Disagreements between Afghan President Hamad Karzai and the US over how the war should be pursued burst into the open at a coalition summit November 20 -- 21. In a face-to-face confrontation photographed in Lisbon, Portugal by the Wall Street Journal, President Barack Obama rejected Afghan demands to curtail raids and airstrikes, telling Karzai that he must listen to American concerns.
In a speech to the closed-door NATO session, Karzai named "civilian casualties, detentions, lawless behavior by some security companies, and, at times, the NATO posture as issues of serious concern to the Afghan people."
After the talks, Obama said that he is sensitive to Afghan requests and appreciates Karzai is "eager to assert full sovereignty including control of security operations within his country. If we are ponying up billions of dollars, if the expectation is that our troops are going to be there to ensure that President Karzai can continue to build and develop his country, then he's got to also pay attention to our concerns."
President Obama acknowledged that the issue of Afghan civilian casualties has caused real tensions. Yet, Obama said, "He's got to understand that I've got a bunch of young men and women who are in a foreign country being shot at, having to traverse terrain filled with IED's, and they need to protect themselves. So, if we are setting things up where they are just sitting ducks for the Taliban, that's not an acceptable answer either."
Obama talks to Karzai as an occupier, setting its own rules, killing civilians when necessary, spending billions of dollars, suffering death and casualties to American soldiers, sullying the name of America while rescuing the un-willing, corrupt and complaining ally, fighting in another country’s civil war. Lest we forget, the Taliban did not attack us on September 11, 2001, but here we are ten years later, sitting ducks for the Taliban who are proud to be fighting against the invading foreigner 7,000 miles from home, the foreigner prepared to waste precious lives and resources until 2014 and perhaps beyond.
Friday, November 26, 2010
Monday, November 22, 2010
Toward Fairer Taxes
On November 28, billionaire Warren Buffett will tell the world on ABC television that rich people should pay more in taxes. “I think that people at the high end - people like me - should be paying a lot more in taxes. We have it better than we've ever had it.”
Buffett supports House Speaker Nancy Pelosi's plans to increase income taxes for those couples with $250,000 gross income - and so do I. And this may be the right time to endorse Pelosi for her effective and dignified leadership as Speaker of the U.S. House of Representatives. Capable and honorable, trapped in a situation of terrible unemployment, she can’t be held personally responsible for the political annihilation of the Democrats. Allowing the bankers to precipitate the crisis, was a national flaw.
President Obama’s deficit commission proposes raising the age at which one can receive Social Security benefits to 69 by 2075. A great many people in their 60s have lost or are about to lose their jobs and have little hope of finding another. Raising the retirement age would extend the period of receiving no income for many people approaching 70. The commission would end deductibility of health benefits and mortgage interest while raising the gasoline tax, levying tax increases on the middle class while giving tax cuts to the wealthy.
Americans should not be stampeded into cutting increasingly critical Social Security protections. It's time to ask those who have reaped the benefits of runaway tax cuts and growing income inequality to pay their fair share, not cut Social Security. It's time to require income taxes on all earnings above $106,800. Doing so would fully address the projected shortfall for 75 years.
Buffett supports House Speaker Nancy Pelosi's plans to increase income taxes for those couples with $250,000 gross income - and so do I. And this may be the right time to endorse Pelosi for her effective and dignified leadership as Speaker of the U.S. House of Representatives. Capable and honorable, trapped in a situation of terrible unemployment, she can’t be held personally responsible for the political annihilation of the Democrats. Allowing the bankers to precipitate the crisis, was a national flaw.
President Obama’s deficit commission proposes raising the age at which one can receive Social Security benefits to 69 by 2075. A great many people in their 60s have lost or are about to lose their jobs and have little hope of finding another. Raising the retirement age would extend the period of receiving no income for many people approaching 70. The commission would end deductibility of health benefits and mortgage interest while raising the gasoline tax, levying tax increases on the middle class while giving tax cuts to the wealthy.
Americans should not be stampeded into cutting increasingly critical Social Security protections. It's time to ask those who have reaped the benefits of runaway tax cuts and growing income inequality to pay their fair share, not cut Social Security. It's time to require income taxes on all earnings above $106,800. Doing so would fully address the projected shortfall for 75 years.
Sunday, November 14, 2010
Showboating the Federal Deficit
President Obama created the National Commission on Fiscal Responsibility to suggest solutions to the nation’s fiscal problems. The commission was to be bipartisan; incorporating Democratic and Republican ideas with the obvious effect that the Democrats, at that time controlling the Senate, the House of Representatives and the White House was surrendering their political advantage in advance of negotiations.
