joe
NY
While I am grateful for the article exposing Geithner's lackey at the Office of the Comptroller of the Currency, it is tiresome, after all this time, to continue reading lazy reporting by N.Y. Times journalists, still allowing people to foment myths, still incapable of connecting dots for their readers.
Mr. Dugan, that scoundrel of a Comptroller, is allowed to posit the argument, WITHOUT QUESTION, that the bailed-out big banks, unlike AIG, Fannie and Freddie, quickly repaid taxpayers with interest for the help they received.
That is a grossly misleading, despicable, flat-out lie, and anyone who has followed this crisis knows it.
The money we gave to AIG went straight onto the balance sheets of the banks. That money wasn't paid back. If we hadn't bailed out AIG, the CDS market would have collapsed and banks would have failed. If we hadn't allowed private investment banks to alchemically change their designation into bank holding companies, thus allowing them to borrow billions upon billions at 0% interest from the public till, they would have failed, as THEIR borrowing costs, LIKE GREECE, would have killed them. If the public hadn't taken ownership of TRILLIONS of mortgage-backed securities from many sources, including Fannie and Freddie, the worthless MBS's and CDO's on bank balance sheets would be even more toxic. The suspension of mark-to-market would not have been enough to prop up the lie of the Enron-style accounting the government allowed the big banks to engage in.
Lastly, the article included the following: "But, critics say, the O.C.C. does not take into account the pivotal role that banks played in stoking the appetite for risky mortgages by securitizing the loans."
This is not a critic's opinion, it is an incontrovertible fact. They created the market, they demanded the product from bank and non-bank lenders, they bought the ratings they needed to sell the junk securities, and then created a multi-trillion dollar insurance scam to cover the losses for the fire they were setting to the U.S. housing market. The big banks haven't paid back squat.
24.3.10
Clueless Friedman
Tom Friedman of NYTimes writes: "It advocates: raising taxes to close our budgetary shortfalls, but doing so with a spirit of equity and social justice; guaranteeing that every American is covered by health insurance, but with market reforms to really bring down costs; legally expanding immigration to attract more job-creators to America’s shores; increasing corporate tax credits for research and lowering corporate taxes if companies will move more manufacturing jobs back onshore; "
AnnS, from Michigan, replies:
You need an editor.
Let's fix that list:
(1) "raising taxes to close our budgetary shortfalls, but doing so with a spirit of equity and social justice"
In Short Return To The 1952 Tax Code. The upper 2% (incomes over $300,000+/-) own 80% of the wealth in the US and get 50% of all income. The upper 1% (incomes over $520,000) own 90% of the wealth. The upper 1/1oth of 1% (incomes over $1,600,000) control an obscene amount of the wealth. TAX THEM
(2) legally expanding immigration to attract more job-creators to America’s shores;
Only Allow Educated Healthy Immigrants Who Can Support Themselves Upon Arrival. No Illiterate Uneducated Peasants Need Apply. And put an end to the shirt-tail relatives following them over here. If the relative can not qualify on their own merits, they do not come. That is the way every other country runs their immigration system.
(3) increasing corporate tax credits for research and lowering corporate taxes if companies will move more manufacturing jobs back onshore;
Ummm.. pretty clueless. Do stop spouting the right-wing myths. Money spent on research and development is ALREADY a 100% deductible expense. Hard to get much more of a "tax credit" than 100%.
Do NOT lower corporate taxes if they promise to be nice and NOT export jobs. RAISE their taxes when they DO export jobs - and raise them so high that they have to pay an amount in taxes that is equivalent 90% of their anticipated savings by exporting the jobs.
And then throw in the little kicker that unless 50%+ of all their employees are in the US, they lose their status as a US Corporation -- and they can trot off an incorporate their business in China.
AnnS, from Michigan, replies:
You need an editor.
Let's fix that list:
(1) "raising taxes to close our budgetary shortfalls, but doing so with a spirit of equity and social justice"
In Short Return To The 1952 Tax Code. The upper 2% (incomes over $300,000+/-) own 80% of the wealth in the US and get 50% of all income. The upper 1% (incomes over $520,000) own 90% of the wealth. The upper 1/1oth of 1% (incomes over $1,600,000) control an obscene amount of the wealth. TAX THEM
(2) legally expanding immigration to attract more job-creators to America’s shores;
Only Allow Educated Healthy Immigrants Who Can Support Themselves Upon Arrival. No Illiterate Uneducated Peasants Need Apply. And put an end to the shirt-tail relatives following them over here. If the relative can not qualify on their own merits, they do not come. That is the way every other country runs their immigration system.
(3) increasing corporate tax credits for research and lowering corporate taxes if companies will move more manufacturing jobs back onshore;
Ummm.. pretty clueless. Do stop spouting the right-wing myths. Money spent on research and development is ALREADY a 100% deductible expense. Hard to get much more of a "tax credit" than 100%.
Do NOT lower corporate taxes if they promise to be nice and NOT export jobs. RAISE their taxes when they DO export jobs - and raise them so high that they have to pay an amount in taxes that is equivalent 90% of their anticipated savings by exporting the jobs.
And then throw in the little kicker that unless 50%+ of all their employees are in the US, they lose their status as a US Corporation -- and they can trot off an incorporate their business in China.
15.3.10
Basically, It's Over
Basically, It's Over
A parable about how one nation came to financial ruin.
By Charles Munger
In the early 1700s, Europeans discovered in the Pacific Ocean a large, unpopulated island with a temperate climate, rich in all nature's bounty except coal, oil, and natural gas. Reflecting its lack of civilization, they named this island "Basicland."
The Europeans rapidly repopulated Basicland, creating a new nation. They installed a system of government like that of the early United States. There was much encouragement of trade, and no internal tariff or other impediment to such trade. Property rights were greatly respected and strongly enforced. The banking system was simple. It adapted to a national ethos that sought to provide a sound currency, efficient trade, and ample loans for credit-worthy businesses while strongly discouraging loans to the incompetent or for ordinary daily purchases.
Moreover, almost no debt was used to purchase or carry securities or other investments, including real estate and tangible personal property. The one exception was the widespread presence of secured, high-down-payment, fully amortizing, fixed-rate loans on sound houses, other real estate, vehicles, and appliances, to be used by industrious persons who lived within their means. Speculation in Basicland's security and commodity markets was always rigorously discouraged and remained small. There was no trading in options on securities or in derivatives other than "plain vanilla" commodity contracts cleared through responsible exchanges under laws that greatly limited use of financial leverage.
In its first 150 years, the government of Basicland spent no more than 7 percent of its gross domestic product in providing its citizens with essential services such as fire protection, water, sewage and garbage removal, some education, defense forces, courts, and immigration control. A strong family-oriented culture emphasizing duty to relatives, plus considerable private charity, provided the only social safety net.
The tax system was also simple. In the early years, governmental revenues came almost entirely from import duties, and taxes received matched government expenditures. There was never much debt outstanding in the form of government bonds.
As Adam Smith would have expected, GDP per person grew steadily. Indeed, in the modern area it grew in real terms at 3 percent per year, decade after decade, until Basicland led the world in GDP per person. As this happened, taxes on sales, income, property, and payrolls were introduced. Eventually total taxes, matched by total government expenditures, amounted to 35 percent of GDP. The revenue from increased taxes was spent on more government-run education and a substantial government-run social safety net, including medical care and pensions.
A regular increase in such tax-financed government spending, under systems hard to "game" by the unworthy, was considered a moral imperative—a sort of egality-promoting national dividend—so long as growth of such spending was kept well below the growth rate of the country's GDP per person.
Basicland also sought to avoid trouble through a policy that kept imports and exports in near balance, with each amounting to about 25 percent of GDP. Some citizens were initially nervous because 60 percent of imports consisted of absolutely essential coal and oil. But, as the years rolled by with no terrible consequences from this dependency, such worry melted away.
Basicland was exceptionally creditworthy, with no significant deficit ever allowed. And the present value of large "off-book" promises to provide future medical care and pensions appeared unlikely to cause problems, given Basicland's steady 3 percent growth in GDP per person and restraint in making unfunded promises. Basicland seemed to have a system that would long assure its felicity and long induce other nations to follow its example—thus improving the welfare of all humanity.
But even a country as cautious, sound, and generous as Basicland could come to ruin if it failed to address the dangers that can be caused by the ordinary accidents of life. These dangers were significant by 2012, when the extreme prosperity of Basicland had created a peculiar outcome: As their affluence and leisure time grew, Basicland's citizens more and more whiled away their time in the excitement of casino gambling. Most casino revenue now came from bets on security prices under a system used in the 1920s in the United States and called "the bucket shop system."
The winnings of the casinos eventually amounted to 25 percent of Basicland's GDP, while 22 percent of all employee earnings in Basicland were paid to persons employed by the casinos (many of whom were engineers needed elsewhere). So much time was spent at casinos that it amounted to an average of five hours per day for every citizen of Basicland, including newborn babies and the comatose elderly. Many of the gamblers were highly talented engineers attracted partly by casino poker but mostly by bets available in the bucket shop systems, with the bets now called "financial derivatives."
Many people, particularly foreigners with savings to invest, regarded this situation as disgraceful. After all, they reasoned, it was just common sense for lenders to avoid gambling addicts. As a result, almost all foreigners avoided holding Basicland's currency or owning its bonds. They feared big trouble if the gambling-addicted citizens of Basicland were suddenly faced with hardship.
And then came the twin shocks. Hydrocarbon prices rose to new highs. And in Basicland's export markets there was a dramatic increase in low-cost competition from developing countries. It was soon obvious that the same exports that had formerly amounted to 25 percent of Basicland's GDP would now only amount to 10 percent. Meanwhile, hydrocarbon imports would amount to 30 percent of GDP, instead of 15 percent. Suddenly Basicland had to come up with 30 percent of its GDP every year, in foreign currency, to pay its creditors.
How was Basicland to adjust to this brutal new reality? This problem so stumped Basicland's politicians that they asked for advice from Benfranklin Leekwanyou Vokker, an old man who was considered so virtuous and wise that he was often called the "Good Father." Such consultations were rare. Politicians usually ignored the Good Father because he made no campaign contributions.
Among the suggestions of the Good Father were the following. First, he suggested that Basicland change its laws. It should strongly discourage casino gambling, partly through a complete ban on the trading in financial derivatives, and it should encourage former casino employees—and former casino patrons—to produce and sell items that foreigners were willing to buy. Second, as this change was sure to be painful, he suggested that Basicland's citizens cheerfully embrace their fate. After all, he observed, a man diagnosed with lung cancer is willing to quit smoking and undergo surgery because it is likely to prolong his life.
The views of the Good Father drew some approval, mostly from people who admired the fiscal virtue of the Romans during the Punic Wars. But others, including many of Basicland's prominent economists, had strong objections. These economists had intense faith that any outcome at all in a free market—even wild growth in casino gambling—is constructive. Indeed, these economists were so committed to their basic faith that they looked forward to the day when Basicland would expand real securities trading, as a percentage of securities outstanding, by a factor of 100, so that it could match the speculation level present in the United States just before onslaught of the Great Recession that began in 2008.
The strong faith of these Basicland economists in the beneficence of hypergambling in both securities and financial derivatives stemmed from their utter rejection of the ideas of the great and long-dead economist who had known the most about hyperspeculation, John Maynard Keynes. Keynes had famously said, "When the capital development of a country is the byproduct of the operations of a casino, the job is likely to be ill done." It was easy for these economists to dismiss such a sentence because securities had been so long associated with respectable wealth, and financial derivatives seemed so similar to securities.
Basicland's investment and commercial bankers were hostile to change. Like the objecting economists, the bankers wanted change exactly opposite to change wanted by the Good Father. Such bankers provided constructive services to Basicland. But they had only moderate earnings, which they deeply resented because Basicland's casinos—which provided no such constructive services—reported immoderate earnings from their bucket-shop systems. Moreover, foreign investment bankers had also reported immoderate earnings after building their own bucket-shop systems—and carefully obscuring this fact with ingenious twaddle, including claims that rational risk-management systems were in place, supervised by perfect regulators. Naturally, the ambitious Basicland bankers desired to prosper like the foreign bankers. And so they came to believe that the Good Father lacked any understanding of important and eternal causes of human progress that the bankers were trying to serve by creating more bucket shops in Basicland.
Of course, the most effective political opposition to change came from the gambling casinos themselves. This was not surprising, as at least one casino was located in each legislative district. The casinos resented being compared with cancer when they saw themselves as part of a long-established industry that provided harmless pleasure while improving the thinking skills of its customers.
As it worked out, the politicians ignored the Good Father one more time, and the Basicland banks were allowed to open bucket shops and to finance the purchase and carry of real securities with extreme financial leverage. A couple of economic messes followed, during which every constituency tried to avoid hardship by deflecting it to others. Much counterproductive governmental action was taken, and the country's credit was reduced to tatters. Basicland is now under new management, using a new governmental system. It also has a new nickname: Sorrowland.
Become a fan of Slate on Facebook. Follow us on Twitter.
Charles Munger is vice chairman of Berkshire Hathaway.
A parable about how one nation came to financial ruin.
By Charles Munger
In the early 1700s, Europeans discovered in the Pacific Ocean a large, unpopulated island with a temperate climate, rich in all nature's bounty except coal, oil, and natural gas. Reflecting its lack of civilization, they named this island "Basicland."
The Europeans rapidly repopulated Basicland, creating a new nation. They installed a system of government like that of the early United States. There was much encouragement of trade, and no internal tariff or other impediment to such trade. Property rights were greatly respected and strongly enforced. The banking system was simple. It adapted to a national ethos that sought to provide a sound currency, efficient trade, and ample loans for credit-worthy businesses while strongly discouraging loans to the incompetent or for ordinary daily purchases.
Moreover, almost no debt was used to purchase or carry securities or other investments, including real estate and tangible personal property. The one exception was the widespread presence of secured, high-down-payment, fully amortizing, fixed-rate loans on sound houses, other real estate, vehicles, and appliances, to be used by industrious persons who lived within their means. Speculation in Basicland's security and commodity markets was always rigorously discouraged and remained small. There was no trading in options on securities or in derivatives other than "plain vanilla" commodity contracts cleared through responsible exchanges under laws that greatly limited use of financial leverage.
In its first 150 years, the government of Basicland spent no more than 7 percent of its gross domestic product in providing its citizens with essential services such as fire protection, water, sewage and garbage removal, some education, defense forces, courts, and immigration control. A strong family-oriented culture emphasizing duty to relatives, plus considerable private charity, provided the only social safety net.
The tax system was also simple. In the early years, governmental revenues came almost entirely from import duties, and taxes received matched government expenditures. There was never much debt outstanding in the form of government bonds.
As Adam Smith would have expected, GDP per person grew steadily. Indeed, in the modern area it grew in real terms at 3 percent per year, decade after decade, until Basicland led the world in GDP per person. As this happened, taxes on sales, income, property, and payrolls were introduced. Eventually total taxes, matched by total government expenditures, amounted to 35 percent of GDP. The revenue from increased taxes was spent on more government-run education and a substantial government-run social safety net, including medical care and pensions.
A regular increase in such tax-financed government spending, under systems hard to "game" by the unworthy, was considered a moral imperative—a sort of egality-promoting national dividend—so long as growth of such spending was kept well below the growth rate of the country's GDP per person.
Basicland also sought to avoid trouble through a policy that kept imports and exports in near balance, with each amounting to about 25 percent of GDP. Some citizens were initially nervous because 60 percent of imports consisted of absolutely essential coal and oil. But, as the years rolled by with no terrible consequences from this dependency, such worry melted away.
