California Free Press

America's Trillion Dollar War Machine and the Wall Street Bail-Out

It's not mere speculation that the US is a huge war machine that neglects the welfare of its own people. When it comes to war, no expense is spared. When it comes to funding programs to help the American people, any expense is too much. The US government is very poor when it comes to welfare in the broad sense of the word, very rich when it comes to war and occupying the world and bailing out Wall Street. With over 700 military bases abroad, there are more than 3 bases for every country in the world. Meanwhile, veterans are made to beg for their benefits and go homeless in the streets. No government official or Presidential candidate is even talking about homelessness in America which is a major and growing problem especially among the elderly and veterans. In The Three Trillion Dollar War, Joseph Stiglitz and Linda Bilmes write

The Bush Administration was wrong about the benefits of the war and it was wrong about the costs of the war. The president and his advisers expected a quick, inexpensive conflict. Instead, we have a war that is costing more than anyone could have imagined. The cost of direct US military operations - not even including long-term costs such as taking care of wounded veterans - already exceeds the cost of the 12-year war in Vietnam and is more than double the cost of the Korean War. And, even in the best case scenario, these costs are projected to be almost ten times the cost of the first Gulf War, almost a third more than the cost of the Vietnam War, and twice that of the First World War. The only war in our history which cost more was the Second World War, when 16.3 million U.S. troops fought in a campaign lasting four years, at a total cost (in 2007 dollars, after adjusting for inflation) of about $5 trillion (that's $5 million million, or £2.5 million million). With virtually the entire armed forces committed to fighting the Germans and Japanese, the cost per troop (in today's dollars) was less than $100,000 in 2007 dollars. By contrast, the Iraq war is costing upward of $400,000 per troop. Most Americans have yet to feel these costs. The price in blood has been paid by our voluntary military and by hired contractors. The price in treasure has, in a sense, been financed entirely by borrowing. Taxes have not been raised to pay for it - in fact, taxes on the rich have actually fallen. Deficit spending gives the illusion that the laws of economics can be repealed, that we can have both guns and butter. But of course the laws are not repealed. The costs of the war are real even if they have been deferred, possibly to another generation.

As Fed chairman Bernanke continues to bail out Wall Street and in the process adds hundreds of billions of dollars in liabilities to the Federal government and the American taxpayer, the US continues to increase its debts and liabilities. First, Bernanke arranged a deal for JPMorganChase to buy out Bear Stearns for $2 a share. But Bear Stearns shareholders were not happy with that so Bernanke in effect says "OK, then, how about $10 a share?" We can't have unhappy shareholders in a bankrupt company, can we?  We must do  something!

J.P. Morgan and Bear still needed the Fed's acquiescence to reopen negotiations. New York Fed President Timothy F. Geithner, with support from colleagues on the Fed Board of Governors in Washington and top officials at the Treasury Department, used that as leverage to negotiate the new deal.

The key word here is acquiescence. The Fed is acquiescing to everything in order to appease Wall Street investors, taking on even more liability in the new deal. The first deal had the fed assuming $30 billion in Bear Stearns liabilities. The second deal has it assuming everything over $1 billion. How is that a better deal for the American taxpayer? This is all a continuing and massive transfer of wealth from the taxpayer to the wealthy along with Bernanke's promise of $400 billion of liquidity to Wall Street banks. Now don't you think that the collective minds on Wall Street are going to figure out a way to cash in on all that liability? They will figure out how to work the system so as to manifest that transfer of wealth and cash in on every last dollar of the Fed's guarantees. When you add on the $160 billion stimulus package, you come up with the astonishing figure, depending on how you value the Bear Stearns liability, of around another trillion dollars for  the recent bailouts and stimuli. A few trillion here, a few trillion there ... pretty soon you're talking about real money!

From Robert Reich's blog:

So JP Morgan is raising its offer for Bear Stearns, hmm? Well, it still may be a good deal for old JP, because the worst that can happen is JP loses $1 billion. If losses turn out to be more than $1 billion, the Fed – that is, you and I and every other American taxpayer – will make it up to JP. Who knows what the assets are really worth? They may be worth 80 cents on the dollar, in which case Bear’s stocks are a huge value even at $10 a share (remember, their market price before the panic was around $70 a share). They may be worth 90 cents on the dollar – even better for JP. Or they may eventually (in the long run, when the crisis is over and housing values start trending upward again) be worth far more --- maybe, just maybe, even approaching $70 a share. JP doesn’t know. Bear doesn’t know. The Fed doesn’t know. Everyone is guessing. Bear shareholders are playing a giant game of “chicken.” They’re threatening to go into bankruptcy – that is, liquidate the firm and essentially sell off their assets in an auction – if they don’t get a better deal from JP than the $2 per share JP originally offered.

