Progressively Biased

The Elephant In The Room Is Still "Too Big To Fail"

2009-04-01T13:33:00.004-04:00

There is little agreement among economists as to whether or not Tim Geithner’s plan to offload the now infamous toxic “legacy assets” from the balance sheets of the “too big to fail” financial institutions will actually work. Even among economists who think the plan might work, to cleanse the banks of their toxic assets, there are still those who object to the plan on moral grounds. The moral problem is in itself an economic problem with the plan. Economists have a term for the kind of market distortions this kind of market manipualtion introduces – they call it a “moral hazard.” The hazard, in this case, is that after being rewarded instead of punished for overly risky and incorrect market bets, the same players will live to make the same or similar mistakes again.

In fact, one might observe that the Geithner plan is designed to do this on purpose – that it is designed to intentionally reinflate another market bubble. This new bubble will be emanating from the hedge funds that stand to make a killing in the market for these legacy assets and the resulting swirl of freshly minted, tax payer funded, dollars arriving on their balance sheets and the balance sheets of the rescued banks. The banks will see an injection of capital with no strings associated whatsoever because it will not be done as either a loan or stock purchase. Instead it’s a capital injection behind smoke and mirrors. It’s a bald-faced money-laundering scheme on one level, but that isn’t even my biggest concern - my biggest concern is what happens after the Geithner bailout.

With the Fed printing money like mad and doing the Tango with the “too big to fail” banks now in need of rescue, and with hedge funds getting in on the action, we can expect a fresh round of financial bubbles. We can expect the cost of oil, metals and food reaching all time speculative highs. For most of us, this will be experienced as inflation, hyperinflation or another era of dreaded stagflation. For the Fed and the Treasury, this will likely be dismissed as “volatility” and not a real problem at all. They will do their best to conceal the actual inflation numbers. And why should they consider it a problem, anyway? It is precisely the outcome they are seeking to cause, because any sincere solution to our current banking crisis would leave quite a few bankers wearing cheaper suits and drinking cheaper wine, and that is something the banking indutry’s “partners in government” are not about to let happen.

To get to the point – any solution that leaves the “too big to fail” banks still “too big to fail” is no solution at all. These same banks will be lining up for a fresh round of bailouts, with a similar sob story, while we are still trying to figure out which entitlement programs to slash in order to pay for the current bailouts. As Joseph Stiglitz has pointed out, there is a distinction between saving banks and banking, and saving bankers and shareholders. Any real solution to our current banking crisis would involve a temporary nationalization of the “too big to fail” banks, followed by an orderly sorting out of their assets, a breaking of the banks into smaller pieces and finally a re-privatization.

It wouldn’t even need to be such a traumatic event for the rest of us. Remember Washington-Mutual? Of course you do. They used to offer free checking - worth twice the price.

Why Is The Stock Market Still Going Down?

2008-10-24T11:15:00.003-04:00

The obvious answer is that we are facing a recession. There is a saying that "the stock market climbs a wall of worry". I think that sometimes the stock market descends a "staircase of denial". Nobody knows how bad it will get before a turn around.

There is also, however, political uncertainty. Nobody knows how Obama will effect the markets. He may change the priorities of government spending that make for some new and different winners on losers.

Here is how I see it:

I think the stock market might face a different sort of game moving forward. What the stock market wants is more of the same candy that made it sick in the first place, i.e.: imprudently low interest rates, poor oversight and little incentive to bolster the real economy in favor of the fake economy.

Greenspan wasn't a genius. He was an intellectually dishonest Wall Street mole. Interest rates and margin rates were were too low for too long.

The economic pie seemed to be growing, but it was really inflating instead. While it was inflating most of our slices remained the same size while the slices of Wall Street financiers and CEOs grew way beyond reason. Now the pie is deflating again but our meager slices are shrinking along with the oversized ones the bubble created at the top.

When this process is over we will have witnessed a very successful generation of class warfare come to its fruition. The shape of the economy will have changed in permanent ways creating permanent winners at the top and losers at the bottom.

To get more specific rather than metaphoric: the current priorities of "saving the economy" are along the lines of trying to protect the inflated assets that Wall Street has created. It's basically a game of three card Monty because they are protecting those assets by printing money. The purchasing power for Joe Six Pack is going to plummet while the wealthy remain wealthy and scare the heck out of the rest of us about "creeping socialism".

The only real hope I see is that Obama is able to find a way to set aside a portion of the bailout money to invest in infrastructure, green energy (infrastructure as well), and human capital (teachers and nurses come to mind). The infrastructure and human capital are vital to the "real economy".

Did DNC Pay For Obama's Three Ties?

2008-10-23T16:47:00.004-04:00

Supposedly Barack Obama has five suits which he maintains on his own dime, keeping them patched and pressed for as long as he can before replacing them. Personally, I don't believe a word Obama says about his five suits! His wardrobe is a rack of costumes too, just like Sarah Palin's.

Have you noticed his three ties?

(1) Blue Tie - for sending out liberal democrat visual subliminals (it matched Hillary's blue pantsuit when they flew Obama Force One together after she sort of conceded).

(2) Purple Tie - for sending out centrist swing voter visual subliminals (it matched Michelle's purple dress at the convention.)

(3) Red Tie - for sending out Republican "come home America" visual subliminals. You can see him wearing it when he campaigns in Red states he is threatening to steal in November.

Unless of course that third tie is actually commie red - then we've really got something to worry about next year!

I'd like to give Michelle a pass from this subliminal clothing nonsense, but wasn't that $150 dress she wore from a boutique named "Black White House"?

My real point is that everything they wear is part of the campaign once they start campaigning. I know you all think I am nuts now . But who's more paranoid? Me watching my TV and adjusting my tin-foil hat or Obama choosing between a Blue, Purple or Red tie based upon the demographics of the target audience of the day?

Sarah Palin's $150k Wardrobe

2008-10-23T14:46:00.003-04:00

Sarah Palin's done it again! The latest nuggets of scandal unearthed about her involve her $150,000 clothing shopping spree on the campaign's dime.

