2008: The Year Reality Intruded

2008 was a pivotal year. The biggest story was the election of Barack Obama as the nation's first African-American president. Probably the second biggest was the perfect storm of preventable disasters in housing, finance, debt and employment that can all be summed up as "the economy."

But beyond this, 2008 was the year when theories based on the make-believe of wishful thinking met reality. As usually happens in such cases, reality won.
Here is a list of 2008's lessons meted out by the school of how the world really works. The lessons leave a number of shattered illusions in their train. May we be wise enough to learn from past mistakes.

1. You can't cut taxes in a recession and balance a budget, It's been tried three times. It has never worked.
2. You can't cut taxes and balance a budget when you're fighting two wars. No one's ever been foolish enough to even consider that before, let alone actually do it.
3. Cutting taxes for the rich does not help the poor. Not under Reagan. Not under Bush I. Not under Bush II. That was never the purpose, just the fig leaf. Watch and learn.
4. Lending to people without the income to repay based on the expectation of asset appreciation invites a banking crash. What happened in 1929 with stocks happened in 2008 with real estate.
5. Voluntary and self-regulation are oxymorons, especially where large sums of money are concerned.
6. Torturing people is not only wrong; it works against us, raising hordes of dedicated enemies. Read our own intelligence estimates and military reports.
7. Global warming is real, and getting worse.
8. Prosperity built on borrowed money comes to an end, sooner or later. If you live beyond your means there will be a reckoning.
9. Personal integrity matters. Think of Jack Abramoff, Tom Delay, Elliot Spitzer, John Edwards, Bernie Madoff and Rod Blagojevich.
10. When working people's income stagnates or goes down, so do profits. That's what happens when demand goes down. Reference 1933.
11. Americans do not always fall for attack politics based on smears and name-calling. Not this time.
12. The majority of women cannot be counted on to vote for a woman candidate if that candidate does not have the best answers they need for the issues they face.
13. White Americans will vote for a minority candidate for president. 2008 shows they will do so when that candidate is the one seriously showing an unvarnished appreciation of what the nation's problems are and if the candidate actually seems intent on solving them rather than spewing the same old ideological drivel that caused the problems in the first place.

Gay Relations With Family Key to Health

One of the greatest health risks to gays comes from an unexpected quarter--how well their orientation is accepted by their families. A new study in the journal of the American Academy of Pediatrics revealed the distressing results. The research was done at San Francisco State University under the leadership of Caitlin Ryan. You can read Lisa Leff's Associated Press story on it here.

The bottom line is that "teens who experienced negative feedback were eight times as likely to have attempted suicide, nearly six times as vulnerable to severe depression and more than three times at the risk of drug use." It is the sense of rejection that seems to matter, rather than the severity of it. "One of the most startling findings was that being forbidden to associate with gay peers was as damaging as being physically beaten or verbally abused."

Researcher Ryan reported that after sharing the results with parents in "strained relationships with their gay teenagers...many were alarmed enough to make immediate changes in their interactions." That is very much to the good. There are a few enigmatic leads, but we do not know why some people are gay. We do know that attempts to convert them to being straight do not work. Acceptance is the best policy for the gay person, for their family and for society as a whole.

It doesn't take very much. As Ryan sums up, she found that, "Someone can still be uncomfortable with their child's sexual orientation, but if they are somewhat more accepting and do the best they can, they will do the youth a lot of good. That to me is an important message."

Teen Abstinence Pledges Have No Effect

The first sentence of the story sums it up pretty neatly. "Teenagers who pledge to remain virgins until marriage are just as likely to have premarital sex as those who do not promise abstinence and are significantly less likely to use condoms and other forms of birth control when they do, according to a study out today."

Janet Rosenbaum, who conducted the study for the Johns Hopkins Bloomberg School of Public Health concluded, "Taking a pledge doesn't seem to make any difference at all in any sexual behavior. But it does seems to make a difference in condom use and other forms of birth control that is quite striking." This striking difference is a 10-point reduction in taking precautions against pregnancy or sexually transmitted diseases. You can see the Washington Post story on it here.

The results will provide fodder for the debate about whether to continue the Bush Administration's concentration on "abstinence only" education programs, which currently enjoy $176 million in federal support. This is a cornerstone issue to the current occupant's fundamentalist base of supporters. They believe that talking about sex makes teenagers more likely to engage in it, as does talking about ways to have sex and not get pregnant or contract STDs. As usual, studies like these do not change their views, which tend to be faith-based and therefore impervious to fact and logic.

If the same number of teens will have sex whether they are taught a comprehensive or an abstinence-only curriculum, then withholding information that would reduce unwanted pregnancies and save lives seems particularly shortsighted and cruel. More studies should be done to determine whether the Johns Hopkins results can be confirmed. If so, then abstinence only programs should be left to the organizations that want to promote them-without public support.

Good comprehensive curricula clearly point out the common emotional and psychological repercussions of teen sex, as well as the risks of pregnancy and venereal diseases and their effects. Armed with this, if the young people still want to have sex they deserve to know the choices of safeguards they can employ. To think and teach otherwise is naive in the extreme--and dangerous.

Middle East Madness

"Madness! Madness!"--Major Clipton, Bridge on the River Kwai, 1957.

That's what I think of when I contemplate the latest lurid goings on in the Middle East between Israel and those of its neighbors who remain hostile. Right now it's the Palestinians in the Hamas-controlled Gaza Strip. Hundreds of rockets have been fired into Israel from there over the past several weeks. In response, Israel has responded as any government with the means to do so would. Over the past two days it has launched air raids on some 210 targets, killing an estimated 280 people and injuring at least 700 more. See the latest details from the BBC here.

Much of the Gaza police and security force has been destroyed. The chief of police himself is among the slain. Every security installation has been struck, according to the Gaza authorities. Israel has moved tanks up to the border and is evidently contemplating going in on the ground. "The time has come to fight," said Israeli Defense Minister and former Prime Minister Ehud Barak.

The Israelis ended their occupation of the territory in 2005, forcibly removing some 2,500 Jewish settlers in the process. A shaky truce between the two sides went into effect on June 19. It had reduced the number of attacks, but not ended them. Beginning in early November the violence began to rise as attacks increased, Israel tightened its grip on border entry points and made an incursion to search for smuggled arms. Lately 80 rockets a day have been fired into Israel. No state would permit that without striking back, and Israel has struck back. Civilian casualties have been remarkably low for such a densely populated area, but nevertheless there have been some--perhaps 20. Only one Israeli has died in the rocket barrage.

This interminable cycle is indeed madness. Why can't Hamas and similar groups face the fact that Israel is here to stay? Why can't they accept the independence and recognition the world is more than ready to give them for their own state? Why can't they see that attacking Israel just gets a hundred times that number of their own people killed, or that the money, lives and effort spent in such attacks could instead be devoted to improving the lives of their children? And why can't Israel see that striking back massively never works either, other than to perpetuate the cycle?

Palestinian Authority President Mahmoud Abbas, admittedly a rival of the Hamas group, blames them for not extending the cease fire. None of this was necessary. None of it ever is. It is simply the normal state of affairs: madness.

Obama Faces Race Against Time

When Barack Obama began his run for the presidency there were a limited number of things he wanted to emphasize on his to-do list. He wanted to stop the war in Iraq, provide health care and begin the transition away from carbon-based energy system to a renewable one. His overall theme of "change" meant that the initiative behind these priorities would be kept away from narrow "special interests." Even before his inauguration, mission creep, the campaign and the exigencies of unfolding events have begun expanding Obama's agenda. Events tend to do that. How well his administration balances focus with response will determine its success.

Conditions have dictated that Obama will take office in the midst of a terrible financial imbroglio, a severe recession that could become something worse, two hot wars in addition to an amorphous "war on terror," horrendous budget and trade deficits and a period of rock-bottom American credibility, frayed alliances and trampled civil liberties. Other impending crises threaten to appear or escalate. To the normative Israeli-Palestinian problem you can add India-Pakistan, Russia and its former empire, Zimbabwe, Somalia, Sudan, Korea, China-Taiwan or Tibet to the list of international hot spots that could flare out of control at any moment.

Plenty of Administrations get hijacked by events and never seem to get back on track to their initial priorities. Think of Kennedy's idealism getting diverted into Berlin and Cuba. Johnson began his Great Society and got mired in Vietnam. Nixon sought Detente but also had Vietnam, stagflation and then Watergate. Reagan faced economic woes and Iran-Contra. Bush the elder said he would be the education president. Instead his most memorable actions were in the Gulf War before he was brought down by a recession. Clinton's domestic agenda was constantly overshadowed by peacekeeping missions. Bush II's promised "humble" domestically-oriented concentration was largely replaced by a focus on war and terrorism.

It will be most difficult for a new president coming in during times like today's not to be caught lurching from one crisis to the next, putting out fires while not really delivering the "change" he and the electorate wanted to effectuate. It seems as though the transition team is being rather amazingly thorough. They are doing everything from keeping tabs on everything Bush deregulates so they can initiate reversals to devising massive programs of infrastructure and green energy construction. They want to reposition the military, initiate several new foreign policy approaches, bring efficiency to the medical services industry and change its insurance basis, rework education, institute a new public service rubric---the list goes on and on.

