THE BAKERSFIELD CALIFORNIAN "FIRES" LEONEL MARTINEZ

Latinos are fast becoming the largest demographic group in Kern County. So what does the Bakersfield Californian do? It fires their only Latino contributor, Leonel Martinez (no relation), who was able to mesh both a personal and local angle into national level developments that affect both Latinos and Kern County.

The reasons are pretty simple. On one level the print media is collapsing under the barrage of news and information sources. Firing Leonel represents the Californian's attempt to "do something" in the face of change. Letting Leonel go will also help save money and (hopefully) stem the tide.

But we all know better.

Leonel Martinez was the only voice on the Californian who consistently brought Latino issues to the table, sometimes doing so in a way that made much of our local community uncomfortable. Most of us heard and saw the commentary. It wasn't always pretty ... especially in a place that is now rated as California's most conservative city (and #8 nationwide).

We're going to have Leonel on our program tomorrow to talk about this, and much more.

- Mark

THE MOTHER OF ALL FINANCIAL STUPIDITY?

It seems to me that Comrade Bush won't be happy until he and his cronies can raise the flag over the United States of Socialist Republicans (USSR). Check this out ...

At the end of March I wrote about how greed and deregulation created "Ponzi-like" market conditions that made Countrywide a success, a failure, and then (ultimately) an attractive investment opportunity for Bank of America. Homeowners were worse off but things couldn't be better for the executives and the "vulture" investors because of the subsidies.

A week later I then explained how the primary culprits behind Countrywide's problems were walking away rich. In the post I highlighted how former Countrywide president Sanford Kurland had secured a new job where his knowledge of "where Countrywide's financial toxic waste is buried" would make him even more money.

One week later I outlined how the federal government was ultimately going to bailout the entire banking industry by taking on the high risk loans of the housing industry.

Today, I present to you The Mother of All Financial Stupidity (at least for the moment) ... It appears that the American taxpayer is now going to fund the Bank of America takeover of Countrywide.

And just how are we going to do this, you ask? Simple. By allowing Bank of America to write-off the losses of newly purchased (but still floundering) Countrywide. It's kind of complicated, but you can read all about it here at Bloomberg.com.


So, this is what we got.

After weathering Countrywide's greed-laced, and government driven, boom & bust cycle ... after being slapped in the face as those responsible for Countrywide's mess walked away rich and into new jobs ... after virtually guaranteeing that the housing and financial industry's troubled loans would be subsidized by the American taxpayer ... it now looks like the American taxpayer is also going to foot the bill for Bank of America's takeover of Countrywide too (which, by the way, gives them a technically illegal 10.9% of industry market share).

Perhaps I'm wrong, but didn't we fight a Cold War to discredit and overthrow market socialism?

- Mark

MORE HEALTH CARE GOOD NEWS

Ahhh ... the beauty of the Bush/Republican-led health care legislation ...

On Wal-Mart’s Web site, you can buy a walker for $59.92. It is called the Carex Explorer, and it’s a typical walker: a few feet high, with four metal poles extending to the ground. The Explorer is one of the walkers covered by Medicare.

But Medicare and its beneficiaries aren’t paying $59.92 for the Explorer or any similar walker ... They are paying about $110.

On the positive side, according to the NY Times, things are set to change on July 1. But guess who's fighting the changes? That's right. The equipment makers. They've stated publicly that "competitive bidding will, among other things, deprive some patients of oxygen equipment they need."

It kind of tugs at your heart, doesn't it?

I don't know, but it seems to me that "competitive bidding" has also been depriving me of some of the gasoline I need. Do you think Congress will do anything about subsidizing my petro purchases?

- Mark

MARKET DEVELOPMENTS

According to the NY Times the stock market fell 358.41 points today, leaving the market at it's lowest level of the year. Now for the bad news ...

June 26 (Bloomberg) -- U.S. stocks tumbled, sending the Dow Jones Industrial Average to its worst June since the Great Depression, as record oil prices, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump.

And the Republicans want four more years of this?

- Mark

BONEHEADED MISCALCULATIONS ...

I don't always agree with some of the information and observations I get from the financial news or newsletters I receive regularly, but this one from The Daily Reckoning offers some very sobering observations. Here's a snippet ...

The most boneheaded miscalculation of all time...

“Terrorism will be reduced...weapons of mass murder will be limited, people will be safer around the world, human rights and democracy will be unleashed in the Middle East, and the fragile outlook for world prosperity will be improved... The uncertainty tax on world growth will be lowered too, as will the energy tax from temporarily spiking oil prices.”

This was Larry Kudlow writing in March, 2003.

The spike in oil prices he described took place on March 12th, 2003, pushing the price of a barrel of crude all the way up to $37.83 and the price of a gallon of gasoline to $1.72. Yesterday, oil closed at $137 and gas sells for $4.06.

But Kudlow was hardly alone in his hallucinations. Laurence Lindsey, then George Bush’s senior economic advisor, looked into his own crystal ball and saw nothing he didn’t like.

“Under every plausible scenario, the negative effect will be quite small relative to the economic benefits... The key issue is oil, and a regime change in Iraq would facilitate an increase in world oil,” thereby driving down oil prices.  