As part of the new Bear Stearns deal, the Fed's role was also renegotiated. The central bank originally had agreed to put public dollars on the line to guarantee $30 billion of risky mortgages owned by Bear Stearns. In the reworked deal, J.P. Morgan agreed to cover the first $1 billion in losses if the value of those securities falls, with the Fed responsible for any losses beyond that. The main point here is that what Bernanke and the Fed are doing is all guess work. They are in uncharted waters and they are playing by ear. But their main concern is the investors not the homeowners who are in or about to go into foreclosure. If they wanted to protect them, they'd mandate restructuring of their loans. But this would piss off the investors who were counting on the homeowners' mortgages resetting to higher interest rates. In other words the investors were counting on the homeowners getting screwed when they made their investments, and, by golly, it's not fair to change the rules of the game now and make their investments worth less. However, it's OK to bail out huge investment banks.

Wall street has become a huge casino and doesn't serve any positive economic purpose or function. It used to be that they provided venture capital for start-ups and assisted with initial public offerings (IPOs). Now Silicon Valley has their own venture capital firms, and Wall Street just provides ever more fancy investment vehicles for rich investors who are not satisfied with just buying stocks and bonds as in the old days. No, they want to bet that the values of these stocks and bonds will go up or down at some future date. They want to buy insurance against their bets. They want derivatives of derivatives. They want synthetic exposure to the bond market as opposed to real exposure. They want credit default swaps. Who needs all this stuff? Surely, it contributes nothing to GDP. 70% of GDP is consumer spending; the remainder is almost evenly divided between real investment and government spending.

[Investment] is defined as investments by business or households in capital. Examples of investment by a business include construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory. Spending by households on new houses is also included in Investment. In contrast to its colloquial meaning, 'Investment' in GDP does not mean purchases of financial products.

In the $14 trillion American economy, if Wall Street and all its supposedly sophisticated investment vehicles disappeared off the face of the earth, the GDP would not be affected one bit! They are talking about regulating Wall Street banks; why not just outlaw all these fancy schmancy investment vehicles? They didn't rear their ugly heads until a couple years ago anyway, and right off the bat they've cost the American taxpayers almost a trillion dollars. Why not get back to a real  economy?

And, tying this all together, the US government is spending $3 trillion on war (and spends more on its military than the rest of the world combined), another trillion on bailouts and stimulus packages, and all the while running up the US national debt to almost $10 trillion. If the US government were to disappear altogether, the US GDP would still be roughly $12 trillion based on consumer spending and real investment. So my solution to this mess: get rid of Wall Street and get rid of the war based component of government spending. They say that in 10 years the government budget will be totally consumed with paying interest on the national debt, social security and medicare. But that doesn't account for the fact that war trumps social security and medicare. It's far more likely that the government budget will consist of paying interest on the national debt and war.

E Pearl Van Gelder Lawrence, my Grandmother

My Grandma Lawrence was the matriarch of the family. I remember one time when I was about four years old my parents were having a party and I was just getting over some childhood disease like whooping cough or measles. I wanted to go and join the others outside, but my Mom didn't want me to expose them to my germs. My Mom, who could be a stern taskmaster, didn't have much sympathy for me but my Grandma comforted me. She took good care of me and my sister when my Mom had to go to a sanitarium for TB for four years.

After my Mom came home, she still wanted us to come over to her house for dinner almost every Sunday. She never wanted us to leave. I remember her standing at the kitchen window waving goodbye as we drove away. I usually spent a couple weeks at her house in Vernon, NJ every summer. I remember practising the trumpet with old sheet music sitting on her porch. Grandma played the piano. She got rustier as she got older, but she always had a piano in a little room off the parlor in Vernon. I remember her playing "My Dreams are Getting Better All the Time."

Grandma was a good cook. She made home made bread and apple pie. I remember, when I was attending Andover, she would make me my lunch for the all day train ride up there with home made bread roast beef and meat loaf sandwiches.  Then I would order a Tropicana orange juice from the porter on the train to go with it. Her kitchen was fascinating; it was really old timey. I remember the stove she used to have was one of those monstrous iron contraptions, and her toaster was the old fashioned kind with two sides that flipped down. You had to turn the bread around to toast the other side. She used a coffee percolator which probably gave rise to my Grandpa's favorite expression, "How ya percolatin'?" She had a little pantry off the kitchen where she kept little cans of deviled ham that I liked.

