Is Jon Stewart Just for Laughs?
By Jerome Grossman
Peter Orszag is President Obama's Director the Office of Management and Budget. Only 40 years old, he is the youngest member of the Obama Cabinet assigned the responsibility of developing and promoting the president's budget. In the rescue of the U.S. financial system, Orszag, Timothy Geithner, Secretary of the Treasury, and Lawrence Summers, the Director of the National Economic Council, are the most influential in determining policy. Of the three, Orszag may have the most liberal sensitivity.
Orszag recently appeared on "The Daily Show", the television program that offers the public Jon Stewart's version of raucous commentary, invoking laughter by skewering public figures and public policy, albeit in a non-confrontational style.In the warm-up Green Room before the program, Stewart, feigning innocence and ignorance of detail, asked Orszag, according to the New Yorker magazine: "This has nothing to do with the budget - it's this thing that I can't get out of my head. With all that bailout stuff, why are they bailing out the banks? Why not the borrowers? These mortgages went bad, and then they were securitized and blah, blah, blah. So why not fix the mortgages, not the securities?" When Stewart asked Orszag why the government didn't just bailout borrowers who have defaulted, Orszag replied, "The problem is, if you just focused on the people who defaulted you create this huge incentive to default.” Stewart looked at Orszag in astonishment, pointing out that the government is creating an equally huge incentive to default by bailing out the financial firms.
Behind all the complexities was a very simple fact. Monthly mortgage payments by millions of homeowners were what provided the money for the banks and financial institutions that bought mortgages from the banks and the Wall Street firms that created sophisticated securities based on these mortgages. Bailing out those who took out the mortgages would save millions of families from being foreclosed, would save entire neighborhoods, would eliminate the need for the bank bailout money, would revive the credit of the banks, would save the big bonuses paid to bankers, etc..
Why wasn’t this approach seriously considered? Politically and morally one would expect the Democratic Party officeholders to help the masses ahead of Wall Street. Are bailouts the special province of big business, highly paid executives, major donors to politicians and political parties? Is Jon Stewart right or is he just for laughs?
Sunday, May 3, 2009
Thursday, April 30, 2009
So What If Texas Secedes?
So What If Texas Secedes?
By Jerome Grossman
Most politicians, analysts, and media are giving President Barack Obama good grades for his first one hundred days in office. With the general public Obama seems more popular than ever as measured by his standing in the opinion polls. And, in spite of the deepening recession, more than 50% of Americans think the country is headed in the right direction.
A notable exception is Governor Rick Perry of Texas who objects to Obama's policies so deeply that he has suggested that Texas might end its association with the United States of America and strike out on its own. Perry insists on the right of Texas to secede from the Union, violating the core principle of the first Republican president, Abraham Lincoln.
So far Perry has not fired on Fort Sumter or any U.S. military installation in Texas but we should be prepared. His primary objection to federal policy is the stimulus package designed to energize the economy but it appears that he will still take the money for his state. At the same time, Perry is trying to persuade other Republican governors to talk of secession as a political tactic to rally the depressed conservative base.
So what if Texas actually secedes? We would still visit there, of course, and would be friendly, not as friendly as with Canada, but somewhat warmer than with Cuba and Venezuela. Would independent Texas give up NASA and the next voyage to the moon? In what league would the Dallas Cowboys play? Would they still be “America's team?” Governor Perry points out that Texas has the right to split into five separate states, each with its own president, enough for every member of the Bush family. And the two Bush ex-presidents of U.S.A. could cap their careers by running for president of an independent Texas. Then each could build second presidential libraries, at least one of them featuring mementos of torture.
Texas as an independent country would give the U.S. several tempting options. We could build a fence on the border to discourage immigration from Texas. We could invade Texas for oil or to change the regime there. And George W. Bush would be the last Texan to be president of the United States.
By Jerome Grossman
Most politicians, analysts, and media are giving President Barack Obama good grades for his first one hundred days in office. With the general public Obama seems more popular than ever as measured by his standing in the opinion polls. And, in spite of the deepening recession, more than 50% of Americans think the country is headed in the right direction.
A notable exception is Governor Rick Perry of Texas who objects to Obama's policies so deeply that he has suggested that Texas might end its association with the United States of America and strike out on its own. Perry insists on the right of Texas to secede from the Union, violating the core principle of the first Republican president, Abraham Lincoln.
So far Perry has not fired on Fort Sumter or any U.S. military installation in Texas but we should be prepared. His primary objection to federal policy is the stimulus package designed to energize the economy but it appears that he will still take the money for his state. At the same time, Perry is trying to persuade other Republican governors to talk of secession as a political tactic to rally the depressed conservative base.
So what if Texas actually secedes? We would still visit there, of course, and would be friendly, not as friendly as with Canada, but somewhat warmer than with Cuba and Venezuela. Would independent Texas give up NASA and the next voyage to the moon? In what league would the Dallas Cowboys play? Would they still be “America's team?” Governor Perry points out that Texas has the right to split into five separate states, each with its own president, enough for every member of the Bush family. And the two Bush ex-presidents of U.S.A. could cap their careers by running for president of an independent Texas. Then each could build second presidential libraries, at least one of them featuring mementos of torture.
Texas as an independent country would give the U.S. several tempting options. We could build a fence on the border to discourage immigration from Texas. We could invade Texas for oil or to change the regime there. And George W. Bush would be the last Texan to be president of the United States.
Thursday, April 23, 2009
How to Force Confession by Torture
How to Force Confession by Torture
By Jerome Grossman
After a closed-door trial, American journalist Roxana Saberi was found guilty in an Iranian court on charges of espionage. An Iranian-American, Saberi had been living in Iran and working as a reporter although the Iranian government claimed it had withdrawn her press credentials. She was sentenced to eight years in prison.