This is why the transition team is moving so urgently with appointments. This will either be one of the best organized and most effective presidencies of all time or it will be one of the most overextended. There are so many things that need fixing or changing, and this team seems intent on acting on them all at once. The only way to accomplish that legislatively is to hit the ground running and present plans in total before effort and attention are diffused and distracted by the inevitable pressure of the crisis of the moment and by politics.

When Obama takes office his first Hundred Days could make Roosevelt's look timid by comparison. On the one hand, if the opposition can tie things up in procedural hurdles or find a soft spot to attack (as happened with Bill and Hillary Clinton's health initiative) the entire effort could quickly bog down. If not, and a friendly Republican or two can be found in the Senate, we could see some truly remarkably sweeping changes. Obama will be trying to lever Congress by mobilizing public support, continuing his grassroots campaign on a more or less permanent basis. It will be fascinating to watch.

Merry Christmas

Christmas is great because of the incongruity of it all. Even today, many believers, particularly those who shout the loudest, picture a deity of power, majesty and grandeur. They like the parting of the Red Sea, destruction of enemies and visions of harsh judgment. They like to quote, "The beginning of wisdom is the fear of God." The king who commands respect and sets rules, that is the image of God most subscribed to then. Many still do.

Yet God did not come riding a cyclone throwing thunderbolts. He came as a defenseless infant born to nondescript parents in an animal pen. This was God as "the still, small voice." Who would fear a baby, a poor child, a run of the mill craftsman like thousands of others?

No one would, of course. That is the wonder of it, and the design. We are not meant to fear. Indeed, as an adult the first words out of Jesus' mouth to people in trouble were usually, "Be not afraid." The message and the spurs are humility, empathy for our condition and love. Jesus radically defied our expectations at birth and kept on doing so his whole life. God as a child, a servant, an outcast, a criminal. He was like nothing most people would have expected, carrying a message that turned the wisdom of the world upside down.

May you enjoy a wondrous Christmas season this year.

Bank Bailout: No Accountability

Even on those rare occasions when the Bush Administration makes the right call they bungle the implementation. After nearly eight years of gross incompetence this is hardly surprising, but here we go again. The latest bonehead blunder concerns the financial bailout. Of the $350 billion distributed so far, hardly any of the recipients either know or will say where the taxpayers' largess has gone, or if it is being used for the intended purposes of continuing to make loans or preventing foreclosures.

The total lack of accountability recalls earlier blundering performances such as Iraq and Hurricane Katrina. These dimwits never seem to learn from their mistakes. Or maybe as long as welfare is going to the rich they really don't care. The Associated Press conducted a revealing investigation. It's called "Where'd the Bailout Money Go? Shhhh, It's a Secret."

Given the financial meltdown and the burden of bad debt brought on by the subprime mess, a bailout to get money circulating again was needed. I myself agreed with the necessity of doing this, as you can check by referencing my earlier posts on the economy. What I did call for, however, was some strict accountability. But no such luck, apparently. The money no doubt is helping these firms in general, but no one can or will say how much is going to free up funds for intelligent loans and how much for mergers or executive bonuses.

JP Morgan Chase's spokesman said, "We've not given any accounting of, 'Here's how we're doing it.' We have not disclosed that to the public. We're declining to." The firm received $25 billion. Sun Trust Banks of Atlanta got $3.5 billion. They say, "We're not providing dollar-in, dollar-out tracking." Mellon Bank said of its $3 billion, "We're choosing not to disclose that." Comerica said of its $2.25 billion, "We're not sharing any other details."

Treasury Secretary Paulson's lame comment on the matter is, "What we've been doing here is moving, I think, with lightning speed to put necessary programs in place, to develop them, implement them, and then we need to monitor them while we're doing this. So we're building this organization as we're going." He wouldn't demand an accounting for every dollar as an up-front requirement before anybody got a single buck? And he's the Secretary of the U.S. Treasury? Unbelievable.

Now, after the fact, a bipartisan Congressional oversight panel is trying to get to the bottom of things. Chair Elizabeth Warren, appointed by the Democrats, will begin calling witnesses. Republican Scott Jarrett of Ohio remarks, "A year or two ago, when we talked about spending $100 million for a bridge to nowhere, that was considered a scandal."

Indeed, the more one finds out about this benighted gaggle of incompetents the more it seems they might indeed be the worst presidential administration in American history.

Obama-Warren Flap

Barack Obama has drawn a lot of angry reaction from gays and the Democratic left about his choice of prominent evangelical pastor Rick Warren to deliver the invocation at his Inauguration. Warren supported California Proposition 8, which overturned the state's recent court decision legalizing same-sex marriages. It would be a good thing for the critics to get over the anger and realize Obama is doing exactly what he promised he would do during his campaign. I refer to the promise that more than any other won him the presidency, the promise to end the cycle of red and blue gotcha politics that does little but demonize and caricature all who do not agree on every point.

Obama has said many times that he is interested in solving America's problems. There are several issues he and Warren agree on, such as HIV-Aids, aid to education and the poor, the need to encourage parental responsibility and environmental action. Rather than do nothing but fight over the things we disagree about, why not work together to make progress where we do agree, Obama asks.

You can read a short, accurate synopsis on the issues involved here.

For his part, Warren too has drawn fire from some of his supporters for inviting the pro-choice Obama to speak at Warren's Saddleback Church in 2006 and to be questioned there this summer on national television just ahead of a similar session with Obama's opponent, John McCain. Obama and Warren exemplify a welcome trend that would be very good for the country over the next few years.

Instead of vilifying each other, liberals and conservatives ought to identify where they hold common ground and get to work on those matters. The disagreements on other items will still be there; there will be contention about them and someone will win and someone will lose. But that is no reason to completely refuse any cooperation on issues where progress can be made. Those are the kind of political games the American people are very tired of, and against which both the Democratic and Republican tickets ran this year. Barack Obama is not going to run the country in the divisive way President Bush has for the past eight years. That is a good thing. Both Obama and Warren are sending this signal to their most fervent supporters and the nation as a whole for good reason. Their approach should be embraced.

What Students Need to Learn

Following up from yesterday's post about the community colleges, years of familiarity with our students has really settled me on some classes I feel ought to be essential for everyone who goes to school in the United States. I'm not talking just about academics, but about things a person needs to know to live a happy and productive life. With our large and growing underclass, we need to understand that more and more young people are simply not getting these life lessons at home. There is a huge correlation between a single-parent, low-income childhood and incarceration, substance abuse, unwed pregnancy, premature death, and so on.

Here are some of the classes I think everybody needs.

Health and Wellness. This includes hygiene, nutrition, exercise and first aid. People need to hear that a double cheeseburger and fries every day will kill them before they are 50. Heaven knows they hear and see enough messages every day telling them to scarf down the burgers, beer, soda and candy. We have an obesity/diabetes epidemic? Is anyone surprised? Gigantic benefits for people's lives and for society down the road

Human Relations. Members of any society need to understand the rules of common courtesy and expectations. Family dynamics could be improved immensely if people learned how to discuss things in psychologically appropriate ways. Sex, raising children, and all that jazz in this class too. This class would reduce crime, violence, divorce, child abuse and just a whole lot of human misery in general. The payoff for society would be huge.

Something vocational or domestic. It could be carpentry, cooking, gardening, appliance repair, plumbing, sewing, or the like. Yes, even academic-minded college-prep students could use some of these skills around the house or in their future lives as suburban homeowners. Some would find a path to vocational careers, too. Not everybody needs to get an academic degree, and millions of vocationally-minded teens see little reason to stay in school if white-collar directed courses are all that are taught. Remember, no more than 25% of jobs will require a college degree for the foreseeable future. Serve your customers' needs or you will lose them. This is not a new concept.

Consumer Math. People need to see how much they will wind up paying for things if they run up credit card debt. How much income it takes to afford an apartment. A house. How to do their taxes. How much various jobs pay. They need to learn about insurance, including medical, auto, home and life. We need to have savvy consumers who have a realistic appraisal of what they need to do to afford to live in society and are proficient enough not to get scammed by all the predators out there in the market. This shouldn't wait until the senior year of high school. It should be in junior high or the freshman year. The average person does not need fancy abstract math. But they sure as heck need this. Our society is structured so that it depends on them knowing it. But look at the foreclosure rate. So let's see that they do.

Finals Week

Today ended another Finals Week here at College of the Sequoias. What stands out to me from the results in my classes is the great disparity among the students. Most either did very well or they did poorly, with relatively few in the middling range. They either applied themselves and studied thoroughly or they did not bother to prepare. This suggests some interesting things to muse about.

In my five History classes I distributed study sheets pointing out what they needed to know for their specific final and where to find it. Depending on the various class calendars the students then had either five or seven days to prepare. For the benefit of those who really like to get started early they had also been told for weeks what chapters their final would cover. Since these are all college students who had stuck it out to the end of the semester, one might assume they would all want to make sure their investments of time, effort and money were not in vain.

If so, that assumption would have been disappointed. One of the questions on the test shed some light on the subject. I asked the students to write about an event in their personal history that had an important effect on their subsequent life. That this is a poor area was highlighted by the number of young people who wrote about tragedies very close to them. There seemed to be a disproportionate number of deaths of close family members, imprisonments, and so forth. Family breakups were commonly cited. Parents losing jobs and frequent moves were other themes. Some had such problems or were recovering from health issues and substance abuse difficulties themselves.

