Seething on the Third Rock

Phantom Flight From Florida

his intriguing report told the tale of a flight out of Florida that allegedly took place on September 13, 2001--a day when all civilian air traffic in the United States was grounded. 

Is there a link between Bush authorizing flights immediately after 9/11 to help Saudi nationals flee the country and "News" Corp & Fox "News" funneling millions of dollars from Prince Alwaleed bin Talal, nephew of Saudi King Abdullah to the Republican Governor's Association?

Phantom Flight From Florida

By KATHY STEELE ksteele@tampatrib.com
Published: Oct 5, 2001 TAMPA - The twin-engine Lear jet streaked into the afternoon sky, leaving Tampa behind but revealing a glimpse of international intrigue in the aftermath of terrorist attacks on America.

The federal government says the flight never took place.

But the two armed bodyguards hired to chaperon their clients out of the state recall the 100-minute trip Sept. 13 quite vividly.

In the end, the son of a Saudi Arabian prince who is the nation's defense minister and the son of a Saudi army commander made it to Kentucky for a waiting 747 and a trip to their homeland.

The hastily arranged flight out of Raytheon Airport Services, a private hangar on the outskirts of Tampa International Airport, was anything but ordinary. It lifted off the tarmac at a time when every private plane in the nation was grounded due to safety concerns after the Sept. 11 attacks.

Local and federal authorities will say little about the flight.

``It's not in our logs ... it didn't occur,'' said Chris White, spokesman for the Federal Aviation Administration's regional office in Atlanta.

For private investigators Dan Grossi and Manuel Perez, the bodyguards on the Lear, it was a trip they can't forget.

A Special Situation Grossi said Tampa police intelligence detectives called him about 11 a.m. Sept. 13, needing help with a special situation: They had been watching three young Saudi men - at least one a student at the University of Tampa - at their south Tampa apartment, and the trio was scared and wanted to go home.

Jim Harf, director of UT's international programs, confirmed one of them is the son of Prince Sultan, the defense minister.

University spokesman Grant Donaldson refused to provide details. Perez said he understood the men arrived in Tampa three weeks earlier to receive tutoring in English.

The Tampa detectives guarding the men were ordered to stay in Tampa by Police Chief Bennie Holder, so Grossi was offered the job of escorting the trio to Lexington, Ky., where the prince's relatives were buying race horses.

Lexington police Lt. Mark Barnard confirmed a Saudi relative had asked for help in getting protection for the men in Tampa. Two off-duty detectives were assigned. Tampa police records list Sultan bin Fahad as the one requesting the security detail.

But Tampa's official assistance ended at Raytheon's airport terminal.

``There was a perceived threat, and the family of the person wanted him home right away,'' said Tampa police Sgt. John Solomon. ``The job lasted about five hours. It was handled very quickly.''

`Out Of A Tom Clancy Movie' Meanwhile, Grossi had put Perez on alert and went home to wait. Both men provide security for the National Football League at Raymond James Stadium. Grossi, who retired from the Tampa Police Department in August, has worked in internal affairs and homicide. Perez, who has his own investigative company in St. Petersburg, worked for the FBI for more than 29 years and has experience in counterterrorism and as a bomb technician.

At 2:30 p.m., Grossi got the call from the police department.

``They said it was happening,'' Grossi said. ``This was out of a Tom Clancy movie.''

Grossi said he was told the clearance came from the White House after the prince's family pulled a favor from former President Bush. Prince Sultan, the Saudi defense minister, was part of the coalition that fought the Persian Gulf War in 1991.

To the United States, Saudi Arabia is a key component in the emerging coalition of nations in the war on terrorism.

The White House referred questions on the trip to the State Department, which denied involvement, and the National Security Council, which did not return messages.

At Raytheon airport, Grossi met with the Tampa detectives who had brought the young men. The Lear's pilot, who had flown in from Fort Lauderdale, introduced himself.

By 4:30 p.m., the twin-engine, eight-passenger jet lifted off.

``They [the trio] looked like typical college students with knapsacks,'' Perez said. ``I didn't realize the prince's son was onboard until we landed.''

Grossi and Perez recalled the strange feeling of flying in the near-empty sky, knowing of the ban on private flights.

``My first reaction to the pilot was, `We're not going to get shot down are we?' '' Perez said.

Grossi said he spoke only briefly to the prince's son.

``He wanted to leave,'' Grossi said. But he also said he would like to return, Grossi said.

In less than two hours, the Lear landed at the Blue Grass airport, where the passengers were met by Saudi security officials, Grossi said. He and Perez saw several private 747s parked on the tarmac with foreign flags on the tails and Arabic lettering on the sides.

Within the hour, the Lear took off again for Tampa with Grossi and Perez. Neither would say how much they were paid.

But the Lear was not headed back to Fort Lauderdale, Grossi said the pilot told him. It was bound for New Orleans to pick up someone who needed a ride to New York.

Grossi said he doesn't recall the name of the aircraft company providing the jet.

