THE CRAZIES ... THE OBAMA HATER VERSION

In the movie The Crazies a small Iowa town is suddenly plagued by insanity (and death) after a mysterious toxin contaminates the water supply. The infected crazies are listless and engage in repetitive speech before going after the healthy members of the population. Those who are not infected are forced to defend themselves by killing their toxic neighbors and friends. It's a pretty grisly movie, but it conveys the idea of what happens when a segment of the population is contaminated, can't think straight, and then go crazy on the normal people who are left to defend the gates of civilization.

I'm inspired to bring up The Crazies because unhinged Obama haters seem to have become infected with the market virus called trickle down theory. And it has made them crazy. Worse, they are hell bent on coming after and infecting the rest of us with their failed but toxic reality. 

The fact that thirty years of trickle down economics has crashed and burned - and brought us nothing but record debt and a collapsed economy - doesn't matter to those who drink the toxic Kool-Aid created by Ronald Reagan. Living in a political bedlam only they understand, they continue to believe that the super rich need more deficit funded tax cuts, and even more deregulation.

Lately, fearful of another four years with President Obama, several of my conservative friends on Facebook seem to have taken a second dose of the trickle down toxin and gone completely bat shit crazy. Like the repetitive crazies in the movie, in drone-like fashion they repeat the same Fox News, Rush Limbaugh, et al. inspired story lines over and over. 

From placing the blame on President Obama for the budget mess, to saying he has raised taxes to record levels, to arguing that he has accomplished nothing while in office, the arguments are the same. Apart from accusing President Obama of being a "liar" because of how he broke his campaign promises, like the crazies in the movie these guys don't rest. 


It doesn't matter - as I have repeatedly pointed out to these people - that the same unfunded spending policies that President Bush put in place are still with us, dragging our economy down ... 

Seriously, it doesn't matter how much evidence that I point to, they continue to believe that the unfunded spending programs that were initiated under President Bush are President Obama's programs. Ergo, President Obama is to blame for spending more than we take in when the data tells us otherwise ...

The primary justification for blaming President Obama is pretty simple. Essentially the crazies argue that President Obama has been in office long enough, and even once had both houses of Congress under Democratic control. Because he has not fixed our economy they argue that he is to blame for the budget and financial mess left by President Bush.

This is powerful stuff. But only if you're crazy.

They don't understand that President Obama never really had both houses in Congress. Lukewarm and turncoat Democrats in the Senate (Nelson, Lieberman, etc.) regularly voted with the GOP. They also don't understand that his faux majority in the Senate was effectively lost when Senator Kennedy passed in 2009. And they sure like to ignore, in crazy-like fashion, that the GOP has pursued record breaking filibuster threats whenever President Obama proposes anything of substance. 

For the crazies in crazy land none of this matters because, well, they're crazy.

It also doesn't matter - as I predicted in January of 2009 - that the GOP effectively promised that they would not work with President Obama in 2009, and then deliberately stalled and failed to work with him after winning the House in 2010. And the proof is in the pudding. The GOP controlled house has not found the time to vote once on the president's jobs bill. But they sure have found the time to vote to repeal the Affordable Care Act 33 times, even though they know it won't pass in the Senate and that President Obama would veto the bill.

It doesn't even matter that our nation has suffered because of their crazy games. As long as President Obama looks bad the Republicans believe their immediate goal of turning him into a one term president (which is part of a larger GOP strategy) will become a reality. Deliberately going out of the way to undermine the health of our nation by going after one guy is seriously crazy (you could also make the case for sedition and treason, but that's another story for another day).

This probably explains why one of my FB friends who says that he is not a Birther went out of his way to present an entirely made up story where President Obama supposedly claimed (and then took his time taking back) that he was born in Kenya. Tell me, who does this kind of stuff?

But wait, we're not done yet. There's even more crazy out there.

The GOP likes to argue that taxes are at record high levels. They are not. In fact, corporate taxes as a percentage of revenue and GDP are lower today then at any time since the end of World War II. Seriously, they are. And, for the record, individual tax rates are at their lowest levels in 60 years. I've presented this information to the crazies many times. But like the crazies in the movie, they apparently don't read.

Since they do not read, as you can imagine, they are not even trying to do the math when it comes to the budget. One person, responding to one my op-eds in our local paper, claimed that President Bush only raised the deficit by $2 trillion dollars! Now that's some serious crazy. 

Blame shifting, congressional games, math dystopia, and deliberately sabotaging the president's agenda are all in a days work for the crazies. They don't even care to discuss the merits of President Obama's accomplishments. For them, there are none.

The only thing that's important for our Obama hating political crazies is that President Obama is discredited and made a one term president ... and that we become infected with their virus. 

- Mark 

IT'S AMATEUR HOUR AT STANDARD & POOR'S

Have you ever wondered what the difference is between systemic risk and financial risk? If you don't know, don't worry, you're not alone. Niether does Standard & Poor's.

In very simple terms, Standard & Poor's can't distinguish between political brinkmanship and the GOP's stupidity in Washington (systemic risk) and financial risk (a debtor that can't pay). What pushed the U.S. to the verge of default last week were the political games - and not the financial capacity - of Washington. Standard & Poor's doesn't understand this distinction and, to show they didn't understand it, downgraded the credit rating of the U.S.