It seemed the social problems we have, especially among the less privileged, are truly serious and corrosive in our society. Many have overcome a lot just to be taking classes at a community college at all. Many were the first to go to college in their families; some were the first or second to even make it through high school. Quite a few mentioned how proud their mother would be if they made it through and graduated. Others mentioned a grandfather or a teacher who had inspired them. It is so crucial for parents to offer encouragement and set standards and expectations, and for the rest of us who come into contact with young people to offer them a positive role model and practical wisdom. So many are not hearing it from many quarters.

Even so, many are just lazy or immature. They simply are not ready or do not get how life operates yet. We will see some of them a few years down the road. We love to see students in their thirties and older come into our classes. They have found out from the school of hard knocks that life without a vocational certificate or degree is usually not a bed of roses. They have been stuck in dead end jobs and are seriously motivated.

At the bottom line, an attitude of pride in one's self, an ethic of achievement and some fear of what life usually metes out to the unprepared would be good cultural traits to pass along. There is also the matter of confidence or belief. Many who do not come from backgrounds that inculcate such values have to fight peer pressure or resentment. Since so many are not getting these ideas at home, they must be communicated at school from the earliest grades. And there also needs to be a more stable financial situation for the working poor. The hand to mouth struggle for existence for many is a major impediment to taking the time or having the resources to succeed. People need to see a realistic way ahead. Just being told about it is not enough for many; they need to see it in their communities.

Reasons Behind Auto Rejection

There are three main reasons Congressional Republicans scuttled the move to provide a bridge loan to keep the Big Three automakers out of bankruptcy. They were to strike a blow against organized labor, curry favor and increased support from business and to serve the foreign automakers in their own states. It was a cold matter of political calculation. See the facts here.

An e-mail "Action Alert" December 10 to GOP Senators told them, "Republicans should stand firm and take their first shot against organized labor." They lost in the Senate by 17 votes, 52-35, but did prevent the Democrats from getting the 60 votes needed to break their filibuster, which was all they needed to do. Humiliating organized labor was their top priority. By breaking the union they can undercut a major source of funding for their Democratic opponents. The UAW has given $12.5 million to Democrats since 2000. That millions of Americans will lose their jobs or that the economy as a whole will suffer about $240 billion in losses if the companies go down is of little concern to them.

By beating down the union the GOP will stand to become even more popular in business circles and garner increased support from them. It is true that the Big Three have been supporting Republicans 3-1 over Democrats, so they are alienating the car companies. But they stand to more than make up for that with the rest of business and industry. They went along with the twenty times larger bailout of the (non-union) financial industry, so it's not that they are against helping corporations per se. They had no problem with no-bid contracts in Iraq or paying for mercenary forces there. And it's not that they have a problem with micromanaging private institutions. No, their requirements for agreeing to the help were to dictate reductions in workers' pay. Not management pay, of course, mind you. No, the signals are clear. Goodies for corporations, sure. But not if any of the help winds up in the hands of hourly workers. That is against their principles.

Finally, there is a decidedly home field interest element working here. The most vociferous opponents were from states where foreign, non-union automakers have set up shop. Sen. Bob Corker of Tennessee has Nissan plants and its U.S. headquarters in his state. Sen. Richard Shelby of Alabama has Mercedes, Hyundai and Honda plants in his. These men have a vested interest in favoring foreign corporations over American ones, and are wasting no time in doing so.

Their machinations are harmful to the well-being of the country and should be seen as such. Hopefully the Bush Administration will free up the $14 billion it has at its disposal to tide GM and Chrysler over until Obama takes office and a much larger contingent of Democrats takes office. Until then we are seeing once again the short-sighted, tit for tat, me first politics as usual that Obama was elected to end. The old guard has 34 days left and seems intent on trying to make the most of them. Their departure will come none too soon.

Not All Heroes Carry an M-16

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. (Fourth Amendment to the United States Constitution)

The Bill of Rights, the first ten Amendments to the Constitution, are the primary legal bulwarks of our personal freedoms. The Fourth Amendment of these ten is the principal obstacle to the establishemnt of a police state such as exists under totalitarian governments along the models of Nazi Germany and Stalinist Russia.

It is therefore to the Constitution that all elected officials, military personnel and government employees take an oath of loyalty. It is not to a leader, political party or even the nation itself that the oath is directed. It is to a higher authority, the authority of the very ethical, legal and moral principles that animated the original Patriots and are expressed in our foundational charter that allegiance is sworn.

Thomas Tamm took his oath seriously. A former standout prosecutor and Young Republican County Chairman, the Justice Department Inspector with Top Secret clearance was tasked with overseeing surveillance on suspected terrorism. Upon noticing that American citizens were being spied on in direct violation of the Constitution and without recourse to the FISA Act provisions for oversight, he brought this to the attention of superiors. When told the practice was "probably illegal" and to "drop it" his conscience would not let him rest.

Unable to make any headway at Justice, he eventually went to a phone booth in a subway station and tipped the New York Times. The exposure of the Bush Administration's unconstitutional abrogation of its oath of office to "preserve, protect and defend the Constitution" created a political storm. It has also cost Tamm his job and subjected him to constant harrassment and threats by the FBI. Michael Isikoff tells Tamm's story in Newsweek. You can see the article here.

Tamm may be charged with revealing state secrets. He explains himself with, "If somebody were to say, who am I to do that? I would say, 'I had taken an oath to uphold the Constitution.' It's stunning that somebody higher up the chain of command didn't speak up." Meanwhile, those at the top of that chain whose malfeasance he exposed are negotiating with publishers for seven-figure royalties for the rights to their memoirs.

Not all the heroes of freedom are in a desert toting an M-16.

The Bigger Picture

Reader Tom sent me an article by Frank Rich today. The New York Times op-ed luminary published a piece called "Two Cheers for Rod Blagojevich" in the December 13 edition of the paper of record. You can go to it here.

As the Times intro to the piece says, as bad as the corrupt Illinois pol is, he is but "a timely national whipping boy for an era of corruption and profound lack of accountability." Yes, the guy is a scum, if not literally crazy. They should impeach the rat and then throw the criminal book at him. But it's rather like Michael Vick or Scott Peterson. Kill some dogs or your pregnant wife or rob a liquor store and people are incensed. Kill thousands and squander billions and it somehow provokes less of a reaction. As Stalin once said, "Kill one person and it is murder. Kill a million and it is a statistic."

Blagojevich is a figure we can get at, unlike the seemingly invulnerable authors of the disasters that now place the national weal in peril. Where is our sense of proportion? As Rich points out, "Blagojevich's alleged crimes pale next to the larger scandals of Washington and Wall Street. Yet those who promoted and condoned the twin national catastrophes of reckless war in Iraq and reckless gambling in our markets have largely escaped the accountability that now seems to await the Chicago punk nabbed by the United States Attorney, Patrick Fitzgerald."

George W. Bush neglected his duty to get the enemy who attacked us and used fear of it as a pretext to start an unrelated war against a different power. He justified it with a web of intentional deceit. He still even this week blames "the intelligence," ignoring the accounts of former administration insiders that attacking Iraq was on the agenda in the first month of the Bush presidency. As a result, thousand of Americans are dead, tens of thousands are maimed, hundreds of thousands of Iraqis are dead and at least $600 billion of our money is gone. These have all become statistics. And the original enemy still plots, schemes and kills. Yet the votes are not there for impeachment. It would be inconvenient.

Stealing elections, abridging the Constitution, torturing prisoners, abrogating treaties, spying on citizens without cause, politicizing the Justice Department, falsifying scientific research, selectively revealing classified information and identities for political gain while keeping the basic workings of government secret - these are the kinds of practices for which tin-pot dictators from third world countries eventually wind up getting hauled in front of the International Court of Justice in The Hague. For the "greatest democracy on earth" they are business as usual if the offenders work at 1600 Pennsylvania Avenue.

The financial malefactors will likely suffer no real consequences either. One would think the reputations of people like Phil Gramm, Robert Rubin and Alan Greenspan would be ruined. Instead, the damage they caused was so severe it became imperative for the people at large to come to the rescue of the institutions they destroyed in order to prevent the total crashing of the entire economy. Instead of being held to account they are, in effect, being rewarded. Make sure to see Rich's article for a fuller list of the miscreants. The bottom line is that this has got to stop. Some people need to go to jail.

We cannot afford this kind of dishonesty and self-delusion any longer, either morally or financially. In 1945 the United States stood like a colossus over a ruined world. It accounted for 50% of the world economy and alone possessed the ultimate military weapon. Those days are long gone. Institutions with the power to misdirect our entire political system or the wealth to short-circuit our entire financial edifice have to be watched like a hawk and held to account. Gov. Blagojevich is a useful example, and the example should not stop with him.

Obama's Afghan Conundrum

The complicated situation in Afghanistan and Pakistan is yet another major piece of unfinished business the Bush Administration will leave on Barack Obama's doorstep. How he handles it will provide a major insight into the new president's methods and world view.

Obama won the Democratic nomination for one reason more than any other: he opposed the Iraq invasion and war from the start. This was not because he is a pacifist. It is because he correctly assessed that the Al Qaeda group responsible for the 9/11 attacks and their Taliban enablers were in Afghanistan and, following the Bush Administration's botched campaign against them, across the border in Pakistan as well. All through the campaign he spoke of winding down in Iraq and ramping up in Afghanistan.

