Saturday, July 26, 2008


We're on vacation this week. I'll be posting again beginning Monday, August 4th. We'll be back on the air Saturday, August 9th. Here's a reminder of why we do this ...

- Mark


Here's FOX News trying to make John McCain look younger by using 8 year old footage.

- Mark

Friday, July 25, 2008


This is not new, but now it's official - FOX News is the Bush administration's mouthpiece. Here's former Bush White House spokesperson Scott McClellan's in his own words ...

Several points were made in this clip.

1. There's a difference between using "friendly" reporters and columnists and having an entire network doing your bidding. FOX does the bidding of the Republican Party and Bush's White House.

2. Don't lie. As Rachel Maddow from Air America points out, if you're slanted acknowledge it (as Air America does). And for Pete's sake, don't post "Fair and Balanced" when you know it's a lie.

3. Don't make up commentary as if you came up with new and "objective" information on your own. As Rachel Maddow points out, "If you get a statement from the White House say [We] got a statement from the White House."

Finally, Rachel Maddow makes it clear that using FOX News like this is blatant propaganda, and against the law ... Not that this matters to the Bush administration.

- Mark


Former Labor Secretary Robert Reich has a couple of things to say about the state of our nation's economy. In a few words, things aren't going to get any better any time soon. Why? Because ...

The heart of the matter isn't the collapse in housing prices or even the frenetic rise in oil and food prices. These are contributing to the mess but they are not creating it directly. The basic reality is this: For most Americans, earnings have not kept up with the cost of living. This is not a new phenomenon but it has finally caught up with the pocketbooks of average people. If you look at the earnings of non-government workers, especially the hourly workers who comprise 80 percent of the workforce, you'll find they are barely higher than they were in the mid-1970s, adjusted for inflation. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. Per-person productivity has grown considerably since then, but most Americans have not reaped the benefits of those productivity gains. They've gone largely to the top.

Inequality on this scale is bad for many reasons but it is also bad for the economy. The wealthy devote a smaller percentage of their earnings to buying things than the rest of us because, after all, they’re rich. They already have most of what they want. Instead of buying, the very wealthy are more likely to invest their earnings wherever around the world they can get the highest return.
With this Reich tells us two things. First, growing inequality is the product of stagnant wages for the middle class. Second, all Bush's tax cuts did was to provide the wealthy with more money to invest in the market.

This helps us understand why we are seeing record debt among America's middle class. We've had to borrow and work more to stay afloat. It also explains increased wealth concentration in America. Asset inflation induced by more money chasing investments (which was also given a boost by Greenspan's cheap money program).

Hang on to your seats. With globalization and a backlash against unions, whoever is the next president is going to have one heck of a hole to dig America's middle class out of.

- Mark

Thursday, July 24, 2008


It looks like Barack Obama was a hit. The UK's had this to say:

If the intended message was to show American voters that he could restore the tarnished image of the US abroad, then the rally - the only such event in his overseas tour - succeeded.

You can watch Obama's entire speech in Berlin by clicking here.

- Mark


It's not enough that Condoleeza Rice issued a memo ordering U.S. overseas missions to offer limited assitance to visiting Senators Barack Obama, Chuck Hagel, and Jack Reed on the eve of their departure to the Middle East (because it wasn't official enough). Now the State Department is telling U.S. Embassy officials that they cannot attend Barack Obama's speech today in Berlin.

Their rationale? They've labeled it a "partisan political activity."

This, coming from the same group that used the U.S. Navy to pull their "MISSION ACCOMPLISHED" stunt ... from the same group that used the United States attorney's office to pursue political indictments against democrats - and then fired those who wouldn't go along ... from the same group used the War on Terror as a political bludgeon to scare America into voting republican ... from the same group that used federal funds to reward their religious supporters with "faith-based" funding ....

As if destroying the economy, undermining our prestige abroad, and leaving the next president with two war failures and trillions more in debt wasn't enough. President Bush seems bent on insuring his legacy as the most shallow and petty president this nation has ever known.

- Mark

Wednesday, July 23, 2008


Going into Iraq wasn't his fault. It was bad intelligence ... Katrina wasn't his fault. Who could have seen levees breaking? ... Sky high oil prices? Not his fault either ... Now Bush is blaming the economy on Wall Street.

After asking those present to turn off the cameras at a fundraiser in Houston President Bush blamed the problems in the economy on Wall Street. "There's no question about it. Wall Street got drunk ... now it's got a hangover."

If Wall Street got drunk, Bush would be the first one to know. He was the one pouring the drinks ... "Here, have another tax break, you can never have too much of my 'No Tax Rotgut." Now, with the economy staving off disaster with Fed-induced cheap money, Bush wants to offer another stimulus plan ... you know, because the first one worked out so well.

No only did Bush pour the drinks that got Wall Street drunk, but he's not even trying to take the keys away. In fact, with his "make my tax cuts permanent" plan he's pushing "one last drink ... for the road."

The problem is that when everyone wakes up it's the American taxpayer who will pick up the tab for Bush's Drunks of Wall Street.

