Just after Christmas and the New Year, I stopped into my favorite liquor retailer . The proprietor, Mister Aga Agra is a tiny Indian man who hails from Bombay. He smiled a greeting from the dark corner where he sat quietly. His big smile transformed and illuminated his craggy face revealing a row of large white teeth and multiple gold fillings.
“How was your Christmas season?” I asked, as I placed a few bottles from the “Specials” selection on the neat counter.
He shuffled over . “For me? You know, I am a Hindu, so we don't...,” his voice trailed off and he smiled again.
“No no, not you, I mean, for the business. How did it go here in the store. Well or poorly?”
“Ah yes!” He muttered, as he smoothed out a sturdy brown paper bag and began tallying my purchases on the wrinkled surface with the stub of a pencil.
“Was it well enough, so you will not wish to return to India?” I asked, with a smile and a wink.
“Oh not to go back! No no no! I am a citizen here now. And of course, I have my family here. There is no return for me.”
“But I hear the economy is very good there,” I pressed on. I looked behind me. There was no one else in the store.
“Yes. That is true. They are doing much better in the economy there than we are here.”
“Why?”
“The Indians make most everything they need in India. They import very little.”
“Only food?” I suggested with a wink.
“Oh yes. Some food, some grains---yes,” he nodded his head as he turned serious, brushing aside my question. “But here in America we are not doing so well as we used to. It is simple. We don't make anything here anymore. We make nothing, and what we need we import from China. We must begin making things here too!”
As I turned to leave, I kept hearing that phrase over and over in my head. It's true: "here we don't make anything anymore."
I remember as a child back in the 1950s and 60s when we did make things here---in fact all our clothes, shoes, hardware, autos and just about everything else. They were manufactured right here in the USA. Some were made right there in my native Brooklyn, New York. Then too, in those days our parents all had good-paying jobs as well. “Made in the USA” was seen on most of the products we bought . But even then, on occasion, you might find some poorly-made, inexpensive item, perhaps a copy of some American product or original idea, perhaps a child’s toy, or a bit of low-cost hardware that would have the “Made in Japan” (not "Made in China") sticker on it. It was a sure indication that whatever it was--a pocket knife, a camera, ceramics or pottery, etc.,--- it was not up to US standards. And too, in those days there was very little unemployment. Workers had good jobs and paid their bills and their taxes. People were confident that their children would do even better than they did. And for a while we did. But sometime in the 1970s things changed for us.
I read with great enthusiasm and interest Prof Richard Wolff’s article “The myth of American exceptionalism implodes” in the guardian.co.uk (January 18, 2011). Prof. Richard Wolff (Economics, University of Massachusetts) clearly lays out the sources of the economic crisis we find ourselves in today. This is a great piece and Wolff and the Guardian should be commended. Unfortunately, we do not get this kind of candor in the US press. Its too bad, because perhaps our citizenry would better understand our present predicament and what has become of their jobs and their paychecks.
Wolff understands that the sad underlying problem of our democracy is that both parties unfortunately depend on the financial support of the same oligarchs, barons of Wall Street, and the large corporations for their political survival. Unlike the banks and big business, the working man has today no powerful advocates in Washington (with a few exceptions, such as our worthy Senate team from Vermont), Wolff also seems to know too, that the economic policy of basing the stimulus and sustenance of our wealth on unfettered domestic consumerism is over. As Mr. Agra, the man from Bombay says, ”We don’t make anything here anymore.” That is our problem.
According to Professor Wolff, conditions were fine up to the 1970s. Prior to that time, the rich were getting richer faster than everyone else, but we were not angry with that for the middle class was prospering too. According to Wolff at that time, “A profitable US capitalism kept running ahead of the labor supply. So, it kept raising wages to attract waves of immigration and to retain employees…….until the 1970s“. After that, things went down hill for the middle class and real wealth of the working men and women declined and continued to do so through the end of the 20th century and on into the early years of this century. But since 2008, rather then helping the working classes, the government has turned on them, making them pay for the cupidity, excess and carelessness of the Wall Street barons, and the timidity, self-serving and craven behavior of Congress. The government bailouts were necessary, but their enormous costs fell on the backs of the working and middle class in the form of higher taxes and eventual reduced services, rather than where it should have on the businessmen and corporations and wealthy investors which profited from the act.
How did we get to this point in an economic crisis that rivals the Great Depression? After 1970 real wages stopped rising, as US businesses found alternate means to satisfy their labor need. At about this time prosperous local companies found ways to become even more profitable. They began eliminating well-paying manufacturing jobs here and moving the production and assembly aspects of their businesses out of the country. They began “off-shoring jobs” and whole factories to Mexico, Taiwan, India, and elsewhere around the world. The thinking of a typical small-company owner became: why should a CEO maintain a high-paid 5000-person workforce here in the US, when he or she could minimize the labor costs (and eliminate worker’s jobs) by moving the production and manufacturing parts of a business offshore, maintaining only a skeleton administrative and executive office here in the US? Thus, a former, well-run functioning American enterprise which provided say--employment to 5050 workers and executives,--all of whom paid taxes, bought appliances, clothes, shoes and automobiles where they worked, and supported the schools, the public and religious organizations where they lived--and yes bought houses (on time payments) --overnight became a US company in name only. What remained was a 50-person executive cadre ensconced in fancy offices with a well-used telephone line to somewhere in Mexico, or elsewhere. The five-thousand workers were out of work and had to seek employment elsewhere--but in an increasingly tight job market the loss of those incomes had an enormous effect on the community.
To add to the effect, about this time as well, the US was undergoing a massive technological revolution in which computers and computerized machinery began to replace human labor. Fewer men and women were needed in these modern manufacturing facilities. About this time too, the women’s liberation movement provided business with even more cheap labor, as more and more women entered the work force. For business there was practically no end of cheap labor and no need to consider labor’s demands for a fair distribution of business profits.
Workers who rightly felt insecure in a weak marker for their labor responded by increasing their productivity, working longer hours--often for the same pay, if it would help to keep their uncertain jobs. To maintain their lifestyles in face of deceasing income, many families had to send others into the workforce (a wife or mother) becoming a “two-wage-earner” family. Often, in real dollars, the two-earner family was earning not very much more than the single worker's family of decades earlier. The two-wage-earner families were simply maintaining their lifestyle, but at a heavy cost to family health, happiness, and coherence. With no one home for the very young , children were left on their own more..or grandparents had to fill the gap and take over mother‘s duties (where such relatives were available) or additional expenses had to be incurred--and perhaps more debt--when the services of a child-care-center were needed. When the financial burden became too great, many families turned to increasing their indebtedness by leveraging cash from their home mortgage--which--due to decreased regulations and a great housing-price bubble-- they used as a "ready cash" machine. Thus, we as a nation proceeded into the 21st century into its first decade. Then when excesses reached a crescendo and a number of banks with weak portfolios defaulted, the system responded with the massive recession of 2007 when the housing bubble burst.
