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.