Basicland was exceptionally creditworthy, with no significant deficit ever allowed. And the present value of large "off-book" promises to provide future medical care and pensions appeared unlikely to cause problems, given Basicland's steady 3 percent growth in GDP per person and restraint in making unfunded promises. Basicland seemed to have a system that would long assure its felicity and long induce other nations to follow its example—thus improving the welfare of all humanity.
But even a country as cautious, sound, and generous as Basicland could come to ruin if it failed to address the dangers that can be caused by the ordinary accidents of life. These dangers were significant by 2012, when the extreme prosperity of Basicland had created a peculiar outcome: As their affluence and leisure time grew, Basicland's citizens more and more whiled away their time in the excitement of casino gambling. Most casino revenue now came from bets on security prices under a system used in the 1920s in the United States and called "the bucket shop system."
The winnings of the casinos eventually amounted to 25 percent of Basicland's GDP, while 22 percent of all employee earnings in Basicland were paid to persons employed by the casinos (many of whom were engineers needed elsewhere). So much time was spent at casinos that it amounted to an average of five hours per day for every citizen of Basicland, including newborn babies and the comatose elderly. Many of the gamblers were highly talented engineers attracted partly by casino poker but mostly by bets available in the bucket shop systems, with the bets now called "financial derivatives."
Many people, particularly foreigners with savings to invest, regarded this situation as disgraceful. After all, they reasoned, it was just common sense for lenders to avoid gambling addicts. As a result, almost all foreigners avoided holding Basicland's currency or owning its bonds. They feared big trouble if the gambling-addicted citizens of Basicland were suddenly faced with hardship.
And then came the twin shocks. Hydrocarbon prices rose to new highs. And in Basicland's export markets there was a dramatic increase in low-cost competition from developing countries. It was soon obvious that the same exports that had formerly amounted to 25 percent of Basicland's GDP would now only amount to 10 percent. Meanwhile, hydrocarbon imports would amount to 30 percent of GDP, instead of 15 percent. Suddenly Basicland had to come up with 30 percent of its GDP every year, in foreign currency, to pay its creditors.
How was Basicland to adjust to this brutal new reality? This problem so stumped Basicland's politicians that they asked for advice from Benfranklin Leekwanyou Vokker, an old man who was considered so virtuous and wise that he was often called the "Good Father." Such consultations were rare. Politicians usually ignored the Good Father because he made no campaign contributions.
Among the suggestions of the Good Father were the following. First, he suggested that Basicland change its laws. It should strongly discourage casino gambling, partly through a complete ban on the trading in financial derivatives, and it should encourage former casino employees—and former casino patrons—to produce and sell items that foreigners were willing to buy. Second, as this change was sure to be painful, he suggested that Basicland's citizens cheerfully embrace their fate. After all, he observed, a man diagnosed with lung cancer is willing to quit smoking and undergo surgery because it is likely to prolong his life.
The views of the Good Father drew some approval, mostly from people who admired the fiscal virtue of the Romans during the Punic Wars. But others, including many of Basicland's prominent economists, had strong objections. These economists had intense faith that any outcome at all in a free market—even wild growth in casino gambling—is constructive. Indeed, these economists were so committed to their basic faith that they looked forward to the day when Basicland would expand real securities trading, as a percentage of securities outstanding, by a factor of 100, so that it could match the speculation level present in the United States just before onslaught of the Great Recession that began in 2008.
The strong faith of these Basicland economists in the beneficence of hypergambling in both securities and financial derivatives stemmed from their utter rejection of the ideas of the great and long-dead economist who had known the most about hyperspeculation, John Maynard Keynes. Keynes had famously said, "When the capital development of a country is the byproduct of the operations of a casino, the job is likely to be ill done." It was easy for these economists to dismiss such a sentence because securities had been so long associated with respectable wealth, and financial derivatives seemed so similar to securities.
Basicland's investment and commercial bankers were hostile to change. Like the objecting economists, the bankers wanted change exactly opposite to change wanted by the Good Father. Such bankers provided constructive services to Basicland. But they had only moderate earnings, which they deeply resented because Basicland's casinos—which provided no such constructive services—reported immoderate earnings from their bucket-shop systems. Moreover, foreign investment bankers had also reported immoderate earnings after building their own bucket-shop systems—and carefully obscuring this fact with ingenious twaddle, including claims that rational risk-management systems were in place, supervised by perfect regulators. Naturally, the ambitious Basicland bankers desired to prosper like the foreign bankers. And so they came to believe that the Good Father lacked any understanding of important and eternal causes of human progress that the bankers were trying to serve by creating more bucket shops in Basicland.
Of course, the most effective political opposition to change came from the gambling casinos themselves. This was not surprising, as at least one casino was located in each legislative district. The casinos resented being compared with cancer when they saw themselves as part of a long-established industry that provided harmless pleasure while improving the thinking skills of its customers.
As it worked out, the politicians ignored the Good Father one more time, and the Basicland banks were allowed to open bucket shops and to finance the purchase and carry of real securities with extreme financial leverage. A couple of economic messes followed, during which every constituency tried to avoid hardship by deflecting it to others. Much counterproductive governmental action was taken, and the country's credit was reduced to tatters. Basicland is now under new management, using a new governmental system. It also has a new nickname: Sorrowland.
Become a fan of Slate on Facebook. Follow us on Twitter.
Charles Munger is vice chairman of Berkshire Hathaway.
13.3.10
History meets the ignorant/forgetful again with "shock and awe"
akhilleus
Bowling Green, KY
Well let's see, the rich get richer, the poor get less all the time, plenty of care for those in power, and devil-may-care for those who aren't. A sense of permanent entitlement for senators and for certain emperors, the idea that they create their own reality no matter what the facts might say.
Sounds like we've become very Roman indeed. And not with the best qualities of that ancient and now dead civilization, either.
But our very recent past contains some events that bear an eerie resemblance to one of the most notorious military disasters in Roman history, one that signaled the beginning of the end for Roman power.
In 9 AD, an unctuous, not very bright Roman commander named Publius Quinctillius Varus, decided to take advantage of rumors (lies, it turns out, of rebellion) to invade a province of what would become Germany. The locals were clearly outgunned by the "greatest army on earth" but they knew their ground. They were smart, ruthlessly efficient, and militarily astute. They had no intention of going toe to toe with the Romans. They trapped them in the forest. Three Roman legions were wiped out to man. Varus thought the natives would greet them with flowers and it would all be over in days.
Varus had no plan other than a Roman version of "Shock and Awe". The natives, led by Arminius, were neither. Varus also had no clear plan for what he would do when he got there, nor a plan for retreat if things didn't go as planned. Sound familiar?
Unlike our own glorious commander, Georgius Bushus, Varus never even got to strut around in full armor in front of a "Mission Accomplished" banner. Instead, the emperor, Augustus, decreed that those three legion numbers never be used again. Like Bush, the Romans never believed they ever made any mistakes. It must have been those numbers.
Bad luck, dash it all.
Bowling Green, KY
Well let's see, the rich get richer, the poor get less all the time, plenty of care for those in power, and devil-may-care for those who aren't. A sense of permanent entitlement for senators and for certain emperors, the idea that they create their own reality no matter what the facts might say.
Sounds like we've become very Roman indeed. And not with the best qualities of that ancient and now dead civilization, either.
But our very recent past contains some events that bear an eerie resemblance to one of the most notorious military disasters in Roman history, one that signaled the beginning of the end for Roman power.
In 9 AD, an unctuous, not very bright Roman commander named Publius Quinctillius Varus, decided to take advantage of rumors (lies, it turns out, of rebellion) to invade a province of what would become Germany. The locals were clearly outgunned by the "greatest army on earth" but they knew their ground. They were smart, ruthlessly efficient, and militarily astute. They had no intention of going toe to toe with the Romans. They trapped them in the forest. Three Roman legions were wiped out to man. Varus thought the natives would greet them with flowers and it would all be over in days.
Varus had no plan other than a Roman version of "Shock and Awe". The natives, led by Arminius, were neither. Varus also had no clear plan for what he would do when he got there, nor a plan for retreat if things didn't go as planned. Sound familiar?
Unlike our own glorious commander, Georgius Bushus, Varus never even got to strut around in full armor in front of a "Mission Accomplished" banner. Instead, the emperor, Augustus, decreed that those three legion numbers never be used again. Like Bush, the Romans never believed they ever made any mistakes. It must have been those numbers.
Bad luck, dash it all.
1.3.10
"Well Mr. Big Brother IRS man... take my pound of flesh and sleep well"
Andrew Joseph Stack, 53, has been identified as the man who flew a small plane into an Austin building housing IRS offices. Here's his letter:
If you’re reading this, you’re no doubt asking yourself, “Why did this have to happen?” The simple truth is that it is complicated and has been coming for a long time. The writing process, started many months ago, was intended to be therapy in the face of the looming realization that there isn’t enough therapy in the world that can fix what is really broken. Needless to say, this rant could fill volumes with example after example if I would let it. I find the process of writing it frustrating, tedious, and probably pointless… especially given my gross inability to gracefully articulate my thoughts in light of the storm raging in my head. Exactly what is therapeutic about that I’m not sure, but desperate times call for desperate measures.
We are all taught as children that without laws there would be no society, only anarchy. Sadly, starting at early ages we in this country have been brainwashed to believe that, in return for our dedication and service, our government stands for justice for all. We are further brainwashed to believe that there is freedom in this place, and that we should be ready to lay our lives down for the noble principals represented by its founding fathers. Remember? One of these was “no taxation without representation”. I have spent the total years of my adulthood unlearning that crap from only a few years of my childhood. These days anyone who really stands up for that principal is promptly labeled a “crackpot”, traitor and worse.
While very few working people would say they haven’t had their fair share of taxes (as can I), in my lifetime I can say with a great degree of certainty that there has never been a politician cast a vote on any matter with the likes of me or my interests in mind. Nor, for that matter, are they the least bit interested in me or anything I have to say.
Why is it that a handful of thugs and plunderers can commit unthinkable atrocities (and in the case of the GM executives, for scores of years) and when it’s time for their gravy train to crash under the weight of their gluttony and overwhelming stupidity, the force of the full federal government has no difficulty coming to their aid within days if not hours? Yet at the same time, the joke we call the American medical system, including the drug and insurance companies, are murdering tens of thousands of people a year and stealing from the corpses and victims they cripple, and this country’s leaders don’t see this as important as bailing out a few of their vile, rich cronies. Yet, the political “representatives” (thieves, liars, and self-serving scumbags is far more accurate) have endless time to sit around for year after year and debate the state of the “terrible health care problem”. It’s clear they see no crisis as long as the dead people don’t get in the way of their corporate profits rolling in.
And justice? You’ve got to be kidding!
How can any rational individual explain that white elephant conundrum in the middle of our tax system and, indeed, our entire legal system? Here we have a system that is, by far, too complicated for the brightest of the master scholars to understand. Yet, it mercilessly “holds accountable” its victims, claiming that they’re responsible for fully complying with laws not even the experts understand. The law “requires” a signature on the bottom of a tax filing; yet no one can say truthfully that they understand what they are signing; if that’s not “duress” than what is. If this is not the measure of a totalitarian regime, nothing is.
How did I get here?
My introduction to the real American nightmare starts back in the early ‘80s. Unfortunately after more than 16 years of school, somewhere along the line I picked up the absurd, pompous notion that I could read and understand plain English. Some friends introduced me to a group of people who were having ‘tax code’ readings and discussions. In particular, zeroed in on a section relating to the wonderful “exemptions” that make institutions like the vulgar, corrupt Catholic Church so incredibly wealthy. We carefully studied the law (with the help of some of the “best”, high-paid, experienced tax lawyers in the business), and then began to do exactly what the “big boys” were doing (except that we weren’t steeling from our congregation or lying to the government about our massive profits in the name of God). We took a great deal of care to make it all visible, following all of the rules, exactly the way the law said it was to be done.
The intent of this exercise and our efforts was to bring about a much-needed re-evaluation of the laws that allow the monsters of organized religion to make such a mockery of people who earn an honest living. However, this is where I learned that there are two “interpretations” for every law; one for the very rich, and one for the rest of us… Oh, and the monsters are the very ones making and enforcing the laws; the inquisition is still alive and well today in this country.
That little lesson in patriotism cost me $40,000+, 10 years of my life, and set my retirement plans back to 0. It made me realize for the first time that I live in a country with an ideology that is based on a total and complete lie. It also made me realize, not only how naive I had been, but also the incredible stupidity of the American public; that they buy, hook, line, and sinker, the crap about their “freedom”… and that they continue to do so with eyes closed in the face of overwhelming evidence and all that keeps happening in front of them.
Before even having to make a shaky recovery from the sting of the first lesson on what justice really means in this country (around 1984 after making my way through engineering school and still another five years of “paying my dues”), I felt I finally had to take a chance of launching my dream of becoming an independent engineer.
On the subjects of engineers and dreams of independence, I should digress somewhat to say that I’m sure that I inherited the fascination for creative problem solving from my father. I realized this at a very young age.
The significance of independence, however, came much later during my early years of college; at the age of 18 or 19 when I was living on my own as student in an apartment in Harrisburg, Pennsylvania. My neighbor was an elderly retired woman (80+ seemed ancient to me at that age) who was the widowed wife of a retired steel worker. Her husband had worked all his life in the steel mills of central Pennsylvania with promises from big business and the union that, for his 30 years of service, he would have a pension and medical care to look forward to in his retirement. Instead he was one of the thousands who got nothing because the incompetent mill management and corrupt union (not to mention the government) raided their pension funds and stole their retirement. All she had was social security to live on.
In retrospect, the situation was laughable because here I was living on peanut butter and bread (or Ritz crackers when I could afford to splurge) for months at a time. When I got to know this poor figure and heard her story I felt worse for her plight than for my own (I, after all, I thought I had everything to in front of me). I was genuinely appalled at one point, as we exchanged stories and commiserated with each other over our situations, when she in her grandmotherly fashion tried to convince me that I would be “healthier” eating cat food (like her) rather than trying to get all my substance from peanut butter and bread. I couldn’t quite go there, but the impression was made. I decided that I didn’t trust big business to take care of me, and that I would take responsibility for my own future and myself.
Return to the early ‘80s, and here I was off to a terrifying start as a ‘wet-behind-the-ears’ contract software engineer... and two years later, thanks to the fine backroom, midnight effort by the sleazy executives of Arthur Andersen (the very same folks who later brought us Enron and other such calamities) and an equally sleazy New York Senator (Patrick Moynihan), we saw the passage of 1986 tax reform act with its section 1706.
For you who are unfamiliar, here is the core text of the IRS Section 1706, defining the treatment of workers (such as contract engineers) for tax purposes. Visit this link for a conference committee report (http://www.synergistech.com/1706.shtml#ConferenceCommitteeReport) regarding the intended interpretation of Section 1706 and the relevant parts of Section 530, as amended. For information on how these laws affect technical services workers and their clients, read our discussion here (http://www.synergistech.com/ic-taxlaw.shtml).
SEC. 1706. TREATMENT OF CERTAIN TECHNICAL PERSONNEL.
(a) IN GENERAL - Section 530 of the Revenue Act of 1978 is amended by adding at the end thereof the following new subsection:
(d) EXCEPTION. - This section shall not apply in the case of an individual who pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.
(b) EFFECTIVE DATE. - The amendment made by this section shall apply to remuneration paid and services rendered after December 31, 1986.
Note:
· "another person" is the client in the traditional job-shop relationship.
· "taxpayer" is the recruiter, broker, agency, or job shop.
· "individual", "employee", or "worker" is you.
