Yesterday came the latest secret U.S. government revelations from Wikileaks. Last summer it was military communiques from Afghanistan and Iraq; this time it concerned cables from the Department of State. The release of these documents is potentially extremely damaging to American foreign policy. I'll try to shed some light on a few of the most asked questions I hear from people.
Why is this happening? It starts with the lessons of 9/11, when it was determined that American intelligence knew the information needed to prevent the attacks, but agencies failed to share what they knew with each other so no one was able to "connect the dots." Since then data bases have been made much more accessible by other government agencies, often by people of very junior rank. The young man who has been charged with downloading and passing along the military documents is a private, for instance. Information used to be too compartmentalized; now it is too open.
Can Wikileaks or the other press and media outlets who have printed or posted the data be prosecuted? Probably not. The Pentagon Papers case ruled that the First Amendment of the Constitution enshrines freedom of the press as a nearly sacrosanct right. If someone can get the material to the media the media is allowed to print it. That doesn't hold for those who steal the material from the government and provide it to the press. The young man who is charged with divulging the military documents will probably never see the outside of a prison again. The exception might be if Wikileaks can be proved to have "conspired" with people on the inside to steal the top secret material. Then perhaps someone there could be prosecuted. Attorney General Eric Holder said today his office would be looking for evidence to prosecute wherever it could.
What was the most sensitive revelation? That would likely be that several Arab leaders privately urged the United States to strike Iran and attempt to destroy its nuclear facilities. Arabs and Persians (Iranians) have been ethnic rivals for a long time. They also are religious rivals, with most Arabs following the majority Sunni branch of Islam and most Iranians the Shi'ite branch. A nuclear-armed, aggressive Iran is a nightmare for the Arab states in the region. This indicates a high level of Arab-American accord about Iran, but also underscores how the Arab leaders feel they have to keep these ideas from their people.
Why are some observers calling the release of these documents "a diplomatic 9/11?" That's because of the lack of trust in American confidentiality. If foreign leaders feel they cannot confide sensitive matters privately to the U.S. government without them becoming public, then they will be less likely to deal truthfully or productively with America. This is where the real damage could be done. U.S. security agencies will need to develop more effective protocols on sensitive information and better supervision and screening of access to it. Otherwise foreign partners will stop working with us on much of anything important. That would be the kind of coup that America's enemies would absolutely love to see.
Monday, November 29, 2010
Wednesday, November 24, 2010
Corporate Profits Up But National Well-Being Isn't
Wow, great news! The Commerce Department reported yesterday that in the third quarter of 2010, U.S. corporate profits surged to an all-time record high. They came in at an annual rate of $1.659 trillion. You can read all about it in the New York Times, or in this article from CNBC. Corporate profits have grown 11% this year. Sam Stovall, chief investment strategist for the Standard & Poor's 500 index says, "Profit margins for S & P firms are now above 9 percent - nosebleed territory."
This excellent news brings some questions to mind. First, aren't Obama and the Democrats supposed to be bad for business? The U.S. Chamber of Commerce just spent $200 million in the last election cycle to tell us so. Yet it certainly looks like the facts fail to support that assertion. The national economy grew at an annualized rate of 2.5% for the quarter while corporate profits were up 11%. A much higher percentage went into corporate coffers than into the rest of the economy.
Well, that must mean more jobs, right? No, it apparently doesn't. While the monthly losses of 700,000 jobs that greeted Obama's inauguration have been staunched, the turnaround that is cheering Wall Street hasn't fully translated to Main Street. According to the Bureau of Labor Statistics, 151,000 private-sector jobs were added in October, but unemployment remains stuck at 9.6%. Job creation is lagging because much of the profit has come from increases in "productivity," i.e. getting more work from fewer people. Much of the rest comes from the nature of where the increased profits are coming from. Three-fourths of all these profits are coming from the financial sector of the economy. Much of it therefore comes not from anyone producing anything, but from betting on where the stock, bonds and commodities markets are heading (futures) and related gimmickry such as derivatives. And these games do not require a lot of workers to make them happen.
