A recent article on line cites a 2007 Federal Reserve Bank survey that found that the average American approaching retirement had amassed a staggering $60,000 in 401(k) savings. Since that was pre-meltdown, one can only wonder what they are worth today. Perhaps enough for part of a "Golden Year in the Sun". The use of the singular is not a typo.
The article goes on to give insights into the number of firms that are going to reduce or terminate matching contributions to 401(k) and similar defined contribution plans. In short, more and more future retirees are going to be in less that stellar financial shape.
What gave me pause about GWB's "Ownership Society" and the attendant privatization of part of Social Security is that if you are living hand to mouth, as at least 50% of the population is doing, the investment in the future you are able to make is paltry, if any at all. Take Social Security and make part of it subject to the vacillations of the market, and today's paltry can look robust compared to tomorrow's down market.
For example, my Mom worked until she was 70, as it was her major form of entertainment. The last 15 years of that time, she pumped as much as she could into a 401(k). She retired in late Summer of 2000, and six months later began receiving mandatory distributions of her 401(k). Less than 2 years later, due to the market tumble following 9/11, every dollar she was forced to withdraw over the next 2 1/2 years had originally cost her an average of $1.50. She had no idea of what was going on, nor did I, as I was totally unaware that her monthly "pension" included these 401(k) funds until late in the game. My "bad" for not knowing where the money really came from, I guess. Had I known at retirement time, I would have encouraged her to move the funds from a stock based portfolio to lower yield, lower risk investments. But, since these were mandatory distributions, once the market fell, the damage was done. She couldn't halt distributions to wait for the market to rise.
"Ownership Society" is a truly Orwellian term. It refers to something that, for a significant portion of the population, really only exists in the abstract. As Yogi Berra would have said, "You can't own anything until you own it." Like it or not, the lower 50% of the income scale in the US do not earn enough to "own" a lot, and it takes a lot to retire. We didn't even encourage building equity in one's home the past 10 years. Placing the whole monkey on their backs is fine, but just don't make it look like a glorious, slam dunk ticket to a secure future.
But then, for the private firms that would receive this privatized Social Security money to invest, the scale of what they could own as a result would be staggering. And, as we have seen, the US financial industry truly has the everyday working stiff's best interests at heart.
WASF
Al
Thursday, March 26, 2009
AIG, I Quit!
This letter was published in numerous newspapers. My initial reaction was sort of sympathetic to the man's words. However, with the opportunity to mull it over, I now feel more inclined to view it as the puerile bleating of a whiner. So, I decided to write back.
Dear Mr DeSantis:
When I first read your letter, my gut response was “Way to go, Jake. You told it like it is.” But, Jake, after finishing a cup of coffee and allowing my mind to wrestle with your words, my visceral and intellectual reaction is now, “So who cares, you self centered fool.”
Why the 180 degree turn? Well, for openers, you are not the only one in our country with whom an employer, the financial community (including AIG), his neighbors and/or the government have broken faith. It’s just that the numbers seem bigger when applied to your case. At least in your eyes. AIG not only broke faith with you, it broke faith with all of us. Perhaps not your specific division, but the company as a whole, and in the short run, you and your division reaped benefit from the actions of the whole.
Secondly, I find it interesting that your magnanimous offer is to turn the “post tax” proceeds of your bonus to “those suffering from the global economic downturn”. Is this an attempt to paint the government as the enemy, lest they tax your bonus too heavily and thereby punish those already victimized by the AIGs of this country? Prior to the public outcry, were you planning to be so beneficent? Does your offered contribution amount to the slightest drop in the bucket of damage that AIG and it’s fellow travelers have inflicted upon the common working stiff as they recklessly sought profits. Can you produce another letter, over your signature, calling upon AIG to be more prudent back when the seeds of this disaster were being planted.
As to those whom your recently proclaimed donation is said to benefit, are you aware of the relative difference between their current suffering and that which you express in the claim against your million dollar bonus? Will you lose your home and find it difficult to put a roof over your family's head? Will you be unable to afford routine health care? Has your retirement been wiped out? Or are we talking about a minor lifestyle adjustment?
Yes, Jake, you worked 10 to 14 hours a day, expecting to receive a million or so bucks for a year’s work. Others had to work the same hours, hoping to receive some 40,000 bucks, make ends meet and still have a job at the end of the year to start the process all over again. Actions of firms like AIG shattered the modest hopes of a couple of million of these folks, and you feel like you have been singled out for shabby treatment?
I wish you well, Jake, even if I find your whining repulsive. If you really want to impress us, divest yourself of all the wealth you have amassed, buy a middle class home, spend a couple of years working 10 to 14 hours a day at the median income, try to restart a retirement plan from scratch and then report back how righteous you feel.
Dear Mr DeSantis:
When I first read your letter, my gut response was “Way to go, Jake. You told it like it is.” But, Jake, after finishing a cup of coffee and allowing my mind to wrestle with your words, my visceral and intellectual reaction is now, “So who cares, you self centered fool.”
Why the 180 degree turn? Well, for openers, you are not the only one in our country with whom an employer, the financial community (including AIG), his neighbors and/or the government have broken faith. It’s just that the numbers seem bigger when applied to your case. At least in your eyes. AIG not only broke faith with you, it broke faith with all of us. Perhaps not your specific division, but the company as a whole, and in the short run, you and your division reaped benefit from the actions of the whole.
Secondly, I find it interesting that your magnanimous offer is to turn the “post tax” proceeds of your bonus to “those suffering from the global economic downturn”. Is this an attempt to paint the government as the enemy, lest they tax your bonus too heavily and thereby punish those already victimized by the AIGs of this country? Prior to the public outcry, were you planning to be so beneficent? Does your offered contribution amount to the slightest drop in the bucket of damage that AIG and it’s fellow travelers have inflicted upon the common working stiff as they recklessly sought profits. Can you produce another letter, over your signature, calling upon AIG to be more prudent back when the seeds of this disaster were being planted.
As to those whom your recently proclaimed donation is said to benefit, are you aware of the relative difference between their current suffering and that which you express in the claim against your million dollar bonus? Will you lose your home and find it difficult to put a roof over your family's head? Will you be unable to afford routine health care? Has your retirement been wiped out? Or are we talking about a minor lifestyle adjustment?
Yes, Jake, you worked 10 to 14 hours a day, expecting to receive a million or so bucks for a year’s work. Others had to work the same hours, hoping to receive some 40,000 bucks, make ends meet and still have a job at the end of the year to start the process all over again. Actions of firms like AIG shattered the modest hopes of a couple of million of these folks, and you feel like you have been singled out for shabby treatment?
I wish you well, Jake, even if I find your whining repulsive. If you really want to impress us, divest yourself of all the wealth you have amassed, buy a middle class home, spend a couple of years working 10 to 14 hours a day at the median income, try to restart a retirement plan from scratch and then report back how righteous you feel.
Tuesday, March 24, 2009
Too much freedom can be a curse!
As we old gits tend to do, my mind recently wandered back some 40 years to my days at Ft Wolters, Texas. One of the finer pieces of wisdom I received there was from the base pediatrician. He wrote a great series of parenting pamphlets, and in one, he addressed the subject of offering choices to our young ones.
His sage wisdom? Limit the choices your child is offered, and once they decide, hold them to it. His logic? If offered unlimited choices, one has great difficulty in evaluating them all to make a sound decision. Further, life will indeed involve limitations at times, and the sooner we learn this, the better we will be able to deal with it.
Thus, he said, rather than asking your offspring the seemingly innocuous question, "What would you like for dinner tonight?", he recommended offering a choice between two selections, one of which would be served to the whole family. Further, he said that such decision making should not be offered every night, but just often enough to involve the child in occasional family decision making.
In broad terms, the good Doc summarized that self discipline cannot be developed when we are allowed to be "children in the candy store with an unlimited allowance". (Credit cards were not in vogue at the time). And, he continued, the offer of limitless choices ultimately becomes a greater frustration when one suddenly bumps up against the notion of not being able to have all two, three or four that are "tied for first place". Doc posited that if the menu of choices is so expansive as to cause decision making to be virtual random guessing, no decision making skills nor sense of responsibility is developed.
If only the good Doc had been at the helm of our society the past 30 years or so. We are now at an economic crossroads where difficult choices need to be made, and all too many of us are angry for having to do so, no less unable to do so. The "all you can eat for $5 buffet" is closing, and no one wants to return to a fixed menu.
WASF
Al
His sage wisdom? Limit the choices your child is offered, and once they decide, hold them to it. His logic? If offered unlimited choices, one has great difficulty in evaluating them all to make a sound decision. Further, life will indeed involve limitations at times, and the sooner we learn this, the better we will be able to deal with it.
Thus, he said, rather than asking your offspring the seemingly innocuous question, "What would you like for dinner tonight?", he recommended offering a choice between two selections, one of which would be served to the whole family. Further, he said that such decision making should not be offered every night, but just often enough to involve the child in occasional family decision making.