I think Grandma was an undiagnosed manic depressive. She loved us a lot but she also suffered a lot especially over the fact that my sister wasn't normal. She never learned to talk and had the mental ability of about a two year old her entire life. But she was emotionally normal; she laughed, she cried and she benefited from all the love and affection Grandma gave her. I remember one time when we had just left the house after Grandpa died, we had forgotten something, and went back to get it. I found Grandma in tears. She said "It's so hard without Grandpa." She was OK every day until 4 o'clock when Grandpa usually came home from the station. After that Grandma got lonely. She lived another 25 years after Grandpa died.

She was born on a farm in Bellvale, NY just outside of Warwick in 1891, the middle girl of three  sisters. She met Grandpa when she took the train to school every day. He was the station agent. They lived as a young couple in Sugar Loaf, NY, where my father was born, and that was the ancestral home of the Laroe family of which she was a descendant. Grandma saved news clippings her entire life and I remember one that told about how she learned Morse code and took over the telegraphy duties when my Grandpa was sick. She saved all the numerous clippings about my Dad too. She was very proud of him. 

Before they moved to Vernon around 1945, they lived in Warwick where my Grandpa was station agent there with the Lehigh and Hudson RR. They rented a house on South Street and I remember spending time there and going to the nearby park. Grandma took me to Akins drug store for vanilla  ice cream sodas. They had glass top tables with merchandise displayed inside. Akins drug store is still there but they don't have the soda fountain any more.

Grandma knew all the townspeople in Vernon, which in those days was just a little hamlet. There was Alvey Mott, the postmaster, who lived next door. I used to go up there to get the mail.  Across the street were the Garlinghouses, who used to sit on a couch on their front porch, the Martins, who were  more respectable, and Berniece whom my Grandma didn't like much. There was Inez who lived up the hill. There was Oscar Lozaw, the local service station owner, and his wife Florence whom Grandma commiserated with. She used to tell about how mean Oscar was to Florence. "Florence cooks him a dozen eggs, a pound of bacon and a loaf of bread for breakfast every day and he never gives her any of it!" To which I replied "Why doesn't she just take some for herself since she's cooking it? Why does she have to wait for Oscar to offer it to her?"

After Grandpa died, Grandma just had a small railroad pension to live on, but she always managed to send me $5.00 for my birthday. She lived in the house in Vernon by the brook until she got too old and sick. I  remember visiting her every day in the hospital in Middletown, NY when I was home on vacation. She told me "Take good  care of Justine," my daughter.  I promised her I would. She died in 1980 at the age of 89.

I always felt close to my grandmother emotionally. Unfortunately, I think I inherited from her my manic depressive tendencies. It's interesting that it skipped a generation because my Dad was never the least bit depressed as far as I could tell. He was the most cheerful person I ever knew. I was always attracted to women more like my Grandma than like my Mom. My Mom was a fantastic person, but she was more managerial than emotional. Even the maid called her the General and the Slavedriver. She obviously thought this was the best way to be for the good of all concerned. Grandma was very emotional and affectionate, and, if it wasn't for her, I wouldn't have known what that felt like and how much I needed it. I have her to thank for all the love and care she gave me!

Grandma's family goes way back in New York State and New Jersey. She talked about it a little bit, but as a kid, I wasn't interested. Her father, George Van Gelder, married Mary Laroe Hallock who was the daughter of Sarah Jane Laroe. The Laroe family goes back to Jaques Laroe who landed in New Amsterdam in about 1670 with his mother and two siblings. They were French Huegenots fleeing religious persecution and were some of the original settlers of the country. The complete genealogy is as follows.

Jacques Le Roux first appears in the records of New Harlem in 1673 when he took the Oath of Allegiance. The surname is variously spelled Le Roux, Laroe, Larue, La Rue and Lereau. Jacques' mother, Jannetje (Jane), landed in New Amsterdam (New York City) about 1670 with 3 children. The father died at sea. Their son, Jacques, was born 1657 and married Wybrecht Helling in Bergen, NJ in 1681. Several of Jacques' children were born in Hackensack, NJ. At his death, he left a large estate including 600 acres of land in Ramapo, NJ. He had 12 children one of whom was Hendrick. Hendrick married Marritie (Mary) Lammerse Smidt in 1715 at Tappan, NY. He inherited a large part of his father's estate at Ramapo and died at Ramapo in 1760. Hendrick had 9 children one of whom was Jacobus baptized in 1721 who was the oldest son and had rights of primogeniture.