Then the President appointed two chairmen of the commission; Erskine Bowles, the Democratic co-chair has a big business background and a small government agenda; and Alan Simpson, the Republican co-chair, had been a US senator whose voting record was solidly cautious conservative.
It is no surprise that these Obama chairs led their commission to endorse proposals that would solve the long-term deficit by cutting back Social Security, Medicare and other social welfare programs. Thus the poor, the sick and the elderly would pay for the tax breaks and bailouts for the already wealthy.
In addition, the co-chairs are proposing a mixture of tax cuts and tax increases - tax cuts for the wealthy, tax increases for the middle class. They suggest eliminating tax breaks that mean a lot to middle-class Americans, including the deductibility of health benefits and mortgage interest, raising the age of social security eligibility, increasing the Federal Gasoline Tax, etc.
The suggested changes would erase nearly $4 trillion from projected deficits through 2020 and stabilize the accumulated federal debt now hovering about $14 trillion. Half of this enormous debt is directly attributable to the tax reductions installed by President George W. Bush and the growing cost of the US military establishment that rules the world. Our country spends more on its military than all other nations in the world combined. We have more than 1000 military bases on the soil of 175 of the 192 member states of the United Nations Most of these countries buy US Treasury Bonds in spite of the big US deficit. Is there an element of compulsion here? Does China actually represent a military threat to the United States? For all the saber-rattling during the Russian-Georgia crisis, did anyone really think Americans were going to die for South Ossetia? The U.S. Navy has eleven large carrier battle groups structured to fight the Imperial Japanese Navy. The Imperial Japanese Navy?
Yes, the Bowles-Simpson panel seeks a cut in the military budget of $100 billion per year. Anybody want to bet on that reduction passing this Congress or any other Congress representing 435 congressional districts each with at least one juicy contract from the Pentagon?
They must be kidding.
Then the President appointed two chairmen of the commission; Erskine Bowles, the Democratic co-chair has a big business background and a small government agenda; and Alan Simpson, the Republican co-chair, had been a US senator whose voting record was solidly cautious conservative.
It is no surprise that these Obama chairs led their commission to endorse proposals that would solve the long-term deficit by cutting back Social Security, Medicare and other social welfare programs. Thus the poor, the sick and the elderly would pay for the tax breaks and bailouts for the already wealthy.
In addition, the co-chairs are proposing a mixture of tax cuts and tax increases - tax cuts for the wealthy, tax increases for the middle class. They suggest eliminating tax breaks that mean a lot to middle-class Americans, including the deductibility of health benefits and mortgage interest, raising the age of social security eligibility, increasing the Federal Gasoline Tax, etc.
The suggested changes would erase nearly $4 trillion from projected deficits through 2020 and stabilize the accumulated federal debt now hovering about $14 trillion. Half of this enormous debt is directly attributable to the tax reductions installed by President George W. Bush and the growing cost of the US military establishment that rules the world. Our country spends more on its military than all other nations in the world combined. We have more than 1000 military bases on the soil of 175 of the 192 member states of the United Nations Most of these countries buy US Treasury Bonds in spite of the big US deficit. Is there an element of compulsion here? Does China actually represent a military threat to the United States? For all the saber-rattling during the Russian-Georgia crisis, did anyone really think Americans were going to die for South Ossetia? The U.S. Navy has eleven large carrier battle groups structured to fight the Imperial Japanese Navy. The Imperial Japanese Navy?
Yes, the Bowles-Simpson panel seeks a cut in the military budget of $100 billion per year. Anybody want to bet on that reduction passing this Congress or any other Congress representing 435 congressional districts each with at least one juicy contract from the Pentagon?
They must be kidding.
Thursday, October 7, 2010
US Secret War Expands Globally
According to the Washington Post, the Obama administration has significantly expanded a largely secret US war against Al Qaeda and other radical groups. Special Operations forces have grown both in number and budget and are deployed in 75 countries operating now. in the Philippines, Colombia, Somalia and Yemen in addition to continuing operations in the Middle East, Africa and Central Asia.
The surge in Special Operations deployments, along with intensified CIA drone attacks in western Pakistan, is the under side of the national security doctrine of global engagement President Obama released in June.
The CIA drone attacks in Pakistan along with unilateral US raids in Somalia and joint operations in Yemen provide politically useful tools in this election year. Obama, one senior military aide said, has allowed “things that the previous (Bush) administration did not.” Special Operations commanders have also become a far more regular presence at the White House than they were under George W. Bush's administration.
