Why I left the Foreign Service III

Rome: Tethered Satellite. Firing of space agency chief.

One of the best parts of my job as Science Officer in various embassies was that I was the representative of NASA, and everyone loved NASA.  In addition to being glamorous, NASA had stuff to give away, like observation time on the space telescope, rides on the Shuttle, etc.  The local space agency always wanted to stay on my good side.  When I came to Rome, I inherited an agreement under which the Shuttle would carry a tethered satellite for the Italian Space Agency.  This satellite would be reusable.  It would ride in the Shuttle cargo bay, and when the Shuttle was in orbit, it would be released on a long tether to collect data away from the pollution of the Shuttle. Then, when the Shuttle was getting ready to return to earth, the satellite would be reeled in, much like a fishing line would be reeled in.  The satellite would be stored in the cargo bay and returned to earth until it was flown on another mission.  It promised huge savings because satellites are so expensive to build, impossible to repair in space, etc. 

On its first flight, however, the reel jammed, the tether broke, and the expensive satellite drifted off into space beyond the reach of the Shuttle.  For a change, being the NASA representative was not so great.  The crew of that Shuttle visited Rome, and while it was not billed as an apology tour for losing the satellite, that's basically what it was.  Meanwhile, the head of the Italian Space Agency was in political trouble.  While his problems were not directly linked to the failed satellite, losing the satellite did not help his position.  I was unhappy, because I was feeling snake bit.  I had had little to do with the mission, which had been planned long before I arrived in Rome, but I was there when it happened.  It turned out that because I was retiring, the head of the Italian Space Agency and I left Rome about the same time.  He was going to take some time off before moving on to his next venture.  While my only fault was being in the wrong place at the wrong time, it added to the dissatisfaction I was feeling about the job.  If the best part of my job, working with NASA, turned sour, there was not much left. 

Why I Left the Foreign Service II

Rome: Fisheries.  Constitutional responsibilities and Ambassador's letter. 

When I arrived in Rome, the State Department was in the process of being sued by four environmental organizations because the State Department, and the Embassy Rome Science Office in particular, had failed to enforce the driftnet fishing regulations of the United Nations.  My assistant was deeply involved in this issue and got daily updates from the trial in New York.  As usual for the government, the State Department lawyers could not try the case in court; Justice Department lawyers represented the US in court supported by State Department lawyers.  The reports always were that the US was winning, but when the verdict came in, the US lost.  The US was ordered to make the Italians enforce the UN regulations with regard to driftnets, and the Federal District Judge in New York would ensure that it did.  This meant that my office's dealings with the Italians on fisheries issues were all subject to review by the judge.  The main thrust of the regulations was to limit the length of the driftnets used by Italian fishermen who were fishing for swordfish.  They said Italians used driftnets that were too long and therefore caught too many swordfish, thus depleting the swordfish population.  

I thought first of all that this decision was an infringement on the executive branch's authority to conduct foreign relations, although I guess it is arguable that the UN resolution was a treaty, over which the courts have authority like domestic laws.  But this meant that my office's actions on fishery matters in Rome were under the constant review of a court in New York.  Anyway we had a big meeting, with a huge delegation from Washington meeting with an even larger Italian delegation, which agreed on guidelines drawn up in large part by my assistant and her counterpart, who was a young staffer for the head of the Italian Agriculture Ministry division of fisheries.  The linchpin of this arrangement turned out to be an Italian Greenpeace member who focused on the swordfish issue.  Whenever there was an issue, it would go to the Federal Court, the court would refer it to the environmental organizations that had won the case; they in turn would ask the opinion of the Greenpeace representative in Italy.  If he approved, the environmental groups would approve, and the court would approve.  