The harsh sentence handed down to this native of North Dakota has generated a global outcry. President Obama and other national leaders as well as a plethora of media outlets have called for the release of this lovely young woman, once a finalist in the Miss American contest.
The Iranian government has not released any evidence against Saberi. Clearly, she has become a pawn in Iran's relations with the United States. In the political maneuvering, Iran may wish to accuse the U. S. and Israel of planning an attack. A confession of a plot by this lovely American would fit the strategy of Iran. And it might even be true, but still no excuse for torture. The United Nations Convention Against Torture is absolute in its prohibition of torture: “No exceptional circumstances whatever, whether a state of war or threat of war, internal political instability, or any other public emergency, may be invoked as a justification of torture.”
How to force the confession? Simply follow the tortures used by the C.I.A. as described by the experts on the International Committee of the Red Cross from their 43 page report on the treatment of fourteen "high-value" detainees in C.I.A. custody, published February 2007 on www.nybooks.com for more gory detail.
• Suffocation by water
• Prolonged stress in standing position
• Beatings by use of a collar
• Prolonged beating, kicking, slapping
• Confinement in a box severely restricting movement
• Prolonged nudity
• Sleep deprivation
• Exposure to cold temperature
• Prolonged Shackling
• Threats of ill-treatment to family
• Deprivation/restricted provision of solid food
Questions: If Roxana Saberi confesses, will the world believe it was not forced? Do the confessions forced by the C.I.A. on the grounds of national security set a precedent and valid excuse for using the same methods on Saberi and perhaps other Americans? How reliable and credible would Saberi’s tortured answers be? Enough for the Iranians to be sure of the confessed information? And how would the use of torture diminish the reputation of the government of Iran as it has diminished the U.S. government?
By Jerome Grossman
After a closed-door trial, American journalist Roxana Saberi was found guilty in an Iranian court on charges of espionage. An Iranian-American, Saberi had been living in Iran and working as a reporter although the Iranian government claimed it had withdrawn her press credentials. She was sentenced to eight years in prison.
The harsh sentence handed down to this native of North Dakota has generated a global outcry. President Obama and other national leaders as well as a plethora of media outlets have called for the release of this lovely young woman, once a finalist in the Miss American contest.
The Iranian government has not released any evidence against Saberi. Clearly, she has become a pawn in Iran's relations with the United States. In the political maneuvering, Iran may wish to accuse the U. S. and Israel of planning an attack. A confession of a plot by this lovely American would fit the strategy of Iran. And it might even be true, but still no excuse for torture. The United Nations Convention Against Torture is absolute in its prohibition of torture: “No exceptional circumstances whatever, whether a state of war or threat of war, internal political instability, or any other public emergency, may be invoked as a justification of torture.”
How to force the confession? Simply follow the tortures used by the C.I.A. as described by the experts on the International Committee of the Red Cross from their 43 page report on the treatment of fourteen "high-value" detainees in C.I.A. custody, published February 2007 on www.nybooks.com for more gory detail.
• Suffocation by water
• Prolonged stress in standing position
• Beatings by use of a collar
• Prolonged beating, kicking, slapping
• Confinement in a box severely restricting movement
• Prolonged nudity
• Sleep deprivation
• Exposure to cold temperature
• Prolonged Shackling
• Threats of ill-treatment to family
• Deprivation/restricted provision of solid food
Questions: If Roxana Saberi confesses, will the world believe it was not forced? Do the confessions forced by the C.I.A. on the grounds of national security set a precedent and valid excuse for using the same methods on Saberi and perhaps other Americans? How reliable and credible would Saberi’s tortured answers be? Enough for the Iranians to be sure of the confessed information? And how would the use of torture diminish the reputation of the government of Iran as it has diminished the U.S. government?
Wednesday, April 15, 2009
Will the Obama Stimulus Work?
Will the Obama Stimulus Work?
By Jerome Grossman
President Obama won the battle over the American Recovery and Reinvestment Act of 2009, (also known as the economic stimulus bill) passed by Congress in February. Obama’s supporters consider the passage of this legislation a great victory. That evaluation may be premature. The stimulus must actually work to get our economy out of the doldrums. Then Obama can be congratulated for his political and economic smarts. Of course, it is too early to appraise the result.
The economic stimulus bill will cost the grand total of $787 billion designed to make up for the 6% decline of the U.S. Gross Domestic Product. However, $787 billion represents only 2% of GDP, but the administration expects that gap to be filled by the “multiplier” effect as the 2% is used and reused in the economy. Some economists think $787 billion is too small because 40% goes to tax cuts which have only a small multiplier effect and the expenditures on roads, bridges, buildings, infrastructure etc. may take years to organize.
Then there are those who believe that no stimulus is necessary, that the economy is a self- stabilizing system, that in a downturn, even if nothing is done, normal employment and production will someday return, propelled by the fact that 70% of our economic activity is spent on domestic affairs, mostly food, clothing, shelter, transportation, the military and related services.
The difference between conservatives and liberals lies mostly in whether the stimulus policy can speed up the recovery significantly and whether the enormous expenditures will lead to inflation. Conservatives worry more about the deficit and taxes to pay for the stimulus as well as the inevitable waste in the rush to recovery.
The liberals believe that every month of recession inflicts pain and suffering on millions of people, a condition that must be avoided if possible. They worry less about the deficit and taxes on the grounds that the faster the economy recovers, the smaller the deficit and the higher the tax revenues. Liberals also point to the immediate relief offered by the stimulus’s extension of unemployment insurance benefits, more money for food stamps, etc.