While all of this was happening, the rich and super-rich just got richer still. As Wolff explains it: while workers salaries were kept flat and their productivity was rising the result was increased profits for businesses. “While workers delivered more and more value to employers, those employers paid workers no more. The employers reaped all the benefits of rising productivity: rising profits, rising salaries and bonuses to managers, rising dividends to shareholders, and rising payments to the professionals who serve employers (lawyers, architects, consultants, etc. “
The result of the growth of wealth of the business class since the 1970s led to a top-heavy distribution of wealth in the US. Prior to the 1970s the top 1% of wage earners garnered annually about nine percent (9%) of the nation’s wealth, but in the next three decades the percent of the top one-percent increased nearly three-fold to a whopping 23% of the nation’s income. That figure is the highest in the industrialized western world--even monarchical England and Sweden who both support a royal family do not have such a distribution of wealth. In fact, those figures are more common in tin-pot dictatorships and banana republics where a corrupted elite hold all the assets. When the top 1% of earners glean nearly a quarter (23% )of all wealth--leaving the lower 99% to scramble and compete for a smaller and smaller portion (67%) of the nation’s wealth, not only is it unjust, it is unsound economically. The super-high wage earners spend their wealth very differently than middle income people do. It is the middle class who buy kitchen appliances, furniture, automobiles, shoes and clothes and pay school taxes and purchases local services, and support the mechanisms which generate a healthy economy from the bottom up. The very few super-high wage earners use their wealth very differently...they invest their money (often unwisely--see below) and purchase such products as massive yachts, over priced art, jet planes, etc. Yes all that spending is good for the economy, but it does not have the same impact that millions of workers have when they buy refrigerators, furniture, clothes, shoes or food.
As a result, of the income inequality more and more wealth has been concentrated in high places…and how was that wealth used during the last several decades?
According to Wolff, the rich cashed in on their windfall “by speculating wildly and unsuccessfully in all sorts of new financial instruments (asset-backed securities, credit default swaps, etc). The richest also contributed to the crisis by using their money to shift US politics to the right, rendering government regulation and oversight inadequate to anticipate or moderate the crisis or even to react properly once it hit. “ The result of these investments and financial skulduggery was the financial crisis we faced in 2007 and continue to suffer from today.
As Wolff puts it “First, they utilised both parties' dependence on their financial support to make sure there would be no mass federal hiring programme for the unemployed (as FDR used between 1934 and 1940). The absence of such a programme guaranteed that real wages would not rise and, with job benefits, would likely fall – as they indeed have done. Second, the rich made sure that the prime focus of government response to the crisis would benefit banks, large corporations and the stock markets. These have more or less "recovered".
In order to change the equation, we must put people to work here not in China or Mexico. As Mr Aga Agra said, "We must begin making things again, here in the USA".
Get the picture?
rjk
Friday, January 21, 2011
Saturday, December 18, 2010
RED TAIL HAWK KILLS GULL IN SUBURBAN PARKING LOT
On a cold and windy December the 15th, 2010, I received an excited telephone call from Mrs. K. Nash, a fellow wild-life observer who informed me that a hawk had killed a big gull in the Walmart Shopping Plaza in Setauket, New York. Mrs. Nash described the bird to me as "some kind of hawk" and "smaller than the gull". A short time later, she e-mailed me a photograph taken with her iPhone. The photograph revealed the bird to be a Red-tailed Hawk (Buteo jamaicensis). The photograph at left (by Mrs K Nash) depicts the bird sitting on the carcass of a Ring Billed Gull in the Walmart Shopping Center. Mrs Nash added that as she approached the hawk, it seemed unafraid, but annoyed at the intrusion and dragged its big prey further away along the asphalt surface. Undeterred, she retreated to her automobile, and drove it to a point where she was able to get close enough to make a fine photograph.Later that day, I visited the site and sought out the carcass. It was located near the southern end of the parking lot adjacent to Route 347. It appeared to have lain undisturbed since the kill. The prey was indeed a mature Ring-billed Gull (Larus delawarensis). The gull looked to be in good condition and seemed of average size for the species. According to Wikipedia, Ring bill adults "are 49 cm (19 in) length and with a 124 cm (49 in) wingspan". While according to the same source, the male Red-tailed Hawk "may measure 45–56 cm (18 to 22 in), while a female can measure 48 to 65 cm (19 to 26 in) long; wingspan is about 114 to 133 cm (45 to 52 in)." Thus if the photographed bird was a male, it was either very close in size (or probably smaller as the observer indicated) and with less of a wing span than its prey.
The initial attack on the gull appeared to have been made at the neck, which the Nash photograph seems to attest to as well. The carcass was found lying on its back, with its wings partly folded. The hawk apparently tore open the neck and consumed the gizzard (it was missing). However, the grainy contents of this organ were scattered in small clumps near the body. The contents appeared to be composed of small yellow seeds mixed with red-colored fruit-fragments (possibly a pomaceous fruit of some sort, or perhaps the berries of the Japanese Bittersweet (Celastrus orbiculatus) which birds are known to eat avidly and which grows in profusion near-by. The hawk appears to have then proceeded to consume the gull's breast. At the time I observed it, the skin was found neatly laid back and the full breastbone exposed. The high-arched bone was completely and neatly cleaned of all flesh. Furthermore, the soft cartilage at the tip of the breastbone and parts of the thin flat bone near the edge were torn away and were apparently also consumed. Also missing and presumably eaten was the liver and part of the intestines. In addition, the neck and back of the head were skinned and partly defleshed. Other than the gull's carcass, the scattered contents of the gizzard and one small puddle of blood there were few evidences of an attack. Few gull feathers were found(though it was windy), and recall that the original observer noted that the prey had been moved some distance.
The unusual attack on a gull by a Red-tail Hawk (waterfowl, and particularly gulls, are well down the list of preferred prey for this species), the large size of the prey, and the location of the kill in a well-used and active suburban parking lot were all unique enough to suggest that this event may be of interest to those who study and admire our native birds and their habits. As a consequence, believing it worthy of reporting to the general public I enter it here as one of Bob's Sermons in Stone and here too at rjkspeaks.
Thanks to Mrs Nash for her quick action and fine photograph.
Tuesday, December 14, 2010
DRIVING A TOYOTA WITH NO BRAKES
My golf buddy “FXS” is a real pinchpenny. He drives a Toyota Prius which gets about fifty miles per gallon. But his recent offers to drive us to our golf destinations have been regularly and resolutely denied. So we have been traveling regularly in over-consumption-style in Del’s Cadillac.
As we barreled down Florida’s Route 1 toward our early morning tee time in Bunnell, Del, a “good ole boy” who hails from Atlanta, Georgia began.
As we barreled down Florida’s Route 1 toward our early morning tee time in Bunnell, Del, a “good ole boy” who hails from Atlanta, Georgia began.
“Say Frankie, you get them brakes on that 'ere Toyota fixed yet? That 'ere model of yourn was “re-called”, he added, drawling out the “re” and “called” way longer than I thought necessary.
