Our Tax Crisis

Wealthy investors felt that the 14,000 level of the DOW was worrisome, even dangerous because it might be the result of the money the Federal Reserve has put into the financial system. They worried that it was not supported by corporate fundamentals. These heavy hitters feared that another financial crisis could lead to deflation, destroying stability and stock values of dividend paying investments. In the last quarter of 2012, growth contracted in the developed world. The 34 member countries gave the world a sign of how the global economy had weakened. Growth vanished in the developed economies. This recent weakness has not generated counter cyclical support from governments and many of the countries where the economy weakened. What they did came late in the crisis. The United States economy did better because fixed private capital investment was still rising. Government investment was down but the US gain is caused entirely by the private sector. Historically, it was very unusual for government Investment in the United States to decline. Austerity has become the byword in many countries, with the heaviest burden falling on the working class and those living at or below the poverty level. Despite the significant contraction of government spending, a protracted fight over the cuts in government spending is likely to last for a long period. If one side wins the first proposal, counter proposals will keep the issue alive for a political generation but only to decide how much and where to cut government programs The social needs of the underprivileged classes will receive far less attention from the drive for the broadest budget cuts. For lack of money, most of the proposals in the President's State of the Union Address are likely to be unfulfilled along with the social economic and moral needs of the nation.

Protecting US interests in Egypt

The Obama administration's official position on the Egyptian uprising has been changing almost daily. Their immediate response was to back President Hosni Mubarak, to the dismay of the protesters. On January 27, VP Joseph Biden went so far as to insist that Mubarak was not a dictator. Then that position was reversed, President Obama himself abandoned Mubarak saying it would be better if the transition process began now and not in September. Today, February 7, Secretary of State Hillary Clinton warned against a hasty exit for Mubarak, saying that moving him could threaten the country's transition to democracy.

At the same time, all administration spokespersons insist that these decisions must be made by “The people of Egypt”, even though it appears that the United States is pushing Egypt in multiple directions according to the numbers and strength of the protesters in the Egyptian square.

The US ought to follow its own advice and stay out of the internal Egyptian crisis except as it affects basic US interests. It has massive clout with Egypt because of its $2 billion a year support of the Egyptian military and economy.

The US could protect its interests by insisting that it would support a new government if the following conditions were met: The 1979 peace agreement Israel would be continued. The Suez Canal would remain open to all shipments of oil regardless of origin. Egypt would continue to cooperate with the world community in the struggle to eliminate terrorism. Egypt would adhere to United Nations prohibitions against the use of torture.

The US would have a policy that met international norms and protected its vital interests The US would affect Egyptian foreign policy without intervening in local political combat. The path for cooperation between the two nations would be clear. The US would have a coherent policy based on its own needs not relying on the number of protesters in the Egyptian square. The uncertainty of US policy would be eliminated. The world’s only superpower should protect its interests without waiting to measure which way the wind was blowing.

Will We Ever Leave Afghanistan?

American military forces have been fighting in Afghanistan since 2001 under the congressional authorization to destroy Al Qaeda for its role in training the 19 criminals who attacked the World Trade buildings in New York City and the Pentagon in Washington D.C. on September 11, 2001, a date that will live in infamy. US military leaders now say that Osama bin Laden and Al Qaeda are no longer in Afghanistan but probably in Pakistan. The enemy has become the Taliban, an insurgency movement dedicated to overthrowing the Karzai government in Afghanistan, a regime supported and financed by the US.

President Barack Obama has sent 30,000 more troops to reinforce the 75,000 already in Afghanistan, in his attempt to secure a military victory over the Taliban guerrillas, a victory that will ensure the survival of the Karzai regime now holding power by election fraud and wholesale corruption. After ten years of fighting, thousands of American troops killed or wounded and a trillion dollars spent, most Americans want to transfer responsibility for this civil war to the Afghan government. However Obama policies for ending this long war are notable for their contradictions. He promises to begin drawing down US forces in July, 2011, “responsibly” but not hastily, and “taking into account conditions on the ground.” These hedges will allow Obama to delay or eliminate withdrawal indefinitely while citing the promised date as policy. Obama hints of willingness to talk to the Taliban while stepping up a military campaign designed to eliminate them. This has inspired President Karzai to begin his own secret negotiations with the Taliban in preparation for the possible departure of the Americans.

This has been the longest war in American history, begun when the US economy was in full bloom and the financial cost was not a factor. Now, with the economy hurting and enormous federal deficits piling up, voters are asking why are we in Afghanistan, a forsaken land dominated by brigands over the centuries, with no economic assets beyond opium, with a population largely illiterate, hardly a factor in world politics. With an important US election just a few months away, the Obama administration finally produced a reason for US presence in Afghanistan by announcing that it had discovered $1 trillion in untapped mineral deposits there, far beyond any previously known reserves and “enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself.”

It must be very difficult for soldiers to put their lives on the line with such a contradictory and vague policy. Who wants to be the last one to die for a mistake? And who will protect the American businesses who invest in the newly discovered mineral riches? And who will protect them from the war lords and native marauders?


The timing of the minerals story is curious, especially because this information has been available for years. In fact, the McClatchy newspaper chain revealed several years ago that the Chinese government had made a long-term deal with the Karzai government giving them mining rights to the biggest copper mine in the world and that the Chinese were being protected from Afghan brigands by US troops. Obama needs to explain why the Chinese get this prize investment when US casualties make the exploration possible. What was the deal between China and the US? Was the price China's cooperation on the nuclear crises with North Korea and Iran?

In any case, it looks as though the American voters are being manipulated. We are leaving Afghanistan – maybe - but if we stay there is a pot of gold at the end of this rainbow. Will this be enough to the defer voter worries until after the November election? Will it take this issue away from the Republicans? The prime reason for the contradictory Obama policy is probably political. Leaving Afghanistan without a clear military victory is sure to inspire political attacks on the Obama administration as incompetent or worse, that it diminished US security by "losing Afghanistan", as though it was ours to lose.