Paul Wolfowitz, then Deputy Secretary of Defense, went on to reassure the nation that Iraqi oil revenues would pay all the costs of reconstructing the country.

Today, we are talking about one of the most boneheaded miscalculations of all time. Almost with a single maladroit stroke, a relatively small group of world-improvers undermined the progress of 9 generations. Five years later, Americans are on the losing end of the “biggest transfer of wealth in history,” as T. Boone Pickens described the oil market of 2008. George W. Bush has the highest disapproval ratings of any U.S. president in history. America’s most profitable industry – finance – has collapsed...its currency has lost a third of its value...and European, Chinese and Indian economists are wagging their fingers saying, “I told you so.”

But here at The Daily Reckoning we always look on the bright side. And the sunny side of this story is that the United States needed to be humbled. After the Soviet Union fell to its knees in 1990, America had a monopoly on worldwide military force. Nature abhors a monopoly; she needed to take the U.S. down a peg. Who better to do the job than this group of neo-cons? They knew no history; nor did they understand economics. They were the perfect people to lead the nation to disgrace and bankruptcy.

Mr. Kudlow continued his miscalculation by referring to a survey, in which 69% of respondents said they would gladly pay $300 for the war.

So far this year alone, the price of crude has risen 40%. It’s now $100 higher than when the neo-cons took America into the Iraq War. Each American uses 25 barrels of oil per year. This is equivalent to a tax of $2,500 in additional energy expense per person...or $10,000 for a family of four, annually. In addition, the war itself is estimated to cost between $1 trillion and $2 trillion. Divide that by the number of U.S. families and you get a figure of $10,000 or more.

Ooops ...

And on and on it goes. Long story short, even the financial analysts have had it with the Bush administration. And why not? As the articles points out:

When Larry Kudlow, Laurence Lindsey and Paul Wolfowitz were explaining how nice it would be to rough up the Middle East, the average suburban American household spent $1,422 on gasoline. Now, according to the Bureau of Labor Statistics, the sum has risen to $3,196.

Read the entire article if you can (it may have a subscription wall). It explains, without trying, why John "I'm-Bush's-Third-Term" McCain should not president.

- Mark

LIEBERMAN MUST BE REMOVED

Senator Joe Lieberman is not an "independent" voice. He is Bush's Voice. He should not be rewarded with committee leadership posts by the Democratic Party if he's going to support Sen. John McCain's presidential campaign while covering for President Bush's Blundering Wars Project.



If you want to sign a petition that asks the Democratic Party to remove Sen. Lieberman as chairman of the Homeland Security and Government Affairs Committee click here.

- Mark

BUSH'S WORLD ... NO BID OIL CONTRACTS IN IRAQ

I'm sure this bit of news should settle all the concerns about the U.S. going into Iraq to create a vibrant market economy, governed by competition and transparent democratic processes ...

According to the NY Times, four Western oil companies, "Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields ..." Left out of the no-bid contracts were offers by more than 40 companies from countries like Russia, China, and India.


This decision should also help assuage concerns that we went into Iraq to help Western oil firms gain access to Iraqi oil, right?

I wonder who's going to pay to maintain the political stability necessary so these guys can make a profit? Hmmmm ...

- Mark

ON THE PATHETIC STATE OF OUR NATIONAL MEDIA & CULTURE

How far we have fallen ...

Well, it looks like it’s official. Our national media is a joke. First, it helped the Bush administration hype a war of choice. Then it said little or nothing about their role in using compromised military officials as “objective” news analysts to help sell the war in Iraq. Now our national media has effectively turned its back on President Bush’s Blundering Wars Project.

The NY Times is reporting that our major news media stations are dedicating fewer and fewer minutes per week to the wars in the Middle East. CBS News no longer has a full-time correspondent in Iraq. This after the media was complicit in helping the Bush administration paint Iraq and Afghanistan as important to American history as the Civil War and World War II.

One of the individuals who understood the hypocrisy of our national media and culture was George Carlin, who passed away Sunday. Here’s Carlin after Janet Jackson’s “wardrobe malfunction” during the Super Bowl.

“On that Super Bowl broadcast of Janet Jackson’s there was also a commercial about a 4-hour erection. A lot of people were saying about Janet Jackson, ‘How do I explain to my kids? We’re a little family, we watched it together ...’ And, well, what did you say about the other thing? These are convenient targets.”

Speaking of convenient targets, ABC’s war correspondent Terry McCarthy explained that one of the reasons the national media focuses on banalities is that bringing up Baghdad at a dinner party is “a conversation killer.”

So, that's it? Our national media has been reduced to little more than a profitable instrument that focuses on empty “convenience” and what makes us comfortable. Great.

But don’t forget your flag pin.

- Mark

REP. TOM UDALL GETS IT

U.S. Representative Tom Udall (D-New Mexico) gets it when it comes to President Bush's efforts to illegally spy on Americans, and then grant the telecom industry "retroactive immunity for helping him do so. Here's his statement on H.R. 6304 in it's entirety.





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JUNE 20, 2008: UDALL: FISA BILL INFRINGES AMERICANS’ FUNDAMENTAL FREEDOMS

WASHINGTON – U.S. Representative Tom Udall, D-N.M., today released the following statement regarding H.R. 6304, the Foreign Intelligence Surveillance Act (FISA) Amendments Act:

"The FISA legislation we considered today has important implications for Americans' fundamental freedoms.