“Uhh-- no not yet,” responded Frankie absently staring out the window at the passing Florida scene. His nose twitched a bit, in a nervous response he had when he was forced to deal with an unpleasant problem on a "golf day".
“You’re jest crazy ta keep rollin’ round in that ‘ere tin buggy!” persisted Del, shooting a glance over his shoulder. He paused to grip the fat Panatella from his nicotine browned teeth and roll the driver side window down a crack. The air whooshed by loudly as he tapped his cigar tip close to the edge to suck ashes out of the window.
He rolled the window up and began his final assault on Frankie, with: “I don’t care how cheap it is per mile!”
“Yeaah!" "If'n you cain’t be sure if’n that little bug’ll stop!” added Terry who comes from Jacksonville. “I wouldn't travel a coon's mile in it!” he added, with finality.
I wondered what a "coon's mile" was. I figured it was a probably a southerner's way to say a short distance.
“Aint that the main thing....Stoppin'!" laughed Del rolling up his window to the top so the whoohsing sound died down. "Stoppin's real important!" he repeated, as he stubbed out his thick cigar in the big ash tray he had "special built" into the dash.
Terry jumped back into the fray. “Aint you skeered? Ain’t you heerd about that fambly in Californ-i-ay. They all died ‘cause their Toyota ran ‘em right through a busy intersection,” he added excitedly.
Frankie remained glumly silent in face of the overwhelming golf-buddy opinion that driving a Toyota without "fixin' the brake problem" was "jest dumb". Golf buddy opinion ranks high among most older men in Florida.
We were all convinced of the danger of driving Frankie’s auto in the face of the seeming real potential for disaster. I dont know for sure, Frankie may have been bullied into doing it, or perhaps he was convinced of his error, but for whatever reason the next week after our trip to Bunnel he attended to those brakes. But he lost a whole day of golfing waiting for his Toota to be repaired.
But with our financial institutions it’s another story.
Our present banking system is still rolling along at 100 miles an hour toward a busy intersection but we have not bothered to fix the brakes.
After the Great Depression in 1933 President Roosevelt signed into law the Glass-Steagall Act which among other things established the FDIC (Federal Deposit Insurance Corporation) which insured depositor’s accounts up to $100,000.00. It also put banking reforms into effect which were designed to control speculation. It categorized firms based on their business. Investment firms, (securities industry) which were involved in making profit by taking on greater risk, were separated from banks (savings and commercial banks) where cash deposits were expected to be protected from excessive risk. Prior to the Great Depression, bankers and brokers were indistinguishable. Unscrupulous bankers and brokers used other people’s money to fund risky investments. Fraud and conflict of interest were rife. After the Great Depression Congress held hearings which revealed these weaknesses and the Banking Act of 1933 (Glass-Steagall) was the result.
Congressional hearings at the time established that there were inherent risks of conflict of interest in the granting of credit (lending) and the use of credit (investment) by a single institution. These conflicts led in large part to the Great Depression. Furthermore, depository institutions have enormous clout since they have the use of other people’s money. This power to invest must be made available via loans or investments on a competitive basis…not used only in-house by the same firm. Finally, deposit based firms should be managed to limit risk and protect the investments of their depositors. Security based firms make profit by taking risk. These latter investments may sometimes lead to enormous losses which without regulation, could impact the integrity of savings deposits. Since the government insures these deposits (FDIC) these losses would have to be borne by the taxpayers.
But since the Clinton and Bush II administrations these wise regulations controls were tossed into the waste bin and now President Obama and his bank-friendly associates seem to have no stomach to put the brakes back on the Toyota..so to speak.
So though Frankie is back with a hard brake pedal and car full of golf-confederates confident in his stopping power…the country he lives in is still careening along like an out of control Toyota!
Get the picture?
RJK
“Uhh-- no not yet,” responded Frankie absently staring out the window at the passing Florida scene. His nose twitched a bit, in a nervous response he had when he was forced to deal with an unpleasant problem on a "golf day".
“You’re jest crazy ta keep rollin’ round in that ‘ere tin buggy!” persisted Del, shooting a glance over his shoulder. He paused to grip the fat Panatella from his nicotine browned teeth and roll the driver side window down a crack. The air whooshed by loudly as he tapped his cigar tip close to the edge to suck ashes out of the window.
He rolled the window up and began his final assault on Frankie, with: “I don’t care how cheap it is per mile!”
“Yeaah!" "If'n you cain’t be sure if’n that little bug’ll stop!” added Terry who comes from Jacksonville. “I wouldn't travel a coon's mile in it!” he added, with finality.
I wondered what a "coon's mile" was. I figured it was a probably a southerner's way to say a short distance.
“Aint that the main thing....Stoppin'!" laughed Del rolling up his window to the top so the whoohsing sound died down. "Stoppin's real important!" he repeated, as he stubbed out his thick cigar in the big ash tray he had "special built" into the dash.
Terry jumped back into the fray. “Aint you skeered? Ain’t you heerd about that fambly in Californ-i-ay. They all died ‘cause their Toyota ran ‘em right through a busy intersection,” he added excitedly.
Frankie remained glumly silent in face of the overwhelming golf-buddy opinion that driving a Toyota without "fixin' the brake problem" was "jest dumb". Golf buddy opinion ranks high among most older men in Florida.
We were all convinced of the danger of driving Frankie’s auto in the face of the seeming real potential for disaster. I dont know for sure, Frankie may have been bullied into doing it, or perhaps he was convinced of his error, but for whatever reason the next week after our trip to Bunnel he attended to those brakes. But he lost a whole day of golfing waiting for his Toota to be repaired.
But with our financial institutions it’s another story.
Our present banking system is still rolling along at 100 miles an hour toward a busy intersection but we have not bothered to fix the brakes.
After the Great Depression in 1933 President Roosevelt signed into law the Glass-Steagall Act which among other things established the FDIC (Federal Deposit Insurance Corporation) which insured depositor’s accounts up to $100,000.00. It also put banking reforms into effect which were designed to control speculation. It categorized firms based on their business. Investment firms, (securities industry) which were involved in making profit by taking on greater risk, were separated from banks (savings and commercial banks) where cash deposits were expected to be protected from excessive risk. Prior to the Great Depression, bankers and brokers were indistinguishable. Unscrupulous bankers and brokers used other people’s money to fund risky investments. Fraud and conflict of interest were rife. After the Great Depression Congress held hearings which revealed these weaknesses and the Banking Act of 1933 (Glass-Steagall) was the result.
Congressional hearings at the time established that there were inherent risks of conflict of interest in the granting of credit (lending) and the use of credit (investment) by a single institution. These conflicts led in large part to the Great Depression. Furthermore, depository institutions have enormous clout since they have the use of other people’s money. This power to invest must be made available via loans or investments on a competitive basis…not used only in-house by the same firm. Finally, deposit based firms should be managed to limit risk and protect the investments of their depositors. Security based firms make profit by taking risk. These latter investments may sometimes lead to enormous losses which without regulation, could impact the integrity of savings deposits. Since the government insures these deposits (FDIC) these losses would have to be borne by the taxpayers.