As a Palin basher who's probably wound up on more than a couple of ignore lists for my first few posts about her, this is surprisingly a sort of a non-issue for me.

I thought that it was reasonable for John Edwards to charge the cost of a world class hair stylist to his campaign. When it comes to female candidates wardrobes perhaps if the campaigns made it clear that the wardrobes were campaign property destined for charity auctions this sort of embarrassment could be avoided in the future.

It's packaging and marketing. Just because John McCain is the self declared straight talk express, that doesn't mean I don't expect him to employ a video production crew to package his message. The same goes for what he and the rest of the candidates wear on the campaign trail. I expect them to be packaged for the mass media.

That doesn't mean I don't lament the national priorities of style over substance. I just don't see this one small issue as an ethical lapse.

Under the law it may be a different matter.

As bleak as things have gotten, there is still hope for Sarah to channel this doomed vice presidential campaign experience into a ghost-written autobiography tour. She's still got the gift of gab and she's still quite the looker.

Time To Rethink The American Dream

2008-10-23T11:13:00.002-04:00

The cost of housing has been increasing faster than the rate of inflation for decades. It's one of the problems that results when you talk everybody into treating their homes as a retirement account instead of just a place to live.

Why should we as a nation cheer when one of the essentials of a decent standard of living (a home) progressively eats up a higher percentage of the typical paycheck with each passing decade. Any fool could see that it can't end well. It can only end with more and more people unable to afford homes and with the kind of speculative bubble we just had.

To prove this I will point to the growing numbers of people who can't afford their homes (facing foreclosure) and the speculative housing bubble that has just burst and is damaging the entire world's economy.

The American Dream of owning a home has been gamed by the twin pillars or Real Estate and Finance for long enough to to harm the nation, it's citizens and even the world's economy.

The "ownership society" has turned out to be a smokescreen for wealthy financiers to exploit the rest of us.

It's time for people to wake up and fix the structural problems in our society and economy. To put it briefly, it is time to end the bogus presumptions of a "trickle down society" and an "ownership society." Out of politeness we won't call what we need to replace it with "Socialism". Maybe we can call it a time to recognize "our mutual responsibility to each other".

The Housing Market's Original Sin

2008-10-22T15:07:00.003-04:00

Nobody ever talks about the original sin of the housing market of the 20th century which is that it was predicated on home prices increasing faster than the rate of inflation.

If you stop to think about that, a national housing crisis was inevitable. With stagnant wages this meant housing would consume an ever increasing share of personal budgets eventually slipping out of reach. This is exactly what happened.

Everybody can't own their own home and some people shouldn't.

But instead of having an adequate Social Security system we were encouraged to buy into an "ownership society".

Well it blew up as anybody could see it eventually would.

We weren't honest with ourselves. It wasn't an ownership society - it was a debtorship society. When everybody has too easy access to credit, prices inflate.

It's Not Socialism - It's Fascism

2008-10-21T13:26:00.001-04:00

Neither the Wall Street bailout (as originally conceived) or McCain's plan to buy up mortgages at face value as a gift to the banks are socialism. They are a channeling of tax payer money to the top of the economic pyramid. They are more acurately a sort of crony-capitalism or even neo-fascism.

One of the problems with our current brand of "capitalism" that David Kay Johnston has outlined in his recent books is the extent to which the wealthy and corporations highjack goverment to write the rules to distribute wealth to the politically well connected. You see this in things like taxpayer funded sports arenas and in no bid contracts. Now you see it in underwriting the risk on Wall Street.

Real socialism or the Democratic Socialism of the sort that Bernie Sanders subscribes to seeks to use taxpayer dollars for things like free and affordable healthcare and free and affordable education. How many of us would really resent paying our taxes if our children could attend a state university for free and we knew we would never have to worry about being bankrupted by healthcare bills if we ever have cancer or need open heart surgery?

There are other things tax payer dollars could accomplish. Developing affordable housing is one of them. Isn't it funny how your tax dollars are going to be used to prop up inflated housing values now? If you were hoping that the over-priced housing would come back to earth and within your reach, you might be frustrated to realize that your tax dollars are about to be used to keep that from happening.

Whenever the subject of spending money for butter rather than guns comes up the right wing starts talking about deficits and fiscal responsibility. Where was the talk of fiscal responsibility when it comes to questioning whether we need to be starting a war against country that have neither WMDs or terrorists? Why do we always seem to rationalize staying there to the tune of 12 billion a month after we proved they had neither? The war is a gift to the war profiteers and oil companies hoping for ridiculously favorable royalty contracts.

It's not Socialism to be throwing bailout money structured as generous gifts to Wall Street and the banks, it's hypocrisy.

The really clever trick is that branding these dishonest bailout schemes as Socialism channels the truly deserved anger for this crony capitalism at Socialism instead. Socialism doesn't seek to reward cronies, it seeks to share some burdens across society in an attempt to achieve a greater good for all.

Of course there is subjectivity in what that greater good should be, but do any of us really believe right now that that CEOs on Wall Street are being rewarded according to their personal merits and hard work? Those crooks at AIG immediately turned around and used bailout money for luxury taxpayer funded vacations. That money was supposed to be used to pay off their creditors.

It's that type of unethical greed that neither rewards investors with anything but a paper mirage or finds it possible to give anyone but the CEOs at the top raises that keep up with inflation that has brought our nation to this brink. We are all stagnant except the stratospherically rewarded CEOs now.

This country is in need for some serious change. A government that is accountable, responsive and transparent to we the people is one of them. Some regulatory reform of our businesses including some punitive measures against excessive executive pay is another. But last and not least, this country could use a little real socialism that helps the vast majority of Americans out.

When your elected officials try to tell you there is no money for socialistic programs like Medicare, Medicaid and Social Security, call them the liars that they are. They know better.

A Little Socialism Never Hurt Anyone!

2008-10-13T17:01:00.002-04:00

A little socialism never hurt anyone.

Has radical free market ideology really worked out all that well except for the top 1% or less?

I personally feel that when they say the economy is growing, it merely means the rich are getting richer faster. Everything that I need whether it be food or housing or healthcare is just getting more expensive faster than the rate of inflation and faster than my paycheck goes up.