Helping us to understand all of this in real simple terms is former Labor Secretary Robert Reich, who penned yet another excellent post on what caused markets to go nuts today. In a few words Reich points out that the Republicans used our nation's debt as an excuse to try and shrink the size of government. In the process they pushed policy goals that they can't pursue - or accomplish - on the merits of their arguments. Put more simply, the GOP's out of control political budget insanity (like Wall Street's gambling and greed) created what we call systemic risk.

It's happened before, and will happen again. Our job is not to lose our heads when it does. Standard & Poor's lost their head.

What Standard & Poor's need to understand is that the GOP's insanity is based on their knowledge that republicans can't convince Americans that they need to give up their Social Security or Medicare benefits (which they paid for). Instead, to accomplish their political goals, the GOP has decided to blackmail America. If effect they said "if you want us to raise the debt ceiling you will have to cut the size of government."

If Standard & Poor's understood this simple fact they would've been able to see that the GOP's game playing - and not America's capacity to pay - is what caused our debt ceiling crisis. It was politically manufactured. A politically astute credit rating agency would've seen this. It would've then issued an AAA rating.

Then (and this is the key point) Standard & Poor's would have explained how the GOPs indulgence of the Tea Party - and not America's ability to pay - created the mess we saw last week. They could have explained, for example:

... like Stalin or Mao in their heyday, the GOP manufactured, and then used, a crisis to try and accomplish policy goals that they can't convince middle America to back on the merits. Perhaps the worst part of this is that, like Stalin or Mao, they're doing this in an effort to create a mythical world that exists only in their crazy little minds.

Instead of distinguishing between systemic risk and financial risk Standard & Poor's went crazy, and simply downgraded America's credit. In the process S&P aided the GOP in their ridiculous goals (which include painting President Obama as a Crisis President), while giving the Tea Party crazies a pass because S&P failed to explain how the Tea Party crazies impact the process.

But wait, it gets worse.

While they won't admit it, Standard & Poor's believes that by downgrading the credit of the United States that ordinary Americans will believe they're making a professional judgment. In fact, what S&P is trying to do is make up for their incompetent grading just before the 2008 market collapse.

If you recall, before 2008 they gave mortgage backed securities (MBS), shady derivative instruments, and the eventually bankrupt Lehman Brothers AAA to A ratings. When the MBS and derivative markets crashed, and brought our economy to brink of disaster, S&P had egg on it's face. Downgrading America's credit is their incompetent way of trying to make amends. Great.

The end result is that America paid dearly for Standard & Poor's financial incompetence after 2008, and are now paying for their political incompetence with a credit downgrade that threw Wall Street into a tizzy today.

Fortunately, while Standard & Poor's told the world to be cautious when considering the purchase of U.S. Treasury Bonds (essentially IOUs issued by the U.S. government) the money world yawned (or laughed?) at S&P's political ignorance and decided to purchase U.S. Treasury Bonds anyways.

It's a mess out there. It has been for some time. Unfortunately, for some analysts, it's also amateur hour. Those analysts appear to be housed at Standard & Poor's.

- Mark

P.S. I'll post Lawrence O'Donnell's "Last Word" commentary on Standard & Poor's incompetence when I find it. He really nails the stupidity behind the downgrade.


UPDATE (8/11/11): Here's the O'Donnell clip, but be sure to take a look at this too.

UPDATE to the UPDATE: Here's the link to the S&P report which lowered the U.S. credit rating down to AA+ from AAA. While it's important to note that S&P is concerned with the Republican party refusing to raise revenues - "We have changed our assumption on this because the majority of Republican­s in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroecono­mic assumption­s in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade ...")  - S&P took "no position on the mix of spending and revenue measures that Congress and the Administra­tion might conclude is appropriat­e for putting the U.S.'s finances on a sustainabl­e footing." Put another way, it gave the Tea Party a pass, while saying very little about repealing our budget busting tax cuts. S&P can - and should - do better than this.

CLOSING PRISONS & RESPONDING TO THE CRAZIES

President Obama is closing secret prisons, related detention camps, and Guantanamo. Already the right wing crazies are running scared, arguing that the "security" we experienced under President Bush (never mind 9/11) will be compromised. This is usually followed by some bedwetting and the assertion that the "terrorists will return to the battlefield ... because they've done it before."

Two points (and this is how you answer the crazies).

RIGHT WING CRAZY: We didn't experience an attack after 9/11, so we must keep President Bush's policies in place.
RESPONSE: While there is a correlation between the sun rising and the rooster's crowing, the rooster doesn't get credit for the sun coming up.

This will no doubt be followed by the unsubstantiated claim that the terrorists will return to the battlefield, like this one.

RIGHT WING CRAZY: "Terror suspects who have been held but released from Guantanamo Bay are increasingly returning to the fight against the United States and its allies, the Pentagon said ..."
RESPONSE: Bush Department of Defense data, and their previous reports, are both contradictory and don't suport the cases cited by public officials.

Don't believe me? Here's the evidence.

- Mark

UPDATE: The Crazies will no doubt jump on this NY Times story of released Guantanamo detainee Said Ali al-Shihri joining a Yemeni al Qaeda group. Here's the problem. We released the guy to the Saudis, where al-Shihri escaped after entering a terrorist "rehabilitation" program.