Well then, that makes it all the more imperative to extend the Bush tax cuts for the rich to produce these extra jobs, doesn't it? No, it doesn't. If you have been paying attention you realize that these lower rates for the rich are currently in effect. They have been for years. And where are the jobs? They weren't being created in the Bush years, and with record profits now, they still aren't. What part of facts and results do people still not get?
The hard truth that many do not want to see is that corporations do not WANT to create jobs. They want to make profit, and if they can do that without hiring they will, for that will make profit higher yet. They do not WANT to provide health care or contribute to society. To a corporate entity these are costs. They did not, and still do not when they can avoid it, WANT
to pay workers a living wage, give them a forty hour week, vacations, lunch breaks, ventilation, safe working conditions or any other humane terms of employment until they were forced to do so by workers united together in strong unions and by labor and consumer legislation rammed down their throats by politicians more worried about losing the votes of an aroused populace than about losing corporate money.
Are they using this immense trove of cash, now estimated to be over $2.5 trillion, for the alleviation of national distress? Are they hiring? Are they offering to help pay down the national debt, contribute to the solvency of Medicare and Social Security, or make any other contribution to national life in return for the tax breaks and bailouts they have received? If society crumbles around them and people are unemployed they are not concerned. As long as profits are high and taxes are low they have what they want.
Why do you think they are always for this kind of "smaller government?" Think about it.
This excellent news brings some questions to mind. First, aren't Obama and the Democrats supposed to be bad for business? The U.S. Chamber of Commerce just spent $200 million in the last election cycle to tell us so. Yet it certainly looks like the facts fail to support that assertion. The national economy grew at an annualized rate of 2.5% for the quarter while corporate profits were up 11%. A much higher percentage went into corporate coffers than into the rest of the economy.
Well, that must mean more jobs, right? No, it apparently doesn't. While the monthly losses of 700,000 jobs that greeted Obama's inauguration have been staunched, the turnaround that is cheering Wall Street hasn't fully translated to Main Street. According to the Bureau of Labor Statistics, 151,000 private-sector jobs were added in October, but unemployment remains stuck at 9.6%. Job creation is lagging because much of the profit has come from increases in "productivity," i.e. getting more work from fewer people. Much of the rest comes from the nature of where the increased profits are coming from. Three-fourths of all these profits are coming from the financial sector of the economy. Much of it therefore comes not from anyone producing anything, but from betting on where the stock, bonds and commodities markets are heading (futures) and related gimmickry such as derivatives. And these games do not require a lot of workers to make them happen.
Well then, that makes it all the more imperative to extend the Bush tax cuts for the rich to produce these extra jobs, doesn't it? No, it doesn't. If you have been paying attention you realize that these lower rates for the rich are currently in effect. They have been for years. And where are the jobs? They weren't being created in the Bush years, and with record profits now, they still aren't. What part of facts and results do people still not get?
The hard truth that many do not want to see is that corporations do not WANT to create jobs. They want to make profit, and if they can do that without hiring they will, for that will make profit higher yet. They do not WANT to provide health care or contribute to society. To a corporate entity these are costs. They did not, and still do not when they can avoid it, WANT
to pay workers a living wage, give them a forty hour week, vacations, lunch breaks, ventilation, safe working conditions or any other humane terms of employment until they were forced to do so by workers united together in strong unions and by labor and consumer legislation rammed down their throats by politicians more worried about losing the votes of an aroused populace than about losing corporate money.
Are they using this immense trove of cash, now estimated to be over $2.5 trillion, for the alleviation of national distress? Are they hiring? Are they offering to help pay down the national debt, contribute to the solvency of Medicare and Social Security, or make any other contribution to national life in return for the tax breaks and bailouts they have received? If society crumbles around them and people are unemployed they are not concerned. As long as profits are high and taxes are low they have what they want.
Why do you think they are always for this kind of "smaller government?" Think about it.
Wednesday, November 17, 2010
An Evening With Greg Mortenson
Last night my wife and I had the pleasure of attending Greg Mortenson's appearance at the Visalia Convention Center. Greg Mortenson is the author of the bestselling books "Three Cups of Tea" and "Stones into Schools" and the director of the Central Asia Institute, which has built over 140 schools in the rugged mountainous areas of northern Pakistan and Afghanistan. What began as the promise of one lost mountaineer to build a school for the villagers who saved his life in 1993 has turned into an ongoing mission to spread education and hope to one of the most remote and poverty-stricken corners of the globe.