“First, today's legislation gives the Bush Administration considerable leeway to continue spying on Americans. The Administration has shown that if Congress gives them an inch, they will take a mile. After their past behavior, it would be irresponsible to give them an opportunity to further encroach on our civil liberties and right to privacy.

“The legislation also sends the message that private actors can work with the Executive Branch to violate the rights of Americans with impunity. Throughout the FISA discussion, I have been clear: I will not support legislation that would grant blanket immunity to telecommunications companies that may have unlawfully helped the Bush Administration spy on Americans. Make no mistake, today's legislation provides blanket immunity. By letting companies off the hook if they were asked to commit illegal acts by the government, the bill ensures that any Americans whose rights were violated will never have their day in court.

“Although the Democratic leadership supported this bill, I could not. It infringes freedoms so fundamental that they cannot be compromised. The right to be free from governmental spying is enshrined in our Constitution, our basic American values and the principles of ordered liberty.

“America's laws should keep us both safe and free. Today’s bill would sacrifice essential liberty in ways that do not contribute to our security. For that reason, I could not support it.”

Let's hope Rep. Udall unseats Sen. Pete Domenici in their New Mexico Senate race.

- Mark

GOOD NEWS, BAD NEWS

From MilitaryTimes.com ...

First the good news. With recent security advances in Iraq, it looks like the U.S. military is finding more and more weapons caches in public places. Better tips combined with cash rewards are leading to so many successful raids that the U.S. military is on track to find and clear more caches by the end of August than in all of 2007 (no word on whether weapon and ammo counts will be higher too).

Now the bad news. According to John Pike, a military and security analyst, “It seems to me that the amount that has been confiscated is small relative to the amount that might be out there.”

Bad News, II. After reading the story I get the sense that the U.S. Military is little more than Iraq's billion dollar police department.

And now for the real Good News. You, me, and our kids (and grandkids) get to pay for it all.

- Mark

FLUSHING THE CONSTITUTION DOWN THE TOILET …

Just great.

The House of Representatives has finally caved into the Bush administration’s proposed spying program, which gives the telecom industry retroactive immunity for helping President Bush spy on Americans at will, and without cause (check out the discussion on MSNBC).

As I’ve pointed out again and again on this site over the past six months, someone needs to look into why the Bush administration was asking the telecom industry to help them spy on Americans at least six months before 9/11. Perhaps we can get someone in the House of Representatives, like Christopher Dodd did in the Senate back in December, to step in and block this freedom and liberty destroying piece of legislation.

And for those of you who are not up to speed on FISA (Foreign Intelligence Surveillence Act) legislation – which the new legislation impacts – you really only need to know two things.

First, FISA was a Watergate era piece of legislation designed to give the president the legal authority to track and listen in on perceived foreign threats to this nation. It’s roots are tied to President Nixon’s claim that he did what he did because he feared foreign subversives. It was, of course, a bogus claim (Nixon was paranoid and vile), but Congress decided there was some merit to the argument and passed FISA in the 1970s.

Second, apart from the fact that there was no 9/11 national security threat when President Bush first asked the telecom industry to help him spy on Americans (and if there was, why didn't Bush listen to Richard Clarke in the summer of 2001?), 9/11 led to legislation that now allows our national security guys to wiretap and spy on anyone they suspect. The only proviso is that they have to ask for a FISA warrant up to 72 hours after the fact. In other words, with the Patriot Act, the president didn’t need to illegally spy on Americans after 9/11 – as long as we had a reasonable hunch.

At the end of the day, the president’s search for retroactive immunity for the telecom industry is little more than a search for personal protection, and protection for his Constitutionally challenged team (and the few complicit Dems who were brow beaten into supporting the president’s spying initiatives early on). Team Bush knows the telecom industry will not go down quietly if they alone are fingered in court for violating the Constitution and our 4th amendment rights.

And they will have much to answer for, as this August 2002 article from Jonathan Turley in the LA Times makes clear.

- Mark

P.S. And for those who can't remember, here's the 4th Amendment:

"The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."

WAR PROFITEERING & THE REPUBLICAN CULTURE OF DECEIT

By way of Dailykos …

A few months back the Boston Globe broke the story of Dick Cheney’s former firm, Kelly Brown & Root (formerly of Halliburton) contributing to the Republican fed culture of deceit and corruption. In a few words, KBR avoided paying hundreds of millions of dollars in Social Security and other taxes by claiming that more than 21,000 employees worked for a Cayman Islands subsidiary that had neither a phone number, nor an office (although it did exist in a computer file in the Cayman Islands).


Here’s what the Boston Globe wrote:

Kellogg Brown & Root, the nation's top Iraq war contractor and until last year a subsidiary of Halliburton Corp., has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in this tropical tax haven.

More than 21,000 people working for KBR in Iraq - including about 10,500 Americans - are listed as employees of two companies that exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean. Neither company has an office or phone number in the Cayman Islands.

The Defense Department has known since at least 2004 that KBR was avoiding taxes by declaring its American workers as employees of Cayman Islands shell companies, and officials said the move allowed KBR to perform the work more cheaply, saving Defense dollars.