But since the Clinton and Bush II administrations these wise regulations controls were tossed into the waste bin and now President Obama and his bank-friendly associates seem to have no stomach to put the brakes back on the Toyota..so to speak.
So though Frankie is back with a hard brake pedal and car full of golf-confederates confident in his stopping power…the country he lives in is still careening along like an out of control Toyota!
Get the picture?
RJK
Tuesday, November 23, 2010
PRESIDENT'S BIPARTISAN COMISSION ON DEFICIT PROPOSES A RETURN TO A CATFOOD DIET FOR ELDERLY
My wife and I saw Judy Woodruff's conversation with Democratic Representative Jan Schakowsky (D, Ill) on Channel 13's PBS Newshour (11-22-10). Representative Schakowsky said succinctly what I have been thinking after Bowles and Simpson released their plan to rape and pillage the poor, the elderly and the middleclass. "Right On" Congreswoman!" we both shouted out to the TV screen.See: http://messageboards.aol.com/aol/en_us/articles.php?boardId=529805&
What did she say? Schakowsky who is a popular Congresswaman in the 9th Illinois Congressional District, who has won there handily for a number of terms now, was appointed to the Commission by Speaker Pelosi. She spoke eloquently and clearly and what she said made a lot of sense. She has just released her own plan for deficit reduction that differs substantially from the Erskine Bowles --Alan Simpson plan. Schakowsky's plan would wipe 440 billion out the deficit column by 2015, but not cut Social Security and Medicare, which the Bowles-Simpson plan carve away at. Schakowsky's plan relies on closing tax breaks for big corporations, it cuts $110 billion from the bloated "defense" budget and generates other income by new revenues including taxing capital gains as ordinary income.See: http://psychoanalystsopposewar.org/blog/2010/11/12/krugman-dissects-catfood-commission-recomendations/
The so-called "bipartisan" commission was a bad idea from the start and President Obama was careless and shortsighted in dumping the problem on such a group. To begin with, any "bipartisan" plan in Washington is likely to fail since it must find middle ground between the likes of Genghis Khan and Attila the Hun. Whenever the progressives attempt to "compromise" they are dealing with colleagues who are so far removed from reality they end up having to re-invent the wheel and introduce the idea of fire to their comrades on the other side of the aisle. The commission has begun to be termed the "Catfood Commission" since its solutions are apparently aimed at getting the elderly and indigent to have to go on a catfood diet to survive.
Schakosky stated: “I thought it was important to put forth a proposal that says we don’t have to go after the middle and lower classes in our country in order to pay for deficit and debt that they had nothing to do with creating, and that we yet could take this problem seriously down the road to reduce the deficit and the long-term debt.” (Transcript from PBS Newshour)
See: http://www.zagasi.com/democratic-rep-jan-schakowsky-says-social-security-not-part-of-the-deficit-problem/221126/
Economist Paul Krugman (and NYT columnist) sees the Bowles-Simpson proposal this way:
"Actually, though, what the co-chairmen are proposing is a mixture of tax cuts and tax increases — tax cuts for the wealthy, tax increases for the middle class. They suggest eliminating tax breaks that, whatever you think of them, matter a lot to middle-class Americans — the deductibility of health benefits and mortgage interest — and using much of the revenue gained thereby, not to reduce the deficit, but to allow sharp reductions in both the top marginal tax rate and in the corporate tax rate."
Beyond that the idea that our workers must work to the age of 69 years...rather than 65 strikes Krugman as unfair. It might not be bad for an office worker or accountant but a laborer? Also he states:" But beyond that, the proposal seemingly ignores a crucial point: while average life expectancy is indeed rising, it’s doing so mainly for high earners, precisely the people who need Social Security least. Life expectancy in the bottom half of the income distribution has barely inched up over the past three decades. So the Bowles-Simpson proposal is basically saying that janitors should be forced to work longer because these days corporate lawyers live to a ripe old age"
Krugman ends with" It’s no mystery what has happened on the deficit commission: as so often happens in modern Washington, a process meant to deal with real problems has been hijacked on behalf of an ideological agenda. Under the guise of facing our fiscal problems, Mr. Bowles and Mr. Simpson are trying to smuggle in the same old, same old — tax cuts for the rich and erosion of the social safety net."
So this is where Madam Schakowsky's proposal is so important. It at least puts the Bowles-Simpson proposal out there where it belongs--a right wing wish list. Ms Schakowsky's propsal presents a yardstick for the nation to gauge the commission's formal presentation. It helps to put it in its place...somewhere out with Genghis and Atilla.
Kudos Congresswoman Schakowsky!
Do you get the picture--now?
rjk
Friday, November 19, 2010
THE FED PRINTS UP MONEY AND CALLS IT QUANTITATIVE EASING
On a recent tour of our local stores Mrs. K. has been annoyed to discover that one of her favorite house-hold products, normally stocked on the shelves of several local stores is no longer available. The product--a stove-top cleaning agent-- was formally easily procured and widely available. But not so now.
“Why can’t I find this item any longer?” she asked with the annoyance.
“Well that product may not have a lot of demand, so Green’s, Walmarts, CVS, True Value, etc. do not wish to replace their stock so quickly, when they are gone. They are reducing or eliminating the shelf-stocks of products that don't sell quickly. It's just one way to reduce overhead," I said.
“So this is just a response to the bad economy then?”
“Yes, it’s a sign of low demand.”
"Yeah, that low demand may be the result of the fact that a good portion of the population is under or unemployed. Less money out there…less demand for stove-top cleaners and other stuff.”
Right now it is jobs, jobs, jobs that are on everyone’s mind. Today, I read in Portfolio.com, with some alarm that there are five applicants for every job that opens. Also, that there are some 15 million Americans out of work right now, and that nearly half a million have quit trying to find work. The formal joblessness rate is recorded as 9.6%, but that would be much worse were it not for the those, nearly 500,000 who simply just quit looking.
Also the inflation rate has dropped down to 1.1% and has been holding steady at this rate for some months. That is well below the 2% rate that is considered desirable.
“That doesn’t sound too threatening. Why should I be concerned with the fact that prices are not rising much?”
“Well the problem is that such a low rate of inflation is and indicator of low consumer demand for goods and services.
“So that’s why I can’t find that “cook top” spray cleaner, I like to use”?
“Exactly!“
“Some products which are not your big sellers are in lower demand anyway…and are simply eliminated off the shelves, as a way to reduce costs and raise profits.“
“That’s one way to control expenses, but it makes me mad!“
“But more importantly, these circumstances of low demand may develop into what the economists call a “vicious deflationary cycle” in which low consumer demand causes product prices to fall, (or they may be simply eliminated as your cook top cleaner), this causes shoppers (like you and me) to retard purchases since they anticipate the continuing fall in prices (Why should you pay more for some product today when you can get some product cheaper tomorrow?). Then the store-owner, responding to low demand, may decrease prices further, while the products manufacturer or producer who is faced with less orders for his product, sells his stock at lower prices since he has too much of it, and, as well, may decide to slow production. These results exacerbate the problem and result in lower demand for labor in both the production end and in the sales end of the economy, resulting in lay offs, and firings. But job losses and reduced employment only tend to decrease money in circulation, and thus depress demand even further. The end result is a continual spiral downward of demand, as prices fall and employees are laid off. This deflationary spiral can be described as a classic “vicious cycle” or a process which tends to exacerbate the cause or causes which generate it.
