Pick Your Color -- Gray or Black?

From gray to blackest black, all the news stories this weekend really offered very few bright threads, but we have to take them where we find them. It is increasingly obvious that the whole country – news media included have one hope and that is that this election is over soon and that the candidate who offers the most hope for the future wins by an unquestionable margin.

One of the brightest threads of the weekend was Colin Powell’s endorsement of Obama on “Meet The Press”. One of the darker tales was the story of A.I.G., the insurance giant bailed out by taxpayers for $123 billion. Just when we thought they had finally been shamed into stopping their post-bailout spa treatments, luxury sports suites, Vegas and California post resort retreats, it was discovered much to our amazement, that some A.I.G. execs were cavorting at a lavish shooting party at a British country manor. Check out Maureen Dowd’s Op-Ed piece to read about the undercover reporter who followed the “feckless financiers on their $86,000 partridge hunt as they tromped through the countryside in tweed knickers, and then later as they slurped fine wine and feasted on pigeon breast and halibut.” Dowd says that these days she’s feeling pretty much like what Charles Dickens described as the “vengeful and bloodthirsty Madame Defarge sharpening her knitting needles at the guillotine”. I can relate to that.

Then, how about Icesave.co.uk where British citizens, municipalities and universities – including Cambridge had their savings parked? When Tom Friedman checked out the Icesave Web site he discovered the headline: “Simple, transparent and consistently high-rate online savings accounts from Icesave”, but underneath in blue letters was the following note appended: “We are not currently processing any deposit or any withdrawal requests through our Icesave Internet accounts. We apologize for any inconvenience this may cause our customers.” That’s more than an inconvenience – we’re talking total panic. See Tom Friedman’s column for more details.

But then there is an upside to all of this, a bright thread – can you believe that? A recession could actually save your life! According to Christopher Ruhm, an economist at the University of North Carolina, Greensboro, the death rates go down during economic slowdowns. Now, granted, the suicides rise but total mortality rates drop, as do deaths from heart attacks, car accidents, pneumonia and most other causes.

Some experts are skeptical. But in downturns we drive less and so car accidents decline, while less business activity means fewer job accidents and less pollution. In addition to the fact that in recessions people have more leisure time and seem to smoke less, exercise more and eat more healthily. For more good news regarding recessions see Nicholas Kristoff’s Sunday column.

However, as far as I’m concerned I have had more than enough of politics, politicians, debates, recession, and fear-mongering. There has still, it seems to me, been more bad news than good for much of the time. Let’s hope the next fifteen days hurry by and that MAYBE we can finally see the light at the end of what has seemed to be an endless eight year tunnel.

More Jobs, Now!

Okay, so much for lovely memories, it's back to ugly reality and reality seems to be the one thing this country has been avoiding, but we can’t continue to pull the shades over our eyes for much longer. Banks and brokerage houses are failing all around us. Trillions of dollars in bailout money has been added to the nation’s debt burden, families too numerous to count are being driven from their homes. Maybe it’s time to get back to the basics – like good jobs, the primary component of a sustainable family life. But our economy is never going to be anywhere near what it needs to be until this country figures out how to provide work at a decent pay for at least most of the men and women who want to work.

The amount of debt for the typical middle-income family, earning about $45,000, grew by a third from 2001-2004, according to the Center for American Progress. The reason for all this added debt was the rising cost of housing, higher education, health care and transportation. At the same time, wages grew just slightly, if at all. It’s going to take more than work, obviously and don’t even ask about the debt burden of the federal government.

The fact is that there haven’t been enough good paying jobs to sustain what most working Americans view as an adequate standard of living and that is the fundamental flaw in the U.S. economic system. This latest financial meltdown has created widespread outrage over the excessive compensation of top executives, so where have we been??? The rich have been running the table for the better part of the last 30 to 40 years! The earnings of the average men in their 30s have remained almost flat for the past four decades, according to the Pew Charitable Trusts.

Accordingly, disaster was avoided by the wives and mothers entering the workplace and by embracing huge amounts of debt for everything from home mortgages, cars, clothing and vacations to food, college tuition and medical expenses. And guess what? The middle-class and working families are up against the wall and the only way to continue financing a reasonable quality of life is through a paycheck. But nearly 160,000 jobs were lost in September alone. More than three-quarters of a million have vanished over the past nine months.