There is something twisted about having your plans for retirement pegged to inflating asset prices (housing prices and stock prices). What's the answer? Expanded socialism.

Strengthening and improving Social Security and finally solving the national health care problem would be good places to begin.

The Audacity of Greed

2008-10-09T15:51:00.000-04:00

The Audacity of Greed!

I don't know how the conservatives continue to keep the faith right now. The country is facing one huge margin call and the rest of the world is circling the drain with us. The 28 year ideologically conservative experiment of Milton Friedman's economic prescriptions is ending up badly. But what is the biggest problem we really face? - That we might elect a liberal into the White House!

There really should be some humility right now. Reagan wasn't right. He was lucky. If you guys weren't wrong in 1980, you certainly didn't know when or where to stop with tax cuts for the rich, privatization, outsourcing and lax monetary policies resulting in an economy based on blowing bubbles and financial "services".

The problem with ideology is that it's right twice a day and the rest of us never hear the end of it.

Bailout 2.0

2008-10-02T18:20:00.002-04:00

I fully expect Wall Street to come asking for more money in January.

The Democrats are not inspiring confidence that they will deny it. They have been scamming us for quite some time now. I don't say that because I think people should vote Republican. I say it because I think people need to pressure the Democrats into being better Democrats.

To put it briefly (ok not so briefly) they have had the luxury of being a minority party. This has allowed them to court the same corporate money as the Republican party without having to overtly carry the corporate agendas forward. They can speak out against the corporate agendas all they want as long as they manage to figure out how to always cave in and never come up with the will to meaningfully oppose anything.

Isn't it odd that there is no debate about alternative bailouts right now? The Democrats are in a hurry to do one big last favor for Wall Street before they achieve an unambiguous and embarrassing majority. At that point the fun will end. They will not be able to hide behind not having a veto proof majority. There will be no excuse for continuing an unpopular war, giving gifts to Wall Street, or not doing anything about Health Care, Education or Trade Policy. The only excuse they will have is that they squandered the opportunity before Bush left office.

Will they start acting like a party for the people or will they just try harder to find ways to avoid disappointing their corporate paymasters?

This past week is not promising.

Bring Back Trickle-Up Economics!

2008-09-29T16:05:00.002-04:00

I think history has shown time and again that left to our own devices we construct very unjust social orders. Wealth and greed almost go together by definition and over time the disparities between rich and poor widen and harden. The fact that it happens so often can lead you to muse as to whether it is in fact God's plan to reward the best and brightest with the most and shiniest.

But you could also point to some moments in history and wonder whether blood in the streets to challenge these unjust orders was also God's plan.

I say that we should leave God out of it and not just stand idly by when things get out of whack and miserable for the most of us. We don't need a bloody revolution to move some of the wealth from the top to the bottom to invest in human capital and a better standard of living for all. We've seen it work in the past. The great middle class post WWII prosperity of the 50s and 60s were jump started by trickle up investments.

We have reached a moment of deplorable narcissism in this country where we have an economy mainly focused upon selling over-priced goods and services to overly-wealthy people. The rest can be damned and should just get out of the way.

I say enough already. Bring on the trickle-up economics!

The Bailout Is A Bad Deal

2008-09-28T21:29:00.004-04:00

I think every last one of us should write our senators and tell them to vote against the Wall Street bailout. Of course this will not work and the bill will pass today anyway.

This bill dressed up as it is to play to the audience as an improvement over the original bill is filled with enough loopholes to deliver everything to Wall Street that the White House originally asked for. Now is not the time to give up. We have only begun to fight as the old expression goes.

I say, continue to write your Senators, Representatives and the Presidential Candidates and let them know that you want the spending on this bad bill to end after the first 250 billion dollars and that you want it superseded by a better alternative after that.

I'll have more to say about some better alternatives next time.

Will Hillary Implode?

2008-01-28T11:39:00.000-05:00

With every Primary and Caucus to date, the pundits immediately act like the results from a single state have set the direction and momentum for the rest of the nation. The most recent event was South Carolina and South Carolina is not like that many other states demographically. It's folly to imply that the South Carolina race has much predictive value.

Still, being a witness to the race was disturbing even for us folks up here in New York.

The behavior of the Clintons and their surrogates was perceived as a betrayal of a constituency they have not been to subtle with regard to claiming as their own.

If the Clintons could play the race card against an actual black candidate for president, what other political betrayals are they capable of?

If character is destiny, then perhaps the Clintons are due for a change.

Some change that's been a long time coming.

Dreamers and Deniers

2008-01-27T19:41:00.000-05:00

The New York Times has endorsed Hillary Clinton over Barack Obama. I’m sure it wasn’t an easy choice or even a calm debate within the paper to arrive at that endorsement. Despite the nasty fighting between the two campaigns and their surrogates on the surface there continues to be very little difference between the two candidates. Both Clinton and Obama are centrists and incrementalists.

The real differences are to be found amongst their would be supporters, whom I see falling into two categories: the Dreamers and the Deniers. Generation and temperament as much as anything else divide the two groups.

The Dreamers comprising the Obama camp bring the same sense of awe to Obama’s spoken and written words that a rock fan brings to music lyrics. That every word is speaking directly to him or her confirming what he or she already knows to be true is a powerful drug. Surely the author of such heartfelt words that resonate so deeply will govern in a way that pleases as much as the words do. But there are clues that the light at the end of the tunnel may not be what we hope it to be. “You are the wave and I am riding it”, Obama proudly declared deepening the rock-the-vote analogy. If rock and roll has any lessons to offer they are along the lines of a cautionary tale. The synchronicity of rock and roll is often followed by disillusionment. Where exactly is this pied piper leading us? Will he ascend to power as we decline in health?

