Saturday, September 27, 2008
Now Bush is evoking the 72-hour, mushroom-cloud specter if Congress doesn’t immediately borrow seven hundred billion dollars to give free money to rich and craven bankers. According to Mister 27%, it’s the only action standing between economic catastrophe and a rosy American future.
Refusal to enact this legislation may well bring economic meltdown, but mostly to the bankers who caused this mess. Meanwhile, when talking $700 billion there are a lot of scenarios one might pursue to save the economy that don’t involve throwing money at the fat cats.
If millions lose their jobs, well, $700 billion will buy a lot of unemployment insurance, not to mention welfare for those who really need it as opposed to this bailout of the rich. That money will also pay to keep a lot of people in their homes, and with affordable mortgages. In the process of rewriting a lot of real estate loans, the banks would get a lot of money to shore up their finances and large numbers of paid off mortgages would clear a lot of bad and/or deteriorating debt. It would also make it more possible to actually put a value on those toxic mortgage-backed assets that are weighing down the system.
That would be far more likely to stabilize the real estate market than Bush’s giveaway. Bush’s plan, moreover, allows the money to be used to buy all kinds of bad debt from all kinds of institutions, so in the end result might not do much for the property market. Worse, $700 billion is actually a small part of the finance system’s true imbalance. What happens when the first tranche doesn’t work? Throw in another trillion or so?
If credit dries up, well Americans are already up to their necks. They’ve borrowed to excess. What better time to start retiring some of that debt? In the process the banks will have more cash. Bank deposits are insured up to $100,000, so everybody small is covered. If the insurance fund runs out of money, well, there’s always a piece of that $700 billion. If a bunch of banks go under, who cares, others will eventually come to take their place.
Property values may go down, but they are still too high by historical standards and harmful for society as a whole. Better for real estate to be cheaper so that a larger percentage of the population can afford to own.
So what if there is a recession. Americans have been working too hard for years; spending too much money buying too many things; maybe it’s time to slow down and take stock. Unwind, start from scratch, rebuild a smarter, more responsible economy. If people are out of work hire them to upgrade the country’s infrastructure and get cracking on sustainability and restoration of the environment. It’s called shock therapy, the very same wrenching changes the US has forced on many smaller countries that experienced financial problems.
Eighty percent think the country is going in the wrong direction so why put out all that dough only to further the same rotten system that is at the heart of the crisis. Let it sink. Wall Street had its fun, many of its denizens are fabulously wealthy, who cares if it goes under. Many of the activities of the financial institutions who’d be queuing up for the dole are purely speculative and singularly destructive: they are pure gambling and have no redeeming value. This is no different than bailing out a gambler who loses his shirt at the casinos.
It’s a good thing that many Repugs are also questioning Bush’s plan, otherwise the Dems would’ve felt compelled to prostate themselves once again before the worst president in history. They would’ve rushed to comply with his wishes else they take the blame for the doomsday sure to result. Even now there seems to be a certainty (in the punditry) that the bill will pass, after a bit of grumbling, with a bit of tweaking here and there, more or less in the president’s emergency timetable.
Big mistake, but I wouldn’t be a tiny bit surprised.
Tuesday, September 23, 2008
Too Big To Fail
… first part written just before the latest bailout plan was floated…
A few days after sending Lehman Bros Investment Bank to the dustbin in order to uphold the concept of moral hazard the US government reversed itself and stepped up to the plate with $85 billion in public money for AIG, the country’s largest insurance company. Lehman with a mere $200 billion in assets wasn’t too big, but AIG with a trillion evidently was - possibly because it sold a lot of insurance on those down and dirty mortgage bonds that are now tanking big time.
This all came on top of the $200 billion of capital infused into quasi-government agencies Fanny Mae and Freddie Mac, $35 billion for the Bear Stearns bail last March and at least $200 billion before that that involved the treasury exchanging, to an array of banks, solid-as-the-US Government bonds for subprime assets possibly worth pennies on the dollar; hard to say, nobody knows for sure what they are worth.