Sure, the practice of off-shoring a firms business to avoid paying taxes isn’t illegal. It’s just shameful. And in this case, war profiteering (like this case) and tax-dodging slaps every American soldier and U.S. taxpayer in the face. And did I mention that KBR has no bid contracts that help provide it with 8 times the amount of work than its nearest competitor?

Fortunately Senator Kerry and Senator Obama jumped on this story. They just forced President Bush to sign legislation effectively closing this Cayman Island loophole. Beachmom from Dailykos has been following the story and has all the links here.

My only question now is whether we can get President Bush to sign on to legislation that will ask KBR to retroactively pay back the taxes they dodged over the years with their war-profiteering activities.

Think about it. If the Bush administration can fight for “retroactive immunity” for his telecom buddies (who illegally helped the government spy on Americans) they should also be prepared to support “retroactive tax responsibility” for his war-profiteering buddies … don’t you think?

- Mark

ANOTHER FRIEDMAN UNIT?

I can’t believe Tom Friedman, from the NY Times, is still trying to give advice on Iraq.

As I noted in yesterday’s post op-ed columnist Tom Friedman once beat the war drums about George Bush’s “audacious shake of the dice” in Iraq. In today’s column he's trying to exhort the next president to “think” about Iraq so that we might “salvage” something out of President Bush’s Blundering Wars Project. In a few words he’s suggesting that the next president, or the next couple of years, will determine whether we can leave Iraq successfully.

Has he just created another “Friedman Unit”?

For those who don’t remember, Tom Friedman demonstrated his inability to think things through by arguing on 14 different occassions immediately after the invasion of Iraq that “the next six months” would determine “whether a decent outcome is possible." Not only was Friedman wrong, but his consistently failed apocalyptic opinions led other more astute watchers to ridicule his dire warnings as a “Friedman Unit”, which is generally viewed as any six month period that gets labeled as “crucial” to the outcome of Iraq.

Friedman’s attempt to pin Iraq’s success or failure on the next president – and not George W. Bush – shouldn’t come as a surprise. Failed analysis on the real big things seems to be his calling.

I'll try and post a little more on this later. It helps to explain what's wrong with our national press.

- Mark

HITLER WAS GREAT? (in hindsight ... )

Imagine if a man or a woman, who genuinely has love in their heart, misleads their partner in an attempt to have a child. Their rationale is, “I will provide love and shelter. If everything goes well, in 40 years our wonderful child’s successes will be testimony enough to my wisdom.”

Does this make sense to you? If you’re the other partner, trapped into a marriage and/or life that you didn’t sign on for, things aren’t all that great. And then there is the primary assumption. What if things don’t turn out as planned? What if the love child turns out unloved and is forced to build a life around the deception and, now, distrust that their birth depended on?

Increasingly I’ve been seeing commentars using this kind logic to argue the following: “Since we don’t know what Baghdad and the Middle East will look like in 40 years we really can’t judge George W. Bush today.”

This “We can only judge him in 40 Years …” mind-set is really little more than an attempt to absolve collasal incompetence at a time when we need to dissect and learn from President Bush’s Blundering Wars Project, and his many other mistakes.

To be sure, I understand the argument. If democracy flourishes in the Middle East, we’re all better off. The ends justify the means. But democracy is not an “add water and stir” concoction. Anyone with an understanding of American Democracy knows this.

Moreover, if allowed to settle into our culture, this mind-set can be used to absolve wrong-doing and incompetence in other life areas. But more importantly it rests on an assumption that none of us can count on: Democracy flourishing in the Middle East. Which brings me to another level that this crazy line of thinking can bring us to.

If we can argue that destroying something so that others can rebuild it is good for mankind then Hitler was great for humanity. Think about it.

With what might be called another “audacious shake of the dice” (thank you Thomas L. Friedman) Adolf Hitler set in motion a series of events that led to the final collapse of imperial Europe and old style colonialism. The United States was forced to step in and clean up the mess but, as we know today, President Roosevelt, President Truman, and President Eisenhower were more than up to the task. So were the Europeans. The world also sought our leadership. Bretton Woods, the Marshall Plan, and military alliances all speak to a cooperative global mind-set that ultimately made Hitler’s madness a source of opportunity.

There’s more to this story. But the key is, if we don’t take the time today to analyze and learn from the Bush administration’s incompetence and hubris, another 40 years will only lengthen our learning curve. More mistakes will be made. Historical Accidents (Hitler), like Historical Incompetence (Bush), provide much for us to learn from. Today.

No matter what the pundits are saying, we don’t need another 40 years to recognize and learn from failure.

- Mark

I'M VOTING REPUBLICAN ...

YUP, THEY STILL HATE US ...

From Bahrain's Gulf Daily News ...

It looks like Iraqi cleric Moqtada Al Sadr is going to break with the U.S. permamanently once the UN mandate expires at the end of the year. The hardliner is gearing up for a prolonged U.S. presence in Iraq by setting up a new force to battle US troops, commenting: "We will not stop resisting the occupation until liberation or martyrdom." His Mahdi Militia Army counts in with 60,000+ troops.