- Mark


With all of John McCain's whining about The Surge, I think it's important to remember that The Surge was not responsible for the decline in violence in Iraq. As I posted back in March the decline in violence is a product of four developments.

1. Moqtada al-Sadr's August 2007 cease-fire.

2. The Anbar Awakening, Sept. 2006 (Sunni's say no to Al Qaeda).

3. The physical separation of Shi'a and Sunnis right before The Surge.

4. The Low-Hanging Fruit of Death are gone (Shi'a & Sunnis move out of old "integrated" neighborhoods by August 2007).
To be sure, The Surge helped solidify the gains that would come from these developments. But this makes The Surge a "supporting" rather than determining factor for Iraq's decline in violence.

Still, John McCain seems to think that supporting The Surge is a sign of good judgment on his part (but curiously says little about his support for going into Iraq in the first place). But his worst gaffe yesterday was making the claim that The Surge made the Anbar Awakening possible. Huh? Doesn't McCain know how to read a calendar (we know he can't read a map)?

And foreign policy is supposed to be his strong point.

Fortunately MSNBC has the goods on McCain's time-line blunder.

So let's be clear here. Supporting The Surge does not make you a military genius, nor does it make you presidential.

It only means you're George Bush's lapdog.

- Mark

Tuesday, July 22, 2008


I can't imagine that McCain's team had anything to do with this video (as suggested at the end), but there are reports that he's a bit "frustrated" with the reception and coverage Obama's been receiving overseas. In any case, it's kind of an amusing clip.

- Mark

UPDATE: I stand corrected. I saw this on the network news earlier this evening. It is from McCain's camp. Incredible. So I guess blatant jealousy and whining are the new standard for president.


Terrorists ... homosexual lifestyles ... choice ... taxes ... communists ... illegal immigrants, etc. Of all the things republicans fear, perhaps their biggest fear is a government that works. After walking us through the thinking that compels people to think like a republican, Markos at Dailykos explains the importance of government incompetence (like the Bush administration's Katrina response) to the republican's electoral success.

... Because Republicans have convinced people that government can't make a difference in their lives, can't solve their intractable problems, hence the only thing that matters are divisive social issues. The demands that government be ineffective has been a planned hallmark of the Bush administration. You don't put a horse lawyer in charge of FEMA if you expect the agency to actually be effective in its mission. So as far as conservative ideology was concerned, Katrina was a resounding success.

This ineffectiveness is centerpiece in conservative self-preservation. If government becomes more effective and works for people, then it could prove devastating to conservatives.
We're then pointed to William Kristol's 1993 memo to republicans in Congress who were preparing to battle Clinton's health care proposal. In it Kristol argues that ...

... congressional Republicans should work to 'kill' — not amend — the Clinton plan because it presents a real danger to the Republican future: Its passage will give the Democrats a lock on the crucial middle-class vote and revive the reputation of the party.
More afraid of losing votes then good governance, Kristol effectively was saying that a republican majority is more important to republicans than a successful health care plan in America.

And these guys claim to put America first?

- Mark


It looks like the Bush administration is pushing hard to get Congress to support Bush's bailout of Fannie Mae and Freddie Mac. He's got the Federal Reserve inspecting their books, from which they will reveal ... well, whatever the Bush administration wants them to reveal.

Seriously, there's no secret to what the Fed's inspectors are going to find. Fannie and Freddie are deep in debt. They owe $1.5 trillion. They "own or guarantee more than $5 trillion in mortgages" - which may not be saying much given the state of many of those mortgages (see previous post).

And that's that, so lend them some money.

For those of you who are unsure why any of this is important, consider this. Fannie Mae and Freddie Mac are government-chartered, but privately held, companies that purchase mortgages. Together they own half of America's mortgages. By purchasing mortgages from the mortgage industry Fanny Mae and Freddie Mac help pump money back into the industry so that mortgage companies can loan more money for housing purchases.

The arrangement is supposed to be a win-win situation for both consumers and the industry. The problem is Fannie and Freddie are so big that if they go under it is widely suspected that mortgage lending in this country will come to a virtual standstill.

And that's the rosy scenario.

Problems for the mortgage industry began when they started relaxing standards with "No Doc" loans, NINJA (no income, no job, no assets) loans, and the Pick Your Payment plans (noted in the previous post) at the same time that Alan Greenspan lowered interest rates. And, in a brilliant stroke of genius, Fannie Mae and Freddie Mac kept on purchasing these and other "innovative" loans.

But here's the funny part.

With so many potentially bad loans on the books, the Bush administration is arguing that the bailout is necessary because, well, Fannie Mae and Freddie Mac don't really need the money. Huh? Here's Treasury Secretary Paulson's rationale for the bailout:

The more flexibility we have on the credit facility, the more confidence you have in the market and the greater protection to the taxpayer because the less likely it will be used.
Seriously, Secretary Paulson is arguing that Congress should provide the administration with "open-ended authority" to make investments and loans to the two giant companies because the Bush administration wants to send a strong signal to the markets that they have plenty of financial muscle behind them.