Moreover, the money already expended on Freddie and Fanny may only be a small part of what the
The manipulators made out like jewel thieves packaging and trading their purposely inscrutable financial instruments, but now that their tomfoolery has turned calamitous, it’s Joe Sixpack to the rescue. Fanny and Freddie were once government agencies with strict rules to work to but in the mania for privatization that’s gripped the country in the past few decades they were turned into a hybrid where profits are privatized while losses, as we now see, are socialized.
Moral hazard is the idea that business people will make greedy and foolish decisions if they know that the government will bail them out; that they won’t have to pay for their transgressions. In the case of Freddie and Fanny, the
Now AIG has been rescued because it’s too big to fail; it’s demise would be catastrophic, we’re told. This however brings up a question that is somehow not part of the debate: If it’s too big to fail then maybe it should never have been allowed to get that big in the first place. Furthermore, investment banks are being sold at bargain prices to other banks so large they too will be too big to go under if/when they hit hard times.
Breaking News… The Congress is preparing legislation to purchase at least $700 hundred billion of additional subprime based, mortgaged-backed, toxic (in Wall Street lingo) securities from tanking banks. In exchange for securities of unknown value, the banks will get real money. That way they can get right back to creating the next financial meltdown. And why not? It’s fun making tons of money and until it all goes bust again they can do really well. They made the money while the getting was good, now the rest of us suckers can bail them out.
So now we’re talking around a trillion and a half dollars (just for perspective that’s $1,500,000,000,000; equal to 10% of GNP) with the possibility that the number could go higher. To be fair, the government may eventually get some value for its money. Once again, impossible to say how much, real estate values are still going down.
On the other hand, it’s not certain that the bailout will do the trick. It may not solve the fundamental problems in the industry. It may be only one more stopgap measure in a cascade of calamities.
When developing countries experience economic or financial meltdowns, we insist that shock therapy is the only proper response and they should just tough it out. Especially, bailing out the little guy is severely discouraged.
When it came to helping people facing foreclosure Congress could only manage a program designed to come to the aid of but 10% of those in trouble. Now at the insistence of the bushman they are racing to the rescue of the fat cats.
With news of the massive bailout, stock markets soared. Knowing the government was coming to the rescue clearly allowed the investor class to breathe a sigh of relief.
There’s one good that will hopefully come of this fiasco: Neo-con economic ideas – deregulation, unfettered free markets - will be totally discredited. They will be as toxic and repulsive as the obscure financial instruments created in the wake of the deregulation mania of the recent past that are the crux of this crisis.
Even if the multiple bailouts are successful - if that’s the proper term - it’ll still take a decade or more for the
Last word is that Congress may actually demand some input into the bailout plan. Well now, that would be a first: Congress asserting itself on behalf of the American people. Hard to imagine, hard to believe, but miracles do happen so stay tuned.
Saturday, September 20, 2008
Tobacco No - Ganja Yes
A new law in The Netherlands banning tobacco smoking indoors means that cannabis smokers can no longer mix tobacco with their weed in the city’s cannabis cafes. Makes perfect sense to me. While everybody is aware of the long term danger of tobacco, most people are under the false impression, stoked by governmental misinformation campaigns, that cannabis involves similar negatives. On the contrary, when you go to the statistics you will not see a single death attributed to the smoking of ganja.
Some years ago a friend who was a medical researcher related the results of a study of cannabis his facility had undertaken. They provided unlimited amounts of power weed to the study population and told them to smoke their brains out. As the study progressed the researchers became concerned for the health of their subjects because cannabis tars were clogging up their lungs and throat. The study was ended prematurely because of their fears. Subsequently they kept a close watch and discovered that the effects of the cannabis smoke completely disappeared within about three months.
Any kind of smoke is going to irritate your respiratory system and being as cannabis is a stimulant, whatever it gives you is going to come out of your body’s capabilities. Whenever I smoke too much my cough goes from intermittent to persistent and I tend to get sick from overextention.