Now, I'm not an expert in Middle East politics. But if Al Sadr's Mahdi Army is gearing up to go after U.S. troops after the UN mandate expires doesn't this suggest that the mess in Iraq is not simply driven by Al Qaeda, or other extremist elements? (something those of us in the reality based world already know). And if someone as popular as Moqtada Al Sadr is gearing up to confront U.S. troops in Iraq, what does this tell us about Sen. McCain's plan for keeping us in Iraq indefinitely?

But it appears that things may only get worse.

While the fight against US troops will be waged by Al Sadr's new group, Al Sadr also understands that he needs to address other issues in Iraq if he is going to maintain his position (part of that "hearts & minds" stuff Bush ignores). In a statement that was read at mosques in the holy Shi'ite town of Kufa Al Sadr stated that other members of his organization will "take on a social and religious role."


Fighting foreign occupiers and providing social relief ... It looks like Al Sadr is gearing up to become Iraq's Supreme Political Warlord of the 21st Century. And our presence gives him all the tools he needs.

- Mark

ON STRIKING IRAN ...

Last year America’s preeminent intelligence agency – the Office of the Director of National Intelligence – issued its National Intelligence Estimate on Iran (“Iran: Nuclear Intentions and Capabilities”) which determined that “Tehran halted its nuclear weapons program” in the fall of 2003. Still the Bush administration is bent on making it clear that a military strike against Iran is still possible before the end of President Bush’s second term.

This is important because it means that the reported use of nuclear weapons against Iran’s underground nuclear facilities also remains possible. While there are several very good, and technical reasons, to fear this scenario this interactive clip from the Union of Concerned Scientists explains several of the potential pitfalls of using nuclear weapons (i.e. nuclear bunker busters) to attack Iran. The clip is really worth watching.

- Mark

SOCIAL SECURITY ... AN EMPTY VAULT?

In last Saturday's program I commented on the CSU Bakersfield Commencement Address given by former Congressman Bill Thomas. In his address Bill Thomas discussed social security and the problems that loom for today's graduates. He said little about his role in escorting President Bush's budget busting policies through congress, nor offered any solutions. Classic.

As promised, here's an op-ed I wrote on the topic from three years ago as it appeared in the Bakersfield Californian March 27, 2005. And, yes, it offers several very common sense solutions. I'll be sure to discuss some of these on tomorrow's program.

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Social security is not in crisis. What is in crisis is our national leadership, which seems bent on putting ideology and the interests of Wall Street above the good of the country.

Arguing that social security will go broke by 2018 President Bush says that there’s no trust fund because we’ve already spent the money you and I pay in payroll taxes. To solve the problem the president is offering privatized investment funds to build financial nest eggs we can use in retirement. Fair enough. The problem, however, is that to make his point the president is deceiving America.

To make his argument work, the president needs you to believe that the social security trust fund is insolvent. The only way it becomes insolvent is if the federal government says it will not honor its obligations. Let’s start from the beginning.

In 1983 Ronald Reagan appointed a commission that recommended collecting an additional 2% in payroll taxes to keep social security steady. The result was higher taxes on the middle class, but an additional $1.2 trillion in government revenue since 1983. The government can do many things with this money but chose to purchase government bonds held in trust by the federal government. Hence, the social security trust fund.

Since the signing of the constitution (Art. VI) every purchaser of U.S. sanctioned treasury notes has been able to bank on the promise that they will be repaid (with interest) by the federal government. The only way for this not to happen is for Washington to say we will not meet our obligations.

This is where President Bush’s deception of America comes into play.

The president and his advisors maintain that the $1.2 trillion accumulated in the trust fund (in the form of government bonds) does not constitute a real asset. Imagine what you’d say if your financial advisor told you the government bonds in your investment portfolio aren’t worth anything because “they’re just IOUs and don’t constitute real wealth.” This is precisely what the president is asking all Americans to accept with the social security trust fund.

More specifically, he’s telling every bond holder that America no longer has a fiduciary or moral obligation to pay its debts. This position might be OK if you’re a Banana Republic, or a third rate tyrant, but the United States of America?

There are several schools of thought why the president is pushing America toward third world financial practices. First, many believe President Bush simply cannot tolerate successful government programs, and views privatization as a way to destroy social security and undermine FDR’s New Deal legacy. To do this – as was the case with going into Iraq – the president needs the economic equivalent of a threatened “mushroom cloud” to scare America. Hence, the bankrupt trust fund story. Second, it’s argued that the Bush Administration is so incompetent they simply don’t understand the implications of undermining social security. I have a hint: Look at the condition of America’s elderly in the 1930s. Third, the Bush administration is simply doing the bidding of Wall Street, who want trillions of new investment dollars to accelerate profit levels.

Whatever your poison – I think it’s a combination of all three – one thing is certain: social security is not in trouble. However, for the sake of argument, let’s assume we’re in a time machine (or wherever George Bush does his thinking), and we’re in the year 2018. What should be done? Here’s my plan.

First, let’s start by rescinding Bush’s tax cuts for the rich. This would add approximately $1.8 trillion to government coffers over the next ten years. This is responsible for three reasons. One, we can use the money to buy out the trust fund the president says will be broke by 2018. Also by “saving” the trust fund we won’t have to borrow the $2-4 trillion necessary to make the transition toward privatized accounts. Finally, because America’s middle-class overpaid payroll taxes for more than 20 years, the surplus initially used by President Bush to justify tax cuts for the rich (“It’s your money”) wasn’t really theirs to return in the first place. With no surplus, the justification for tax cuts for the rich simply makes no sense (and spare me the “tax cut-job creation” lie).