Admittedly, you need to read the treatment to understand what it is saying but it’s not very complicated. The bottom line is that they may as well have put my name right in the text of section (d). Moreover, they could only have been more blunt if they would have came out and directly declared me a criminal and non-citizen slave. Twenty years later, I still can’t believe my eyes.
During 1987, I spent close to $5000 of my ‘pocket change’, and at least 1000 hours of my time writing, printing, and mailing to any senator, congressman, governor, or slug that might listen; none did, and they universally treated me as if I was wasting their time. I spent countless hours on the L.A. freeways driving to meetings and any and all of the disorganized professional groups who were attempting to mount a campaign against this atrocity. This, only to discover that our efforts were being easily derailed by a few moles from the brokers who were just beginning to enjoy the windfall from the new declaration of their “freedom”. Oh, and don’t forget, for all of the time I was spending on this, I was loosing income that I couldn’t bill clients.
After months of struggling it had clearly gotten to be a futile exercise. The best we could get for all of our trouble is a pronouncement from an IRS mouthpiece that they weren’t going to enforce that provision (read harass engineers and scientists). This immediately proved to be a lie, and the mere existence of the regulation began to have its impact on my bottom line; this, of course, was the intended effect.
Again, rewind my retirement plans back to 0 and shift them into idle. If I had any sense, I clearly should have left abandoned engineering and never looked back.
Instead I got busy working 100-hour workweeks. Then came the L.A. depression of the early 1990s. Our leaders decided that they didn’t need the all of those extra Air Force bases they had in Southern California, so they were closed; just like that. The result was economic devastation in the region that rivaled the widely publicized Texas S&L fiasco. However, because the government caused it, no one gave a shit about all of the young families who lost their homes or street after street of boarded up houses abandoned to the wealthy loan companies who received government funds to “shore up” their windfall. Again, I lost my retirement.
Years later, after weathering a divorce and the constant struggle trying to build some momentum with my business, I find myself once again beginning to finally pick up some speed. Then came the .COM bust and the 911 nightmare. Our leaders decided that all aircraft were grounded for what seemed like an eternity; and long after that, ‘special’ facilities like San Francisco were on security alert for months. This made access to my customers prohibitively expensive. Ironically, after what they had done the Government came to the aid of the airlines with billions of our tax dollars … as usual they left me to rot and die while they bailed out their rich, incompetent cronies WITH MY MONEY! After these events, there went my business but not quite yet all of my retirement and savings.
By this time, I’m thinking that it might be good for a change. Bye to California, I’ll try Austin for a while. So I moved, only to find out that this is a place with a highly inflated sense of self-importance and where damn little real engineering work is done. I’ve never experienced such a hard time finding work. The rates are 1/3 of what I was earning before the crash, because pay rates here are fixed by the three or four large companies in the area who are in collusion to drive down prices and wages… and this happens because the justice department is all on the take and doesn’t give a fuck about serving anyone or anything but themselves and their rich buddies.
To survive, I was forced to cannibalize my savings and retirement, the last of which was a small IRA. This came in a year with mammoth expenses and not a single dollar of income. I filed no return that year thinking that because I didn’t have any income there was no need. The sleazy government decided that they disagreed. But they didn’t notify me in time for me to launch a legal objection so when I attempted to get a protest filed with the court I was told I was no longer entitled to due process because the time to file ran out. Bend over for another $10,000 helping of justice.
So now we come to the present. After my experience with the CPA world, following the business crash I swore that I’d never enter another accountant’s office again. But here I am with a new marriage and a boatload of undocumented income, not to mention an expensive new business asset, a piano, which I had no idea how to handle. After considerable thought I decided that it would be irresponsible NOT to get professional help; a very big mistake.
When we received the forms back I was very optimistic that they were in order. I had taken all of the years information to Bill Ross, and he came back with results very similar to what I was expecting. Except that he had neglected to include the contents of Sheryl’s unreported income; $12,700 worth of it. To make matters worse, Ross knew all along this was missing and I didn’t have a clue until he pointed it out in the middle of the audit. By that time it had become brutally evident that he was representing himself and not me.
This left me stuck in the middle of this disaster trying to defend transactions that have no relationship to anything tax-related (at least the tax-related transactions were poorly documented). Things I never knew anything about and things my wife had no clue would ever matter to anyone. The end result is… well, just look around.
I remember reading about the stock market crash before the “great” depression and how there were wealthy bankers and businessmen jumping out of windows when they realized they screwed up and lost everything. Isn’t it ironic how far we’ve come in 60 years in this country that they now know how to fix that little economic problem; they just steal from the middle class (who doesn’t have any say in it, elections are a joke) to cover their asses and it’s “business-as-usual”. Now when the wealthy fuck up, the poor get to die for the mistakes… isn’t that a clever, tidy solution.
As government agencies go, the FAA is often justifiably referred to as a tombstone agency, though they are hardly alone. The recent presidential puppet GW Bush and his cronies in their eight years certainly reinforced for all of us that this criticism rings equally true for all of the government. Nothing changes unless there is a body count (unless it is in the interest of the wealthy sows at the government trough). In a government full of hypocrites from top to bottom, life is as cheap as their lies and their self-serving laws.
I know I’m hardly the first one to decide I have had all I can stand. It has always been a myth that people have stopped dying for their freedom in this country, and it isn’t limited to the blacks, and poor immigrants. I know there have been countless before me and there are sure to be as many after. But I also know that by not adding my body to the count, I insure nothing will change. I choose to not keep looking over my shoulder at “big brother” while he strips my carcass, I choose not to ignore what is going on all around me, I choose not to pretend that business as usual won’t continue; I have just had enough.
I can only hope that the numbers quickly get too big to be white washed and ignored that the American zombies wake up and revolt; it will take nothing less. I would only hope that by striking a nerve that stimulates the inevitable double standard, knee-jerk government reaction that results in more stupid draconian restrictions people wake up and begin to see the pompous political thugs and their mindless minions for what they are. Sadly, though I spent my entire life trying to believe it wasn’t so, but violence not only is the answer, it is the only answer. The cruel joke is that the really big chunks of shit at the top have known this all along and have been laughing, at and using this awareness against, fools like me all along.
I saw it written once that the definition of insanity is repeating the same process over and over and expecting the outcome to suddenly be different. I am finally ready to stop this insanity. Well, Mr. Big Brother IRS man, let’s try something different; take my pound of flesh and sleep well.
The communist creed: From each according to his ability, to each according to his need.
The capitalist creed: From each according to his gullibility, to each according to his greed.
Joe Stack (1956-2010)
02/18/2010
If you’re reading this, you’re no doubt asking yourself, “Why did this have to happen?” The simple truth is that it is complicated and has been coming for a long time. The writing process, started many months ago, was intended to be therapy in the face of the looming realization that there isn’t enough therapy in the world that can fix what is really broken. Needless to say, this rant could fill volumes with example after example if I would let it. I find the process of writing it frustrating, tedious, and probably pointless… especially given my gross inability to gracefully articulate my thoughts in light of the storm raging in my head. Exactly what is therapeutic about that I’m not sure, but desperate times call for desperate measures.
We are all taught as children that without laws there would be no society, only anarchy. Sadly, starting at early ages we in this country have been brainwashed to believe that, in return for our dedication and service, our government stands for justice for all. We are further brainwashed to believe that there is freedom in this place, and that we should be ready to lay our lives down for the noble principals represented by its founding fathers. Remember? One of these was “no taxation without representation”. I have spent the total years of my adulthood unlearning that crap from only a few years of my childhood. These days anyone who really stands up for that principal is promptly labeled a “crackpot”, traitor and worse.
While very few working people would say they haven’t had their fair share of taxes (as can I), in my lifetime I can say with a great degree of certainty that there has never been a politician cast a vote on any matter with the likes of me or my interests in mind. Nor, for that matter, are they the least bit interested in me or anything I have to say.
Why is it that a handful of thugs and plunderers can commit unthinkable atrocities (and in the case of the GM executives, for scores of years) and when it’s time for their gravy train to crash under the weight of their gluttony and overwhelming stupidity, the force of the full federal government has no difficulty coming to their aid within days if not hours? Yet at the same time, the joke we call the American medical system, including the drug and insurance companies, are murdering tens of thousands of people a year and stealing from the corpses and victims they cripple, and this country’s leaders don’t see this as important as bailing out a few of their vile, rich cronies. Yet, the political “representatives” (thieves, liars, and self-serving scumbags is far more accurate) have endless time to sit around for year after year and debate the state of the “terrible health care problem”. It’s clear they see no crisis as long as the dead people don’t get in the way of their corporate profits rolling in.
And justice? You’ve got to be kidding!
How can any rational individual explain that white elephant conundrum in the middle of our tax system and, indeed, our entire legal system? Here we have a system that is, by far, too complicated for the brightest of the master scholars to understand. Yet, it mercilessly “holds accountable” its victims, claiming that they’re responsible for fully complying with laws not even the experts understand. The law “requires” a signature on the bottom of a tax filing; yet no one can say truthfully that they understand what they are signing; if that’s not “duress” than what is. If this is not the measure of a totalitarian regime, nothing is.
How did I get here?
My introduction to the real American nightmare starts back in the early ‘80s. Unfortunately after more than 16 years of school, somewhere along the line I picked up the absurd, pompous notion that I could read and understand plain English. Some friends introduced me to a group of people who were having ‘tax code’ readings and discussions. In particular, zeroed in on a section relating to the wonderful “exemptions” that make institutions like the vulgar, corrupt Catholic Church so incredibly wealthy. We carefully studied the law (with the help of some of the “best”, high-paid, experienced tax lawyers in the business), and then began to do exactly what the “big boys” were doing (except that we weren’t steeling from our congregation or lying to the government about our massive profits in the name of God). We took a great deal of care to make it all visible, following all of the rules, exactly the way the law said it was to be done.
The intent of this exercise and our efforts was to bring about a much-needed re-evaluation of the laws that allow the monsters of organized religion to make such a mockery of people who earn an honest living. However, this is where I learned that there are two “interpretations” for every law; one for the very rich, and one for the rest of us… Oh, and the monsters are the very ones making and enforcing the laws; the inquisition is still alive and well today in this country.
That little lesson in patriotism cost me $40,000+, 10 years of my life, and set my retirement plans back to 0. It made me realize for the first time that I live in a country with an ideology that is based on a total and complete lie. It also made me realize, not only how naive I had been, but also the incredible stupidity of the American public; that they buy, hook, line, and sinker, the crap about their “freedom”… and that they continue to do so with eyes closed in the face of overwhelming evidence and all that keeps happening in front of them.
Before even having to make a shaky recovery from the sting of the first lesson on what justice really means in this country (around 1984 after making my way through engineering school and still another five years of “paying my dues”), I felt I finally had to take a chance of launching my dream of becoming an independent engineer.
On the subjects of engineers and dreams of independence, I should digress somewhat to say that I’m sure that I inherited the fascination for creative problem solving from my father. I realized this at a very young age.
The significance of independence, however, came much later during my early years of college; at the age of 18 or 19 when I was living on my own as student in an apartment in Harrisburg, Pennsylvania. My neighbor was an elderly retired woman (80+ seemed ancient to me at that age) who was the widowed wife of a retired steel worker. Her husband had worked all his life in the steel mills of central Pennsylvania with promises from big business and the union that, for his 30 years of service, he would have a pension and medical care to look forward to in his retirement. Instead he was one of the thousands who got nothing because the incompetent mill management and corrupt union (not to mention the government) raided their pension funds and stole their retirement. All she had was social security to live on.
In retrospect, the situation was laughable because here I was living on peanut butter and bread (or Ritz crackers when I could afford to splurge) for months at a time. When I got to know this poor figure and heard her story I felt worse for her plight than for my own (I, after all, I thought I had everything to in front of me). I was genuinely appalled at one point, as we exchanged stories and commiserated with each other over our situations, when she in her grandmotherly fashion tried to convince me that I would be “healthier” eating cat food (like her) rather than trying to get all my substance from peanut butter and bread. I couldn’t quite go there, but the impression was made. I decided that I didn’t trust big business to take care of me, and that I would take responsibility for my own future and myself.
Return to the early ‘80s, and here I was off to a terrifying start as a ‘wet-behind-the-ears’ contract software engineer... and two years later, thanks to the fine backroom, midnight effort by the sleazy executives of Arthur Andersen (the very same folks who later brought us Enron and other such calamities) and an equally sleazy New York Senator (Patrick Moynihan), we saw the passage of 1986 tax reform act with its section 1706.
For you who are unfamiliar, here is the core text of the IRS Section 1706, defining the treatment of workers (such as contract engineers) for tax purposes. Visit this link for a conference committee report (http://www.synergistech.com/1706.shtml#ConferenceCommitteeReport) regarding the intended interpretation of Section 1706 and the relevant parts of Section 530, as amended. For information on how these laws affect technical services workers and their clients, read our discussion here (http://www.synergistech.com/ic-taxlaw.shtml).
SEC. 1706. TREATMENT OF CERTAIN TECHNICAL PERSONNEL.
(a) IN GENERAL - Section 530 of the Revenue Act of 1978 is amended by adding at the end thereof the following new subsection:
(d) EXCEPTION. - This section shall not apply in the case of an individual who pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.
(b) EFFECTIVE DATE. - The amendment made by this section shall apply to remuneration paid and services rendered after December 31, 1986.
Note:
· "another person" is the client in the traditional job-shop relationship.
· "taxpayer" is the recruiter, broker, agency, or job shop.
· "individual", "employee", or "worker" is you.
Admittedly, you need to read the treatment to understand what it is saying but it’s not very complicated. The bottom line is that they may as well have put my name right in the text of section (d). Moreover, they could only have been more blunt if they would have came out and directly declared me a criminal and non-citizen slave. Twenty years later, I still can’t believe my eyes.
During 1987, I spent close to $5000 of my ‘pocket change’, and at least 1000 hours of my time writing, printing, and mailing to any senator, congressman, governor, or slug that might listen; none did, and they universally treated me as if I was wasting their time. I spent countless hours on the L.A. freeways driving to meetings and any and all of the disorganized professional groups who were attempting to mount a campaign against this atrocity. This, only to discover that our efforts were being easily derailed by a few moles from the brokers who were just beginning to enjoy the windfall from the new declaration of their “freedom”. Oh, and don’t forget, for all of the time I was spending on this, I was loosing income that I couldn’t bill clients.
After months of struggling it had clearly gotten to be a futile exercise. The best we could get for all of our trouble is a pronouncement from an IRS mouthpiece that they weren’t going to enforce that provision (read harass engineers and scientists). This immediately proved to be a lie, and the mere existence of the regulation began to have its impact on my bottom line; this, of course, was the intended effect.
Again, rewind my retirement plans back to 0 and shift them into idle. If I had any sense, I clearly should have left abandoned engineering and never looked back.
Instead I got busy working 100-hour workweeks. Then came the L.A. depression of the early 1990s. Our leaders decided that they didn’t need the all of those extra Air Force bases they had in Southern California, so they were closed; just like that. The result was economic devastation in the region that rivaled the widely publicized Texas S&L fiasco. However, because the government caused it, no one gave a shit about all of the young families who lost their homes or street after street of boarded up houses abandoned to the wealthy loan companies who received government funds to “shore up” their windfall. Again, I lost my retirement.
Years later, after weathering a divorce and the constant struggle trying to build some momentum with my business, I find myself once again beginning to finally pick up some speed. Then came the .COM bust and the 911 nightmare. Our leaders decided that all aircraft were grounded for what seemed like an eternity; and long after that, ‘special’ facilities like San Francisco were on security alert for months. This made access to my customers prohibitively expensive. Ironically, after what they had done the Government came to the aid of the airlines with billions of our tax dollars … as usual they left me to rot and die while they bailed out their rich, incompetent cronies WITH MY MONEY! After these events, there went my business but not quite yet all of my retirement and savings.