Obama has won the first round. He has his stimulus package. Is it big enough to carry out liberal theory? Will it work in the multiplier effect? Will the economy suffer an additional collapse that will overcome this first rescue attempt? We are in unexplored territory. The lessons and stimulus of the Great Depression of the 1930s may no longer apply. Obama needs to win the second round within a reasonable time to justify his policy. The kind of recovery achieved will be decisive.
Will the Obama recovery be in the shape of V, an immediate bounce off the low point to normality, or U, a delayed recovery, or the dreaded L, an extended recession/depression with no end in sight?
By Jerome Grossman
President Obama won the battle over the American Recovery and Reinvestment Act of 2009, (also known as the economic stimulus bill) passed by Congress in February. Obama’s supporters consider the passage of this legislation a great victory. That evaluation may be premature. The stimulus must actually work to get our economy out of the doldrums. Then Obama can be congratulated for his political and economic smarts. Of course, it is too early to appraise the result.
The economic stimulus bill will cost the grand total of $787 billion designed to make up for the 6% decline of the U.S. Gross Domestic Product. However, $787 billion represents only 2% of GDP, but the administration expects that gap to be filled by the “multiplier” effect as the 2% is used and reused in the economy. Some economists think $787 billion is too small because 40% goes to tax cuts which have only a small multiplier effect and the expenditures on roads, bridges, buildings, infrastructure etc. may take years to organize.
Then there are those who believe that no stimulus is necessary, that the economy is a self- stabilizing system, that in a downturn, even if nothing is done, normal employment and production will someday return, propelled by the fact that 70% of our economic activity is spent on domestic affairs, mostly food, clothing, shelter, transportation, the military and related services.
The difference between conservatives and liberals lies mostly in whether the stimulus policy can speed up the recovery significantly and whether the enormous expenditures will lead to inflation. Conservatives worry more about the deficit and taxes to pay for the stimulus as well as the inevitable waste in the rush to recovery.
The liberals believe that every month of recession inflicts pain and suffering on millions of people, a condition that must be avoided if possible. They worry less about the deficit and taxes on the grounds that the faster the economy recovers, the smaller the deficit and the higher the tax revenues. Liberals also point to the immediate relief offered by the stimulus’s extension of unemployment insurance benefits, more money for food stamps, etc.
Obama has won the first round. He has his stimulus package. Is it big enough to carry out liberal theory? Will it work in the multiplier effect? Will the economy suffer an additional collapse that will overcome this first rescue attempt? We are in unexplored territory. The lessons and stimulus of the Great Depression of the 1930s may no longer apply. Obama needs to win the second round within a reasonable time to justify his policy. The kind of recovery achieved will be decisive.
Will the Obama recovery be in the shape of V, an immediate bounce off the low point to normality, or U, a delayed recovery, or the dreaded L, an extended recession/depression with no end in sight?
Friday, April 10, 2009
Obama's New Approach to Iran
Obama's New Approach to Iran
By Jerome Grossman
The Obama administration will take part directly in international negotiations with Iran aimed at ending Teheran's nuclear program. It is the latest move in a shift in U. S. policy toward Iran, a very positive step toward direct engagement with Iran that President Obama promised during his campaign for president, a step that merits strong approval.
This expression of conciliation contrasts sharply with U.S. policy since 1979 and especially with the belligerence of the Bush administration, a belligerence that has not inhibited Iran but has alienated U.S. allies in Europe. As Secretary of State Hillary Clinton said, "There is nothing more important than trying to convince Iran to cease its efforts to obtain a nuclear weapon". However, Iran has been suspected of developing the nuclear bomb for at least 20 years and has insisted that its centrifuges are enriching uranium only for peaceful use. As Chancellor Angela Merkel of Germany said at the United Nations in 2007: "The world does not need to prove to Iran that Iran is building an atomic bomb. Iran must persuade the world that it does not want the bomb." Yet, Mohammed El-Baradei, the Director General of the International Atomic Energy Agency that monitors Iran's facilities, does not accuse Iran of bomb making capability.
The situation is complicated by widespread disapproval of Iranian human rights violations, its combination of religion and politics, as well as the insults directed at Israel, Jews and the West. The Iranians justify their conduct by reminding the world that the United States and its allies supported Saddam Hussein in his invasion of Iran, 1980-1988, that cost Iran a million lives. On April 3, the London Times printed an article headlined, "Only Obama can save Iran from Israeli bombs", citing the hawkish Netanyahu government in Israel. When Netanyahu travels to Washington next month, Iran is expected to dominate the conversations. Israel will not attack Iran without tacit approval from America - we hope. But time is running out. This could become Obama's biggest challenge as he assumes the mantle of keeper of the peace
President Obama deserves credit for putting the U.S. on the diplomatic track with Iran. He may have been influenced by the financial crisis in the U.S... As David Wessel put it in the Wall Street Journal on April 9, "For 15 years, the American people have been told they could have it all: costly wars, expansion of Medicare to cover drugs, health insurance for those without, more money for schools-and tax cuts for most of them. They deserve to be told that they can't have it all in the future."
Apparently, Obama has ruled out another costly war and will concentrate on the desperately needed domestic programs. Two unnecessary wars in Iraq and Afghanistan are two too many. Obama will avoid the third war, gaining his objectives by diplomacy and soft power.
By Jerome Grossman
The Obama administration will take part directly in international negotiations with Iran aimed at ending Teheran's nuclear program. It is the latest move in a shift in U. S. policy toward Iran, a very positive step toward direct engagement with Iran that President Obama promised during his campaign for president, a step that merits strong approval.