What an inspiration this man is. He started as a nurse with no money of his own and had to raise it from scratch. The materials for the first school he built in Khorfe, Pakistan cost only $12,000 and teachers can be hired for $100 a month. He has been effective in an area notoriously volatile and suspicious of outsiders because he listens and lets the local villagers determine what they want--with the one rule that girls must be educated as well as boys. Experience has shown him the wisdom of an African proverb he uses, "Teach a boy and you educate an individual, teach a girl and you educate a community." That's because 2/3 of the schooled boys tend to leave the local community looking for jobs while 2/3 of the girls remain local. They also have much less infant and maternal mortality; since Bangladesh increased female literacy from 20% to 65% the average woman has gone from 8.5 children to 2.8.
Though much of his work is in areas with strong Taliban influence, not a single one of these schools has been bombed. Education is an effective antidote to extremism. And the local buy-in is a strong protective factor. While Mortensen raises the money, the local people must provide the land and most of the unskilled labor for each project. He showed lots of slides of the region, its people (especially the children) and the schools his organization has helped build. The conditions they live under have to be seen to be believed, high-altitude vistas of rugged beauty to be sure, but places with sparse vegetation where agriculture is difficult and herding on the scant forage a challenge made often perilous by the presence of lethal mines left over from the region's legacy of war.
I was impressed with Greg's demeanor. He is not a really adept speaker, which was reassuring. He seemed like a regular person of strong purpose rather than a glib salesman type. That made his sincerity evident. He related how he asked the Afghan minister of Education how much money he would need to revive a good national education system. $248 million a year, he was told. Greg commented that with 100,000 troops in Afghanistan and a war effort costing $100 billion a year, that works out to $1 million per soldier a year. Greg asked, "What if we withdrew 248 soldiers and used that money to completely fund the country's school system?"
Greg Mortenson has already been awarded the Star of Pakistan, the nation's highest civilian honor, by the country's president. He was nominated for the Nobel Peace Prize in 2009 and I'm quite certain he will win it one day. He certainly deserves it. One of the most touching parts of the evening was pictures Greg showed of a group of elders touring one of his schools to see if they wanted one for their own community. These scary looking guys with black turbans, big beards, and toting Kalashnikovs dropped their weapons and turned into little boys when they got to the school's playground. Imagine the audience's laughter when we were treated to pictures of them playing on the swing set. "We were trained to hate and fight from an early age," Greg reported the leader saying. "I never got to be a child, to play and laugh and learn to read and write. Now I have the opportunity to give our children the chance we never had."
Just as the subtitle of "Three Cups of Tea" says, Greg Mortenson and his Central Asia Institute are truly "promoting peace one school at a time." If you have not read this book or looked into this worthy organization I heartily recommend you to click on the links provided here and spend a few minutes. This cause is really worth your support.
What an inspiration this man is. He started as a nurse with no money of his own and had to raise it from scratch. The materials for the first school he built in Khorfe, Pakistan cost only $12,000 and teachers can be hired for $100 a month. He has been effective in an area notoriously volatile and suspicious of outsiders because he listens and lets the local villagers determine what they want--with the one rule that girls must be educated as well as boys. Experience has shown him the wisdom of an African proverb he uses, "Teach a boy and you educate an individual, teach a girl and you educate a community." That's because 2/3 of the schooled boys tend to leave the local community looking for jobs while 2/3 of the girls remain local. They also have much less infant and maternal mortality; since Bangladesh increased female literacy from 20% to 65% the average woman has gone from 8.5 children to 2.8.
Though much of his work is in areas with strong Taliban influence, not a single one of these schools has been bombed. Education is an effective antidote to extremism. And the local buy-in is a strong protective factor. While Mortensen raises the money, the local people must provide the land and most of the unskilled labor for each project. He showed lots of slides of the region, its people (especially the children) and the schools his organization has helped build. The conditions they live under have to be seen to be believed, high-altitude vistas of rugged beauty to be sure, but places with sparse vegetation where agriculture is difficult and herding on the scant forage a challenge made often perilous by the presence of lethal mines left over from the region's legacy of war.