As my daughter would say, "Hellooo ... we released him to the Saudis?".

Here's another issue to ponder, which wasn't mentioned in the article: Was al-Shihri tortured during interrogation? This is important to know because if he was it could mean that George Bush's tactics have created a hornet's nest for future generations to deal with.

THE GOOD, THE BAD, AND THE UGLY

On a regular basis I get comments about what I have written or said in public forums or in the media. Some of it is good. Some times it's bad for what it reveals about America's future. Other times it just makes you laugh because of what it tells us about the crazies that are out there. I especially enjoyed this diatribe directed at me after I wrote to a Tea Party crazy conservative that the "Fairytopia market world" they believe in doesn't exist.

 Mark your vast knowledge of fairies would lead one to believe that you belong to that low life, scum sucking, bottom dwelling, dingy smelling group of nefarious would be communist Marxist who are by some twisted fate, members of that disgraceful group known as the Barney Frank, act alike, Democrats. If I were you, I would hide myself in shame and ... See Morerealize you really are not American at heart or of mind. But most definitely are an accumulation from some oderferious, decayed part of the world, like the bottom of a human waste pit. Consider yourself properly vetted and cast out of membership with any real American patriot. "WE THE PEOPLE" shall overcome the likes of detrimental ilk, such as you. I will pray for you, but not very much!

I know, pretty ugly. But you have to admit, it's kind of funny. Entertaining too.

Most of the time, though, I get genuinely good comments. Yesterday, for example, I gave a talk at the university for the 60+ Club. The group is made up mostly of retirees who support the mission of the university, and attend presentations given by faculty members because they're interested in the world around them.

One of the comments yesterday dealt with the specific definition of "mark-to-market" accounting. In a few words mark-to-market accounting in our post-meltdown world allows market players to reprice collapsed financial products upward. Apparently I didn't make it clear enough that mark-to-market accounting has been turned on it's head since the bailout, and is really just another way for market players to avoid taking responsibility for the stupid decisions they made. This is one of the reasons many accountants refer to the concept as "mark-to-make-believe" (which I should have noted yesterday).

In all cases, these comments demonstrate you've got an audience that's done their homework, and makes presentations fun. This is good.

Then I get comments from people who aren't looking for clarification. Nor are they foaming at the mouth Tea Party diatribes (like from the guy mentioned above). Instead, they're ideological rants that the writer believes are bold statements of fact, when they are really little more than emotionally-charged opinions. For example, a couple of days ago I received these comments on the blog site I have for my book, The Myth of the Free Market: The Role of the State in a Capitalist Economy.

The free market did not write a 60,000+ page tax code that punishes work, rewards sloth and buys the votes of special interest groups, the government did.

The free market did not destroy our public school system and graduate (or fail to graduate) generations of civically and financially illiterate citizens, the government did.

The free market did not drive our jobs overseas and kill our entrepreneurial spirit with over-taxation, over-regulation and frivolous lawsuits, the government did.

The free market did not ban drilling for oil, vilify coal and block the building of nuclear power plants in the United States, thereby transferring hundred of billions of dollars of American wealth and many thousands of energy-industry jobs to foreign countries, the government did.

This crisis is the result of a giant social engineering experiment and vote-buying scheme gone tragically wrong.

The free market does not try to engineer society or buy votes, the government does.

The government caused this crisis, the free market did not.

The government cannot fix the crisis, the free market can.

What's clear is that - like my Tea Partying friend noted above - this individual has a utopian view of how markets work. In a few words, the state creates the conditions under which wealth is created. I can't emphasize enough how silly it is to believe that market players in a market setting without rules suddenly become virtuous and ethical. The pursuit of profit does ugly things to people who might otherwise be decent people (then again, many of them are unhinged sociopaths).

What's interesting, though, is that I shouldn't have to write any of this.

James Madison and the Founding Fathers made it clear that what was behind the activities tearing the country apart, especially after winning our independence from Britain, were the conflicts and "factions" driven by people in the pursuit of wealth. Without going into a long history lesson here (read my book), it needs to be said that our Constitution includes Art. I, Section 8 (and other sections) precisely because the Framers understood that market players don't always do the right thing, and needed guidance. Indeed, the patron saint of captalism, Adam Smith, wrote that government action to protect consumers and citizens from market players was necessary. There's a reason why he wrote this (it's tied to collusion and favorable legislation), but this post is already long enough. Click on the labels below for more.

The point is, believing in market fairytopias is intellectually lazy and, quite frankly, reveals a penchant for embracing myths that's dangerous because they work against our understanding of reality. This is bad for the country because it prevents us from developing policies that deal with real world problems.

At the end of the day, market players in the pursuit of profit don't alway do the right thing. People in the state of nature aren't angels either. Believing otherwise is sweet. But it's also delusional.

- Mark

THE REAL TRAGEDY (AND FARCE) BEHIND THE KIM DAVIS SHOW ... AND WHY AMERICA'S IN TROUBLE

The New Yorker has an interesting article suggesting that "All Scientists Should Be Militant Atheists." Drawing from the Kim Davis Show currently playing out in the national media, the article begins by asking, "To what extent should we allow people to break the law if their religious beliefs are in conflict with it?"