In broad terms, the good Doc summarized that self discipline cannot be developed when we are allowed to be "children in the candy store with an unlimited allowance". (Credit cards were not in vogue at the time). And, he continued, the offer of limitless choices ultimately becomes a greater frustration when one suddenly bumps up against the notion of not being able to have all two, three or four that are "tied for first place". Doc posited that if the menu of choices is so expansive as to cause decision making to be virtual random guessing, no decision making skills nor sense of responsibility is developed.
If only the good Doc had been at the helm of our society the past 30 years or so. We are now at an economic crossroads where difficult choices need to be made, and all too many of us are angry for having to do so, no less unable to do so. The "all you can eat for $5 buffet" is closing, and no one wants to return to a fixed menu.
WASF
Al
Thursday, March 12, 2009
Sometimes an Education is Unsettling
My area of study, back when I thought a PhD would look nice following my name, was Labor Market Theory, particularly "Dual Labor Market" theory. There were basically two faculty/student "teams" studying the subject. Our team looked at the structural aspects, while the other looked at the sociological side.
To explain a bit. Dual Labor Market refers to a phenomenon in which there is a "Primary" and a "Secondary" Labor Market. Jobs turnover in the Primary market tends to be relatively stable, and earnings are strongly predicted by education level, years of experience, seniority on a job, etc. All those classic factors that instinctively pop into mind.
The Secondary market, on the other hand is characterized by high job turnover and very low earnings. The only statistically significant predictors of earnings are the prevailing minimum wage and hours worked. A PhD working in the secondary market will earn the same as a high school drop out. A person with 10 years on the job will not earn significantly more than the one hired yesterday.
While I was not seriously involved in the sociological side of the subject, several findings remain with me to this day. One was that if an individual works in secondary market jobs for more than two years, the odds of escaping that workforce diminish dramatically. Education, skill, training, and all the typical remedies for low earning do not work, unless it is retraining. For example, consider a graduate engineer with 10 years professional experience, who has to take a secondary market job(s) for a couple of years, perhaps due to a layoff. After about two years in secondary market employment, he suffers a high probability of remaining there. His probability of returning to primary market employment increased somewhat if he took, for example, a trade school course in auto mechanics and changed career fields, even if there were engineering jobs around. A career change was more promising than if he tried to return to engineering, even if he did more studies in engineering! In short, the Secondary Labor Market is the "Roach Motel" of employment.
As I said, my area of concentration was the structural side of the issue, so my insights into the sociology were limited. Thus, I can only offer the glimpse above. While this was back in the late 70's, early 80's, I can't help thinking about it today.
The good news is that if the above holds true, the laid off geniuses who brought this mess upon us might very well be flipping burgers for years to come! The bad news is that if middle class jobs stay off the radar for too long a period of time, many fine people may be trapped in their new found mess.
Another piece of bad news is that if people cannot readily return to a field where they have gained useful experience, that field loses the experience which they had gained. Sort of a brain drain.
Al
To explain a bit. Dual Labor Market refers to a phenomenon in which there is a "Primary" and a "Secondary" Labor Market. Jobs turnover in the Primary market tends to be relatively stable, and earnings are strongly predicted by education level, years of experience, seniority on a job, etc. All those classic factors that instinctively pop into mind.
The Secondary market, on the other hand is characterized by high job turnover and very low earnings. The only statistically significant predictors of earnings are the prevailing minimum wage and hours worked. A PhD working in the secondary market will earn the same as a high school drop out. A person with 10 years on the job will not earn significantly more than the one hired yesterday.
While I was not seriously involved in the sociological side of the subject, several findings remain with me to this day. One was that if an individual works in secondary market jobs for more than two years, the odds of escaping that workforce diminish dramatically. Education, skill, training, and all the typical remedies for low earning do not work, unless it is retraining. For example, consider a graduate engineer with 10 years professional experience, who has to take a secondary market job(s) for a couple of years, perhaps due to a layoff. After about two years in secondary market employment, he suffers a high probability of remaining there. His probability of returning to primary market employment increased somewhat if he took, for example, a trade school course in auto mechanics and changed career fields, even if there were engineering jobs around. A career change was more promising than if he tried to return to engineering, even if he did more studies in engineering! In short, the Secondary Labor Market is the "Roach Motel" of employment.
As I said, my area of concentration was the structural side of the issue, so my insights into the sociology were limited. Thus, I can only offer the glimpse above. While this was back in the late 70's, early 80's, I can't help thinking about it today.
The good news is that if the above holds true, the laid off geniuses who brought this mess upon us might very well be flipping burgers for years to come! The bad news is that if middle class jobs stay off the radar for too long a period of time, many fine people may be trapped in their new found mess.
Another piece of bad news is that if people cannot readily return to a field where they have gained useful experience, that field loses the experience which they had gained. Sort of a brain drain.
Al
Tuesday, March 03, 2009
Is the US Economy Sustainable?
For quite a while, I have felt that if the US economy was so dependent on consumer debt, there was no way it's growth could be sustained. Sooner or later, unless wages across the entire population rose more than the growth in GDP, the proverbial "minimum monthly payment" on consumer debt would surpass their ability to make those payments. In an economy such as the US, where consumer spending is such a major component of GDP, growth in consumer spending needs to be backed by growth in consumer real wages, or sooner or later, the house collapses. And it has.
I ran across an interesting article today. Someone seems to agree with my reasoning. I sure wish I was wrong, for my reasoning carried me to conclude that America needs a significant reset of its economy, and that means that either we accept a significantly depressed economy, or wealth must be distributed differently.
Note that I am not suggesting a "redistribution of wealth". But, somehow, more wealth needs to land into the hands of the masses for them to be able to spend without the assistance of excessive debt. In sort, if the rich keep getting richer and the poor keep getting poorer, the consumer spending of the rich will not support the economy. "Trickle Down" is pure horse-hockey.
Temporarily, however, as a result of the economy going over the edge, the only way to "prime the pump" of the masses' ability to spend is a redistribution of wealth, and Obama's tax policy is the only available tool in the tool box that can do that.
But, to get the rich to understand that they are better off in the long run to be slightly less rich requires a major culture shift. So far, all too many of them operate under the delusion that their personal well being is all that is needed for a robust society and economy. As more and more of the other 95% see that their economic well being is what really drives the economy, times in the US could get very interesting.
I ran across an interesting article today. Someone seems to agree with my reasoning. I sure wish I was wrong, for my reasoning carried me to conclude that America needs a significant reset of its economy, and that means that either we accept a significantly depressed economy, or wealth must be distributed differently.
Note that I am not suggesting a "redistribution of wealth". But, somehow, more wealth needs to land into the hands of the masses for them to be able to spend without the assistance of excessive debt. In sort, if the rich keep getting richer and the poor keep getting poorer, the consumer spending of the rich will not support the economy. "Trickle Down" is pure horse-hockey.
Temporarily, however, as a result of the economy going over the edge, the only way to "prime the pump" of the masses' ability to spend is a redistribution of wealth, and Obama's tax policy is the only available tool in the tool box that can do that.
But, to get the rich to understand that they are better off in the long run to be slightly less rich requires a major culture shift. So far, all too many of them operate under the delusion that their personal well being is all that is needed for a robust society and economy. As more and more of the other 95% see that their economic well being is what really drives the economy, times in the US could get very interesting.
Sunday, February 15, 2009
Unfortunately, however, we will have to sell the boat
As I listen to the robber barons of Wall Street moan and groan about salary and bonus limitations that accepting a taxpayer bailout involves, I am reminded of an incident some 38 years ago, when I was stationed at Ft Wolters,TX instructing helicopter flying.
Officer students attending flight school at Ft Wolters encountered new found wealth. It was a TDY assignment, and they drew flight pay. Thus, they were drawing full pay and allowances, PLUS $24 in per diem (Tax free), PLUS $150/month flight skins (taxable), and would do so for 11 months, or about $9,500 more than "usual" while in training. I the late 60's/early 70's that was significant bucks.
So, our dauntless students looked at this new found wealth and began to elevate their lifestyles with, most typically, new cars. Being able to easily make 11 monthly payments of $870 or more could buy a couple of cars back then, and they did. Our local auto dealers were more than qualified to explain how it was done. And, since flight school was normally followed by a year in RVN, where even more $$$ could be saved, some extended the plan to include the financial windfall of that.
But then, shock of shocks, DOD did its periodic review of per diem rates and found that they should only be receiving $21/day! Talk about gloom, doom and mayhem! LTs and CPTs scrambling to figure out how to stay afloat with $120/month less. We actually had to set up financial management classes to help them avoid defaulting. So, a number of us permanent party were given training on how to conduct small group ( 5 or 6 students) counseling sessions and we went for it. The sessions began by having each student express their plight and what they thought they must do.
At the first session I conducted, I was amazed at how shattered these guys were, and how stumped some were as to how to handle it. Some were outright hostile toward DOD over the change. The last one, however, seemed quite calm, and sure of a solution. He said that he and his wife had been quite prudent. Rather than buying a Corvette, like so many others, they stuck to the Ford Mustang. One for each of them, along with a Ford station wagon for "family use." They had only bought an amount of furniture that could fit in a U-Haul trailer(TDY moves don't cover household goods), another reason for the station wagon. They would pay a car-less student to drive one of the Mustangs to Ft Rucker for the second half of training.