I was impressed with Greg's demeanor. He is not a really adept speaker, which was reassuring. He seemed like a regular person of strong purpose rather than a glib salesman type. That made his sincerity evident. He related how he asked the Afghan minister of Education how much money he would need to revive a good national education system. $248 million a year, he was told. Greg commented that with 100,000 troops in Afghanistan and a war effort costing $100 billion a year, that works out to $1 million per soldier a year. Greg asked, "What if we withdrew 248 soldiers and used that money to completely fund the country's school system?"
Greg Mortenson has already been awarded the Star of Pakistan, the nation's highest civilian honor, by the country's president. He was nominated for the Nobel Peace Prize in 2009 and I'm quite certain he will win it one day. He certainly deserves it. One of the most touching parts of the evening was pictures Greg showed of a group of elders touring one of his schools to see if they wanted one for their own community. These scary looking guys with black turbans, big beards, and toting Kalashnikovs dropped their weapons and turned into little boys when they got to the school's playground. Imagine the audience's laughter when we were treated to pictures of them playing on the swing set. "We were trained to hate and fight from an early age," Greg reported the leader saying. "I never got to be a child, to play and laugh and learn to read and write. Now I have the opportunity to give our children the chance we never had."
Just as the subtitle of "Three Cups of Tea" says, Greg Mortenson and his Central Asia Institute are truly "promoting peace one school at a time." If you have not read this book or looked into this worthy organization I heartily recommend you to click on the links provided here and spend a few minutes. This cause is really worth your support.
Saturday, November 13, 2010
To Actually Balance the Federal Budget
This week the co-chairs of the President's Fiscal Commission on the National Debt released their joint recommendations to restore the federal government to long-term fiscal solvency. You can see the entire document here. Democrat Erskine Bowles, Chief of Staff for President Bill Clinton, and Republican Alan Simpson, a former Senator from Wyoming, came forward with their own report because they considered it unlikely they will get the required agreement from 14 of the 18-member bipartisan commission to submit an official set of recommendations from the full group. While that is pursued, the co-chairs wanted to have something for the nation and its leaders to think about.
They propose about $200 billion a year in cuts and $100 billion a year in additional tax revenues to reduce the debt by $4 trillion by 2020 and as a percentage of GDP from 60% to 40% between 2024 and 2037. They call for a long period of discipline to slowly bring expenditures into line with taxes, starting slowly over the next couple of years due to the current weak economy.
The bottom line is that there will have to be shared sacrifice: of the $200 billion in cuts half would be domestic, including reductions in farm supports, freezing federal wages for three years, eventually reducing the federal work force by 10%, restraining medicare growth and raising the social security retirement age in stages to 69, and half would be in defense, including closing 1/3 of our overseas bases and stretching out procurements.
The additional taxes would include a modest fifteen-cent a gallon increase in the gasoline tax, lowering many tax rates but eliminating deductions, getting rid of the home mortgage interest deduction for second homes, equity loans and for mortgage amounts over $500,000. In total, about two-thirds of their projected savings would come from cost cutting and one-third from tax increases. It's interesting that no return to the tax rates before the Bush cuts was even considered; that alone would go farther toward balancing the budget than all the cuts they recommend.
Although I have said repeatedly in this space that slashing spending in a down economy is foolish, eventually when things turn around the borrowing will need to stop. We will be spending $1 trillion a year on interest by 2020 otherwise. Someone will have to tell the American people the truth: there will need to be higher taxes and budget cuts; we cannot provide services unless people are willing to pay for them. This blueprint is at least a reasonable place to start facing the facts.
They propose about $200 billion a year in cuts and $100 billion a year in additional tax revenues to reduce the debt by $4 trillion by 2020 and as a percentage of GDP from 60% to 40% between 2024 and 2037. They call for a long period of discipline to slowly bring expenditures into line with taxes, starting slowly over the next couple of years due to the current weak economy.
The bottom line is that there will have to be shared sacrifice: of the $200 billion in cuts half would be domestic, including reductions in farm supports, freezing federal wages for three years, eventually reducing the federal work force by 10%, restraining medicare growth and raising the social security retirement age in stages to 69, and half would be in defense, including closing 1/3 of our overseas bases and stretching out procurements.