Second, why don’t we raise the cap on payroll taxes? Today, all income above $90,000 is exempt from the payroll tax, which releases approximately 15% of all income from the social security tax. This contrasts with twenty years ago when only 10% of national income was exempted by the cap. This imbalance needs to be addressed, and could be with a new ceiling at, say, $200,000.

Finally, we could discuss raising the eligibility requirements, or reduce social security cost of living increases (COLAs) by one-half percent per year? And privatization? I’m not opposed to private accounts (I have a couple of my own), but if you have to borrow $2-4 trillion to fund the transition, and still cut future benefits, it’s not worth it.

In the end, the case for crisis and privatization is disingenuous, damages America’s long-term credibility, and undermines our future. The fact that the president doesn’t understand this should be cause for worry.

- Mark

McCAIN: BRINGING TROOPS HOME "NOT TOO IMPORTANT ..."

Apart from not understanding the difference between keeping troops in Korea, Japan, Germany (tied to post-war demands and global security) and Iraq (covering a mistake + oil) John McCain seems to believe the surge is working - which simply is not true.



For McCain to say that bringing the troops home is "not too important" demonstrates, once again, that he is not fit to lead.

- Mark

WE JUST LOST $23 BILLION?

From the BBC ...

A BBC investigation estimates that around $23bn (£11.75bn) may have been lost, stolen or just not properly accounted for in Iraq.

Currently there is a U.S. gag order that prohibits revealing information related to these developments. As well, the Bush administration has done what it can to classify this information by claiming that explaining how money has been "allocated" in Iraq could affect national security.

- Mark

EXPLAINING THE McCAIN VOTE, III

Some of you may remember Greg Mankiw. He was chair of President Bush’s Council of Economic Advisors. He is also the same guy who wrote that “trickle-down” theory (i.e. tax cuts for the rich creates growth) was a “crank theory” in his first text book. But then he left this section out in his next text book, which happened to come out at the same time that he was being considered for an appointment on President Bush’s Council of Economic Advisors – which he secured. After helping to add almost $4 trillion in national debt by providing intellectual cover for Bush’s disasterous “trickle down” economic policies Mankiw is at it again.

A couple of days ago he wrote that investment banks that find themselves in trouble, and have to go to the federal government (i.e. the Federal Reserve) for help, might end up being regulated like commercial banks under an Obama administration – as if this is a bad thing. Fortunately, UC Berkeley economics professor Brad de Long helps us understand why Mankiw is wrong, again.

Look, I have no problem with people like Greg Mankiw finding their place in the sun, and then selling out their profession in order to gain access to power. But for Mankiw – and there will be more once the Bush presidency is finally over – to come out and assert that market institutions like investment banks don’t need regulating after they’ve speculated their way into trouble demonstrates that ideology has always trumped the facts for the Bush administration. They simply don't get it.

That anyone pays attention to people like Harvard's Greg Mankiw, war monger Paul Wolfowitz, FOX News' William Kristol, the Washington Post's Fred Hiatt, and other Bush enablers, explains why our country is in the position it is today. It’s also the equivalent of sticking your head in the sand and marveling at the serenity (or is that "serendipity") of it all.



Hey, I have an idea. Why don’t we make President Bush’s tax cuts permanent and invade Iran? That should fix what ails this country, right? This mind-set, my friends, helps to explain the John McCain vote.

- Mark

A (kind of) SHORT HISTORY OF THE DEMOCRATIC PARTY, THE REPUBLICAN PARTY, AND RACE IN AMERICA

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So I was watching FOX News a few days back (I know, I know …) and the host was interviewing an individual that had written a book explaining the role of the Democratic Party in keeping slavery and Jim Crow alive in the south. Implied in the FOX News interview was that (surprise, surprise) today's Democratic Party is to blame for much of the ugliness that resulted from slavery.

The segment, no doubt, is part of a larger effort to confuse voters on the issue of race during the presidential campaign. It's all tied to Obama, so we'll see more of this nonsense. The tone of the interview also reminded me of a post I read and responded to a few years back on our campus Political Forum. I’ve made a few minor adjustments to what I posted back then, but the story below is the same.

For those of you who don’t have the time to read the post, the MORAL OF THE STORY is this: Elements of the Democratic Party that FOX News drags through the mud were never fully embraced by Progressive Northern Democrats (i.e. its Liberal Wing), eventually abandoned the party and, perhaps more importantly, are now the base of today's Republican Party.

If you want specifics, and the facts, here’s my post from a few years back with minor modifications.

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Dear ____________.

Your information on race and political parties is largely uniformed and misleading. Because it lacks context (on the larger history of political parties) what you present is the type of information that reflects incomplete thinking and leads to ignorant statements. I won’t address each specific point in your post (primarily because it would suggest the context is sound) but you should consider the following when you post or discuss political parties, race, and political interests in America.

First we need to understand that political parties are nothing more than a coalition of interests. As interests change so do coalitions and alliances. But first a brief history on parties in America.