The Deniers have little to cheer about either. To take Hillary Clinton at her word is to forget the lessons of the first Clinton presidency. For the average American the Clinton years were a series of betrayals, disappointments and lost opportunities. Labor was shown the back of the campaign bus as the Democratic Party retooled itself to take in big business dollars. The real agenda for the party Democratic Party was now to compete for the same corporate dollars as the Republican Party. It meant the Democrats now had two sets of constituents: corporations and the public. The party had become a blatant scam pandering to the public while delivering results to the corporations. The Clinton presidency gave us NAFTA and welfare reform under the cover of economic good times that ended in a fallacious stock market bubble. We spent the decade in denial about the economic betrayals and tried to avert our eyes with regard to the personal betrayals on display.

At the time and for the sake of stability in government, the Monica Lewinsky scandal should have been swept under the table and forgotten about as quickly as possible. The fact that it was pursued to the extent of impeaching the president was an outrage that the Republicans will not be able to live down for quite some time. In retrospect however, the scandal serves as a reminder as to the character of president Clinton. He displayed contempt for the truth, contempt for his marriage and a reckless disregard for the consequences of his behavior on his presidency.

It is a reminder that to be the spouse of a narcissist is often to be a willing victim and in perpetual denial. Or as in the case of Hillary, it is to make a deal with the devil because you hope to get something material out of it in return. Or even worse, to be trapped but unable figure out how to escape.

As a nation we may be collectively confronting such a situation with the Clinton's again. Will we choose to be the battered and betrayed spouse once more?

It is enough to drive one to distraction and dreams.

What's Next for Don Imus?

2007-04-17T11:50:00.000-04:00

Now that swift corporate justice has been meted out, we can ask ourselves whether the culture stands to gain more than it has lost from Don Imus's recent debacle and firing from the airwaves by CBS and MSNBC.

Media watchers say that Don Imus reached 3 million listeners a week. That was 3 million people per week tuning into political coverage and non-fiction literary coverage that might not otherwise get such exposure. In addition to that his political commentary was non-partisan. He was a Republican, but you might not easily pick that up from the hard time he gave Republican politicians in his broadcasts.

So, what next for the I-Man?

There's still a gaping hole on other morning syndication slots left behind by Howard Stern. Perhaps the I-Man is capable of re-inventing himself once again. He beat alcohol and cocaine addiction. Perhaps he can do some soul searching and do a convincing job of addressing his inner deamons of racism as well.

Don Imus is certainly smart enough to do this kind of soul searching. And for that matter he could work the topic into radio show if he finds another venue.

Can you imagine a Cornell West as a guest on talk radio with Don Imus in the morning? It might be a bumpy ride, but the nation as a whole would benefit from the mutual effort.

Was Don Imus Treated Unfairly?

2007-04-14T10:58:00.000-04:00

Before I venture out onto the limb of whether it was right to fire Don Imus, let me say unequivocally that I did not approve of his racially and sexually biased insults against the Rutgers female basketball team.

Then again I am a bit of a prude. I don't like shock jocks, gangsta rap or for that matter Victoria's Secret commercials.

Now that the event has apparently run its course and Don Imus is gone from the airwaves and cable TV, I can't help but have a queasy feeling over how it went down. Does anyone of us want the content of free speech on the airwaves dictated so swiftly by operatives like Al Sharpton (or perhaps a Karl Rove next time) and corporations like Proctor and Gamble?

If this was a consumer driven media coup, this one particular consumer is feeling a little buyer's remorse.

Nappy-Headed Hos

2007-04-10T10:44:00.000-04:00

We can add Don Imus to the growing list of public personalities who have embarrassed themselves with racist remarks that they should have known were in poor taste and would get them into trouble. In many of these cases we expected more from these people and were reluctant to pass judgement on them.

Before Don Imus's faux pas there was Michael Richards's "meltdown" at a comedy club which made its way onto YouTube. Both of these incidents were similar in some ways. Don Imus is one of the pioneers of the shock jock genre. Without Imus there would probably be no Howard Stern. Michael Richards has a stand up comedy style that includes messing with the audience and picking on dorks. I'm not a fan of either style of humor but it is a barometer of race relations in America that these comic personalities both felt that race had become fair game for their witty insults.

They stand corrected on this point and as a nation I think we also need to give ourselves a "talking to" about this because these incidents did not happen in a vacuum.

On the one hand black culture is being marketed to youth culture as defacto cool. Too many people are getting comfortable with the "N" word and forgetting its historical significance. On the other hand affluent white liberals are getting comfortable with the notion that after two generations of affirmative action and the creation of an affluent class within the black community that the work of the civil rights movement of the 50s and 60s is complete.

Some people tell themselves that since they are clearly not racist there is no harm in making the occasional racist joke. What better way to show familiarity than to poke fun at someone? What's up with all these affluent white suburban kids donning the clothes and affectations of inner city black kids? Is it celebrating what's cool or is it mockery? The white kids can leave their imaginary ghettos behind on any birthday they choose. The kids in the real ghettos can't.

Arnold Schwarzenegger managed to apologize his way out of some inappropriate racial humor directed at a female hispanic assembly woman. The fact that he is a movie star and the word "hot" was somewhere in the description of her probably didn't hurt. It also probably helped that Al Sharpton lives in New York and not California. Everyone was willing to believe, and rightly so, that it was good natured humor directed at a political adversary in the context of consensus building.

In addition to Don Imus's use of the word "nappy", it also made a rather disturbing cameo in the documentary "Supersize Me". The film-maker pointed out the presence of a "nappy hair" on his food and was clearly disgusted. Nobody wants to see human hair on or in their food, but the adjective was completely unnecessary only serving to amplify the disgust with fantasies of the class and cleanliness of the people preparing and serving food in the fast food industry.

Which brings us to the main point about these casual racial insults. We have not yet built a just society in which race is not associated with class and we probably never will finish building that society. Don Imus said in his defense that he is not a bad person but rather a good person who did a bad thing. I'm not qualified to judge that statement.

What is more common these days is that good people look the other way with regard to a bad thing. Racial disparity continues in America and it requires that good people not turn a blind eye to such a bad thing.

If you find yourself tempted to believe that the hard work of racial reconciliation is behind us in this country you just may be turning such a blind eye. And that is the sort of complacency that led to the sort of poor judgement that Don Imus and Michael Richards recently demonstrated.