``Who knows who they really were,'' Grossi said. ``It was certainly somebody important to obtain clearance to fly.''

Reporter Kathy Steele can be reached at (813) 885-5437. Reporters Brenna Kelly and Elizabeth Lee Brown contributed to this report. They can be reached at (813) 885-5437.

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2012-07-24 Me, Mitt Romney and Sally Ride

Here is a brief list of some of the “special rights” currently being denied to homosexual Americans almost all of which are also denied to unmarried heterosexuals:

- Immigration Rights for Foreign Spouses
- Assumption of a Partner's Pension
- Automatic Inheritance
- Bereavement Leave
- Burial Determination
- Child Custody
- Divorce Protections
- Domestic Violence Protections
- Exemption from Property Tax on a Partner’s Death
- Joint Adoption and Foster Care
- Joint Bankruptcy
- Joint Insurance
- Joint Parenting (Insurance Coverage, School Records)
- Joint Tax Treatment
- Medical Decisions on Behalf of a Partner
- Sick Leave to Care for a Partner
- Social Security Survivor Benefits
- Various Property Rights
- Visitation of a Partner in a Hospital or Prison
- Visitation of a Partner’s Children
- Wrongful Death Benefits

I include the Equal Protection Clause of the 14th Amendment to the U.S. Constitution for your review.

Amendment XIV.

Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

2010-01-05 Fools Gold: Why We Could Never Return to the Gold Standard

I think people love to look for silver bullets (pardon the pun)—simple policy prescriptions which have only benefits and no drawbacks. And the reality is that if any such policies were actually even remotely viable the “System” would inevitably begin to incorporate them. The fact is that no major economies in the world use a gold or other precious metal standard and for good reason. The primary reason is because precious metals do not exist in the quantities required to offer a serious alternative to paper currencies for the volume of financial transactions that occur on the planet on a daily basis. There is NOT enough gold on the planet.

There is about 1 trillion US dollar bills in circulation. The US annual economic activity (gross domestic product) is around 15 trillion US dollars. That’s right, the vast majority of all US economic activity is electronic. Even though printing money is relatively cheap there is simply no way to print enough money to make every transaction paper even if practically speaking, you desired to do so. Can you imagine buying a $1M house with $100 bills?

The amount of gold in the world is finite. Production simply has not grown in relation to the size of the world's economies. The annual worldwide production of gold is something like 50 million troy ounces per year. At recent record prices that is only 50 billion US dollars. The volume of new gold worldwide is no where near enough to support even US annual economic growth.

Now compare both of these numbers (US dollar bills and annual gold production) with annual worldwide economic growth. It is complicated to make an apples and oranges comparison but the world probably produces between 50 to 75 trillion USD per year in economic growth. I think you get the picture. There is neither enough gold nor paper currency on the planet to come anywhere close to accommodating global economic activity.

So then what if all nations returning to the Gold Standard drove up the price of gold to accommodate increased demand? In that event, then the value of gold has become less determined by its inherent store of value (e.g., use in manufacturing etc. which would soon be suspended due to the increased price) and more based on its arbitrary use as a currency. In effect, the new price would essentially render gold as a proxy for a very highly denominated paper currency. No you couldn't just print more of it, but you could revalue the gold you had by simply increasing demand. This demand would most often take the form of electronic gold-denominated loans. In effect we would be trading imaginary gold credits. And the primary determination of price would be based on your ability to repay. This is exactly the same situation we have today in US dollars.

And of course the Federal Reserve could issue trillions of dollars in gold-denominated bonds the same as they issue trillions of dollars in dollar-denominated bonds. This would be something similar to what is happening in Greece today where it is racking up otherwise sound Euro-denominated debt. If you want to reduce the country's ability to borrow money, switching to the gold standard seems a fairly convoluted way to accomplish that assuming that such was desirable in the first place--better to just pass new regulations for the Federal Reserve. In practice, countries should borrow money when times are tough as Obama in now and save money in times of plenty as the Republicans failed to do during the Bush II years.

2009-07-13 Border Madness: US Customs and Borders Responds

Please read the following response from Homeland Security to my note Border Madness from 06/16.  I am very interested in those of you who are heterosexual unmarried couples and your experience with US customs.  Thanks in advance.

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Timothy J Goyer, Executive Director, Admissibility and Passenger Programs
Office of Field Operations
U.S. Customs and Border Protection
U.S. Department of Homeland Security
Washington, D.C. 20029

Dear Mr. Ferguson,

Thank you for your correspondence, which we received on June 25, 2009, wherein you expressed concern that U.S. Customs and Border Protection (CBP) does not allow you and your common law partner to file a joint Customs Declaration (CBP Form 6059B) when applying for admission into the United States.

Please know that CBP understands your concerns in this matter.  However, pursuant to Title 19, Section 148.34(b) of the U.S. Code of Federal Regulations, a joint declaration may be files only by persons who (1) are related by blood, marriage, or adoption, (2) have lived together in one household at their last permanent residence; and (3) intend to live together in one household after arrival in the United States.