The situation after after seven years finds the Taliban, driven from power at the end of 2001, resurgent throughout Afghanistan. While in control of most of Afghanistan before 9/11 they ran a rigidly repressive Islamic theocracy and welcomed the presence of radical groups such as Al Qaeda. The Taliban are particularly strong in the nation's South among the majority Pashtun tribal areas. Their leaders, including Mullah Omar, are believed to be ensconced in the Waziristan region of Western Pakistan. From there they train and stage attacks across the border. Pashtuns are numerous on that side of the frontier as well.

Al Qaeda too has reconstituted itself. Though its leaders such as Osama bin Laden and Ayman al-Zawahiri are also though to be in the "tribal autonomous areas" of Western Pakistan, the organization has tentacles in many countries. Terror attacks since 9/11 have originated from such places as Indonesia, North Africa, Yemen, the Philippines and Spain. Their presence is believed to be strong in Somalia, Sudan and Bangladesh, and they are known to have a presence even in European countries and lawless areas of South America. Some entered Iraq following the American invasion there, but their heinous conduct finally wound up turning most of their early Sunni Muslim allies against them.

Now after seven years of general futility the Afghan president grows increasingly frustrated and impatient with the US-led NATO effort in his country. Hamid Karzai and his government exert effective administration over little more than the capital city of Kabul itself. He is openly talking of sitting down to negotiate with the Taliban and asking the international force to leave. See the story here. Warlords of the various ethnic groups such as Uzbeks and Turkmen control swaths of territory, as do the Taliban and the NATO forces. The NATO presence of some 60,000, more than half of them Americans, are far too few to pacify the rugged countryside and its fiercely independent factions. They are increasingly turning to greater opium production to finance their operations.

Pakistan is a nation riven with rival factions itself. The elected President, Asif Ali Zardari (official biography here) of Pakistan certainly has reason to oppose terrorism. He is the widower of Benazir Bhutto who was murdered in a terrorist attack a year ago in Rawalpindi, presumably by fundamentalist groups who could not abide the thought a her, a liberal woman, once again as President of Pakistan. See the Bhutto biography here. Its Inter Services Intelligence agency helped create the Taliban as well as the Lashtar e Taiba terrorist group that attacked Mumbai, India last month.

Why was Pakistan forming such groups? In the case of the Taliban, it was originally to oppose the Soviet takeover of Afghanistan in the 1980s. Lashtar was formed to resist India's control over the disputed territory of Kashmir. The fact that the groups have gone rogue has not discredited them in all eyes among Pakistan's power structure. While many see them as sources of threat and instability to Pakistan itself (as they are), fundamentalists like their theology and important circles within the military enjoy longstanding ties to them and are seemingly acting to protect them from the sporadic army incursions the government sends into the Western border areas.

Pakistan has developed nuclear arms, as has India. Should Pakistan prove unable to subdue Lashtar-e-Taiba there is good reason to fear an Indian attack on its suspected bases. The dangers of such a confrontation are obvious. Similarly, American air strikes and even commando raids across the border into Pakistan from Afghanistan nettle sensibilities there as well. President Zardari may not have full command of his own government in the matter. He recently promised a sweep but then the military cancelled it.

Obama's challenge is thus extreme. He visited Pakistan as a young man and was impressed with the need to ease the poverty there that helps to fuel violent radicalism. He wants an "ally in the war on terror" there but knows that if he pushes too hard Zardari may be ousted in favor of someone less well disposed to American interests or anti terrorism. He would definitely like to find a way to satisfy India's understandable concerns without destablizing Pakistan further or touching off a nuclear crisis in South Asia.

To settle the Kashimiri dispute on terms favorable to Pakistan (the region is primarily Muslim) in exchange for sincere Pakistani assistance against the terrorist groups might provide the best avenue for achieving productive results. Whether Obama and his Secretary of State Hillary Clinton can do this remains to be seen. It is undeniably a very tall order. But otherwise we are likely to see the same threat based in Western Pakistan inviting more American strikes which will further alienate the Pakistani people against our aims.

Five Blunders, Part II

Let's rejoin our skein from yesterday about the five blunders Nobel economist Joseph Stiglitz pointed out in his recent Vanity Fair article. These mistakes have done much of the damage that has put the US economy in its present dire straits. You can read his whole article here.

Mistake Number Four he calls "Faking the Numbers." In the wake of the collapses of the Enron and WorldCom houses of cards, Congress passed the Sarbanes-Oxley Act to encourage accurate accounting. Unfortunately, they failed to follow S.E.C. Chairman Arthur Levitt's advice to crack down on stock options. These ingenious dodges to inflate executive pay off-salary offer two tempting incentives: to paint rosy pictures of the company's performance to inflate the stock's value, and to get management concentrating on quarterly numbers instead of the long term health of the firm. To add to the problem, rating "agencies such as Moody's and Standard & Poor's are paid by the very people they are supposed to grade. As a result, they've had every reason to give companies high ratings," including those whose portfolios were founded on "toxic mortgages."

Mistake Number Five entails weaknesses in the $700 billion financial bailout plan. One of these is that Treasury Secretary Paulson threw money into some institutions and not others and did not require it be made available to make loans. "He even allowed banks to pour out money to their shareholders as taxpayers were pouring money into the banks." Another is that nothing was done to address the cause of the problem, all those mortgages going into foreclosure. Stiglitz likens it to giving a bleeding patient a massive blood transfusion without stitching up the cut that's causing the blood loss. Here is massive government intervention, with about half the money being spent so far. But once again, the reluctance to provide no-nonsense requirements for what the banks ought to be doing with the money is mitigating the program's effects.

It all boils down to a consistent flaw that ties together all five blunders, the expectation that the great movers and shakers of finance and industry will do the right thing for themselves, their stakeholders and the country without firm regulations mandating it. As Stiglitz puts it, "The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal."

Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, "I have found a flaw." Congressman Henry Waxman pressed him, responding, "In other words, you found that your view of the world, your ideology, was not right; it was not working." "Absolutely, precisely," Greenspan said. The embrace of America - and much of the rest of the world - of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.

Five Blunders, Part I

In an article in Vanity Fair, former Chairman of the Council of Economic Advisors Joseph Stiglitz lists five major mistakes from the eras of Reagan, Clinton and Bush II that have led us to our current economic crisis. Stiglitz, a Nobel laureate, is currently a professor at Columbia University. To read his entire article click here.

Mistake Number One was not reappointing Paul Volcker as Fed Chairman in 1987 and replacing him with Alan Greenspan. Volcker had accomplished the near-miraculous, bringing inflation down from 11% to 4% in his seven-year tenure. "But Volcker also understood that financial markets need to be regulated. Reagan wanted someone who did not believe any such thing, and he found him in a devotee of objectivist philosopher and free-market zealot Ayn Rand." That person was Alan Greenspan.

Greenspan helped lead us into not one but two bubbles, the tech bubble of the late 90s and the housing bubble of the 00s. He refused to take preventative regulatory measures in both cases. Stiglitz explains he could have increased margin requirements to restrain the tech stock bubble and prevented the predatory and no-documentation "liar loans" that inundated the mortgage industry with the bad paper at the root of the present meltdown. The latter was debated in full on the Council of Economic Advisors to which Stiglitz belonged, but Stiglitz relates that the deregulators won the day, so as not to stifle "innovation." Events have shown what such innovation built on fraudulent data can lead to.

Mistake Number Two was repealing the Depression-Era Glass-Steagall Act which had "separated commercial banks (which lend money)and investment banks (which organize the sale of bonds and equities)." The principle was to prevent conflicts of interest. Without it, the very institution that had its shares issued by its own investment bank arm (and rated AAA, of course) could feel pressured or obligated to lend that arm money. When Stiglitz objected he was told not to worry; the industry would create its own walls of separation. Instead, a $300 million industry lobbying campaign and the legislative muscle of Sen. Phil Gramm prevailed.

Mistake Number Three was the Bush tax cuts of 2001 and 2003. Going primarily to the wealthy, they did little to stimulate the economy, a task which was left up to the Fed. The Fed acted with "low-interest rates and liquidity," putting millions into the housing market who couldn't really afford to be there. The war in Iraq used up further money and led to huge oil price increases. The savings rate fell to zero and the capital gains rate was cut in half. High-risk speculation was thereby encouraged and productive investment such as in manufacturing and infrastructure was starved for funding. The national debt increased 70% in just a few years.

All the pieces were now in place for a massive "correction," i.e. the unwelcome intrusion of reality into this Fantasyland of wishful thinking. I'll proceed to the Fourth and Fifth mistakes and a general summation tomorrow.

Illinois Corruption Implications

The arrest of Illinois Governor Rod Blagojevich and his chief of staff John Harris on corruption charges this morning should serve to wipe out the perception of an ethics advantage Democrats have enjoyed since their successful 2006 congressional campaign against the "Republican culture of corruption." And though it should hurt his party, so far the scandal has only served to improve Barack Obama's personal stature on ethics.

In the run up to the 2006 election Republicans were at the center of a flurry of embarrassing corruption incidents. Scooter Libby, Tom Delay, Randy "Duke" Cunningham, Larry Craig and Mark Foley headlined an all-star rogue's gallery that, combined with George W. Bush and Dick Cheney's constitutional transgressions, badly tarnished the GOP's reputation that year. In conjunction with public disillusionment with the Iraq War, the result was the Democrats gaining the majority in both houses of congress for the first time in 12 years.