After getting past the extreme examples of not allowing people to behead one another, or demanding that veils be worn in public, the author, Lawrence M. Krauss, gets to what's really at stake: protecting society from fanatics and extremists of all stripes. Krauss writes:

No idea or belief should be illegal; conversely, no idea should be so sacred that it legally justifies actions that would otherwise be illegal. Davis is free to believe whatever she wants, just as the jihadist is free to believe whatever he wants; in both cases, the law constrains not what they believe but what they do.

Of course, Krauss recognizes that protecting one another from the crazies in our society isn't the only issue here. In many ways, we're having this absurd Kim Davis moment because we're slipping as a culture and society.

One one level we have people conflating Kim Davis' arrest with the arrest of civil rights activists like Martin Luther King, Jr. because of how she's standing up for her beliefs. This is absurd.

You can't be a civil rights advocate when you're trying to deny a group of people access to equal protection under the law. As comedian Larry Wilmore points out, if we're going to compare Kim Davis to anyone from the 1960s it should be former Alabama Governor George Wallace, who famously tried to keep black students out of the University of Alabama.

Another indicator of societal decline is how we've enshrined one set of religious ideas over all others, including our secular ones. Lawrence Krauss points out:

The Kim Davis controversy exists because, as a culture, we have elevated respect for religious sensibilities to an inappropriate level that makes society less free, not more. Religious liberty should mean that no set of religious ideals are treated differently from other ideals. Laws should not be enacted whose sole purpose is to denigrate them, but, by the same token, the law shouldn’t elevate them, either.

For my money I'd argue that we've become so "politically correct" that tolerance has morphed into a desultory "hands off" approach to religious beliefs - at least Christian beliefs - even if they trend towards bigotry. It's as if, in the process of trying to separate church and state, we've unwittingly created a wall that both protects and encourages religious extremism in America.

One of the reasons for this, according to Lawrence Krauss, is that scientists have backed away from their historical duty. They no longer challenge the myths and superstitions that have dominated our lives over the millennium because, in part, they don't want to break social protocols. Krauss writes that scientists should become more forceful in what they uncover, even if it offends religious sensibilities:

Five hundred years of science have liberated humanity from the shackles of enforced ignorance. We should celebrate this openly and enthusiastically, regardless of whom it may offend.

What Krauss is suggesting is that we shouldn't become intellectually lazy in the name of religious freedom, or political correctness. The reason is simple. As the scientific community has backed away from challenging ignorance and false piety the religious charlatans and carnival barkers have been emboldened.

The result is the sensibilities of the religious extremists are easily offended because their delusional agenda(s) dominate our town square. Unfortunately, the toxic stupidity building around Kim Davis' stand not only pollutes our political environment, but it's poisoning our intellectual well too (to be sure, Fox News got the ball rolling).

What's really distressing is how Americans who think they understand American history ignore that we've already had this state-religion discussion. Seriously. Over 200 years ago the Founding Fathers contemplated the very same issues.

Guess what they did?

They created a Constitution with no mention of Jesus, Christianity, or the Bible. They were creatures of the Enlightenment - which is rooted in the scientific method - and worked to create a nation that could function with diverse economic, religious, and cultural values.

This meant not elevating religion above the national ideal.

To make sure we got the point they added the First Amendment, which said there would be a separation of church and state. You could worship any religion you wanted, but not at the expense of broader societal freedoms.

As an added bonus, before the Constitution was signed a series of articles were written to explain what was in the Constitution. These article are widely considered one of America's greatest contribution to political philosophy, and are known to posterity as The Federalist Papers. Can you guess what's missing?

I'll make it simple. There's nothing in The Federalist Papers that remotely suggest our nation was founded on the principles of Christianity, Jesus, or the Bible.

So, yeah, the fact that we're having this discussion again is a tragedy.

No, scratch that. It's a farce.

The fact that we're having this discussion again, when we should have learned long ago about the dangers of trying to inject religion into our political lives, is what makes the Kim Davis Show a farce.

The smart readers understand the paraphrased quote ... and why America's in trouble.

Sigh.

- Mark

BLOWBACK & THE SORROWS OF EMPIRE ... IN REAL TIME

In a series of books that began with Blowback: The Costs and Consequences of American Empire, Chalmers Johnson warns us about the political and military challenges that would face America at the beginning of the 21st century.

Writing before 9/11, Johnson argued that the United States needed to begin the process of disengaging from many of its global commitments, or we would begin to face serious repercussions around the world - both militarily and financially.

Then 9/11 happened.

After 9/11 Johnson came out with The Sorrows of Empire: Militarism, Secrecy, and the End of the Republic, where he describes the full entrenchment of the militarists throughout the U.S. government.

The real problem is not that these militarists are military hawks, pushing for more weapon programs. They have always been around. Instead, Johnson argues, the problem is their hyped up post-9/11 influence, and their new found ability to manipulate military budgets, while classifying everything that crosses their desks as "top secret". At the end of the day, American democracy - and the promises of transparency - suffer.

Finally, Johnson came out with Nemesis: The Last Days of the American Republic (2006).

In it Johnson writes about militarism, imperial hubris, national security secrecy, secret armies, and executive arrogance that have worked to undermine the promises of the Constitution. He compares the U.S. to ancient Rome and asks why we don't (or haven't yet) learned the lessons of history.