This expression of conciliation contrasts sharply with U.S. policy since 1979 and especially with the belligerence of the Bush administration, a belligerence that has not inhibited Iran but has alienated U.S. allies in Europe. As Secretary of State Hillary Clinton said, "There is nothing more important than trying to convince Iran to cease its efforts to obtain a nuclear weapon". However, Iran has been suspected of developing the nuclear bomb for at least 20 years and has insisted that its centrifuges are enriching uranium only for peaceful use. As Chancellor Angela Merkel of Germany said at the United Nations in 2007: "The world does not need to prove to Iran that Iran is building an atomic bomb. Iran must persuade the world that it does not want the bomb." Yet, Mohammed El-Baradei, the Director General of the International Atomic Energy Agency that monitors Iran's facilities, does not accuse Iran of bomb making capability.
The situation is complicated by widespread disapproval of Iranian human rights violations, its combination of religion and politics, as well as the insults directed at Israel, Jews and the West. The Iranians justify their conduct by reminding the world that the United States and its allies supported Saddam Hussein in his invasion of Iran, 1980-1988, that cost Iran a million lives. On April 3, the London Times printed an article headlined, "Only Obama can save Iran from Israeli bombs", citing the hawkish Netanyahu government in Israel. When Netanyahu travels to Washington next month, Iran is expected to dominate the conversations. Israel will not attack Iran without tacit approval from America - we hope. But time is running out. This could become Obama's biggest challenge as he assumes the mantle of keeper of the peace
President Obama deserves credit for putting the U.S. on the diplomatic track with Iran. He may have been influenced by the financial crisis in the U.S... As David Wessel put it in the Wall Street Journal on April 9, "For 15 years, the American people have been told they could have it all: costly wars, expansion of Medicare to cover drugs, health insurance for those without, more money for schools-and tax cuts for most of them. They deserve to be told that they can't have it all in the future."
Apparently, Obama has ruled out another costly war and will concentrate on the desperately needed domestic programs. Two unnecessary wars in Iraq and Afghanistan are two too many. Obama will avoid the third war, gaining his objectives by diplomacy and soft power.
Tuesday, April 7, 2009
Barack Obama's War
Barack Obama's War
By Jerome Grossman
President Obama seems to be serious about a major effort to conquer Afghanistan even if it requires military operations in Pakistan without the permission of that ally. Must every U.S. president pursue a war to mark his time in office? Is it the required role of a superpower to fight all over the world? Iraq War number two was George W. Bush's war. Iraq number one belonged to his father. Bill Clinton's war was in Bosnia and Serbia. Lyndon Johnson's presidency will be marked forever by Vietnam. Was America in danger in any one of these wars?
Obama tells us that his war will be a long-term effort lasting at least five years, to root Al Qaeda and Osama bin Laden out of Afghanistan although both are now hiding in the wilderness of Pakistan. 38,000 US troops are now in Afghanistan. 17,000 more are on the way, 4000 additional will arrive to train Afghan troops, and General David Petraeus has requested 10,000 more for next year. Some military experts think that 250,000 soldiers plus an equal number of civilian contractors will be necessary to pacify Afghanistan, a country 50% larger than Iraq, with forbidding mountainous terrain where guerillas hide.
U. S. forces are regularly attacking the Taliban and other insurgent Pakistanis with unmanned drone airplanes and secret Special Forces on the ground. The Wall Street Journal reported on April 1 that the air raids have stoked anger among ordinary Pakistanis many of whom are ambivalent about the U.S. fight against Islamic militants but see the strikes as a violation of Pakistani sovereignty.
The Pakistan Taliban chief goes much further, threatening an attack on the U.S. homeland in retaliation. “Soon we will launch an attack on Washington that will amaze everyone in the world." The CIA takes such threats seriously, the “blowback" effect carried out by a weak enemy incapable of matching strength on the battlefield but impelled to retaliate against the hated invader, the defiling infidel.
The U. S. military and diplomats are finding it difficult to obtain the necessary cooperation of the Pakistani government and military against the Taliban. Despite heavy subsidies from the U.S. government, Pakistan’s Islamic leaders worry more about India, their historic Hindu enemies against whom they have fought three wars since 1948. Right now the two nations are actually fighting another undeclared war in Kashmir. Crushing the Taliban would weaken Pakistani forces in the event of another Indian war, dividing the people of Pakistan even more than they are now.
With Al Qaeda dispersed and Bin Laden in hiding, it is difficult to see the American purpose in invading this land of poverty and banditry, a land that has not been subdued by previous superpowers. Does Obama believe that he cannot afford not to conquer Afghanistan, that the political fallout in America from a military withdrawal might endanger his presidency? I hope not. Afghanistan is unimportant, certainly not worth the lives and the money, not even from an imperial viewpoint. The U. S. is already the only superpower, no economic or military power can compete. The only danger is over extension, the unnecessary expenditure of people and resources, a characteristic of a wasteful empire.
By Jerome Grossman
President Obama seems to be serious about a major effort to conquer Afghanistan even if it requires military operations in Pakistan without the permission of that ally. Must every U.S. president pursue a war to mark his time in office? Is it the required role of a superpower to fight all over the world? Iraq War number two was George W. Bush's war. Iraq number one belonged to his father. Bill Clinton's war was in Bosnia and Serbia. Lyndon Johnson's presidency will be marked forever by Vietnam. Was America in danger in any one of these wars?
Obama tells us that his war will be a long-term effort lasting at least five years, to root Al Qaeda and Osama bin Laden out of Afghanistan although both are now hiding in the wilderness of Pakistan. 38,000 US troops are now in Afghanistan. 17,000 more are on the way, 4000 additional will arrive to train Afghan troops, and General David Petraeus has requested 10,000 more for next year. Some military experts think that 250,000 soldiers plus an equal number of civilian contractors will be necessary to pacify Afghanistan, a country 50% larger than Iraq, with forbidding mountainous terrain where guerillas hide.