The Blagojevich scandal has broken right after the December 6 defeat of Democratic Louisiana congressman William Jefferson, who had been indicted for bribery in 2007 after a raid on his Capitol Hill office in 2006 found a wad of $90,000 in campaign cash.

As the soon-to-be party in power, the Democrats will be the ones primarily having to play defense on ethics, and expect the Republicans to quickly seize the initiative on the issue, particularly since Blagojevich hails from the same state as President-elect Barack Obama.

Federal Prosecutor Patrick Fitzgerald of Libby trial fame today announced the specific charges as mail and wire fraud and conspiracy to commit bribery in trying to sell his appointment to the Senate seat being vacated by Barack Obama to the highest bidder. The fraud charge carries a maximum sentence of 20 years and the bribery charge 10. A Reuters report picked up by Yahoo News spells out the details. You can read it here.

So far, Barack Obama has come out of the incident on the moral high ground. Top former Republican strategist Ed Rollins comments on NPR that Obama receives high marks for refusing to deal. In the taped sessions Blagojevich rails against Obama for offering only "appreciation" should the governor appoint Obama's preferred choice, reputed to be Valerie Jarrett. See the NPR story here.

In fact, Obama may have indirectly spurred the urgency of Blagojevich's bribery efforts by acting to tighten up Illinois' ethics laws. A week before his first debate with John McCain and when he was under Republican attack for his associations, Obama called Illinois State Senate President Emil Jones and asked him to pass a law he had long backed, "banning the so-called pay-for-play system of influence peddling in Illinois." Jones, a Chicago Democratic power and Obama mentor, changed his position on the bill and got it passed 55-0. Blagojevich, who had also opposed it, could do nothing to stop it since his veto would have been overridden. Instead, as the charges read, he became frantic to extort what benefits he could for the appointment before the new law goes into effect on January 1. To see the New York Times story on this click here.

Detroit Must Be Saved

Have you noticed a strange sense of proportion among some policymakers these days? It seems that some who couldn't approve the $750 billion bailout for the financial industry fast enough have major misgivings about committing $25 to $35 billion to save the auto industry. Now, why would that be? Might it have anything to do with a white collar v. blue collar bias? With antipathy toward unionized industry? With an exceptionally cozy and often politically lucrative relationship between many lawmakers, lobbyists, and financial houses?

The collapse of any of the three major US car makers, GM, Ford or Chrysler would probably lead to the loss of 3 million American jobs. Not only the company itself but most US parts suppliers would probably go down. They operate on thin margins and the loss of one of their three major domestic customers would likely do them in. Thousands of dealers would go out of business too. It would spread to affect jobs in shipping, advertising, mining, insurance, lending and would echo through the stores, restaurants, service businesses and charities of every community where an auto plant, parts supplier, garage or dealership is located.

The loss of all that income would reduce funding for schools and state and local government as well. A widening circle of layoffs, falling demand, dropping sales and resulting additional layoffs would reprise the infamous downward spiral of the Great Depression.

There are also international competitive and national security implications. It is essential to retain a manufacturing base for competitive technological reasons. Similarly, a domestic vehicle production capacity must be maintained for military needs. A nation cannot safely leave the production of its military equipment in the hands of others. For all these reasons, economic, technological and defense, President-elect Obama is right to say that simply allowing them to fail "Is not an option." As usual, he looks at the overall national interest and answers the shrill voices with reason.

Ideologues on the right and left must be ignored. The rightists proclaim that the market must be allowed to work, even if it leads to 10 million Americans living in packing crates. The leftists seem happy to "stick it to the man," in the persons of the corporate chiefs, apparently forgetting the social calamity it would cause for millions of average citizens.

A short-term set of low-interest loans along the lines proposed by Sen. Carl Levin and Rep. Barney Frank should be approved so the Big Three can make it through the New Year. Then a comprehensive recovery package entailing substantial "restructuring," as Obama puts it, can be set up as his new Administration comes in. Corporate heads may be required to roll. Excess lines (Pontiac, Saturn) may have to be discontinued. Intelligent fuel economy standards and/or hybrids and plug-in EVs may need to be mandated. New distribution systems may need to be devised. The UAW has indicated a willingness to offer even more concessions, though hopefully they will not have to Wal-Mart themselves. (In spite of all the hysterical fulminations of right wing mouthpieces, labor expenses are only 10% of US car costs.) Perhaps the public will acquire an ownership stake in the companies, as it has in many of the financial firms undergoing rescue, until they can pay back what has been lent to them.

If $125 billion can be committed to one insurance company, AIG, surely a quarter of that amount can be applied to save the American auto industry and all the ancillary sectors and people who directly and indirectly depend on it. Chrysler was bailed out in this fashion decades ago and has repaid the loan many times over, both directly and through the good jobs it has provided and the taxes it has paid ever since. This is not simply altruism; it is in our national self-interest. Not to act is to take a step into the economic abyss. Detroit must be saved.

Spread Some Happiness

The holiday season is upon us, and seldom has the injunction "peace on earth, good will toward men" received stronger scientific support. Indeed, the advice to "Be of good cheer" and spread "joy to the world" is validated by a study that reaches the conclusion, as its primary researcher puts it, that "Happiness is contagious."

You can go to the British Medical Journal's home page, BMJ, to learn more. You can see an abstract of its findings here.

The massive study by Harvard medical sociologist Nicholas Christakis and UC San Diego political scientist James Fowler followed 4,379 people for twenty years, from 1983 to 2003. That's an absolutely enormous sample. If you want to live in a happy community, smile and send out happiness to others. It has an effect to three degrees of separation, that is to the friends of friends of friends.

"A friend who lives within a mile and who becomes happy increases the probability that a person is happy by 25%." When one spouse is happy it increases the happiness of the other by 8% if they live together. For siblings who live within a mile it is 14%, and even affects their friends by 5%. Next door neighbors are affected by 34% if their neighbors are happy. Social networks and distance are important factors in the equation, which has major societal implications. Happy people are consistently measured to be more creative, productive and healthier.

"For a long time, we measured the health of a country by looking at its gross domestic product," said James Fowler, "But our work shows that whether a friend's friend is happy has more influence than a $5,000 raise." People's attitudes and behaviors clearly influence those around them. They found correlations in obesity and quitting smoking, for instance.

So, if you want to live in a happy environment, be the change you desire. Smile, be friendly, exude a positive and upbeat attitude and watch the atmosphere improve. Sometimes the old tried and true cliches are the best. This is certainly an example of it. I consciously follow this maxim in my own life. Try it yourself and you'll enjoy the results-and so will the community around you!

More Corporations Board Climate Train

Interesting news came from Washington today, as the very pro-green Environmental Defense Fund released a statement of principles for regulating greenhouse gases. What makes the news interesting is that Environmental Defense secured as co-signatories eleven of the most prominent energy and manufacturing companies in America. At a time when the U.S. Chamber of Commerce's spokesman for environmental affairs says, "The (economic ) crisis puts the nail in the coffin for climate change," and the Chamber's web site predicts economic calamity if CO2 is regulated as a pollutant, others in the business community are ready to cooperate with environmentalists to address the gathering threat.

In its statement, Environmental Defense and the firms joining as signatories agree on four "common beliefs" and "support a balanced and constructive way forward." These are, in part:

1. The Supreme court's decision in Massachusetts v. EPA requires the EPA to determine whether greenhouse gas emissions endanger public health and welfare.

2. Congress should be the authoritative body to undertake the essential work to craft comprehensive climate legislation.

3. While congress deliberates EPA should take the lead in developing a unifying framework for regulating greenhouse gases.

4. EPA should advance policy actions that address the potential for unintended adverse consequences.

The energy companies signing on include American Electric Power, Austin Energy, National Grid, Pacific Gas & Electric, Public Services Energy Group, AES, NRG Energy and Reliant Energy. The manufacturers are American Honda Motors, Texas Industries and 3M. All of these firms are heavyweights. For thumbnails of their size and operations see the Environmental Defense announcement.

The lesson here is of the possibility for sensible, reasonable and necessary cooperation flowing from the results of the recent election. With the climate deniers defeated, there may now be a synergistic relationship between responsible environmentalism and proactive corporations who see the opportunities inherent in a way forward that mitigates damage to the biosphere while helping the economy at the same time. Fossil fuels will of necessity remain an important part of the mix for some years to come, but business leaders who are looking ahead are the ones who will help lead the way into the future and position their companies to reap the rewards. Announcements such as today's are welcome steps in the right direction, and we will be seeing more like them in the next few years.

College Costs Hamstring Opportunity

A comprehensive report just out on American higher education gives 49 states a failing grade on college affordability. "Measuring Up" is the report of the National Center for Public Policy and Higher Education. You can peruse the entire 36-page report here. The only state not failing-California-earned a "C" by virtue of its relatively affordable community college system.

The implications of the study are ominous for the nation. At a time when a better-educated workforce is needed to compete in the global arena the United States' proportion of highly qualified people is in relative decline versus other nations. As access falls, we waste a greater percentage of our human capital and ensure a lower standard of living for succeeding generations.