By this time, I’m thinking that it might be good for a change. Bye to California, I’ll try Austin for a while. So I moved, only to find out that this is a place with a highly inflated sense of self-importance and where damn little real engineering work is done. I’ve never experienced such a hard time finding work. The rates are 1/3 of what I was earning before the crash, because pay rates here are fixed by the three or four large companies in the area who are in collusion to drive down prices and wages… and this happens because the justice department is all on the take and doesn’t give a fuck about serving anyone or anything but themselves and their rich buddies.
To survive, I was forced to cannibalize my savings and retirement, the last of which was a small IRA. This came in a year with mammoth expenses and not a single dollar of income. I filed no return that year thinking that because I didn’t have any income there was no need. The sleazy government decided that they disagreed. But they didn’t notify me in time for me to launch a legal objection so when I attempted to get a protest filed with the court I was told I was no longer entitled to due process because the time to file ran out. Bend over for another $10,000 helping of justice.
So now we come to the present. After my experience with the CPA world, following the business crash I swore that I’d never enter another accountant’s office again. But here I am with a new marriage and a boatload of undocumented income, not to mention an expensive new business asset, a piano, which I had no idea how to handle. After considerable thought I decided that it would be irresponsible NOT to get professional help; a very big mistake.
When we received the forms back I was very optimistic that they were in order. I had taken all of the years information to Bill Ross, and he came back with results very similar to what I was expecting. Except that he had neglected to include the contents of Sheryl’s unreported income; $12,700 worth of it. To make matters worse, Ross knew all along this was missing and I didn’t have a clue until he pointed it out in the middle of the audit. By that time it had become brutally evident that he was representing himself and not me.
This left me stuck in the middle of this disaster trying to defend transactions that have no relationship to anything tax-related (at least the tax-related transactions were poorly documented). Things I never knew anything about and things my wife had no clue would ever matter to anyone. The end result is… well, just look around.
I remember reading about the stock market crash before the “great” depression and how there were wealthy bankers and businessmen jumping out of windows when they realized they screwed up and lost everything. Isn’t it ironic how far we’ve come in 60 years in this country that they now know how to fix that little economic problem; they just steal from the middle class (who doesn’t have any say in it, elections are a joke) to cover their asses and it’s “business-as-usual”. Now when the wealthy fuck up, the poor get to die for the mistakes… isn’t that a clever, tidy solution.
As government agencies go, the FAA is often justifiably referred to as a tombstone agency, though they are hardly alone. The recent presidential puppet GW Bush and his cronies in their eight years certainly reinforced for all of us that this criticism rings equally true for all of the government. Nothing changes unless there is a body count (unless it is in the interest of the wealthy sows at the government trough). In a government full of hypocrites from top to bottom, life is as cheap as their lies and their self-serving laws.
I know I’m hardly the first one to decide I have had all I can stand. It has always been a myth that people have stopped dying for their freedom in this country, and it isn’t limited to the blacks, and poor immigrants. I know there have been countless before me and there are sure to be as many after. But I also know that by not adding my body to the count, I insure nothing will change. I choose to not keep looking over my shoulder at “big brother” while he strips my carcass, I choose not to ignore what is going on all around me, I choose not to pretend that business as usual won’t continue; I have just had enough.
I can only hope that the numbers quickly get too big to be white washed and ignored that the American zombies wake up and revolt; it will take nothing less. I would only hope that by striking a nerve that stimulates the inevitable double standard, knee-jerk government reaction that results in more stupid draconian restrictions people wake up and begin to see the pompous political thugs and their mindless minions for what they are. Sadly, though I spent my entire life trying to believe it wasn’t so, but violence not only is the answer, it is the only answer. The cruel joke is that the really big chunks of shit at the top have known this all along and have been laughing, at and using this awareness against, fools like me all along.
I saw it written once that the definition of insanity is repeating the same process over and over and expecting the outcome to suddenly be different. I am finally ready to stop this insanity. Well, Mr. Big Brother IRS man, let’s try something different; take my pound of flesh and sleep well.
The communist creed: From each according to his ability, to each according to his need.
The capitalist creed: From each according to his gullibility, to each according to his greed.
Joe Stack (1956-2010)
02/18/2010
20.2.10
on the (american) elites
open letters to david brooks
Bob Potter
Syracuse, NY
I'll tell you why Americans don't trust elites anymore.
We don't trust political elites because we can see that they are for sale to whoever comes up with the most campaign cash. The ones with the most cash are always the large corporations, so the government obligingly "gets out of their way". Under relaxed regulations corporations can legally do things that harm the general welfare (need I provide examples?). So we've learned not to trust the corporate elites.
Why don't we trust the elites of the "truth professions" (journalism, science, and education)? Because the corrupted corporate and political elites have waged a concerted campaign to discredit those professions. They simply don't want their misdeeds to be understood by the American people. Every time you hear "biased mainstream media", "global warming hoax", "ivory tower eggheads" or the like, you know what I mean. Even the word "elite" itself has been turned into a pejorative (but only when applied to the truth professions).
I could go on, but I'm too tired and depressed by it all.
Kate Madison
Depoe Bay, Oregon
..."This is not to say that we should return to the days of the WASP ascendancy. That’s neither possible nor desirable."
Could have fooled me, David! Seems like that is exactly what you are saying! Less transparency--hmmm, like more lurid little secrets and cover ups? We all know the long-term corroding effects of secrets in family and other systems. And you say no longer are rich families passing their thrones down to their progeny. What are you saying here? Seems to me that most of the graduates of business schools at elite Ivy League universities ARE the offspring of wealthy, or at least, well connected families! And they go on to work for big wealthy corporations. Oh yeah, a few affirmative action students here and there, but anybody paying full tuition has got to have money!!! Either that or drown in student loans.
I think you are right though that the rich and well connected these days do not go out for two martini lunches and a round of golf. They are much more likely to be workaholics, go home late at night and possibly do a few lines of cocaine.
As for empathy, WHAT? Our modern executive elites are no more or less psychopathic than those who came before. The upper 1% of our pathetic society is entitled, consumptive to a sickening degree, and has no clue what the word "enough" means--just as those who preceded them did not! Please do not try to con us by talking about the good old days! For most people they never existed!!
stevemerlan
Redwood City CA
As the sum of wealth in society has grown, so-called "elite" education has become more and more a matter of learning how to ride the gravy train. As Mr. Brooks says, once your social origins were the key to the share of the pie you were likely to get. Now it's more possible to start on the outside and wind up in a very well paid inside, but at the expense of neglecting studies and activities that don't lead directly to a large bonus. There were good reasons for reading Caesar's Gallic Wars in Latin; first it forced you to learn another language and study a very different society, second it told you that winners and losers alike come to dust.
American education of the last few generations has a lot to answer for.
David Isenbergh
Washington, DC
I accept a lot of what Mr. Brooks says, but there's something I'd like to add:
Back in the 1950's, the elites were defined by their contributions to the practical well-being of ordinary Americans. I can recall a magazine interview of the late J. Paul Getty, in which he was asked to state the accomplishment he was most proud of. He replied that his greatest achievement was providing good jobs for tens of thousands of his fellow citizens. Think of Ford. Think of General Motors. General Electric. These great corporate entities enabled hundreds of thousands of American to enter the middle class. But today such entitites are no longer the great engines of domestic employment they once were. Shifts toward financial operations as well as reliance on foreign-made parts and assembly have greatly eroded their economic value for working American. The need to contribute directly to the common man, in terms of goods, services and jobs, is no longer a priority for America's privileged elite.
Phil in the mountains of Kyushu
Japan
What you take to be diversity at the top only looks that way from the outside -- skin color, gender, ethnic background. Yes, these new inclusions count for much, at many levels, both for the former excluded and their excluders -- or they would count for much, if the insides of all these rainbows hadn't also been corroded and reduced.
These reductions come from everybody who appears different all now getting the same de-personalized courses of instruction at all corporate academe. While people in classrooms shows obvious external diversity, instructors don't call on students to access these differences. Instructors call on students to reduce vocab and ranges of reference to each department's specialization orthodoxies. Americans haven't grown on the inside, but have shrunk -- to fit corporate agendas, such as the frauds that rule Wall Street, ga-ga consumerism that rules masses, the corporate money that rules the White House and Congress, and the permanent cycles of elections that now the Supreme Court says ought be even more lop-sided corporate.
All this diversity in superficial appearance doesn't help, either, as American policy steamrolls the world for the corporate interests, too, with thuggeries of military force as ongoing predictable. Americans don't know more foreign languages. Americans have no new peace initiatives, such as from the Fulbright program, which steadily chugs on simply as reward bennie for corporate academe.
No, you've really missed it here, seeing diversity on the outside, and mistaking that for insides which remain too largely gutted for the corporate training too many have gotten.
Cdr. John Newlin
Vista, Calif.
So, today financial firms recruit heavily from the Ivy League schools? Really? Given the lack of morals and the rampant greed and corruption so starkly evident in the financial community today, one must wonder if the Ivy League schools bother to teach ethics? Or perhaps they teach a different form of ethics. An ethos based on Gordon Gekko's "Greed is good" philosophy.
I'm not sure you are a journalist, Mr. Brooks, but for the sake of this comment, I will assume that you are. So you are a cultured analyst who drinks a lot of water? Actually your definition of modern journalists sounds a lot like that of modern elitists, Mr. Brooks.
Empathy is a skill? You've got to be kidding, Mr. Brooks. How does one, like yourself for example, who has no empathy whatsoever for the common middle class, acquire that skill? I admit that I haven't looked but I would bet that one cannot find a single university or college in this land that offers "Empathy 101."
After reading the rest of your offering today, Mr. Brooks, I am indeed convinced that you are so disconnected with American culture as to deservedly be asked, "From which planet do you submit your columns?"
Calgacus
Britannia
Mr. Brooks has a curious concept of "meritocracy." While certainly more people have obtained formal educations and credentials, those attainments do not make them more learned, nor do they display much merit; for example, the previous president of the US had "gentleman's C's" while at Yale and doubtless also in his MBA at Harvard, yet one would never make the mistake of thinking that any of his achievements in life had anything to do with merit, whether he was running small oil companies into the ground or running a large, nuclear-armed country into the ground.
Elitism, contrary to what Mr. Brooks asserts, is alive and thriving in the United States. It is not the elitism of intellect that rules, however, but the elitism of money. Indeed, the latter has been on the rise for the last several decades; the gap between the rich and everyone else in the country has exploded, and the rich themselves have pulled a disappearing act from the rest of society. The social vacuum left by the vanished wealthy has allowed those making $100k per annum to entertain the delusion that they are the rich. Between the delusions of the merely comfortable, and the explosion of accreditation and formal education, a larger proportion of modern society than that of a few generations ago believes that it should have a share of power. Yet real power follows wealth, and wealth has become concentrated at decidedly feudal levels in the US. Furthermore, the growth of the number of positions of power has not increased with the growth of those who believe they should have it. The natural result of such conditions is an increase in instability, competition and conflict in society. One should note that similar conditions enabled the rise of men such as Crassus, Pompey, and Caesar in the Roman Republic, which did not long survive their contest for power.
Elizabeth Fuller
Peterborough, NH
Since our institutions have become more meritocratic the polar ice caps have shrunk, but few of us would claim that this phenomenon has been caused by widening the pool of intellectual elites or by expanding opportunities for education. Just because two things happen simultaneously does not mean cause and effect is involved. It's interesting to speculate why things have gone to hell in a handbasket now that leadership positions are more open to women and minorities, but we have to be really careful about what conclusions we reach and how we arrive at those conclusions.
You say that our system rewards those who can amass technical knowledge. Is that really true? It seem to me our system rewards those who make money, sometimes suppressing technical knowledge in order to generate profits. Even in the arts our society doesn't reward the conservatory-educated, talented musician with extensive technical knowledge more than the booty-shaking pop star. And when we call for a less progressive income tax, aren't we telling those who devote themselves to amassing technical knowledge and contributing to society that we don't value them enough to educate their children well or to provide them with the kind of health care available to those who generate outsized profits?
When a society elevates selfishness to a virtue, as Ayn Rand did, people don't fear being called selfish, and women and minorities can be just as selfish and venal as the good old boys. Maybe the reason things functioned more smoothly in the past was because those in power felt secure where they were. Now the opportunities to cut throats on the way up are open to more and more people, and the atmosphere has become one of kill or be killed. Ruthlessness is what is rewarded.
You point out that there is a need for empathy, and that empathy has nothing to do with a meritocracy. That depends on how you define merit. For many of us values like empathy are what define merit, and we would love to see it replace selfishness, not gradually, but as soon as possible. Before it's too late.
John T. Compton
Rhinebeck, NY
I'm still not clear how David Brooks defines "elites." George Bush and Barack Obama both went to Ivy League schools, so they are elites of a sort. But George Bush never had anything near a grasp of the facts that President Obama demonstrated when he singlehandedly embarrassed the GOP at their retreat. Neither Bush nor virtually any other politician in America today could have schooled the opposition the way President Obama did that day. No, the term "elite" has become conservative code used to demonize intelligence and complexity. It's used by the GOP to pretend it's a party of populists rather than the actual bought-and-paid-for party of big business and corporate greed. But after eight years of an incompetent Republican President and Congress, who did nothing but make the wealthy wealthier, it's getting harder for them to sell the idea that a great leader can be made out of an average American. Thanks to the Republicans, "plain spoken" is becoming a euphemism for "stupid but supports our platform." President Obama may not solve our problems, but his world-class intellect and natural curiosity should be a prerequisite for his job. That's not elitism - it's common sense. We've already seen what happens when we elect incurious, incompetent beer-buddy leaders. Torture, Katrina, unnecessary war and the Bush Recession.
Vincent Amato
New York City
Your strength as a writer and a thinker, David, is crafty disingenuity posing as innocence. Too much transparency? No power elite? Give me a break. The fact that the "old" power elite has withdrawn from the public political process does not mean that it has given up its power, its elitism, or its role in shaping events, just that it is too refined (in its own view of itself) to get down and dirty in the messier realities of the new, supposedly "multi-cultural" agora.
Janice Herbrand
Tacoma, WA
Thanks, David, for expressing an opinion that's going to make neither of us popular: there is something to be said in favor of an hereditary ruling elite. My family was never part of it, but we shared their values; or assumed we did.
These values weren't particularly complicated. You were to be honest in all your dealings, use your money wisely, and keep your private life private. I don't know which is more embarrassing, hearing about the mess many of those we look up to have made of their lives, or having to listen to their public apologies.
We didn't talk about empathy, or probably have much of it. Helping those less fortunate than you was your duty.
Granted that this ethical system wasn't perfect, but it's better than what we have now: judging people's worth by how much money they have.
I'm all in favor of everyone's having a chance to acquire wealth and power, but we do need some guidance on the responsibilities that come with them.
Prof. Jai Prakash Sharma
India
What C.Wright Mills perceived of the US political system and its power elite some decades back is still relevant, though the nature of power elite does seem to have undergone sea change over the years. For, then, it was socially and politically rooted elite, responsive to its support structure, now the elite is self serving and socially-politically insulated, hence fails to command respect and recognition.
Johnny E
Texas
"The things that will destroy America are prosperity at any price,
peace at any price, safety first instead of duty first, the love of
soft living and the get rich quick theory of life." Teddy Roosevelt
Syracuse, NY
I'll tell you why Americans don't trust elites anymore.