As a law enforcement agency, CBP must enforce the statues as passed by the United States Congress.  With regard to marriage, CBP is bound to observe the Defense of Marriage Act (Public Law No. 104-199), which was signed into law on September 21, 1996, and defines marriage as a legal union exclusively between one man and one woman.  Any change to this statue would require action on the part of the United States Congress.

I appreciate your interest in U.S. Customs and Border Protection.  If we may offer further assistance, please contact Mr. Mark Hill, a member of my staff, at (202) 344-2652.

Sincerely,

Timothy J Goyer

2009-06-16 Border Madness

Frederick E. Ferguson
Toronto, ON  CANADA

U.S. Customs and Border Protection
Director, Preclearance Operations
1300 Pennsylvania Ave, Northwest
Room 5.5B
Washington, DC 20229

Dear Director,

I am a US Citizen and Canadian Permanent Resident living for nearly 12 years with my Common Law Partner and Canadian Permanent Resident in Toronto.  On June 12, 2009 Toronto Preclearance CBP officials refused to allow us to enter the U.S. with a single customs claim form despite the fact that 1) we live at the same address and 2) we packed out suitcases together.  As a result I spent nearly an hour waiting while he was sent to secondary processing.  We could not communicate by cell phone and CBP officers had to go back and forth communicating with both of us in order to eventually resolve the impasse.  I am sure you can see how inefficient and frustrating this situation was for all concerned.

I am aware that the Defense of Marriage act prohibits the U.S. government from recognizing same-sex marriages. Regardless of the merits of that law, I do not believe the law compels the result that happened in this case. Had we been allowed to enter the U.S. with our Canadian marital status recognized on the customs form, we would have been entitled to none of the unique legal rights or privileges in the U.S. that a married couple would receive. Nothing legal in the sense that any statute would have been affected had our declaration that we are in fact a Canadian married couple been honored. In addition, it seems to be counter to the mission of CBP to not seek to identify those passengers who are 1) traveling together, 2) living together and 3) sharing luggage.

I do not understand why it should be American policy to insist that people seeking to enter our country as tourists from another country repudiate their own country's rules and engage in what are to them wholly inaccurate self descriptions and in a way that they understandably find to be degrading and may in fact undermine American national security. Forcing people to deny their own important values when this has no security bearing serves no public purpose. Whatever its motivation, treating people in this way inflicts tremendous emotional pain for no reason other than to express disapproval of their marital status be they same-sex or unmarried heterosexuals. It further undermines the primary mission of the CBP which should be to guard and protect the American people and ensure the security of its borders.  I urge you to reverse this policy.

Sincerely,

Frederick E. Ferguson

2009-05-14 An Honest Difference of Opinion

I was just reflecting on some of the comments about the Miss USA fiasco and same sex marriage.  Obviously, the whole controversy was fabricated by Donald Trump to shore up interest in the flagging pageant and along with it sponsor revenue. I have been told that my outrage is misplaced since Carrie Prejean (Miss California) was just expressing an "honest difference of opinion".  Well I certainly agree that everyone has a right to their opinions.  And I could have certainly understood if she had said that while she believes that homosexuality is a sin that she does not advocate discriminating against gays in state or federal law.  Her opinions should clearly stop where my individual rights begin. And no one should be able to vote against equal rights for someone else in a referendum like Proposition 8.  It's simply un-American.  It occurs to me that the anti-miscegenation statues were not struck down nationally by the US Supreme Court (in Loving v. Virginia) until June 12, 1967.  I was just 3 months old.  Who knows how long that "honest difference opinion" of average Americans on the issue of interracial marriage would have stood without the moral leadership of an "activist" Supreme Court.  Let's hope Obama does appoint an empathetic and activist justice who can provide a counterbalance to some of the lesser instincts still prevalent in our society today.

 

Above: The plaintiffs, Mildred and Richard Loving

2009-03-18 The Look of Money : One Trillion Dollars

n light of the current economic collapse and multi-trillion dollar bailouts of financial institutions I found this depiction of what one trillion dollars ($1,000,000,000) actually looks like.  (Click on the images to enlarge.)

Above: One hundred dollars ($100)

Above: Ten thousand hundred dollars ($10,000)

Above: One million dollars ($1,000,000)

Above: One hundred million dollars ($100,000,0000)

Above: One billion dollars ($1,000,000,000)

Above: One trillion dollars ($1,000,000,000,000)

2009-02-14 Liberalism vs. Chauvinism: Round I

Main Entry: lib·er·al

Pronunciation: \ˈli-b(ə-)rəl\

1. one who is open-minded, not bound by authoritarianism or strict in the observance of orthodox, traditional, or established forms or ways
2. a passionate advocate or adherent to individual rights and freedoms
3. one with ideals of the individual especially economic freedom, greater individual participation in government, and constitutional, political, and administrative reforms designed to secure these objectives.