My friend then explained that, in contrast to marijuana, tobacco impacts the small passages in the lungs, the cilia, in a way that scars them and causes permanent damage. Your lungs will improve markedly after you quit smoking but will never return to your previous state.
The only tobacco I’ve smoked in the past 27 years was when I’ve mistakenly taken a hit off of a joint rolled by a European where the practice of mixing it with ganja is common. I invariably cough my brains out in response. If I knew it was coming I could smoke it differently and possibly avoid the same level of coughing fit, but then again if I knew the joint was adulterated with tobacco I’d absolutely never touch the stuff. It’s beyond me why anybody would want to take pure sweet ganja - cannabis grown outdoors requires no pesticides or herbicides - and mix it with diabolically manufactured tobacco containing all manner of nasty chemical additives. Additionally, I’ve read recently that one of the reasons that tobacco is so cancerous is the chemicals used in growing it act to increase its toxicity.
It took a monumental effort to rid myself of the ugly habit years ago and today it conjures up only disgust and abhorrence. (There’s nothing like a reformed tobacco smoker when it comes to harassing and looking down on those who are currently addicted.)
I was coughing with increasing frequency and intensity and knew I was doing serious damage to my respiratory system. It got to the point where my friends were fearing for my health. I had quit and restarted several times but knew that the state of my dependency was such that drastic measures would need to be taken; will power was not going to do the trick. Previously I had stopped temporarily a few times when I had gotten so sick that smoking was impossible. As a result I used immersion therapy, aka, overdoing it, and purposely smoked myself into a serious illness. It wasn’t that difficult since I was already halfway there. I had been smoking cheap roll-your-own tobacco, pretty harsh under the best circumstances, and started chain smoking. After the pouch was finished I started rolling butts, and then butts of butts and began coughing continuously and righteously and before too long I felt so bad that even one more drag was inconceivable.
I’m in pretty good shape considering I started smoking a pack a day at 12, went through coughing fits as early as 15 and continued for a total of 28 years. I can do a lot in the physical realm but my lung capacity is under par and I run out of breath easily. We referred to cigarettes as coffin nails in the fifties so we were under no illusions in spite of advertising, including on TV, which featured doctors endorsing their favorite brands.
Personally, I see no redeeming value in tobacco as it’s currently used except that it keeps the hands of nervous people occupied. The habit is especially pernicious considering the chemicals added to keep it burning, resulting in many home fires over the years, and the extra nicotine added to increase chemical dependency.
In contrast, smoking a hand-rolled cigarette of clean organic tobacco once or twice a day would seem to me to be quite benign. It’d be hard to imagine smoking enough under those circumstances to bring on emphysema or cancer. If I hadn’t nearly destroyed myself with tobacco in the past, I might do it myself. I’m too far gone; today it would be impossible. Even regular smokers would be better off hand rolling clean tobacco; they would smoke less and reduce their chances of contracting disease.
Many smokers have the attitude, which I shared back in my teens, that it’s worth cutting a life short if you can derive immediate pleasure. When reminded as a teenager that I was causing harm I’d retort that I was enjoying myself and didn’t care about the future… “As long as I live to the year 2000 (at age 59) I’ll be happy”. Well now, y2k has come and long gone and I would’ve sorely missed these last eight years and I’m still going strong. Moreover, what’s missing from the ‘enjoy now, die early’ attitude is that it’s not a pretty death. You don’t just have a great time and then suddenly pop off: no, it’s a nasty, horrible death of pain, debility and suffering.
As far as I’m concerned all packaging, marketing and advertising of tobacco should be banned. It is insane that society allows corporations to make profits off of such a destructive substance. When money is involved they will have no qualms about bending the truth to make an extra buck, and large numbers of people will die premature and awful deaths as a result.
In many public markets in
Prohibition sucks on almost every level. To begin with, drug wars are really culture wars and cultural norms change over time. It wasn’t that long ago historically when marijuana was legal in
Secondly, prohibition is futile in any society that allows its citizens even a semblance of freedom. Unless repression is near total, people will do what they want to. I was offered ganja in
Prosecution of offenders – police, courts, prisons - is extremely costly to society as a whole and to the individuals whose lives are disrupted. Most of all prohibition increases the cost of contraband to extreme levels making it a lucrative business for criminal elements. South American cocaine cartels literally have billions of dollars at their disposal which they use to corrupt governments and murder public officials trying to enforce the law.