We don't trust political elites because we can see that they are for sale to whoever comes up with the most campaign cash. The ones with the most cash are always the large corporations, so the government obligingly "gets out of their way". Under relaxed regulations corporations can legally do things that harm the general welfare (need I provide examples?). So we've learned not to trust the corporate elites.
Why don't we trust the elites of the "truth professions" (journalism, science, and education)? Because the corrupted corporate and political elites have waged a concerted campaign to discredit those professions. They simply don't want their misdeeds to be understood by the American people. Every time you hear "biased mainstream media", "global warming hoax", "ivory tower eggheads" or the like, you know what I mean. Even the word "elite" itself has been turned into a pejorative (but only when applied to the truth professions).
I could go on, but I'm too tired and depressed by it all.
Kate Madison
Depoe Bay, Oregon
..."This is not to say that we should return to the days of the WASP ascendancy. That’s neither possible nor desirable."
Could have fooled me, David! Seems like that is exactly what you are saying! Less transparency--hmmm, like more lurid little secrets and cover ups? We all know the long-term corroding effects of secrets in family and other systems. And you say no longer are rich families passing their thrones down to their progeny. What are you saying here? Seems to me that most of the graduates of business schools at elite Ivy League universities ARE the offspring of wealthy, or at least, well connected families! And they go on to work for big wealthy corporations. Oh yeah, a few affirmative action students here and there, but anybody paying full tuition has got to have money!!! Either that or drown in student loans.
I think you are right though that the rich and well connected these days do not go out for two martini lunches and a round of golf. They are much more likely to be workaholics, go home late at night and possibly do a few lines of cocaine.
As for empathy, WHAT? Our modern executive elites are no more or less psychopathic than those who came before. The upper 1% of our pathetic society is entitled, consumptive to a sickening degree, and has no clue what the word "enough" means--just as those who preceded them did not! Please do not try to con us by talking about the good old days! For most people they never existed!!
stevemerlan
Redwood City CA
As the sum of wealth in society has grown, so-called "elite" education has become more and more a matter of learning how to ride the gravy train. As Mr. Brooks says, once your social origins were the key to the share of the pie you were likely to get. Now it's more possible to start on the outside and wind up in a very well paid inside, but at the expense of neglecting studies and activities that don't lead directly to a large bonus. There were good reasons for reading Caesar's Gallic Wars in Latin; first it forced you to learn another language and study a very different society, second it told you that winners and losers alike come to dust.
American education of the last few generations has a lot to answer for.
David Isenbergh
Washington, DC
I accept a lot of what Mr. Brooks says, but there's something I'd like to add:
Back in the 1950's, the elites were defined by their contributions to the practical well-being of ordinary Americans. I can recall a magazine interview of the late J. Paul Getty, in which he was asked to state the accomplishment he was most proud of. He replied that his greatest achievement was providing good jobs for tens of thousands of his fellow citizens. Think of Ford. Think of General Motors. General Electric. These great corporate entities enabled hundreds of thousands of American to enter the middle class. But today such entitites are no longer the great engines of domestic employment they once were. Shifts toward financial operations as well as reliance on foreign-made parts and assembly have greatly eroded their economic value for working American. The need to contribute directly to the common man, in terms of goods, services and jobs, is no longer a priority for America's privileged elite.
Phil in the mountains of Kyushu
Japan
What you take to be diversity at the top only looks that way from the outside -- skin color, gender, ethnic background. Yes, these new inclusions count for much, at many levels, both for the former excluded and their excluders -- or they would count for much, if the insides of all these rainbows hadn't also been corroded and reduced.
These reductions come from everybody who appears different all now getting the same de-personalized courses of instruction at all corporate academe. While people in classrooms shows obvious external diversity, instructors don't call on students to access these differences. Instructors call on students to reduce vocab and ranges of reference to each department's specialization orthodoxies. Americans haven't grown on the inside, but have shrunk -- to fit corporate agendas, such as the frauds that rule Wall Street, ga-ga consumerism that rules masses, the corporate money that rules the White House and Congress, and the permanent cycles of elections that now the Supreme Court says ought be even more lop-sided corporate.
All this diversity in superficial appearance doesn't help, either, as American policy steamrolls the world for the corporate interests, too, with thuggeries of military force as ongoing predictable. Americans don't know more foreign languages. Americans have no new peace initiatives, such as from the Fulbright program, which steadily chugs on simply as reward bennie for corporate academe.
No, you've really missed it here, seeing diversity on the outside, and mistaking that for insides which remain too largely gutted for the corporate training too many have gotten.
Cdr. John Newlin
Vista, Calif.
So, today financial firms recruit heavily from the Ivy League schools? Really? Given the lack of morals and the rampant greed and corruption so starkly evident in the financial community today, one must wonder if the Ivy League schools bother to teach ethics? Or perhaps they teach a different form of ethics. An ethos based on Gordon Gekko's "Greed is good" philosophy.
I'm not sure you are a journalist, Mr. Brooks, but for the sake of this comment, I will assume that you are. So you are a cultured analyst who drinks a lot of water? Actually your definition of modern journalists sounds a lot like that of modern elitists, Mr. Brooks.
Empathy is a skill? You've got to be kidding, Mr. Brooks. How does one, like yourself for example, who has no empathy whatsoever for the common middle class, acquire that skill? I admit that I haven't looked but I would bet that one cannot find a single university or college in this land that offers "Empathy 101."
After reading the rest of your offering today, Mr. Brooks, I am indeed convinced that you are so disconnected with American culture as to deservedly be asked, "From which planet do you submit your columns?"
Calgacus
Britannia
Mr. Brooks has a curious concept of "meritocracy." While certainly more people have obtained formal educations and credentials, those attainments do not make them more learned, nor do they display much merit; for example, the previous president of the US had "gentleman's C's" while at Yale and doubtless also in his MBA at Harvard, yet one would never make the mistake of thinking that any of his achievements in life had anything to do with merit, whether he was running small oil companies into the ground or running a large, nuclear-armed country into the ground.
Elitism, contrary to what Mr. Brooks asserts, is alive and thriving in the United States. It is not the elitism of intellect that rules, however, but the elitism of money. Indeed, the latter has been on the rise for the last several decades; the gap between the rich and everyone else in the country has exploded, and the rich themselves have pulled a disappearing act from the rest of society. The social vacuum left by the vanished wealthy has allowed those making $100k per annum to entertain the delusion that they are the rich. Between the delusions of the merely comfortable, and the explosion of accreditation and formal education, a larger proportion of modern society than that of a few generations ago believes that it should have a share of power. Yet real power follows wealth, and wealth has become concentrated at decidedly feudal levels in the US. Furthermore, the growth of the number of positions of power has not increased with the growth of those who believe they should have it. The natural result of such conditions is an increase in instability, competition and conflict in society. One should note that similar conditions enabled the rise of men such as Crassus, Pompey, and Caesar in the Roman Republic, which did not long survive their contest for power.
Elizabeth Fuller
Peterborough, NH
Since our institutions have become more meritocratic the polar ice caps have shrunk, but few of us would claim that this phenomenon has been caused by widening the pool of intellectual elites or by expanding opportunities for education. Just because two things happen simultaneously does not mean cause and effect is involved. It's interesting to speculate why things have gone to hell in a handbasket now that leadership positions are more open to women and minorities, but we have to be really careful about what conclusions we reach and how we arrive at those conclusions.
You say that our system rewards those who can amass technical knowledge. Is that really true? It seem to me our system rewards those who make money, sometimes suppressing technical knowledge in order to generate profits. Even in the arts our society doesn't reward the conservatory-educated, talented musician with extensive technical knowledge more than the booty-shaking pop star. And when we call for a less progressive income tax, aren't we telling those who devote themselves to amassing technical knowledge and contributing to society that we don't value them enough to educate their children well or to provide them with the kind of health care available to those who generate outsized profits?
When a society elevates selfishness to a virtue, as Ayn Rand did, people don't fear being called selfish, and women and minorities can be just as selfish and venal as the good old boys. Maybe the reason things functioned more smoothly in the past was because those in power felt secure where they were. Now the opportunities to cut throats on the way up are open to more and more people, and the atmosphere has become one of kill or be killed. Ruthlessness is what is rewarded.
You point out that there is a need for empathy, and that empathy has nothing to do with a meritocracy. That depends on how you define merit. For many of us values like empathy are what define merit, and we would love to see it replace selfishness, not gradually, but as soon as possible. Before it's too late.
John T. Compton
Rhinebeck, NY
I'm still not clear how David Brooks defines "elites." George Bush and Barack Obama both went to Ivy League schools, so they are elites of a sort. But George Bush never had anything near a grasp of the facts that President Obama demonstrated when he singlehandedly embarrassed the GOP at their retreat. Neither Bush nor virtually any other politician in America today could have schooled the opposition the way President Obama did that day. No, the term "elite" has become conservative code used to demonize intelligence and complexity. It's used by the GOP to pretend it's a party of populists rather than the actual bought-and-paid-for party of big business and corporate greed. But after eight years of an incompetent Republican President and Congress, who did nothing but make the wealthy wealthier, it's getting harder for them to sell the idea that a great leader can be made out of an average American. Thanks to the Republicans, "plain spoken" is becoming a euphemism for "stupid but supports our platform." President Obama may not solve our problems, but his world-class intellect and natural curiosity should be a prerequisite for his job. That's not elitism - it's common sense. We've already seen what happens when we elect incurious, incompetent beer-buddy leaders. Torture, Katrina, unnecessary war and the Bush Recession.
Vincent Amato
New York City
Your strength as a writer and a thinker, David, is crafty disingenuity posing as innocence. Too much transparency? No power elite? Give me a break. The fact that the "old" power elite has withdrawn from the public political process does not mean that it has given up its power, its elitism, or its role in shaping events, just that it is too refined (in its own view of itself) to get down and dirty in the messier realities of the new, supposedly "multi-cultural" agora.
Janice Herbrand
Tacoma, WA
Thanks, David, for expressing an opinion that's going to make neither of us popular: there is something to be said in favor of an hereditary ruling elite. My family was never part of it, but we shared their values; or assumed we did.
These values weren't particularly complicated. You were to be honest in all your dealings, use your money wisely, and keep your private life private. I don't know which is more embarrassing, hearing about the mess many of those we look up to have made of their lives, or having to listen to their public apologies.
We didn't talk about empathy, or probably have much of it. Helping those less fortunate than you was your duty.
Granted that this ethical system wasn't perfect, but it's better than what we have now: judging people's worth by how much money they have.
I'm all in favor of everyone's having a chance to acquire wealth and power, but we do need some guidance on the responsibilities that come with them.
Prof. Jai Prakash Sharma
India
What C.Wright Mills perceived of the US political system and its power elite some decades back is still relevant, though the nature of power elite does seem to have undergone sea change over the years. For, then, it was socially and politically rooted elite, responsive to its support structure, now the elite is self serving and socially-politically insulated, hence fails to command respect and recognition.
Johnny E
Texas
"The things that will destroy America are prosperity at any price,
peace at any price, safety first instead of duty first, the love of
soft living and the get rich quick theory of life." Teddy Roosevelt
16.2.10
Folk Letter
William
Peoria, Illinois
Were I an unkind person I'd say the boobacracy has awakened, but then I'd have to say "been there done that". I remember in my callow youth, at eighteen, in 1964 standing on one of the main streets in Peoria holding my Goldwater sign aloft as Lyndon Johnson's motorcade drove by. I was against "segregation" but nervous in an inchoate way that LBJ was proposing giving rights to blacks at the expense of the "rights of white men" and would usher in a socialist revolution. I was afraid, even then, that some bogyman was going to take my guns, though I didn't have one and wasn't interested in buying one. It was just the prospect of not being able to wave one any time I wanted at some perceived threat that the Goldwater people had convinced me was an assault on my liberty and the beginning of tyranny. (It seems ironic now that LBJ gave me my first gun and provided me the training in its use.)
I had little grounding in politics and almost no understanding what a modern nation state was about. I didn't realize that we had gone from an agrarian nation to an urban mass society where a highly structured hierarchy was required for cars to move seamlessly from New York to California and a coordinated system of higher education was necessary for all of the technological changes that were to improve my life in so many ways. I was wedded to the idea that if I followed the common sense of any 18th century yeoman farmer democracy would be saved. At eighteen, the life I'd known was changing all too rapidly for me and I was afraid. JFK was dead and LBJ was co-opting his magnificent political vision to his own unsavory ends. The draft and Vietnam were lingering in the not to distant future. The prospect of bombing North Vietnam "into the stone age" seemed preferable to having to risk my own life in the much more reasoned approach of limited warfare in the world of international power politics.
I suspect that this is how many of those attracted to the Tea Party Movement are feeling today. Mr. Obama's characterization when he spoke in San Francisco was apt, if somewhat poorly constructed, when he talked about people "wedded to their guns and their fundamentalist religion". These are basically good people, neighbors who I've worked with and talked to. People who want the world to be as it was, and have no clear understanding that it can never be that way again unless there is a catastrophic change in demography that will sweep many of us away, along with the fears that they have. Nourished by the pabulum of cynical demagogues-- like Glen Beck, Bill O'Reilly, and Lyndon Larouche and exploited by self serving politicos like Richard Shelby, John Boehner, and Jim Demint they are looking for simple answers and people who promise to bring yesterday, a more understandable time, back. One always listens for the simple explanation first, not just because it's the easiest to understand but also because it takes less effort.
Lenin's promise was simple "bread and peace" and eventually the Russian people got bread and peace, but at a horrible price. Hitler's promise was equally simple to restore the German nation to its rightful place on the world stage. The Germans got that, but the price the they and the world paid was horrendous.
Many of the people coalescing around the Tea Party Movement, young and old, are at the beginning of their political awakening. They are angry and frustrated by what they see and rightly so. They're in the midst of a personal storm. They see their own little boats on the verge of capsizing and they're looking for the calmer seas of yesterday. Eventually many of them will realize that there are no simple solutions and reason will moderate their fear struck emotionalism. In the meantime let's hope, for all of our sakes, that God does indeed protect fools, drunks, and the United States of America.
Peoria, Illinois
Were I an unkind person I'd say the boobacracy has awakened, but then I'd have to say "been there done that". I remember in my callow youth, at eighteen, in 1964 standing on one of the main streets in Peoria holding my Goldwater sign aloft as Lyndon Johnson's motorcade drove by. I was against "segregation" but nervous in an inchoate way that LBJ was proposing giving rights to blacks at the expense of the "rights of white men" and would usher in a socialist revolution. I was afraid, even then, that some bogyman was going to take my guns, though I didn't have one and wasn't interested in buying one. It was just the prospect of not being able to wave one any time I wanted at some perceived threat that the Goldwater people had convinced me was an assault on my liberty and the beginning of tyranny. (It seems ironic now that LBJ gave me my first gun and provided me the training in its use.)
I had little grounding in politics and almost no understanding what a modern nation state was about. I didn't realize that we had gone from an agrarian nation to an urban mass society where a highly structured hierarchy was required for cars to move seamlessly from New York to California and a coordinated system of higher education was necessary for all of the technological changes that were to improve my life in so many ways. I was wedded to the idea that if I followed the common sense of any 18th century yeoman farmer democracy would be saved. At eighteen, the life I'd known was changing all too rapidly for me and I was afraid. JFK was dead and LBJ was co-opting his magnificent political vision to his own unsavory ends. The draft and Vietnam were lingering in the not to distant future. The prospect of bombing North Vietnam "into the stone age" seemed preferable to having to risk my own life in the much more reasoned approach of limited warfare in the world of international power politics.