IN THE BEGINNING … POST REVOLUTIONARY PERIOD
A brief introduction to the history of the republican and democratic parties requires that we understand two basic points about each party. First, what we see as the Democratic Party was founded largely by anti-federalist, state’s rights supporters, and led initially by Thomas Jefferson. Since most of America was dominated by small farmers it should come as no surprise that the Anti-Federalists were early supporters of small farmers, local political issues, and states’ rights. This was the forerunner of the Democratic-Republican Party, which would become simply the Democratic Party.

The modern Republican Party, on the other hand, is a product of up can coming industrial Northern interests who were partial to the Federalists. This group was originally led by Alexander Hamilton. They focused on the need for a strong federal government to help deal with emerging industrial and growing business interests (like the value of money, tariffs, etc.).

In the first phase of party growth you generally had the Jeffersonians (anti-Federalist, small farmer supporters) and the Hamiltonians (Federalists, business supporters). Because the South was dominated by slave trading farmers, and the north was the home of emerging industrialists, we begin to see the basic contours of our current Democratic-Republican-party split: Democrats supporting local interests and small players, Republicans supporting money and business interests.

EARLY HISTORY … PARTY CONSOLIDATION
Led by Thomas Jefferson, the Anti-Federalists (soon to be Democratic-Republicans and, later, simply “Democrats”) focused on small farmers who did not want the federal government intervening in their affairs or undermining their sovereignty. This helps us understand why the south, filled with slave-holders, would embrace states rights and gravitate to “Jefferson’s Party.” Later, southerner and war hero Andrew Jackson united southern farmers and urban workers under a party that focused on a populist message, emerging machine politics, and city patronage (which grew significantly as immigrants streamed into the east coast’s cities). His personal style attracted newcomers, while westerners and the “New Frontier” advocates (Manifest Destiny, and all that) gravitated to Jackson, which allowed the party to consolidate a number of disparate interests into a strong Democratic party.

On the Federalists side things weren’t going as well. In fact, Jackson was so popular that opposition to Jackson was the real driving force behind the emergence of the Whig Party (the immediate predecessor to the Republican Party). The Whig Party broke down and reemerged as the Republican Party, putting together enough supporters from industrialists, Whig hold-overs, and Northern Democrats opposed to slavery. This coalition – and not simply the Republican party – got Abraham Lincoln elected in 1860.

And here lies a key point. First, Lincoln’s majority was really a coalition of anti-slavery Whigs, emerging business interests, and anti-slavery Democrats. Second, it was at this point that the Democratic Party began to split along two lines. Those who supported slavery (the south) and those who opposed it (the north), choosing instead to focus on machine politics, patronage, populist policies, the working class, etc.

POST-CIVIL WAR PERIOD
The Republican Party begins its history after the Civil War as a supporter of the business class (the northern industrial elites) and, when it suited them, opposition to emerging Jim Crow laws in the Democratic, slave-holding south. I say this because people often forget – or never learn – it was the Republican Party that agreed in 1876 to sign away the protective Reconstruction Troops placed throughout the south in the post-Civil War era. They did this so that they could get southern Democrats to concede the contested 1876 presidential election and get the incompetent Rutherford B. Hayes in office.

With the removal of federal troops from the post-civil war south the region was free to create its own social system. Jim Crow was on his way, as the Black Codes became a part of the southern law and culture (e.g. it was illegal for black men to be unemployed in some states, black men could not look at white women, etc.). It was at this time that the Civil Rights legislation of the 1870s (yes, there was a Civil Rights revolution then) was either ignored or broken down by the push for state’s rights in the south. Once established, Jim Crow pushed to every part of the country, and the southern caste system was generally accepted by the early 1900s (Democrat Woodrow Wilson was especially no help).

Southern Democrats continued to remain an integral part of the larger Democratic Party not because the party embraced their view on race (as did the Republicans), but because the party sided with southern farmers on the issue of tariffs and prices. Tariffs were key because northern industrialists needed them to keep out competition, which Republicans supported. But tariffs also hurt southern interests as importers of southern farm goods also kept tariffs artificially high, thus blocking out or reducing the profits of farmers.

It is at this time that the Republican Party becomes entrenched as the party of Big Business. Placing high tariffs on imports, the United States had the highest overall tariffs in the industrial world from the mid-1800s through World War I. At the same time, Republicans create a larger economic and political environment that was so industry friendly that regulations and codes were willfully ignored, while labor rights were ignored or put up for sale.

FDR AND THE MODERN DEMOCRATIC PARTY
Corruption became rampant throughout the political system, as state legislatures were regularly bought and sold (some of the stories of former California Governor Leland Stanford are quite interesting). This is one of the reasons a populist backlash emerged, which allowed progressives like Hiram Johnson in California, and Teddy Roosevelt nationally, to become popular, at least for a time (corruption was so rampant it was at this time that California got its referendum, recall, and initiative process). This Progressive Era subsided, but returned with a vengeance after the market collapse of 1929. It is at this time coalitions within parties begin to switch, or become uncomfortable where they are.

