all the money that the administration has spent in Guantanamo to build jail cells, courtrooms, develop special judicial-style proceedings with military lawyers, etc., it could easily have held the trials in normal American courts for less money. Of course, the administration would not do that because it wants a guaranteed guilty verdict, no matter what, and in a real trial there is no guarantee of a guilty verdict.

I thought one of the most moving statements was by Navy Commander Suzanne Lachelier on the PBS Newshour. She said:

I think the American people, if they watched, and if they knew what was going on, if they understood the ramifications in the long term to our Constitution, to their Constitution, I think they would be ashamed.

I wear the uniform with pride. I am proud to be a member of the U.S. Navy, but I don't think these proceedings make for a proud day for any member of the service.

I hope that decent government officials, like Sen. Lindsey Graham and Def. Sec. Robert Gates, will protect her from retribution by evil people in the administration, like V.P. Dick Cheney and President Bush.

Obama Encourages Israel to Attack Iran

A day after Obama gave a "pandering" speech to AIPAC, according to the Washington Post, Israel announced that an attack on Iran appeared unavoidable, according to Reuters. One of the most important things Obama said was that Jerusalem should remain the capital of Israel and be undivided. This is a declaration that, if serious, probably makes moot (and impossible) future negotiations on peace in the Middle East. Jerusalem is a war spoil not granted to Israel by the UN, and if the Arabs have no part in Jerusalem, it's unlikely they'll negotiate about how to divide up the West Bank and Gaza.

Col. Patrick Lang points out regarding Hillary's pandering speech that some of her hawkish campaign advisers, who probably lost her the primary by advising her to vote for pro-Israeli positions versus Iraq and Iraq, were probably sitting in the audience at AIPAC. On the Daily Show, Jon Stewart made fun of all of the candidates, particularly excoriating McCain for bragging that he took Sen. Joe Lieberman to Israel. Stewart said that you don't need to take your own Jew to Israel; there are already plenty there. Helena Cobban points out that the LA Times missed one of Obama's most significant statements by confusing what he said about Jerusalem.

My only hope is that Obama was not entirely sincere when he spoke to AIPAC. He had appear strong, because as he said at the beginning of his speech, the Jewish community suspects him of being a (closet?) Muslim and weak on Israel. If he gets to be President, he can always say that the situation has changed since he spoke to AIPAC, but will he?

Senate Seconds Scott McClellan

The Senate Intelligence Committee has issued a report basically reiterating what Scott McClellan says in his new book, What Happened, according to the Washington Post. The report says that Bush inflated the threat posed to the US by Iraq's supposed WMD. Did he give them the courage finally to issue their report? Is anybody surprised? Why isn't somebody -- Bush or Cheney, for example -- in trouble?

Obama Driven from Church

Barack Obama's having to leave his church is a bad sign for religious freedom in the US. People should be free to attend the church of their choice. Obama is a special case because he is running for president, but not that special. Admittedly, the US is not like the old Soviet Union where people were persecuted for going to church, or like a country that has an established religion connected to the government, like the situation that drove the Pilgrims and the Puritans to the US centuries ago, or like the Nazi persecution of the Jews, although that was more racial than religious.

What Obama's experience shows is that you have to be a member of a pretty bland, mainstream, widely accepted church if you don't want to be persecuted for your religion. While Obama's pastor may have been controversial, the United Church of Christ is not. And most recently, Obama was criticized because of what a visiting Roman Catholic priest said in his church. America says, "Don't you dare try to listen to other points of views. Don't you dare try to understand other religions. We'll crucify you."

It's hard to tell how much this religious hatred emanated from the Clinton campaign, how much from Republicans and their proxies like Fox News, how much from the evangelical right, and how much from news media that just wanted a story. But the end result was that Obama was not free to attend the church of his choice, and that's sad for America.

Israel Rejects Bush's Advice

The NYT rightly points out that Israel rejected Bush's advice directed at Obama not to negotiate with regimes you don't like, although it gave him time to get out of the country before Israel's talks with Syria became public. It just makes Bush and the neocons look like idiots. And they endanger the US in the process.

American-Israeli Pundits

In his blog, Patrick Lang takes on David Brooks' column in the NYT. I always liked Col. Lang's commentary on PBS, and I was happy to find his blog. Brooks is one of the more intelligent conservative columnists; so, it's disturbing when a reasonable moderate like Lang finds: "David Brooks is not an editorial columnist. He is a propagandist for the hard right in this country and in Israel." If this is Brooks, then what about a wild man like Charles Krauthammer. There's a more reasonable piece in the WP by James Rubin, but must the entire commentariat be Jewish? I definitely suspect their loyalty to the US, in that I believe they are more concerned about Israel's security than about America's. But it's arguable that that is a legitimate perspective for a 100% American. It's just not my perspective. I think the "I" by Sen. Joe Lieberman's party affiliation means "Israeli" not "Independent."

Just for the record, I am outraged at Bush's comments in Israel about an appeasement Senator (read Obama) who is the current day Neville Chamberlain. Bush should not have taken domestic politics overseas, although Republicans probably view Israel as a 51st state; maybe Democrats do, too. I don't, and so I thought his comments were extremely inappropriate. But it shows how much Jews control American foreign policy, and tilt it toward Israel. Bush probably raked in millions for the RNC and McCain by his comments.

MSNBC had a stupid but telling segment on Hardball, where Chris Matthews asked some apologist for Bush what Chamberlain did that was so bad. The apologist didn't know, but wouldn't admit that he didn't know. Matthews finally said that it was that Chamberlain agreed to Hitler's military occupation of Czechoslovakia, not that Chamberlain advocated talking to Hitler. McCain prostituted himself by buying into Bush's comments, but he will get lots of Jew money for doing so, and he needs money. But that's what prostitutes are: people who sell themselves for money.