What can the Fed do? I read recently that Ben Bernanke is planning to decrease long term interest rates and stimulate growth by having the Fed purchase (“soak up”) Treasury Bonds. Bernanke will buy them with money he just freshly printed at the Treasury. That sounds like a nice way to say we are just printing money as we need it. But here’s how it works.
Treasury Bonds are safe but they do not make much interest. So to get the attention of buyers, the government has to keep interest rates at a level high enough to encourage sales. These practices will costs us in the long run. By buying up Treasury Bonds, a cash infusion is put directly into government coffers. Since the government would have less urgency to sell bonds, they need not encourage buyers by raising interest rates. This action would tend to decrease the value of the dollar, since in effect by creating money ex nihilo, the government is in effect is decreasing the value of its currency.
That might make the Chinese angry….since they hold so much of our debt they will be paid back in inflated currency.
But I’ve not heard anyone one claim that we are just printing up money as we need it. No the polite term for this process is called quantitative easing (QE). Formally this describes a policy used by central banks like the Fed to increase the supply of money. To do this they increase the excess reserves of the banking system. Quantitative Easing is resorted to when other “normal” methods of nudging the economy along have failed. Prior to QE you may remember the Fed lowered bank interest rates, and the interbank interest rate (or discount rate). But sine these are at or close to zero….there is only one other “tool” to try that is falling back on the printing presses.
In fact it is even simpler than that. The central bank simply credits own account with money it creates out of thin air (ex nihilo---out of nothing). Then using this account it purchases financial assets, including government bonds, debts, mortgage backed securities, corporate bonds and other assets. This process is referred to as “open market operations”. Once the funds are out there, it is hoped that banks will have more reserves so they can use these funds to lend out to firms or individuals.
From Japan article http://www.nytimes.com/2010/10/17/world/asia/17japan.html?src=me&ref=general
Still, as political pressure builds to reduce federal spending and budget deficits, other economists are now warning of “Japanification” — of falling into the same deflationary trap of collapsed demand that occurs when consumers refuse to consume, corporations hold back on investments and banks sit on cash. It becomes a vicious, self-reinforcing cycle: as prices fall further and jobs disappear, consumers tighten their purse strings even more and companies cut back on spending and delay expansion plans.
http://climateprogress.org/2010/10/17/is-this-what-america-faces-if-the-tea-party-triumphs/
“Why can’t I find this item any longer?” she asked with the annoyance.
“Well that product may not have a lot of demand, so Green’s, Walmarts, CVS, True Value, etc. do not wish to replace their stock so quickly, when they are gone. They are reducing or eliminating the shelf-stocks of products that don't sell quickly. It's just one way to reduce overhead," I said.
“So this is just a response to the bad economy then?”
“Yes, it’s a sign of low demand.”
"Yeah, that low demand may be the result of the fact that a good portion of the population is under or unemployed. Less money out there…less demand for stove-top cleaners and other stuff.”
Right now it is jobs, jobs, jobs that are on everyone’s mind. Today, I read in Portfolio.com, with some alarm that there are five applicants for every job that opens. Also, that there are some 15 million Americans out of work right now, and that nearly half a million have quit trying to find work. The formal joblessness rate is recorded as 9.6%, but that would be much worse were it not for the those, nearly 500,000 who simply just quit looking.
Also the inflation rate has dropped down to 1.1% and has been holding steady at this rate for some months. That is well below the 2% rate that is considered desirable.
“That doesn’t sound too threatening. Why should I be concerned with the fact that prices are not rising much?”
“Well the problem is that such a low rate of inflation is and indicator of low consumer demand for goods and services.
“So that’s why I can’t find that “cook top” spray cleaner, I like to use”?
“Exactly!“
“Some products which are not your big sellers are in lower demand anyway…and are simply eliminated off the shelves, as a way to reduce costs and raise profits.“
“That’s one way to control expenses, but it makes me mad!“
“But more importantly, these circumstances of low demand may develop into what the economists call a “vicious deflationary cycle” in which low consumer demand causes product prices to fall, (or they may be simply eliminated as your cook top cleaner), this causes shoppers (like you and me) to retard purchases since they anticipate the continuing fall in prices (Why should you pay more for some product today when you can get some product cheaper tomorrow?). Then the store-owner, responding to low demand, may decrease prices further, while the products manufacturer or producer who is faced with less orders for his product, sells his stock at lower prices since he has too much of it, and, as well, may decide to slow production. These results exacerbate the problem and result in lower demand for labor in both the production end and in the sales end of the economy, resulting in lay offs, and firings. But job losses and reduced employment only tend to decrease money in circulation, and thus depress demand even further. The end result is a continual spiral downward of demand, as prices fall and employees are laid off. This deflationary spiral can be described as a classic “vicious cycle” or a process which tends to exacerbate the cause or causes which generate it.
What can the Fed do? I read recently that Ben Bernanke is planning to decrease long term interest rates and stimulate growth by having the Fed purchase (“soak up”) Treasury Bonds. Bernanke will buy them with money he just freshly printed at the Treasury. That sounds like a nice way to say we are just printing money as we need it. But here’s how it works.
Treasury Bonds are safe but they do not make much interest. So to get the attention of buyers, the government has to keep interest rates at a level high enough to encourage sales. These practices will costs us in the long run. By buying up Treasury Bonds, a cash infusion is put directly into government coffers. Since the government would have less urgency to sell bonds, they need not encourage buyers by raising interest rates. This action would tend to decrease the value of the dollar, since in effect by creating money ex nihilo, the government is in effect is decreasing the value of its currency.
That might make the Chinese angry….since they hold so much of our debt they will be paid back in inflated currency.
But I’ve not heard anyone one claim that we are just printing up money as we need it. No the polite term for this process is called quantitative easing (QE). Formally this describes a policy used by central banks like the Fed to increase the supply of money. To do this they increase the excess reserves of the banking system. Quantitative Easing is resorted to when other “normal” methods of nudging the economy along have failed. Prior to QE you may remember the Fed lowered bank interest rates, and the interbank interest rate (or discount rate). But sine these are at or close to zero….there is only one other “tool” to try that is falling back on the printing presses.
In fact it is even simpler than that. The central bank simply credits own account with money it creates out of thin air (ex nihilo---out of nothing). Then using this account it purchases financial assets, including government bonds, debts, mortgage backed securities, corporate bonds and other assets. This process is referred to as “open market operations”. Once the funds are out there, it is hoped that banks will have more reserves so they can use these funds to lend out to firms or individuals.