In closing, he said, "So, you see, with a bit of prudent planning, and a willingness to sacrifice a bit, it need not be a crisis. Unfortunately, however, we will have to sell the boat."
I shared that story with my colleagues, and the student's final words became an oft quoted quip when one of us was expressing mock sympathy.
Al
Officer students attending flight school at Ft Wolters encountered new found wealth. It was a TDY assignment, and they drew flight pay. Thus, they were drawing full pay and allowances, PLUS $24 in per diem (Tax free), PLUS $150/month flight skins (taxable), and would do so for 11 months, or about $9,500 more than "usual" while in training. I the late 60's/early 70's that was significant bucks.
So, our dauntless students looked at this new found wealth and began to elevate their lifestyles with, most typically, new cars. Being able to easily make 11 monthly payments of $870 or more could buy a couple of cars back then, and they did. Our local auto dealers were more than qualified to explain how it was done. And, since flight school was normally followed by a year in RVN, where even more $$$ could be saved, some extended the plan to include the financial windfall of that.
But then, shock of shocks, DOD did its periodic review of per diem rates and found that they should only be receiving $21/day! Talk about gloom, doom and mayhem! LTs and CPTs scrambling to figure out how to stay afloat with $120/month less. We actually had to set up financial management classes to help them avoid defaulting. So, a number of us permanent party were given training on how to conduct small group ( 5 or 6 students) counseling sessions and we went for it. The sessions began by having each student express their plight and what they thought they must do.
At the first session I conducted, I was amazed at how shattered these guys were, and how stumped some were as to how to handle it. Some were outright hostile toward DOD over the change. The last one, however, seemed quite calm, and sure of a solution. He said that he and his wife had been quite prudent. Rather than buying a Corvette, like so many others, they stuck to the Ford Mustang. One for each of them, along with a Ford station wagon for "family use." They had only bought an amount of furniture that could fit in a U-Haul trailer(TDY moves don't cover household goods), another reason for the station wagon. They would pay a car-less student to drive one of the Mustangs to Ft Rucker for the second half of training.
In closing, he said, "So, you see, with a bit of prudent planning, and a willingness to sacrifice a bit, it need not be a crisis. Unfortunately, however, we will have to sell the boat."
I shared that story with my colleagues, and the student's final words became an oft quoted quip when one of us was expressing mock sympathy.
Al
Friday, January 30, 2009
Down with the Old, Up with the New
Probably no photo of the Iraq invasion has been hyped more than the pictures of a statue of Saddam being toppled in Baghdad.
Since then, some of those who participated in toppling the statue have expressed regrets.
Now a new monument has been erected concerning the war.
Why would children at an orphanage assist an artist to memorialize the shoe recently thrown at George Bush?
From David Knowles:
But why are these Iraqis so ungrateful to our former president given that the tyrant who led them, Saddam Hussein, has been deposed and executed? Perhaps it has something to do with the fact that 5.1 million Iraqis were displaced by the war and the sectarian violence that ensued. According to the International Organization for Migration, that figure represents the largest human relocation in modern times.
Consider, too, the mind-boggling number of orphans caused by the war. The Iraqi Government estimates that the conflict has left 5 million children without parents.
Given these hard realities, perhaps a shoe-sculpture can be viewed as a civilized reaction to the legacy of Mr. Bush.
Surely a totally unexpected monument to your legacy, Mr Bush!
Al
Since then, some of those who participated in toppling the statue have expressed regrets.
Now a new monument has been erected concerning the war.
Why would children at an orphanage assist an artist to memorialize the shoe recently thrown at George Bush?
From David Knowles:
But why are these Iraqis so ungrateful to our former president given that the tyrant who led them, Saddam Hussein, has been deposed and executed? Perhaps it has something to do with the fact that 5.1 million Iraqis were displaced by the war and the sectarian violence that ensued. According to the International Organization for Migration, that figure represents the largest human relocation in modern times.
Consider, too, the mind-boggling number of orphans caused by the war. The Iraqi Government estimates that the conflict has left 5 million children without parents.
Given these hard realities, perhaps a shoe-sculpture can be viewed as a civilized reaction to the legacy of Mr. Bush.
Surely a totally unexpected monument to your legacy, Mr Bush!
Al
McConnell says GOP "must change"
"After crushing defeats in back-to-back elections, the top Senate Republican warned Thursday that the GOP risks remaining out of power in the White House and Congress unless it better explains its core principles to woo one-time faithful and new loyalists."
What is amazing to me is that McConnell thinks that the "core principles", as operationalized over the past 10 years,are attractive to more than a minority of the population.
As I read further, it seems that the GOP feels that their "message" is either not getting out or is misunderstood. Are they unable to understand that it is not a matter of "message", but the impact of their rule that has turned off so many voters.
What planet are these people living on?
Al
What is amazing to me is that McConnell thinks that the "core principles", as operationalized over the past 10 years,are attractive to more than a minority of the population.
As I read further, it seems that the GOP feels that their "message" is either not getting out or is misunderstood. Are they unable to understand that it is not a matter of "message", but the impact of their rule that has turned off so many voters.
What planet are these people living on?
Al
Thursday, January 29, 2009
The Rich Get Richer and the Poor Get ????
Todays IHT had this piece on Wall Street. Seems the geniuses in the financial industry managed to rake in the sixth highest level of total bonus dollars in history. Not bad for a gaggle of boys who posted record losses, bankrupted many, and helped push the world into a near depression.
Granted, 2008's $18.4 billion in bonuses is down 44% from 2007. The average bonus for 2008 was only $112,000, or only 3 times the average US worker's annual wages. Three times the average worker's wages for losing other peoples' money. Or, in another perspective, it's three times the annual budget for the city of Chicago! And that's just the bonuses, not base salaries, stock options and benefits.
The firms argue that it's necessary to pay this to retain "bright, hard working employees". If they were so bright, why did they set their investors up for calamity? Perhaps they really need employees who don't work so hard, and the losses could be less?
And, many of these firms were on the taxpayer dole with bailout/TARP money. Why did I (or more accurately, my grandkids) get stuck with part of financing rewards for people who couldn't turn a profit?
WASF
Al
Granted, 2008's $18.4 billion in bonuses is down 44% from 2007. The average bonus for 2008 was only $112,000, or only 3 times the average US worker's annual wages. Three times the average worker's wages for losing other peoples' money. Or, in another perspective, it's three times the annual budget for the city of Chicago! And that's just the bonuses, not base salaries, stock options and benefits.
The firms argue that it's necessary to pay this to retain "bright, hard working employees". If they were so bright, why did they set their investors up for calamity? Perhaps they really need employees who don't work so hard, and the losses could be less?
And, many of these firms were on the taxpayer dole with bailout/TARP money. Why did I (or more accurately, my grandkids) get stuck with part of financing rewards for people who couldn't turn a profit?
WASF
Al
Tuesday, January 20, 2009
The Campaign is over - now the work begins
Watching yesterday's Inauguration, I was reminded of the old joke about the Senator who dies and arrives at the Pearly Gates. He's offered the chance to choose between Heaven and Hell, and given a chance to spend a day in each place. In Hell, much to his surprise, he sees cocktail parties, yachting, golf, bridge tournaments and sunny beaches. Heaven is simply clouds and harp music. He tells St Peter that while Heaven seems nice, Hell seems less boring. St Peter accepts this and places the Senator back on the elevator. When the elevator doors open in Hell, the Senator steps out into pure fire and brimstone, misery and suffering. He accosts the Devil and asks, "What is going on. When I was here yesterday, this was a pleasant and lively place. Now, it's hellish!"
"Simple", say the Devil. "Yesterday we were campaigning for your vote. Today is a different story."
Through the campaign and in his inauguration address, President Obama promised a better America. Yesterday, he clearly denounced many of the practices and habits that have brought great harm to our country, the family of nations and this earth.
Both Mr Obama and the American people have a lot on our plates that needs to be corrected. He used the pronoun "we" regularly, and I find that dead on.
To achieve what Mr Obama speaks of, Americans must undergo a major cultural shift. I hope we can rise again to the task.
"Simple", say the Devil. "Yesterday we were campaigning for your vote. Today is a different story."
Through the campaign and in his inauguration address, President Obama promised a better America. Yesterday, he clearly denounced many of the practices and habits that have brought great harm to our country, the family of nations and this earth.
Both Mr Obama and the American people have a lot on our plates that needs to be corrected. He used the pronoun "we" regularly, and I find that dead on.
To achieve what Mr Obama speaks of, Americans must undergo a major cultural shift. I hope we can rise again to the task.
Monday, January 12, 2009
Mixed Emotions
There's and old saying that the ultimate in mixed emotions is watching your worst enemy drive off a high cliff - in your brand new Mercedes.
