ONGOING FINANCIAL CRISIS
The downturn is proceeding ominously.No one seems to know just what the solution is. So far the huge "bailouts" for banks and insurance companies has not produced any noticeable effect. What becomes painfully obvious is the interconnectedness of it all.
A common objective most often mentioned is "getting the credit flow going again". This is akin to when one sleeps on an arm and it goes numb from lack of circulation. Once the pressure is removed the tingling begins and the arm returns to normal activity.

In the present instance the problem is a toxicity. It is almost as if gangrene has set in. In many instances the only remedy is amputation. The pure capitalist course is to accept the results of the risk taken and live by the consequences. Sounds simple enough but apparently there is too much else at stake. Can't understand just what all that is but the powers that be feel the necessity for sparing the malefactors.

On the sidelines, definitely still smarting from the bruises of the election, sit the disgruntled Republicans. Their only mantra is "cut taxes". Other than that there has not been a single positive suggestion. Interestingly they register shock at running up the deficit. Must be they thought that was their prerogative exclusively.
Boehner, the spokesman, continually carps at wht ever is proposed.

Meanwhile, in Washington, at a great gathering of "conservatives", the self proclaimed guru ("successor to Bill Buckley"), held forth for twice his allotted time to exhort the gathering to obstruct in every way possible, President of the United States Obama's proposals. This most unAmerican diatribe was greeted with applause and hoots of glee. It is a sad commentary on the depths to which the proud Republican Party has fallen. There are few, if any, moderate Republicans left. The neo-con infection is still ravening the fragile psyche of the non-Liberals.

The most ridiculous charade of all is to cast the current recovery program as a Socialist plot to destroy the country. Ironically it has been the Republicans who initially nationalized the banks when the crisis broke. Bush and Paulson went pall
mall to the Treasury to rescue the banks and Wall Street. Hypocrisy is certainly not alien to politics and it is brazenly employed by both parties.

My optimistic hope is that time will bring about the needed resolution of the current mess.

What is most effective?

There is abundant discussion or opining about what President Obama should or shouldn’t do, what he will or will not be able to do. At this point in time, prior to his inauguration, Obama, in my opinion, made many important positive moves. His appointments strike me as intelligent. How the mix works remains to be seen.

What is lacking in most of the discussion is our relationship with (not to) Iran. The neo-con’s, plus Bush and Cheney’s ham-fisted attempt at the democratization of Iraq has helped establish Iran as the dominant player in the Middle East. It is imperative that now the U.S. and Europe recognize this and handle it accordingly. To do that requires recognition of Iran’s interests. Focusing on the singular issue of a nuclear program and asserting that it poses dire consequences for the world is not productive nor in our best interest. Iran will use its resources to promote its perceived best interest as best it can. This is manifest in its support of proxies Hezhbolla and Hamas. While Iran’s influence grows our position weakens

The central crisis point in the Middle East is the Israeli / Palestinian struggle. Israel is currently attempting to stop rocket attacks by Hamas from Gaza. Obviously, Hamas cannot manufacture rockets. It gets them from Iranian sources. The borders are porous and it appears impossible to stop the flow of arms into Gaza, or Lebanon for that matter.

The point is that it is in now imperative that Iran be negotiated with if any progress is to be made. To do that high-level talks must be initiated with no preconditions or prejudicial statements or positions taken. Pure and simple open discussion has to be engaged in where Iran can put its grievances on the table. Perhaps I’m naïve to think that this can be achieved. Nonetheless my experience has been that allowing one’s opposite to state their case openly is the best way to establish what the problems are and what needs to be done to solve them.

To date blunt militaristic measures have proven to be not only ineffective they definitely exacerbate the problems. Six horrible years in Iraq are obvious examples of how not to function. Poor understanding of the situation leads to poor decisions. Our foreign policy decisions have been based on immoral motives for decades. That has been a fatal flaw. Communism is no longer the bogeyman. Today’s super capitalism is our greatest threat. Our government has become captive to the corporate overlords. Our legislators have become beholden to corporate largess via campaign contributions. Those contributions have actually been corporate investments that have paid off more handsomely than Madoff’s clients were misled to believe.