Main Entry: chau·vin·ist
Pronunciation: \ˈshō-və-nist\

1. one who demonstrates excessive or blind patriotism
2. having undue partiality or attachment to a group or place to which one belongs or has belonged

ell I for one am proud of my late in life conversion to classic liberalism.  Of course these days the word 'liberal' has been hijacked by the pit bulls of the far right and redefined as something less than redeeming.  That is unfortunate as it reflects a wanton mischaracterization of the rise of western capitalism, democracy and religious freedom in general.  I suppose some would prefer a sort of aristocratic theocracy akin to Saudi Arabia instead.  One never really knows.

Frequently I am stopped and asked if I would consider returning to the U.S. now that Barack Obama (and the icons of evil for wing nuts, Nancy Pelosi and Harry Reid) are in control.  Sadly, I have to say, "No."  I would never consider living as a second class citizen in my own country.  The United States is still a country where the Federal government actively discriminates against homosexuals under the Defense of Marriage Act and Don't Ask, Don't Tell policies.  Several U.S. states have recently sanctioned referendums against same-sex marriage and in favor of protections for employers and private landlords who choose to discriminate on the basis of sexual orientation.  There is certainly nothing liberal about that.  I could never expose my family to the capricious injustice of such home grown American chauvinism.  The electoral groundswell that swept Barack Obama into office in states like California also rolled back state protections for homosexual families under Proposition 8.  The battle for liberalism in America is far from over.

In fact, I think it is fair to say that liberalism in America has really struggled over the past 20 years in the face of the once powerful coalition of country club Republicans with religious right extremists.  Before Obama, Liberals were paralyzed by their academic "soft" banners in the face of a GOP parade of pseudo-Christian populism (i.e., less than 50% of Americans believe in human evolution). Liberals are resurgent now only due to the self-destruction of the GOP as it lapsed into an ever tighter death embrace of anti-intellectualism, rejecting the arts, humanities, science and both Keynesian and Monetarist economic principles.  Republican chauvinists have literally choked on their own brand of ideological Koolaid--greed (i.e., tax cuts and welfare for the rich) laced with militarism, simplistic patriotism and cultural intolerance.  In the process they have alienated huge swaths of the American electorate as well as virtually all of our international allies.  Let's be honest.  There is literally no way you could have an African American named 'Barack Hussein Obama' as President of the United States today without the apocalypse that was 8 years of George W. Bush.

And yet I am hopeful--hopeful that Americans will once again demonstrate the optimism, innovation, civility, generosity, tolerance and indomitable human spirit that have allowed us as a people to move beyond guarantees of freedom and justice only for a narrow group of slave and property owning aristocratic white males to a broad based social economic democracy with protections for the poor, workers, ethnic and religious minorities, women, indigenous people and almost everyone who has come to call these shores "home".  Let us remember that the job is not done.  And until America is truly free, I will not rest, I will not sit down and I will not be silent.

2009-01-03 Palestine vs. Israel in Toronto: Round I

 anadian policed separated pro-Palestinian and pro-Israeli protesters in Toronto today. The Palestine House organized a crowd of around two thousand protesters at Yonge-Dundas Square faced off by a smaller group of people organized by the Jewish Defense League across the street at Eton Centre. The Palestinian supporters were taking part in a march first to the Israeli consulate on Bloor Street and eventually to the U.S. consulate on University Avenue later in the afternoon.

 

Click on the images to enlarge.  I have posted more photos on facebook --> here.

2008-12-23 No Change

 

2008-12-19 Bush Makes a Final Stand for Homophobia

Alone among major Western nations, the United States has refused to sign a declaration presented Thursday at the United Nations calling for worldwide decriminalization of homosexuality.  More than 70 UN members outlaw homosexuality, and in several of them homosexual acts can be punished by execution.

Co-sponsored by France and the Netherlands, the declaration was signed by all 27 European Union members, as well as Japan, Australia, Mexico and three dozen other countries. There was broad opposition from Muslim nations, and the United States refused to sign, indicating that some parts of the declaration raised legal questions that needed further review.

According to some of the declaration's backers, U.S. officials expressed concern in private talks that some parts of the declaration might be problematic in committing the federal government on matters that fall under state jurisdiction. In numerous states, landlords and private employers are allowed to discriminate on the basis of sexual orientation; on the federal level, gays are not allowed to serve openly in the military.  More --> here.

2008-Nov-08 "I Have a Dream", Dr. Martin Luther King, Jr.

Above: Dr. Martin Luther King, Jr. speaks on the steps of the Lincoln Memorial during the March on Washington for Jobs and Freedom in on August 28, 1963.  Watch the video --> "I Have a Dream" video on YouTube.

Above: President Elect Barack Obama at Grant Park, Chicago, IL, November 4, 2008.  Watch --> here.

2008-11-05 We are Free at Last!

2008-10-20 Here's to the End of Greed, Fear, Hate and War

 

Today I took a personal stand to end greed, fear, hate and war. May my descendants know that I took responsibility for what others do in my name.