I suspect that this is how many of those attracted to the Tea Party Movement are feeling today. Mr. Obama's characterization when he spoke in San Francisco was apt, if somewhat poorly constructed, when he talked about people "wedded to their guns and their fundamentalist religion". These are basically good people, neighbors who I've worked with and talked to. People who want the world to be as it was, and have no clear understanding that it can never be that way again unless there is a catastrophic change in demography that will sweep many of us away, along with the fears that they have. Nourished by the pabulum of cynical demagogues-- like Glen Beck, Bill O'Reilly, and Lyndon Larouche and exploited by self serving politicos like Richard Shelby, John Boehner, and Jim Demint they are looking for simple answers and people who promise to bring yesterday, a more understandable time, back. One always listens for the simple explanation first, not just because it's the easiest to understand but also because it takes less effort.
Lenin's promise was simple "bread and peace" and eventually the Russian people got bread and peace, but at a horrible price. Hitler's promise was equally simple to restore the German nation to its rightful place on the world stage. The Germans got that, but the price the they and the world paid was horrendous.
Many of the people coalescing around the Tea Party Movement, young and old, are at the beginning of their political awakening. They are angry and frustrated by what they see and rightly so. They're in the midst of a personal storm. They see their own little boats on the verge of capsizing and they're looking for the calmer seas of yesterday. Eventually many of them will realize that there are no simple solutions and reason will moderate their fear struck emotionalism. In the meantime let's hope, for all of our sakes, that God does indeed protect fools, drunks, and the United States of America.
15.2.10
(European) Views on Euro vs. Krugman's: Euro, expression of European Hubris
Harald
Germany
The first thing about the Euro you have to know is that it isn't primarily a financial tool, but a peace project - as the whole European Union is. The Euro gives Europeans a common symbol which tells every european citizen that we belong together. This is a very important point on a continent shaken by wars for centuries. Even nowadays you can see that old, buried conflicts can suddenly show up like it has in Yugoslavia.
You were able to see the power of a symbol like this in Eastern Germany in 1989 / 1990. Millions of people were demonstrating against the communist government. A lot of them were showing posters like "If the Deutsche Mark doesn't come to us, we will go to the Deutsche Mark." So even when a lot of economists told the government of Western Germany that it would economically bad to expand the Deutsche Mark to eastern Germany, it was absolutely necessary - the people of eastern Germany already started to leave their country for the "golden west".
The euro is also a tool for integration: By eliminating currency exchange risks it helps to foster trade relations and thereby strenghens our Union. This helps strenghen common interests and so we can start and implement common projects like the Lisbon treaty, which gives us opportunities to something like a (weak) federal government and easier ways to come to decisions (e.g. elimination of the unanimity principle in a lot of cases).
In fact, the Euro is the solution to a lot of problems. By requiring fiscal responsibility it strenghens the fundament of Europe. But if a country behaves irresponsible and ignores the rules (with the help of Goldman Sachs and AIG) and runs a hidden 13% debt instead of the allowed 3% debt, then we run into trouble. The rules I mentioned to prevent financial crises wouldn't even be there without the Euro.
Somehow it sounds to me that you actually instead of talking about european problems you only want to talk again about your usual point that deficits don't matter right now. I think in the case of Greece you are wrong. The deficits are the problem here, the problem is not the Euro and there is no easy solution for this government. In Spain a devaluation of its currency would have major and harsh social implications - so it wouldn't be an easy way out, too.
I guess we have common ground if we say that more european integration in some areas is necessary, but this will take time. But the Euro certainly isn't the problem here, it's a helping tool.
Louella Santobello
Nice, France
If Europe's adopting a single currency before the continent was ready for it, what is behind the financial disarray of the UK, which did not adopt the Euro?
William Osler
Philadelphia, PA
"A breakup of the euro is very nearly unthinkable, as a sheer matter of practicality. As Berkeley’s Barry Eichengreen puts it, an attempt to reintroduce a national currency would trigger 'the mother of all financial crises.' "
Professor Krugman: I think you might want to challenge the assumption that the Euro won't break apart because the results of such a schism would be too horrible to contemplate. Since when has this stopped horrible events from happening in the past? There are some who are saying quitely publicly that the Euro is already doomed, and thinking investors should prepare for just such an outcome, which would mean (IMHO) a much higher dollar and much lower stock prices. Caveat emptor!
Pierre Garenne
France
I am regularly bored by "anglosaxon" statements on Europe and the euro which, rather than examining Europe's evolving economic and political situation (for better or worse) consists of simple Europe-bashing. A major factor in the slow speed of Europe's drive to some form of unity (the euro was as much if not more a political than an economic decision) has been the perpetually negative interventions by the UK which tries to profit from its US and financial institutional relations and at the same time not lose out on its exports (including financial services) to Europe(the UK's largest market).
In my view European unity and some form of European (federal?) government would already be in place to our great advantage if it wasn't for British (little Englander) obfuscation, and with it the possibility of finding political and economic solutions for the PIIGS (English nomenclature) problems before the event. The UK is clearly a US and financial industry cat's paw pursuing political and economic policies that benefit a transatlantic financial-banking elite, disrupting Europe-wide financial regulation and political unity is seen as profitable.
Whether, as the UK government argues, the crumbs that the ordinary Brits manage to pick up under the table are sufficient compensation for their country's real economic and political situation is an analysis that is long overdue (by Paul?).
British policy has, over several centuries, been to finance sectorial international interests through the national Exchequer at the expense of the ordinary citizen. Profits are not directly affected by the "transfer of such charges" from company balance sheets to the national Exchequer. One could argue a similar thesis concerning US economic and foreign affairs policies. Does the man-in-the street really benefit? I have serious doubts.
JGB
Paris, France
On the other hand,it was my impression that if Ireland hadn't had the Euro they would have suffered a similar financial calamity to Iceland's (which doesn't have the Euro).
JFF
Boston, Massachusetts
Does this mean that the British - who stuck firmly to the pound sterling - got it right?
JC
Parksville, GWN
As this crisis moves forward, deflation will overtake not only weak economies but will eventually come to reside at the doorstep of the United States. The global under-utilization of industrial capacity, over supply of housing, unsupportable debt repayments, and falling wages will all contribute to the collapse of what will soon be the world's last bastion of Leveraged Capitalism. Unless the Federal Government is willing to annul a large percentage of the vast debts of its citizens, corporations, and lower levels of government, any financial stimulus provided will be used to service debts accumulated by these groups. Corporations will continue to be, at least temporarily, at the head of the line due to the inordinate influence that they wield in the circles of power. However, should such a universal attempt be made, international bond markets will not stand idly by. Expect very large rises in Real Interest Rates as a result. The Great Recession is merely a precursor to a far larger scale event, as the limits of credit-fueled growth have now been reached.
In conjunction with Peak Oil, deflation in this scenario is not universal, as energy and it's dependent products (food and fuel primarily) will rise rapidly as a percentage of disposable income. As necessities (see above) consume an ever larger percentage of total income less remains available for discretionary spending. Deflation does therefore not equate to greater purchasing power for the majority (those with net indebtedness) as purchasing power falls at a greater rate that aggregate prices.
Needless to say this is a terrifying outcome, particularly for corporations, as their survival depends on the continued consumption of non-necessities (both goods and services). Citizens can and will adapt to this new economic reality albeit with dramatic adjustments to quality and style of life. Governments may not be so lucky as their flexibility is constrained by shrinking tax bases, rising social program costs, and the political and economic costs of massive unfunded liabilities.
Even at this late hour governments can still hope to mitigate the worst of the social fallout, as to be forewarned is to be forearmed. The first Great Depression could likely not have been prevented but some of the pain, suffering, and disruption that it caused could have been lessened with the soonest possible adoption of reasonable lending standards, curtailment of predatory corporate behavior, and truthful discourse. The same holds true today.
Nostromo
Zurich
“Europe needs to move much further toward political union, so that European nations start to function more like American states.”
Why? What's wrong with small countries?
Almost the only people in Europe who want “political union” are politicians and political commentators. On the very rare occasions when voters have been allowed to express themselves on the subject, they have mostly voted against it. The whole European enterprise has become profoundly undemocratic.
Furthermore, the EU bureaucracy is more wasteful and expensive than the bureaucracy of any member state (which is really saying something). Eliminating it would have the same effect on Europe's economic performance as removing a ball and chain from the legs of a long-distance runner. The money wasted in Brussels and Strasbourg could be more usefully used to help small businesses create jobs.
Thirty years ago, the European Common Market had a real economic raison d'être: reducing tariffs, and thereby freeing trade, among its members. That was very valuable, and made Europe more prosperous. Now, that reason has largely gone, replaced by WTO treaties which have reduced tariffs and freed trade worldwide. Eliminating the EU would not greatly reduce the trade between (say) France and Germany, because WTO agreements would allow each country's companies to compete in the other. Having outlived its usefulness; imposing a huge bureaucratic cost on the continent; and continuing only in defiance to the wishes of most Europeans, the EU should be abolished, not turned into some monster super-state to appease the lust of politicians for power and the liking of commentators for a superficial simplification of the international scene.
Marie Burns
Fort Myers, Florida
You can blame Europeans on the euromess, but I would rather blame Lloyd Blankfein. Louise Story & other Times reporters wrote yesterday that "One deal [with faltering Greece] created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels." AND in some derivatives deal, the Times reports, "In what amounted to a garage sale on a national scale, Greek officials essentially mortgaged the country’s airports and highways to raise much-needed money." The deal is predicted to be a big loser for Greece, but not for Goldman.
Maybe the officials who made these bad deals were dumb, but bankers have a moral obligation not to purposely ruin the economies of major governments (or continents!) for their own personal gains.
"Savvy businessmen" whose wealth we ought not begrudge? These aren't Masters of the Universe. They're Sleazy Little Opportunists & Scam Artists. It was guys just like these who caused europoet Dante Alighieri to dream up the circles of hell.
The Constant Weader at www.RealityChex.com
P.S. OR, the real trouble with the euro is the French don't have words for eighty & ninety. You should look into that, Paul.
Phil in the mountains of Kyushu
Japan
You want Europeans to "start to function more like American states"?
Oh my gosh -- clearly you haven't read a word of your colleague Gail Collins' columns over the past week. She has had a hilarious time trying to decide which U.S. state out-dysfunctionals all the rest --- an impossible competition, as hundreds of readers' "comments" have shown -- so many varieties of idiocy atop the institutions of so many states.
But, even if you've been negligent in your reading of your colleagues, you really expose ivy-towered limits when you suppose Europe even remotely capable of reducing all its systems of education to such laughably and pathetically tragic new lows as Americans "enjoy" for U.S. schools.
Europeans can never be as dumb as Americans -- a possibility made even more remote by the further dumbing down of the U.S.'s "reality" and idol-idolizng TV shows, and what passes for "news" across most all corporate media.
Or do you evince need for Europeans to copy Americans for another reason -- that people are too decorous in your Princeton digs, and you really pine for all the ludicrous sexual shenanigans that demonstrably increase proportionally as American politicians pursue, too, their corporate donors?
So what is it -- the U.S.'s bad schools, bathetic corporate media, or out-of-control personal lunacies in elected officials -- where do you want old-culture decent Europeans to tumble first?
Patrice Ayme
Hautes Alpes
Dear Paul:
The hubris is all yours. You are an American, you have an American mess on your hands, and, with all due respect, why don't you mind your own business?
You obviously understand strictly nothing to the European construction. You view it as hubris. Europeans see it as the way out of 15 centuries of mess.
All you can suggest is that Spain would make economic war through devaluation to the rest of Europe. Let me reassure you: war was tried before in Europe. You would know this if you had learn history in your heart of hearts, instead of knowing a few glimpses, here and there.
Merkel and Sarkozy understand Europe much better, and they want to increase economic integration. thus, they want to construct towards a better future, not destruct, towards the same ugly past, as you propose.
Now it is in the interest of the USA to destroy the Euro, so you try your best. The help given by the American plutocracy to nascent fascism in Europe can be viewed as an opportunistic plot to destroy Europe. but it did not work. Europe, unfortunately for American hegemony, is not to the USA what Greece was to Rome. When Greece was on its knees, Rome crushed it. Now Greece is on its knees, and the rest of Europe will save it. And Europe is powerful, even militarily powerful (a well kept secret).
I may write an essay on the subject, replying more thoroughly to your Europhobia, but it is barely worth it. In Europe, banks and, in the case of Spain, too much development of tourism and real estate are viewed as the problem. Not the Euro.
In the case of Greece, the military budget is a complicating factor, and so is extravagant spending by the state. This is going to be cracked down on. Because France and Germany are going to lend to Greece, with strings attached. Formal structures will follow.
From the heart of Europe, little crisis is to be seen. But the tone about banks and the USA is getting ever sharper, after Obama's pathetic performance in Copenhagen. So mind your American plate: it is full, and it's a big mess, and it is pretty disgusting.
It is true that my house cleaning lady, Agneska, barely speak French, and her English is not any better. my aging Mom has to use sign language with Agneska. But here she is, in the Alps, having followed her Polish plumber husband who works in a big local French firm. She is very young, and she will learn her French. I know two Russians who came here, knowing little, and now they are perfectly integrated. Integration of Europe is happening, and it is hubris to think it could not be done.
Patrice Ayme
Germany
The first thing about the Euro you have to know is that it isn't primarily a financial tool, but a peace project - as the whole European Union is. The Euro gives Europeans a common symbol which tells every european citizen that we belong together. This is a very important point on a continent shaken by wars for centuries. Even nowadays you can see that old, buried conflicts can suddenly show up like it has in Yugoslavia.
You were able to see the power of a symbol like this in Eastern Germany in 1989 / 1990. Millions of people were demonstrating against the communist government. A lot of them were showing posters like "If the Deutsche Mark doesn't come to us, we will go to the Deutsche Mark." So even when a lot of economists told the government of Western Germany that it would economically bad to expand the Deutsche Mark to eastern Germany, it was absolutely necessary - the people of eastern Germany already started to leave their country for the "golden west".
The euro is also a tool for integration: By eliminating currency exchange risks it helps to foster trade relations and thereby strenghens our Union. This helps strenghen common interests and so we can start and implement common projects like the Lisbon treaty, which gives us opportunities to something like a (weak) federal government and easier ways to come to decisions (e.g. elimination of the unanimity principle in a lot of cases).
In fact, the Euro is the solution to a lot of problems. By requiring fiscal responsibility it strenghens the fundament of Europe. But if a country behaves irresponsible and ignores the rules (with the help of Goldman Sachs and AIG) and runs a hidden 13% debt instead of the allowed 3% debt, then we run into trouble. The rules I mentioned to prevent financial crises wouldn't even be there without the Euro.
Somehow it sounds to me that you actually instead of talking about european problems you only want to talk again about your usual point that deficits don't matter right now. I think in the case of Greece you are wrong. The deficits are the problem here, the problem is not the Euro and there is no easy solution for this government. In Spain a devaluation of its currency would have major and harsh social implications - so it wouldn't be an easy way out, too.
I guess we have common ground if we say that more european integration in some areas is necessary, but this will take time. But the Euro certainly isn't the problem here, it's a helping tool.
Louella Santobello
Nice, France
If Europe's adopting a single currency before the continent was ready for it, what is behind the financial disarray of the UK, which did not adopt the Euro?
William Osler
Philadelphia, PA
"A breakup of the euro is very nearly unthinkable, as a sheer matter of practicality. As Berkeley’s Barry Eichengreen puts it, an attempt to reintroduce a national currency would trigger 'the mother of all financial crises.' "
Professor Krugman: I think you might want to challenge the assumption that the Euro won't break apart because the results of such a schism would be too horrible to contemplate. Since when has this stopped horrible events from happening in the past? There are some who are saying quitely publicly that the Euro is already doomed, and thinking investors should prepare for just such an outcome, which would mean (IMHO) a much higher dollar and much lower stock prices. Caveat emptor!