He'd be better off telling the truth. The Bush administration doesn't want the economy collapsing on his watch.

Incredibly enough, Paulson added that the American taxpayer shouldn't be worried because both firms have "strong collateral" to back what the government makes available. And that "strong collateral"? One has to assume it's all the mortgages they own.

So this is what we have. The Bush administration wants to make about $25 billion available to two private firms, who are sitting on a pile of mortgages that may be toxic and ready tank. And it's because they want to send a strong signal to markets.

Hey, I have an idea. Why not let them go under. This will send a better signal: Don't make stupid business decisions, and expect the American Taxpayer to bail you out.

- Mark

P.S. I understand that letting Fannie and Freddie go under is not responsible, and probably even dangerous. However, if the federal government is going to provide the confidence that market players clearly cannot, we need to start looking at new regulations, including those listed in the Robert Reich post listed below.


Charlotte-based Wachovia Corp., the nation's fourth largest bank, announced that it lost $8.9 billion in the second quarter of this year. It will cut 6,350 jobs in response to mortgage-related losses.

Wachovia is pointing to problems caused by its California affiliate, Golden West Financial Corp., which it purchased in 2006. Golden West is being hit hard by their once highly touted "Pick a Payment" loan option, which let customers pay less-than-full interest payments on new loans. These mortgages were issued to new borrowers with shaky credit and, understandably, are pushing default rates up. These type of "innovative" loans are one of the keys to understanding why the credit industry finds itself in so much trouble.

But there is some good news here. Someone is finally accepting responsibility.

Wachovia Chairman Lanty Smith issued a statement saying, "These bottom-line results are disappointing and unacceptable." He added, "While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility."

I could be wrong, but I suspect the "performance" he's referring to involves the team that recommended purchasing Golden West for $25 billion in 2006.

Regardless, in a "Don't Blame Me" culture embraced by George Bush, Alan Greenspan, and industry executives, Lanty Smith's comments are a breath of fresh air.

- Mark

Monday, July 21, 2008


Here's Barack Obama, with Gen. Petraeus, Ambassador Crocker, and President Karzai in Afghanistan.

- Mark


On the evening before Barack Obama traveled to the Middle East Sec. of State Condoleeza Rice issued a memo instructing U.S. overseas missions to provide only "minimal support" to foreign visits made by presidential candidates. "It is imperative that, in implementing these various requirements, we treat both major presidential candidates evenhandedly," said Rice, in her cable.

What a joke.

Senator McCain has traveled to Europe, the Middle East, and Colombia over the past months, yet the State Department did not issue any special instructions. The rationale? McCain was leading an official congressional delegation. Huh?

Apparently when you're traveling with Senators Chuck Hagel (R-Neb.) and Jack Reed (D-RI) you're only doing tourism stuff. Here's a quote from their joint statement of their trip.

We're talking to our military and diplomatic leadership, and to the leaders of Afghanistan, about whether we have the right strategy and the right resources to defeat the Taliban and al Qaeda, and to support lasting stability. Our message to the Afghan government is this: we want a strong partnership based on "more for more" - more resources from the United States and NATO, and more action from the Afghan government to improve the lives of the Afghan people.
This sounds pretty official to me. In fact, Chuck Hagel's website makes it clear that it was an official visit.

Rice's timing and her failure to issue anything like this when McCain was overseas demonstrates, once again, how petty and political this adminstration can be.

- Mark

Sunday, July 20, 2008


There's an excellent article in today's NY Times that discusses the "great divide" between bankers and borrowers in America.

The article points to two developments that are contributing to this divide: (1) Borrowers who are in trouble on their mortgages are offered little or no relief from their government, while (2) Banks and the executives who ran them into the ground are quickly deemed worthy of taxpayer bailouts. More specifically, the American taxpayer is being ...

... asked to stand by with money to inject into Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants, should they need propping up if loan losses balloon.

The message in this disconnect couldn’t be clearer. Borrowers should shoulder the consequences of signing loan documents they didn’t understand, but with punishing terms that quickly made the loans unaffordable. But for executives and directors of the big companies who financed these loans, who grew wealthy while the getting was good, the taxpayer is coming to the rescue.
So, this is what we're moving to in America: The homeowner-taxpayer has to suck it up and bear personal responsibility for their actions. The "too big to fail" crowd, who signed off on the shady loans and contracts, gets the government to save them from their poor decisions. And the homeowner-taxpayer pays for it at both ends.

There's something about personal responsibility that's not right here.

- Mark

Saturday, July 19, 2008


From the LA Times ...

While in Iraq Barack Obama received an "unexpected boost" from Iraqi President Nouri al-Maliki. He told the German magazine Der Spiegel that "he looked favorably on Obama's call for a 16-month timetable for withdrawing most U.S. forces from Iraq."

Unfazed by Obama's winning strategy for Iraq - and as expected - Sen. John McCain whined and attacked Obama's foreign policy credentials and judgment.