2007-03-04 Bush, Economics 101 and the Prestige

I am no economist but I find it extremely curious that we are hearing all these claims that nobody in the Administration, the Federal Reserve or Wall Street saw the economic meltdown coming.  I was perusing my blog and found this post from March 2007.

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Every great magic trick consists of three acts. The first act is called "The Pledge"; The magician shows you something ordinary, but of course, it probably isn't. The second act is called "The Turn"--the magician makes his ordinary something do something extraordinary. Now if you're looking for the secret you won't find it.  That's why there's a third act called, "The Prestige".  This is the part with the twists and turns, where lives hang in the balance, and you see something shocking you've never seen before.   

- Michael Caine as Cutter in The Prestige (2006).

saw the Prestige on DVD this week.  It is quite a film, much better than The Illusionist (2006) within the nascent genre of magic thriller I believe. 

Watching the film, for some reason I started to note several parallels to the current trends on global financial markets.  Volatility has recently spiked in equities, foreign exchange and commodities.  And like an ancient soothsayer, I have been trying to detect the trend lines that will portend our economic future.

We all know that the US continues to run massive budget deficits, trade deficits and current account deficits.  The current account consists of the balance of imports and exports in goods and services as well as transfer payments such as net investment income.  Meanwhile, negative real interest rates (baseline rates of interest minus inflation) introduced after 9-11 and only recently raised have helped to trigger a rapid runup in prices in key housing markets.  Basically, the price of risk has collapsed while the prices of assets (including commodities) purchased with debt have spiraled ever higher chased by ever cheaper money in over heating economies.

- Michael Caine as Cutter in The Prestige (2006).

saw the Prestige on DVD this week.  It is quite a film, much better than The Illusionist (2006) within the nascent genre of magic thriller I believe. 

Watching the film, for some reason I started to note several parallels to the current trends on global financial markets.  Volatility has recently spiked in equities, foreign exchange and commodities.  And like an ancient soothsayer, I have been trying to detect the trend lines that will portend our economic future.

We all know that the US continues to run massive budget deficits, trade deficits and current account deficits.  The current account consists of the balance of imports and exports in goods and services as well as transfer payments such as net investment income.  Meanwhile, negative real interest rates (baseline rates of interest minus inflation) introduced after 9-11 and only recently raised have helped to trigger a rapid runup in prices in key housing markets.  Basically, the price of risk has collapsed while the prices of assets (including commodities) purchased with debt have spiraled ever higher chased by ever cheaper money in over heating economies.

2008-10-10 Connecticut Supreme Court Overturns Gay Marriage Ban

he Connecticut Supreme Court overturned a ban on same-sex marriage on Friday in a victory for gay-rights advocates that will allow couples to marry in the New England state.

Writing for the majority in the 4-3 decision, Justice Richard Palmer found:

We conclude that, in light of the history of pernicious discrimination faced by gay men and lesbians, and because the institution of marriage carries with it a status and significance that the newly created classification of civil unions does not embody, the segregation of heterosexual and homosexual couples into separate institutions constitutes a cognizable harm.

2008-10-07 Bob Barr on Same Sex Marriage

Bob Barr on marriage from www.bobbarr2008.com

Regardless of whether one supports or opposes same sex marriage, the decision to recognize such unions ought to be made by each state rather than imposed as a one-size-fits-all mandate by the federal government. Any federal laws that prevent states from determining their own standards for marriage should be repealed; the federal government should not define marriage, whether by statute or constitutional amendment.

Well I suppose Mr. Barr would also favor letting states decide whether they should discriminate against women, minorities or the handicapped or perhaps he just thinks it's okay for states to discriminate against gays.  In any event, his philosophy would leave in place all of Federal immigration laws that discriminate against me and keep me and my family out of the country right now.  Strict constructionism of a constitution that was written 200 years ago fully supporting the enslavement of Africans and the disenfranchisement of women is either seriously disingenuous or otherwise out of touch with the progress of civil society that has occurred ever since.

2008-10-04 Republicans, the Cult of Individual Interest and the Threat to Capitalism

he events of the past year have been breathtaking.  We now have Republican John McCain swinging wildly from long held tenants of deregulation to a new found populist montra of regulation (at least in finance).  Meanwhile the capital markets and businesses large and small across the country and around the world wait anxiously to see how all of the volatility in both the financial and political marketplaces will affect them.  What is really going on here?

The now infamous Republican icon Ronald Reagan ushered in an era of deregulation and tax cuts with unrestrained government spending particularly on favored conservative welfare recipients in the defense industry and commercial agriculture.  The idea often muted was to load up the government with so much debt and such limited revenues that there would simply be no money left over to spend on society in general.  Individuals with means would somehow take care of themselves and we could ignore everyone else in good conscience as deadbeats.  This idea has now been utterly discredited by 8 years of the failed policies of the Bush administration.  But I think it would be easy to take away the wrong lessons from the experience. 