Pierre Garenne
France
I am regularly bored by "anglosaxon" statements on Europe and the euro which, rather than examining Europe's evolving economic and political situation (for better or worse) consists of simple Europe-bashing. A major factor in the slow speed of Europe's drive to some form of unity (the euro was as much if not more a political than an economic decision) has been the perpetually negative interventions by the UK which tries to profit from its US and financial institutional relations and at the same time not lose out on its exports (including financial services) to Europe(the UK's largest market).
In my view European unity and some form of European (federal?) government would already be in place to our great advantage if it wasn't for British (little Englander) obfuscation, and with it the possibility of finding political and economic solutions for the PIIGS (English nomenclature) problems before the event. The UK is clearly a US and financial industry cat's paw pursuing political and economic policies that benefit a transatlantic financial-banking elite, disrupting Europe-wide financial regulation and political unity is seen as profitable.
Whether, as the UK government argues, the crumbs that the ordinary Brits manage to pick up under the table are sufficient compensation for their country's real economic and political situation is an analysis that is long overdue (by Paul?).
British policy has, over several centuries, been to finance sectorial international interests through the national Exchequer at the expense of the ordinary citizen. Profits are not directly affected by the "transfer of such charges" from company balance sheets to the national Exchequer. One could argue a similar thesis concerning US economic and foreign affairs policies. Does the man-in-the street really benefit? I have serious doubts.
JGB
Paris, France
On the other hand,it was my impression that if Ireland hadn't had the Euro they would have suffered a similar financial calamity to Iceland's (which doesn't have the Euro).
JFF
Boston, Massachusetts
Does this mean that the British - who stuck firmly to the pound sterling - got it right?
JC
Parksville, GWN
As this crisis moves forward, deflation will overtake not only weak economies but will eventually come to reside at the doorstep of the United States. The global under-utilization of industrial capacity, over supply of housing, unsupportable debt repayments, and falling wages will all contribute to the collapse of what will soon be the world's last bastion of Leveraged Capitalism. Unless the Federal Government is willing to annul a large percentage of the vast debts of its citizens, corporations, and lower levels of government, any financial stimulus provided will be used to service debts accumulated by these groups. Corporations will continue to be, at least temporarily, at the head of the line due to the inordinate influence that they wield in the circles of power. However, should such a universal attempt be made, international bond markets will not stand idly by. Expect very large rises in Real Interest Rates as a result. The Great Recession is merely a precursor to a far larger scale event, as the limits of credit-fueled growth have now been reached.
In conjunction with Peak Oil, deflation in this scenario is not universal, as energy and it's dependent products (food and fuel primarily) will rise rapidly as a percentage of disposable income. As necessities (see above) consume an ever larger percentage of total income less remains available for discretionary spending. Deflation does therefore not equate to greater purchasing power for the majority (those with net indebtedness) as purchasing power falls at a greater rate that aggregate prices.
Needless to say this is a terrifying outcome, particularly for corporations, as their survival depends on the continued consumption of non-necessities (both goods and services). Citizens can and will adapt to this new economic reality albeit with dramatic adjustments to quality and style of life. Governments may not be so lucky as their flexibility is constrained by shrinking tax bases, rising social program costs, and the political and economic costs of massive unfunded liabilities.
Even at this late hour governments can still hope to mitigate the worst of the social fallout, as to be forewarned is to be forearmed. The first Great Depression could likely not have been prevented but some of the pain, suffering, and disruption that it caused could have been lessened with the soonest possible adoption of reasonable lending standards, curtailment of predatory corporate behavior, and truthful discourse. The same holds true today.
Nostromo
Zurich
“Europe needs to move much further toward political union, so that European nations start to function more like American states.”
Why? What's wrong with small countries?
Almost the only people in Europe who want “political union” are politicians and political commentators. On the very rare occasions when voters have been allowed to express themselves on the subject, they have mostly voted against it. The whole European enterprise has become profoundly undemocratic.
Furthermore, the EU bureaucracy is more wasteful and expensive than the bureaucracy of any member state (which is really saying something). Eliminating it would have the same effect on Europe's economic performance as removing a ball and chain from the legs of a long-distance runner. The money wasted in Brussels and Strasbourg could be more usefully used to help small businesses create jobs.
Thirty years ago, the European Common Market had a real economic raison d'être: reducing tariffs, and thereby freeing trade, among its members. That was very valuable, and made Europe more prosperous. Now, that reason has largely gone, replaced by WTO treaties which have reduced tariffs and freed trade worldwide. Eliminating the EU would not greatly reduce the trade between (say) France and Germany, because WTO agreements would allow each country's companies to compete in the other. Having outlived its usefulness; imposing a huge bureaucratic cost on the continent; and continuing only in defiance to the wishes of most Europeans, the EU should be abolished, not turned into some monster super-state to appease the lust of politicians for power and the liking of commentators for a superficial simplification of the international scene.
Marie Burns
Fort Myers, Florida
You can blame Europeans on the euromess, but I would rather blame Lloyd Blankfein. Louise Story & other Times reporters wrote yesterday that "One deal [with faltering Greece] created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels." AND in some derivatives deal, the Times reports, "In what amounted to a garage sale on a national scale, Greek officials essentially mortgaged the country’s airports and highways to raise much-needed money." The deal is predicted to be a big loser for Greece, but not for Goldman.
Maybe the officials who made these bad deals were dumb, but bankers have a moral obligation not to purposely ruin the economies of major governments (or continents!) for their own personal gains.
"Savvy businessmen" whose wealth we ought not begrudge? These aren't Masters of the Universe. They're Sleazy Little Opportunists & Scam Artists. It was guys just like these who caused europoet Dante Alighieri to dream up the circles of hell.
The Constant Weader at www.RealityChex.com
P.S. OR, the real trouble with the euro is the French don't have words for eighty & ninety. You should look into that, Paul.
Phil in the mountains of Kyushu
Japan
You want Europeans to "start to function more like American states"?
Oh my gosh -- clearly you haven't read a word of your colleague Gail Collins' columns over the past week. She has had a hilarious time trying to decide which U.S. state out-dysfunctionals all the rest --- an impossible competition, as hundreds of readers' "comments" have shown -- so many varieties of idiocy atop the institutions of so many states.
But, even if you've been negligent in your reading of your colleagues, you really expose ivy-towered limits when you suppose Europe even remotely capable of reducing all its systems of education to such laughably and pathetically tragic new lows as Americans "enjoy" for U.S. schools.
Europeans can never be as dumb as Americans -- a possibility made even more remote by the further dumbing down of the U.S.'s "reality" and idol-idolizng TV shows, and what passes for "news" across most all corporate media.
Or do you evince need for Europeans to copy Americans for another reason -- that people are too decorous in your Princeton digs, and you really pine for all the ludicrous sexual shenanigans that demonstrably increase proportionally as American politicians pursue, too, their corporate donors?
So what is it -- the U.S.'s bad schools, bathetic corporate media, or out-of-control personal lunacies in elected officials -- where do you want old-culture decent Europeans to tumble first?
Patrice Ayme
Hautes Alpes
Dear Paul:
The hubris is all yours. You are an American, you have an American mess on your hands, and, with all due respect, why don't you mind your own business?
You obviously understand strictly nothing to the European construction. You view it as hubris. Europeans see it as the way out of 15 centuries of mess.
All you can suggest is that Spain would make economic war through devaluation to the rest of Europe. Let me reassure you: war was tried before in Europe. You would know this if you had learn history in your heart of hearts, instead of knowing a few glimpses, here and there.
Merkel and Sarkozy understand Europe much better, and they want to increase economic integration. thus, they want to construct towards a better future, not destruct, towards the same ugly past, as you propose.
Now it is in the interest of the USA to destroy the Euro, so you try your best. The help given by the American plutocracy to nascent fascism in Europe can be viewed as an opportunistic plot to destroy Europe. but it did not work. Europe, unfortunately for American hegemony, is not to the USA what Greece was to Rome. When Greece was on its knees, Rome crushed it. Now Greece is on its knees, and the rest of Europe will save it. And Europe is powerful, even militarily powerful (a well kept secret).
I may write an essay on the subject, replying more thoroughly to your Europhobia, but it is barely worth it. In Europe, banks and, in the case of Spain, too much development of tourism and real estate are viewed as the problem. Not the Euro.
In the case of Greece, the military budget is a complicating factor, and so is extravagant spending by the state. This is going to be cracked down on. Because France and Germany are going to lend to Greece, with strings attached. Formal structures will follow.
From the heart of Europe, little crisis is to be seen. But the tone about banks and the USA is getting ever sharper, after Obama's pathetic performance in Copenhagen. So mind your American plate: it is full, and it's a big mess, and it is pretty disgusting.
It is true that my house cleaning lady, Agneska, barely speak French, and her English is not any better. my aging Mom has to use sign language with Agneska. But here she is, in the Alps, having followed her Polish plumber husband who works in a big local French firm. She is very young, and she will learn her French. I know two Russians who came here, knowing little, and now they are perfectly integrated. Integration of Europe is happening, and it is hubris to think it could not be done.
Patrice Ayme
From an Iranian to an American Nobel Prize Economist
Hamid Varzi
Tehran
I simply love it when U.S. economists talk down the Euro, as they have been doing since its inception. Even funnier is the justification that Euroland cooks its books, as if the U.S. Treasury doesn't!
Mr. Krugman, would you care to comment on the 'birth/death' rate, or even the omission of U-7 to U-9 unemployment, that the BLS uses to artificially lower its unemployment 'statistics'? Or about the Federal Reserve purchase of over a quarter of auctioned TBills, under the hilarious category of 'household purchases', to create the false impression that foreigners are still lapping up U.S. debt? Or the U.S. Government's discarding of accounting principles in pegging the U.S. National Debt at around $ 14 trillion when its unfunded liabilities are over $ 50 trillion?
Mr. Krugman, you and other U.S. economists do your nation a gross disservice by constantly 'talking up' your economy at the expense of other economies that have massive trade surpluses, better education, better healthcare, lower crime, far more civil societies and a far lower foreign debt than the U.S.A.. You won't encourage improvement unless and until you start injecting doses of realism into your analyses.
Tehran
I simply love it when U.S. economists talk down the Euro, as they have been doing since its inception. Even funnier is the justification that Euroland cooks its books, as if the U.S. Treasury doesn't!
Mr. Krugman, would you care to comment on the 'birth/death' rate, or even the omission of U-7 to U-9 unemployment, that the BLS uses to artificially lower its unemployment 'statistics'? Or about the Federal Reserve purchase of over a quarter of auctioned TBills, under the hilarious category of 'household purchases', to create the false impression that foreigners are still lapping up U.S. debt? Or the U.S. Government's discarding of accounting principles in pegging the U.S. National Debt at around $ 14 trillion when its unfunded liabilities are over $ 50 trillion?
Mr. Krugman, you and other U.S. economists do your nation a gross disservice by constantly 'talking up' your economy at the expense of other economies that have massive trade surpluses, better education, better healthcare, lower crime, far more civil societies and a far lower foreign debt than the U.S.A.. You won't encourage improvement unless and until you start injecting doses of realism into your analyses.
14.2.10
To all journalists cri..., err mediating Sarah Palin
Paul Dorell
Evanston, IL
I wish you'd stop suggesting that Obama is politically inept. Apparently he's talking over your head too. In fact, Lloyd Blankfein IS a very savvy businessman, and his shrewdness is at the heart of the financial crisis. Goldman Sachs was able to outwit its competitors and the federal government without breaking any laws, making billions of dollars in the process, partly at taxpayer expense. The public and Congress, and you too apparently, need to be educated about what happened, and appropriate regulations must be quickly enacted. Anyone who wastes time discussing Sarah Palin is little more than a dupe for her self-promotion, which has nothing to do with serious public policy and will ultimately relegate her to the sideshows of history.
Evanston, IL
I wish you'd stop suggesting that Obama is politically inept. Apparently he's talking over your head too. In fact, Lloyd Blankfein IS a very savvy businessman, and his shrewdness is at the heart of the financial crisis. Goldman Sachs was able to outwit its competitors and the federal government without breaking any laws, making billions of dollars in the process, partly at taxpayer expense. The public and Congress, and you too apparently, need to be educated about what happened, and appropriate regulations must be quickly enacted. Anyone who wastes time discussing Sarah Palin is little more than a dupe for her self-promotion, which has nothing to do with serious public policy and will ultimately relegate her to the sideshows of history.
The Dems' Ailment
Elizabeth Fuller
Peterborough, NH
When the Supreme Court voted to allow corporations to fund political campaigns, a commenter on these pages wrote in to say that this is what we get after President Obama appoints people like Sonia Sotomayor to the Supreme Court, proving Republicans have done an excellent job of convincing stressed-out Americans who don't have the time to read that they are the party of the common man.
I have stopped wondering why so many people continue to vote against their own best interests, believing that because they are busy and tired, they consume only sound bites, and the Republicans have been masters at writing the best sound bites. What I have continued to wonder is why the Democrats haven't taken the time and spent the money to compare political philosophies in a simple but non-condescending manner in order to point out that the deregulation of business sought by the Republicans is what caused all our retirement funds to shrink and raised interest rates to 29% on credit cards we signed on for at 5.9%. It has been inconceivable to me that they haven't done so.
Only recently has it occurred to me that it may be that the Democrats can't do that because they haven't been putting their money where their mouths are. This country has moved to the right, and if Democrats are going to convince the public their positions are more beneficial to the common man, they're going to have to show voting records that prove they care about those without power or money. They're going to have to drop the centrist label and proudly explain and claim more liberal positions-- positions that twenty years ago may have been called centrist. How many of them can now? Why haven't national usury laws been enacted or even seriously considered? If they can't back up their populist claims with real action, they're no better than Sarah Palin. Democrats--and I count myself among them-- need to grow backbones and proceed civilly, but with the courage of our convictions.
Peterborough, NH
When the Supreme Court voted to allow corporations to fund political campaigns, a commenter on these pages wrote in to say that this is what we get after President Obama appoints people like Sonia Sotomayor to the Supreme Court, proving Republicans have done an excellent job of convincing stressed-out Americans who don't have the time to read that they are the party of the common man.
I have stopped wondering why so many people continue to vote against their own best interests, believing that because they are busy and tired, they consume only sound bites, and the Republicans have been masters at writing the best sound bites. What I have continued to wonder is why the Democrats haven't taken the time and spent the money to compare political philosophies in a simple but non-condescending manner in order to point out that the deregulation of business sought by the Republicans is what caused all our retirement funds to shrink and raised interest rates to 29% on credit cards we signed on for at 5.9%. It has been inconceivable to me that they haven't done so.
Only recently has it occurred to me that it may be that the Democrats can't do that because they haven't been putting their money where their mouths are. This country has moved to the right, and if Democrats are going to convince the public their positions are more beneficial to the common man, they're going to have to show voting records that prove they care about those without power or money. They're going to have to drop the centrist label and proudly explain and claim more liberal positions-- positions that twenty years ago may have been called centrist. How many of them can now? Why haven't national usury laws been enacted or even seriously considered? If they can't back up their populist claims with real action, they're no better than Sarah Palin. Democrats--and I count myself among them-- need to grow backbones and proceed civilly, but with the courage of our convictions.
6.2.10
24.1.10
Post Massachusetts
Tom in San Jose
San Jose, CA
The administration still doesn't get it. In today's NY Times we read, "The White House chief of staff, Rahm Emanuel, and Secretary Geithner were both making calls to senators on Mr. Bernanke’s behalf..." Clearly, President Obama has no intention of addressing the problems that lie at the root of the Massachusetts Massacre.