Just a day or two before I was scheduled to leave Rome for retirement, the Agriculture Minister summoned the Ambassador to discuss the swordfish issue.  I went along with the Ambassador because my assistant who was the expert and had negotiated the agreement was sick.  The Minister said that the agreement negotiated by the delegations was not workable because it was too tough on Italian fishery enforcement personnel.  It required them to do frequent, thorough inspections of driftnets, catches, etc.  The majority of swordfish fishermen were based in Sicily, and they were upset at the inspections.  Thus, they turned to the Mafia to get the inspectors off their backs, and the government inspectors found themselves under constant death threats from the Mafia.  The Minister said it was too much to put his men in such danger; we needed to give them more leeway.  He wanted to ease the terms in the agreement regarding inspections somewhat.  The changes were fairly minor and the Ambassador was willing go along, but I reminded him that he didn't have authority to agree on the spot with the Minister, because any change had to be approved by the District Court, which essentially meant getting the approval of Greenpeace.  The Ambassador was not happy to find his authority limited, which I must admit I stressed, because I didn't like it either.  I thought the State Department (and the Ambassador) had been unfairly, perhaps unconstitutionally, placed under the authority of the judge.  We got the changes approved on my last day in Rome, but the Ambassador and I parted on unfriendly terms.  On my last day of active duty in the Foreign Service, he sent me a short, bitter letter criticizing my work on the driftnet matter, the only such letter I received during my career.  Since I was retiring, it didn't matter to me.  But to me the whole mess was another example of the fact that the government did not work correctly.  I found it entirely inappropriate that Greenpeace Italy should control the American government's policy on fisheries issues, rather than my office, the Ambassador, and the fisheries officials in the State Department.  In Italy, Greenpeace could not get the Italian Government to do what it wanted; so, through its American branch it sued and got US courts to order the State Department to order the Italian Government to do what Greenpeace thought it should do.  I guess Greenpeace gets kudos for originality and persistence, but I don't think it says much good about the way our government works.  This was an issue that Greenpeace should have worked out within the Italian Government, or between the Italian Government and the UN, without US intervention. 

Rome: Tethered Satellite.  Firing of space agency chief. 

Rome: Help on North Korean Nuclear Proliferation. 

Rome: Denial of Visas to Children.  Helms-Burton and "Winds of War." 

MTCR and Skawina in Poland

Before I move on to Rome, there were some other disappointing events in Poland.

MTCR.  Before the fall of Communism, there had been some security failure at the embassy in Poland, so that even after the fall, there was a lot of concern about security of classified material.  As a result, there were a limited number of paper copies of classified cables, with few distributed to anybody except the office that had "action," i.e., that had to act on or respond to the cable from the Department of State.  In other embassies, more people might have gotten "info" copies, so that they would know more of what was going on in the embassy.

Besides overseeing the science cooperation, which was cancelled, I also had responsibility for environmental issues and some nuclear related matters, one of which was export control  matters such as the Zangger List, which controlled exports of items which might be used for nuclear proliferation.  In that capacity, I often dealt with a Polish diplomat at the Foreign Ministry,. Ambassador Strulak, who worked on a variety of proliferation issues.  One day while I was talking to him, he asked me if I could find out why the US had blackballed Poland's membership in the Missile Technology Control Regime (MTCR).  This came as a shock to me, because I had worked on MTCR issues for years in the Department of State, and I had seen nothing about the MTCR in the embassy cable traffic.  It turned out that the "action" on MTCR cables went to the political section, and I did not get a copy in the science section, although after years of working on the issue, I had to be one of the experts on the MTCR.  In fact that is why Amb. Strulak had asked me about it.  On one of his visits to Washington, he was asking around in the State Department about why Poland had been blackballed, and someone had told him to ask me in Warsaw, because I was an expert.  Until then Amb. Strulak never knew that I had worked on missile proliferation as well as nuclear proliferation.

By then, however, I had been out of the loop for several years, working on other issues.  However, I called back to my old office and talked to the man then running it, Vann Van Diepen.  I had known Vann since he was in intern and I was an analyst in the State Department Bureau of Intelligence and Research.  However, Vann told me there was nothing I could do, because President Clinton had personally decided to blackball Poland.  It's not unusual for an issue that can't be agreed between agencies to go to the White House for decision.  I also knew what the problem was: The MTCR was unwieldy because it basically operated on consensus.  The US wanted to get a more controllable management structure before it got too big, and adding Poland would have made it bigger.  On the other hand, the Poles wanted to cooperate so badly that they would not have been a problem in reaching consensus.