HIV and American Visas

Andrew Sullivan's op-ed in the Washington Post reminds me of an experience at the State Department in the early 1990s. I was the deputy director of an office called OES/EHC, which stood for Bureau of Oceans, Environment and Science/Office of Environment, Health, and Conservation. Under the health responsibility I had an M.D. who in theory worked for me, although as a doctor, he made far more than I did. He wanted to take on the Jesse Helms visa ban on HIV-positive foreigners, and I went along to give him bureaucratic support. He took me to meet with HIV medical specialists in HHS and other agencies, and they convinced me that the Helms proposal was improper. At that time, the only basis for denying a visa to someone coming to the US was that they had a highly infectious disease. Jesse claimed that HIV was highly infectious, but the medical people said it was not. The only disease that was categorized as truly highly infectious was tuberculosis. They said that you couldn't catch HIV by sitting next to someone on a bus, for example.

So, my M.D. and I wrote a memo to the Secretary of State, then Jim Baker, saying that the Jesse Helms proposal should be rejected. Both my boss, the Assistant Secretary for OES, and the Assistant Secretary for Consular Affairs, who was responsible for visas, signed off on it. We sent it on its way to Baker, but it had to go through the Under Secretary for Economic Affairs, who was then Bob Zoellick, who is now President of the World Bank. Zoellick never passed the memo on to Baker; he kept it buried in his in-basket. I somewhat respected that decision, because the memo asked for a decision from Baker that put him in a no-win situation. Clearly the right legal, scientific thing to do was to reject the Helms proposal, because it had no legal or scientific justification. However, Jesse Helms was a great, powerful enemy of the State Department in the Senate. If Baker made Helms mad, there would be hell to pay on many other issues, probably ranging from the State Department budget to major issues of war and peace. So, Zoellick protected Baker from ever having to put his fingerprints on our memo.

It was bad law; it was unfair to HIV-positive people, but politically it was probably the best thing for the State Department. My colleagues and I periodically tried to press Zoellick to release the memo, but he never did. Neither of the Assistant Secretaries, much less people at our level, had the clout to bypass Zoellick.

I didn't know until I read Sullivan's column that Congress had subsequently passed a specific law banning HIV-positive people. A law has a better legal justification than Helms' regulation, although neither has scientific or humane justification, as Sullivan points out.

If you ask me, the fear of HIV is a sign of the same cowardice as the fear of terrorists. This generation of political leaders who grew up during Vietnam is, with a few exceptions, a generation of draft dodgers. They were either too afraid or too selfish to go to fight in Vietnam, and now they are afraid of HIV and terrorists, so afraid that they resort to torture of terrorists, and other extra legal means of dealing with both terrorists and HIV-positive people. It's a sad commentary on America.

State Comments on India Deal Kept Secret

The Washington Post reports that the State Dept. has asked Congress to keep State's comments on the US-India nuclear deal secret. It's not surprising, since the deal is sensitive in both countries. In India, the opposition believes the deal puts too many restraints on India's nuclear program; in the US, arms control advocates believe that it rewards India for flouting the nonproliferation regime and developing nuclear arms.

To me, one of the most interesting things is that the new chairman of the House Foreign Affairs is Howard Berman, replacing Tom Lantos. Lantos was supposed to be the only Holocaust survivor in Congress, although it doesn't sound like he actually survived much; he was never in Auschwitz, Treblinka, or any of the real death camps. But he was Jewish, and his successor, Howard Berman is Jewish. And who is another country that like India has flouted the nonproliferation regime and developed nuclear weapons? Israel. Israel is not likely to come under much scrutiny in the House.

What's the impact of the US acceptance of proliferation by India and Israel on the problem countries of the day: Iran, North Korea, Pakistan, now Syria, et. al? Nobody knows for sure, but it's probably not good. But we (the US) will try to keep quiet about what's going on in India and Israel, so that we can beat up on the other countries. It might work, but I doubt it. It's ironic that the Jews, by developing Israeli nuclear weapons, are their own worst enemy in trying to prevent Iran from doing the same thing.

Israel, Marshall, and Truman

In today's Washington Post, Richard Holbrooke recalls America's response to the declaration of Israel's creation. He says that most of the "wise men" at the State Department opposed immediate recognition of Israel, because it would create so many problems with the Arabs. Defense Secretary Forrestal said there were 30 million Arabs [with oil] and 600,000 Jews [with no oil]. Secretary of State General George Marshall led the argument against immediate recognition. Clark Clifford, Truman's domestic political adviser, led the argument for recognition. Holbrooke, who wrote Clifford's biography says that domestic politics were not important, i.e., the Jewish vote. He might be biased.

Only with great effort was Secretary Marshall persuaded not to make a public stink when Truman recognized Israel, and then Truman went ahead and did it. It's still questionable whether this was the right decision. Clearly it's been good for Zionist Jews in America, who interestingly according to Holbrooke did not include the Jews who owned the Washington Post and the New York Times. But it's not so clear that it's been good for America as a nation. No doubt today's high price of gasoline is in part due to Truman's decision to side with Israel over the Arabs. And of course we have over 100,000 troops in Iraq doing something that is in part motivated by the defense of Israel. Both Hillary and McCain continue to pander to the Jewish vote by threatening to destroy Iran, which is the new target for Israel, now that the US has neutralized Iraq's threat to Israel.

But it's a never ending struggle for the US to defend Israel. Just in the last 24 hours Lebanon has threatened to blow up again. Will Bush "stay the course" in Lebanon, too, or will he follow Reagan's example and stay out?