Well, this piece in the IHT raises such mixed emotions.
Deep in my heart of hearts, as well as firmly in my intellect, I am convinced that GWB & Co broke the law. Further, I would like to see him and all who enabled him pay for such transgressions, returning the functioning of our republic to that of a nation of law. Yet, on the other hand, I clearly remember the never ending story of GOP v. Clinton and the vast resources expended in that witch hunt.
There are arguments for and against a wide ranging investigation. Some of the "against" arguments say that it would cause a "chilling effect" on INTEL operations, as the agents who did certain things were assured by the administration that their actions were lawful, and would be hesitant to act decisively in the future. This kind of "Eichmann" defense is chilling in its own way.
One reason for the mess in Afghanistan was GWB taking his "eye off the ball" by invading Iraq. At present, I am tempted to think that that Mr Obama & Congress have a huge target to engage in terms of our collapsing economy. While I would like to see every torturer, every proponent of torture, and every tolerater of torture hung by his or her heels, perhaps we should let our elected officials get their arms around the economy first, and then turn to on investing time and energy in bringing the GWB criminals to justice.
To be frank, I would welcome a year or two without reference to, or reminders of Bush & Co. Condemn and outlaw the old practices on 20 Jan. Then give us all a break.
Al
Well, this piece in the IHT raises such mixed emotions.
Deep in my heart of hearts, as well as firmly in my intellect, I am convinced that GWB & Co broke the law. Further, I would like to see him and all who enabled him pay for such transgressions, returning the functioning of our republic to that of a nation of law. Yet, on the other hand, I clearly remember the never ending story of GOP v. Clinton and the vast resources expended in that witch hunt.
There are arguments for and against a wide ranging investigation. Some of the "against" arguments say that it would cause a "chilling effect" on INTEL operations, as the agents who did certain things were assured by the administration that their actions were lawful, and would be hesitant to act decisively in the future. This kind of "Eichmann" defense is chilling in its own way.
One reason for the mess in Afghanistan was GWB taking his "eye off the ball" by invading Iraq. At present, I am tempted to think that that Mr Obama & Congress have a huge target to engage in terms of our collapsing economy. While I would like to see every torturer, every proponent of torture, and every tolerater of torture hung by his or her heels, perhaps we should let our elected officials get their arms around the economy first, and then turn to on investing time and energy in bringing the GWB criminals to justice.
To be frank, I would welcome a year or two without reference to, or reminders of Bush & Co. Condemn and outlaw the old practices on 20 Jan. Then give us all a break.
Al
Thursday, January 08, 2009
Hearts and Minds
Those of us of the Viet Nam era remember so well the "Hearts and Minds" mantra. Of course, it was used to refer to the hearts and minds of other peoples we were trying to "free".
Today's IHT had three interesting pieces.
http://www.iht.com/articles/2009/01/08/mideast/vatican.php
http://www.iht.com/articles/2009/01/08/opinion/edkhalidi.php
http://www.iht.com/articles/2009/01/08/opinion/edlichfield.php
The first surely raises eyebrows. A Roman cardinal comparing Gaza to concentration camps. A bit strong? Perhaps. But taken in concert with the second article, one surely must recall a city called Warsaw. The only significant difference is that Gaza is far more than a city, and all of Gaza is a ghetto. It is difficult to describe it any other way.
Quite chilling is Khilidi's comment:
Far more revealing are the words of Moshe Yaalon, then the Israeli Defense Forces chief of staff, in 2002: "The Palestinians must be made to understand in the deepest recesses of their consciousness that they are a defeated people."
So, rather than win the "hearts and Minds" of the Palestinians, folks like Yaalon wish to crush them. With this mindset, can a workable accord, such as that suggested in the Lichfield piece, ever be reached? Do people with minds such as Yaalon have a heart?
Al
P.S. While speaking of "hearts and minds", there are conflicting forces in my heart and mind. My maternal family hails from Kobryn, Belorus, where the Nazis diligently recorded their success in eradicating 99.9% of the Jewish population, all of my relatives included. My mind reels at the totality of this barbarity, and my heart is pierced by my innocent kinfolks' slaughter. I do cry "Never Again!" But then, statements such as understanding that "in the deepest recesses of their consciousness that they are a defeated people", is calling for genocide of the spirit. The reduction of a people to eternal underclass status in the notion that Jewishness trumps all others. Have people like Yaalon failed to understand the broader reality of the Halocaust? No one should suffer the fate of my kin - physically or spiritually. Never!
Today's IHT had three interesting pieces.
http://www.iht.com/articles/2009/01/08/mideast/vatican.php
http://www.iht.com/articles/2009/01/08/opinion/edkhalidi.php
http://www.iht.com/articles/2009/01/08/opinion/edlichfield.php
The first surely raises eyebrows. A Roman cardinal comparing Gaza to concentration camps. A bit strong? Perhaps. But taken in concert with the second article, one surely must recall a city called Warsaw. The only significant difference is that Gaza is far more than a city, and all of Gaza is a ghetto. It is difficult to describe it any other way.
Quite chilling is Khilidi's comment:
Far more revealing are the words of Moshe Yaalon, then the Israeli Defense Forces chief of staff, in 2002: "The Palestinians must be made to understand in the deepest recesses of their consciousness that they are a defeated people."
So, rather than win the "hearts and Minds" of the Palestinians, folks like Yaalon wish to crush them. With this mindset, can a workable accord, such as that suggested in the Lichfield piece, ever be reached? Do people with minds such as Yaalon have a heart?
Al
P.S. While speaking of "hearts and minds", there are conflicting forces in my heart and mind. My maternal family hails from Kobryn, Belorus, where the Nazis diligently recorded their success in eradicating 99.9% of the Jewish population, all of my relatives included. My mind reels at the totality of this barbarity, and my heart is pierced by my innocent kinfolks' slaughter. I do cry "Never Again!" But then, statements such as understanding that "in the deepest recesses of their consciousness that they are a defeated people", is calling for genocide of the spirit. The reduction of a people to eternal underclass status in the notion that Jewishness trumps all others. Have people like Yaalon failed to understand the broader reality of the Halocaust? No one should suffer the fate of my kin - physically or spiritually. Never!
Thursday, November 20, 2008
I WANT TO BELIEVE
In 1990 the Dow Jones began flirting with 3,000 for the first time ever. The internet and the computer revolution led the market to heights of euphoria, and the Dow Jones passed 10,000 for the first time in 1999 - a stunning rise from less than 3,000 to over 10,000 in less than ten years.
It took over a hundred years for the Dow to go from 100 to 10,000. It went from less than 3,000 to over 10,000 in less than ten years (1990-1999). This is an unsustainable rise in stock prices, just like during the first depression - and since then we added more than 4,000 more points, reaching the peak in October of last year.
The Great Depression saw similar markets before the '29 crash. It took nearly 22 years for the Dow Jones Industrial Average to rise from 100 to 200. But it took barely over a year for the average to vault the next hundred points. The industrial average hit precisely 300 on the last day of 1928. It had soared 48% that year, making 1928 one of the best in history. The only better have been 1915 and 1933 - until now, of course, when the market tripled from 1990 to 1999, and then added another 4,000 or so.
The market added more value from 2000 to 2008 than the worth of the entire market in 1990. Thus the stock market has proclaimed that from 1990 to 2008 (before this crash), the worth of American companies has gone from an index of less than 3,000 to over 14,000 - that is to say, it doubled, then doubled again, and then some more. This did not make sense in the 1920s, and it does not make any sense now - but unfortunately, the reasons for the rise in the '20s - the adoption of electricity for mass production - undoubtably had more impact on society than the adoption of computers and the internet in our time, but our market went crazier than it did back then. The first doubling of the Dow Jones took 22 years, and the last time the market doubled in less than a decade led directly to the Great Depression. This time we tripled the market in less than a decade and kept going. While market crashes are not the only reason for a depression, there is a real possibility that this Depression may be worse than last time, just as WWII was worse than WWI despite how much humanity thought it had learned from the World War, now called the First World War.
The Dow Jones website asks: Why the huge increase in the 1920s? ''I call it the final fling upward,'' says Richard Stillman, a former professor and author who has written a book on the DJIA. ''This was a great era of euphoria. Prosperity was an explosion: Automobiles were in mass production, radios were in mass production,'' and telephone and aerospace industries were taking off.
And I would add that the rise of easy credit led Americans to add more debt in the 1920s than ever before, resulting in a large part of the American market being rooted in loans that were unlikely to ever be paid. Sound familiar? No-money down for cars, washing machines, telephones, you name it. And Americans bought and bought, and then the bottom fell out. It was the 20th-century version of the "sub-prime mortgage mess." Except we have more debt than Americans did then (in % terms and per capita) and that debt is not for things we could do without back then - phones, cars, etc. - but for our HOMES. In other words, this time the data looks worse.
Dow Jones' website adds Professor Stillman thinks that Herbert Hoover's victory over New York Governor Al Smith in the 1928 presidential race also helped the Dow industrials surmount 300. ''The political climate continued to be highly favorable to business,'' he says. Mr. Hoover favored ''rugged individualism,'' and the less interference in business, the better.