I bring the Johnson Trilogy up because of this Washington Post article.

Drawing on information provided by Washington insiders, including a few "Super Users" who have access to the most sensitive security briefings, the Washington Post's initial report provides a stunning look at how out of control our America's militarism has become. According to the Post article, one Super User recounted how, for his initial briefing, he was escorted into a tiny, dark room, seated at a small table and told he couldn't take notes. Program after program began flashing on a screen, until he finally yelled ''Stop!" in frustration.

He simply couldn't take it all in. "I wasn't remembering any of it," he said. Among the findings include:

* Some 1,271 government organizations and 1,931 private companies work on programs related to counter terrorism, homeland security and intelligence in about 10,000 locations across the U.S.

* Nearly 1 1/2 times the number of people who live in Washington, D.C., hold top-secret security clearances.

* In the D.C. metropolitan area, 33 building complexes for top-secret intelligence work are under construction or have been built since 9/11. They occupy the equivalent of three Pentagons.

* Many security and intelligence agencies do the exact same work, creating redundancy and waste.

* 50,000 intelligence reports are issued each year--amongst 1,000 a week--that even senior officials admit cannot possibly be digested.

Whether we're facing, as Chalmers Johnson argued, the last days of the Republic, is yet to be determined. But one thing is clear. Rather than streamlining our defense priorities 9/11 has only served to privatize security, put it's users on steroids, while vastly expanding our military budgets.

How bad has it gotten? According to CIA Director Leon Panetta, the levels of spending since 9/11 are not sustainable. "Particularly with these deficits, we're going to hit the wall ..." Yet, no one can say that we're safer today than we were before 9/11. Still, the national security crazies say we need to spend more. Great.

Chalmers Johnson's discussions on blowback, secrecy & militarism, and the last days of the American Republic all seem to be wrapped up in the Post's series this week. Be sure to read it. The Washington Post will be running these articles throughout the week.

Stay tuned.

- Mark

UPDATE: Click here for additional figures, and discussion.

WIKILEAKS DID US ALL A FAVOR

This is funny. I always enjoyed how Yosemite Sam got hot and bothered over trespassers getting "footy prints" all over his desert. It's a classic. Best of all, the clip reminds me of how people are getting hot and bothered over the WikiLeaks document dump that's all over the Internet. Seriously.

Why beat up the camel on Julian Assange for dropping "footy prints" all over when there's all kinds of "footy prints" already out there?

I've been watching the WikiLeaks-National Security drama unfold for the past week and see Yosemite Sams and political theater all around. Indeed, cries of treason and terrorism are almost as absurd as are suggestions that we should consider both the death penalty and the censorship of private media groups for those who helped publish WikiLeaks' documents.

What a bunch of drama queens. Here's why.

What About Scooter Libby (and Iraq)?
Remember I. "Scooter" Libby? He was convicted of lying to conceal the involvement of the Bush White House in leaking the identity of an active CIA agent. Curiously, the same people who either gave Libby a free pass or provided propaganda cover are now suddenly concerned over national security secrets. Why is that?

And what about all the lies and corruption that led us into war in Iraq in the first place? Where's the indignation here? The last time I looked, going to war on a pack of lies has produced far more death, destruction, and debt than what WikiLeaks has done.

State Secrets Exposed? Hardly
Still, I'm particularly amused by the absurd claims of damage to our national secrets. As I pointed out months ago, starting with the cold war our nation has slowly become an overly militarized and secretive state. The events of 9/11 only made this trend worse.

How bad is it? Think about this:

* We now have over 10,000 counter terrorism, homeland security and intelligence locations across the country.

* We have over 850,000 intelligence personnel with "top secret" access.

* We also produce over 50,000 intelligence reports (no doubt all "top secret") every year.

What this means is that most of the cables that were downloaded and transferred to WikiLeaks were already accessible to around 3 million diplomats, military people, agencies, and private security companies (and their staff) at many levels. In addition, most of the stuff we've seen from WikiLeaks we've known about for years. As John Allen Paulos put it, "Something is not all that secret ... if millions of people can pull it up on their computers."

(And, besides, according to George Bush's Attorney General, Michael Mukasey, "not every wrong, or even every violation of the law, is a crime.”)

But Let's Kill the Messenger Anyways ...
Just as I'm concerned by the absurd claims of damage to our national secrets, I'm equally concerned over the equally absurd notion that killing the messenger, Julian Assange, will somehow make us safer (or send a message). Just as Yosemite Sam did himself a disservice by beating the heck out the poor camel, going after Julian Assange and WikiLeaks will not make anyone safer.

This is the 21st century. Because there are lots of "footy prints" out there we will have more WikiLeaks. What our diplomatic corps needs to keep in mind is what I tell my students - don't write or post anything that would prove embarrassing if it were put on the front page of a newspaper.

Concluding Comments
As we privatized and expanded our military apparatus the result has been that we've ended up with more and more national security crazies. Their level of importance (in their minds) is tied to the amount of top secret stuff they work with. Many of them think they're the second coming of James Bond. They're not.

With so many top secret clearances, and with so many hands and eyes in the national security pot, many of them are doing little more than looking for Boris and Natasha ...