Among the findings: While the consumer price index has risen 106% since 1982 in constant dollars and the median family income 147%, college tuition and fees have gone up 439%. That's a classic bubble that cannot be sustained. For the lowest income quintile net college costs for a four-year public university after factoring in financial aid now constitute 55% of yearly family income. That's up from 39% in 2000. For the middle quintile they have risen from 18% to 25%. For the highest income quintile the increase has only gone from 7% to 9% of family income.

"Measuring Up" concludes, "...improvements (in college preparation) are overshadowed by larger gains by other countries, and by the deterioration of college affordability throughout the United States. The relative corrosion of our 'educational capital' has occurred at a time when we need more people to be college trained because of Baby Boomer retirements and rising skill requirements for new and existing jobs."

In the current bad economic atmosphere when states "are grappling with substantial budget shortfalls," the report decries the "usual patterns of the past" that continually address this with "precipitous tuition increases, cuts in student financial aid, and drops in college access." If this model is continued, "then our national and state gaps in college access and completion will worsen, and college affordability will continue to deteriorate."

The upshot of this would be the denial of opportunity to more potential business and societal leaders and the resultant slippage of the American economy further in world rankings. Proposals for cuts to the community college system here in California, for example, are expected, if enacted, to freeze 260,000 students out. Spread that across the nation and you get a picture of the kind of limits to opportunity and the American dream such short-sighted policies would and are engendering. There may be areas where cuts have to be made in tough economic times, but failing to invest in our own national competitiveness and the future earning power of our best and brightest surely must not not be among them.

Obama Apointments and Change

As more of the incoming Obama Administration takes shape, many are asking, "Where's the change?" With so many Clinton era retreads-including Hillary Clinton herself-tapped for top positions, many want to know whether we are going ahead to the future or back to the 90s. The answer is we are going where Obama said we would be.

An old Washington saw holds that personnel is policy. In this view, appointing a lot of Clintonian centrists means we'll be seeing a lot of centrist and triangulation-generated policy. But in his announcement press conferences Obama has opened the curtain on a different approach. What he wants is to hear spirited debate from smart and experienced people. Then he will make a decision and expect his department heads, the Cabinet Secretaries, to implement it. Paraphrasing Harry Truman, Obama declared, "The buck will stop with me."

What is clear is that we will be seeing a lot less ideology and a good deal more pragmatism than we have become accustomed to in the past eight years. Obama is interested in what works, not in preconceived notions of how things "should" be in a theoretical construct.

We'll see plenty of change, all right. Neoconservative approaches have produced dismal failure. Obama is hinting at a massive New Deal style stimulus program. He sounds serious about energy independence and environmental crisis. He will engage the world rather than pose, bluster and bully. His economic bent is to work from the bottom up rather than the top down.

And along with these generally liberally-oriented perspectives will come an openness that could accomplish much. Speaking to the Republican governors today, Obama told them that if they have workable ideas for how the federal government can help the states solve their problems, they will always find him "with a ready ear."

The change is Obama himself. It is like night and day.

Prevent the Next Meltdown

The federal bailout of Citigroup, including a stake of $45 billion in cash injection for shares and up to $250 billion in loss guarantees, is but the latest manifestation of a shocking abnegation of responsibility. Between them, Thomas Friedman and Paul Krugman encapsulate our financial and recessionary situation to a tee. Three-time Pulitzer Prize winner Friedman reminds us how we came to this state of affairs and Nobel economist Krugman reminds us how to prevent a recurrence.

Writing on November 26, Friedman diagnoses the root of the problem. In his piece "All Fall Down" Friedman reminds us it was not just the bankers who caused the financial meltdown. It "involved a broad national breakdown in personal responsibility, government regulation and financial ethics." The heart of his summation is telling:

So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling these loans into securities and selling them to third parties as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so.

Friedman's column is well worth reading. He introduces astonishing examples such as a Bakersfield "strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000." And why not? The builder sold a home, the person who sold the house made a commission, as did the one who wrote the loan, the regulator who assessed the prospects as A-plus and then the outfit that bundled it together with other loans to sell in bulk to other financial institutions. It was nothing but a giant pyramid scheme.

Krugman squares the other end of the equation in his piece on November 28, "Lest We Forget." In it, Krugman begs us not to get so caught up in the details of extricating ourselves from the current mess that we neglect the stringent regulation that will be necessary to keep another such catastrophe from happening again. He reminds us that the banking industry is rather strictly regulated but that the derivative swaps that perpetrated this rot are not. This is what he refers to as the "shadow banking system," the one that Alan Greenspan, Phil Gramm and Robert Rubin insisted was somehow immune to human fallibility and could not be restrained by annoying rules requiring sane and sustainable practices.

Congress and the new president should heed Krugmann's conclusion: "So here's my plea: even though the incoming administration's agenda is already very full, it should not put off financial reform. The time to start preventing the next crisis is now."

Dealing with Mumbai

The horror of the Mumbai terror attacks is at long last over. According to the Calcutta News Net current totals after sixty hours of combat are 183 dead, including 20 police and 22 foreigners, and 327 injured. Two things are still unclear: who was responsible and what their objective was. Another critical imponderable concerns what India and other governments will now do.

Among the theories now current the Times of India reports American and Indian signals intercepts link the terrorists to a group known as Lashkar-e-Taiba, sometimes spelled Lashkar-e-Toiba, a Pakistani-based group dedicated to opposing Indian sovereignty over the disputed region of Kashmir.

Lashkar-e-Taiba, literally "army of the pure," is one of a number of groups established with the aid of Pakistani military intelligence in the 1980s. The nation's Inter-Services Intelligence directorate (ISI) was active with the American CIA in working to organize resistance groups fighting against the Soviet Occupation of Afghanistan. One of these became al-Qaeda. In many cases it is now clear that these efforts succeeded in spawning a set of hateful violent Islamic fundamentalist groups.

If the Mumbai attacks were indeed this group or another spawned in or abetted in Pakistan as seems likely, the next question is what will India do. Its government has announced it can no longer tolerate the existence of safe havens for such groups in Pakistan. It is difficult to imagine any government in the world who had suffered such an attack saying anything else. The United States too has ratcheted up the pressure on Pakistan. The Bush Administration has stepped up Predator drone attacks within Pakistan and even sent in a commando raid against suspected al-Qaeda or Taliban targets across the Afghan border. As a candidate, Barack Obama stated his preference for drawing down in Iraq and building up in Afghanistan. He also announced support for the idea of striking unilaterally into Pakistan at al-Qaeda targets whenever the Pakistanis "could not or would not" do the job themselves.

Faced with this kind of pressure from both India and the Americans the Pakistani government will soon have a bitter quandary on its hands. To take on the extremists within its borders could invite something approaching civil war. At the very least, the terrorists' capabilities would now largely be directed against the government itself. But to do little would be to invite increasingly brazen violations of its sovereignty by the American superpower and by its longtime hated rival, India. We should soon see what course Pakistan will take. It will be tough politically for the Islamic state to crack down hard. Either path will be painful and result in much violence in the country.

India and the United States ought to be working together behind the scenes to coordinate a strategy and an approach to Pakistan on this. They need action but they also need to sustain the rule of law and organized authority in Pakistan. If that breaks down, if Pakistani society disintegrates into its various tribes or important factions within the government or military side with the extremists one need only remember that Pakistan has nuclear weapons. If ever there was a time for adroit diplomacy based on an acute understanding of a country and its problems now is that time.

Homelessness

My wife and I went to San Diego to get together with friends and family for Thanksgiving. We stayed at a downtown San Diego hotel. While having breakfast at the hotel cafe Thursday morning I saw a homeless woman shuffle by on the sidewalk outside. The accoutrements of the trade labelled her as homeless whether or not she really was. The apparently 65-year-old white-haired woman wore a grimy stocking cap and pushed a wheeled, wire cart stuffed with bedrolls and plastic trash bags.

People like her are such a common sight in our society. I have seen them around home, scrounging in trash cans looking for cans and bottles or pushing a shopping cart behind bushes between streets and drainage ditches, getting ready to bed down for the night. Early morning runners along the St. John's River tell me they see encampments in the trees lining this local runoff channel. The local cops regularly sweep the city parks at night to roust them. They beg at freeway onramps. They are everywhere but they are invisible at the same time.

An estimate puts the number of Americans who experience homelessness during a year at 3.5 million. About 33% are chronically homeless. The number at any one time is thought to be about 800,000. It is believed the homeless population tripled between 1981 and 1989. You can look at some data from the National Coalition for the Homeless or the Los Angeles Homeless Services Coalition. They think about 59% of homeless people live out of their cars and 25% live in "makeshift shelters" like boxes. About 33% to 50% suffer from mental illness. Veterans are twice as likely to be homeless as the rest of the population. 43% are female and 39% are children. 25% are employed but cannot afford shelter. In fact, 76% had been employed within the past year.

You didn't used to see so many homeless before the eighties. Anecdotally I'd certainly support the findings about the numbers growing dramatically then and remaining high since. In addition to being a human tragedy for the homeless themselves I suspect they present quite a cost to society. Their camps and living arrangements in general cannot be very sanitary. They wash infrequently and urinate and defecate in the open. The chronically homeless support themselves by some combination of scrounging, begging, stealing, prostitution and dealing drugs. Only 7% have legitimate jobs and high percentages are drug and/or alcohol abusers.