According to people who know a lot more than I do, the economy won’t be saved by bailing out Wall Street and waiting for that day that never comes, when the benefits trickle down to ordinary Americans. It won’t be saved until we get serious about putting vast numbers of Americans back to work in jobs that are reasonably secure and pay a sustaining wage.

We have a lot of rebuilding to do; we need to put more of us to work rebuilding our country’s collapsing infrastructure, revitalize the public school system, working to create more energy self-sufficiency and try, for a change, to do a re-take on an economy that still leans strongly in favor of the rich.

Now, let’s hear the politicians talk about that for a while and stop the name calling and slander, the “it’s all about” me and “he’s the bad guy” crap and start working together to redeem this country before it’s too late – for us – you know, the guys at the bottom of the pole!

A Look at a Different Future for America

I think our country is in for some major changes in the near future, if it isn’t already happening. It has a lot to do with the shrinking of the world in general and of our growing dependence on other countries – a possibility we use to brush off as something that would never happen. But it has, thanks in part to the financial mess we find ourselves in today.

Thomas Friedman had a good piece in the NYT Op-Ed today and he spells it out so much better than I ever could, so here’s the major part of his column.

“Even though the dollar has strengthened a bit lately, we are going to need foreigners and sovereign wealth funds from China, Asia, Europe and the Middle East more than ever to survive this crisis — and they are going to need us to be healthy as well. In the process, we are going to become even more intertwined and dependent on the rest of the world.

Sarah Palin won’t have to worry that she doesn’t know what the Bush doctrine is. No one really knew what it meant. But it had something to do with the unilateral exercise of American power, and the next president’s ability to act unilaterally on anything other than vital national security issues is going to be reduced. As the old saying goes: He who has the gold makes the rules. Well, we no longer have as much gold, and until we get some, we will have to pay more heed to the rules of those who lend us theirs.

At a time when the U.S. government gets half its borrowings from abroad, at a time when the U.S. household savings rate is hovering around zero and China alone is already holding around $1 trillion in U.S. Treasury notes and Fannie Mae and Freddie Mac bonds — yes, that’s how you got that cheap subprime mortgage — it can’t be any other way.

Somebody better tell John McCain: We are all Swedes now. Forget about “Live Free or Die.” Until we get our financial act together, our motto is going to be: “Swedish spoken here — or Arabic or Chinese or German ...”

I would also bet that more and more of the foreign investors who come our way are going to want to buy hard, tangible assets — skyscrapers, real estate and real companies — not just mutual funds, T-bills, bank stocks or other equities. No problem. Americans own assets all over the world; foreigners have long owned substantial positions in U.S. companies. That’s globalization — and now you are going to see globalization and financial integration on steroids. It should help us, but also change us.

“The next round of capital that comes in from abroad is going to be much more demanding and move into real assets,” argued Jeffrey Garten, professor of trade and finance at the Yale School of Management. “Being a bigger debtor nation means losing even more of our sovereignty. It means conducting our economic policies with an eye toward whether others approve. It means bearing the advice and criticism that we have dispensed ad nauseam to other countries for over half a century. It means far more intensive consultations with other capitals on our fiscal policies and our monetary policies.”

At the same time, added Garten, “Corporate decisions will become more sensitive to international factors, in part because more non-Americans will be on the governing boards.” Ultimately, this could make American industry even more globally competitive — but for those who can’t pass global muster or enlist global collaborators, the consequences could be harsh.
Of course, neither Barack Obama nor John McCain dare talk about this now. They want to pretend nothing has really changed. The minute one of them steps into the Oval Office, they will tell us otherwise. That will be the January surprise.

There was a lot of talk after Russia invaded Georgia that globalization was over and we were seeing the return of “history” and the primacy of politics over economics. I think not. Politics and economics are always inextricably intertwined. History-making is rarely free. The Russian stock market has been hammered as a result of its invasion of Georgia, and the global slowdown has sunk Russian oil and gas earnings. No country is an island today.

Making history is not simply about the will to do so. It’s also about the way — the resources you have to achieve your ends. Whatever wills the next American president comes to office with, he is going to find that his ways have been diminished and restricted — until we roll up our sleeves and work our way out of this mess.”