U. S. forces are regularly attacking the Taliban and other insurgent Pakistanis with unmanned drone airplanes and secret Special Forces on the ground. The Wall Street Journal reported on April 1 that the air raids have stoked anger among ordinary Pakistanis many of whom are ambivalent about the U.S. fight against Islamic militants but see the strikes as a violation of Pakistani sovereignty.
The Pakistan Taliban chief goes much further, threatening an attack on the U.S. homeland in retaliation. “Soon we will launch an attack on Washington that will amaze everyone in the world." The CIA takes such threats seriously, the “blowback" effect carried out by a weak enemy incapable of matching strength on the battlefield but impelled to retaliate against the hated invader, the defiling infidel.
The U. S. military and diplomats are finding it difficult to obtain the necessary cooperation of the Pakistani government and military against the Taliban. Despite heavy subsidies from the U.S. government, Pakistan’s Islamic leaders worry more about India, their historic Hindu enemies against whom they have fought three wars since 1948. Right now the two nations are actually fighting another undeclared war in Kashmir. Crushing the Taliban would weaken Pakistani forces in the event of another Indian war, dividing the people of Pakistan even more than they are now.
With Al Qaeda dispersed and Bin Laden in hiding, it is difficult to see the American purpose in invading this land of poverty and banditry, a land that has not been subdued by previous superpowers. Does Obama believe that he cannot afford not to conquer Afghanistan, that the political fallout in America from a military withdrawal might endanger his presidency? I hope not. Afghanistan is unimportant, certainly not worth the lives and the money, not even from an imperial viewpoint. The U. S. is already the only superpower, no economic or military power can compete. The only danger is over extension, the unnecessary expenditure of people and resources, a characteristic of a wasteful empire.
Sunday, March 29, 2009
Obama's Strategy on Afghanistan
Obama's Strategy on Afghanistan
By Jerome Grossman
It is difficult, even impossible, to accept President Obama’s “New strategy for Afghanistan and Pakistan” as described by him in a formal speech on March 27. It fails by imperial and non-imperial standards.
First the imperial: Chalmers Johnson, a former CIA agent, reports in his book Nemesis: “The Carter administration deliberately provoked the Soviet invasion of Afghanistan….. In his 1996 memoir, former CIA Director Robert Gates acknowledges that the American intelligence services began to aid the anti-Soviet mujahideen guerillas not after the Russian invasion but six months before it…. President Carter's purpose was to provoke a full-scale Soviet military intervention……….. to tie…….down the USSR.” Will an expanded military effort in Afghanistan tie down the U.S. as it did the USSR?
Obama plans a U.S. military effort in Afghanistan lasting at least five years in a country 50% larger than Iraq in area and population. The NATO allied forces are token in size and commitment and rarely leave their base camps. A serious U.S. military effort will require at least 250,000 troops tied down in Afghanistan/Pakistan. Will America be unable to react to other challenges as they arise especially its obligations, to protect Saudi Arabia, Jordan, Egypt, Israel, Kuwait, United Arab Emirates, Iraq, to deter Iran from a nuclear program, to support Pakistan from collapse; etc..
The invasion of Iraq could be justified on imperial grounds because it is strategically situated in the heart of the largest concentration of oil in the world. Afghanistan has no comparable resource, one of the poorest countries, no industry, little farming, rugged terrain, a land of banditry and bribery.
The adventure fails from a non- imperial perspective. Obama says “That country will again be a base for terrorists who want to kill as many of our people as they possibly can.” None of the 19 people who perpetrated the September 11 criminal tragedy were Afghan or Taliban. Fifteen of them were Saudi. There are no Al Qaeda training camps in Afghanistan any longer. Osama bin Laden and what is left of his crew is in hiding somewhere in the wilderness of Pakistan. The Al Qaeda operation is scattered and disorganized. Yes, another 19 thugs could infiltrate the U.S. and kill Americans, but sending an army into Afghanistan is not going to prevent another such criminal act. In fact, the hyped war in Afghanistan is more likely to divert us from protecting ourselves against another September 11.
By Jerome Grossman
It is difficult, even impossible, to accept President Obama’s “New strategy for Afghanistan and Pakistan” as described by him in a formal speech on March 27. It fails by imperial and non-imperial standards.
First the imperial: Chalmers Johnson, a former CIA agent, reports in his book Nemesis: “The Carter administration deliberately provoked the Soviet invasion of Afghanistan….. In his 1996 memoir, former CIA Director Robert Gates acknowledges that the American intelligence services began to aid the anti-Soviet mujahideen guerillas not after the Russian invasion but six months before it…. President Carter's purpose was to provoke a full-scale Soviet military intervention……….. to tie…….down the USSR.” Will an expanded military effort in Afghanistan tie down the U.S. as it did the USSR?
Obama plans a U.S. military effort in Afghanistan lasting at least five years in a country 50% larger than Iraq in area and population. The NATO allied forces are token in size and commitment and rarely leave their base camps. A serious U.S. military effort will require at least 250,000 troops tied down in Afghanistan/Pakistan. Will America be unable to react to other challenges as they arise especially its obligations, to protect Saudi Arabia, Jordan, Egypt, Israel, Kuwait, United Arab Emirates, Iraq, to deter Iran from a nuclear program, to support Pakistan from collapse; etc..