This is strikingly similar to "compassionate conservatism" and the withdrawal of government regulations since 1990 and especially since the beginning of the Bush era.
Most people know that "the Dow Jones Industrial Average did miserably during the Depression of the 1930s. It began the decade at 248.48, down from a high of 381.17 before the crash of 1929. By July 1932, the depths of the Depression, the industrial average was crawling at 41.22. It ended 1939 at 150.24." If we apply the same percentage drops, the peak of 14,093 would reach all the way down to 1,524 if it dropped as much as the market did in what we may begin calling the First Great Depression. That is, 41.22 to 381.17 is the same percentage drop as 1,524 to 14,093.
If the market merely should have doubled from 1990, then it would be at a mere 6,000 today - perhaps not an undervaluation. In terms of market history, doubling the market from 3,000 to 6,000 in 18 years is a good performance. We moved from 3,000 to over 14,000 in that time. In short, it does not make sense.
Those investing now at 7,552 hoping to game the market when it reaches "bottom" should reconsider and perhaps protect their own bottom instead. We don't know where the bottom is, and by that I mean WE WON'T KNOW WHERE THE BOTTOM IS UNTIL AFTER WE GET THERE. If this Second Great Depression is only half as bad on stock market prices as the last one, then the bottom will be 3,048. The market is more than twice as high today. WE DON'T KNOW.
We keep telling ourselves "it won't be as bad as back then" but few economists or reporters can explain WHY. I don't see why it should be easier this time, and as discussed above, many factors look worse.
From the Dow Jones website:
What many investors don't know is that the 1930s were also the most volatile decade on record for stock prices. Investors, their nerves rubbed raw by the Depression, were prone to fits of euphoria and despair. Thus, the industrial average plunged 52.7% in 1931 and 32.8% in 1937, but it rose 66.7% in 1933 and 38.5% in 1935. Daily volatility was also intense. Strange as it may seem, seven of the 10 biggest up days in history, on a percentage basis, occurred during the 1930s.
The volatility we have seen in the past few months is the most volatile in the history of the market. We have seen day after day of triple-digit gains or losses - usually losses - and we are now almost halfway down from the peak. The idea that the bottom is near is comforting, but it is not supported by the evidence.
This kind of turmoil led to the rise of fascism and world-wide conflict last time. This kind of turmoil (albeit on a lesser scale and not world-wide) led to the fall of the Soviet Union. What will this kind of world-wide turmoil lead to now? Add in global warming and corresponding famine/massive migration, the end of the age of oil, our staggering national debt (which we should not even worry about balancing at this point, not right now), and the fact that many nations now possess nuclear weapons, and we are in for quite a ride.
I want to believe those pundits and economists who say that this time won't be as bad as the 1930s, that this is a "bad recession, possibly worse than the one in 1981-1982." I want to believe them. But I saw this coming long before they spoke out about it, and they have been wrong, consistently wrong, and they give no reasons for their belief that this time it won't be as bad, that we are not due another Depression on the scale of the 1930s. They believe that, but they believed the "fundamentals of our economy are sound" long after I saw the fundamentals were clearly indicating otherwise.
I want to believe those who tell me it won't be as bad, but at this point I don't. Buckle up, it will be rougher ride than any of us have ever taken in our lifetimes, and most people don't have any idea how bad it is going to get.
[I took much of my information on the 1920s and 1930s from the Dow Jones website found at http://www.djindexes.com/]
Friday, November 07, 2008
FLYING COLORS
I wept with joy on Tuesday night. I expected President-elect Obama to win, yet I was surprised at how much emotion I felt when, finally, the minute the polls closed here in California I heard Jim Lehrer call the election. Expecting it all night, I was prepared to shout my joy aloud.
Instead, and to my surprise, as the words "Obama wins" scrolled across the screen, I sat down and found myself out of breath, dizzy, overcome with emotion that I did not expect to feel. "It really just happened" I kept saying to myself. My wife was popping champagne, but I had to take a moment first.
Thanks to Phil Carter for making it possible for me to play a small part in this defining moment in history. And thanks to him for continuing to serve the Republic with his work on the most impressive and professional campaign in a generation, possibly in history. But the joy I felt was not partisan. It was more than that. It was not about red versus blue, or even defeating the movement that gave us George W. Bush, the most despised president in our history. It was not even about the majesty of a nation founded upon slavery electing a black man as our leader in a time of crisis. It was all of those things, yes. But it was even more than that. It was about, as the campaign slogan said, HOPE.
I have been reading about FDR and the Great Depression recently, from William Manchester's The Glory and the Dream. As an employment attorney I knew the market crash was coming for some time. Many of my peers knew it too. We began to use the phrase "over the cliff" last year when referring to the economy. We knew the house of cards was coming down.
We face the very real possibility of the Second Great Depression. There is sure to be much more pain to come. Even with the hyperbole of the 24-hour cable networks, the true extent of the economic disaster is not yet fully understood by most. It will be worse than most people fear.
But with smart, honest, dedicated and idealistic people working to make America better, we will come through this challenge stronger, and with more freedom, than before. It will not be easy. All of us will sacrifice. But I am confident in the United States of America. I have hope.
Nobody knows what the future will bring. We face economic catastrophe, xenophobia, isolationism, famine, global climate change, resultant mass migrations on a scale never seen in human history, and the age-old scourge of war. Not the "war on terror." WAR. War between nation-states. Not because we want it. Not because others want it. Because when resources become scarce and people become afraid and xenophobic, when people are hungry and angry, they tend to fight. It is a flaw in human nature - an evolutionary survival mechanism gone awry in our modern industrialized world. There will be war - hopefully not involving us, but probably it will. World War I appeared to many at the time to have put an end to war. Europeans, people knew, had learned how horrible war was and were determined to avoid such disaster in the future. As the "Lost Generation" came to power they knew better than others how terrible war truly is, and they would not repeat the mistakes of the past. And then came the Great Depression. And then came xenophobia, instability, revolution, nationalism, and eventually the bloodiest conflict in the history of man. And only a generation after the previous bloodiest conflict in the history of man.
Now we face the Second Great Depression, global climate change, the end of the age of oil, and most of all, fear. Fear in third world nations. Fear in modernized, western nations. Hatred of the "other." Changing climate patterns resulting in famines in some areas, bounty in others. And a power vacuum left over by the end of the Cold War that has yet to be filled. And America herself, the "hyper-power," is facing the same scale of economic crisis that led to the demise of the Soviet Union.
But given the tears of joy on November 4th as our system gave voice to a people choosing hope over fear, I expect we will remain true to the ideals of our Revolution. As we did on Tuesday, as we did in 1941, as we did in 1932, and in 1860, and in 1776, the People of the United States will choose the hard right over the easy wrong. We just did so again. We will address the many challenges we face and we will come out stronger. Better. Of course not all of us. In 1860 many of us chose the path of tyranny. But as a People we will choose to reform ourselves and to do what must be done. Democracies don't necessarily make better decisions than other forms of government. Our strength is that we can change without blood in the streets. We can experiment. We can change our minds. We can replace our most powerful leaders simply by choosing to do so. And on Tuesday, the 4th of November, 2008, we did just that. Our Revolution again impressed all of humanity. We changed.
Shortly before the economic crisis became news I decided to re-read Manchester and see what we did right, and what we did wrong, the last time we faced a crisis similar to what we face now. And it was exactly on point. And scary. And yet, with the election of Barack Hussein Obama, comforting. He is not FDR, but he may be in the same league. And he needs to be. And I think he can do it. But if not, we will be ok. Because if he can not be transformative figure that FDR was, if he can not do what FDR did, we will simply get somebody who can. That is the magic of democracy. It is not about any one person. It is about the power of all of us.
If George Washington had fallen in battle, our Revolution would simply have replaced him. The People fought our Revolution, not just General Washington. He had only the power we gave him to do what we were ordering be done. WE can. Not just president-elect Obama. All of us, the American People, can and will do what we need to do. We recognize the greatness in our greatest presidents, but all power comes from the People, and if presidents, or Congress, fail us, we replace them. Our nation has decided on a different path, and we have chosen president-elect Obama to lead us there. And he will lead us there. Or we will get somebody who can. Yes we can.
In 1932 FDR was the president-elect of a bankrupt nation. As he took office the foes of freedom gathered enormous strength and prepared to attack. And we were attacked. The entire world went up in flames and evil appeared to triumph. Democracy was seen as weak and inept - because some democracies were weak and inept. Yet by the time he died in office in 1945 our nation was the richest, most powerful nation in human history - and for the most part we held true to our ideals in the midst of the worst crisis since the threat of the traitorous Confederacy. We came out better than before. We defeated Nazi Germany and Fascist Italy and Imperial Japan - and the Depression. We had the New Deal rewrite the social contract and improve the lives of the average American. The cost was staggering, in pain and in blood and in money, but we came out better than before. Yes we did.