Jacobus Laroe married Rebecca Bertholf in 1742 at the First Reformed Church of Passaic, NJ. In 1765 Jacobus moved to Warwick, NY, the first relative to live in Orange County, NY. Jacobus and his wife are buried in Locust Hill Cemetery just off route 94, the King's Highway, between Warwick and Chester, NY. Jacobus died in 1781 and his wife died within 24 hours. They were both buried at the same time. I visited the Locust Hill Cemetery recently, a place I had driven by all my life but had never realized the significance of.  Many of the headstones have suffered the ravages of weather but names and dates are still discernible. Crynis was Jacobus’ and Rebecca's son born in 1762 in Bergen, NJ and moved with his parents to Warwick. He had sequentially 2 wives, the first of whose name is lost and the second of whom was Joanna Howell. He and his 2 wives are buried in Locust Hill Cemetery. Crynis served in the Revolutionary War under Col. John Hathorn. Crynis had 9 children by his first wife and 1 child by his second.

One of the children, James Buskirk, was born in 1803, married Adeline Benedict born 1804, and died in 1853. Starting in 1858 after her husband died, Adeline composed a journal, of which I have a copy, in her own handwriting. It tells about John Brown being hanged, the railroad coming to town and other historical events leading up to the Civil War as well as everyday life around Sugar Loaf, NY. She died in 1874.

James Buskirk Laroe and Adeline had 4 children: Mary Elizabeth, Sarah Jane (1831-1888), Abigail and John Henry. Sarah Jane married James Hallock (1832-1892) around 1855. They had 5 children the oldest of whom was Mary Laroe Hallock (1866-1930) who married George Van Gelder (1857-1912).

George and Mary had 3 children: Mary (Maisie) H. (1888-1976), Edith Pearl
(1891-1980) and Mina. Mary married Thomas Relyea (1879-1969). They had 2 children: George (1907-1995) and Evelyn (1908-2004). Pearl married James S. Lawrence (1888-1952): They had 2 children: Clifton E. (1913-1975) and Edith (1914- ). Mina married Charles Beecher. They had no children.

Evelyn married George Zimmer. They had 1 son George Harold. He married Linda. They had 2 daughters, Wendy and Amy.

Clifton married Florence E. Clark (1913-1997) in 1940. They had 2 children John C. (1941- ) and Jeanne E. (1945-1978). Edith married George Leatham (1914-1987). They had 2 children: George Lawrence (1948- ) and James (1953- ). George married Mary Pipes (1950- ). They have 2 children Sydney Alicia (1982- ) and George Taylor (1984- ).

John married Janice Olson (1946- ) in 1970. They had 1 child: Justine N. (1970- ). Justine married L. Quartez Wynn in 2003. They have 3 children: Jasmine A. (2001- ), Monique I. (2003- ) and Isaiah Q. (2008- ).

So the direct line from Jacques Laroe to the youngest descendant is: Jacques Laroe, Hendrick Laroe, Jacobus Laroe, Crynis Laroe, James Buskirk Laroe (marrried Adeline), Sarah Jane Laroe (married James Hallock), Mary Laroe Hallock (married George Van Gelder), Edith Pearl Van Gelder (married James S. Lawrence), Clifton E. Lawrence, John C. Lawrence, Justine N. Lawrence (married L. Quartez Wynn), Jasmine, Monique and Isaiah Wynn.

So Jasmine, Monique and Isaiah are 10th generation descendants of Jacques Laroe, the French Huegenot, or 11th generation descendants of his mother, Jannetje
(Jane), who was the first ancestor to set foot in North America in about 1670.

Three Cheers for the Failure of the Neocon Carlyle Group Hedge Fund!

The Carlyle Group, a bunch of neocons including former President George H W Bush, James Baker, former Secretary of State, Frank Carlucci, former Secretary of Defense among others, who sought to profit off the war in Iraq by investing in defense contractors, have come a cropper! Hip hip hooray! Hip hip hooray! Hip hip hooray! They had the inside information about war and the massive budget expenditures for war, and they sought to profit from this insider information and to profit off of war. For all essential purposes, they are war profiteers. But their greed did not stop there. Not content just to profit from war, they formed a couple of hedge funds in order to multiply their profits by investing in mortgage backed securities. Now those hedge funds have defaulted and I couldn't be happier. I hope these billionaires lose their asses. Just desserts I say.