Anyway, I was disappointed that no one thought it worthwhile to consult me or even to inform me that this matter was on-going, when I had been the main working level person handling this issue a few years earlier in Washington.  It was as if they didn't think the science office could handle a policy issue.

Skawina.  Although they didn't think I should be involved in political matters, it was pretty much accepted that I handled environmental issues.  This main mainly meant working with the Polish environment ministry, and supporting an organization called the Ekofundusz (or Eco-fund).  The Ekofundusz was a non-governmental group funded by forgiven US debt.  Instead of being repaid, the US authorized the Ekofundusz to finance environmental projects in Poland that it found worthwhile.  I don't remember its budget, but most of the projects were relatively small, maybe in the tens of thousands of dollars.

For me one of the best things about the Ekofundusz was that it provided a refuge for liberal environmentalists who had supported the overthrow of Communism.  In the mid-1990s when I was there, the old former Commies were back in power in many places, including the environment ministry.  The Ekofundusz was like a Brookings Institution or Heritage Foundation, it gave the anti-communist environmentalists an office and a little salary until they had a chance to get back into government.  This is the same kind of thing that the Maria Skladowska Curie Fund could have done for anti-Communist scientists and engineers, but by cutting off the funding, the Republicans cut them off at the knees.  Fortunately, because of the vagaries of the law, the environmentalists' funds were not cut off.

In addition, USAID had a much larger environmental program as part of its agenda.  One of its projects was to build a scrubber for an old electric power plant near Krakow, called Skawina.  I frankly didn't pay much attention to it, although AID was better than the political section about keeping me informed.  So, I knew we were building this scrubber, and we turned it over to the Poles.  After a while, I began to hear from my Polish contacts that the scrubber didn't work.  Basically, it blew exhaust from the power plant through a process in which lime stone was supposed to remove most of the sulfur from the gas.  When I began to look into it, it turned out that it didn't work.  The chemical properties of Polish limestone were not suitable for the process.  It was somewhat galling, because the main Poles complaining were old Communist apparatchiks who were happy to see the US fail, but they were right that the system did not work.  One took me to a much bigger power plant with working scrubbers; they were built by the Dutch, but were based on General Electric designs.  I think that when I left Warsaw for Rome, Skiwina was still not working.

Why I Left the Foreign Service I

As I complain about how things are going in the US, I think that I could have stayed in the State Department Foreign Service, but instead I retired almost 15 years ago.  Could I have made a positive difference if I had stayed in?  Or would I have continually been implementing policies that I disagreed with?  I came down on the latter side.  I thought I would write down why I did so, and consider whether, about 15 years later, it was the right or wrong thing. 

Brazil Space Program.  One of the first serious things that went wrong was years before I retired, while I was serving as the science officer in Brasilia in the 1980s.  NASA was a great asset for the US in relations with other courntries.  Because I was the embassy's representative for NASA, I had good relations with the Brazilian space agency, INPE.  INPE wanted to build some satellites and ground stations to monitor them with, to survey the Amazon.  The US bidder on the ground stations, Scientific Atlanta, for some reason failed to get its bid in on time and lost to a Japanese company.  I persuaded INPE to reopen the bidding, and as a result, Scientific Atlanta won.  Then the Defense Department, I think the office of Steve Hadley (who went on to be NSC chief), denied the export license for the ground stations.  My friends at INPE were livid and my good relationship ended.  I think Hadley was a Richard Perle acolyte in the Pentagon, and Perle hated Brazil. 

Polish Science Fund.  In the 1990s I went to Poland as embassy Science Counselor, where my main job was to oversee science cooperation beteen the US and Poland under a joint fund called the Maria Sklodowska Curie Fund which was to continue for five years.  After about two years, the Republicans under Newt Gingrich were elected, and cut off funding for the cooperation under a clause in the agreement allowing either side not to fund it if funding was impossible.  This was clearly inserted into the agreement for Poland, which faced many financial challenges as it emerged from Communism, but the US used the clause instead.  For the rest of my tour, I was periodically called into the Polish Foreign Minsitry by a senior official and berated for the US not fulfilling its commitment.  Meanwhile, Polish scientsts who had lost most of the government funding also lost what would have been an American lifeline, a sort of anti-Marshall Plan.  As an added insult, the Ambassador eliminated my science office in the embassy, because there was no more joint program to oversee. 