The clearest public description of the secret-war aspects of the doctrine came from the White House counterterrorism director John O. Brennan. He said that the United States will not merely respond after the fact to a terrorist attack but will “take the fight to Al Qaeda and its extremist affiliates whether they plot and train in Afghanistan, Pakistan, Yemen, and Somalia and beyond.” That rhetoric is not much different than Bush's pledge to “take the battle to the enemy and confront the worst threats before they emerge”.
.
In a report this June, the United Nations question the Obama administration's authority under international law to conduct such raids, particularly when they kill innocent civilians. One possible legal justification - the permission of the countries in question - is complicated in places such as Pakistan and Yemen where the governments privately agree but do not publicly acknowledge the attacks. While the Obama administration continues Bush policy, it has rejected the constitutional executive authority claimed by Bush and has based its lethal operations on the authority Congress gave the President in 2001 to use “all necessary and appropriate force against those nations, organizations, or persons” he determines, “planned, authorized committed or aided the September 11 attacks.” However, many of those currently being targeted particularly in places outside Afghanistan had nothing to do with 2001 attacks. Should one person, even the President of the United States, have the unilateral power to commit the nation to war?
.
The New York Times reported a senior United Nation's official said the United States appeared to think that it was "facing a unique threat from transnational terrorist networks" that justified its effort. But that could quickly lead to a situation in which dozens of countries carry out "competing drone attacks" outside their borders against people "labeled as terrorists by one group or another."
The surge in Special Operations deployments, along with intensified CIA drone attacks in western Pakistan, is the under side of the national security doctrine of global engagement President Obama released in June.
The CIA drone attacks in Pakistan along with unilateral US raids in Somalia and joint operations in Yemen provide politically useful tools in this election year. Obama, one senior military aide said, has allowed “things that the previous (Bush) administration did not.” Special Operations commanders have also become a far more regular presence at the White House than they were under George W. Bush's administration.
The clearest public description of the secret-war aspects of the doctrine came from the White House counterterrorism director John O. Brennan. He said that the United States will not merely respond after the fact to a terrorist attack but will “take the fight to Al Qaeda and its extremist affiliates whether they plot and train in Afghanistan, Pakistan, Yemen, and Somalia and beyond.” That rhetoric is not much different than Bush's pledge to “take the battle to the enemy and confront the worst threats before they emerge”.
.
In a report this June, the United Nations question the Obama administration's authority under international law to conduct such raids, particularly when they kill innocent civilians. One possible legal justification - the permission of the countries in question - is complicated in places such as Pakistan and Yemen where the governments privately agree but do not publicly acknowledge the attacks. While the Obama administration continues Bush policy, it has rejected the constitutional executive authority claimed by Bush and has based its lethal operations on the authority Congress gave the President in 2001 to use “all necessary and appropriate force against those nations, organizations, or persons” he determines, “planned, authorized committed or aided the September 11 attacks.” However, many of those currently being targeted particularly in places outside Afghanistan had nothing to do with 2001 attacks. Should one person, even the President of the United States, have the unilateral power to commit the nation to war?
.
The New York Times reported a senior United Nation's official said the United States appeared to think that it was "facing a unique threat from transnational terrorist networks" that justified its effort. But that could quickly lead to a situation in which dozens of countries carry out "competing drone attacks" outside their borders against people "labeled as terrorists by one group or another."
Thursday, September 30, 2010
Obama's Major Leaguers Strike Out
Prepare to say goodbye to the highly touted economic and political teams that President Barack Obama put together to rescue the nation from the mistakes of the George W. Bush administration. These experts were assembled to give the relatively inexperienced new president the centrist policies that disappointed the eager voters who had jammed the polling stations to support the apostle of change.
Among the departing economists, please find Lawrence Summers, Director of the White House Economic Council, Peter Orzag, Head of Management and Budget and Christina Romer, Chair of Council of Economic Advisors. They will be followed by the political team led by hardnosed centrists, Rahm Emanuel, White House Chief of Staff, and David Axelrod, architect of the winning strategy in the presidential election. Watch for the retirements of Secretary of Defense Robert Gates and Gen. James Jones, National Security Advisor, both holdovers from the Bush presidency.
This multi-faceted shakeup is an admission of failure to solve the problems of the nation. It promises a new approach, a new beginning closer to the expectations generated by Obama's charisma.