Unfortunately for McCain it looks like President Bush has been swayed by Obama too. It turns out that President Bush and the Iraqi leader have reached an agreement on the need to set a "time horizon" for withdrawing U.S. troops.

- Mark


Apparently Chad Vegas believes there is "a superior law" of the land in this country. Fast forward to 7:20 for the exact quote.

Look, I have no problem with using religion as a spiritual and moral guide for your personal life. But once one religious leader comes out and suggests that there is a "superior law" to the Constitution the doors are busted wide open for other (non-Christian) religious leaders to do likewise.

- Mark


Former Labor Secretary Robert Reich has an excellent idea for ending "creeping socialism" for the private sector that's occurring during the Bush administration. Responding to the bailouts proposed for Fannie Mae, Freddie Mac, and IndyMac, Reich suggests the following.

... When taxpayers insure a giant entity against loss -- as we now are with Freddie, Fannie, and Wall Street investment banks -- those entities must agree that:

(1) for the duration of the bailout, their top executives cannot receive total annual compensation higher than that received by the President of the United States, and

(2) the government gets five percent of their current valuation as shares of stock (roughly representing the benefit to their shareholders of the federal insurance) -- so that if and when the entities become profitable again, taxpayers are compensated for the risk they've taken on.
I would probably add another ...

(3) Money, salaries, and bonuses above and beyond what the President of the U.S. makes, from the 3 years prior to the bailout, must be paid back by the top executives.

My thinking is this: If the executives ran the company into the ground, Why should they be allowed to be compensated like corporate champions for doing so?

- Mark

P.S. The president makes $400,000 per year.

Friday, July 18, 2008


This doesn't seem right to me.

The Air Force's top leadership sought for three years to spend counterterrorism funds on "comfort capsules" to be installed on military planes that ferry senior officers and civilian leaders around the world, with at least four top generals involved in design details such as the color of the capsules' carpet and leather chairs ... Air Force officials say the government needs the new capsules to ensure that leaders can talk, work and rest comfortably in the air.
The idea of making our "civilian leaders" more comfortable as they look into the wars that they expose our military guys to is just wrong. I say let them sweat. And with lower level GIs on the ground being "stop-lossed" into 2 or 3 tours of duty, I have no problem with military generals having to "rought it out" now and then.

With record budget deficits spending $16.2 million on "comfort capsules" is just nuts.

You can read the story here, in the Washington Post (there may be a registration wall).

- Mark

Thursday, July 17, 2008


Did you ever want to see Paris (France, not Hilton) up close and personal?

Check out this site ... ... and be sure to click on the red boxes as they pop up.

- Mark

Wednesday, July 16, 2008


President Bush spoke yesterday at an unscheduled press conference. His hand was forced by increasingly bad news coming out of markets, and declining consumer confidence. How bad is it, you ask? Bad enough for President Bush to say with a straight face that providing bailout money to Freddie Mac, Fannie Mae, and IndyMac did not constitute a break from free market principles.

So let’s take a look at what President Bush increasingly believes a free market economy looks like.

GOVERNMENT INSPIRED CONFIDENCE … After telling us throughout his increasingly torturous tenure as president that the government is the problem President Bush told America yesterday they didn’t have to worry about losing their money to the problems that plague America’s largest banking institutions, like IndyMac. Why? Because the financial institutions adhere to sound business practices? Nope. Americans can remain confident about their money because “their deposits are protected by our government …”

GOVERNMENT SUBSIDIZED INVESTMENTS … And what about President Bush’s assertion that poor market performance and incompetence would eventually lead market players to discipline bad behavior? Forget about it. The president wants Congress to give the Treasury Department the authority to lend money to Freddy Mac and Fannie Mae which, together, hold or guarantee almost half of America’s $12 trillion mortgage debt. That’s the easy part. Then he wants to bailout private stock holders by having the American taxpayer purchase their collapsing stocks (presumably at “fair market” price).

FAVORABLE LEGISLATION … Then we have Sen. Richard C. Shelby (R-AL) claiming that there is a silver-lining because the banking system entered “into this episode extremely well-capitalized” and “extremely profitable.” Nowhere did Shelby mention that part of the reason for their healthy portfolios is that Congress long ago wrote the banking industry very favorable credit card and bankruptcy legislation that has worked to keep consumers on a debt-laden treadmill. And let’s not forget how abolishing the Depression Era Glass-Steagall Act in 1999 allowed private investors to get into the insurance and housing industries.

GOVERNMENT PROVIDED CAPITAL … Oh, and let’s not forget that the federal government made over $100 billion in credit and loans available to our nation’s financial institutions over six months ago, which they drew upon (at rock bottom interest rates), but neglected to lend out.

Let’s recap. When things go bad, the government (1) provides the security, (2) subsidizes investments, (3) will write favorable legislation that generates and props up profits, and then (4) provides capital to troubled financial institutions.