Government Shutdown.  Meanwhile, the State Department asked me if I would like to go to Rome, because the Science Counselor there had been fired for some other budgetary reason. I agreed, but on the day I was leaving Warsaw with the car packed, Embassy Rome called and said don't leave because the government shutdown meant there was no money for travel.  However, my wife and I then had no place to live.  The house the embassy had rented for us was empty and was being returned to the owner.  The idea that the US government would put us out on the streets of Warsaw was so abhorrent to me that it was pretty much the straw that broke the camel's back, as far as continuing to work for the US.  I was usually the good soldier, doing as I was ordered, but this time I was so mad that I called Rome to see if I could get their order reversed.  I did, and we started driving to Rome, but for me the damage was done.  The US government had said, "Hey, you're expendible.  You and your wife can die freezing on the streets of Warsaw.  We don't care." 

Vietnam War.  It reminded me of the day I arrived in Vietnam, and the Army assigned me to Dong Ha on the DMZ, so close to North Vietnam that the dot on the map for Dong Ha projected into North Vietnam.  I went where the Army told me to go, but for the State Department to do that to me and my wife was, I thought, beyond the pale.  There have been a lot of Foreign Service officers assigned to Iraq and Afghanistan (without spouses), but hopefully, the State Department didn't drop them off in some God forsaken village and say, "Hey, we can't afford to come back for you.  You will have to walk back.  Try to avoid the Taliban."  When I was at an artillery firebase near the Laotian border, Firebase Barbara, we had no American infantry support because we were turning over the war to the Vietnamese.  We had two American "dusters" assigned to protect us, old anti-aircraft guns that fired 40 mm rounds with every round a tracer, firepower that tended to inspire some awe in the North Vietnamese.  One night when there was a alert that we might be attacked because of activity spotted by an intelligence fly-over, our battalion headquarters said, "Don't give any gasoline to the dusters.  Their supply people are lazy and incompetent.  We don't want to help them out."  Of course the alternative was to have the dusters not shoot to protect us.  We gave the dusters the gas they needed.  They blew away several square kilometers at the base of the mountain, and we were not attacked.  Did the penny pinchers in Washington really want us to die?  Probably not, but did they really care?  Probably not.  Did they really care about us in Warsaw?  Probably not. 

When we got to Rome, things did not get any better for me from a policy perspective.  More on this later,  Some topics: 

Rome: Fisheries.  Constitutional responsibilities and Ambassador's letter. 

Rome: Tethered Satellite.  Firing of space agency chief. 

Rome: Help on North Korean Nuclear Proliferation. 

Rome: Denial of Visas to Children.  Helms-Burton and "Winds of War." 

Republicans want America to fail

Today on CNBC in an interview with Maria Bartaromo, Nuriel Roubini said that it made no difference what economic proposals Obama made because the Republicans would oppose anything. He said they want the economy to be as bad as possible because that helps their election chances next year. So Roubini thinks the Republicans want America to fail. How terrible!

It is not unlike what Paul Krugman says in his NYT column. He said Bernanke is less likely to move aggressively to support the US economy if Rick Perry is going to call him a traitor for doing so.

The upshot is that the Republicans are willing to propose actions to push the US into a depression, or block Democratic actions to avert a depression, just so they can defeat Obama in the 2012 election. How disloyal to this country can you get! And how insensitive to the suffering of their jobless fellow citizens!

How We Got into Libya.

The Europeans wanted to get into Libya. To a certain extent, it's their backyard. I thought the Israelis too wanted us in, but now I'm not so sure. The impetus for Bernard-Henri Levy's Libya visit may have been more French than Jewish. Clinton and Rice wanted us in because of Rwanda. But the deciding factor may have been the unexpected votes by the AU and the UN. They called our bluff and said go ahead and support the rebels.

Debt and Global Waming

Republicans want to cut debt so that their children will not be burdened. But then they are against doing anything to counter global warming, which means that their great-grandchildren probably won't survive anyway, at least not in a lifestyle that looks anything like ours today.