Are we ready for a new day? A new role? Let’s hope we elect a president that can deal with the future in a much better way than Bush and the Republicans have dealt with the past eight years.

When is Enough, Enough?

I realize that I’m always asking questions in my posts and maybe it’s because I never seem to be able to find the answers I’m looking for – maybe no one else knows the answers either. But when do we start looking at the bigger picture? When do we finally get the picture that McCain cares more about trying to win this election than he does about the good of our country. And when do people in this country recognize that his idiotic behavior has nothing to do with the actual problems, but only what he sees as a way to show himself in whatever light will make him look good and help him win the presidency. It’s all about McCain not about the future of this country. Frank Rich’s Op-Ed piece in the NYT discusses this and it’s well worth the read
http://www.nytimes.com/2008/09/28/opinion/28rich.html?th&emc=th

But that’s only one of the major problems we have to deal with. The other things that scare me are the things I see and hear about that are happening in different places around the country where people are lambasting Muslims and they are cheap, not so subtle tricks to try and undermine Obama. In Portland, Oregon a DVD doing just that was included in the delivered copies of the newspaper paper, The Oregonian. In a town in New Mexico at a local golf course, the secretary of the organization used the membership mailing list to send out a message about "Why Muslims Can't Be Americans." What are people thinking? Or is that the problem? Fear and ignorance is beginning to overwhelm this country right now and when that happens we can say goodbye to all the hopes and dreams of so many. It is terrifying to think just where our country is going to wind up if these sorts of things continue. For more on this see http://texastooregon.blogspot.com/ and http://zeesgowest.blogspot.com/

Surely, we are better citizens than this! The world has become too small for us to just consider ourselves as citizens of the United States, whether we like the idea or not we are citizens of the world and that’s as it should be, particularly now. If we can extend our view to a new conception of “we are the world” what a difference we could make, not just here in this country, but everywhere.

It’s not just this election, it’s not just McCain’s tactics, it’s not just the totally unprepared for office, Sarah Palin, it’s our future, our country’s future, the future of our children and grandchildren that is at stake here. So, I ask again, when is enough, enough?

Wake Up Call Maybe?

You really think it could be that? Well, if not read it and weep -- if you aren’t already weeping as a result of the past few days. How about this headline for today?

“Bush seeks $700 billion for bailout

The Bush administration is asking Congress to let the government buy $700 billion in bad mortgages as part of the largest financial bailout since the Great Depression.”

What more does it take to get those “Hoosiers for a hot chick” Republicans, “skin color” skeptics and just plain “head in the sand” numb skulls to wake up? No, there are no roses or coffee to smell, just the sound of our country on the skids.

We so desperately need new leadership, not more of the same or maybe even worse. We need a new outlook, a new approach, new plans to get us out of the hole we’ve dug ourselves into – I say we because in spite of all the warnings over the past eight years, we have let this happen. We need to bring jobs back to our country, we need to rebuild our infrastructure, mend our roads and bridges, upgrade our schools and our hospitals and health care.

I’m certainly not smart enough to have any answers, but I do believe Obama has many of those answers and he’s also smart enough to find the right people who have the answers when he doesn’t and the courage to admit when he needs help.

No more of this delusional notion of McCain’s that the “fundamentals of the economy are strong”. Hello! does he even know what the fundametals are? If the economy isn’t his forte, do you really believe that it’s Palin’s forte? Wake up, people! Wake up before it’s too late!

Where Do We Go From Here and How Do We Get Started?

I have heard from so many people who are upset, scared, uncertain as to where our country's financial mess is going to end up and where is it going to leave us? I'm certainly not wise enough to have any answers -- I'm looking for my own, but Thomas Friedmans Op-Ed column in the NYT yesterday did have, what seemed to me to be some very valid thoughts. I didn't want to pick and choose statements to post, so I'm posting the whole article and hope it will be of some benefit as we think through where we find ourselves these days.

September 17, 2008
Op-Ed Columnist
Keep It in Vegas
By THOMAS L. FRIEDMAN

Watching some financial stocks just get wiped out in recent months, I often hear a voice in the back of my head, and it is the same voice as one of those dealers in Las Vegas who coolly tells you as he sweeps up your chips after you’ve busted in blackjack: “Thank you for playing, ladies and gentlemen.”