From Japan article http://www.nytimes.com/2010/10/17/world/asia/17japan.html?src=me&ref=general
Still, as political pressure builds to reduce federal spending and budget deficits, other economists are now warning of “Japanification” — of falling into the same deflationary trap of collapsed demand that occurs when consumers refuse to consume, corporations hold back on investments and banks sit on cash. It becomes a vicious, self-reinforcing cycle: as prices fall further and jobs disappear, consumers tighten their purse strings even more and companies cut back on spending and delay expansion plans.
http://climateprogress.org/2010/10/17/is-this-what-america-faces-if-the-tea-party-triumphs/
Tuesday, November 9, 2010
US A BANANA REPUBLIC?
A few days ago, I read Nicholas Kristof's piece in the NY Times (November 6, 2010) wherein he likens the US, to a "Banana Republic". In these nations the wealthiest one-percent of the population may garner as much as 20 percent of the economic resources leaving only 80% to be divided among the 99% of the rest of the population. The term "banana republic" (think of Honduras or Guatemala as typical examples) are countries where powerful foreign companies exploit a nation for its agricultural output, pay-off elected officials and corrupt the legal government as a means to maximize profits. The United Fruit Company of the 1930s comes readily to mind. In such circumstances it is only to be expected that the chosen few elites who cooperate and collude with the foreigners are those who typically garner the lion's share of the wealth. Thus the hope for a reasonably humane life in such places is restricted --where basic infrastructure, medical care, housing, public transportation and other services are all lacking or severely limited since the elite and the foreigners care little for these benefits. But how can Kristof describe the conditions in OUR country as a banana-republic? Anyone I ask about wealth distribution and banana republics either have no clue about our wealth distribution, see themselves as "quite well off" and see no relationship between the USA and Guatemala. Those that have an opinion indicate that "perhaps the top wealthy 20% of the population may control about that much or a little more of the nation's income and goods. (I did get one interesting comment from a friend who lives in Manhattan. He was one of the few who was even aware of the purchasing power of the super wealthy. He used a count of the number of Christian Louboutin women's shoes he observed on Manhattan sidewalks as a rough measure of the local economy. Since the shoes are easily identifiable by their shiny red-lacquered soles, the exorbitantly priced footwear---some costing well over $2,500 a pair--are easy to spot. He was the only one I encountered who had some remote idea of the disparity in wealth in the City, his own modest economic status and the high level of others.
In an interesting study conducted in 2005, researchers from Duke and Harvard Universities probed the perceptions of wealth distribution in the USA by interviewing a large representative sample and posing the question: how much should the top twenty percent of the population earn?
In an interesting study conducted in 2005, researchers from Duke and Harvard Universities probed the perceptions of wealth distribution in the USA by interviewing a large representative sample and posing the question: how much should the top twenty percent of the population earn?
"The report concludes, that 92 percent of the respondents....believed that the top 20 percent of a population should own only 32 percent of a nation's wealth. More than 90% of the respondents said they'd rather live in a country with a wealth distribution in which the wealthiest should not own more than about a third of the nation's wealth." (See:"Building a Better America -- One Wealth Quintile At A Time" by Dan Ariely of Duke University and Michael I. Norton of Harvard Business School from Huffington Post 9-23-10 http://www.huffingtonpost.com/2010/09/23/americans-support-wealth-redistribution_n_736132.html). (rjkspeaks author's note: In Sweden the top 20% own about 32 % of that nation's wealth, this is not unusual. In France the top 20% control about 40% of the nation's wealth. In Italy the top 20% control 36% of that nation's wealth, while in Germany the top 30% control about 51% of the wealth.)
But today, the USA, the richest nation in the world, is very much unlike Sweden (or other modern democratic industrialized nations for that matter). The way wealth and income are distributed in the US does resemble a banana republic as Kristof claims. Today, the richest Americans--those in the top one-percent take home about 24% of the nation's "pie" leaving only 76% of the wealth for the remaining 99% of the population. If we examine the top 20% of present-day American wage-earners, we learn that they garner about 84% of the total wealth leaving only 16%!!!!!! of the national pie to be divided up by the remaining 80% of the population. That does not seem fair does it? No, it is not fair and even seems un-American! In most modern, western industrialized nations...these USA figures stand out in contrast like a sore thumb.
But things were quite different here in the USA not so long ago. Back in 1976, the same 1%group at the top took home only 9% of the total nation's income (rather than the 24% of today). But since then, in little more than three decades, their "take" increased nearly three-fold. How did this great "condensation of wealth" occur? (See:http://en.wikipedia.org/wiki/Economic_inequality#Social_cohesion)
Paul Krugman of the NY Times states that one cause of inequality of wealth distribution in the USA is globalization (which has resulted in many higher paying jobs to disappear offshore), and to "fragmentation of means of production" where labor-intensive aspects of a manufacture process might be "farmed out" to nations where cheap labor can be used to reduce costs for production aspects, while engineering, marketing and advertising of a product might remain in the home country. Others argue that technological innovation and automation have reduced demand for labor.
How did this happen to the US?
One reason has been the American economic model which has been in place for these last decades. According to an off shore observer--German Finance Minister Wolgang Shauble (responding to a question regarding German export surpluses), states: "The American growth model.........is in a deep crisis. The United States lived on borrowed money for too long, inflating its financial sector unnecessarily and neglecting its small and mid-sized industrial companies. There are many reasons for America's problems, but they don't include German export surpluses." (Der Spiegle: November 6, 2010)
So how did we get here? Is Schauble correct?: Have we inflated our financial sector and neglected our small and medium sized businesses? Our small and medium sized firms are the traditional heart of our economy, the businesses which employ the vast majority of our working population...where decent salaries are earned...where benefits generally are substantial and which help generate the bulk of our federal taxes. But we ignored these firms to favor the more influential US financial sector. This is not good for the USA in general and not too smart.
Favoritism to the financial sector helps to explain why our unemployment figures (formally now at 9.6%) are so difficult to change. By neglecting our small and medium sized businesses the engines of income and employment we have set the stage for the present unhappy employment situation. Now, after decades of neglect, we have fewer of these businesses and fewer places to stimulate for increased employment.
The financial sector which we have favored over the last decades by reducing government oversight and by Reagan-encouraged deregulation have increased questionable loans to home-buyers. They lowered the standards for borrowers. They encouraged banks to make more loans to less qualified lenders. Then they took these mortgages, bundled them together to create "assets" or commodities which they sold as "bank stocks", then, using these created assets, they further diced up the bundled mortgages to create other "products" or derivatives which permitted banks to take bets on the fact that these manufactured assists were going to increase or decrease in value. When the economy faltered, and people defaulted on their loans...many of these mortgages became worthless paper---but where were they? They were sliced and diced into many products and sold to investors by our biggest banks. The result was that the entire house of cards came down around the banker's shoulders. The government responded with a massive bailout of the the banks called the Troubled Asset Relief Program (TARP). But that did not stop them from accepting TARP funds for their erroneous ways-- a program which paid them handsomely for their perfidy. Finally, it did not prevent banks and financial institutions from continuing to give out massive and embarrassing bonuses to their top staff members. These activities only exacerbated the uneven distribution of wealth...