In the past people like that were institutionalized. The non-functional mentally ill and non-functional addicts were "committed" to controlled state wards. In the interest of "freedom" and the Reagan-era desire to cut social services these tools and facilities were greatly scaled back in the 1980s. The result is what we see now. I'm not so sure that what we have is progress, or preferable to what we had before then. In a recent year there were 80,000 homeless in Los Angeles and 18,529 beds in homeless shelters. Are we saving money this way or costing ourselves? Are we serving the chronically homeless best this way or are there better ways? Is not the presence of hundreds of thousands of desperate vagabonds in the self-described greatest country on earth a national disgrace?

Thanksgiving Gratitude List

I'll be travelling out of town with my wife for Thanksgiving. I'm not sure when I'll have a chance to blog before Friday, so I'll devote this space to what we are supposed to be doing at this time of year, counting our blessings. A gratitude list is a healthy thing. It's a good antidote for a negative attitude, which is something I do not want to have.

I'm thankful for
A wonderful wife who is still my best friend after 31 years,
Two fine grown daughters who love their parents, and
A full-time job doing what I love.

I'm thankful that
It seems they got the prostate cancer and it hasn't returned.
I am on good terms with my three sisters.
I have had a chance to see much of the US and a bit of Europe.

I'm grateful
I live in a country with so many freedoms.
I am pretty happy most of the time.
I get to associate with so many fine colleagues and students at work.

I'm grateful that
I've gotten to see the Dodgers win 5 World Championships and the Lakers 8 of them.
My parents pulled themselves up from impoverished childhoods and gave my sisters and me support and a chance.
George W. Bush has less than two more months in office.

I'm thankful that
We have good health insurance.
We can afford to pay our mortgage.
Visalia is such a nice city.

I'm thankful for,
Thanksgiving, turkeys, stuffing, cranberry sauce, pumpkin pie, friendship and love.

Happy Thanksgiving!

Fanatics Among Us

Today one of my U.S. History students handed me a minister's blog entitled "Response to the Recent Presidential Election." The writer, who signs off as "Dutch Sheets" is a pastor in the Christian Reformed Church, formerly popularly known as the Dutch Refomed Church. The student indicated his general agreement with the pastor's views.

The upshot of the pastor's analysis is that because of the election of Barack Obama, the harsh punishment of a vengeful God is now about to fall upon the United States. In his section entitled "Judgment Will Increase" the minister begins "This is not a fire and brimstone warning from an angry, legalistic preacher." When somebody starts out that way it's a pretty clear indication of what is to come next. He does not disappoint, either.

Here is what the reverend forecasts from the Almighty as retribution for America's choosing Senator Obama: "More economic woes, more violence in an already violent nation, disease and death (satan, who is responsible for these things will have greater inroads to our nation), natural disasters (weather-tornadoes, hurricanes, floods, drought; fires; earthquakes; etc.), terrorism (they will fear us much less now), war, perhaps on our own soil, and judgments relating to the Court."

The list makes me wonder two things. First, what would he have forecast if he had been "an angry, legalistic preacher," and second, are not these predictions characteristic of what has been happening under the born-again President Bush whom this preacher no doubt supported the past two elections, and under whose reign, if this preacher's crystal ball and view of God is right, we should have expected earthly blessings day and night for the past eight years?

What is sobering to consider is that tens of millions of people are subjected to this picture of God, this world view and this view of the legitimacy of Barack Obama as president every week in churches across the country.

Was this the God Jesus spoke of? God as the big hit-man in the sky, indiscriminately laying waste guilty and innocent alike in an endless thirst for vengeance? Is the world view that is godly the one whose candidate supports unnecessary wars and sings and jokes about starting new ones? Is it really that clear and simple?

And finally, if millions of the faithful are weekly being exposed to an ideology that holds the recent election is not about the expressed will of the people but instead about a servant of "satan" whose "background, associations, beliefs and practices..." will set the causes of "God, life and morality...back years, possibly decades," then how long will it be before many of them feel it their celestial duty to eliminate him before these calamities befall us?

I do not mind saying that I frankly find this variety of religion very, very disquieting.

Obamanomics To Be Unveiled

President-elect Barack Obama is set to announce his economic team on Monday. His economic package is being prepared with the idea of having it ready to pass on Inauguration Day, January 20. It may well include a massive stimulus package in the range of $600 billion. There is no doubt Obama and his advisers feel the economy is too sick to stand further delay. He obviously intends to pursue an activist presidency.

Obama's economic brain trust will include Timothy Geithner, the 47-year-old head of the New York Federal Reserve Bank as Treasury Secretary. When word of his impending appointment was leaked Friday the market responded with a nearly 500-point gain. His reputation includes a cool demeanor and a non-ideological approach to problem-solving.

Larry Summers, 55, a former Treasury Secretary under Bill Clinton, will head the National Economic Council. Summers is brilliant but purportedly arrogant. His selection as an inside adviser to the president rather than a conduit to the press and public seems shrewd. Peter Orszag, director of the Congressional Budget Office, will supposedly be announced as Obama's Director of the Office of Management and Budget. He enjoys the confidence of both parties on Capitol Hill for his non-spin fiscal reporting.

To round out the top-level announcements we will likely also see New Mexico Governor Bill Richardson as Secretary of Commerce. He served as Secretary of Energy and Ambassador to the UN in the Clinton days, and his diplomatic credentials ought to come in handy in his new job for negotiating trade pacts. Hillary Clinton's position at State has also been widely reported.

The recession is worsening now primarily because of consumer retrenchment. Consumer spending accounts for some 70% of economic activity, and it has contracted as unemployment has risen, credit has tightened and home values have plummeted. The next contributor to economic activity, investment, is also down. Few businesses are interested in expanding in such a bad economy, even if they are flush or have access to credit. That leaves one entity with the pull to provide demand on a large scale, and that is the federal government.

In true Keynesian fashion, this is what the Obama Administration plans to do. Like Franklin Roosevelt's New Deal, Obama will ask Congress to initiate a massive public works program, an investment in jobs and national infrastructure to jolt the economy into action and get confidence and demand moving again. He will also reportedly go ahead with his middle class tax cut proposals. To engender some support across the aisle among Republicans, aides such as David Axelrod have let word out that Obama may not push for the reinstitution of the pre-Bush tax rates for the wealthy as Obama advocated during the campaign. Instead these could be allowed to lapse on schedule at the end of 2010.

These moves will unquestionably worsen the deficit, but the avoidance of a deflationary spiral (read Depression) constitutes the urgent matter at hand. Unfortunately, budget reduction will have to wait. In the meantime, while the Bush Administration seems to be asleep at the wheel now other than hurriedly rewriting environmental regulations to permit more poison in the air and water, the Obama team is, as expected, taking bold steps to prepare to hit the ground running and begin addressing the nation's problems from Day One-and even before.

How Will US Handle Multipolar World?

The era of American dominance in world affairs is coming to an end. So says the latest assessment from the U.S. Directorate of National Intelligence. Its report, "Global Trends 2025: A Transformed World", paints a picture just seventeen years hence in which, "the U.S. will find itself as one of a number of important actors on the world stage," playing "a prominent role in global events" but not the decisive one as in the past.

C. Thomas Finegar, chairman of the National Intelligence Council and the nation's top intel analyst said on Thursday, "The unipolar moment is over, or certainly will be over by 2025." World War II ended in a bipolar world. From 1945 to 1991 the United States and the Soviet Union dominated world events. When the Soviet regime collapsed the "unipolar moment" was created. The U.S. stood as the lone world superpower. Now, with the emergence of China and India, the reassertion of Russia and the consolidation of regional blocs such as the European Union, the pre-war multipolar dynamic is poised to return. An essential question for Americans is, how should the United States adjust to the coming reality?

The keys should be to cultivate self-sufficiency within and multilateral cooperation without. Internally, this is why it is so important now to embark on domestically-produced renewable energy in a big way. It is similarly why we must invest in restoring the national infrastructure to world-class status. The transportation, energy and communications grids especially need immediate attention. Fortunately, these are projects the incoming president-elect is committed to. Pursuing them will also offer the added benefits of internal economic stimulus in a time of recession. Health care and education need attention, too. It is a competitive drag on the U.S. economy to be paying twice as much per capita for a health system as the rest of the developed world while getting poorer results. Inefficiencies like this can no longer be tolerated. In education we are wasting too much of our human capital by making it financially unfeasible for so many of our young people to go to college. Our competitors do not have this problem. Obama's "school for service" proposal is a way to address this. It or something like it must be embraced.

Externally, we will no longer be able to bully and intervene militarily with impunity to get our way. To attempt to do so will only invite similar counterpressure from our international rivals, rivals whose influence and power will be coming ever closer to our own. To continue down this path would be to follow the path of earlier waning imperial powers such as France and the Netherlands, who futilely and at great wasted expense tried to hold onto their colonies in the wake of World War II. Instead, the focus of our diplomacy with the rising powers should be to lock in mutually beneficial arrangements on such topics as regional security, resource allocation, terrorism, immigration, trade, labor standards and the environment.