Our current economic crisis is a crisis of morality. Over several generations our countries moral fabric has been weakened by individual’s self interest at the expense of moral integrity. The very success that has lead to our general affluence has undermined the national character. The incessant pursuit of capital gain has lead to successive crises such as the Savings and Loan scandal, the dotcom bubble and the housing bubble that brought about the current cataclysmic financial meltdown. The much adulated financial guru, Alan Greenspan, presided over the latest fiasco and had to confess that he was surprised to learn that his expectation of enlightened self-interest would prevent the financial wunderkind from fouling their own nest.

Now amid the chaos and rubble of our, and much of the world’s, economic collapse we greet our new president. The corporate grip on our government may or may not have been weakened. Frankly I am afraid it would be dangerous for Obama to attempt too stringent a revision of current policies. Hopefully he will lessen the influence lobbyists have on writing the bills that are purportedly in the common interest. The pharmaceutical bill was written by lobbyists and included the prohibition of government discounts. It definitely should be amended removing that clause. Likewise people should be able to purchase foreign drugs; the FDA isn’t doing too good a job of checking domestic products.

Market meltdown

The Cape Cod Times editorial on the “market meltdown” with the subheading “ big business can’t be trusted to police itself” is right on the money.

I am saddened, ashamed, and disgusted at the plight the financial community and our government has visited upon the country. Saddened at the losses, not of the big money hedge funds and other greed driven financial entities, but of the small investors who trusted the system to protect them.

I am ashamed of our government watchdogs that saw the whole catastrophe brewing and not only did nothing but rather cheered on the excesses. Conservative ideology diligently dismantled the regulatory mechanisms put in place after the previous depression, led by Phil Gramm and John McCain.

I am disgusted that the institutions such as Moody’s and Standard & Poor’s and Fitch were either complicit in giving AAA and AA ratings to financial bundles that were of such high risk that today no one is able to backtrack the transactions to their source. Or they are guilty of malpractice in not doing the diligent risk evaluation they are paid to do.

There are sufficient grounds for a criminal investigation into the malfeasance of those involved. I fear however that the bailout package will be “sheltered from court review” as reported in the Cape Cod Times.

Now that the horse is out of the barn and the barn has burned down an excellent book that describes the history of this meltdown is “Bad Money” by Kevin Phillips.

Phillips details how searchers for profits had to scramble after the technology bust in 2001. They recognized that the burgeoning housing market contained the greatest asset source. Led by the federal government’s penchant for debt, in the midst of a costly war, handing out a multibillion dollar tax break to the already wealthy, the money grubbers utilized the removal of banking safeguards to devise “financial innovations” that were based on subprime mortgages. Very high risk investments that were resold in packages that were again resold all over the world. The profitability of debt was so great that the instinct of greed in the financial world created the, now famous, housing bubble.

It did not happen all at once and people like Alan Greenspan recognized what was happening years ago. Being happy to see so much wealth created, for a select group, he did nothing to sound the alarm. If/when the bubble collapsed the government would bail them out. That has been the history of “boom and bust” for decades.

Privatize the profits and socialize the debt. That is the legacy of this Bush conservative government?

In the spirit of Thanksgiving I would like to thank all those who have refrained from posting any rude comments to my blog. It gives me a comforting sense of privacy to think that no one reads them.

Fifty days before Obama is the REAL thing. The financial crisis worsens and the automotive industry goes to the brink of disaster. These are heady days. It may get worse before it gets better but the important thing is that it will get better. The stock market is edgy about the BOTTOM. The housing market is also looking for that elusive territory. This to me is more exciting than a Patriots game squeaker.