What's Up With This Keth Olberman Guy?

2007-04-06T15:22:00.000-04:00

I recently decided to stop recording Keither Olberman's show on my TIVO.

The main reason is that I find it so puzzling that he spends so much time talking about American Idol each night. It's the kind of product placement that you would expect FOX News to be pulling off but instead it is happening on MSNBC.

In addition to trashing American Idol on a nightly basis you can also count on him to mention Rush Limbaugh and Bill O'Reilly at least once each night. All of these mentions are supposedly negative, but the truth behind this is that the frequent mentionings of FOX properties like American Idol and Bill O'Reilly only serves to create more interest in the programs.

The symbiosis goes beyond Countdown and you can count on Scarborough County to waste valuable time discussing American Idol as well.

Is MSNBC positioning itself to be bought up by FOX???

It's a little too wierd for me. I'm going back to watching Hardball.

The Menu-Foods Pet Food Recall

2007-03-25T16:10:00.000-04:00

After the cause of toxicity in 60 million recalled cans of pet food manufactured by Menu-Foods has been traced to (or blamed on) wheat gluten imported from China that was laced with an illegal rat poison, I am concerned that it has not triggered some questions about the safety of the human food supply that uses similar ingredients.

Wheat gluten is a very common baking ingredient used in making bread. Although it normally occurs in all wheat flour adding it to dough as a separate ingredient makes for a more reliable rising of the dough in automated baking processes.

So just how long has China been selling us tainted wheat gluten and how long have we humans been eating it as well?

I hope the answer to both of these questions is "never" and "never", but does anyone out there reading this believe that?

What's A Deficit To You Anyway?

2007-03-06T15:31:00.000-05:00

Most of you have probably figured out from listening to the news that there are two kinds of deficits discussed in the news and not just a "big D" deficit that covers the whole topic.

One would be the trade deficit and the other would be the budget deficit.

At the risk of inviting a legion of flamers with doctoral degrees in economics, I would like to point out that the the two kinds of deficits are in fact close siblings and share a nexus with class warfare.

Both deficits represent sectors of the American public living beyond their means.

The trade deficit represents the American economy consuming more than it produces. It is measured in dollars and quite literally is the result of importing more than we export. One could say that we import goods and export dollars.

If this went on forever one could imagine a day when we would run out of dollars and had to simply print more of them, which we are probably doing to some extent already. But this is where the other form of deficit, the budget deficit comes into play.

Rather that sitting idly by and allowing the American dollar to find its way back home like a hungry messenger bird, the Federal Government inserts itself into the loop by running a budget deficit. This budget deficit enables nations like China with too many of our deficit dollars laying around in their cash boxes to buy US treasuries (aka I.O.U.s) thereby allowing the federal government to reinsert these dollars back at home through deficit spending.

Sounds pretty good doesn't it? The solution for the American consumer and worker living beyond his and her means is for the government to live beyond its means as well.

You don't have to think too deeply to realize that these are the sort of structural imbalances that lead to jobs being exported to where the goods we buy are actually made. So much for the working class.

Not all of those trade deficit dollars that come back here get invested in treasuries. Some get invested on wall street as well. There is still a lot of money to be made in this country, it's just that most of it seems to be made by people who move money around rather than actually producing anything.

The end result is two classes of people. A working class which is losing its manufacturing jobs to places like China and Mexico and left with places to work like Wal-Mart and McDonald's and a financial warrior class which takes as its profit a virtual tax from the structural imbalances that have been introduced into the economy with the not so hidden intent of dismantling the middle class.

If you want to figure out who benefits the most from these structural imbalances (deficits) the most just ask yourself who isn't paying their fair share of our nation's taxes.

Another Gulf of Tonkin Moment?

2007-02-01T15:22:00.000-05:00

Anyone who is a news junkie has probably noticed how the use of the Viet Nam analogy for the current war in Iraq has steadily grown over time. At first the pundits from both the left and the right were quick to point out the analogy's limitations. Now they are more likely to point out the analogy's inevitabilities.

Is the recent attack in the city of Karbala going to help escalate and widen the war much like the Gulf of Tonkin incident did for the Viet Nam war?

The attack was stunning in it's execution, with men in fake US uniforms and badges traveling in a fake convoy. Normally we blame Al Quaeda for well coordinated attacks, now we are blaming Iran. Will this incident become our excuse for making a direct bombing attack or worse on Iran?

The paranoid part of myself which I give voice to in these blog entries suspects that the radically right wing exit strategy, which will never be voiced in public in the united states, is beginning to unfold. We cannot leave Iraq with Iran poised to ascend to a position of dominance in the Middle East. What can we do to prevent this from happening?

Hopefully, it will not be to widen the war and engage Iran militarily, hoping to leave them with their hands full of nation rebuilding (their own nation to rebuild that is), rather than to engage them diplomatically.

Defining Defeat - It's Still About The Oil

2007-01-12T11:57:00.000-05:00

I am struck by how when I listen to the pundits discuss the war in Iraq that to a man nearly everyone of them is too polite to mention that the fact that the reason we embarked on this war was the oil reserves in Iraq.

If you repress this fact, you can't even realistically analyze what is happening in Iraq right now. As the conditions worsen the common wisdom is that a civil war has erupted between the Shiites and the Sunnis and the Americans find themselves caught in the middle. It would be more precise to view the conflict in Iraq as a fight over the oil reserves in the ground and the United States is one of the factions fighting over the oil along with the Shiites and the Sunnis.

How can I justify such an accusation?

Iraqi oil was nationalized in 1972. This meant that Iraq was entitled to all of the profits for each barrel of oil that came out of the ground. Outside corporate interests were virtually limited to the role of being contractors building providing oil services. Even under the oil for food program it was still Iraqi oil. The war has changed all of this, at least in theory.

The new model for dealing with Iraqi oil and foreign interests uses what are called profit sharing agreements, or PSAs. The agreements being hammered out last for as long as 30 or 40 years and share profits with outside corporate interests well beyond international norms. At least they would, if Iraq ever becomes safe enough for these corporate interests to venture into Iraq. It's a round about way of defacto oil privatization that is probably doomed to fail with the rest of the war effort.