This current crisis, while certainly the worst in our lifetimes, is not on a par with what FDR faced, nor Lincoln, and certainly not George Washington. The next few years will be terrible in many ways - many of them unforeseen and horrible - but we will come out of this crisis better than before. We will hold true to our ideals. The nation spoke on Tuesday, and our experiment with self-government passed yet another test. There will be more to come, and we shall pass those tests as well - and with flying colors.
With flying colors.
I put out the American flag today. I haven't done that for a while. Too many people attempted to make that flag stand for something I did not believe in - hate, fear, jingoistic nationalism, xenophobia. I became reluctant to fly that flag I love because it appeared to send a message I was not in agreement with.
But today it seemed to stand for only what I always thought it should stand for all along: the Republic, one nation, indivisible, with liberty and justice for all.
I am flying that flag today. Long may she wave.
Instead, and to my surprise, as the words "Obama wins" scrolled across the screen, I sat down and found myself out of breath, dizzy, overcome with emotion that I did not expect to feel. "It really just happened" I kept saying to myself. My wife was popping champagne, but I had to take a moment first.
Thanks to Phil Carter for making it possible for me to play a small part in this defining moment in history. And thanks to him for continuing to serve the Republic with his work on the most impressive and professional campaign in a generation, possibly in history. But the joy I felt was not partisan. It was more than that. It was not about red versus blue, or even defeating the movement that gave us George W. Bush, the most despised president in our history. It was not even about the majesty of a nation founded upon slavery electing a black man as our leader in a time of crisis. It was all of those things, yes. But it was even more than that. It was about, as the campaign slogan said, HOPE.
I have been reading about FDR and the Great Depression recently, from William Manchester's The Glory and the Dream. As an employment attorney I knew the market crash was coming for some time. Many of my peers knew it too. We began to use the phrase "over the cliff" last year when referring to the economy. We knew the house of cards was coming down.
We face the very real possibility of the Second Great Depression. There is sure to be much more pain to come. Even with the hyperbole of the 24-hour cable networks, the true extent of the economic disaster is not yet fully understood by most. It will be worse than most people fear.
But with smart, honest, dedicated and idealistic people working to make America better, we will come through this challenge stronger, and with more freedom, than before. It will not be easy. All of us will sacrifice. But I am confident in the United States of America. I have hope.
Nobody knows what the future will bring. We face economic catastrophe, xenophobia, isolationism, famine, global climate change, resultant mass migrations on a scale never seen in human history, and the age-old scourge of war. Not the "war on terror." WAR. War between nation-states. Not because we want it. Not because others want it. Because when resources become scarce and people become afraid and xenophobic, when people are hungry and angry, they tend to fight. It is a flaw in human nature - an evolutionary survival mechanism gone awry in our modern industrialized world. There will be war - hopefully not involving us, but probably it will. World War I appeared to many at the time to have put an end to war. Europeans, people knew, had learned how horrible war was and were determined to avoid such disaster in the future. As the "Lost Generation" came to power they knew better than others how terrible war truly is, and they would not repeat the mistakes of the past. And then came the Great Depression. And then came xenophobia, instability, revolution, nationalism, and eventually the bloodiest conflict in the history of man. And only a generation after the previous bloodiest conflict in the history of man.
Now we face the Second Great Depression, global climate change, the end of the age of oil, and most of all, fear. Fear in third world nations. Fear in modernized, western nations. Hatred of the "other." Changing climate patterns resulting in famines in some areas, bounty in others. And a power vacuum left over by the end of the Cold War that has yet to be filled. And America herself, the "hyper-power," is facing the same scale of economic crisis that led to the demise of the Soviet Union.
But given the tears of joy on November 4th as our system gave voice to a people choosing hope over fear, I expect we will remain true to the ideals of our Revolution. As we did on Tuesday, as we did in 1941, as we did in 1932, and in 1860, and in 1776, the People of the United States will choose the hard right over the easy wrong. We just did so again. We will address the many challenges we face and we will come out stronger. Better. Of course not all of us. In 1860 many of us chose the path of tyranny. But as a People we will choose to reform ourselves and to do what must be done. Democracies don't necessarily make better decisions than other forms of government. Our strength is that we can change without blood in the streets. We can experiment. We can change our minds. We can replace our most powerful leaders simply by choosing to do so. And on Tuesday, the 4th of November, 2008, we did just that. Our Revolution again impressed all of humanity. We changed.
Shortly before the economic crisis became news I decided to re-read Manchester and see what we did right, and what we did wrong, the last time we faced a crisis similar to what we face now. And it was exactly on point. And scary. And yet, with the election of Barack Hussein Obama, comforting. He is not FDR, but he may be in the same league. And he needs to be. And I think he can do it. But if not, we will be ok. Because if he can not be transformative figure that FDR was, if he can not do what FDR did, we will simply get somebody who can. That is the magic of democracy. It is not about any one person. It is about the power of all of us.
If George Washington had fallen in battle, our Revolution would simply have replaced him. The People fought our Revolution, not just General Washington. He had only the power we gave him to do what we were ordering be done. WE can. Not just president-elect Obama. All of us, the American People, can and will do what we need to do. We recognize the greatness in our greatest presidents, but all power comes from the People, and if presidents, or Congress, fail us, we replace them. Our nation has decided on a different path, and we have chosen president-elect Obama to lead us there. And he will lead us there. Or we will get somebody who can. Yes we can.
In 1932 FDR was the president-elect of a bankrupt nation. As he took office the foes of freedom gathered enormous strength and prepared to attack. And we were attacked. The entire world went up in flames and evil appeared to triumph. Democracy was seen as weak and inept - because some democracies were weak and inept. Yet by the time he died in office in 1945 our nation was the richest, most powerful nation in human history - and for the most part we held true to our ideals in the midst of the worst crisis since the threat of the traitorous Confederacy. We came out better than before. We defeated Nazi Germany and Fascist Italy and Imperial Japan - and the Depression. We had the New Deal rewrite the social contract and improve the lives of the average American. The cost was staggering, in pain and in blood and in money, but we came out better than before. Yes we did.
This current crisis, while certainly the worst in our lifetimes, is not on a par with what FDR faced, nor Lincoln, and certainly not George Washington. The next few years will be terrible in many ways - many of them unforeseen and horrible - but we will come out of this crisis better than before. We will hold true to our ideals. The nation spoke on Tuesday, and our experiment with self-government passed yet another test. There will be more to come, and we shall pass those tests as well - and with flying colors.
With flying colors.
I put out the American flag today. I haven't done that for a while. Too many people attempted to make that flag stand for something I did not believe in - hate, fear, jingoistic nationalism, xenophobia. I became reluctant to fly that flag I love because it appeared to send a message I was not in agreement with.
But today it seemed to stand for only what I always thought it should stand for all along: the Republic, one nation, indivisible, with liberty and justice for all.
I am flying that flag today. Long may she wave.
Saturday, November 01, 2008
Attorney - Client Privilege ?
In the never ending saga of warrantless wiretaps by the Bush administration, a federal judge has ordered the Justice Department to produce White House memos that provide the legal basis for the Bush administration's post-Sept. 11 warrantless wiretapping program.
What I find amazing, is the claim of attorney - client privilege by the Justice Department as the rationale to withhold release of these memos. Am I wrong in thinking that the clients of the Executive Branch are We, The People? While it was the President who requested a legal opinion, and the Justice Dept who rendered same, the notion that the Justice Dept represents the President to the exclusion of the people is a rather unique twist. Had Bush sought legal advice from in house counsel, perhaps he would have a legitimate case, but when Justice provides this counsel and then seeks to hide it from the people, is that not a conflict of interest of mammoth proportions? In a situation such as this, who then, represents the people? Do I, as a citizen, have the same protection in my communications with a Justice Dept lawyer? I would seriously doubt it.
I guess the approach is to start by claiming "National Security". Then claim "Executive Privilege". Now, "attorney - client privilege". Next, perhaps, we will hear that these memos were exchanged using personal Yahoo e-mail accounts, and are thus private, personal communications, not governmental ones.
In the broadest and most extreme of views, this reeks of a government that has turned upon its people.
Al
What I find amazing, is the claim of attorney - client privilege by the Justice Department as the rationale to withhold release of these memos. Am I wrong in thinking that the clients of the Executive Branch are We, The People? While it was the President who requested a legal opinion, and the Justice Dept who rendered same, the notion that the Justice Dept represents the President to the exclusion of the people is a rather unique twist. Had Bush sought legal advice from in house counsel, perhaps he would have a legitimate case, but when Justice provides this counsel and then seeks to hide it from the people, is that not a conflict of interest of mammoth proportions? In a situation such as this, who then, represents the people? Do I, as a citizen, have the same protection in my communications with a Justice Dept lawyer? I would seriously doubt it.
I guess the approach is to start by claiming "National Security". Then claim "Executive Privilege". Now, "attorney - client privilege". Next, perhaps, we will hear that these memos were exchanged using personal Yahoo e-mail accounts, and are thus private, personal communications, not governmental ones.