It was as recent as 1992 when you could get a shopping bag of pot for one dollar at local public markets. Cambodians used to flavor their soups with it and smoke it when they couldn’t afford to buy tobacco. And in spite of all the hullabaloo about drugs we have our “happy” pizza restaurants where you can still, I believe, get a sprinkle of pot added to your pepperoni.
Cannabis is different from other drugs in the sheer idiocy and unfairness of prohibition. Even if a pot smoker doesn’t consider it totally harmless they would never think it a serious danger. That is actually an example of a beneficial side effect of prohibition. Inquisitive, open-minded individuals learn a healthy dose of skepticism towards government and its attempts at social control and that fosters the creation of counterculture… After a lifetime of being told something is the height of evil you meet someone you like and trust who tells you differently. You try it and immediately know the truth. You’ve been liberated.
The hard drugs are of a different category, though still not worthy of prohibition. Cocaine, meth, heroin can be dangerous on an OD level and on an addiction level. Still, if you asked me if a person is better off being a alcoholic or a heroin junky I’d say the latter. You won’t get any diseases, for sure, or do debilitating harm to your body. On the other hand, you also won’t be inclined to accomplish much, though probably more than being a latter-stage lush. That judgement, however, would only hold true if you had the same easy access to both. If you had to steal to get your fix, you’d be better off drinking.
Here’s an anecdote which aptly describes the feeling, though in this instance the drug was opium from which heroin is derived. A friend related his experience in
Cocaine will make you feel strong and invincible and not affect your functioning or productivity at all. However, if you’re not flush with money and you really need a line, you’ll rob a bank, or some such, to get it. On the other hand, I tend to think that chewing the leaves, which have 500 times less potency than powder cocaine, would be quite benign, like coffee.
Meth is heavy shit that can turn you into a washed out freak, so highly not recommended, though even there I’ve known long time meth users who never lost their essential good personalities.
To sum up, what I do to my body is my business: government interference is costly, futile, counterproductive, unfair and stupid.
Thursday, September 18, 2008
In Thailand and many other countries in the region and the world, democracy is either under threat or fighting an uphill battle against entrenched interests. The border problems Cambodia has been having with Thailand in regards to the ancient Preah Vihear Temple is strictly a sideshow to the crisis unfolding in Bangkok.
First a little background on the border conflict. The border was originally demarcated at the turn of the last century on the line of an escarpment that generally provides a natural separation between the two countries. The land rises very gently on the Thai side then drops steeply when it hits Cambodia. The temple sits at the top of the escarpment overlooking the Cambodian plain.
Geography would logically put the temple in Thailand, especially since it’s easily accessed from there and that, in fact, that was the original intention in drawing the line. Historically, however, it is most definitely a Khmer temple and for some reason, not fully documented it seems, the temple was placed in Cambodia. In 1962 Cambodia went to the International Court to settle the matter, Thailand made no objection and the temple was awarded to Cambodia.
Though the border has been settled in international law for 46 years, when the two countries got together to ask for World Heritage designation, Thai politics intervened. It makes sense for the two countries to apply together since most visitors come from Thailand as it is currently very difficult to access from Cambodia, requiring a difficult 2 mile hike up the face of the escarpment. A road is planned from the Cambodian side but considering the country’s needs doesn’t take a high priority.
Protesters against the Thai government took the agreement between the two countries as a giveaway of Thai land and demonstrated at the site – the temple literally sits a few meters from the border – upon which Cambodia shut the border to Thai visitors and that’s where it’s stood now for a couple of months.
Though the Thai protesters at the temple and in Bangkok seeking to topple the government are part of a movement called People’s Alliance for Democracy, they want to truncate democracy by having most seats in Thailand’s parliament chosen by appointment. The reason is clear enough: the current government would once again win a majority in a free and fair election. The reason for that success is also not up for question.