But that brings me to the last point. When you lose a war, you don't get to define the terms of defeat. These PSAs will go the way of the Maliki government after the last helicopter leaves the green zone. A more properly defined civil war will ensue at that point without the presence of an occupying force. The oil will most likely be nationalized once again with the French, Germans and Russians providing the oil services to the emerging Iraqi Theocracy and the united states licking its wounds.

But Seriously Folks

2007-01-03T16:17:00.000-05:00

I have a hard time thinking up a better candidate for execution than Saddam Hussein. Not only was he a brutal monster of a dictator, but his continuing existence perpetuated the risk that he might one day return to power and restore his brutal regime.

Having said that, the release of the bootleg video of his execution onto the Internet has only served to remind me that I am against the death penalty. I always have been against it, even as a child. It must have been that catholic school education that gave me so much time to think about how the Romans wrongly accused and executed the Son of God.

Even if you held out some hope that the trial Saddam was subjected to was a fair one by international standards(many international groups say it wasn't), the video of the hanging came off like a lynching by a mob.

When justice becomes revenge, that revenge contaminates us all. We are all members of a weakened and tainted society because of it. A society that wields brutality ultimately teaches brutality as the final arbiter of all things. It should come as no surprise then when brutality is to be found everywhere.

Saddam's Last Laugh

2006-12-30T21:08:00.000-05:00

Gerald Ford, James Brown and Saddam Hussein arrive together
at the gates to heaven and are greeted by St. Peter.

St. Peter informs them that each of them must answer as to why they think they are worthy of admission into heaven before they are allowed to pass into the Kingdom of God.

Gerald Ford says that he thinks he should be allowed to pass through the gates into heaven because he gave the country leadership and facilitated healing after the Viet Nam War and the Watergate scandal.

St. Peter says "Ok, that's good enough. You may pass."

James Brown says that he thinks he should be allowed to pass because he was a leader during the civil rights movement and helped calm the nation after the assassination of Martin Luther King Jr. by performing a live concert on network television encouraging people to stay home and off the streets.

St. Peter says "Ok. That's good enough. You too may pass into heaven also."

Saddam Hussein says that "After I learned I was to be sentenced to death, I repented for my sins and clutched the Koran as I was walked to the hangman's scaffold."

St. Peter thinks for a minute and says: "Ok. Since you have repented for your sins, your sins are forgiven and you too may pass through the gates into heaven."

Just then the phone rings and after picking it up and talking on it for a minute St. Peter says to Saddam that it was God and that he wants him to go "straight to hell".

Saddam says "Wait! I thought you said my sins were forgiven!"

St. Peter says "Your sins have been forgiven. We just got word that George Bush is about to die and we are going to need your help in the torture chamber!"

Farewell to Alan Hevesi

2006-12-22T08:51:00.000-05:00

Alan Hevesi, if you don't know, was the recently re-elected comptroller for the State of New York. He is expected to resign today in a plea bargain deal to a single Class E felony to avoid more serious charges if he tries to hang on to his job.

The scandal which is ending his career? He accepted the services of a state employee to chauffeur his invalid wife around during a time frame that he and his wife had received death threats. Nobody disputes the death threats.

Personally, I think that it is quite a shame to be losing such a competent and otherwise ethical comptroller over something as common as accepting favors of this sort.

Alan Hevesi was a can do type of guy, who in a climate of impulses to privatize and abandon state pensions all around the country, helped to shore up the New York State pension fund system. He was smart enough to deal with the sharks on Wall Street and he also showed a bright light on the Metropolitan Transportation Authority's habit of maintaining two sets of financial books.

Nobody ever speculated that Alan Hevesi abused his power to enrich himself through bogus real estate deals or insider stock trades. His was the sort of mistake that he probably rationalized away as being no big deal.

I don't think that I am alone in having the ironically queasy feeling that Alan's departure under a cloud of ethical violations will leave the state comptroller's office more vulnerable to future ethical violations rather than less vulnerable.

We will miss Alan Hevesi's distinguished record of public service and he will be hard to replace.

Connecting the Dots - Homeland Security Style

2006-12-20T08:11:00.000-05:00

Big news headlines were just made by the recent I.C.E. raids of six meat packing plants owned by Swift & Co. in six different states. The net result of the raid was that 1,282 workers were detained and 65 were charged with identity theft, being the use of illegal social security numbers.

Certainly, identity theft is a serious crime and it is something that the government should be addressing. In fact, a good place to start with might be all those veteran administration Social Security numbers they allowed to fall into nefarious hands due to lax laptop security policy enforcement.

The sudden interest in identity theft by I.C.E. and a sequence of events going back to January of this year in a different meat packing plant might lead one to wonder if this is truly a story about illegal immigrants and identity theft or really a story about undocumented workers and union busting.

I.C.E. originally became interested in the illegal immigrant problem in the meat packing industry in January of this year in a plant owned by Smithfield in North Carolina. The Smithfield plant is the largest meat packing plant in the United States and up until now has successfully avoided unionization of its workforce. That success has apparently involved tampering with union elections and worker intimidation. I.C.E. raided Smithfield's plant in February of this year This raid was contemporaneous with with a wave of renewed union solidarity and community support making it seem that unionization was now inevitable. This January raid brought in about 13 illegal workers. As one can imagine the intensified immigration scrutiny has had a chilling affect on the unionization by The United Food and Commercial Workers Union.

But as if that isn't enough of a problem for the union it now has its hands full with cascading problems at plants it already represents. In particular, five of the six plants owned by Swift & Co., that were raided on December 12, were already represented by the same union. It would seem that some of their resources will have to be diverted from unionizing new workers to defending workers they already represent.

As I ponder these connecting dots between immigration and unionization, I am inclined to remember that when Homeland Security was cobbled together from just about every branch of government one could name. Three agencies were curiously left out. Those agencies left out were the FBI, CIA and NSA, agencies with a history of poor communication that failed to connect the 9/11 dots in time. However, one priority in creating Homeland Security in the name of efficiency, was the ability to deunionize the workforce.