Some would blame the failures on the economic collapse and the administration’s political difficulties in passing corrective national legislation. But the Obama appointees, selected for their knowledge of capitalism's booms and busts as well as the difficulties of managing change in a nation of 300 million seemed to lack a coherent plan.
• They miscalculated the political effect of joblessness, of government spending, of the federal deficit, of the national debt.
• They came to power with the biggest public goodwill in decades but squandered it in delays and false starts.
• They proved unable to deal with the strategies of the Republicans in Congress
despite almost total political control of the House and Senate. Instead of winning compromises with elements of the GOP they settled for a media victory over “The party of NO”, forgetting that every compromise is made with opponents whose negotiation position is NO, until they agree. Hey failed to remind the electorate that the Bush administration launched two wars and a new entitlement – Medicare prescription drugs – while cutting taxes.
• They were unable to use the powerful financial and industrial institutions they saved from bankruptcy to pressure the Republicans in Congress even while they were bailing out these companies with trillions of dollars.
• They were unable to organize the committed army of Obama supporters in the presidential election into a grassroots organization to act as a pressure group on members of Congress and the media.
If the Obama administration is to survive the presidential election of 2012 giving Obama a second term, the replacements of the teams that struck out need to develop a relevant strategy. Unfortunately the new appointments will be made in the shadow of the 2010 congressional elections, almost sure to result in Democratic defeats. If history is the guide, replacements will be even more centrist than the original team. After Bill Clinton’s political defeat in the election of 1994, his policies swung further to the right but benefited from a business boom. Business and financial interests will demand looser regulation, fewer prosecutions, and lower taxes. Obama is already under pressure to appoint business executives, as though his outgoing aides Lawrence Summers and Robert Rubin had not already worked for Goldman Sachs and Citigroup. Rest assured that neither Paul Krugman nor Joseph Stiglitz, both liberals, Keynesians and Nobel Prize winners, will be appointed.
The likely results: current policies will continue with new leaders, policies of mild economic stimulation, based on the political hope and prayer that another boom/bust cycle begins in time for the 2012 presidential election as it did for Bill Clinton and Ronald Reagan when they got into trouble. Good luck.
Among the departing economists, please find Lawrence Summers, Director of the White House Economic Council, Peter Orzag, Head of Management and Budget and Christina Romer, Chair of Council of Economic Advisors. They will be followed by the political team led by hardnosed centrists, Rahm Emanuel, White House Chief of Staff, and David Axelrod, architect of the winning strategy in the presidential election. Watch for the retirements of Secretary of Defense Robert Gates and Gen. James Jones, National Security Advisor, both holdovers from the Bush presidency.
This multi-faceted shakeup is an admission of failure to solve the problems of the nation. It promises a new approach, a new beginning closer to the expectations generated by Obama's charisma.
Some would blame the failures on the economic collapse and the administration’s political difficulties in passing corrective national legislation. But the Obama appointees, selected for their knowledge of capitalism's booms and busts as well as the difficulties of managing change in a nation of 300 million seemed to lack a coherent plan.
• They miscalculated the political effect of joblessness, of government spending, of the federal deficit, of the national debt.
• They came to power with the biggest public goodwill in decades but squandered it in delays and false starts.
• They proved unable to deal with the strategies of the Republicans in Congress
despite almost total political control of the House and Senate. Instead of winning compromises with elements of the GOP they settled for a media victory over “The party of NO”, forgetting that every compromise is made with opponents whose negotiation position is NO, until they agree. Hey failed to remind the electorate that the Bush administration launched two wars and a new entitlement – Medicare prescription drugs – while cutting taxes.
• They were unable to use the powerful financial and industrial institutions they saved from bankruptcy to pressure the Republicans in Congress even while they were bailing out these companies with trillions of dollars.
• They were unable to organize the committed army of Obama supporters in the presidential election into a grassroots organization to act as a pressure group on members of Congress and the media.
If the Obama administration is to survive the presidential election of 2012 giving Obama a second term, the replacements of the teams that struck out need to develop a relevant strategy. Unfortunately the new appointments will be made in the shadow of the 2010 congressional elections, almost sure to result in Democratic defeats. If history is the guide, replacements will be even more centrist than the original team. After Bill Clinton’s political defeat in the election of 1994, his policies swung further to the right but benefited from a business boom. Business and financial interests will demand looser regulation, fewer prosecutions, and lower taxes. Obama is already under pressure to appoint business executives, as though his outgoing aides Lawrence Summers and Robert Rubin had not already worked for Goldman Sachs and Citigroup. Rest assured that neither Paul Krugman nor Joseph Stiglitz, both liberals, Keynesians and Nobel Prize winners, will be appointed.