A fund managed by the US private equity giant Carlyle Group has become the latest to be hit by demands from lending banks making calls on loans secured on mortgage bonds. Carlyle Capital Corp, a publicly traded fund that holds $21.7bn (£10.8bn) of securities, said it had received a default notice from one of its lending banks and expected at least one more after it failed to meet demands for extra security from jittery counterparties. The Guernsey-based fund has struggled to meet more than $60m of margin calls and demands for extra collateral since the start of the month. It met the calls until Wednesday, when it was landed with more than $37m of demands and missed four out of seven calls. John Stomber, the chief executive of Carlyle Capital, said counterparties were demanding margin prices that did not represent the underlying recoverable value of the fund's assets. Carlyle Capital's investments are all AAA-rated securities issued by Fannie Mae and Freddie Mac, the US-Government-sponsored mortgage finance agencies. "This disconnect has created instability and variability in our repo financing arrangements," he added. "Management is actively working with the company's repo counterparties to develop more stable financing terms." The return demanded for agency mortgage bonds over 10-year US Treasuries has widened to the highest for 22 years, according to Bloomberg. Tumult in the credit markets as asset values of all but the safest of debt plummet is prompting lenders to investment funds to demand ever-greater security for their loans, forcing funds into crisis even if they claim the underlying assets are sound. Carlyle Capital's woes come after Peloton, a London-based hedge fund, was forced to liquidate its two funds and shut down because 14 lending banks had pulled credit lines. William O'Donnell, a UBS government bond strategist, said markets were "utterly unhinged". ... Carlyle Group has more than $75bn under management. In the 1990s, its advisers included John Major, the former prime minister, and George Bush, the former US president.

From a previous blog:

And then there's the Carlyle Group from which George Bush, the father, is making billions from the War on Terrorism. Even as the planes smashed into the WTC George Herbert Walker Bush was meeting with Osama Bin Laden's brother at the Carlyle Group. Quote from the website- the Bush- Saudi Connection: "It’s passing strange that even as the hijacked planes smashed into the World Trade Center, the Carlyle Group was holding its annual investor conference. Shafig Bin Laden, brother of Osama Bin Laden, attended."

Now while the Fed is bailing out investment bankers by pumping liquidity into the system, they are not pumping liquidity into the individual motgagees who are defaulting on their mortgage payments and going into foreclosure. A slight difference in moral hazard whether you are Joe Six Pack or a high flying financial institution. They lecture the poor mortgage holders that they knew what they were getting into; therefore, they are acting irresponsibly if they walk away from their obligation to pay their mortgage. However, when a financial institution gets a government bailout instead of facing the full consequences of the decisions it made, it's clear that there is a different standard for Joe Six Pack than there is for the mega-rich CEOs and billionaire investors.

The government is simply protecting its own: rich investors. They made a bet that the  middle class would responsibly pay their predatory mortgages once they reset thus netting them juicy profits. That bet didn't work out so they went to Uncle Sam to bail them out. No such bail-out was extended to Joe Six Pack. Paulson and Bernanke tell you that the economy would grind to a halt if Wall Street investment banks fail. Nonsense! The only consequence is that all the rich investors would lose their shirts. They deserve to do so because of their greedy risk taking behaviour. In other words they rolled the dice and lost. Then they come crying to the government. When they are winning they chide that the government has no place interfering in the free market. The government should keep its nose out of their affairs. Wall Street to government: butt out. We rich bastards know what we're doing and we don't need government to regulate us. Privatize! Privatize! Hands off the economy.

I say let the hedge funds fail. They have nothing to do with the everyday needs of average middle class people. They only have to do with rich investors. Some hedge fund managers have made as much as $100 million a year. These people don't deserve to be bailed out by the government. It's just another example of the transfer of wealth from the poor and middle class to the rich facilitated by the Bush Administration and lauded by Rush Limbaugh and all the true conservatives. After all the $400 billion promised by the Fed to cover shaky investment banks will ultimately come out of taxpayers' pockets. Or the Fed will print money causing hyperinflation and the dollar's demise. Either way it's more government debt and taxpayer liability.

Well the chickens are coming home to roost. A good portion of Wall Street could go out of business without affecting the real economy. It only serves the needs of investors, not average citizens. This portion of the economy should be allowed to "seize up." Then the economy could get back to its real function: providing goods and services for real people instead of providing investment opportunities for rich investors. Bernanke and Paulson are only watching out for the investment class not the middle class home owners going into foreclosure, otherwise known as the debtor class.

Demise of the Hedge Funds?

Wall Street investment bank Bear Stearns is in trouble. Another bailout by the Federal government, which is willing to bail out any high flying investment firm but not the little guy, has occurred. They were prompted to do this by a good old fashioned run on the bank. Just as in Mary Poppins, investors were calling Bear Stearns and demanding their money. Poor Bear Stearns. They had already suffered the collapse of two of their hedge funds tied to the sub-prime mortgage mess. Leveraged 30 to 1, it could simply not give everyone who wanted it their money back. So good old Uncle Sam, stingy when it comes to health care or social programs to help the poor, just couldn't say no to Bear Stearns and its investors. We can't have high flying capitalist investors losing money now, can we? Good old Uncle to the rescue. At these stratospheric levels they call it a liquidity crisis. At the level of the average consumer, they call it being too poor to pay your bills. It amounts to the same thing. The greedy capitalists lost their bets. Tough tittie. Let them go out of business. Let them lose their asses. Let Bear Stearns and its hedge fund investors fail. They were "all in." Now they've crapped out. Who cares? Another day in the life. But the government bails them out, thereby taking on trillions of dollars in increased liabilities (to the taxpayers, that is), in addition to the trillions of dollars it throws down the rat hole in Iraq, but is too poor to take care of its veterans not to mention its homeless veterans or poor people seeking health care.