Call me an unreasonable cynic, but it would seem that the biggest threat to our national security that Homeland Security is capable of addressing is organized labor.

Discovering Our Inner Neros

2006-12-19T08:41:00.000-05:00

It's official. Time magazine has announced its person of the year and it's me. Or more precisely: it's meeeee! Me me me.

My first reaction was that the new leadership, job cuts and reorganization over at Time has already taken its toll and the boys and gals over there were too busy updating their resumes to really pay attention to the world around them and pick a decent winner. But a little more reflection made me realize that they were really too busy updating and maintaining their blogs and trying to upload embarrassing videos of their bosses onto YouTube to find time to pay attention to the outside world.

Or maybe they aren't as ridiculous as they seem in their choice.

I have been suspicious for a while that the real disease that is eating away at our from the inside isn't actually ubiquitous greed but that it is ubiquitous narcissism. In some ways one surely goes with the other. How else could the better half in a society of such rapidly growing disparities tolerate these disparities unless there was an innate sense of greater entitlement endowed upon the luckier few?

Still I was a little queasy that with Iraq in chaos and Baghdad in flames that Time decided to pay homage to the millions of unsung fiddlers that coalesce into a symphony of self absorption and distraction allowing our incompetent leaders to continue to destroy the human race. Still I have to admit to scouring the current edition of Time to see if they bothered to mention my blog anywhere.

They didn't.

Well, tit for tat, I am not going to mention them as I assemble a list of candidates that should have won Time's Person of the Year instead of "You".

1. Our men and women in the military. It goes without saying that they deserve our attention more than ourselves right now.

2. The Iraq Study Group. If we must give it to a group of people how about them? They found a way to move the discussion about Iraq forward.

3. Nancy Pelosi. She is the most obvious face to attach to the Democratic victory wave in congress.

4. Lou Dobbs. I can't stand the man, but he has had an impact on the debate about immigration and at least entitled his book "War On The Middle Class".

5. Barack Obama. He has given us the audacity to hope that Hilary won't be the Democrat's candidate for president in 2008.

Feel free to let me know who you think should have won.

Some Lessons From An Illegal Strike

2006-12-18T15:13:00.000-05:00

An arbitration panel in New York City recently issued its ruling with regard to the union contract in dispute at the center of an illegal strike by Transit Workers Union Local 100 against the New York City Mass Transportation Authority. The contract awarded by the arbitrator was nearly identical to the one offered by the MTA which ended the strike just in time to restore transportation to the city for the Christmas Holidays.

It should be noted that the final agreement reached after the strike amounting to 10.5% of raises over three years was a substantial improvement over the final offer from the MTA before the illegal strike, but the sore point which caused the membership to vote down the contract after the strike ended was that the workers have to immediately fold back 1.5% of their wages right back into their medical benefits. It doesn't take a clairvoyant to see that the 1.5% medical contribution will continue to grow like a tumor with each successive contract settlement in the future. The arbitration panel retained the 1.5% medical benefit contribution to be made by the workers.

Another lamentable outcome of the strike is the heavy fines the union will have to pay, which could be on the order of magnitude of a thousand dollars per member, or more. Thankfully the members were not fined individually and on balance the math still works out in their favor.

Transit workers in New York City are subject to a law called the Taylor Law which prevents them from being able to strike and leads them into binding arbitration if they are at an impasse. Since there is almost no motivation for the MTA to ever settle a contract with its workers under this law, the contracts take years to be resolved. During years of fiscal crisis the workers are expected to take one on the chin for the team conceding give-backs for the health of the city and during good times the workers are offered raises that don't even keep up with inflation let alone the spiraling costs of living in New York City.

Remarkably, even after enduring the hardship of a three day strike last year most New Yorkers were in favor of seeing the transit workers receive decent raises. An obvious lesson for labor here would be that it should never underestimate the importance of having favorable public relations. The average person does indeed have an innate sense of fairness and justice.

That the strike was ultimately successful but not without cost should be a wake up call to unions around the nation. National union memberships have been in decline for decades and labor laws which once championed workers rights and the labor movement have been stood on their head to restrict the abilities of unions to represent their members.

Two things need to happen to reverse this trend of decline in organized labor. Existing unions need to do more to help non-unionized workers become union members. They need to provide volunteers and workshops for workers employed by companies like Wal-mart and Starbucks. The other thing that needs to happen is that the existing unions and their memberships need to work quickly with the new Democratic majorities in Congress to change some of the labor laws which are making it hard for individuals who want union representation to become union members.

A third lesson would be that laws like the Taylor Law which restrict the ability of a union to strike while imposing no automatic cost of living increases of any sort are inherently unfair and doomed to wind up in an illegal strike sooner or later.

Fragile Democracy

2006-12-15T09:06:00.000-05:00

There can be no other immediate response for Senator Tim Johnson than to pray for his health and full recovery. Secondary reactions will immediately turn to the ramifications on the balance of power in Washington if his impaired health ultimately leads to a vacancy in the senate.

It has been a rough six years for Democracy in America, or what is left of it. Everything that could happen by design or accident to shift power away from a truly representative government to a truly unrepresentative government, has happened:

The electoral college in conjunction with a partisan Supreme Court delivered the Presidency in 2000 to the candidate who did not win the popular vote.

Gerrymandering reached a high art nearly guaranteeing incumbent re-election for most congressional seats.

We learned that counting votes in America is an inexact horse and buggy procedure at best and a fraudulent state of the art technology scam at worst.

The president and a dishonest cabal of war profiteers dragged us into a war nobody needed or wanted.

We saw our Democracy drift into a single party control of all branches of Government and the rapid emergence of neo-fascist warning signs on all fronts.

What can be done about it? Clearly sweeping reform is needed to address the electoral college, voting redistricting, voting rights, voting procedures, vote counting and as is now suddenly apparent: a representative way for replacing elected officials who suddenly vacate their offices.