In the broadest and most extreme of views, this reeks of a government that has turned upon its people.
Al
Monday, October 27, 2008
Hats off to Brother Carter!
Those of us who met on the old INTEL-Dump and have continued our cyber friendship will appreciate this IHT article. Whatever your politics, we owe a "hats off" to Phil Carter, as whatever level of camaraderie we share, Phil made it possible, and I thank him for introducing me to all of you, as well as many of the "old timers" with whom we no longer have contact.
INTEL-DUMP came into existence because Phil cares. The participants joined in the fray because we cared. Phil used a level of intellectual discourse that generally made the discussion stimulating.
Best to Phil, and best to all of you.
Al
INTEL-DUMP came into existence because Phil cares. The participants joined in the fray because we cared. Phil used a level of intellectual discourse that generally made the discussion stimulating.
Best to Phil, and best to all of you.
Al
Monday, October 20, 2008
Does this leave you a little ill at ease?
I found this "Challenge Coin" today on the internet. Versions for each branch of service are available.
Are there not limits on what one can use the official seals of government agencies for? Can one use the service seals to promote obviously sectarian religious beliefs?
Is the mission of the US military "to stand against the devil's schemes"? If so, which schemes? To many who read Ephesians as part of their faith, unjust war is a scheme of the devil.
Is that a Crusader? If so, not only Muslims would be offended. Orthodox Christians still remember the sack of Constantinople.
For me, this is much more than a little bit unsettling. It's offensive.
Al
Saturday, October 18, 2008
What does the story of Joe the Plumber tell us?
Last night, while waiting at the port for the bride to return on the ferry from Athens, I grabbed a cappuccino and watched the news at the cafe on Greek TV. A full 5 minutes were devoted to the unfolding story of "Joe the Plumber". The newscaster's comments were certainly unflattering toward Joe, John McCain and US politics in general. My fellow coffee drinkers watched and when the unexpected turn of events were given, laughed heartily at how McCain had failed to get the real story on Joe, his occupation and less than honest representations to Obama.
There is, however, at least to me, a very telling lesson to be learned here. John McCain is running for the highest office in the land. Amongst his many claims for being highly qualified is his military service. If there is anything I learned in the military, it was that you "never come to class without having done your homework". Apparently, John forgot, or never learned this lesson.
But more significant to me, a lover of numbers and the challenge of making sense of them, Joe's comments didn't hunt from the very beginning. First, Obama's $250,000+ income population represents about 2% of the households in the US. Was this guy saying he was going to buy a plumbing firm that would set him above 98% of the households in the country? Quite a stretch. Then I thought about what level of business a plumbing firm would have to do to turn a quarter million in profit. At a 20% profit margin, he'd have to have annual sales of $1.25 million. That's a hell of a lot of plumbing at a very high profit %.
When McCain jumped upon Joe as an example of "middle class workers", that really blew me away. Again, Joe's question pertained to tax rates on the highest 2% of households. I doubt there are many "workers" in that category, and by definition, no middle class households. But, it looked like a great "GOTCHA" moment. Rather than simply say that Obama simply wanted to "spread the wealth", McCain decided to make Joe an icon of how Obama would repress the working class.
The Story of Joe the Plumber, as presented to the world by John McCain, is a fraud. First, the tax proposal being bashed does not apply to the working class. Second, Joe will never make $250,000 by buying his boss's two man plumbing operation. Third, at present, Joe cannot buy the company and operate under current licensing laws in his area.
Anyone who has taken a freshman level course in business should have seen the holes in Joe's original comments. Anyone versed in public policy should have recognized that $250,000 annual income is not representative of the middle class. Anyone who served in the military should have thought about doing some homework before thrusting this incident onto the world stage as a campaign transforming event. John McCain claims expertise in all three of these areas. As cute as it was, it just didn't hunt.
That the campaign, along with it's candidate, chose this path raises some very serious questions about both. But, in this age of sound bites, cute and gotchas, those serious questions will never be as fully addressed as, let's say, where Bill Clinton stuck a cigar.
So, what the story of Joe the Plumber tells us, is that no matter how bad our government and our elected officials perform, we deserve it. We keep electing people like this.
WASF
Al
There is, however, at least to me, a very telling lesson to be learned here. John McCain is running for the highest office in the land. Amongst his many claims for being highly qualified is his military service. If there is anything I learned in the military, it was that you "never come to class without having done your homework". Apparently, John forgot, or never learned this lesson.
But more significant to me, a lover of numbers and the challenge of making sense of them, Joe's comments didn't hunt from the very beginning. First, Obama's $250,000+ income population represents about 2% of the households in the US. Was this guy saying he was going to buy a plumbing firm that would set him above 98% of the households in the country? Quite a stretch. Then I thought about what level of business a plumbing firm would have to do to turn a quarter million in profit. At a 20% profit margin, he'd have to have annual sales of $1.25 million. That's a hell of a lot of plumbing at a very high profit %.
When McCain jumped upon Joe as an example of "middle class workers", that really blew me away. Again, Joe's question pertained to tax rates on the highest 2% of households. I doubt there are many "workers" in that category, and by definition, no middle class households. But, it looked like a great "GOTCHA" moment. Rather than simply say that Obama simply wanted to "spread the wealth", McCain decided to make Joe an icon of how Obama would repress the working class.
The Story of Joe the Plumber, as presented to the world by John McCain, is a fraud. First, the tax proposal being bashed does not apply to the working class. Second, Joe will never make $250,000 by buying his boss's two man plumbing operation. Third, at present, Joe cannot buy the company and operate under current licensing laws in his area.
Anyone who has taken a freshman level course in business should have seen the holes in Joe's original comments. Anyone versed in public policy should have recognized that $250,000 annual income is not representative of the middle class. Anyone who served in the military should have thought about doing some homework before thrusting this incident onto the world stage as a campaign transforming event. John McCain claims expertise in all three of these areas. As cute as it was, it just didn't hunt.
That the campaign, along with it's candidate, chose this path raises some very serious questions about both. But, in this age of sound bites, cute and gotchas, those serious questions will never be as fully addressed as, let's say, where Bill Clinton stuck a cigar.
So, what the story of Joe the Plumber tells us, is that no matter how bad our government and our elected officials perform, we deserve it. We keep electing people like this.
WASF
Al
Sunday, October 05, 2008
So, what is this thing called infrastructure?
A recent news item quoted snippets from the two candidates about the economy:
On the other hand, McCain touts "market expansion" as the cure all. Expanding markets create jobs. You know, like the vast expansion of the mortgage market.
First, one should keep in mind that many significant elements of our infrastructure are not serious long term "GDP multipliers". Rebuilding sorely neglected bridges creates jobs for the construction project's duration. The bridge may be enduring, but the jobs are not. Thus, the cash infusion is finite, and any workers trained and employed in these projects will be looking for new employment at the project's completion. Yet, we need to bite the bullet and tend to this task. To me, the sound approach would be a long term infrastructure building and maintenance program that would establish, at the least, a stable labor pool, and an "industry" with a long term life expectancy. The difficulty is doing this in a tax averse, profit seeking society. We must have "growing markets", and if we are talking about tax funded infrastructure, the end result is higher taxes to "grow the market opportunities", especially if profit making firms have a vested interest in the "market". But many elements of infrastructure are societal needs, not simple capitalist markets.
So, we must avoid the pitfalls of never ending public works projects. Taxes must support necessary infrastructure. Infrastructure vital to the nation's well being. Otherwise, we become like the former Soviet Union, where vast fortunes were spent building unnecessary facilities solely to create jobs - year after year after year. Exquisite amphitheaters for band performances to entertain passing boats along the Volga River waterway, for example. When we cruised up the Volga in 1992, we saw numerous amphitheaters, facing the river, kept neat and clean, but never used. As our Russian friend said, "Build it. Engage a staff to keep it clean. Lots of jobs. Lots of Jobs. But nothing meaningful produced - not even music." Adding to the horrific burden that caused the government to collapse of its own weight.
And all infrastructure is not simply brick and mortar. Consider air transportation. Since the start of airline deregulation, the US has really had no serious air transportation policy. Safety regulations, operating regulations, airport building programs and the air traffic control system, yes. Those four areas are pretty much what represents the infrastructure of the US air transport system, and these are what are addressed in allocating the current resources and planning for the future air transportation needs of the country. Notice I didn't mention airlines. During the blood bath of "Fare Wars" in the early 1990's, Bob Crandall, then CEO of American Airlines, said that airlines were no longer anything other that the purveyors of a commodity - "cheap seats between point A and Point B". Anyone with enough borrowed money could enter "the market" with a couple of aircraft and offer cheap seats, whether or not these seats were necessary, and whether or not the business plan could ever realistically offer a profit. These low price airlines drove the rest of the industry to match their prices, as any cash flow is better than no cash flow.