It was thought to be the end of the season when Brady went down. His backup, Cassells had not played in a real game. Now the Pats are in contention for the league title and Cassells has proven to be an excellent passer and scrambler. Hopefully this is a good portent for the new administration. Already the critics are jumping on Obama for various reasons, both real and imagined. I feel more and more confident that he knows what he is doing, and even more so , that he knows how to do it. He has put together a solid brain trust and knows enough to seek advice. His instincts will guide him to recognize the best advice.

The automotive moguls made themselves look as foolish as the are by flying in to D.C. in their private jets and asking for help. Wisely the legislators have told them to go back home and work out a feasible long range plan where they won't be coming back (perhaps on commercial jets) in six months or a year for more money. They have fought emission control and better gas mileage for years.(The argument was it would cost jobs) The profits from the SUVs and trucks were so good they ignored the increase in market shares of the small foreign cars.(Now where are the jobs going?) How blind they were. They didn't even seem humble at the hearings where they almost demanded huge loans "because they are a key element of our economy". I've detested those behemoths (SUVs) from the beginning so I feel vindicated that they are getting their just desserts.

If anyone knows how to tell the market bottom I'd love to hear it.

Following the results of the election I waited a while to write this. My immediate reaction was too euphoric to be trusted. In the mean time the reaction of the world has become evident and it is a very thrilling spectacle indeed. It was never imagined that so many people would be expressing so much relief at the demise of an American administration. We knew our reputation was at a low ebb internationally and here at home the president hit the lowest rating (only exceeded by the congress) that any president ever had.

Now the problem is for the new president to bring sanity to a disastrous foreign policy, tackle the infrastructure deficit, rescue an abused environmental program, correct a totally mismanaged health program, and as an aside solve the financial crisis that our legendary economic community has foisted upon the world. All this at the same time burdened by an astronomic national debt. Why anyone would aspire to the reins of leadership under such circumstances is awfully difficult to comprehend. David had it easy against Goliath. Goliath was a stupid oaf,David had a secret weapon. The world fiscal crisis is no Goliath and we have no secret weapon. Paradoxically it has been necessary to rely on the same people that created the crisis to solve it. So far the results have not been impressive, to say the least.

Bush in 2000 was installed by fiat of the supreme court. Obama got fifty two percent of the popular vote. The Bushites are whining that "almost half" of the country voted for Palin, opps, I mean McCain. The extreme element of the losers are turning violent. Hate crimes, racist rallies, and nasty slogans, i.e. "he's not my president" a bumper sticker no less, are popping up all over the country. Usually levelheaded Maine has some loonies. This frothing at the mouth from overheated zealots will hopefully soon burn itself out as the unemployment problem exceeds the passion of politics.

With a firm hand at the wheel and a level head Obama will begin to right the ship of state. Our job is to be calm and not over anxious about immediate results. It didn't happen overnight and it won't be corrected overnight. It is my hope that Obama's willingness to talk (negotiate) with the Iranians will help to disentangle the Gordian Knot that the Middle East has evolved into. Bush's weak handling of the Israeli-Palestinian question where the question of settlements was concerned, that is one of the key points of contention, simply accepted the "facts on the ground" as a basis for not requiring Israel to return to the 1967 borders. Currently regarding Iran it is realistic to accept "the facts on the ground" that Iran is, thanks in large part to the miscalculated invasion of Iraq. the dominant, most stable state in the region and has vast influence over the neighboring counties. We must treat Iran as a worthy partner in solving the entire M.E. dilemma. Ahmadinajad will likely be replaced in the next Iranian election and a more rational leader will emerge.

This is a momentous period in the history of our country and the world. We have a great opportunity to capitalize on it.

From most of the polls it appears that Obama will be elected. As Colin Powell said it will be a "transformational event". I has been eight long years since I said "anybody but Bush". I never envisioned that those years would be so terrible. How our country could be taken over by a pack of idiologues that ran it into the ground not only here but throughout the world is too sad to think about.