Bear Stearns, squeezed by the sub-prime crisis, needs an emergency loan. Its stock plunges, and wariness grows. By Walter Hamilton and Tom Petruno, Los Angeles Times Staff Writers March 15, 2008 NEW YORK -- The battered global financial system looked a lot more fragile Friday as one of Wall Street's biggest investment houses was forced to get an emergency loan from the Federal Reserve, raising the specter of more giant securities firms laid low by the global credit crisis. Bear Stearns Cos. said its ability to finance its operations had "significantly deteriorated" in the preceding 24 hours, compelling it to borrow an undisclosed amount of money from the Fed. The disclosure sent the stock market down sharply and underscored how vulnerable the global financial system has become since a wave of defaults on home loans given to people with bad credit led to the collapse of the sub-prime mortgage market. Bear Stearns is heavily exposed to faltering securities tied to sub-prime mortgages, and as credit markets seized up in recent weeks, confidence waned that the company would be able to make good on its own obligations. That triggered a classic run on the bank, with clients pulling out money and other financial firms refusing to do business with the company. "A lot of people wanted to get cash out," Alan Schwartz, Bear Stearns' chief executive, said in a conference call with analysts. A lack of confidence is undermining much of Wall Street and is threatening to become a self-fulfilling prophecy that could intensify the country's credit squeeze, doing more damage to an economy that many experts say is already in a recession. "This transcends Bear Stearns," said Bruce Foerster, a Wall Street veteran and president of South Beach Capital Markets. "It shows the fragility of all these institutions, particularly investment banks and commercial banks." Bear Stearns' stock plunged $27, or 47%, to $30. It has plummeted 79% in the last year.

It's that nasty old sub-prime mortgage mess thats at the root of all the trouble. Wall Street cleverly securitzed all that debt and sold it off as bonds to investors, something it couldn't have done if Franklin D Roosevelt's New Deal had been left in place. But Rush Limbaugh, among others, is trying to do something about that - FDR's New Deal, that is. In others words Republican types are conscientiously seeking to destroy it, something they managed partially to do by pressuring "triangulating" Clinton into repealing the Glass-Steagall Act that put a firewall between commercial (think mortgage) and investment (think mortgage backed securities) banking. So it was off to the races for the know-it-all, Wall Street, super hip capitalist bankers and hedge fund types. Oh how high did they fly - for awhile - making millions and billions of dollars. Consider the Forbes Fortune 400 list - hedge fund managers galore. Now they're crying crocodile tears to the Fed and the Federal Government - two different entities, but totally incahoots. Oh well, if you make $100 million a year, you only need to work one year anyway.

Bush says the economy is having a "tough time", but not to worry. If the sky were falling, Bush would call it a "tough time." "Never let them see you sweat" is his motto. But wait a  minute. These Wall Street guys are smarter and wealthier than Joe Six Pack. So they deserve to be bailed out, don't they? After all Joe Six Pack is an average slob who will be satisfied with the $600. bread and circus money Bush is prepared to give them.

Robert Reich has a blog in which he says all the Fed bailouts in the world won't work. Can't put Humpty Dumpty back together again. Some are even calling for more regulation. Oh how that word grates on the nerves of true conservatives. Maybe FDR had it right the first time. Think they might call for a reinstitutionalization of the Glass-Steagall Act? Not on my watch, says Bush. Ronald Reagan (remember trickle down economics?) would roll over in his grave. The Bush-Cheney plan was to leave the Democrats the biggest economic mess of all time when they took over in '09. It just didn't quite work out that way. The shit hit the fan altogether too early. Now they're trying to fix the economy with spit, glue and bailing wire, sort of like how the Okies fixed up their jalopies when they left the dust bowl for California in the 30s.

Robert Reich says: "The Fed bailing out the big banks is like someone with a helium tank blowing more air into a leaky balloon. It only postpones the inevitable, which is that the balloon will lose its air and float back to earth. For markets to work again, speculative bubbles have to burst, one way or another." I like that metaphor! Like blowing hot air into a balloon with a hole in it. Tough, indeed, Mr. President. But you don't have a clue, and if you did, you wouldn't let it puncture your macho bravado that can't admit that you and all your neocon, feed-the-rich-soak-the-poor cronies were just plain wrong about the economy, the war in Iraq and just about everything else, both philosophical and practical, that you've laid your hands on or spouted out of your mouths for the last 28 years.