This is why so many work to classify everything that crosses their desks as "top secret" - even when the information is run of the mill stuff that can be easily accessed on the Internet. While much of the stuff our analysts see is important, they don't want to appear insignificant by missing anything or, worse, be accused of overlooking some thing.

Put another way, our evolving cloak and dagger culture is increasingly making a mockery of national security. 

Still, we're urged to kill the messenger of leaked national security documents because the documents are considered so "top secret" that only a few million should have access to them. The reality is the WikiLeaks document dump revealed petty gossip, and proved more embarrassing than many are comfortable with. Worse, they show how we've become an overly secretive and militarized culture - which allowed us to be lied into a war of choice that we still don't know how to leave.

WikiLeaks did us all a favor by reminding us all of this.

I'm with Rep. Ron Paul on this one. If it's not WikiLeaks today, there are plenty of "footy prints" and wannabe WikiLeaks out there. I guarantee it.

- Mark

Update: This piece from Arianna Huffington argues that the WikiLeaks that were posted revealed little because they were limited and vetted by Julian Assange's group. Put another way, they provided no national security threat (unlike George Bush's wars). It also underscores my point that we live in the 21st century, and that there will be more WikiLeaks coming down the pike. Just because the U.S. gets embarrassed by inconvenient stories - many of which should not even be classified - should not be the basis for turning exposed lies into protected speech (while the truth becomes criminal). This is especially pertinent for the Obama administration, who turned its back on their opportunity to expose and prosecute extraordinary lies when they had the opportunity. At the end of the day, Huffingtonpost reminds us, we should be focusing on transparency and what the government is doing, instead of protecting the lies that make Washington insiders uncomfortable.

KRUGMAN WINS NOBEL PRIZE

Princeton economist and NY Times op-ed writer Paul Krugman has been awarded the Nobel prize in economics. While the award is based on his insights on international trade, the Nobel prize also recognizes Krugman's capacity to clarify general economic principles. Here's a partial list of the books that Krugman's written ...

Written in 1999, The Return of Depression of Depression Economics is one of the "must read" books for anyone interested in understanding the economic mess that confronts the international community.

In a few words Krugman questions whether the type of trading and market rescues that went on before 1999 is prudent and sustainable given that there is no real framework for dealing with systemic crisis. He asks the right questions - especially given what we're seeing now. Krugman makes it very clear that the conditions that existed at the domestic level in 1929 (weak regulations, market myopia, little understanding of the financial instruments, etc.) now exist at the international level. Hence the title of the book.

In The Return of Depression Economics Krugman goes through several case studies to demonstrate how the economic fault lines that existed pre-1999 pose a danger to global trade. I've used this book many times in my International Political Economy class. While the book is a bit technical in some places, it is highly accessible. I'm surprised this book hasn't been cited by pundits today. Perhaps it will now.

Another Krugman book that I like is The Great Unraveling: Losing Our Way in the New Century (2003). The book is really a collection of his essays, mostly from the NY Times. I especially like this book because it allows the reader to see how prescient Krugman has been on the economic challenges of our day.

Few recall that it was Paul Krugman, at the height of the California Blackouts, who first raised the issue of whether Enron and other energy players were deliberately gaming the system and ripping off California consumers. It turns out Krugman was right. The narrative on this rip-off was real time; the analysis alone makes the book a bargain.


Krugman's most recent book, The Conscience of a Liberal (2007), pulls his ideas together in a very readable fashion. Quite simply, Krugman proves that he is one of the best writers on the planet when it comes to explaining complex financial issues, and the challenges of our day.

In all, the Nobel Prize helps validate what Paul Krugman has been saying for years. While the right wing crazies will no doubt lament the Nobel committee's "declining standards" or refer to other "shiny spoon" nonsense, the fact is the Nobel Prize is well deserved.

Our presidential candidates, and the world, would do well to listen to what Krugman has to say about the economic issues confronting us today.

- Mark

WHAT YOU REALLY NEED TO KNOW ABOUT THE HEALTH CARE DEBATE

As promised from last night ...

Today we’ve learned that the U.S. Senate has formed a deal on health care reform. I haven’t seen what’s in the deal so I won’t comment on whether I like it or not. However, as I promised last night, I am going to present a rather quick overview that explains why we need REAL health care reform. First, the cost comparisons (links have been provided in previous posts; click on topic labels below).

ECONOMIC COST TO OUR NATION
I think one of the greatest concerns I have is what non-competition and virtual monopolies have done for private health care costs in America. Think about this: In 1970 America spent 7.2 cents of every dollar we generated on health care costs. Today we spend 17.6 cents of every dollar we earn on health care. Here are projected costs in America, starting the year 2018, if we do absolutely nothing regarding health care.

* 2018 = 20 cents of every dollar earned goes to health care.

* 2025 = 25 cents of every dollar earned goes to health care.

* 2052 = 49 cents of every dollar earned goes to health care.

Put another way, our monopolistic private system will eventually swallow our national income if we do nothing to reign in costs.

Does this have to happen? Not if we look at costs around the world, and how they achieve those costs.

COMPARATIVE COSTS
If we look elsewhere we see costs that aren’t remotely near what we spend as a nation.

* Canada   = 10 cents of every dollar earned goes to health care.