Our national psyche has some serious problems. We can't feel sorry for ourselves. We did it to ourselves. A large part of the blame goes to our hyper commercial system. It is Capitalism on steroids. Unquestionably capitalism in a democracy is a wonderful combination, but it has to be tempered by concience. There must be limits to the extent that unregulated business is permitted to go its merry way with disregard for moral restraints. I feel strongly that safeguards such as bond rating services, Standard and Poor and Moodys, were malfeasant in their mistaken ratings of AAA and AA for the mortgage bonds that turned out to be toxic. When money is leveraged 30 times there must be a red light that goes on somewhere.
It was also the total lack of restraint that drove millions to secure loans they could not possibly repay. Of course the brakes should have been applied by the gimlet eyed bankers who gleefully solicited and wrote up contracts that, though profitable, they knew would eventually be found fraudulent down the road. Stifling their conciences they hoped it would happen far from their doorstep. That it happend on such an enormous scale shows how fast and how vast the financial system extends. It not only contaminated the U.S. but a great portion of the world. Those other countries, greedy themselves, cannot feel kindly toward the U.S. for handing them such hot potatoes.
With the change in administrations dare I expect that the EPA and other governmental agencies will now do their jobs honestly and not at the beck and call of corporations? In 2000 I saw the corporations lining up behind Bush and feared the consequences. It all came to pass.
There are fundamental changes I am hopeful of. Health care has to be reformed. Eventually there needs be a single payor system if we are ever to control costs. The tremendous overhead and paperwork stagnation of the present mess can't be tolerated. Then our infrastructure is in bad shape from years of neglect. Putting money into this program is a super job creator with a useful payback. Next we must upgrade the educational program and fund it. Not just hyperbole but real action and follow-up. The environment is sadly deteriorated from too many years of not only neglect but depredations and exploitation.
The tax structure must be changed to dissuade manuacturers from exporting jobs to other countries. Disallow offshore addresses that allow corporations to escape properly owed taxes.

The Iraq war and the increasing involvement in Afghanistan is looming over everything and how that is resolved remains to be seen. At least now we will have a rational head as commander-in-chief so I am hopeful that a reasonable solution will be found.

That is entirely beyond the ability of any administration to accomplish in one session. Let's hope our legislators will kick their oppositional habits and cooperate for the good of the country -- for once.

Now that the conservative socialists have become socialist conservatives there may be a glimmer of hope that there is an opportunity to get some things straight.

Two weeks plus to go!! We have been two years getting to this point. Pretty well worn out on it too. Eight years ago I would have unquestionably voted for McCain. Now things have changed so dramatically I can no longer abide the man. His sucking up to Bush and his gang has turned me against him decidedly. He is like a dog that has been kicked but comes back looking for love.

The final straw, that to me showed very poor judgment, was his choice of Palin. That is utterly irresponsible. "He'd rather lose an election than lose a war" yet he is willing to jeopordize the country to spark a faultering campaign. 'nough said on that.

Of course the biggest surprise, even though it was anticipated by many, is the financial mess. The S&L debacle was bad enough but now the whole world is caught in the turmoil. Boiling the miscreants in oil would not be severe enough a punishment for the wholesale grief that has been brought upon the nation and the world. "The market can police itself because it is self corrective". Unfortunately, not when human greed and avarice, an aspect of human nature, take command. Just like the lousy war in Iraq, we are in the mess so the only question is how so we get out of it? It is to some degree satisfying to see the bloody capitalists having to resort to that terrible socialistic notion of nationalization. I wonder if it occurs to them that there is a function for government after all? If for no other reason than to bail them out when they screw up. As I've said before, "privatize the profits and socialize the debt".

It is late now and I don't have the energy to belabor all the points I'd like to make so I'll close.

The Silly Season

Both political parties have had their conventions now. Both have gone overboard to vilify the other.
The surprise with the most clout of course was Sarah Palin. I first learned of her when she appeared on the cover of Alaska magazine. Having recently been to Alaska I was aware of some of the problems they had up there. Mostly political corruption on the part of Murkowski and Stevens. The governor and senator. Palin made a name for herself by fighting the old boy system and getting a better deal for Alaskans from the oil companies.