I say let Bear Stearns go out of business. Let all the Wall Street, let's-make-money-out-of-money types go out of business. Let's get back to the basics. Screw the "financialization of America." Derivatives don't put food on the table. I say strip the hedge funds from the economy. Get rid of most of Wall Street and get back to basics. Put the strictly financial types, who are parasites of capitalism, out of business. If a business doesn't serve the needs of the people, it shouldn't exist! People that provide real goods and services should be encouraged. People that make money off of money should not. They're only turning the economic system into a casino! I noticed that the high gas prices aren't due to lack of supply (remember the first law of capitalism: the law of supply and demand). They're due to investors in the commodity market for oil taking their money out of shaky Wall Street investments and bidding up the price of oil. Hey, if trading oil on the commodities market were made illegal, we wouldn't have this problem. What's wrong with oil suppliers selling directly to oil companies selling directly to consumers. Too many middle men. Get rid of the traders. Then all that would determine the price of gas would be real supply and demand, something that the OPEC cartel carefully controls. Either way we're screwed.

From an article in the San Diego Union, March 15, 2008, entitled Fed Acts to Rescue a Major US Bank:

Firms such as Bear Stearns conduct business with many individuals, corporations, financial companies, pension funds and hedge funds. They also do billions of dollars of business with one another every day, borrowing and lending securities at a dizzying pace. The sudden collapse of a major player could not only shake client confidence in the entire system, but also make it difficult for sound institutions to conduct business. Hedge funds that rely on Bear Stearns to finance their trading and hold their securities would be stranded; investors who wrote financial contracts with Bear Stearns would be at risk; and markets that depended on Bear Stearns to buy and sell securities would screech to a halt, if they were not already halted. ... The demise of the hedge funds began what has been a slow but persistent loss of market confidence in the bank. Such an erosion can be devastating for any investment bank, especially one such as Bear, which has a leverage ratio of over 30-to-1, meaning it borrows more than 30 times the value of its $11 billion equity base. “The public has never fully understood how leveraged these institutions are,” said Samuel Hayes, a professor of investment banking at Harvard Business School. “But the market-makers understand this inherent risk. This is a run on the bank, just like Long Term Capital Management, Kidder and Drexel Burnham.”

Why Obama Should Not Be the Democratic Nominee

There are a lot of reasons.  But before I start let me say that I'll vote for Barack if he's the Democratic nominee. He would be infinitely better than John McCain.

1. He wants to bring people together. Give me a break! The only people he needs to bring together are the Republican Senators who will filibuster every piece of Democratic inspired legislation to death and effectively stop anything the Democrats want to do. Think he'll get the bloc-voting, filibustering Republican Senators to come over to the Democratic side? Think again. He'll either get nothing done or triangulate as Bill Clinton did. Instead of triangulation what we need is a President who will take on the filibustering Republicans and the legitimacy of the filibuster itself. This might spark a constituional crisis but so be it!

2. As nominee, the Republicans will generate all kinds of rumors about his African connections. Half his family lives there. Then there are the rumors about his lack of patriotism. The Republican smear machine will go to work on Obama. You can see they are ambivalent about who they'd rather run against because they've already developed a well-spring of hatred and demonization for Hillary over the last 20 years or so. They'll have to start from scratch with Obama, but they're already working overtime to make up for lost time.

3. As President, there will be all kinds of pressure on him to intervene in Africa. We've already got a mess on our hands in Iraq, that road to hell having been paved with bad intentions. We don't need another one in Africa, this time the road to hell being paved with good intentions. Mia Farrow, Steven Spielberg and others have been pressuring politicians to intervene there. And who's already there siding with the bad guys? China. They want the oil and they don't give a crap about who gets pushed off their land in order for them to get it. We don't need a confrontation with China in Africa.

4. Lack of political sophis-tication. We don't need Amateur Hour in the White House.

5. More susceptible to cooption and selling out. He'll want to triangulate with the Republicans as Bill Clinton did (a big mistake in my opinion) in order to get anything done. Republican pressure will undermine his agenda and determine the course of legislation. (Witness Bill Clinton with Gatt-NAFTA and signing the repeal of the Glass-Steagall Act which led directly to the sub-prime mortgage crisis.) Hopefully, Hillary has gotten beyond "triangulation," realizes the errors of her husband's ways.

6. Obama is more likely to pander to powerful interests. Hillary has been there, done that and has nothing to prove.

7. Obama still hasn't made his fortune; Hillary has nothing to sweat financially. This would make Obama more likely to sidle up to and be impressed by powerful financial interests.