The People’s Power Party now in control is a reconstitution of Taksin Shinawatra’s political legacy. He was ousted in a bloodless military coup two years ago but his power lives on because he was the first Thai political leader to consider the needs of the poor. His opponents insist that he was cynically using them but meanwhile he provided free health care and development money for rural needs, something no other Thai government ever considered doing.
Taksin, Thailand’s richest person, is now in exile in England, on the run from corruption charges - some probably true, others mostly trumped up. The impetus for his original ouster revolved around the sale of his communications company to a state-owned Singapore investment company. Just prior to the sale he had the law changed to exempt the nearly $2 billion sale from taxes.
In the normally fractured state of Thai politics, he was the first prime minister to win an outright majority of the vote. As part of his election campaign, he vowed to stamp out drugs - Thailand had, and still has, a serious meth problem.
In one of his first acts in office he solidified his popularity amongst Thais rich and poor by ordering the police to off – literally - a lot of drug dealers. Twenty-five hundred “drug dealers” were summarily executed within about two weeks. With no opportunity to prove their innocence, it’s hard to imagine that at least 10% to 20% weren’t either completely innocent – many probably placed on police blacklists for personal reasons - or guilty of strictly minor offences.
Thai protesters, derived from the Bangkok elite, were intent on ousting the new PM Samak Sundaravej, seemingly for no other reason than that he sought to continue the populist policies of his mentor, Taksin. In the latest twist the Supreme Court kicked him out of office for conflict of interest because he received a very small amount of money from a cooking show he hosts on TV. Once again a desperate ploy to remove a popularly elected government.
This is very similar to what’s now in happening in Bolivia, South America’s poorest country, where entrenched elites have gone to great lengths to thwart the will of the people.
Evo Morales, first indigenous president in a country with an overwhelming indigenous majority, former president of the country’s Coca Growers Association, recently won a referendum on his leadership by 2 to 1. His socialist, redistributive program, however, doesn’t sit well with the mostly white citizens of the country’s Eastern and Northern provinces where most of the country’s natural gas deposits lie.
They want autonomy in order to keep a large percent of resource receipts and have practically threatened revolution. Several people died recently in clashes between pro and anti-government demonstrators. Their position is exceedingly shaky considering Morales’s impressive democratic mandate. It’s not hard to understand why an entrenched elite would want to maintain its power and privileges but it’s nonetheless difficult for me to grasp how they could feel so little compassion, have such limited sense of fairness, have so little respect for fellow citizens.
A recent summit of nine South American leaders stood solidly behind his government. He has no intention of backing down. South American society has always seemed to have a rough, violent edge to it, possibly how the white population has been able to maintain its repressive thumb over the less privileged for so long, so it won’t be an easy battle.
Fortunately, the people are fighting back. The process is not always pretty. Outcomes will not always, or even often, satisfy the neo-con democracy-touting crowd, but it’s long past time that politics reflected the needs of all citizens. The thwarters of democracy who fight to go backwards are missing the point: society cannot advance unless resources and benefits are shared by all.
Soon even Americans may get the message that throwing money at the wealthy, giving them free reign to manipulate markets and government, is not in their best interests. Witness the current financial meltdowns which are a direct result of conservative policies: a losing proposition for all. And yet, as of this post, about half the American people are poised to vote for McCain who pledges to continue the neo-cons’ rotten politics. How bad does it have to get before the Americans learn where their true interests lie?
Friday, September 12, 2008
What to make of the McCain bounce in the polls? Not much, it’s way too early to fret. Thoroughly frightening prospect, though, nonetheless.
I love the way the Repug’s convention was centered on bringing “change” to Washington, as if they hadn’t been in power (or aided in their destructions by their fawning consorts in the so-called opposition party) for most of recent history. When 80 percent of the American people think the country is going in the wrong direction and a mere 25% approve of the president’s job they have to do their best to flee reality.