Somehow “market socialism” doesn't seem strong enough. With market bailouts, and the fact that President (Comrade?) Bush seems bent on tearing down our Constitution (with his FISA legislation), he and his republican friends in Congress seem hell-bent on creating another U.S.S.R. that only they benefit from … The United States of Socialist Republicans.

Bring your own Vodka. But don't worry. In Bush's U.S.S.R. the government will eventually subsidize the purchase.

- Mark


In what can only be seen as a stinging slap at the ill-conceived policies and hubris of the neo-cons who came to power with George W. Bush, Defense Secretary Robert M. Gates said that the State Department should take the lead in U.S. engagements with other countries. Warning of "creeping militarization" in the U.S. Gates - a former CIA director - said that civilian agencies should have more funding because ...

... the most persistent and potentially dangerous threats will come less from emerging ambitious states, than from failing ones that cannot meet the basic needs -- much less the aspirations -- of their people.
With more and more states unable to meet basic needs, Gates warned against allowing the military take the lead in distributing U.S. aid and rebuilding countries around the world (as is the case in Afghanistan and Iraq), cautioning that "We cannot kill or capture our way to victory" in the war on terror.

For those of you who read this blog regularly, you know that Gates is advocating that the U.S. go back to building it's "soft power" - which is the capacity to attract others to your side. Soft Power is not a novel concept. After winning WWII we were able to convince many nations to side with us because other nations saw that ideas and moral conviction matter in the U.S. And the democratic ideal was just one part of this equation.

Many nations saw how the U.S. acted during WWII and understood what it meant for humanity. For example, while the U.S. won kudos for fighting and defeating fascist and dictatorial powers, the world also saw a big difference between how the Japanese and Germans treated their POWs. They also saw a big difference between the emerging police state in Russia, and the open society that existed for most Americans in the U.S.

Rather than taking out our guns and telling the world to follow our lead, the U.S. benefitted from the success of its ideas and the power of example.

To be sure, a strong military helped us make our points. It still does. But the ability to attract others to your position means you don't have to force your will at the point of a bayonet. This often leads to acquiesence, and even subordination. The 20th Century became the American Century because of this.

- Mark

Saturday, July 12, 2008


From time to time I have posted sections from my forthcoming book, The Roots of Markets and Wealth: The Indispensable Role of the State in Making Markets Work. With all the ugliness going on this past week (month, year, under Bush ...) I thought I would post the section on Reaganomics, which started us on the deficit-spending orgy and deregulation binge that's brought us to this point.

In this section I argue that what Conservatives claim happened during the Reagan Revolution is a big illusion (perhaps bigger than President Bush's "Mission Accomplished" claim). The section below is from Chapter 10, "An Empire of Debt."

Upon entering the White House in 2001, the center-piece of George W. Bush’s economic program was rooted in Ronald Reagan’s supply-side economic policies. President Bush reasoned that by putting more money in the hands the nation’s wealthy that investments would increase, which would create more jobs and generate more tax revenue.

Insisting that the Reagan administration’s policies got the economy moving the Bush administration promised that just as Reagan saved the American economy from stagflation and misery that his tax-cutting, favor-the-rich, plan would reinvigorate the American economy. While the rhetoric was strong, a careful read of the facts illustrates that the Bush administration misread both Reagan’s accomplishments and history.

To understand what President Bush was trying to emulate in 2001 it’s necessary to recall the conditions that Ronald Reagan inherited, and supposedly tamed while in office. With inflation (12-13%) and interest rates (20%) reaching new heights in the late 1970s, and unemployment on the rise (around 6%), both confidence and investment were lagging in America. The result was a new term in the field of economics and a fresh challenge in American politics: Stagflation (recession, low productivity, and inflation). By the time Ronald Reagan left office inflation and interest rates were back down to single digits, while unemployment hovered around a more acceptable 5 percent.

Because of these developments, conservatives and ill-informed talk show hosts like to claim that a combination of tax cuts, deregulation, bureaucratic reform, and assorted incentives created the environment for investment that energized the economy. Indeed, according to revisionist historians the Reagan administration was able to get America moving by reducing the size of government, cutting government spending, and getting “government off of our backs.” This would be an interesting by-line except for one thing – it’s not true.

First, it’s interesting to note that job creation under Ronald Reagan never matched the levels achieved under Jimmy Carter, while the size of the federal government’s workforce grew from 2.8 million employees to 3.1 million. In fact, the number of federally subsidized programs under Ronald Reagan was scaled back only to 1970-1975 levels, which helps explain why the Reagan administration hardly dented the size of government.

Acknowledging this, in 1985 Fortune magazine wrote that the “budget is way out of balance because of a little-known fact: real federal spending, adjusted for inflation, has climbed even faster under President Reagan than it did in the Carter years.” In the end, in spite of what the supply-side supporters promised, the national debt almost tripled from approximately $930 Billion to $2.7 Trillion under Reagan.

So what created the conditions for the American economy to stabilize in the late 1980s, and take off during the 1990s? Primarily three factors: all of which undermine the Bush administration’s second-coming-of-Reagan claim (they also pretty much debunk the “first-coming-of-Reagan” claim too).