The likely results: current policies will continue with new leaders, policies of mild economic stimulation, based on the political hope and prayer that another boom/bust cycle begins in time for the 2012 presidential election as it did for Bill Clinton and Ronald Reagan when they got into trouble. Good luck.
Monday, August 16, 2010
The Democrats Fight Back
At long last, the Obama administration has compiled talking points for Democratic candidates for the U.S. Senate and House of Representatives. This campaign material is essentially defensive and does not reflect pride in the Democratic controversial legislation.
To offer hope for improving the economy: the Federal Open Market Committee is using proceeds from the Fed's vast mortgage-bond portfolio to buy long-term Treasury securities to increase the money supply by least 2 trillion dollars, thereby loosening credit and stimulating business activity. Warren Buffett objects, saying the move would lead to inflation. However, the policy change is a desperate attempt to revive the economy before November 2 and can be made without getting 60 votes in the Senate.
To offer hope for reducing the federal deficit: Secretary of Defense Robert Gates announced “a cut in the military budget,” then explained that inefficient programs would be eliminated, the proceeds used for “war fighting” with the result that the next military budget will increase by “only 1% over inflation”.
To offer hope for an end to the American wars in Afghanistan and Iraq: Dates have been set for withdrawals of combat troops “subject to safe conditions on the ground” but with the understanding that US residual military forces will remain to train native troops, to protect the US embassies and the private contractors hired by the US to support the residual forces.
To offer proof that the US will continue to pursue and destroy Al Qaeda, Taliban and other insurgencies: Members of Congress are urged to cite the Wikileaks report on the 92,000 secret documents as well as the CIA -inspired report on the “Secret Assault on Terrorism” that appeared in the New York Times to show that the US military effort has been widened to many more countries on two continents. Message: we will protect you no matter what it takes.
To offer proof that the governing Democrats are not liberals: Cite Obama's Press Secretary Robert Gibbs who insists that the administration has no “professional lefties”, or people who “want to eliminate the Pentagon”, or desire “to have a Canadian health care system” imported to the US, or “relentless liberals” who were the base of the movement that put Obama in the White House.
Will these strategies help to reverse the current decline in the political fortunes of the Democratic candidates? Do they truly reflect the aims and ideals of the Party? Will they build the Party or blur the Democratic message and foster disunity? These questions must be answered to the satisfaction of the voters.
To offer hope for improving the economy: the Federal Open Market Committee is using proceeds from the Fed's vast mortgage-bond portfolio to buy long-term Treasury securities to increase the money supply by least 2 trillion dollars, thereby loosening credit and stimulating business activity. Warren Buffett objects, saying the move would lead to inflation. However, the policy change is a desperate attempt to revive the economy before November 2 and can be made without getting 60 votes in the Senate.
To offer hope for reducing the federal deficit: Secretary of Defense Robert Gates announced “a cut in the military budget,” then explained that inefficient programs would be eliminated, the proceeds used for “war fighting” with the result that the next military budget will increase by “only 1% over inflation”.
To offer hope for an end to the American wars in Afghanistan and Iraq: Dates have been set for withdrawals of combat troops “subject to safe conditions on the ground” but with the understanding that US residual military forces will remain to train native troops, to protect the US embassies and the private contractors hired by the US to support the residual forces.
To offer proof that the US will continue to pursue and destroy Al Qaeda, Taliban and other insurgencies: Members of Congress are urged to cite the Wikileaks report on the 92,000 secret documents as well as the CIA -inspired report on the “Secret Assault on Terrorism” that appeared in the New York Times to show that the US military effort has been widened to many more countries on two continents. Message: we will protect you no matter what it takes.
To offer proof that the governing Democrats are not liberals: Cite Obama's Press Secretary Robert Gibbs who insists that the administration has no “professional lefties”, or people who “want to eliminate the Pentagon”, or desire “to have a Canadian health care system” imported to the US, or “relentless liberals” who were the base of the movement that put Obama in the White House.
Will these strategies help to reverse the current decline in the political fortunes of the Democratic candidates? Do they truly reflect the aims and ideals of the Party? Will they build the Party or blur the Democratic message and foster disunity? These questions must be answered to the satisfaction of the voters.