Now, one might say the the flying public benefited, because they were able to save considerable money in airfares, and many more people got the opportunity to fly. On the other hand, look closely at what this "commodity" approach to airlines has created over the last 18 or so years. Employment in the industry is highly unstable. Real wage levels in the industry have fallen. Route structures are unpredictable. Every major airline (I'm including Southwest) in existence in 1990, except two, has either gone out of business or declared bankruptcy to stay in business. Billions in retirement plans as well as employee and investor saving have evaporated. All but one major airline now ships its "major maintenance" tasks to foreign sites, where quality oversight is questionable. But even if the quality is OK, highly skilled jobs are lost in the US, diminishing the domestic size of this talented labor pool in the long run. And, as we now see, all airlines are having to significantly reduce total capacity to survive, driving fares up and eliminating cities from the route network. And this contraction has hit the domestic market harder than international routes, resulting in fewer US jobs. In short, allowing "market forces" to make airlines commodity suppliers rather than an integral part of the air transportation infrastructure has had enormous long term societal cost.
If you want to jump up and shout, "What about Southwest?", I would respond that Southwest is a "niche" airline that has wisely identified and dominates its niche. It is not part of the US airline "system" in any respect other than using airports and air traffic control. You cannot book travel through Southwest outside its own system. Part of the savings in using Southwest is its use of outlying or secondary airports. If you want to travel from Amarillo, TX (as well as dozens of other cities that Southwest serves) to London, for example, you will have to change airports (at your time and expense) to connect to the transatlantic flight, carrying your baggage with you in the taxi, train or bus. And, if your SW flight is late or canceled, the airline to which you are connecting has no legal obligation to accommodate this problem. Unlike "regular" airlines, a Southwest ticket carries no cash value outside Southwest. I am not saying Southwest isn't great. I am just saying that upon close inspection, it is operating in a system of its own and provides a service separate and different from what we see as the "air transportation system". It does, however do its job well and at benefit to the flying public. But if all airlines were to adopt Southwest's model, there would be no "system" and travel would be truly chaotic.
Placing the airlines into the "infrastructure" of the air transportation system of the US would indeed stabilize the industry, and that could be done to a great measure by establishing a national air transportation policy. Here in Europe, the discounters are restricted to point to point niche markets by requiring them to generally use a secondary airport at one end of each route. Niche markets are recognized and encouraged. What Southwest does to lower costs, European regulators do to preserve infrastructure. And everybody benefits.
But the air transport system is not the only element of infrastructure that has fallen prey to free market forces. Anyone remember ENRON, or the financial "system"?
"Infrastructure" has such a noble ring. And, in the main, US infrastructure in many areas is deteriorating, often to make way for "free market" profits, as well as to gain political capital by lowering taxes. But in the end, failing to recognize, build and maintain essential infrastructure delivers a down stream bill which often far exceeds the tax savings and short term profits initially enjoyed.
Hopefully, Mr Obama knows a bit more about infrastructure than our national track record demonstrates. Should he be the successful candidate, and if he understands even the basics of national infrastructure, we may very well benefit.
Al
"I will rebuild the middle class and create millions of new jobs by investing in infrastructure and renewable energy," vowed Obama.
McCain pledged to "open markets around the globe for our products, cut taxes and expand domestic production of energy ... I will create jobs and get the economy on the right track."
I find Obama's use of the term infrastructure interesting, not because our infrastructure is not in need of investment, but because it is probably one of the more neglected and misunderstood elements of America.On the other hand, McCain touts "market expansion" as the cure all. Expanding markets create jobs. You know, like the vast expansion of the mortgage market.
First, one should keep in mind that many significant elements of our infrastructure are not serious long term "GDP multipliers". Rebuilding sorely neglected bridges creates jobs for the construction project's duration. The bridge may be enduring, but the jobs are not. Thus, the cash infusion is finite, and any workers trained and employed in these projects will be looking for new employment at the project's completion. Yet, we need to bite the bullet and tend to this task. To me, the sound approach would be a long term infrastructure building and maintenance program that would establish, at the least, a stable labor pool, and an "industry" with a long term life expectancy. The difficulty is doing this in a tax averse, profit seeking society. We must have "growing markets", and if we are talking about tax funded infrastructure, the end result is higher taxes to "grow the market opportunities", especially if profit making firms have a vested interest in the "market". But many elements of infrastructure are societal needs, not simple capitalist markets.
So, we must avoid the pitfalls of never ending public works projects. Taxes must support necessary infrastructure. Infrastructure vital to the nation's well being. Otherwise, we become like the former Soviet Union, where vast fortunes were spent building unnecessary facilities solely to create jobs - year after year after year. Exquisite amphitheaters for band performances to entertain passing boats along the Volga River waterway, for example. When we cruised up the Volga in 1992, we saw numerous amphitheaters, facing the river, kept neat and clean, but never used. As our Russian friend said, "Build it. Engage a staff to keep it clean. Lots of jobs. Lots of Jobs. But nothing meaningful produced - not even music." Adding to the horrific burden that caused the government to collapse of its own weight.
And all infrastructure is not simply brick and mortar. Consider air transportation. Since the start of airline deregulation, the US has really had no serious air transportation policy. Safety regulations, operating regulations, airport building programs and the air traffic control system, yes. Those four areas are pretty much what represents the infrastructure of the US air transport system, and these are what are addressed in allocating the current resources and planning for the future air transportation needs of the country. Notice I didn't mention airlines. During the blood bath of "Fare Wars" in the early 1990's, Bob Crandall, then CEO of American Airlines, said that airlines were no longer anything other that the purveyors of a commodity - "cheap seats between point A and Point B". Anyone with enough borrowed money could enter "the market" with a couple of aircraft and offer cheap seats, whether or not these seats were necessary, and whether or not the business plan could ever realistically offer a profit. These low price airlines drove the rest of the industry to match their prices, as any cash flow is better than no cash flow.
Now, one might say the the flying public benefited, because they were able to save considerable money in airfares, and many more people got the opportunity to fly. On the other hand, look closely at what this "commodity" approach to airlines has created over the last 18 or so years. Employment in the industry is highly unstable. Real wage levels in the industry have fallen. Route structures are unpredictable. Every major airline (I'm including Southwest) in existence in 1990, except two, has either gone out of business or declared bankruptcy to stay in business. Billions in retirement plans as well as employee and investor saving have evaporated. All but one major airline now ships its "major maintenance" tasks to foreign sites, where quality oversight is questionable. But even if the quality is OK, highly skilled jobs are lost in the US, diminishing the domestic size of this talented labor pool in the long run. And, as we now see, all airlines are having to significantly reduce total capacity to survive, driving fares up and eliminating cities from the route network. And this contraction has hit the domestic market harder than international routes, resulting in fewer US jobs. In short, allowing "market forces" to make airlines commodity suppliers rather than an integral part of the air transportation infrastructure has had enormous long term societal cost.
If you want to jump up and shout, "What about Southwest?", I would respond that Southwest is a "niche" airline that has wisely identified and dominates its niche. It is not part of the US airline "system" in any respect other than using airports and air traffic control. You cannot book travel through Southwest outside its own system. Part of the savings in using Southwest is its use of outlying or secondary airports. If you want to travel from Amarillo, TX (as well as dozens of other cities that Southwest serves) to London, for example, you will have to change airports (at your time and expense) to connect to the transatlantic flight, carrying your baggage with you in the taxi, train or bus. And, if your SW flight is late or canceled, the airline to which you are connecting has no legal obligation to accommodate this problem. Unlike "regular" airlines, a Southwest ticket carries no cash value outside Southwest. I am not saying Southwest isn't great. I am just saying that upon close inspection, it is operating in a system of its own and provides a service separate and different from what we see as the "air transportation system". It does, however do its job well and at benefit to the flying public. But if all airlines were to adopt Southwest's model, there would be no "system" and travel would be truly chaotic.
Placing the airlines into the "infrastructure" of the air transportation system of the US would indeed stabilize the industry, and that could be done to a great measure by establishing a national air transportation policy. Here in Europe, the discounters are restricted to point to point niche markets by requiring them to generally use a secondary airport at one end of each route. Niche markets are recognized and encouraged. What Southwest does to lower costs, European regulators do to preserve infrastructure. And everybody benefits.
But the air transport system is not the only element of infrastructure that has fallen prey to free market forces. Anyone remember ENRON, or the financial "system"?
"Infrastructure" has such a noble ring. And, in the main, US infrastructure in many areas is deteriorating, often to make way for "free market" profits, as well as to gain political capital by lowering taxes. But in the end, failing to recognize, build and maintain essential infrastructure delivers a down stream bill which often far exceeds the tax savings and short term profits initially enjoyed.
Hopefully, Mr Obama knows a bit more about infrastructure than our national track record demonstrates. Should he be the successful candidate, and if he understands even the basics of national infrastructure, we may very well benefit.
Al
Friday, October 03, 2008
Thought provoking piece by John Eisenhower
Today's IHT has this piece by John S.D. Eisenhower, Ike's son.
I offer it without comment, other than it's revelations and opinion are thought provoking.
What do you think?
Al
I offer it without comment, other than it's revelations and opinion are thought provoking.
What do you think?
Al
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