On the inflation front, we find that OPEC – an oligopoly that depends on cooperation to sustain itself – found its solidarity undermined by late 1981. With the beginning of the Iran-Iraq War, which Saddam Hussein initiated in part because the ayatollahs were fomenting fanatic revolution in Iraq, black markets in the oil industry grew as cheating on the part of the two combatants began (they needed to fund their war efforts).

In addition, conservation efforts, alternative energy sources, new oil discoveries, among other developments, helped to stabilize oil prices. But these efforts were initiated by President Ford and, to a larger degree, by President Carter. Still, the reality was OPEC unity – the primary catalyst behind price hikes – had unraveled, while government-inspired conservation efforts paid off. As the price for oil dropped, so did inflationary pressures.

We also need to recognize a second force on the inflation front. Recall the strategy employed to control inflation was taken up by Federal Reserve Chairman Paul Volcker. In spite of pressure from the Reagan administration, who initially wanted to expand the money supply, most economists agree that by sticking to his guns, and maintaining a stringent monetary policy, Mr. Volcker helped to slay the inflation dragon. Critical here is that Mr. Volcker was appointed by Jimmy Carter, and not Ronald Reagan.

Finally, the Reagan administration’s deficit spending broke all previous records. In fact, his administration spent twice as much as the previous 39 presidential administrations combined, in the process using taxpayer funded debt to deposit hundreds of billions of dollars into that national and global economy each year. This government induced “pump priming” was an artificial stimulus – what economists call a “Keynesian stimulus” – and was hardly a vote of confidence for laissez-faire economics.

In sum, cracks in OPEC unity, conservation efforts, a tight monetary policy, and a state-led stimulus to our larger economy speak more to serendipity and Keynesianism than to the invisible hands of the market that President Reagan spoke about. At the end of the day, a realistic review of some of the “cause and effect” facts suggest that the Reagan administration’s policies were, at best, a supporting rather than leading factor in reversing the dismal economic environment of the 1970s.

- Mark

P.S. And for those of you wondering, the publisher liked the first draft of my manuscript. We're now working on small edits and the bibliographic drudgery. The book will be out (hopefully) this fall, or winter.

Friday, July 11, 2008


And republicans wonder why they're caricatured as nuckledragging neanderthals.

It's really pretty simple, if your a John McCain Republican: "Viagra good. Insurance cover. Birth control bad. Insurance no cover."

For some reason I feel like eating raw meat.

- Mark


Speaking of the McCain vote, I'm wondering how Republican Conservatives are going to spin this article on John McCain's infidelity, from the LA Times. This shouldn't be an issue for republicans (or anyone else) except for the fact that (1) republicans live and breathe family values (or at least claim to) and (2) John McCain's public statements, and his book, don't mesh with his signed court documents.

My bet is that the Republican Good News Fairy will help them ignore the topic. It's much too inconvenient.

- Mark

P.S. Click on the Tom Tomorrow comic if you can't read the captions.

Thursday, July 10, 2008


Robert Scheer nails it when it comes to understanding how out of touch our increasingly militarized culture has become. Looking at the growing relationship between China and Taiwan, he sees a new "consumer revolution" fostering civility between these two Chinese speaking nations.

You can't trust the Chinese. I don't care if you're talking about those communists on the mainland or the other guys on Taiwan — they just won't follow the war-games script that our weapons hawks had counted on ... No longer pretending to be enemies, where they engaged in angry rhetoric while doing much business together on the side, a public love affair has broken out across the Straits of Formosa. On Friday, scheduled direct flights began between the mainland and its breakaway island for the first time in 60 years, and the invasion of tourists clicking their cameras was on.
After citing growing investments and academic exchanges between the two nations, Scheer points out that the leader of the "old nationalist Kuomintang Party, which won the recent Taiwan election, quickly went to the mainland to pledge the dawn of a new era."

The political descendants of Chairman Mao and Chiang Kai-shek holding hands. Can you imagine?

The benefits of these developments are obvious. That is, except to American militarists, who believe pretend patriotism and more weapons make the nation ... and that expanded military budgets make the politician.

That peace has broken out is a nightmare scenario for America's military hawks in desperate need of an excuse for soaking up more than half of the U.S. government's discretionary budget. There was real panic when Mikhail Gorbachev formally ended the Cold War and George H.W. Bush announced a 30 percent cut in military spending in 1992. Then came the 9-11 terrorist attacks and the wildest peacetime spending spree in history. No one in power noticed that the expensive weapons were designed to defeat an enemy that no longer existed.
The result of 9/11 and the rise of American Militarism is not simply tied to America spending money like drunken sailors, or to the fact that the Bush administration wants to bury America's Constitution. Rather, as we strain to pay for weapons we can't afford, we are now faced with very real threats to America's economic well-being and our standard of living.

Still, we're told we need to break the bank every time the militarists soil themselves, which seems to be every time they see a shadow.