But today, the USA, the richest nation in the world, is very much unlike Sweden (or other modern democratic industrialized nations for that matter). The way wealth and income are distributed in the US does resemble a banana republic as Kristof claims. Today, the richest Americans--those in the top one-percent take home about 24% of the nation's "pie" leaving only 76% of the wealth for the remaining 99% of the population. If we examine the top 20% of present-day American wage-earners, we learn that they garner about 84% of the total wealth leaving only 16%!!!!!! of the national pie to be divided up by the remaining 80% of the population. That does not seem fair does it? No, it is not fair and even seems un-American! In most modern, western industrialized nations...these USA figures stand out in contrast like a sore thumb.
But things were quite different here in the USA not so long ago. Back in 1976, the same 1%group at the top took home only 9% of the total nation's income (rather than the 24% of today). But since then, in little more than three decades, their "take" increased nearly three-fold. How did this great "condensation of wealth" occur? (See:http://en.wikipedia.org/wiki/Economic_inequality#Social_cohesion)
Paul Krugman of the NY Times states that one cause of inequality of wealth distribution in the USA is globalization (which has resulted in many higher paying jobs to disappear offshore), and to "fragmentation of means of production" where labor-intensive aspects of a manufacture process might be "farmed out" to nations where cheap labor can be used to reduce costs for production aspects, while engineering, marketing and advertising of a product might remain in the home country. Others argue that technological innovation and automation have reduced demand for labor.
How did this happen to the US?
One reason has been the American economic model which has been in place for these last decades. According to an off shore observer--German Finance Minister Wolgang Shauble (responding to a question regarding German export surpluses), states: "The American growth model.........is in a deep crisis. The United States lived on borrowed money for too long, inflating its financial sector unnecessarily and neglecting its small and mid-sized industrial companies. There are many reasons for America's problems, but they don't include German export surpluses." (Der Spiegle: November 6, 2010)
So how did we get here? Is Schauble correct?: Have we inflated our financial sector and neglected our small and medium sized businesses? Our small and medium sized firms are the traditional heart of our economy, the businesses which employ the vast majority of our working population...where decent salaries are earned...where benefits generally are substantial and which help generate the bulk of our federal taxes. But we ignored these firms to favor the more influential US financial sector. This is not good for the USA in general and not too smart.
Favoritism to the financial sector helps to explain why our unemployment figures (formally now at 9.6%) are so difficult to change. By neglecting our small and medium sized businesses the engines of income and employment we have set the stage for the present unhappy employment situation. Now, after decades of neglect, we have fewer of these businesses and fewer places to stimulate for increased employment.
The financial sector which we have favored over the last decades by reducing government oversight and by Reagan-encouraged deregulation have increased questionable loans to home-buyers. They lowered the standards for borrowers. They encouraged banks to make more loans to less qualified lenders. Then they took these mortgages, bundled them together to create "assets" or commodities which they sold as "bank stocks", then, using these created assets, they further diced up the bundled mortgages to create other "products" or derivatives which permitted banks to take bets on the fact that these manufactured assists were going to increase or decrease in value. When the economy faltered, and people defaulted on their loans...many of these mortgages became worthless paper---but where were they? They were sliced and diced into many products and sold to investors by our biggest banks. The result was that the entire house of cards came down around the banker's shoulders. The government responded with a massive bailout of the the banks called the Troubled Asset Relief Program (TARP). But that did not stop them from accepting TARP funds for their erroneous ways-- a program which paid them handsomely for their perfidy. Finally, it did not prevent banks and financial institutions from continuing to give out massive and embarrassing bonuses to their top staff members. These activities only exacerbated the uneven distribution of wealth...
That's how we got here.
.
Wednesday, July 7, 2010
A SHIP OF STATE IN NEED OF A COURSE CORRECTION
Like the oil gushing out of the Gulf of Mexico, the Obama Administration continues on the course of the last administration, sputtering and spouting, the viscous slime from the past is unable to be altered or abated as it poisons, suffocates and kills those who come in contact with it. The problems of gushing oil and drifting unchanging domestic and foreign affairs can to a large degree be related back to Bush era policies of imperialism, greed, single-minded devotion to business interests, deregulation, imperialism and the evisceration of even minimal environmental review. The Obama Administration inherited the policies, but appears helpless to alter them or their outcomes as it continues to drift on the current, taking the nation in the same general direction, as if the former defeated and delegitimized oil-smeared former captain remained somehow tethered to the helm, and the new captain is without the strength, determination, or will to pry the tiller from the old man’s oily grasp.
We had great hopes back in January 22, 2009 when CNN reported on a key promise made by Obama during the election which epitomized the hopw for real change-- the closing of the ill- conceived, infamous Guantanamo Bay Prison. “Promising to return America to the "moral high ground" in the war on terrorism, President Obama issued three executive orders Thursday to demonstrate a clean break from the Bush administration, including one requiring that the Guantanamo Bay detention facility be closed within a year. The president said he was issuing the order to close the facility in order to "restore the standards of due process and the core constitutional values that have made this country great even in the midst of war, even in dealing with terrorism."
What happened to restoring our core values and standards of due process?
Nothing much.
By June 25, 2010, the NY Times was reporting that closing Guantanamo and keeping the prison closing pledge has drifted out of the President’s agenda. In a piece entitled “Closing Guantanamo Fades as a Priority” The Times states “Stymied by political opposition and focused on competing priorities, the Obama administration has sidelined efforts to close the Guantánamo prison, making it unlikely that President Obama will fulfill his promise to close it before his term ends in 2013. When the White House acknowledged last year that it would miss Mr. Obama’s initial January 2010 deadline for shutting the prison, it also declared that the detainees would eventually be moved to one in Illinois. But impediments to that plan have mounted in Congress, and the administration is doing little to alter events.” See: http://www.nytimes.com/2010/06/26/us/politics/26gitmo.html.
Senator Carl Levin, Democrat Chair of the Senate’s Armed Services Committee adds:“There is a lot of inertia” against closing the prison, “and the administration is not putting a lot of energy behind their position that I can see,” said Levin. He added that “the odds are that it will still be open” by the next presidential inauguration.
Though we have since learned that the costs of keeping Guantanamo open, obtained from a new Defense Department study of the costs of the facility at Guantánamo Bay, Cuba, show that taxpayers spent more than $2 billion on the prison between 2002 and 2009. Administration officials argue that the cost of operations and personnel could be cut roughly in half – to about $150 million a year – if detainees were instead housed at an Illinois prison. But reason and savings (even in these desperate times) appear not to change many minds. See http://documents.nytimes.com/current-costs-at-guantanamo
So as Tomdispatch reminds us in http://www.tomdispatch.com, closing Guantanamo is just one of the obvious factors that indicate how little things have really changed, “It would have been hard to do then” states Dispatch. But it is even more so now, with the Gulf gushing oil, the economy teetering into a possible second dip, the market behaving uncertainly about its wish to be a bear or a bull, and Obama’s approval ratings dropping like a stone (down to 38% among Independents), as well as a summer heat-wave fogging Congressional minds even more than they are usually.