Sunday, August 1, 2010
Can Obama be Re-elected in 2012
As the November congressional elections draw closer, the conventional wisdom is that large Democratic losses in the Senate and the House of Representatives are inevitable parts of the political process, a reaction to the sweeping Democratic victories in 2006 and 2008. Another view holds that the defeated party reorganizes itself and recovers some political power as the nation seeks a new equilibrium.
Yes, there have been political eras where this scenario played out, when the president's party suffered significant midterm losses, but there are just as many elections when this did not happen. And in every case, there were policy reasons for defeat of the president's party at midterm. In the current election, systematic interviews with Democratic and Republican insiders in December, 2008, found that none of them believed that the “inevitability” theory applied to the Obama administration even though it took office in the depths of the Great Recession.
Indeed, the election and inauguration of President Barack Obama was marked by a remarkable outpouring of energy, enthusiasm and passion for his ideas for hope and change. Obama has been unable to keep these feelings and attitudes alive in his own party. They have moved to the Republican opposition. The Tea Party activists are today the main source of passionate public participation with their rallies, public meetings and insistent demands while the people whose vigor elected Obama sit in sullen inactivity. Jay Leno says that “President Obama has a new message for the American people…. “Things could be a lot worse.” We've gone from “Change you can believe in” to “Things could be a lot worse.”
In this depressed political situation, the Obama White House seems to be prepared for the loss of the Senate and the House. Their victories in Health Care Reform and Financial Reform have not brought the enthusiastic popular support they expected. The necessary compromises and the talmudic details of the programs are not well understood and so far have not changed the lives of the voters. Obama supporters have been disappointed on these and other issues. They were expecting a great leap forward but received only a baby step.
Nevertheless, Obama is engaged in an endless summer of fund raising for Democratic candidates, appealing especially for big bucks. His cautious management style seems to preclude any serious effort to rev up his base to challenge the power of the elites who seem to dominate the United States, the military and the bankers. That would not be the style of Obama, a man who prefers loving to fighting.
It is within this depressing frame that Obama and his political advisers prepare for his reelection effort in 2012. They find Obama himself is more popular than his policies. He retains the loyalty of youth, minorities, labor and liberals. Although none of these constituencies are satisfied with Obama’s policies, they cannot allow the historic symbolism of his election to be shrouded in defeat and rejection.
Will Obama's basic constituency turn out to work and vote in 2012 as they did in 2008? Must he change his advisers and adopt more liberal programs in the face of the Tea Party and the elite’s opposition? Can he reduce unemployment and America's commitment to police the entire world? Or will our first bi-racial president be rejected, not for his race, but for his unwillingness to preside over a regime of serious change?
Yes, there have been political eras where this scenario played out, when the president's party suffered significant midterm losses, but there are just as many elections when this did not happen. And in every case, there were policy reasons for defeat of the president's party at midterm. In the current election, systematic interviews with Democratic and Republican insiders in December, 2008, found that none of them believed that the “inevitability” theory applied to the Obama administration even though it took office in the depths of the Great Recession.
Indeed, the election and inauguration of President Barack Obama was marked by a remarkable outpouring of energy, enthusiasm and passion for his ideas for hope and change. Obama has been unable to keep these feelings and attitudes alive in his own party. They have moved to the Republican opposition. The Tea Party activists are today the main source of passionate public participation with their rallies, public meetings and insistent demands while the people whose vigor elected Obama sit in sullen inactivity. Jay Leno says that “President Obama has a new message for the American people…. “Things could be a lot worse.” We've gone from “Change you can believe in” to “Things could be a lot worse.”
In this depressed political situation, the Obama White House seems to be prepared for the loss of the Senate and the House. Their victories in Health Care Reform and Financial Reform have not brought the enthusiastic popular support they expected. The necessary compromises and the talmudic details of the programs are not well understood and so far have not changed the lives of the voters. Obama supporters have been disappointed on these and other issues. They were expecting a great leap forward but received only a baby step.
Nevertheless, Obama is engaged in an endless summer of fund raising for Democratic candidates, appealing especially for big bucks. His cautious management style seems to preclude any serious effort to rev up his base to challenge the power of the elites who seem to dominate the United States, the military and the bankers. That would not be the style of Obama, a man who prefers loving to fighting.
It is within this depressing frame that Obama and his political advisers prepare for his reelection effort in 2012. They find Obama himself is more popular than his policies. He retains the loyalty of youth, minorities, labor and liberals. Although none of these constituencies are satisfied with Obama’s policies, they cannot allow the historic symbolism of his election to be shrouded in defeat and rejection.