The additional taxes would include a modest fifteen-cent a gallon increase in the gasoline tax, lowering many tax rates but eliminating deductions, getting rid of the home mortgage interest deduction for second homes, equity loans and for mortgage amounts over $500,000. In total, about two-thirds of their projected savings would come from cost cutting and one-third from tax increases. It's interesting that no return to the tax rates before the Bush cuts was even considered; that alone would go farther toward balancing the budget than all the cuts they recommend.
Although I have said repeatedly in this space that slashing spending in a down economy is foolish, eventually when things turn around the borrowing will need to stop. We will be spending $1 trillion a year on interest by 2020 otherwise. Someone will have to tell the American people the truth: there will need to be higher taxes and budget cuts; we cannot provide services unless people are willing to pay for them. This blueprint is at least a reasonable place to start facing the facts.
Saturday, November 6, 2010
National Tide Dissolves at California Border
Unlike the national results, Democrats did exceptionally well in California. They captured every statewide office from Governor to Insurance Commissioner and dominate the state legislature. Democrats control the Assembly 52-28 and the Senate 25-15. What is more, by voting for Proposition 25, California's electorate has given Sacramento the power to pass a budget with a simple majority vote instead of the two-thirds requirement that has produced gridlock in recent years.
The new dynamic will give the California Democratic Party a golden opportunity to stand as a national example. With Jerry Brown in the governor's chair and Democrats fully in charge of both houses they will be able to work their will without having to cater to Republican sensibilities at all. If they solve the state's budget mess and help usher in a recovery in the country's most populous state their example will be held up by liberals nationally as a blueprint for the rest of the country to follow. If they fail, of course, you can have no doubt it will be picked up by conservative media as validation of their criticisms elsewhere and across the U.S.A.
A problem exists, however, in other ballot propositions passed by California's voters as well, measures that severely restrict the state government's options for dealing with the current difficulties. The 2/3 requirement is still in effect for any tax increases, and now also for fees, thanks to Prop 26. The state cannot borrow from funds earlier committed to transportation or local government, thanks to Proposition 22. And it isn't getting back some $1.5 billion in corporate taxes, cut as the Republican price for agreeing to last year's budget, thanks to the failure of Proposition 24. So without the ability to increase revenues at all, the Democratic prerogative will consist mainly of making the cuts they prefer instead of the ones Republicans would have favored.
Still, it's a start. They will be held accountable now, as they should be. And with a Redistricting Commission now in charge of drawing election districts instead of the legislature itself, there are certain to be more competitive state legislative races than in the past. So between that and the national implications of the publicity generated by their success or failure, the Democrats who will now chart the Golden State's course will have a strong impact on whether the party will quickly recover nationally--or whether another lengthy period of Republican dominance is before us.
The new dynamic will give the California Democratic Party a golden opportunity to stand as a national example. With Jerry Brown in the governor's chair and Democrats fully in charge of both houses they will be able to work their will without having to cater to Republican sensibilities at all. If they solve the state's budget mess and help usher in a recovery in the country's most populous state their example will be held up by liberals nationally as a blueprint for the rest of the country to follow. If they fail, of course, you can have no doubt it will be picked up by conservative media as validation of their criticisms elsewhere and across the U.S.A.
A problem exists, however, in other ballot propositions passed by California's voters as well, measures that severely restrict the state government's options for dealing with the current difficulties. The 2/3 requirement is still in effect for any tax increases, and now also for fees, thanks to Prop 26. The state cannot borrow from funds earlier committed to transportation or local government, thanks to Proposition 22. And it isn't getting back some $1.5 billion in corporate taxes, cut as the Republican price for agreeing to last year's budget, thanks to the failure of Proposition 24. So without the ability to increase revenues at all, the Democratic prerogative will consist mainly of making the cuts they prefer instead of the ones Republicans would have favored.
Still, it's a start. They will be held accountable now, as they should be. And with a Redistricting Commission now in charge of drawing election districts instead of the legislature itself, there are certain to be more competitive state legislative races than in the past. So between that and the national implications of the publicity generated by their success or failure, the Democrats who will now chart the Golden State's course will have a strong impact on whether the party will quickly recover nationally--or whether another lengthy period of Republican dominance is before us.
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