And when Iran or the bearded guys hiding out in Pakastani caves don't work it's all too easy to break out the China Card.

Fomenting fear of China is essential to making the case for the whole range of high-tech war toys that no longer have a legitimate military purpose. But it's a sick joke. We are paying the Chinese the interest on the money we borrow from them to build very expensive weapons to counter weapons the Chinese have no intention of building.
But we still need to prepare, no doubt, because of what the Chinese might do, in ten years ... or so. From Scheer's column:

The latest word from the Pentagon is that "the intelligence community estimates China will take until the end of this decade or later to produce a modern force capable of defeating a moderate-size adversary."
Let's see, if we're already spending more than ten times what the Chinese are spending on their military, in ten years we should be 100 times more powerful than China - like we are today - right? I feel muscular already.

At that time, I'm sure, we can tell the Chinese we aren't going to pay them what we owe them (hey, if George W. Bush can threaten future Social Security recipients with non-payment, we can certainly do it to the Chinese). That way they won't be able to afford the weapons we think they're thinking of building. Under this scenario, we remain at the top of the world (kind of) ... even deeper in debt, no longer masters of our own destiny.

Higher inflation, increased taxes, and dependence on the financial kindness of others may be the price we have to pay, but at least we'll have the most expensive military money can buy - even if we can't find and kill a sick man in a Pakastani cave with it.

George Washington and Dwight Eisenhower would be proud.

- Mark

P.S. At the center of the top photo is Hu Jintao, general secretary of China's Communist Party. He's shaking hands with the Chairman of Taiwan's Kuomintang Party, Lien Chan, April 28, 2007, in Beijing, China. Lien Chan was leading Taiwanese delegation to the the third Cross-Taiwan Strait Economic, Trade and Cultural Forum since 2005.

Wednesday, July 9, 2008


Remember when the Bush administration tried to alter, then stalled, and finally released (under court order) it's climate report four years late? The report concluded - to absolutely no one's surprise - that climate change (a.k.a. "global warming") is occurring.

Today, after the Bush administration pushed the richest nations to ignore the poor and developing nations of the world, the LA Times is reporting that the most advanced nations called on the rapidly developing nations to ... drum roll please ... cut their emissions output because of "climate change" that is occurring.

For their part the richest nations acknowledged that they also had to pursue "a long-term target for emissions reductions" ... and promised to think about cutting their emission levels in half, some time in the future ... if the poorer nations did so first.

In effect, with the Bush administration leading the way, the G-8 nations have simply agreed to kick the can down the road to the next generation.

President Bush called the G-8 summit "a success." Those in the reality based world called it what it really was: Yet another example of failed leadership on the part of the United States under President Bush.

- Mark

Tuesday, July 8, 2008


Sen. Jim Webb sponsored and then pushed through a new GI Bill that John McCain opposed, and then missed votes on. His rationale for opposing the GI Bill? If our military personnel had the opportunity to go to college they would not stay in the military. That's politico-speak for, "We can't get people to sign up for President Bush's Blundering Wars Project, so we don't want to give the soldiers we have incentives to leave ..."

Watch McCain dodge his record, and refuse to answer for other votes (on veteran's health care) in this clip ...

One other point. It seems that his hand-picked audience were more than happy to clap for McCain when he stumbled through and then dodged, rather than answer, the questions. Pathetic.

Do the principles of democracy and accountability mean anything to these people?

- Mark

Monday, July 7, 2008


Thanks to DailyKos for the tip on this great site and this story ...

It looks like yet another level in America’s Real Estate lending house of cards is getting ready to take a dive. It turns out that “Alt-A” lender IndyMac is going under.

Without getting into the details “Alt-A” simply means that IndyMac lent to customers who were not the worst borrowers (i.e. the sub-prime category), but were not the best borrowers (i.e. with great credit scores). Put another way, IndyMac niether dined in the good restaurants (prime lenders), nor were forced to live like seagulls at the city dump (sub-prime lenders). They were good Dumpster Divers (I know, poor analogy, but you get the picture).

But why were they such good Dumpster Divers? While many of the poor performing loans in the sub-prime market had Wall Street and private investors backing their loans, IndyMac was able to get the federal government to help them fund or underwrite their contracts.

How much, you ask? By March 31, 2008 the federal government was technically (if not legally) on the books for 94% of IndyMac’s liabilities.

Executives at IndyMac see the looming disaster and are circling the wagons, effectively saying “Don’t blame us … what’s happening lies with forces outside of our control” (p. 4)

IndyMac is currently being sued, with one lawsuit quoting from a Feb. 2006 IndyMac document advertising that IndyMac “will accept” as “Verification of Employment for a full documentation loan” contracts with “no pay stubs or W2s” (p.8).

Hmmm ... the plot thickens.

MORAL OF THE STORY (from the CRL report): “IndyMac’s story offers a body of evidence that discredits the notion that the mortgage crisis was caused by rogue brokers or by borrowers who lied to bankroll the purchase of bigger homes or investment properties. CRL’s investigation indicates many of the problems at IndyMac were spawned by top-down pressures that valued short-term growth over protecting borrowers and shareholders’ interests over the long haul.