* France    = 11 cents of every franc/Euro earned …

* Germany = 10.6 cents of every mark/Euro earned …

* Japan      = 8.1 sen of every yen earned …

* UK         = 8.4 pence of every pound earned …

* Switz.    = 11 centimes out of every franc/Euro earned …

What’s worse is what we spend on administrative costs in America. The most widely accepted figures tell us that the private sector spends about 30 cents of every dollar they get in premiums on administrative costs (media, profits, bonuses, etc.). The federal government, on the other hand, spends 2 cents of their budget on administrative costs.

More recent, industry friendly, estimates point to the federal government spending 5 cents of every health care dollar on administrative costs while the private sector spends approximately 17 cents. Still, either way you slice it, health care administrative costs are at least 3 times as high in the private sector than they are in the public sector.

But, wait, it gets worse.

COMPETITIVENESS, EFFICIENCY & PERSONAL COSTS
What does health care cost our national economy in terms of competitiveness and efficiency? Think of it this way. Corporate America has to purchase health care at a price that is 30% higher than what other countries pay (see above). Want to buy a U.S. made automobile? Tack on 30% extra to cover the health care costs of each worker in America versus what Japan and Germany pay to build their automobiles.

Rising co-pays, skyrocketing premiums, denial specialists, and suddenly being dropped from coverage also work against individual security and overall economic efficiency. Simply put, when workers are forced to transfer more of what they earn to the health care industry because of the non-competitive nature of the industry workers are worse off. This not only robs consumption from other areas of the economy but it creates financial land mines for individual families beset with sudden surprises, like claim denials or being dropped from insurance rolls.

These financial land mines, in turn, have contributed to a surge in personal bankruptcies in America. More than 1.2 million bankruptcy cases are expected to be filed by the end of this year. Well over half of these are filed because of the inability to deal with the costs of catastrophic illness. Incredibly, half of catastrophic illness bankruptcies happen to families with health insurance.

Finally, while we might be able to put an accounting figure on the cost, there is no way to measure the personal and emotional costs when 44,000 Americans die from lack of health insurance in America.

Still, many on the far right will argue that quality and customer satisfaction are what separate America from the rest of the world? Let’s take a look at the claim.

NATIONAL SATISFACTION
This OECD report makes it clear that more people in the U.K., Germany, and France (among others) are happier with their overall health care system than we are here in the U.S.

Still, there’s no doubt that a good number of Americans are happy with their health care. Here’s why. What the vast majority of Americans like about their health care is really mandated and/or covered by the government. Think about the following:

* The federal government covers the elderly, our military personnel, and our military veterans through Medicare, military hospitals, and the VA.

* Private firms and employers are subsidized ($246.1 billion in 2008) by the American taxpayer so that they can provide private health insurance. Put another way, your private employer gets reimbursed by the federal government for providing “private” health insurance.

* Government regulations - and not private insurance policy - forbid private (government subsidized) employer insurance plans from discriminating against employees with pre-existing conditions.

* When we combine Medicare, our military personnel, and what the American taxpayer subsidizes for “private” sector plans we find that 60% of total health care costs are absorbed by the federal government.

* With the federal government involved in covering 60% of all national health costs one thing becomes clear: We’re already paying for a National Health program. We’re just not getting the benefits.

At the end of the day Europeans are more satisfied with their health care system than we are. And to the extent that we are happy with our health care system it’s because the federal government is managing or mandating some of the more key elements that make our nation’s health care system work. Again, we already have a national health care program. We just don’t get the benefits.

OTHER CONSIDERATIONS
In other areas that should make us reconsider why the Party of No opposes reform, we should ask the following questions …

* Why is it that 62.9% of physicians support a public option?

* Why is it that life expectancy is higher in Japan, the UK, Germany and Switzerland?

* Why is it that Portugal, Greece, and even Cuba have better infant mortality rates than we do?

Related to life expectancy and infant mortality rates, I have just one question: Where the hell are the “right to life” crazies in this debate? Just wondering ...

Look, when all is said and done, profit maximization is the primary motive for the private insurance industry. It’s that simple. This explains why the private insurance industry's primary techniques for holding down costs are: (1) practicing risk selection, (2) limiting services covered, (3) constraining payments to providers, (4) hiring & training claim denial specialists, and (5) shifting costs to patients. Improved health care is not in the mix. If this status quo continues we are all in big trouble.

We need national health care reform that brings real reform and real competition. A vibrant public option is supposed to do this ... just as public universities provide a "public option" to those who can’t or don’t want to attend private universities. I get this. Most of you get this. We’ll see over the next few days whether Congress gets it too.
 
- Mark

GREENSPAN vs. GREENSPAN CAGE MATCH ... WE LOSE

"... A New Paradigm
of Active Credit Management."

- ALAN GREENSPAN (October 5, 2004)

Translation: "I don't see no credit 
market Chernobyl-like meltdowns in America."

One of the things you get when you follow free market ideologues long enough is that their words come back to haunt them. In this case former Federal Reserve Chair (1987-2006), Alan Greenspan, claimed in 2004 that credit markets were just fine. Big private market players, rather than "over regulated" banks, were spreading money and credit around efficiently.

Private market players (our shadow banking system), Greenspan argued, know what they're doing. Even if they were funding the purchase of toxic assets, and providing easy money that helped create our housing bubble, they were the ones who were on the hook if they lost money -- so the argument went. The market not only knew best according to Greenspan but, in this case, had created a "new paradigm of active credit management."