That’s what happens when bubbles burst. You feel wiped out, and the coolness with which the dealers — in this case the markets — sweep away all your chips is unnerving. It’s easy to over-react, and it is important that we don’t. Now is the time for coolly sorting out what markets can do best and what governments need to do better.

Let’s understand what happened here. Wall Street — the financial industry — became a bubble in recent years thanks to an excess of liquidity and the oldest bubble maker in history: greed. Some of the smartest people forgot one of the oldest rules of investing: There is no such thing as a risk-free return. When you reach too far for yield, sooner or later you get burned.
In the ’90s, the no-lose, risk-free, high-yield return was supposed to be dot-com stocks. This decade’s version are subprime mortgages and financial stocks. Just like the dot-comers in the 1990s, the financial stocks got inflated to ridiculous levels and salaries for Wall Street executives reached ridiculous heights. You are now watching live and in color that bubble burst: “Thank you for playing, Lehman Brothers.” That’s really sad for a 158-year-old company.
The market is now consolidating this industry, with the strong eating the weak, which will impose its own fiscal discipline. Good. Maybe then more of our next generation of math geniuses will think about going into engineering the next great global industry — energy technology — rather engineering derivatives.

But we also need to understand the uniqueness of this bubble in order to identify where smart government needs to step in. One reason this financial bubble got so big is now well known: you and your neighbor went out and got subprime mortgages, which enabled many more people to become homeowners — a real blessing. Your local finance company or bank, which extended those mortgages, later resold them to an aggregator who put them into big packages with thousands of other subprime mortgages. Then those loan packages were chopped up and sold in small pieces as corporate bonds to all kinds of institutions, who were reaching for extra yield. Your subprime mortgage payments went to pay the interest on those bonds.
But as the housing market collapsed, and people couldn’t cover their mortgages or sell their houses, the bonds lost value and, therefore, the banks that held them lost capital, and the whole pyramid started to crumble. This infected the entire housing market, so banks no longer knew the value of their mortgage-backed assets. The result? They stopped lending. Hence, the current credit crunch. This credit crunch is what makes this crisis so lethal. We can’t tolerate a prolonged situation where banks won’t lend to good companies.

That’s why Congress needs to create another Resolution Trust Corporation like we used to get out of the savings-and-loan crisis of the 1980s. As then, so now, we need a government agency to buy the toxic mortgages off the banks’ balance sheets, hold them and sell them in an orderly way later. That would prevent a fire sale of homes and mortgages now and restore confidence to banks so they start lending again.

In the long run, though, regulators need to find ways to limit the amount of leverage investment banks or insurance companies can take on at any one time, because given how intertwined they all are in today’s global economy, one bank blowing up can now take down many.
“We are at the end of an era — the end of ‘leave it to the markets’ and of the great cop-out that less government is always better government,” argues David Rothkopf, a former Commerce Department official in the Clinton administration and author of a book about the world’s financial leaders who brought about this crisis: “Superclass: The Global Power Elite and the World They Are Making.” “I think, however, it is important to stress the difference between smart government and simply more government.

“We do not need a regulatory ‘surge’ on Wall Street,” he added. “We need a complete rethinking of how we make global financial markets more transparent and how we ensure that the risks within those markets — .many of which are new and many of which are not well understood even by the experts — are managed and monitored properly.”

In sum, government’s job is to police that fine line between the necessary risk-taking that drives an innovation economy and crazy gambling with other people’s savings in ways that threaten us all. We need to make sure that what happens in Vegas stays in Vegas — and doesn’t come to Main Street. We need to get back to investing in our future and not just betting on it.

A Matter of Urgency

As hard as I try to find uplifting and beautiful things to post -- and I do post some of those, too -- I end up coming back to the nightmare of politics because I hate to see our country heading down the tube and if, "we the people" lose this election, that is exactly where we're headed.

The New York Times Op-Ed Section had an insightful and scary picture of the politics of today written by Frank Rich and I think his insights into this election are all too true – chillingly true. America had better wake up. NOW! Last week people were asking if Palin is qualified to be so very close to, not just the vice-presidency, the presidency itself. Now it seems a more likely question is, what kind of president would Palin be?