So what has changed? We do have a black president and a lovely black first family. That is a good form of change. But other than that, and some well-spoken sentiments and oratory from the talented and intelligent Obama, Washington has not changed much since Bush left. Oddly, as if to underscore the lack of change, our nation again suffers with a disaster off the coast of Louisiana—though this time it is worse—with effects both on shore and in the deep waters of the Gulf. On foreign policy, the war in Afghanistan is looking much like it was under Bush---but now with more troops and more fatalities. An examination of who is mostly conducting the War in Afghanistan appears to be not much different had Senator John McCain won. In Iraq that disastrous ill-conceived and conducted invasion and civil war is thankfully slowly atrophying, but at a pace set by its chief designers and avid supporters---of the last administration. No change there. We still have a Bush-style warrior Secretary of State in our inconsequential and ineffective Ms Clinton. We continue to be burdened by Bush holdovers such as Mr. Gates, the Bush era Secretary of Defense, and also National Security Advisor Mr. James Jones who is a close friend of John McCain. So not surprisingly, we are still bogged down in an unending and unsuccessful war in Afghanistan. That gusher has not been “top killed”.
Just to understand how far off course we are, mark this on your navigation chart. In recent testimony concerning our reason for being in Afghanistan Mr. Leon Panetta, Head of the CIA indicated that there are perhaps “50 to 100 Al Qaida in that nation” for which we taxpayers have spent a nearly $300 billion dollars to apprehend and/or neutralize. That is $3 billion dollars for each turbaned head! We are either very inefficient or we are spending these hundreds of billions for some other reason. My old friend Tony would always say…”Check out where the money goes!”
Finally, we have some agencies (I think here of Blackwater or Xe of Bagdhad fame and its recent shameful 200 million dollar Pentagon contract) which are in the war business and operate to see it sustained and expanded. For example our expanding CIA Drone War in bordering Pakistan. The agency continues to generate new Taliban and al Qaida sympathizers with their ill-informed and poorly aimed drone-attacks, often resulting in numerous “collateral” civilian deaths. The spill goes on.
So when are we going to plug that leak Mr. Obama?
We had great hopes back in January 22, 2009 when CNN reported on a key promise made by Obama during the election which epitomized the hopw for real change-- the closing of the ill- conceived, infamous Guantanamo Bay Prison. “Promising to return America to the "moral high ground" in the war on terrorism, President Obama issued three executive orders Thursday to demonstrate a clean break from the Bush administration, including one requiring that the Guantanamo Bay detention facility be closed within a year. The president said he was issuing the order to close the facility in order to "restore the standards of due process and the core constitutional values that have made this country great even in the midst of war, even in dealing with terrorism."
What happened to restoring our core values and standards of due process?
Nothing much.
By June 25, 2010, the NY Times was reporting that closing Guantanamo and keeping the prison closing pledge has drifted out of the President’s agenda. In a piece entitled “Closing Guantanamo Fades as a Priority” The Times states “Stymied by political opposition and focused on competing priorities, the Obama administration has sidelined efforts to close the Guantánamo prison, making it unlikely that President Obama will fulfill his promise to close it before his term ends in 2013. When the White House acknowledged last year that it would miss Mr. Obama’s initial January 2010 deadline for shutting the prison, it also declared that the detainees would eventually be moved to one in Illinois. But impediments to that plan have mounted in Congress, and the administration is doing little to alter events.” See: http://www.nytimes.com/2010/06/26/us/politics/26gitmo.html.
Senator Carl Levin, Democrat Chair of the Senate’s Armed Services Committee adds:“There is a lot of inertia” against closing the prison, “and the administration is not putting a lot of energy behind their position that I can see,” said Levin. He added that “the odds are that it will still be open” by the next presidential inauguration.
Though we have since learned that the costs of keeping Guantanamo open, obtained from a new Defense Department study of the costs of the facility at Guantánamo Bay, Cuba, show that taxpayers spent more than $2 billion on the prison between 2002 and 2009. Administration officials argue that the cost of operations and personnel could be cut roughly in half – to about $150 million a year – if detainees were instead housed at an Illinois prison. But reason and savings (even in these desperate times) appear not to change many minds. See http://documents.nytimes.com/current-costs-at-guantanamo
So as Tomdispatch reminds us in http://www.tomdispatch.com, closing Guantanamo is just one of the obvious factors that indicate how little things have really changed, “It would have been hard to do then” states Dispatch. But it is even more so now, with the Gulf gushing oil, the economy teetering into a possible second dip, the market behaving uncertainly about its wish to be a bear or a bull, and Obama’s approval ratings dropping like a stone (down to 38% among Independents), as well as a summer heat-wave fogging Congressional minds even more than they are usually.
So what has changed? We do have a black president and a lovely black first family. That is a good form of change. But other than that, and some well-spoken sentiments and oratory from the talented and intelligent Obama, Washington has not changed much since Bush left. Oddly, as if to underscore the lack of change, our nation again suffers with a disaster off the coast of Louisiana—though this time it is worse—with effects both on shore and in the deep waters of the Gulf. On foreign policy, the war in Afghanistan is looking much like it was under Bush---but now with more troops and more fatalities. An examination of who is mostly conducting the War in Afghanistan appears to be not much different had Senator John McCain won. In Iraq that disastrous ill-conceived and conducted invasion and civil war is thankfully slowly atrophying, but at a pace set by its chief designers and avid supporters---of the last administration. No change there. We still have a Bush-style warrior Secretary of State in our inconsequential and ineffective Ms Clinton. We continue to be burdened by Bush holdovers such as Mr. Gates, the Bush era Secretary of Defense, and also National Security Advisor Mr. James Jones who is a close friend of John McCain. So not surprisingly, we are still bogged down in an unending and unsuccessful war in Afghanistan. That gusher has not been “top killed”.
Just to understand how far off course we are, mark this on your navigation chart. In recent testimony concerning our reason for being in Afghanistan Mr. Leon Panetta, Head of the CIA indicated that there are perhaps “50 to 100 Al Qaida in that nation” for which we taxpayers have spent a nearly $300 billion dollars to apprehend and/or neutralize. That is $3 billion dollars for each turbaned head! We are either very inefficient or we are spending these hundreds of billions for some other reason. My old friend Tony would always say…”Check out where the money goes!”
Finally, we have some agencies (I think here of Blackwater or Xe of Bagdhad fame and its recent shameful 200 million dollar Pentagon contract) which are in the war business and operate to see it sustained and expanded. For example our expanding CIA Drone War in bordering Pakistan. The agency continues to generate new Taliban and al Qaida sympathizers with their ill-informed and poorly aimed drone-attacks, often resulting in numerous “collateral” civilian deaths. The spill goes on.
So when are we going to plug that leak Mr. Obama?
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