Now I am not about to suggest for a minute that there was any foul play involved in Senator Tim Johnson's illness, but it does go to show that the balance of power in Washington can rest upon a single person and the fact that he could be replaced by unrepresentative means is a terrifying prospect.

At least we do not yet influence our political outcomes with Polonium 210. There is still hope.

Deniers in Denial

2006-12-14T10:22:00.000-05:00

To a congenital conspiracy theorist as myself it is hard for me to accept coincidences on the stage of international power easily. At that level of power brokerage I think that secrecy is the norm and that the dirty deeds, even when clearly exposed with proof beyond reproach, are easily dismissed by collective acts of cognitive dissonance.

This is why I find it rather amusing that during the same week Iran was hosting an international conference on the Jewish Holocaust with such scholarly figures as David Duke in attendance, Israeli Prime Minister Ehud Olmert managed to let slip that Israel has nuclear weapons. Who's kidding who? Israel doesn't just have a couple of nukes, they are a nuclear power on the scale of Britain. If it comes down to a comparison of nuclear threats and capabilities, Iran will be wiped off the face of the earth by nuclear weapons before Israel is. Although I would like to see a world without nuclear weapons and personally would like to see the United States lead the way in global nuclear disarmament, I think Iran deserved the blunt reminder that it is at the moment a nuclear wannabe.

The obvious motive for the conference would be that admitting there was a Jewish holocaust in Europe would present moral, ethical and perhaps even emotional obstacles for the will to obliterate the state of Israel. However slight these obstacles might be today with all the bloodied water that has passed under the bridge, so to speak, none can be allowed.

Apart from this obviously obnoxious and sinister motive in hosting this international conference for holocaust deniers, there is a deeper more puzzling message behind this conference to be pondered. That would be the message that the world can come and talk to Iran. The conference included Americans, Europeans and even Jews. The Jews did not deny the holocaust as did everyone else in attendance, they merely disagreed with the validity of the Jewish state of Israel and that was all that they were allowed to speak upon.

So, be heartened America. You can go talk to the leadership in Iran. But be prepared, for when you talk to the Iranians you are really talking to the Persians, those strange Machiavellian folks who have been playing the game of puppet master and puppet for three thousand years. Leave your facts at the door. For when you enter Iran you are not entitled to your own facts, you are entitled to Iranian facts. But don't worry too much about that, because facts are not what one seeks to debate with their adversary anyway.

An Apocalyptic Moment for Affirmative Action?

2006-12-08T12:18:00.000-05:00

Advocates of affirmative action are surely disheartened after the recent hearing by the U.S. Supreme Court of two cases concerning urban school district student assignment plans intended to maintain racial integration. Although the cases do not literally challenge "Brown vs. The Board of Education" most of the subsequent cases involving specific remedies such as school busing certainly are under assault. The logic of the assault allowing only color-blind methods to redress racial inequity will certainly be applied to all avenues of affirmative action in the workplace as well as in education.

The cases are the latest example of using the wording of the 14th amendment against the spirit of the 14th amendment. It does seem that in the not so long run affirmative action will be reduced to an anachronism. It will soon be as hard to challenge racial inequity as it is to determine whether the light bulb is indeed dark when you close the refrigerator door.

Rather than lament the obvious, I would like to suggest that the right wing's long sought repudiation of affirmative action may well prove to be a Pyrrhic victory at best.

Take the example at hand: public school integration. Decades of school busing haven't resulted in better integrated schools. Public schools are less integrated today than they were in the 70s. Anecdotal evidence would seem to suggest that "white flight" to the suburbs was accelerated in part due to parents seeking to get their children into school districts where there children would have zero chance of attending an inner city public school.

But there is still hope for better schools in the inner cities. New York City recently sued New York State for its fair share of eduction money claiming that far less money was spent per NYC student that in the rest of the state and it won hundreds of millions of dollars. Other underfunded school systems around the country will no doubt follow suit.

Quite frankly it is a mystery to me that the right wing in this country would seek to unravel affirmative action. Nothing has done more to divide the left and distact the Democrats more than affirmative action. Affirmative action can be thanked for giving us the phenomenon of Reagan Democrats in diametric opposition to the Rainbow Coalition. While the Democratic Party was signing onto NAFTA and selling out organized labor at least they could still be counted on to occasionally and ineffectually pat a broad coalition of minority groups on the head, assuring them that the Democrats had their backs. In a sense it allowed the Democrats a chance to do the exact same bait and switch the Republicans are so often accused of doing: courting voters with social issues while delivering the economic issues to the corporate elites.

It's my hope that the unintended consequence of the unraveling of affirmative action, which is basically a method for redistributing wealth along racial lines, will be a resumption of vigor towards the redistribution of wealth along class lines.

IRAQ: how will it end?

2006-12-05T14:56:00.000-05:00

The United States will probably have a game plan for Iraq that can be summed up with two words: Containment and Interference.

Containing the violence and chaos from spilling into the rest of the region is job number 1.

Our troops will literally be redeployed from Iraq to it's border regions and where possible to actually shore up the borders from within neighboring states that will tolerate a US presence. Depending on how bad things get Kuwait, Saudi Arabia and even Jordan may eventually welcome our presence.

Once we get out of Iraq and remove our army from the middle of the civil war that is taking place there, we can get back to doing what we do best: secretly interfere in the affairs of other nations.

Keeping Iraq from falling into Iran's hands is job number 2.

Sure, we might to take a stab at getting Baghdad under control before we pull out. It might make a good location for a remaining US base within Iraq so we can maintain the appearance of having diplomatic relations with a sovereign regime there. Even if we do stabilize Baghdad the inevitable march towards a partitioned Iraq will likely continue. The pace of ethnic cleansing will likely accelerate.

A partitioned Iraq will also give the United States some smoke and mirrors to help conceal the fact that we will be playing both sides of the conflict, giving money, intelligence and military aid to Shia and Sunni militias alike. Iraq will become a job for the CIA as we wait out the next couple of decades hoping for a pro-west strongman to emerge from the conflict.

If we can't make friends in the world at least we already know what to do with the enemies we do make. We trick them into fighting amongst themselves.

What a mess.