Privatized Profits Socialized Risk

On October 3, 2008 President George W Bush signed into law the Troubled Asset Relief Program (TARP), which authorized the United States government to spend up to $700 billion buying up assets and equity from private financial institutions.

“In particular, the program was designed to deal with "troubled assets" which it defined as (A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress."

In short, the government was reacting to the Subprime Mortgage Crisis which was wreaking havoc on the US economy. And, contrary to what you may have heard from conservative ideologues, the people that caused the crisis are the very same people who became the recipients of what is generally referred to as “The Bailout”. The economic leaders of the industrialized nations had no trouble identifying the culprits:

"During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions."

The above paragraph grandly titled the "Declaration of the Summit on Financial Markets and the World Economy" was the conclusion drawn by the leaders of the Group of 20, meeting in November of 2008, to determine the causes of the ongoing global financial crisis. A crisis which was precipitated by the collapse in value of mortgage-backed securities issued by US financial firms, and sold to investors across the globe. What you saw during the manic years of the US real estate bubble was a complete abandonment of sound lending principles. There are those who will try and convince you that it was all the fault of poor people and deadbeats receiving loans they didn't deserve, and could never pay back. Don't believe it. Look at the compensation and severance packages that the CEO's of financial institutions received, after losing tens of billions of dollars for their shareholders and investors.

Absentis Artificiosus

Just to be clear, the Bush White House ultimately admitted that the "Mission Accomplished" banner was both made, and hung, at the behest of the administration. Of course, they tried to blame it on the sailors when it became obvious just how premature the banner, and Bush's speech, actually were.

I read recently that they are debating whether, or not, to hang the banner in the Bush Library. Personally, I believe that it belongs there. Because, while the message conveyed certainly didn't apply to events in Iraq, it most certainly has applications here at home.

By setting in motion a train of events that culminated in a disastrous financial crisis, the Bush administration laid the groundwork for an unprecedented right-wing assault on this country's social-welfare system. If the economy continues to deteriorate, we will see spending cuts to programs previously thought to be untouchable. Not defense spending or aid to Israel, mind you. But, all of the so-called "entitlement" programs that serve to soften the sharp edges of our capitalist economy will be targeted.

To put it in much cruder terms, Grover Norquist's wet dream will become our collective nightmare...

Weimar Republic

There is an ugly mood percolating among those who feel like they have been shafted by this economy. They are looking for someone, or something, to blame it all on. Probably the last time Obama actually said something really profound was when he talked about how rural white Americans "cling to their guns and religion" because of economic forces beyond their control. He got lambasted for that, and it probably didn't help that he made those remarks to an audience in San Francisco.

Sales of guns and ammunition have gone up every year since Obama was elected. In fact, the gun industry should probably make a sizable donation to his reelection campaign. Obama has done absolutely nothing that would displease an NRA member, since he has been president, but it doesn't matter. They are convinced he's coming for their guns. The election of a Rick Perry would likely result in depressed sales.

Neither political party, at this point in time, offers these millions of alienated Americans any hope. But, one party does offer them what they want to hear, and that is the GOP/Tea Party. The causes of their economic pain are complex, and do not lend themselves to easy explanations or solutions. But, someone like Glenn Beck, with his chalkboards and bizarre history lessons, promised to make sense of it all. Beck appears to have flamed-out, but there will be others.

My point is this: If someone does come along who is capable of channeling and directing this rage, all bets are off. At the moment, we are turned against one another, but all that presently misdirected anger could easily be turned against the real enemy.

The 1% of the population, that owns nearly all of the wealth in this country, might want to think long and hard about what they are doing to the rest of us.

A Land Without People...?

Very sobering article in the NYT's today, regarding the looming vote in the UN General Assembly, on the issue of Palestinian statehood. A vote on a resolution, to grant recognition to a Palestinian state, could come as soon as September of this year and, as things stand now, it seems destined to win passage. The potential ramifications of such an event are significant, to say the least.

The proposed Palestinian state would encompass all of the West Bank, Gaza, and East Jerusalem. Passage of the resolution would immediately put Israel in the position of occupying, controlling, and settling, territory belonging to a fellow member state. The big difference between this UN resolution, and the dozens before it that were critical of Israel, is that this vote will come in the General Assembly, rather then in the Security Council. What that means is that the United States will not be able to veto this resolution, as it has done some 60 times before, to UN resolutions critical of the Jewish state.

"Most of the West Bank remains occupied by Israel. Thousands of Israeli troops are deployed here, and 120 Jewish settlements dot the land. Israeli roadblocks and checkpoints make ordinary life impossible for many of the territory's 2.5 million Palestinians. U.S.-mediated talks aimed at ending the conflict are moribund."