But before this happens a political tidal wave ushered in an anti-business environment, which led to the regulatory capitalism of the post-war era. Republican industrialists retrenched, while FDR wove together a coalition of organized labor, southern farmers, Big City machines (who weren’t wiped out by the progressive movement in the early 1900s), and northern liberals. By the 1960s, however, southern farmers were not happy with the emerging civil rights legislation and other “liberal” ideas associated with “northern elites.” Simply put, they threatened the cultural status quo of the south.

NIXON, REAGAN, AND THE MODERN REPUBLICAN PARTY
After Barry Goldwater was crushed in the 1964 presidential elections Richard Nixon, coming off his own defeat in 1960 (where, yes, JFK won with corrupt political bosses), he saw a political opening in the south. Disgruntled southerners opposed federal legislation, and argued for state’s rights, because they were opposed to emerging civil rights legislation (and other liberal ideas like women’s rights, labor rights, etc.) that would undo almost a century of Jim Crow.

Embarking on what would become known as his “southern strategy” Nixon deliberately played to the cultural fears of the south (i.e. the dangers brought by civil rights and liberal thinkers that threaten to undermine a culture and a lifestyle) and began attracting southern democrats to the Republican Party. Southern Democrats who supported the Republican Party at this time became known as “dixiecrats,” were pandered to by Ronald Reagan in 1980, and eventually became – along with big business and, later, the religious right (another story for another day) – the base of the modern Republican Party.


MORAL OF THE STORY (again): Elements of the Democratic Party that FOX News drags through the mud were never fully embraced by Progressive Northern Democrats (i.e. its Liberal Wing), eventually abandoned the party and, perhaps more importantly, are now the base of today's Republican Party.

- Mark

OBAMA DOES WHAT DEMS WON'T?

Sen. Joe Lieberman has been joined at the hip with Sen. McCain, even becoming one of Sen. McCain’s lead attack dogs on Obama’s candidacy. But it looks like Sen. Obama is not going to put up with it much longer, and is finally confronting Lieberman. Check out what Roll Call is reporting.

… during a Senate vote Wednesday [last week], Obama dragged Lieberman by the hand to a far corner of the Senate chamber and engaged in what appeared to reporters in the gallery as an intense, three-minute conversation.

While it was unclear what the two were discussing, the body language suggested that Obama was trying to convince Lieberman of something and his stance appeared slightly intimidating.

Using forceful, but not angry, hand gestures, Obama literally backed up Lieberman against the wall, leaned in very close at times, and appeared to be trying to dominate the conversation, as the two talked over each other in a few instances.

Still, Obama and Lieberman seemed to be trying to keep the back-and-forth congenial as they both patted each other on the back during and after the exchange.
Afterwards, Obama smiled and pointed up at reporters peering over the edge of the press gallery for a better glimpse of their interaction.

Obama loyalists were quick to express their frustration with Lieberman's decision and warned that if he continues to take a lead role in attacking Obama it could complicate his professional relationship with the Caucus.

I doubt that anything is going to change. Lieberman long ago showed who he wants to be president, and could care less what the Democratic Party or Sen. Obama think. Still, this is encouraging.

- Mark

FORTY YEARS AGO TODAY ...

It was forty years ago today that Robert F. Kennedy was assassinated in Los Angeles. RFK's speech on "The Mindless Menace of Violence" is as pertinent today as it was when he gave it in 1968.



The Washington Post has reposted some of their editorial board comments on his assassination here.

- Mark

PRAISE THE LORD ... WE'RE SLIPPING IN SCIENCE

With George Bush in the White House we may lose the lead in in science and technology. Here's why ...

Many of you are familiar with the Republicans Culture Wars which contradicts many of the tenets of science and reason. It has also brought us to the point where a President's "gut" can trump evidence, and has allowed conservatives to convince themselves that it's OK to support incompetence and ineptitude in the White House because President Bush is "a Godly man." The Republicans Culture Wars have also given us perhaps America's greatest contribution to ignorance, the Creation Museum in Kentucky.

Apart from asking us to believe that dinosaurs roamed the earth as vegetarians 6,000 years ago, and that they traveled with Noah on his ark (no word on whether they ate the Unicorns), the museum is, quite simply, a national embarrassment.

The problem isn't so much the museum. It could be billed as an amusement park (and it should be). The problem is that the museums theme has been incubated in an uncritical environment. This environment is directly to blame for creating a mind-set that led America to elect a "Godly president" who also happened to fail in virtually every earthly effort he attached himself to. Not surprisingly, President Bush has been an abject failure as a president as well. Which brings me to what's happening to the heart and soul of America's economic future - science and technology.

As if President Bush's Blundering Wars Project weren't enough for one president, it is now clear that years of cutting science and technology budgets (to pay for war and tax cuts for the rich) have made an already precarious science position in the U.S. even worse.

Specifically, after securing bi-partisan support for a competitive initiative, President Bush held the line on an already bloated budget which forced Congress to cut funding for science research. President Bush then turned around and blamed Congress for funding cuts when it was his administration that agreed to increased science funding, but then held the line on about $20 billion that would have funded America's science initiatives. If you're looking for an analogy, it's like telling the kids they can have ice cream, but then deliberately leaving your wallet at home so you don't have to pay for it.

If it seems confusing, don't worry. The I'm sure this guy - who was no doubt around to see it all 6,000 years ago - can explain it all to you ...

- Mark