8. Hip-hop in the White House? Oh, noooooooooo.

The Debate Over Global Warming is Moot

All the things we should do if global warming is indeed a fact caused by human activity, we should do anyway to reduce the human impact on the planet, to protect future generations and for common sense good stewardship of the earth's resources. Doesn't it make more sense to use renewable resources as much as possible rather than non-renewable resources? Doesn't it make sense to recycle rather than creating ever larger garbage dumps? Take oil, for instance. Oil is a finite, for all intents and purposes, non-renewable resource which is not necessary for automobile  transportation given the level of technology already in existence today. All electric plug-in vehicles could provide all our transportation needs. Imagine a house entirely powered by solar panels (possible today). A couple more panels could provide all the electricity needed to fill up your plug-in electric car's battery.

In Germany the government is incentivizing citizens to add solar panels to their homes, even to create solar panel farms to put electricity out on the grid. What a wonderful idea - the decentralization of electricity production! The goal is for each home to provide its own electricity and more!

This is from Germany Embraces the Sun by Reiner Gaertner:

FREIBURG, Germany -- Germany is not necessarily known as the sunniest spot in Europe. But nowhere else do so many people climb on their roofs to install solar panels. Since the introduction of the Renewable Energies Laws (EEG) in April last year, Germany has been experiencing a remarkable boom in solar energy. "When my cab driver gives me a lecture about solar technologies, I know I am back home," raved Rian van Staden, executive director of the International Solar Energy Society (ISES) about Freiburg, the sunniest city in Germany and host to the InterSolar conference July 6-8. The little university town in southwest Germany, about 40 miles away from the French and Swiss borders, is Germany's "Solar Valley." A gigantic solar panel at the train station greets visitors to Freiburg. The city also boasts the new Zero Emissions Hotel Victoria, which is the first European hotel to run completely on alternative energy sources. Even Freiburg's premier league soccer stadium is solar powered. More than 450 environmentally oriented companies and institutions take advantage of the favorable weather, research, networking opportunities and progressive political climate in Freiburg, which makes even Berkeley -- its soul mate in the San Francisco Bay Area -- look comparatively conservative. The German solar industry has exploded in the last two years. DFS (Deutscher Fachverband Solarenergie), the German Association for Solar Energies, recently reported a 50 percent rise in solar panel orders during 2000. German solar companies sold 75,000 solar systems in 2000 in addition to 360,000 solar systems installed previously, and photovoltaic installations increased fourfold from 1999. Solar power means big business in Germany: Solar companies generated revenues of $435 million in 2000. According to DFS, Germany -- with its 54 percent market share -- is by far the European leader in produced solar collectors.

So there is a lot of possible economic activity around alternative energy production that doesn't involve further depletion of non-renewable resources irrespective of whether ot not they contribute to global warming. This is simply good stewardship of the planet. Or should we just use every drop of available oil and then switch to some other form of energy? A good reason not to do so is that petroleum products have other uses besides energy production such as chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. 16% of all petroleum production is converted into these other materials. So petroleum production will not shrivel up and go away entirely.

Recycling also is an idea whose time has come. Again it is just a common sense form of good planetary stewardship. Waste products that can be recycled reduce the need to produce original products from scratch and the energy needs required to do so. Besides many of these products if dumped in landfills or rivers are poisonous to the environment. The only reason we would not be recycling or using renewable energy resources is that vested interests including the big oil companies have too much at stake financially. Conversion to another form of energy production would decrease their profits. So their attitude is "let the environment be damned. And we'll take our government subsidies, thank you very much, in addition to our record profits!"

Industries that produce raw materials do not want you to recycle. That's less money for them. They want consumers to buy and consume the products they produce according to the wasteful model they presently use. That's how their interests are vested. Wise energy and recycling policies would have to be set by the government. Who else is there to do it? That's why vested industries spend so much money lobbying the government to get them not only not to change their policies to what makes sense for good stewardship of the planet, but to get them to set policies even more favorble to the vested industries using the slogan "no  government interference in the economy" or laissez-faire. This fails to recognize that the government is interfering every day as it accedes to the pressure of lobbyists to support current vested interests.

Pain at the pump is threatening the pocketbooks of all Americans as gas prices continue their rise towards $4.00 a gallon and the dollar plummets in value. We continue to enrich OPEC nations while undermining our own energy independence and security all in the name of the free market. What free market? OPEC is a cartel, and they're eating our lunch while US oil companies, in collusion with OPEC, continue to make record profits. This is the US-Middle East nexus, and the US military is simply used to promote and maintain the stability of this relationship.

So let's not talk about global warming. Let's talk about good stewardship of the planet, and the fact that Mother Nature might not take too kindly to our changing the gaseous composition of the atmosphere!