Rich says, and I couldn’t agree more, “It’s an urgent matter, because if we’ve learned anything from the G.O.P. convention and its aftermath, it’s that the 2008 edition of John McCain is too weak to serve as America’s chief executive. This unmentionable truth, more than race, is now the real elephant in the room of this election.

No longer able to remember his principles any better than he can distinguish between Sunnis and Shia, McCain stands revealed as a guy who can be easily rolled by anyone who sells him a plan for “victory”, whether in Iraq or in Michigan. A McCain victory on Election Day will usher in a Palin presidency, with McCain serving as a transitional front man, an even weaker Bush to her Cheney.

The ambitious Palin, who lies with ease about her own record, and the ruthless forces she represents know it, too. You can almost see them smacking their lips in anticipation, whether they’re wearing lipstick or not.”

Even though I was too young to be actively engaged in the politics of the late 1940s, I do remember the fear mongering of Joe McCarthy and how we were all told to see our enemies everywhere. Guess what? That’s the same pitch Republicans, McCain and Palin are using all over again. The same old game to pit the good, patriotic real Americans against those subversive, probably gay, urbanites, not to mention blacks, who threaten to take away everything small-town folks hold dear. Well, guess what “small-town folks”? They are using you and they do not share your values. They are after power and control and this country cannot afford another eight years with them in the White House and more of the same.

As Rich says, “This election is still about the fierce urgency of change before it’s too late. But in framing this debate, it isn’t enough for Obama to keep presenting McCain as simply a third Bush term. Any invocation of the despised president – like Iraq – invites voters to stop listening. Meanwhile, before our eyes, McCain is turning over the keys to his administration to ideologues and a running mate to Bush’s right.

As Republicans know best, fear does work. If Obama is to convey just what’s at stake, he must slice through the campaign’s lipstick jungle and show Americans the real perils that lie around the bend.”

In other words, people, wake up, pull you head out of the sand, pay attention to what is happening in this election! We only have 127 days to move our country towards real change – change that matters, desperately.

Perhaps There Will be a New Day

I didn’t want the media telling me how I should feel, I didn’t want them explaining every nuance, I didn’t want them looking behind, above, below, dissecting every statement made by Obama as well as the other speakers, so I watched C-Span and it was great! You couldn’t help but feel the excitement; there was so much of it in the air, on the faces in the crowd. There was hope you could feel as it seemed to rise from the crowd. There were tears, but they were of joy and enthusiasm and excitement. And there were tears in my eyes as well and a smile on my lips.

I don’t know what comes next, I don’t know what will happen in the next few months, I don’t know what the end result will be, but I know that I have hope for the first time in a number of years. I’ll take that.

We have the opportunity to take back our country, to return to values that have been lost or shuffled out of sight. I hate to see the doubt and skepticism, that jaded outlook that says nothing can be this good and last, that it’s all just another show. But those negative views are out there as well as the hope and enthusiasm and I can’t do anything about that. What I do know is that they won’t influence or change or negate my belief that, YES, WE CAN!

Questions for Our Country

Frank Rich and Maureen Dowd, both with the New York Times, had serious and valid questions for the people of this country today. We would do well to listen and we’d better start searching for answers before November if we want to take this country in a different direction.

I’ll start with Dowd: “While McCain’s experience was heroic, did it create a worldview incapable of anticipating the limits to U.S. military power in Iraq? Did he fail to absorb the lessons of Vietnam, so that he is doomed to always want to refight it? Did his captivity inform a search-and-destroy, shoot-first-ask-questions-later, “We are all Georgians,” mentality?”

Rich asks this: “Is a man who is just discovering the Internet qualified to lead a restoration of America’s economic and educational infrastructures? Is the leader of a virtually all-white political party America’s best salesman and moral avatar in the age of globalization? Does a bellicose Vietnam veteran who rushed to hitch his star to the self-immolating overreaches of Ahmad Chalabi, Pervez Musharraf and Mikheil Saakashvili have the judgment to keep America safe?"