The invasion of Iraq could be justified on imperial grounds because it is strategically situated in the heart of the largest concentration of oil in the world. Afghanistan has no comparable resource, one of the poorest countries, no industry, little farming, rugged terrain, a land of banditry and bribery.
The adventure fails from a non- imperial perspective. Obama says “That country will again be a base for terrorists who want to kill as many of our people as they possibly can.” None of the 19 people who perpetrated the September 11 criminal tragedy were Afghan or Taliban. Fifteen of them were Saudi. There are no Al Qaeda training camps in Afghanistan any longer. Osama bin Laden and what is left of his crew is in hiding somewhere in the wilderness of Pakistan. The Al Qaeda operation is scattered and disorganized. Yes, another 19 thugs could infiltrate the U.S. and kill Americans, but sending an army into Afghanistan is not going to prevent another such criminal act. In fact, the hyped war in Afghanistan is more likely to divert us from protecting ourselves against another September 11.
Sunday, March 22, 2009
A.I.G. Bonuses - The Last Straw
A.I.G. Bonuses - The Last Straw
By Jerome Grossman
The national explosion of anger over the bonuses awarded to financial officers at American International Group indicates that the tipping point has been reached in the accumulated resentments on American financial inequality.. For generations, under both Republican and Democratic administrations, the income gap between the 95% of U.S. population lumped together as working class and middle class, and the 5% who earned $250,000 or more per year, has widened significantly. The 5% have more clout. They dominate U.S. politics, education, culture, taxation rules, charitable institutions, media, and business, acting as a kind of American nobility with benefits handed down from generation to generation.
Then comes a time when a relatively insignificant event captures the attention of the masses who begin to connect their anger at the current violation with the other half-remembered abuses. Then comes real change. Sometimes a popular leader emerges to dramatize the exploitation, like William Jennings Bryan, who galvanized the Democratic Party with “You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold,” dramatizing the economic ills plaguing farmers and industrial workers. He won the Democratic nomination twice although not the presidency. But he won many of his reforms, backed by an aroused citizenry, were adopted, including the income tax, popular election of senators, woman suffrage, popular knowledge of newspaper ownership etc.
Today Americans are worried that the bailout was designed for the benefit of those who created the crisis. They suspect that America has been taken over by a small class of connected insiders who use money to control elections, buy influence, systematically weaken financial regulation and get government money to bail them out when they get into trouble.
The A.I.G. bonuses remind the 95% of:
• The bailouts of the banks and bankers from their own mistakes
• The failure to bail-out the average citizen from unfair mortgages and job layoffs
• The bankers who gambled with depositor money at enormous risk to build bonuses for themselves
• The low tax rate paid by the wealthiest Americans on the top portion of their earnings now at 35%, once 91% under Eisenhower, 70% under Nixon, 50% under Reagan. What happened to the progressive tax based on ability to pay?
• The special tax rate for capital gains of 20% used by the wealthiest Americans
• The special tax breaks given to insiders as earmarks
• Some business executives maintain control by appointing their friends to boards of directors
• Some business executives vote themselves enormous salaries
• Some business executives vote themselves stock options, some of which are back-dated to take advantage of stock price increases
• Some business executives vote themselves enormous retirement packages not based on performance
• Some business executives discharge workers and speed up the rest of the work force to increase short term profits and stock prices
• Some business executives maintain headquarters outside the U.S.A. and shift corporate income from country to country to avoid taxes
Will the anger about A.I.G. bonuses subside? Or will an organization of citizens spring up to fight for their interests? Will another William Jennings Bryan denounce the current abuses and agitate for fairer wages and fairer division of the profits of our technological society? Will the current anger dissipate into the day-to-day problems of an economy in decline? Will the A.I.G. bonuses be the last straw?
By Jerome Grossman
The national explosion of anger over the bonuses awarded to financial officers at American International Group indicates that the tipping point has been reached in the accumulated resentments on American financial inequality.. For generations, under both Republican and Democratic administrations, the income gap between the 95% of U.S. population lumped together as working class and middle class, and the 5% who earned $250,000 or more per year, has widened significantly. The 5% have more clout. They dominate U.S. politics, education, culture, taxation rules, charitable institutions, media, and business, acting as a kind of American nobility with benefits handed down from generation to generation.
Then comes a time when a relatively insignificant event captures the attention of the masses who begin to connect their anger at the current violation with the other half-remembered abuses. Then comes real change. Sometimes a popular leader emerges to dramatize the exploitation, like William Jennings Bryan, who galvanized the Democratic Party with “You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold,” dramatizing the economic ills plaguing farmers and industrial workers. He won the Democratic nomination twice although not the presidency. But he won many of his reforms, backed by an aroused citizenry, were adopted, including the income tax, popular election of senators, woman suffrage, popular knowledge of newspaper ownership etc.
Today Americans are worried that the bailout was designed for the benefit of those who created the crisis. They suspect that America has been taken over by a small class of connected insiders who use money to control elections, buy influence, systematically weaken financial regulation and get government money to bail them out when they get into trouble.
The A.I.G. bonuses remind the 95% of:
• The bailouts of the banks and bankers from their own mistakes
• The failure to bail-out the average citizen from unfair mortgages and job layoffs
• The bankers who gambled with depositor money at enormous risk to build bonuses for themselves
• The low tax rate paid by the wealthiest Americans on the top portion of their earnings now at 35%, once 91% under Eisenhower, 70% under Nixon, 50% under Reagan. What happened to the progressive tax based on ability to pay?