Will Obama's basic constituency turn out to work and vote in 2012 as they did in 2008? Must he change his advisers and adopt more liberal programs in the face of the Tea Party and the elite’s opposition? Can he reduce unemployment and America's commitment to police the entire world? Or will our first bi-racial president be rejected, not for his race, but for his unwillingness to preside over a regime of serious change?
Thursday, July 1, 2010
? Nationalize the Big Banks ?
Politicians in Washington are mesmerized by Wall Street campaign dollars and terrified by being branded “socialists”. That seems to be the most likely explanation for the failure of the Congress to pass a second stimulus bill despite continuing high levels of unemployment -especially long-term unemployment - that are absolutely catastrophic for millions of families.
In fact, politicians are leaning in the other direction. Instead of a jobs bill, they are promoting deficit reduction. Instead of promoting stimulation of the economy there has been a stunning revival of Herbert Hoover financial orthodoxy: hard money, balanced budget, and deficit reduction.
Yes, long-term fiscal responsibility is important but cutting spending in the midst of a recession is more likely to lead to deflation of prices, business activity and jobs than to the inflation that worries the financial elite. Social stability is promoted by full employment policies, diminishing crime, sickness and chronic unhappiness. Didn’t we learn from bitter experience?
The same politicians have just completed a financial overhaul bill that will be known as the Dodd - Frank Act. The outcome of this so-called reform is particularly relevant to taxpayers who spent and pledged trillions of dollars to bail out the banking system, especially the five US banks with the most assets: Bank of America $2.34 trillion, J.P. Morgan Chase $2.14 trillion, Citigroup $2 trillion, Wells Fargo $1.2 trillion, Goldman Sachs $0.88 trillion. The 10 largest banks have $10.4 trillion in assets, equivalent to 80% of the gross domestic product of the entire US
The most important failing of the Dodd-Frank Act is that it does not resolve the biggest problem and the greatest danger in the recent financial crisis.. If any one of the largest banks falls into serious financial trouble, by mistakes or by excessive risk, the federal government would be compelled to rescue to prevent collapse of the entire financial system. The concentration of wealth and power is the greatest danger to our capitalist system.
The Act reduces proprietary trading and regulates derivatives but we have had regulators and regulations for 100 years of ineffectiveness as low paid civil servants are overcome by the richest financial institutions in world history. There are two ways to reduce the risk of “too big and too powerful to fail”. First, cut the enormous and interconnected financial firms down to size by requiring them to sell off their various divisions. Alternatively, let them remain large but have the federal government take them over to be treated as public utilities run by salaried employees without the tempting bonuses realized by anti-social risks and gambling with other people’s money. If the taxpayer assumes the ultimate risk by bailout, he should have the ownership as well as the profits generated by the rise and fall of the various markets, often manipulated by the big boys in their seats of power
In fact, politicians are leaning in the other direction. Instead of a jobs bill, they are promoting deficit reduction. Instead of promoting stimulation of the economy there has been a stunning revival of Herbert Hoover financial orthodoxy: hard money, balanced budget, and deficit reduction.
Yes, long-term fiscal responsibility is important but cutting spending in the midst of a recession is more likely to lead to deflation of prices, business activity and jobs than to the inflation that worries the financial elite. Social stability is promoted by full employment policies, diminishing crime, sickness and chronic unhappiness. Didn’t we learn from bitter experience?
The same politicians have just completed a financial overhaul bill that will be known as the Dodd - Frank Act. The outcome of this so-called reform is particularly relevant to taxpayers who spent and pledged trillions of dollars to bail out the banking system, especially the five US banks with the most assets: Bank of America $2.34 trillion, J.P. Morgan Chase $2.14 trillion, Citigroup $2 trillion, Wells Fargo $1.2 trillion, Goldman Sachs $0.88 trillion. The 10 largest banks have $10.4 trillion in assets, equivalent to 80% of the gross domestic product of the entire US
The most important failing of the Dodd-Frank Act is that it does not resolve the biggest problem and the greatest danger in the recent financial crisis.. If any one of the largest banks falls into serious financial trouble, by mistakes or by excessive risk, the federal government would be compelled to rescue to prevent collapse of the entire financial system. The concentration of wealth and power is the greatest danger to our capitalist system.