The real issue is that Republicans either don't understand or don't care to engage the complexities in the balance of incentives and disincentives in the proper functioning of capitalism.  Businesses may say that they don't like taxes or government regulations but what they really find hard to cope with is uncertainty.  It is arguable that cutting taxes aids the individual shareholder.  But if that leaves government unable to fund public education or health care in the end the same businesses and shareholders will have a hard time finding and retaining competent workers in order to grow and prosper.  Similarly deregulation is appealing up until it stimulates underpriced environmental degradation and unrestrained risk taking that not only threatens long-term earnings but even the on going viability of businesses and whole sectors as presently seen on Wall Street.

While the profit motive is an important incentive to business, the fact is that taxes and regulations are also necessary components of the societal framework for capitalism to grow and flourish.  American capital, hard work and ingenuity have proven time and time again to respond to this framework for the benefit of investors, competitors, workers and the environment alike. 

The Republican Party lost its way when it decided for short-term political advantage under the chimera of small government to take a sledge hammer to this proven framework by attempting to remove the disincentives of taxes and regulations.  We were told that by focusing purely on the needs of individual investors that somehow the markets and society would take care of themselves.  Again American capital, hard work and ingenuity responded to this policy redirection but with a plethora of unintended consequences.  The immediate result was moral hazard and an orgy of risk taking unrestrained by even the slightest fear of regulatory accountability.  In some sense the $700B bailout has even validated this belief by ultimately rescuing many of the American and global investors who were invited to the party.  And now as the Federal Reserve wrecklessly ramps up the printing presses; society, investors, workers, taxpayers and the environment alike will all suffer grievously as a direct result. 

Capitalism isn't threatened by sensible regulatory, tax and social spending policies that reflect the common stake that we all have in markets and society as a whole.  On the contrary, it is precisely the absence of these considerations in a misguided indulgence of individual self interest that has proven disastrous for all concerned.

2008-10-01 When Will We Learn?

2008-09-30 When Madmen Reign

By Bob Herbert, The New York Times, September 29, 2008 [1]

I’m not holding my breath, but I would like to see the self-proclaimed conservative, small government, anti-regulation, free-market zealots step up and take responsibility for wrecking the American economy and bringing about the worst financial crisis since the Depression.

2008-09-26 Radical Right Talk Radio Tears Itself Apart Over Bailout

isclaimer: On the record, I have opposed the bailout.  Simply enough trying to fix prices in the housing market at foreclosure levels simply won't prevent the economic depression that is approaching our shores.  $700B is just a grain of sand in front of that tsunami.  Of course I am also opposed to robbing poor Peter to pay rich Paul but that is a separate issue since I don't think the con can work anyway.  But I am really getting a kick out of listening to the right wing radical extremists on talk radio tear each other apart over this.  It's like shining a spot light into a closet full of cockroaches.

 

Bill O'Reilly ->  http://gawker.com/5055097/bill-oreilly-loses-it-over-bailout

Mark Levin -> http://hotair.com/archives/2008/09/25/counterstrike-mark-levin-goes-nuclear-on-oreilly-over-bailout-rant/

2008-09-23 America is One Big Fat Subprime Mortgage

he events of the past week are truly difficult to put into perspective.  While the content of the proposed bailout of the American financial services sector are still being debated, pundits are already talking about hundreds of billions or even trillions of dollars of private debt being transferred magically into the ether of the US government and the American taxpayers.  What does all of this really mean? 

Well let's first keep in mind that the US government doesn't have any money to pay for this bailout.  As of September 2008, the total U.S. federal debt was approximately $9.7 trillion and even before the current bailout the U.S. Federal Budget Deficit for 2008 was estimated to add another $400B.   Some say the bailout may push this years deficit to over $1 trillion.  And remember we are not even counting the costs of the wars in Afghanistan and Iraq or unfunded commitments to the Social Security Administration or Medicare which some estimate will contribute another $47 trillion dollars in mandatory obligations to future U.S. taxpayers.  Currently $261 billion dollars of the $2.66 trillion dollar US budget goes solely to interest accrued on the existing national debt. And today the Bush Administration is asking once again for Congress to amend the debt ceiling to allow the debt to grow to $11.3 trillion. [1]

The bottom line is that we are headed back to dollar devaluation after a brief respite over the past couple of weeks as global capital ran for temporary shelter in dollar denominated assets.  And as I have long predicted on this blog inflationary dollar devaluation is unavoidable in a country where neither the government nor the people are willing to live within their means.  The price of oil and everything else that is priced in dollars will explode and interest rates will rise pushing the country back into the stagflation of the 1970's.

And what about the bailout?  Forget about it.  If the politicians actually managed to agree on some final terms the bailout is nonetheless doomed to fail at the primary order of the day--stabilizing home prices.  This is because ex-Goldman Master of the Universe and currently Treasury Secretary Czar Henry Paulson is proposing to price the government's mortgage purchases through a reverse auction.  In effect, banks will compete with each other to take the biggest haircut on their toxic mortgage portfolios in order to get the government to pick them first.  Your foreclosed neighbor's reverse auction price will in effect become the market price for all properties in your neighborhood.  If you haven't defaulted on your underwater mortgage yet  you may as well.