Thoughts on Reading "Obama's Wars"

People talk about how Afghanistan invaded the US, because bin Laden trained there. But that's like saying some empty building is responsible for a drug killing because the drug gang met there. The gang is the problem, not the building. 9/11 was really a criminal matter, not a military one. But Bush and Cheney were probably right that the American people wanted a big military response, especially since all the hijackers died,and there was no one to hold legally responsible except bin Laden.

Woodward's book emphasizes the importance the whole Obama administration placed on naming McChrystal as Afghanistan commander. When he had to be removed it must have been devastating.

Bush, after invading Afghanistan with a few special forces troops, sent in a few regular troops, and then basically abandoned the war to start a new one in Iraq. The one thing he needed to do in Afghanistan was find bin Laden, but he failed to do it. He left a rump American force there with insufficient guidance and resources. This was terrible for the military, essentially assigning them to a waste of.lives and money, with no possible desirable outcome. Obama gave the military the chance to make something out of Afghanistan, but it's questionable whether that is possible. In any case, so far the military has failed to make progress, even with more resources.

When Obama began to focus on Afghanistan, he and his advisers began to give Pakistan a higher priority as a threat to US interests. Thus, the strategy for Afghanistan was controlled by what effect it would have on Pakistan. Seen this way, US policy for the war was backhanded, sort of like pushing on a string. And Afghanistan once again was second fiddle to another country, this time Pakistan instead of Iraq.

Underlying the debate is the military's need for a war to justify it's existence. The military gets a lot more money, power and attention in wartime than peacetime. So, it's not surprising that it would encourage any war for any reason.

Letter to Veterans Committee

Is Veterans' Committee Chairman Miller a military veteran?

As a Vietnam veteran I ask, because press reports, including a recent email from the American Legion, indicate that this Congress wants to drastically cut veterans benefits.

It sounds like Chairman Miller is from the Pensacola area. When I was growing up, the Pensacola Naval Air Station was one of the most important things around Pensacola, but I find it is not mentioned in the Chairman's bio. I grew up in Mobile, Alabama, and my mother and I used to shop at the Naval commissary while my father was serving in the Army in Korea during that war.

It is terrible that this Congress is attacking veterans as dead and wounded veterans come home from two wars in Iraq and Afghanistan and some kind of military action in

Elizabeth Warren Redux

I am very disappointed with President Obama's decision not to nominate Elizabeth Warren as head of the new consumer protection agency. She is one of the few people in Washington that I respect and trust. Obama's decision to pass over her for one of the deputies she hired shows cowardice in the face of Republican opposition. To me, coming simultaneously with the fight over the debt ceiling and budget deficit, it illustrates the failure of the two party system.

I have seen in the news that Elizabeth Warren is considering a run for the Massachusetts Senate seat held by Scott Brown. I can't imagine why a woman with her high moral character would want to join a corrupt, dysfunctional body like the US Senate, but she could only raise its standards. Nevertheless, she surely would have been more useful as head of the consumer agency.

The consensus seems to be that Congress will come up with some way to raise the debt ceiling, whether the minimalist Mitch McConnell approach to raise the ceiling but do nothing about the budget, or the gang of six maximalist approach to make huge modifications to the budget. Because I have no confidence in Congress, and because Congress has dithered until the last minute, I do not expect anything important to come out of this mess. I don't see how it can reform Medicare, Social Security and the tax code in less than two weeks.

I am hopeful that the ceiling will be raised somehow so that the US does not default on its debt at the same time that Europe is facing much more substantive debt problems. Europe has to deal with the future of the entire Euro zone, while the US is tied up in knots over a simple procedural issue. But the two together could bring down the world economy, or at least transfer world leadership from the West to China.

Swift Boat Vets Don't Love the Troops

I am not happy with all the talk by Republicans (and Democrats) about how much they love the troops. As a Vietnam veteran I did not get a particularly heartwarming welcome home. The main welcome I remember is that Continental Airlines offered me a free drink flying from Fort Lewis, Washington, where I separated from the Army, to New Orleans, on my way to Mobile.