The Act reduces proprietary trading and regulates derivatives but we have had regulators and regulations for 100 years of ineffectiveness as low paid civil servants are overcome by the richest financial institutions in world history. There are two ways to reduce the risk of “too big and too powerful to fail”. First, cut the enormous and interconnected financial firms down to size by requiring them to sell off their various divisions. Alternatively, let them remain large but have the federal government take them over to be treated as public utilities run by salaried employees without the tempting bonuses realized by anti-social risks and gambling with other people’s money. If the taxpayer assumes the ultimate risk by bailout, he should have the ownership as well as the profits generated by the rise and fall of the various markets, often manipulated by the big boys in their seats of power
Tuesday, June 22, 2010
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.
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.
Thursday, June 17, 2010
Jobs or Derivatives?
The United States needs another stimulus package to increase domestic economic activity which will generate more jobs and eliminate the remnants of the “Great Recession”. However, the Congress hesitates to pass the necessary legislation because the members are spooked by the rise of a competing worry, the federal deficit, now at $12.3 trillion and increasing by over $1 trillion for this year and the next.
These are not unimportant numbers but they should be placed in context: the accumulated deficit is equal to the lost revenues of the George W. Bush tax cuts plus the cost of the George W. Bush wars in Iraq and Afghanistan. Without these very questionable expenditures there would be no federal deficit.
The proposed jobs bill is not questionable. It is required by the very high unemployment rate now almost 10% according to federal statistics but actually nearer to 15% when it includes the workers who have stopped looking for work, the workers who are forced to work part-time, and those working at jobs well below their training. As a result, we have a serious jobs crisis, a family crisis, and a humanitarian crisis that requires immediate amelioration before it leads to a social explosion.
The US economy and the federal government have other obligations, current and potential, that make the federal deficit look like small change. The Wall Street Journal reported on June 16, 2010, in an inside section indicating minimum importance, that, “Right now, US banks, mostly a few giants, have $276 trillion in over-the-counter derivatives….. Most of these derivatives are within commercial bank subsidiaries that enjoy federal deposit insurance. Thus, the banks effectively enjoy a government subsidy that likely distorts prices and allows them to hold too little capital against the derivatives…. The top derivative banks are so big the government would almost certainly rescue them - and their derivatives affiliates - if they are collapsed….”
The frightening $276 trillion threat posed by the derivatives is not getting the attention of the media and the Congress commensurate with the danger, nowhere near the worry about the $12 trillion threat and that's a pity. The $12 trillion threat is being used to prevent passage of a $1 trillion jobs bill that would boost jobs and business activity as it did during the Great Depression of the 1930s.
These contrasting choices highlight the most important issues this election year. There is no obligation for the federal government to guarantee any derivative investments (aka gambling). There is an obligation for the federal government to promote social and family stability through gainful employment policies.
Will the candidates for the U.S. Senate and the House of Representatives respond to the political contributions of the bankers or the agonies of the workers and their families? Stay tuned.
These are not unimportant numbers but they should be placed in context: the accumulated deficit is equal to the lost revenues of the George W. Bush tax cuts plus the cost of the George W. Bush wars in Iraq and Afghanistan. Without these very questionable expenditures there would be no federal deficit.
The proposed jobs bill is not questionable. It is required by the very high unemployment rate now almost 10% according to federal statistics but actually nearer to 15% when it includes the workers who have stopped looking for work, the workers who are forced to work part-time, and those working at jobs well below their training. As a result, we have a serious jobs crisis, a family crisis, and a humanitarian crisis that requires immediate amelioration before it leads to a social explosion.
The US economy and the federal government have other obligations, current and potential, that make the federal deficit look like small change. The Wall Street Journal reported on June 16, 2010, in an inside section indicating minimum importance, that, “Right now, US banks, mostly a few giants, have $276 trillion in over-the-counter derivatives….. Most of these derivatives are within commercial bank subsidiaries that enjoy federal deposit insurance. Thus, the banks effectively enjoy a government subsidy that likely distorts prices and allows them to hold too little capital against the derivatives…. The top derivative banks are so big the government would almost certainly rescue them - and their derivatives affiliates - if they are collapsed….”
The frightening $276 trillion threat posed by the derivatives is not getting the attention of the media and the Congress commensurate with the danger, nowhere near the worry about the $12 trillion threat and that's a pity. The $12 trillion threat is being used to prevent passage of a $1 trillion jobs bill that would boost jobs and business activity as it did during the Great Depression of the 1930s.
These contrasting choices highlight the most important issues this election year. There is no obligation for the federal government to guarantee any derivative investments (aka gambling). There is an obligation for the federal government to promote social and family stability through gainful employment policies.
Will the candidates for the U.S. Senate and the House of Representatives respond to the political contributions of the bankers or the agonies of the workers and their families? Stay tuned.
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