She has an attractive family and is a beautiful women in a physical sense. She is also a strong conservative Republican. Then there are other endearing qualities about her. She is a life member of the National Rifle Association. She denies global warming. She enjoys hunting and brags about being able to field dress a moose. Hunting moose is like shooting cows in a pasture. She endorses hunting wolves and bears from planes and helicopters. She advocates drilling for oil in the ANWR, a wildlife refuge. Her latest project is the natural gas pipeline to be built by a company she is on the board of. She has to be a cold hearted cookie to espouse all those things.

She tries to convey sweetness and light but in reality is a Dragon Lady. She probably can out Cheney, Cheney. We don't need anymore of that kind of hubris. The conservatives are bent on lower taxes and less regulation. Those twin items alone have led to the dismal state of our infrastructure and the deregulation of banking practices leading to the financial fiasco of the sub prime mess that is costing our citizens their jobs and homes. Combine that with our rapacious foreign policies, over reliance on our crippled armed forces, despite the defense budget being 60% of our total expenditures, our under funded education programs, the atrocious treatment, or non-treatment, of our returning wounded. The cost of the unwarranted Iraq war in lives and treasure is overwhelming evidence of poor decision making and scandalous mismanagement.

The health care system is way out of whack. There is more money going into the administrative
cost than is being spent on actual health care. In the auto industry alone health care costs exceed the cost of the steel in the products. Having the multiplicity of insurance companies with their arcane restrictions is an inefficient way to provide care. Health care providers are driven to distraction and expense to keep up with the paperwork alone. Arbitrary allowances and non-allowances drive both consumers and providers crazy. Yet the conservative answer is more private insurance. Because of the high overhead premiums are beyond the reach of many Americans. Using high deductibles to lower the premium puts many people at risk. By extending the Medicare program to be a universal system there would be tremendous savings. How does that get paid for? Obviously taxes would have to pay for it. However the increase in taxes would be far less than the present cost.

McCain claims to fight the special interests. How is it then that he has the most notorious lobbyist, ex senator, Phil Gramm, as his economic advisor? Gramm engineered the Enron Loophole that relaxed regulation of the commuication rules. This directly led to excesses that caused the collapse of Enron which in turn cost stockholders and employees their life savings.
Many of McCain's campaign crew are either part time or full time lobbyists. Are they supporting him in order to be put out of business? Certainly not!!!! Some things never change.

The convention was heavy on McCain's military family and his service. There is no question that his imprisonment for five years was an extrordinary ordeal. That he survived it is a miracle. He came home to a hero's welcome. He has been playing off that his whole career in government. He has stood for welcome changes in campaign financing. I applaud that. He stumbled once in the Keating Five scandal and was censured by the Senate. He is human but no superman. When Bush/Rove slimed him in the South Carolina primary race it finished him. He gritted his teeth and resolved to make another try at the right time. He pandered to the Bush/Rove Evangelical
base in order to retain a conservative constituancy. He built on that foundation. Nonetheless some do not consider him a true conservative. His opposition to many of Bush's ideas caused him to be dubbed a "maverick". To his credit in his speech he admitted that "the Republicans came to Washington to change it and Washington changed them". the neo-conservatives remodeled the Republican party into the most corrupt. highest spending. most corporate oriented party and administration we have seen. Bush's famous tax cuts, that the Democrats went along with, together with the high expenses of the Iraq war put us deep in the hole. Now our national debt is in the trillions and we are financing our government by borrowing from China and Japan. Some conservative government. It is difficult to believe that things could have gone so wrong in a relatively short time. Bush inherited a great surplus and managed to turn it into a huge deficit.
In spite of McCain's promise to change things it is hard to see how he can do that with the baggage he is carrying.