No Chernobyl-like credit market meltdowns were on his horizon.

Then the September 2008 credit market meltdown happened. Ooops.

Mr. Greenspan spoke up again on Sunday (Aug. 1). He claimed that we should repeal President Bush's tax cuts for the rich because we can't afford them. Specifically, he said (in typical Greenspanspeak):

"We believe it is appropriate to let those tax cuts that go to the most fortunate expire,"

I have only one question. Where the hell was this Alan Greenspan when President Bush said we needed tax cuts for the rich in 2001?

If  you recall, when George W. Bush ran for president in 2000 he gained considerable support telling America that the surpluses generated during the Clinton administration was "your money." It didn't matter that we had a $5.6 trillion national debt to pay down. In his mind budget surpluses should be given back to the American taxpayer in the form of tax cuts. So, instead of paying down our national debt (where were the Tea Bag crazies then?), President Bush proposed tax cuts, most of which would go to the nation's wealthiest Americans.

As he pointed out in his book The Age of Turbulence, Greenspan supported tax cuts at the time because "chronic surpluses could be almost as destabilizing as chronic deficits." We have two problems here. First, while we had a budget surplus in 2001, we hadn't started to run "chronic" surpluses. Second, Greenspan ignored how previous Republican tax cut policies had effectively quadrupled our national debt between 1981 and 1993.

What's key here is that Alan Greenspan knew all of this. Yet he still supported tax cuts that would primarily benefit the wealthy (yes, he understood the Bush proposal) to deal with "chronic surpluses."

To be sure, Greenspan was careful to say at the time that he supported tax cuts in general, and not necessarily President Bush's tax cut proposal. But he was being politically naive, at best. More probably, as an Ayn Rand sycophant, Greenspan was using his position to help get more money into the hands of private market players. More bluntly, he was playing a parlor game and was deliberately disingenuous.

Whatever inspired him, with decades of experience in Washington, Greenspan had to know that his congressional testimony supporting tax cuts would give President Bush the political gravitas - or greenlight - he needed to ram his tax cut program through congress. Ten years later, and with an additional $5 trillion added to our national debt, Mr. Greenspan is now saying "Hey, I think we need to pay for these tax cuts."

Still, perhaps we shouldn't be so hard on Greenspan and his sudden fiscal two-step. As chair of President Reagan's National Commission on Social Security Reform (the "Greenspan Commission") Alan Greenspan supported raising social security (FICA) taxes on the middle class in 1983 to help pay for projected social security shortfalls.

Got that? To deal with looming deficits in 1983 a tax hike on middle-class America was fine. This helps explain why the payroll (FICA) tax was raised in the 1980s (yes, President Reagan raised taxes). But to deal with real deficits in 2001 ($5.6 trillion) Mr. Greenspan was fine with tax cuts, most of which would go to America's wealthiest class.

Are you kidding me? How do you go from, "Let's raise taxes on the middle class to pay for projected shortfalls" in 1983 to "In spite of an actual $5.6 trillion debt, let's take projected surpluses and use them for tax cuts, which will go primarily to the rich" in 2001?

Now, in 2010, we have Mr. Greenspan saying that we should allow tax cut legislation that benefitted primarily the richest Americans to "expire" because we can't afford them. I guess you're never wrong if you're an intellectual schizoid ...

So, which Mr. Greenspan should we go with? Mr. We-Should-Pay-Our-Bills-So-Let's-Tax-The-Middle-Class? (1983), or Mr. To-Hell-With-the-Deficits-Taxes-for-the-Rich-Are-OK-by-Me? (2001), or Mr. Ooops-Now-We-Should-Pay-Our-Bills? (2010). Will the real Mr. Greenspan please stand up. Cue the music...




For my money, we also run into problems when we sit down and do the math.

What we find is that the billion dollar surpluses, generated in part by the social security tax hike, were effectively handed over to America's wealthiest during the Bush years -- making it one of the greatest transfers of wealth in human history. No wonder the far right is afraid of discussing class warfare. They're winning, and they don't want America to find out how it happened.

Today America finds itself staring at bloated budget deficits (a product of Bush's failed policies), more than $12 trillion in debt (due to a failed trickle-down theory), and another social security hole that Republicans claim can only be fixed with more tax cuts and deregulation.

(To be sure, the vast majority of our projected social security short fall is attributed to slowing wage growth and increased inequality in America. These are two economic shifts that Greenspan's commission didn't anticipate. Then again, they probably didn't anticipate the Republican Party tearing up the post-war social contract, which helped slow wage growth and increased income gaps in America.)

In all cases, Mr. Greenspan now concedes there was a flaw in his model, and that he was shocked by the results of the casino mentality that he helped create.



Incredible. Still, the damage has been done. And Alan Greenspan was there egging it on, every step of the way.

While Greenspan 2010 seems to be channeling Greenspan 1983, the reality is Greenspan 2001-2006  -- and the policies he rubber stamped during his time at the Fed -- is emerging as the winner in this Greenspan vs. Greenspan Cage Match.

Unfortunately, that's bad news for the rest of us.

- Mark

UPDATE (12/17/12): I just found this Tom Tomorrow cartoon. It pretty much explains the post ...