The most anti-veteran thing I remember was Swift Boat veterans ads that the Republicans ran against John Kerry when he ran for President. Although it was directed at a fellow Swift Boat veteran, Kerry, it was really an attack on all veterans, particularly against Vietnam vets. It ironic that except for pilots and Seal teams, Swift Boat vets have been the only Navy vets who have actually fought the enemy since World War II. I think most Navy personnel killed or injured in Iraq or Afghanistan are medics assigned to Marine units.

In retrospect, I think the attitude of the general public toward Vietnam veterans coming home was that the Vietnamese should have killed the returning vets. They thought that would have been more just, because Vietnam vets were perverted baby killers. Those who didn't go -- Clinton, Bush, Cheney -- felt they had to condemn Vietnam vets, because otherwise the draft dodgers would have looked bad. They weren't necessarily cowards, but they were selfish, not willing to serve their country.

As a result, Vietnam vets have something in common with low ranking German Nazi vets, who fought in WW II because they had to, and they fought for the guy in the foxhole next to them, like the troops in Afghanistan, not for any Nazi ideals. But they will forever be branded as low grade war criminals. That's more or less how those who didn't fight see Vietnam vets. It was particularly hard on minorities and less educated vets, who were drafted or volunteered in disproportionately large numbers because the more advantaged youths refused to go.

Do Republicans Understand Debt Crissis?

Republicans don't seem to understand the difference between incurring debt and paying it off. The debt ceiling is about paying off existing debt. If we don't pay it, it is like not paying a credit card balance. The credit card company is going to charge you lots of fees and higher interest and will probably refuse to lend you any more money. What Republicans are worried about is continual charging on the card, running up a bigger and bigger balance. The answer is to stop charging, not to stop paying. Once you have a huge bill, it is hard to figure out how to pay it off. It is a much longer and tougher job than just making a payment each month. They need to keep paying the bill, and then work on a budget.

Republicans vs. Elizabeth Warren

The Huffington Post reports that the Republicans will keep both the House and the Senate in session. Basically, Obama asked for this yesterday. The question is whether they will do anything. Huff Post thinks somebody will just appear on the floor every few days and make some meaningless statement to keep the session active. If so, it will be meaningless for the debt crisis.

Another result, however, will be to prevent Obama from making recess appointments, in particular of Elizabeth Warren. I find it significant that the Republicans and big business are so afraid of her. I think she is just someone who supports the average American. It means to me that the Republicans and big business must really hate the average American. They succeed by following P.T. Barnum's saying that "There's a sucker born every minute."

Letter to Senators and Congressman

As you discuss tax reform, at the top of your list should be eliminating the capital gains tax. In general, capital gains should be taxed as ordinary income. It is the main reason that many wealthy people pay a lower tax rate than ordinary people. Warren Buffet often cites the example that his secretary pays a higher tax rate than he does. Basically the capital gains tax is welfare for billionaires.

Yesterday, former Reagan budget chief David Stockman called for reform of the capital gains tax on Fareed Zakaria's GPS program on CNN. He said that it made some sense when inflation was high, so that capital gains merely reflected inflation and not an increase in the real value of an asset. But today, there is virtually no inflation. The other justification is that it encourages new business. There is some basis for that. Perhaps, people who start their own businesses and true venture capitalists should get some kind of tax break to encourage them, although most venture capitalists are multi-millionaires. But someone who buys Apple stock at $200 and sells it a year later for $300 hasn't really encouraged entrepreneurship. A favorable view is that he made a good investment; a less favorable view is that he was just gambling and made a winning bet. Why should this country encourage gambling over doing a hard day's work as an engineer or waitress?

Earlier, I wrote you suggesting the gradual elimination of the home mortgage tax deduction, because it unreasonably favors homeowners over renters, especially if the homeowners paid no money down and have no equity in their homes. They are essentially renters, but get a homeowner's tax break. It might be fair to continue the deduction for people with substantial equity in their houses. Building up equity is the saving which the deduction was originally intended to encourage. But the subprime housing crisis illustrated the economic dislocation that the tax deduction helped create.