The excerpt I pasted above came from a Wall Street Journal article on the same subject. Now, the Journal is not known as a bastion of anti-Zionist thinking. I don't recall too many articles or editorials in the Journal championing the Palestinian cause. However, simply stating the obvious represents a dangerous threat to Israel's ability to maintain the status quo. And, that is the best that Israel and her supporters can hope for. Because any change in the status quo is going to come at Israel's expense.

My thinking on the subject is that Israel will ultimately have to yield to the realities of both history and demographics. And that will spell the end of the distinctly Jewish state that has existed since 1948. The so-called "two-state solution" was never anything, but a chimera. There simply are not enough land, or resources, to support two independent states. A single multi-ethnic state is the only logical answer to a problem that has stubbornly defied solution. There is no other way.

White Man's Burden

I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place.

-Winston Churchill in his submission to the Palestine Commission 1937

The Masses are Asses

My understanding of the problems plaguing today's news media outlets is as follows: The majority of American news consumers are not interested in unbiased, objective reporting no matter how good it is. They would much prefer to listen to someone who is going to cater to their ignorance, and tell them what they already believe to be true. Hence, the popularity of personalities like Rush Limbaugh and Glenn Beck. There is no commercial market for something like NPR so it relies on public funding and corporate sponsors. That it no way reflects on the product; simply the realities of the marketplace. Just because something is popular and profitable does not mean it has any inherent value, other then as a commodity. Right-wing media, as a rule, dispenses with any pretense of objectivity or even civility. That formula will always win out over reasoned and dispassionate discourse. We desperately need a new approach because the current one is not working...

The Cross and the Switchblade

Politicians like Sarah Palin, and the Tea Party movement she represents, are a desperate rear-guard action against demographic and cultural changes that they refuse to accept. On the fringes of this movement are the white supremacists, neo-Nazis, etc. who are at least honest about who and what they hate. The mainstream of the movement will vehemently deny that their opposition to Obama, and what he represents, is in any way motivated by his skin color. That claim is quickly demolished by even a cursory examination of their preferred means of attacking the president. The continuing "controversy" about Obama's birth certificate strikes at his very legitimacy as an American citizen. The message is unmistakable: "He is not one of us.". Can anyone imagine a white president being treated in such a fashion? It is simply inconceivable. The nonsense about Obama's father and grandfather and Kenyan Mau Mau rebels fighting the British is an even more blatant use of race. What on earth could any of that have to do with anything? Unless it's a not-so-subtle way of attempting to link Obama with some very scary-sounding Africans, who probably slaughtered a lot of white people.

What's in a Name?

Facebook has this new feature called "Notes" that allows users to write far beyond the 160 character limit that applies to status posts. So, instead of writing a blog post and linking to it through facebook, I decided to do the opposite. Here it is...

El Judio Maravilloso

We can only speculate on what Cuba would look like today had the Revolution not taken place. Would it have become the Mob-controlled City-State envisioned, and largely realized, by American organized crime figures such as Meyer Lansky? Impossible to say with any degree of certainty, but is surely a provocative question. In the book Havana Nocturne by the author T.J. English, the full extent of the Mob's control of Havana's decadent entertainment industry is revealed. And, with the "benevolent" Cuban dictator Fulgencio Batista as their partner, the sky really did seem to be the limit.

T.J. English manages to accomplish the remarkable feat of making this reader feel nostalgic for the world that Castro obliterated when he came down from the mountains. Havana Nocturne brings that world to vivid, colorful life and what a story it is. The protagonist of the book is clearly the Jewish-American mobster Meyer Lansky, who is the driving force behind the Mob's colonization of Cuba. Lansky stood at the pinnacle of success in 1958 having achieved his dreams of creating an off-shore criminal empire that was beyond the reach of American law enforcement. In 1958 Havana a perfect nexus of crime, show business, and politics existed to a degree impossible to realize in the United States.

The book is chock-full of fascinating characters and events. I never knew that when Desi Arnez would cry out "Babalu" as he was banging on his bongo drum, he was actually invoking the Santeria God of percussion. The wildly popular 1950's sitcom I Love Lucy, which featured the Cuban-American musician Arnez and his wife actress Lucille Ball, exposed American television audiences to Cuban music and dance culture.

In today's wired and digital world, a book need not be a stand-alone experience. A taste of the sights and sounds of 1950's Havana was as close as a youtube search. This video I'm embedding serves as a splendid companion to a book which I highly recommend...

Whistling Dixie

As we move further into the sesquicentennial anniversary year of the American Civil War, there are quite a few interesting things to consider. The New York Times has been running their Disunion series for a number of weeks now and it is truly fascinating. Even USA TODAY, which I tend not to read unless stuck in an airport, weighed in with a very good look at the subject. The Secession Ball was a not-to-miss event if you happened to be Charleston, SC. Maybe in four more years, they'll burn down the city again!