Why are they doing this you may ask?  I think it all goes back to that burgeoning $9 trillion dollar debt already on the books.  The government appears to be terrified that if it appears we plan to screw all those Japanese, Chinese, Arab and UK investors out of billions of dollars in toxic Mortgage Backed Securities then maybe, just maybe they might become more reluctant to keep refinancing the still growing US National Debt.  And who could blame them?  I can't think of a bigger subprime mortgage than the one your government has taken out on you and your children's future.

2008-09-19 This is What I Believe

his is what I believe.  The President can't fix the serious and complex problems that afflict America. Only the American people can do that.  So as a candidate for President either you can inspire the people to get involved and debate and decide how to make the hard choices for a better future.  Or you can suggest simplistic palliatives that merely serve the purpose of perpetuating your self-serving interest in the status quo.  Obama has inspired me to donate hundreds of dollars to his campaign and I have been a life-long Republican.

2008-09-18 Further Evidence of McCain's Senility

ppearing on the Miami-based Union Radio this week, Presidential candidate McCain suggested that he may not be willing to meet with Jose Luis Zapatero, the Prime Minister of US ally and NATO member Spain. [1] It appears that either McCain is taking a much more hawkish line than even the Bush Administration or perhaps he doesn't even know who Zapatero is or that Spain is a NATO ally.  Folks this is scary.  Listen to the whole interview --> here.

QUESTION: Senator, finally, let's talk about Spain. If you're elected president, would you be willing to invite President Jose Luiz Rodriguez Zapatero to the White House to meet with you?

MCCAIN: I would be willing meet, uh, with those leaders who our friends [sic] and want to work with us in a cooperative fashion, and by the way, President Calderon of Mexico is fighting a very very tough fight against the drug cartels. I'm glad we are now working in cooperation with the Mexican government on the Merida plan. I intend to move forward with relations, and invite as many of them as I can, those leaders, to the White House.

QUESTION: Would that invitation be extended to the Zapatero government, to the president itself?

MCCAIN: I don't, you know, honestly I have to look at relations and the situations and the priorities, but I can assure you I will establish closer relations with our friends and I will stand up to those who want to do harm to the United States of America.

QUESTION: So you have to wait and see if he's willing to meet with you, or you'll be able to do it in the White House?

MCCAIN: Well again I don't, all I can tell you is that I have a clear record of working with leaders in the hemisphere that are friends with us, and standing up to those who are not, and that's judged on the basis of the importance of our relationship with Latin America, and the entire region.

QUESTION: Okay... what about you, I'm talking about the President of Spain?

MCCAIN: What about me what?

QUESTION: Okay... are you willing to meet with him if you are elected president?

MCCAIN: I am willing to meet with any leader who is dedicated to the same principles and philosophy that we are for human rights, democracy and freedom, and I will stand up to those that do not.

2008-09-17 Carly Fiorina on Sarah Palin's Experience

ppearing on the McGraw Milhaven Show on St. Louis KTRS Radio, Carly Fiorina, a John McCain surrogate and ex-CEO of Hewlett Packard, a major American computer company, said that Sarah Palin couldn't run HP. Of course Carly did a pretty good job of running HP into the ground all by herself.

Question:  Carly, I have a minute.  I want to ask you a question about experience--someone who has worked her way up from a secretary to run Hewlett Packard.  Does Sarah Palin--John McCain obviously believes she has the experience to become President of the United States.  Do you think she has the experience to run a major company like Hewlett Packard?

Carly Fiorina: No.  I don't.  But you know what?  That's not what she is running for.  [chuckles]

Listen on YouTube --> here.

2008-09-17 John McCain is Still Pouring the Banking Deregulation Koolaid

In financial institutions, there is no substitute for adequate capital to serve as a buffer against losses. Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital. [1]

    -- John McCain, March 25, 2008

2008-09-15 Gone With the Wind

ehman Brothers was started by three immigrant brothers in my home town Montgomery, Alabama in 1850 as a cotton trading business.  The company went bankrupt today with $613B in debt due to the greed and debt driven ponzi schemes that have replaced sound economics in this country.

1840–1859. The history of Lehman Brothers parallels the growth of the United States and its energetic drive toward prosperity and international prominence. What would evolve into a global financial entity began as a general store in the American South. Henry Lehman, an immigrant from Germany, opened his small shop in the city of Montgomery, Alabama in 1844. Six years later, he was joined by brothers Emanuel and Mayer, and they named the business Lehman Brothers.

1858. Cotton was the cash crop of the time, and the Lehmans accepted it from the local farmers as currency to settle accounts. The brothers traded the cotton for cash or merchandise, becoming brokers for buyers and sellers of the crop. In 1858, they opened an office in New York, which was the commodity trading center of the country.

Read the rest of the history on Lehman's website while you still can --> here.