My Meeting with Kissinger

Kissinger's new book "On China" reminds me of the only time I met him. As a young Foreign Service officer on his second assignment, I was working in the State Department INR watch office, which monitored incoming intelligence reports. While he was Secretary of State during the Ford administration, Kissinger was holding Middle East peace talks. One quiet Sunday afternoon while Egypt's Sadat was in the US, we got a highly classified intelligence report that there was an assassination plot against him. We in the watch office and the operations center debated about whether we needed to tell Kissinger, who of course was in negotiations with Sadat. We decided we should tell him. He was in the State Department building, and his secretary said to come down and brief him.

Because the report was so highly classified, State Department rules were that you had to carry it in a locked briefcase, even if just walking a few yards from the Operations Center to the Secretary's office. So, I took my locked briefcase down to Kissinger's office. His secretary said he was meeting with Assistant Secretary Phil Habib in a small conference in the back of his office suite, where they were discussing the peace talks with each other. I went back and found them. I started unlocking my briefcase to show them report, and Kissinger said, "Just tell me what the report says." So, I said, "There is an assassination plot against Habib." Phil Habib looked up at me incredulously, and I said, "No, no, I mean against Sadat." And they said something like, "Okay, thanks." and that was it.

Sadat, of course, was not assassinated then and not for several years afterwards, but he lived under constant threats of assignation for all those years. As far as I know, Phil Habib only lived under an assassination threat for about ten seconds.

Raise the Debt Ceiling

I am aghast that the US government continues to threaten to quit paying interest on its debt. While it is mostly Republicans, the straight vote last week in the House on whether to increase the debt ceiling was defeated with many Democrats joining the Republicans. I thought this was terrible. The Republicans said it was just a joke for show and that Wall Street was in on the joke. Afterwards, bond prices rose and interest rates fell, indicating that Wall Street was not concerned. I don't get it.

This Reuters article says the Chinese are concerned. It would seem that we should be concerned, too, if only because the Chinese hold $1 trillion of our debt. In theory we have the Chinese over a barrel because of the old MAD theory (Mutually Assured Destruction). If the Chinese destroy the US dollar, they lose their trillion dollar investment. But in this case, the US is threatening to take the first MAD step by destroying the value of its own currency.

The Republicans say that maybe nothing bad will happen, that the US can stop paying interest for a few days or weeks and then, when the budget negotiations are finished, it can start paying again like nothing ever happened. Maybe. But the Chinese analogy to playing with fire is apt. We don't know for sure what will happen, and we might burn our own house down. Why would we want to even risk the possibility of that?


Another possibility is that Treasury would take the money to pay interest on the debt from Social Security and government pension funds. As a retiree this really ticks me off. As a Vietnam veteran, I support shared sacrifice, but this is like the draft during the Vietnam war and voluntary military service in Iraq and Afghanistan now. There is no shared sacrifice. Only the fools sacrifice because of some insincere patriotic appeal, like Sarah (Paul Revere) Palin's. Sarah Palin gets rich, while the redneck grunts in the Middle East die. In this case, the ordinary retirees will sacrifice so that we can pay interest to Chinese millionaires and American billionaires in New York who wouldn't lift a finger to defend the US, although they were the ones attacked on 9/11.

Coburn Withdrawal Bad Sign for Debt

Sen. Tom Coburn's withdrawal from the gang of six working on the budget/debt ceiling crisis is a bad sign. I was never convinced that he was committed to the process, but now he certainly is not. He probably came under heavy pressure from his fellow Republicans to drop out. They probably plan to push the debt ceiling issue to the limit. Pundits say it may not destroy the country, but there is a possibility that it might. As somebody said today, why would you want to test whether it will destroy the country, if there is even a slight possibility that it might, and if you could easily avoid doing so.

Yes, we need to bring down the deficit and start paying down the debt, but we shouldn't default on our debt payments and undermine our credit in the process.

Why Aren't We as Brave as the British?

I apologize for the disjointed letter posted previously.

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

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

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

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

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

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

Raise the Debt Ceiling Now

Letter to Congressman and Senators:

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

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

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

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

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

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

People Who Walk Away from Their Houses

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

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