Maybe Rich is right, maybe it’s time to bury “Change We Can Believe In”, because zero hour is indeed here and as this presidential race finally gains the country’s full attention, the strategy that vanquished Hillary Clinton must be rebooted to take out John McCain.

The press has not been Obama’s friend, not with 28 percent positive and 72 percent negative and that in spite of McCain’s blatant confusions, memory lapses and outright lies that still barely cause a ripple, lies that include falsifying crucial details of his marital history in his memoirs, as The LA Times uncovered in court records last month.

What does it take for this country to wake up? Change? Yes, we desperately need change. The fierce urgency of the 21st century demands not just “Change We Can Believe In”, but “Change Before It’s Too Late”.

What does it take for us to get past the pouting and sulking of Hillary’s followers? No one is disputing McCain’s courage during the Vietnam War, but people, that was forty years ago! Just how long is McCain going to ride that horse? And what does it have to do with the world we live in now? Other than plant the seeds of fear that causes us to see enemies everywhere? If we don’t take care of our own country now, it truly is going to be too late for “change” of any kind.

American Myths and Illusions

This morning I was reading a transcript of a recent Bill Moyers Journal and his guest was author Andrew J. Bacevich, the author of several acclaimed books and his latest is “The Limits of Power: The End of American Exceptionalism”. I was a little curious because he begins with a quote from the Bible, the Book of Second Kings, chapter 20, verse one. “Set thine house in order.” I’m not happy about the mixing up of politics and religion that seems to be quite prevalent with Republicans and the Moral Majority – although that does seem a misnomer to me, so I felt the need to find out what he was referring to and why. Apparently, Moyer had the same question – not necessarily for the same reasons, but he did ask him, “How come the admonition?”

Bacevich, said he has been troubled by the course of our foreign policy for a very long time and that the book had been his way of sorting out the problems as he saw them. His conclusion was that our biggest problems are within.

He said, “I think there’s a tendency on the part of policy makers and probably a tendency on the part of many Americans to think that the problems we face are problems that are out there somewhere, beyond our borders. And that if we can fix those problems, then we’ll be able to continue the American way of life as it has long existed. I think that is fundamentally wrong. Our major problems are at home.”

I thought about that for a while and finally had to admit that I felt he was right. I mean I have felt that many of our problems have gotten worse over the last eight years of Bush/Cheney politics, but the more I read, the more I realized that a lot of the problems have been growing steadily for much longer than eight years.

Another thing he said in the book was; “the pursuit of freedom, as defined in an age of consumerism, has introduced a condition of dependence on imported goods, on imported oil, and on credit. The chief desire of the American people is that nothing should disrupt their access to these goods, that oil, and that credit. The chief aim of the U.S. government is to satisfy that desire, which it does in part of through the distribution of largesse here at home, and in part through the pursuit of imperial ambitions abroad.” Or in other words our foreign policy is the result of a dependence on consumer goods and credit. This may be a little hard line, but I’m afraid it’s a lot closer to the truth than anyone in this country really wants to admit to.

He feels that, “what will not go away, is a yawning disparity between what Americans expect and what they’re willing or able to pay and that one of the ways we avoid confronting our refusal to balance the books is to rely increasingly on the projection of American military power around the world to try to maintain this dysfunctional system, or set of arrangements that have evolved over the last 30 to 40 years. But it’s not the American people in general who are deploying around the world. It is a very specific subset of our people, this professional army. We like to call it an all-volunteer force.”

The more I read, the more depressed I found myself feeling because there was a lot of truth in what he was saying, but at the same time I felt a degree of bitterness and anger. He served in Vietnam and his son was killed in Iraq, he has reasons to feel bitterness and anger. But strangely enough he seems to feel that in the end Iraq may prove to be the source of our salvation as a country because he hopes that in the end it will cause us to ask serious questions about just where this war came from, what has been the cost, where is the money coming from and how else could it have been spent? And for what? Who bears the burden? It was a fundamental mistake. It never should have been undertaken and hopefully we will be able to see ourselves in the mirror and see what we have become. And perhaps we can undertake an effort to make those changes in the American way of life that will enable us to preserve for future generations that which we value most about the American way of life. Suddenly, his biblical quote made sense to me.

I can only hope if we do indeed set our house in order our children can have a better future.