• The special tax rate for capital gains of 20% used by the wealthiest Americans
• The special tax breaks given to insiders as earmarks
• Some business executives maintain control by appointing their friends to boards of directors
• Some business executives vote themselves enormous salaries
• Some business executives vote themselves stock options, some of which are back-dated to take advantage of stock price increases
• Some business executives vote themselves enormous retirement packages not based on performance
• Some business executives discharge workers and speed up the rest of the work force to increase short term profits and stock prices
• Some business executives maintain headquarters outside the U.S.A. and shift corporate income from country to country to avoid taxes
Will the anger about A.I.G. bonuses subside? Or will an organization of citizens spring up to fight for their interests? Will another William Jennings Bryan denounce the current abuses and agitate for fairer wages and fairer division of the profits of our technological society? Will the current anger dissipate into the day-to-day problems of an economy in decline? Will the A.I.G. bonuses be the last straw?
Tuesday, March 17, 2009
Better to Bribe Than to Kill
Better to Bribe Than to Kill
By Jerome Grossman
There are four power centers in the Obama foreign-policy establishment, each led by heavyweights with close relationships to the president: Secretary of Defense Robert Gates, Secretary of State Hillary Clinton, National Security Adviser James Jones, and Vice President Joseph Biden. Gates and Jones have strong military backgrounds; Clinton and Biden come from political and civilian experience. Which one will have the president's ear?
Obama has a big decision to make on Afghanistan where U.S. forces have been fighting for almost eight years and where the president says we are not winning. About 35,000 US troops are in action there alongside the same number of soldiers from NATO allies. Obama has commissioned the development of a plan for Afghanistan due in April, but he is sending 17,000 more troops before the plan is ready, surely a sign that military matters are not going well in the allied effort.
Loquacious Biden has preempted the discussion. On March 10 he said that 70% of the Taliban are essentially mercenaries who possibly could be negotiated with instead of fought and said that the U.S.likely will try this approach." Five percent of the Taliban is incorrigible, not susceptible to anything other than being defeated. Another twenty-five percent or so are not quite sure, in my view, of the intensity of their commitment to the insurgency........ And roughly 70% are involved because of the money, because of them being......paid.” Notice that Biden ignores Afghan nationalism and the universal resentment against foreign invasion, expressed repeatedly over the centuries, most recently by armed resistance against the Soviet Union and the British Empire.
Biden is suggesting a strategy based on U.S. experience with the Sunnis in Iraq and the Taliban in Afghanistan. When the U.S. invaded Afghanistan immediately after the September 11 tragedy, it defeated the Taliban with air power and dollars, with few soldiers. U.S. forces learned that the opposing forces could be defeated with cash, or at least sent back to their villages with the help of bribed local warlords.
General David Petraeus repeated this teqnique in the Anbar province of Iraq, where he was able to buy the cooperation of the local sheiks and then put 100,000 Sunni insurgent warriors on the U.S. payroll where they remain to this day. That was and is the prime reason for the sudden decline in insurgency in Iraq. Petraeus also threw into the deal guns for the vacationing warriors, who decided to wait for the U.S. to leave before using those guns against their Shia rivals.
There doesn't seem to be a compelling reason for the U.S. occupation of Afghanistan. Osama bin Laden is hiding somewhere in Pakistan. The Al Qaeda training camps in Afghanistan have been destroyed. Poor, primitive Afghanistan is a nation of brigands with a corrupt central government to match. If we can end the war by purchase, so much the better. Better to bribe than to kill.
By Jerome Grossman
There are four power centers in the Obama foreign-policy establishment, each led by heavyweights with close relationships to the president: Secretary of Defense Robert Gates, Secretary of State Hillary Clinton, National Security Adviser James Jones, and Vice President Joseph Biden. Gates and Jones have strong military backgrounds; Clinton and Biden come from political and civilian experience. Which one will have the president's ear?
Obama has a big decision to make on Afghanistan where U.S. forces have been fighting for almost eight years and where the president says we are not winning. About 35,000 US troops are in action there alongside the same number of soldiers from NATO allies. Obama has commissioned the development of a plan for Afghanistan due in April, but he is sending 17,000 more troops before the plan is ready, surely a sign that military matters are not going well in the allied effort.
Loquacious Biden has preempted the discussion. On March 10 he said that 70% of the Taliban are essentially mercenaries who possibly could be negotiated with instead of fought and said that the U.S.likely will try this approach." Five percent of the Taliban is incorrigible, not susceptible to anything other than being defeated. Another twenty-five percent or so are not quite sure, in my view, of the intensity of their commitment to the insurgency........ And roughly 70% are involved because of the money, because of them being......paid.” Notice that Biden ignores Afghan nationalism and the universal resentment against foreign invasion, expressed repeatedly over the centuries, most recently by armed resistance against the Soviet Union and the British Empire.
Biden is suggesting a strategy based on U.S. experience with the Sunnis in Iraq and the Taliban in Afghanistan. When the U.S. invaded Afghanistan immediately after the September 11 tragedy, it defeated the Taliban with air power and dollars, with few soldiers. U.S. forces learned that the opposing forces could be defeated with cash, or at least sent back to their villages with the help of bribed local warlords.
General David Petraeus repeated this teqnique in the Anbar province of Iraq, where he was able to buy the cooperation of the local sheiks and then put 100,000 Sunni insurgent warriors on the U.S. payroll where they remain to this day. That was and is the prime reason for the sudden decline in insurgency in Iraq. Petraeus also threw into the deal guns for the vacationing warriors, who decided to wait for the U.S. to leave before using those guns against their Shia rivals.
There doesn't seem to be a compelling reason for the U.S. occupation of Afghanistan. Osama bin Laden is hiding somewhere in Pakistan. The Al Qaeda training camps in Afghanistan have been destroyed. Poor, primitive Afghanistan is a nation of brigands with a corrupt central government to match. If we can end the war by purchase, so much the better. Better to bribe than to kill.