Iraq and Afghanistan should have shown us how costly and indecisive the war model of addressing foreign problems can be. It may be that extreme rivalry with the rising powers is inevitable, but it ought to be our goal to avoid that if possible and seek the win-win first. It is indeed welcome that the crude and myopic approach of the outgoing administration is giving way to the more forward-looking stance of the new one. Change is never easy, but it is coming. The only real question is how we will manage it: proactively and intelligently or reactively and wastefully. Now is the time to make the intelligent choice.

Meeting of Minds on Abortion?

An article in today's Washington Post offers hope that an outbreak of common sense might be in the offing on the abortion front. See the entire article here. After thirty-five years of attempting and failing to ban abortions there appear to be movements afoot in the pro-life community to begin dealing realistically with means to reduce the number of unwanted pregnancies and provide the kinds of support to pregnant women that could help more decide to bear their children. Such measures are welcome and long overdue.

"Frustrated by the failure to overturn Roe v. Wade, a growing number of anti-abortion pastors, conservative academics and activists are setting aside efforts to outlaw abortion and instead are focusing on building social programs and developing other assistance for pregnant women to reduce the number of abortions," reports Jacqueline L. Salmon. The election of Barack Obama has ended for the foreseeable future the likelihood of anti-abortion justices being nominated to the Supreme Court. With that in mind, some abortion foes have decided to take Obama up on his word.

In accepting the Democratic nomination at Denver's Invesco Field Obama said, "We may not agree on abortion, but surely we can agree on reducing the number of unwanted pregnancies in this country." This follows in the same vein as that enunciated by Bill Clinton when he, as candidate and president, stated his view that, "abortion should be safe, legal and rare."

Most Americans feel abortion should be legal, in the 2006 Gallup Survey by a margin of 60% to 36%. But they are also uncomfortable with it. Gallup also finds that 51% consider the practice "morally wrong." Pew Research showed this dilemma by finding that 66% of Americans favored a "middle ground" between the polar positions while only 29% said there was "no room for compromise."

Among those promoting the pregnancy prevention and personal support include the National Hispanic Christian Leadership Conference, Catholics in Alliance for the Common Good, Sojourners, a progressive evangelical movement, Catholics United, Richard Cizik, vice president of the National Association of Evangelicals and Joel Hunter, pastor of Northland Church in Longwood, Fla., one of the nation's largest churches. Hunter says, "There's got to be a way we can take some of these hot-button issues and cooperate, rather than simply keep fighting and becoming gridlocked in this hostility of the culture wars."

Social research appears to strongly back up the approach. A study by Catholics United for the Common Good found, "The abortion rate for women living below the poverty line is more than four times that of women above 300% of the poverty level." Women who have no insurance or access to contraception and who see little prospect of properly providing for a child are far more likely to opt for abortion. Basic common sense should have made this conclusion obvious to all long ago. It would be a good thing if action were now taken. Fewer unwanted pregnancies and healthier mothers and babies would be very good things for American society. It's about time.

Hillary Clinton for State?

Last March, after surviving the gauntlet of "Super Tuesday" primaries on February 5 against Hillary Clinton, Barack Obama was in the middle of running off eleven consecutive primary and caucus wins. The lead he amassed that month was his margin of victory; Clinton thereafter was never able to close the gap.

One of the little-noticed things Obama did that month in the midst of a frenetic schedule of appearances was to place a call to an author. Doris Kearns Goodwin, a Pulitzer Prize-winning historian, had written an acclaimed book about the sixteenth president. Team of Rivals: The Political Genius of Abraham Lincoln had received the Lincoln Award as the best book about the Civil War in 2005. Obama had read the book and wanted to garner a few further insights about how Lincoln managed his Cabinet, a Cabinet he had stocked with practically every one of the members of his party who had contested him for the nomination.

Obama's inquiry was not idle chatter. He has already tapped one primary season rival, Joe Biden, for the vice presidency. Reports are now rampant that the job of Secretary of State is Senator Clinton's to accept or turn down. Obama is said to have offered her the post when the two met in Chicago. I believe the reports. The Obama campaign up to now has maintained nearly unprecedented message discipline and no one is denying the reports. Just today former President Bill Clinton said his wife "would make a great Secretary of State."

I tend to concur. She is brilliant. She knows foreign and defense policy backward and forward. She knows and has personal relationships with the world's heads of state and government. Her profile is the highest possible, lending the utmost weight and credibility to her diplomacy with global leaders and efforts to assuage the intricacies of the world's trouble spots. Imagine a visit to Russia, China, India, Saudi Arabia or even North Korea with Hillary Clinton as diplomat in chief. The effect would be electrifying, several orders of magnitude past what would be generated by John Kerry or Bill Richardson. She has a heart but can also famously be as tough as nails. It is easy to picture her as an altogether formidable chief of American foreign policy.

The potential drawbacks are apparent. Might she undermine the president or prove to be an unmanageable subordinate? Are there more Clinton skeletons in the closet that vetting might turn up, particularly with respect to husband Bill's international foundation and its sources of financial support? And speaking of Bill, might he wind up underfoot, in the way, at odds with and a distraction for Obama and his Administration in general?

The answer, of course is that such problems are certainly possible. Given the competence of the Obama operation so far, however, I am inclined to believe they have been anticipated. Obama seems to want strong people around him. His style is to encourage open debate. Then, when he makes a decision, it is final. His approach will be like Lincoln's-to tie the fates of himself and his erstwhile rivals together so that his success is their success and vice versa.

In a remarkable parallel Lincoln tapped New York Senator William Henry Seward, who had been strongly favored to win the Republican nomination in 1860, for his own Secretary of State. Seward began with the apparent idea that he would be the real power of the Lincoln Administration over the thinly-experienced man from Illinois, but before long he considered Lincoln his best friend and he was among the president's firmest supporters. I too have read Goodwin's book and am sure Obama is mining it for insights into leading such a prominent group and maintaining authority. One trait Obama certainly has no shortage of is self-confidence.

For her part, Clinton is, for all her fame, a relatively junior senator. The landmark legislation coming out of Congress under this administration will, for the most part, have the names of long-serving senators such as Dodd, Leahy, Kennedy, Levin, Boxer, and yes, probably McCain attached to it. State presents Clinton with the opportunity to achieve some transcendent objectives, far beyond what she is likely to have under her name in the senate anytime soon.

Consider the kinds of issues the next Secretary of State will tackle. An Israeli-Palestinian settlement, for instance. The successor to the Kyoto climate change treaty. A truly effective global working arrangement on terror. Fixing the horrible African mess. Splitting Syria from Iran. Putting Afghanistan back together. And Iraq. Nuclear proliferation, particularly with respect to Iran and North Korea. Finding the appropriate ongoing relationship with Russia. Encouraging constructive development and evolution in the Islamic world so as to promote justice and drain the swamp that engenders extremism.

Hillary Clinton as Senator has earned high marks for doing her homework, learning the ropes, working across party lines where possible and letting the more senior members enjoy the lion's share of credit when credit is due. I have a hunch that if she becomes Secretary of State she will be a better subordinate than many expect. We will have to wait and see what happens, but keep in mind the Obama team has had a transition operation in place already for at least three months now. Watch what unfolds. Unless I miss my guess, what we are about see leading up to the Inauguration and in the weeks immediately following will be like nothing Americans have witnessed before, except among the very elderly. Fasten your seat belt and get ready to be amazed.

Voter Resources

Where does a citizen go to find pertinent information on candidates and issues at election time? All too often, the answer is nowhere. For many people soundbite or negative commercials and a little word of mouth from other dubiously informed people are the major determinants in their decision-making.

There are, however, some good resources for those who want to dig a little deeper. I like to find out how candidates stand on a number of issues, and if they have a record on actual bills. I really want to find out if they and their campaigns have a history of telling the truth. I also want to find out who is supporting them financially. The money trail is even more important on ballot propositions, many of which are put up by special interests in the guise of being for the general good. Here is a list of valuable sites. I want to thank Maria Gaston for much of this research.

Project Vote Smart does research on thousands of political candidates and officials. It has a great record for nonpartisanship. It asks the candidates to take its National Political Awareness Test each election on the issues they will probably be dealing with if elected. It is tops on the list. Go to www.vote-smart.org or click the link.

To find out whose money is backing what and whom at the state level, a great site is kept up by the National Institute on Money in State Politics. It's called followthemoney.org. You can find it at www.followthemoney.org


Do you want to find out who is giving you the straight scoop and who is shoveling the bull? An excellent site for this is FactCheck.org. They especially stay on top of major races and controversies around the country and spare no one from their impartial scrutiny. Click on the link or look into it at www.factcheck.org.

For the real policy wonk you can go to Thomas (as in Jefferson), the Library of Congress site dedicated to publishing all the records of Congress, including not only their votes but also their statements on bills being considered. You can access this at //thomas.loc.gov/home.

As the paper of record in the nation's capital, the Washington Post is unequalled in its day to day coverage of what is going on there. It also has links to voluminous resources such as voting and poll data bases. You may need to register with the paper online, but it's free and they do not send advertising to you. See what WaPo Politics has to offer at www.washingtonpost.com/politics.

You can find out what the parties are concentrating on at their own websites, too. The Republicans display their wares and a dim view of the Democrats at the Republican National Committee site, www.gop.org/. The Democratic National Committee has its own site at www.democrats.org/. The minor parties such as the Libertarians and Greens all have their own sites, too.

Happy hunting, and remember at election time, stay informed!