Put another way, greed and stupidity were endemic in the industry. See it all here, or here (PDF) in the Center for Responsible Lending’s report.

- Mark

Friday, July 4, 2008


The Executive Editor of the Bakersfield Californian, Mike Jenner, has agreed to come on the program tomorrow. He will be on during our first hour.

While I have spoken with several friends and colleagues about issues and questions they would like Mr. Jenner to address, Mr. Jenner has made it clear that he will field questions on air. The call in number is 631-1230.

- Mark

Thursday, July 3, 2008


Speaking of militarism in America, it’s time we begin looking into what the mind-set has brought us ...

As Chalmers Johnson noted in The Sorrows of Empire, one of the first signs of militarism is when its proponents come to put military service and all things military above the integrity of the government structures and processes the military are supposed to protect.

In a twisted kind of “We have to burn the village in order to save it” mentality, civilians and the political classes elevate all things military above democratic processes and deliberate state functions. The ends justify the means. Worse, they come to believe they must display a “warrior’s culture” if they are to ingratiate themselves with real men of war.

This helps explain why many who have never served in the military adopt a callous and cavalier attitude toward war. Their lack of experience means they have to “out military” the military guys. This is the genesis of our modern day Chicken Hawks.

Military men, on the other hand, “pay court” to the pet schemes of the new political “warrior class” in an attempt to both promote within the system and, eventually, earn their stripes with the civilian-tied contractors.

But the real goal of many high-level military personnel is to gain access to key government positions, or to secure a new career in the defense industry. With civilians trying to find a place in the new “warrior culture”, and with military men cozying up to the new civilian political class (of Chicken Hawks), the goal is to out-do one another in preparing for constant war.

The end result – as we know all too well – is that much of America’s national security policy has centered around simply trying to scare us into believing we are under siege and need military messiahs for our salvation. Fear rather than analysis drive policy.

The proper functions and duty of government become secondary to addressing the needs of the new warrior culture, which helps to institutionalize war into our political system. Democracy is sacrificed to militarism and all things military.

The end result is a misguided and conflict-pandering need to promote wars that are not well understood by Americans (Iraq, and perhaps Iran), while former warriors are idolized for their service, prompting America’s cowering electorate into giving someone like John McCain a pass on his policy prescriptions for society (being a POW does not a president make).

America’s electorate is forced to suffer at the feet of this process, which we call militarism.

This is yet another disasterous legacy of George W. Bush, the politics of fear, and his Blundering Wars Project

- Mark

Tuesday, July 1, 2008


After my previous post, I think it's necessary we take a look at how politics, fear, and militarism can play out in any country. It's not pretty.

- Mark


Well, it looks like John McCain understands he won't be able to win the election unless he can make it look like his military service means that he's the only one who understands national security and military issues. The implication is that we all need to be afraid unless, of course, John McCain is president.

Team McCain has even taken to going after Barack Obama for what Gen. Wesley Clark said here ...

Specifically, after being asked by Bob Schieffer about Barack Obama's lack of experience because he hasn't "ridden in a fighter plane and gotten shot down ..." the McCain people got upset that Gen. Clark responded "Well I don't think riding in a fighter plane and getting shot down is a qualification to be president ..." (1:54 into the clip). I agree. has it's response to Team McCain's drama-filled indignation here ...


General Clark,

We the undersigned thank you for speaking up forcefully and honestly about what it takes to lead this nation, and the kind of judgment we must look for. You were right to say that Senator McCain has not shown good judgment, despite his extraordinary service to America. Just in the past few years:

- Senator McCain's service and experience, both as a POW and as a Senator apparently hasn't infused him with a dose of good judgment.

- Senator McCain's experience hasn't led him to realize that the war in Iraq and it's continuance has empowered and emboldened Iran, and destabilized the region.

- Senator McCain's experience hasn't caused him to recognize that we're losing ground in Afghanistan, and Osama bin Laden is still out there, plotting.

- Senator McCain's experience didn't lead him to support the 21st Century GI Bill -- he opposed it. It didn't even make him feel the need to get back to Washington to vote on this -- one of the most important veterans' bills this Congress. He twice skipped votes on the GI Bill, to fundraise.

- Senator McCain's experience didn't help him empathize with troops are overstretched and overdeployed, when he voted against the bipartisan Webb-Hagel "Dwell Time Amendment," which would have given troops as much time at home as in the field.
We all honor Senator McCain's service, as you said you do. But that does not mean that on matters of security, the military, and veterans that he is beyond reproach. Nor does it mean that his service trumps the poor judgment he has shown in some of the most important issues of our time.

Do not back down, and keep treating the American people like adults who can handle a real, honest, and blunt debate in these important times.

To sign a petition put out by some of America's Iraq/Afghanistan war veterans at, which let's Gen. Clark know Team McCain is out of touch and grasping at straws, click here.

- Mark