1860–1869.  The Civil War disrupted the Lehmans' business. When hostilities ended, the brothers moved north and concentrated their operations in New York, where they helped establish the Cotton Exchange.

The post-war period witnessed the rapid growth of railroads, sparking the transformation of the nation from an agrarian to an industrial economy. At the time, Lehman Brothers' future merger partner, Kuhn, Loeb, was underwriting much of the financing for railroad construction.

Railroad bonds represented a significant advance in the development of capital markets. Their affordable price attracted a great number of individual investors and Lehman Brothers, recognizing a trend, expanded its commodities business to include the sale and trading of securities. The Firm also moved into the area of financial advisory, which provided the foundation for underwriting expertise.

2008-09-14 Who would you hire?

Obama:

• Occidental College - 2 years studying Politics and Public Policy
• Columbia University - B.A. Political Science with a specialization in International Relations
• Harvard Law School - Juris Doctor, Magna Cum Laude,  editor of the Harvard Law Review

Biden:

• University of Delaware - B.A. in History and a B.A. in Political Science
• Syracuse University College of Law - Juris Doctor

McCain:

• United States Naval Academy - Class rank 894 of 899

Palin:

• Hawaii Pacific University - 1 semester
• North Idaho College - 2 semesters - General Studies
• University of Idaho - 2 semesters - Journalism
• Matanuska-Susitna College - 1 semester
• University of Idaho - 3 semesters - B.A. in Journalism

2008-09-13 Greenspan Says the U.S. Can't Afford McCain's Tax Plan

Sept. 13 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the U.S. can't afford $3.3 trillion of tax cuts proposed by Republican presidential nominee John McCain without similar reductions in the federal budget.  Greenspan, a lifelong Republican and longtime friend of McCain, said on Bloomberg Television's ``Political Capital With Al Hunt'' that ``I'm not in favor of financing tax cuts with borrowed money.''
 

2008-09-10 WSJ Opinion: How to Save Detroit And $50 Billion

or a sum small compared to their revenues but large in relation to their market caps, the Detroit auto makers were all over the two conventions. Their lobbyists had something to sell -- a plea for $50 billion in federal loans. Congress practically owes us this money, Ford, GM and Chrysler argue -- because Congress slammed us with new fuel mileage mandates that will cost us $100 billion to meet.

John McCain caved. The White House is in the process of caving. Barack Obama didn't need to cave. But before rushing to pass the legislation, there's an easy way to save $50 billion or whatever part of these loans wouldn't be paid back: Just repeal the fuel economy rules.

"How to Save Detroit and $50 Billion", By HOLMAN W. JENKINS, JR, WSJ, Business World, September 10, 2008; Page A13

See all WSJ editorials and op-eds, plus video commentary, on Opinion Journal. 

2008-09-05 Republicans Are Not Better At The Economy

t is the conventional wisdom of the Red Meat crowd that Republicans are better stewards of the economy.  This assumption is apparently based on their near religious conviction in trickle down economics and the view that Republican administrations are reliably more sympathetic to big business and the rich.  In this article I show that at least as a matter of economic performance that the Republicans are no better stewards of the economy.  On the contrary, the evidence indicates slightly higher economic returns under Democratic administrations.  What wealthy Republican voters are doing of course is trying to balance their desire for personal tax cuts with the fictitious economic stewardship argument so that they can feel less guilty about their own greed.

Over the years, stock analysts have suggested that the stock market prefers Republicans in the White House.   The following table shows stock market returns under Republican and Democratic Administrations 1901 to 2004 according the Stock Trader's Almanac.

In short, a $10,000 investment compounded during Democratic presidencies since 1901 would be worth $279,705 after 48 years. The same $10,000 investment during the 56 Republican years would have been worth just $78,699.  Adjusted for inflation the difference is less significant but still favors the Dems. [1]

Well you might say maybe the Democrats spend more money in the public sector, improving economic performance in the private sector by bloating the Federal Budget Deficit.  Previously I blogged on this exact issue. [2] 

(Click on the chart above to enlarge.)

What this chart clearly shows is that whereas National Debt has continuously risen, without exception, every Republican administration since 1977 has increased the national debt as a percentage of GDP while every Democratic administration has reduced it.  For me this is a moral issue.  Borrowing from future generations to pay for the greed of the top 10% of Americans is both economically senseless and immoral.

What about overall federal spending? Growth in federal spending has averaged 6.96% under Democratic Administrations compared to 7.57% under Republicans. [3]

What about unemployment?  On the day that US unemployment hit 6.1% it is worth noting that from 1962 to 2001, unemployment averaged 5.1% under Democratic Administrations and 6.75% under Republicans. [4]

GDP Growth? GDP growth from 1962 to 2001 has averaged 3.9% under Democratic Administrations and 2.9% under Republicans. [5]

Inflation?  You guessed it.  Inflation under Democratic Administrations at 4.26% between 1962 to 2001 trailed average inflation rates under the Republicans at 4.96% [6]