And Sarah Palin, beauty-queen mayor of a town under 10,000 less than two years ago, supposedly ready to take the reins of power from a geezer with a sketchy medical history, doesn’t know much about
Ah but the media love her. Though she’s railed against sex education, because abstinence-only is the sole legitimate moral position a rightwingnut conservative Christian political leader can take, she’s now hailed as courageous for standing by her knocked-up teenage daughter - who obviously didn’t get the message. She’s suddenly become a liberal, at least this time, at least in the context of her own family. Very similar to “family-values” Repugs caught soliciting sex in public bathrooms, life has intruded into her regressive bygone-era ideology.
Meanwhile, Obama says family is off-bounds. If he loses it’s because he’s too good. This is more than family, this is public policy that leaves many less fortunate teenagers in dire straits. The Repugs gleefully berate minority teen mothers as promiscuous and deserve to be called up on their duplicity and hypocrisy.
Meanwhile Obama has humanized himself by taking some truly awful stands, especially his capitulation on the FISA – Foreign Intelligence Surveillance Act – spying bill. The court was set up twenty or so years ago in response to illegal warrantless spying on international communications by federal agencies. Out of more than 19,000 applications for spying received by the court during its tenure, only a handful were refused. The government was even allowed to do the surveillance for 72 hours before it was required to get approval.
This wasn’t good enough for Bush so he got congress to give the government unlimited powers to spy on international communications. Obama obviously thought he needed to fold his principles – he had previously opposed the changes – for political reasons. I believe he lost more fervor from his strongest potential supporters than he might have gained from a few undecideds.
I caught most of the Dem convention while back in the states. A lot of populism was on display and a lot of talking about real people, elements that were sorely lacking in the Gore and Kerry campaigns until too late. Both losers, and they were truly lousy candidates whatever you think about them as individuals, started their runs thinking the bushman was so bad they couldn’t lose for trying.
Nonetheless, it’s important noting that, in spite of their monstrous failings and the general worthlessness of the Democratic party, they both, in fact, did win their elections only to have them stolen. While fraud has been reduced in some states, the bottom line is that Obama has to win by a large margin or the thievery of the last two presidential elections will be repeated.
Obama has been amazingly deferential toward Hillary, even bordering on obsequious, in spite of her nasty, futile campaign and childish whining about how the world was so unfair towards her. She could’ve won the nomination with better organization and a smarter strategy, but she was outmaneuvered fair and square, by, in my estimation, a much better candidate.
Meanwhile the BarryO, who sometimes seems almost a transcendent being, heaped so much praise on Hillary it almost made me gag, but effectively mollified her and Bill and got them on the proper political track: Was she going to take her marbles and sit out the election or help elect the geezer? Impossible.
While Obama’s mantle of above-it-allness has been strained by some of his recent positions and the reality that he is a Democrat, and thus beholden in many of the same ways to the same corporate controllers as the Repugs, he remains far superior to any candidate for president in a long time. In office I believe he’ll listen and learn and more often than not steer the correct course.
Unfortunately, he’ll not be able to accomplish the bulk of his promises, partly because the Republicans have left the country in such a sorry state of debt and debility and partly because his pledge to lower taxes on everyone earning less than $250,000 per year, now supposedly middle class, cannot possibly leave sufficient resources to right the country’s course. Raising taxes on the wealthy is a proper beginning but it can never be enough to reduce the deficit and pay for the infrastructure and development changes that must be done to meet the challenges of the near future. That’s going to have to come from everyone but the poorest.
Almost every speaker at the Dem convention spoke of conversion to sustainability, a far cry from the past when the subject rarely surfaced - even from Al Gore during his run. Obama is proposing a ten year $150 billion program for alternate energy programs. While far greater than anything that’s been done in the past, it’s only about 10% of what will actually be needed to save the
It’s a good start, but honestly, starts are not enough; yet proposing an adequate program would be unthinkable politically and financially. Will he respond sufficiently at points of crisis when hard-boiled reality on the ground meets his politically plausible but woefully inadequate previous stands? That’s our only reasonable hope.