Wednesday, March 11, 2009
Too Big to Fail
Too Big to Fail
By Jerome Grossman
At least twenty oversized American banks have histories of reckless behavior, including bad lending and gambling with derivatives, that have left them insolvent, in fact, bankrupt. They have poisoned the economy and should pay the price for their mistakes just like every other business.
However, because their machinations affect so many investors, depositors and other businesses, they have been given a pass, saved by massive injection of federal government funds. By basic capitalist standards, this is a gross violation of business integrity, weakening the structure of our economic system. The violated principle is summarized as “Too big to fail.” One Nobel Prize winning economist called it “looting”.
The managers of such institutions knew how to take advantage of their special status. They took excessive risk for mountainous profits that would entitle them to massive bonuses if successful - or a government bailout if the investment failed. The techniques were often complicated; but some were based on inadequate reserves that purposely underestimated the financial exposure. The managers were in financial clover: heads I win, tails you lose, “Too big to fail.”
In the current crisis, the government is rescuing the managers once again, lending $700 billion as bailout money. That amount, leveraged on an accepted basis of ten to one, could have supported $7 trillion of lending capacity in a new or reorganized bank, more than enough to serve the nation's business. We didn’t go that route; they are “Too big to fail.” President Obama has given primary responsibility for the financial crisis to Lawrence Summers, head of the National Economic Council, and Timothy Geithner, Secretary of the Treasury. The president can do better than these two conventional figures stuck in the past.
There may be an uncomfortable analogy in the position of the United States in world affairs: “Too big to fail.” Decade after decade we overspend on military equipment, organize the largest military budget the world has ever seen, enter failed military quagmires in Vietnam, Iraq and Afghanistan, yet we get token troop support from nations around the world even though their populations disapprove of our military invasions. A remarkable 737 American military bases with hundreds of thousands of American troops are situated in 130 countries, a worldwide presence that protects the governing elites on virtually every continent. Is the U.S.A. “Too big to fail” because its collapse would upset the political and military status quo all over the world?
Where does the U.S. get the money to finance its domestic and foreign errors? In large part from China, Japan, Saudi Arabia and the other countries that buy U.S. Treasury bonds in the hope that they will be redeemable despite our enormous national debt of $10,942,165,294,650.89 or roughly eleven (11) trillion dollars. China's economy depends on the sales of goods to the U.S. The Saudis have big investments in the U.S. and depend on U.S. military power to protect them from their own people and keep the oil flowing. The Japanese are inheriting our automobile business
In spite of their mistakes, the banks and the U.S. maintain their prime positions in the world because they are “Too big to fail.” How long can it last? Their gross errors of management are too expensive, depressing profits and living standards by forcing greatly increased costs on the entire world. Adam Smith, the patron saint of capitalism, would tell the nation and the world that these arrangements are too inefficient and unstable to be continued indefinitely.
By Jerome Grossman
At least twenty oversized American banks have histories of reckless behavior, including bad lending and gambling with derivatives, that have left them insolvent, in fact, bankrupt. They have poisoned the economy and should pay the price for their mistakes just like every other business.
However, because their machinations affect so many investors, depositors and other businesses, they have been given a pass, saved by massive injection of federal government funds. By basic capitalist standards, this is a gross violation of business integrity, weakening the structure of our economic system. The violated principle is summarized as “Too big to fail.” One Nobel Prize winning economist called it “looting”.
The managers of such institutions knew how to take advantage of their special status. They took excessive risk for mountainous profits that would entitle them to massive bonuses if successful - or a government bailout if the investment failed. The techniques were often complicated; but some were based on inadequate reserves that purposely underestimated the financial exposure. The managers were in financial clover: heads I win, tails you lose, “Too big to fail.”
In the current crisis, the government is rescuing the managers once again, lending $700 billion as bailout money. That amount, leveraged on an accepted basis of ten to one, could have supported $7 trillion of lending capacity in a new or reorganized bank, more than enough to serve the nation's business. We didn’t go that route; they are “Too big to fail.” President Obama has given primary responsibility for the financial crisis to Lawrence Summers, head of the National Economic Council, and Timothy Geithner, Secretary of the Treasury. The president can do better than these two conventional figures stuck in the past.
There may be an uncomfortable analogy in the position of the United States in world affairs: “Too big to fail.” Decade after decade we overspend on military equipment, organize the largest military budget the world has ever seen, enter failed military quagmires in Vietnam, Iraq and Afghanistan, yet we get token troop support from nations around the world even though their populations disapprove of our military invasions. A remarkable 737 American military bases with hundreds of thousands of American troops are situated in 130 countries, a worldwide presence that protects the governing elites on virtually every continent. Is the U.S.A. “Too big to fail” because its collapse would upset the political and military status quo all over the world?
Where does the U.S. get the money to finance its domestic and foreign errors? In large part from China, Japan, Saudi Arabia and the other countries that buy U.S. Treasury bonds in the hope that they will be redeemable despite our enormous national debt of $10,942,165,294,650.89 or roughly eleven (11) trillion dollars. China's economy depends on the sales of goods to the U.S. The Saudis have big investments in the U.S. and depend on U.S. military power to protect them from their own people and keep the oil flowing. The Japanese are inheriting our automobile business
In spite of their mistakes, the banks and the U.S. maintain their prime positions in the world because they are “Too big to fail.” How long can it last? Their gross errors of management are too expensive, depressing profits and living standards by forcing greatly increased costs on the entire world. Adam Smith, the patron saint of capitalism, would tell the nation and the world that these arrangements are too inefficient and unstable to be continued indefinitely.
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