On a more scholarly note, I happen to be reading a book right now titled How We Fight: Crusades, Quagmires, and the American Way of War by Dominic Tierney. Haven't finished it yet, but did get through the chapter that is relevant to this post. Tierney picks the Civil War as his starting point, and does an excellent job of analyzing the glaring difference between how the war was fought, and the way in which the peace was lost. Meaning that the Union was infused with a powerful crusading spirit so long as the fighting was continuing, but the people of the North did not have the will or the patience to see the project through to the end.

The Reconstruction period that followed the end of hostilities is barely remembered today. If it is remembered, the perception is of a failed experiment marked by "scalawags", "carpetbaggers", and rampant corruption. While elements of all these things did exist, that is not quite the entire story. Dominic Tierney offers a novel treatment of the Reconstruction era. Tierney presents it as America's first attempt at what we today call "nation-building". And that is an excellent way to describe Reconstruction.

In April of 1865, the South lay largely in ruins. The region's entire social structure had been completely upended. It's economy and physical infrastructure was wrecked. Never was there a more opportune time for the victors to go about reordering the system, and rebuilding the South in their own image. Unfortunately, Abraham Lincoln was murdered and his vice-president Andrew Johnson was not the man to impose such a peace. When Grant took office, progress was finally being made, but precious time had been lost.

What followed was a sad litany of Southern white resistance, puncuated by acts of extreme terrorism, aimed at returning blacks to their former status. The people of the North eventually tired of the whole dismal enterprise and the last federal troops were removed from the region in 1877. Blacks ended up waiting another century to finally receive the whole range of rights guaranteed them by the Constitution.

Dominic Tierney poses a very provocative question towards the end of the chapter. He asks how much worse could the Reconstruction government have been then the one that led the region into a catastrophic war in 1861?

Lunatic Fringe

When the process of governing is incomprehensible, manipulation and propaganda thrives. The strange stories that Glenn Beck creates with his chalkboard gain traction with Americans, who are made anxious by the large changes that have overtaken the United States, including the election of a black president and the increasing racial diversity of the population, deindustrialisation and the decline of American power abroad, as well as cultural changes in sexual and family norms.

By telling simple fairy tales that trace these big and complex changes to the machinations of particular people, Beck makes the changes comprehensible in a way, and also makes the people who are presumably responsible the targets of his listeners' frustration and outrage. Partly because it is utterly irrational, and partly because it is an effort to bully and intimidate his political opponents, this is dangerous for democratic politics.

The above paragraphs were written by Francis Fox Piven, an elderly academic who has become the latest target of Glenn Beck's increasingly unhinged rhetoric. Despite being subjected to numerous death threats, as a result of the spotlight Beck is putting her in, Piven has managed to maintain her composure, while providing the most lucid explanation of Beck's appeal that I have yet heard. Anyone with even a rudimentary understanding of 20th century history should quickly recognize Beck's "history lessons" for what they are. Glenn Beck starts with an already formulated version of history complete with stock villains. He then proceeds to distort the historical record until it fits his warped version of events.

Another person who makes sense of otherwise seemingly inexplicable political and cultural phenomenon is Chris Hedges, a columnist and foreign correspondent. Hedges most recent book is titled Death of the Liberal Class, and I am about halfway through it at the moment. A discussion about the book by the author is available on youtube, and is definitely worth a watch. Interestingly enough, Hedges works within the same time period in American history as does Beck, but without the chalkboard, tweed jacket, pipe, or insane theories.

Since I can embed the video within my blog post, I think I'm going to do just that:

From My Cold Dead Hands

The temptation to try and turn the shooting of Gabrielle Giffords into a feel-good narrative appears to have won out. Rather then use the horrific event as an opportunity to honestly examine the consequences of our fatal attraction to firearms, the focus has already shifted to daily updates about the congresswoman's progress. Incremental signs of improvement are eagerly seized upon and presented as evidence of a "miraculous" recovery. And while some of that enthusiasm is tempered with reminders of just how difficult a journey lies ahead for Giffords, the desired story line has already been established.

The other 18 people shot have been effectively marginalized, for the most part. The living, and the dead, will recede from our collective memory, and the Tucson shooting will be reduced to the story of two individuals: the gunman and his primary target. Jared Lee Loughner will be portrayed as an aberration, rather then a particular type that is all too familiar to us. Gabby Gifford has already been reduced to a symbol of "healing", both literally and metaphorically, instead of the vibrant and intelligent human being that existed before a bullet tore through her brain.