It is business as usual.
Pluto Finnigan
Gainesville, FL
Obama just gave a speech in Ohio that was all wrong. It was the identical speech that he gave during the campaign. During the campaign in 08, Obama addressed the crowds this way:"you're mad, well I'm mad too...". He repeated this line in Lorain, Ohio just days ago. During the campaign those words meant "I am with you, I understand and I will address those issues". One year into his presidency those words meant "I am trying to get you to think that I get it but obviously I am an ineffective President because you elected me to do something and here I am just repeating what I want to do, not what I'm doing".
I always felt that democrats' fortunes would rise and fall with the health care legislation. Recently, Obama said to Congress: Pass the bill and I will sell it. Those words really bowled me over. It's just all wrong. He is saying that he is a shill. He is saying that the bill is such a cheat that he won't sign on to it today - he'll leave the fashioning of the bill to Congress - but he'll sell it when he can say "well, I wouldn't have made this bill, it isn't perfect, but it's the best congress could do.....blah, blah, blah". This really turns me off. I want Obama to say this is my health care reform plan, this is a plan I will defend to the death and I will take it into the mid terms and put it up against anything the republicans throw at me and if you like their plan then vote for them and if you want my plan then give me allies in Washington so I can pass it.
the reason Coakley lost the election in Mass is simple: Obama beseeched the Mass electorate to send him an ally in DC. He used those words. An ally for what? A health plan that funnels tax dollars into the coffers of big health care insurance companies? Two Bush wars?
In short, why not just vote for the republican?
urnumbersix
Washington, DC
The only way that Obama can "reboot" is to pull some Big rabbits-out-of-the-hat which exclusively benefit the middle-class. "Walk the walk," enough talking! (The Ohio speech was the wrong move - he should have signing Executive Orders.)
That means he's got to take on all the big interests and corporations whose sole task these days seems to be to turn the middle-class into the lower-class. On all fronts, special interests are bleeding America dry, while getting half of America to support them, against these own individuals self-interest.
Obama can do some window-dressing that may result in change, like letting Rahm, Geithner and Summers go "spend more time with their families" and getting some consumer-based aides in place. But that will not be enough!
He must show us that he can actually Deliver. And that he will actually Do what he promises. Then, like JFK, his support will soar among the American people once again. Giving him room and political capital to do more.
Mr. President, Do. Act. Deliver. And we'll come home to you.
WoodyMcBreairty
West Hollywood
Hillary was right when she said before the election "People think if Obama is President, choirs will sing, angels will come down and everything will be all goodness and light", I paraphrase somewhat, but I voted for Hillary in the primary, I think she would have made a much better President. Obama is all image, speaks beautifully, puts English words together masterfully, but he lacks leadership skills, is afraid to be assertive for fear of upsetting someone. I think that's why he voted "present" more than 100 times in the Illinois Senate, so he could remain noncommittal and not expose his true convictions because I think he had running for President in mind even then and tried to play both sides and the middle so he could get everyones support in the Presidential election. He would have made a good ambassador, but he has shown in only 1 year that he does not have the chutzpa or effrontery to deal with such a challenge as the Presidency, especially in these uncertain and troubled times. Maybe he and Joe Biden could trade places. As President Obama said "Nobody messes with Joe."
Phxflyer
Phoenix
Anyone who thinks that all of our nation's ills should have been cured in 12 months is a fool. It took 30 years of republican rule to get into this mess, it will take more than a year to get out of it, a point that every Democrat should emphasize every day. But there is also no doubt that a change of course is needed. President Obama needs to use his bully pulpit and political capital to make it so. He should remind those who oppose him that a majority of Americans elected him to institute these changes, including single payer health care reform . . . and he should start with the members of his own party. A considerable number of Democrats were swept into office last year riding candidate Obama's coattails. And make no mistake: the only reason they were elected was to make sure the proposals of candidate Barack Obama became law under President Barack Obama. While President Obama likes to emulate JFK, when it comes to his managing the members of his own party it's time for President Obama to emulate LBJ.
[In reference to Obama's decision to centralize control over his party's strategy for Fall 2010]
mtdarkhorse
Seattle
I wonder if it will work, re-forming the old team. I'll tell you one thing: many of us who donated large to and worked for Obama are not interested in any more pretty words. We're interested in him behaving as his campaign rhetoric led us to believe he would, instead of the exact opposite. As for those who voted for him but weren't fervent supporters - well, I think further pretty words will just make them more angry than they are.
Here's a suggestion: try replacing some advisors, like Rahm the corporatist Emanuel, Geithner, and Summers. Replace with some people we can trust to care about ordinary Americans. Just that would go a long way in helping people "hope" again.
Roman
Santa Monica
Great! So instead of governing the country whose nominal president he is and instead of steering it into the calmer waters by, for example, saving trillions of dollars now wasted in The Forever War or by putting bosses of The Financial Crime Cartel to the federal penitentiary, our Beloved Leader, the puppet-president for the corporate masters was ordered to babble some more.
These "masters of universe" that pull puppet's strings as always overestimate their powers and underestimate people's feelings. No one wants to hear more of his empty talks, no one would be deceived no more no matter how much media whores they can buy; people want CHANGE, something they voted for.
And the people started to show their rage. Bit by bit; after all we're fat, self-indulgent nation on a forced diet, suffering from sugar rush withdrawal syndrome, but once we clean and sober up, the revolution would start and nothing will stop it. CHANGE starts by throwing all these puppet's puppets he and his propaganda machine will try to prop up by some more of his empty talk.
Hurrb
New Jersey
de-ba'-cle (dibah'kl), n. Break-up of ice in river; (Geol.) sudden rush of water carrying along blocks of stone and other debris; confused rush, rout, stampede; collapse, downfall, e.g. of a government.
San Jose, CA
The administration still doesn't get it. In today's NY Times we read, "The White House chief of staff, Rahm Emanuel, and Secretary Geithner were both making calls to senators on Mr. Bernanke’s behalf..." Clearly, President Obama has no intention of addressing the problems that lie at the root of the Massachusetts Massacre.
It is business as usual.
Pluto Finnigan
Gainesville, FL
Obama just gave a speech in Ohio that was all wrong. It was the identical speech that he gave during the campaign. During the campaign in 08, Obama addressed the crowds this way:"you're mad, well I'm mad too...". He repeated this line in Lorain, Ohio just days ago. During the campaign those words meant "I am with you, I understand and I will address those issues". One year into his presidency those words meant "I am trying to get you to think that I get it but obviously I am an ineffective President because you elected me to do something and here I am just repeating what I want to do, not what I'm doing".
I always felt that democrats' fortunes would rise and fall with the health care legislation. Recently, Obama said to Congress: Pass the bill and I will sell it. Those words really bowled me over. It's just all wrong. He is saying that he is a shill. He is saying that the bill is such a cheat that he won't sign on to it today - he'll leave the fashioning of the bill to Congress - but he'll sell it when he can say "well, I wouldn't have made this bill, it isn't perfect, but it's the best congress could do.....blah, blah, blah". This really turns me off. I want Obama to say this is my health care reform plan, this is a plan I will defend to the death and I will take it into the mid terms and put it up against anything the republicans throw at me and if you like their plan then vote for them and if you want my plan then give me allies in Washington so I can pass it.
the reason Coakley lost the election in Mass is simple: Obama beseeched the Mass electorate to send him an ally in DC. He used those words. An ally for what? A health plan that funnels tax dollars into the coffers of big health care insurance companies? Two Bush wars?
In short, why not just vote for the republican?
urnumbersix
Washington, DC
The only way that Obama can "reboot" is to pull some Big rabbits-out-of-the-hat which exclusively benefit the middle-class. "Walk the walk," enough talking! (The Ohio speech was the wrong move - he should have signing Executive Orders.)
That means he's got to take on all the big interests and corporations whose sole task these days seems to be to turn the middle-class into the lower-class. On all fronts, special interests are bleeding America dry, while getting half of America to support them, against these own individuals self-interest.
Obama can do some window-dressing that may result in change, like letting Rahm, Geithner and Summers go "spend more time with their families" and getting some consumer-based aides in place. But that will not be enough!
He must show us that he can actually Deliver. And that he will actually Do what he promises. Then, like JFK, his support will soar among the American people once again. Giving him room and political capital to do more.
Mr. President, Do. Act. Deliver. And we'll come home to you.
WoodyMcBreairty
West Hollywood
Hillary was right when she said before the election "People think if Obama is President, choirs will sing, angels will come down and everything will be all goodness and light", I paraphrase somewhat, but I voted for Hillary in the primary, I think she would have made a much better President. Obama is all image, speaks beautifully, puts English words together masterfully, but he lacks leadership skills, is afraid to be assertive for fear of upsetting someone. I think that's why he voted "present" more than 100 times in the Illinois Senate, so he could remain noncommittal and not expose his true convictions because I think he had running for President in mind even then and tried to play both sides and the middle so he could get everyones support in the Presidential election. He would have made a good ambassador, but he has shown in only 1 year that he does not have the chutzpa or effrontery to deal with such a challenge as the Presidency, especially in these uncertain and troubled times. Maybe he and Joe Biden could trade places. As President Obama said "Nobody messes with Joe."
Phxflyer
Phoenix
Anyone who thinks that all of our nation's ills should have been cured in 12 months is a fool. It took 30 years of republican rule to get into this mess, it will take more than a year to get out of it, a point that every Democrat should emphasize every day. But there is also no doubt that a change of course is needed. President Obama needs to use his bully pulpit and political capital to make it so. He should remind those who oppose him that a majority of Americans elected him to institute these changes, including single payer health care reform . . . and he should start with the members of his own party. A considerable number of Democrats were swept into office last year riding candidate Obama's coattails. And make no mistake: the only reason they were elected was to make sure the proposals of candidate Barack Obama became law under President Barack Obama. While President Obama likes to emulate JFK, when it comes to his managing the members of his own party it's time for President Obama to emulate LBJ.
[In reference to Obama's decision to centralize control over his party's strategy for Fall 2010]
mtdarkhorse
Seattle
I wonder if it will work, re-forming the old team. I'll tell you one thing: many of us who donated large to and worked for Obama are not interested in any more pretty words. We're interested in him behaving as his campaign rhetoric led us to believe he would, instead of the exact opposite. As for those who voted for him but weren't fervent supporters - well, I think further pretty words will just make them more angry than they are.
Here's a suggestion: try replacing some advisors, like Rahm the corporatist Emanuel, Geithner, and Summers. Replace with some people we can trust to care about ordinary Americans. Just that would go a long way in helping people "hope" again.
Roman
Santa Monica
Great! So instead of governing the country whose nominal president he is and instead of steering it into the calmer waters by, for example, saving trillions of dollars now wasted in The Forever War or by putting bosses of The Financial Crime Cartel to the federal penitentiary, our Beloved Leader, the puppet-president for the corporate masters was ordered to babble some more.
These "masters of universe" that pull puppet's strings as always overestimate their powers and underestimate people's feelings. No one wants to hear more of his empty talks, no one would be deceived no more no matter how much media whores they can buy; people want CHANGE, something they voted for.
And the people started to show their rage. Bit by bit; after all we're fat, self-indulgent nation on a forced diet, suffering from sugar rush withdrawal syndrome, but once we clean and sober up, the revolution would start and nothing will stop it. CHANGE starts by throwing all these puppet's puppets he and his propaganda machine will try to prop up by some more of his empty talk.
Hurrb
New Jersey
de-ba'-cle (dibah'kl), n. Break-up of ice in river; (Geol.) sudden rush of water carrying along blocks of stone and other debris; confused rush, rout, stampede; collapse, downfall, e.g. of a government.
2.1.10
On Home Affordable Modification Program (HAMP)
AnnS
MI
The HAMP and other loan mod programs are simply extend-and-pretend in that
(1) The banks don't have to write down the loans losses now so they can keep pretending that the loan is worth more than it is
(2) The borrowers don't have to face up to the fact that they can not afford the house and that it will be 20-30 years before it reaches what was its peak price - and they can extend the fantasy until the modified loan resets back to the original terms in about 5 years and thenn they go into foreclosure.
ALl these bailed out debtors who owe more than the house is worth are not homeowners at all - they are simply renting from the bank and odds are they are paying more than the house would rent for on the open market.
The loan mod standards are unrealistic. They do not follow good lending practice by having a front end AND back end debt-to-income ratio. They do use the front end ratio of 31% - meaning that the loan payment can not be more than 31% of gross income. They are not, however, using a back end DTI of setting a limit on how much fixed debt the borrower can have. Fixed debt would be the house + the car payment + the credit card payment + the school loan payments. That back end DTI should not be more than 41% of gross. (And 31/41 DTI ratios are still very high. 25 years ago it was 25/31 for the two DTIs.) Without looking at how much total debt the borrower has is a recipe for failure.
So all that happens is a lot of houses which will eventually end in foreclosure are stuck in the pipeline and the process drags on and on and on and..... That means that the readjustment of housing prices drags on and on and on.....
And as for Mr. Zandi of Moodys with his nonsense that Treasury should MAKE the lenders write down the principal, I have to ask 2 things:
(1) Where on earth did he get his law degree - if any? The Federal government can NOT 'make' the lenders forgive principal without substantive and procedural due process for the taking of their property (the right to the money). And the only way that can be done is through a bankruptcy proceeding which would cram down the loan - and the Republicans have a conniption fit at the idea of allowing primary home loans to be crammed down in the same way loans for business real estate, cars, 2nd homes and everything else is crammed down in a bankruptcy to current market value of the collateral.
(2) No way, absolutely no way in hell, would the vast majority (the 90% not in foreclosure) stand for the taxpayers handing over billions upon billions to the the banks so that (a) the banks don't lose a penny and (b) the defaulting borrower's loan gets paid down for them by the rest of us. ANy suggesstion that the 90% who are paying their mortage or rent should ante up the money to pay down the mortgage of someone who can't pay their bills so that the banks don't lose a penny and the Wall St bankers can get their obscene bonuses would nigh on provoke armed revolt. That would be political suicide for a politician.
These programs are a debacle. Better to just let the inevitable foreclosures run their course quickly and get it down. If there is going to be pain, better fast than slow. Once it is over, then you can pick up the pieces. Closing one's eyes and whistling past the graveyard is not a plan.
MI
The HAMP and other loan mod programs are simply extend-and-pretend in that
(1) The banks don't have to write down the loans losses now so they can keep pretending that the loan is worth more than it is
(2) The borrowers don't have to face up to the fact that they can not afford the house and that it will be 20-30 years before it reaches what was its peak price - and they can extend the fantasy until the modified loan resets back to the original terms in about 5 years and thenn they go into foreclosure.
ALl these bailed out debtors who owe more than the house is worth are not homeowners at all - they are simply renting from the bank and odds are they are paying more than the house would rent for on the open market.
The loan mod standards are unrealistic. They do not follow good lending practice by having a front end AND back end debt-to-income ratio. They do use the front end ratio of 31% - meaning that the loan payment can not be more than 31% of gross income. They are not, however, using a back end DTI of setting a limit on how much fixed debt the borrower can have. Fixed debt would be the house + the car payment + the credit card payment + the school loan payments. That back end DTI should not be more than 41% of gross. (And 31/41 DTI ratios are still very high. 25 years ago it was 25/31 for the two DTIs.) Without looking at how much total debt the borrower has is a recipe for failure.
So all that happens is a lot of houses which will eventually end in foreclosure are stuck in the pipeline and the process drags on and on and on and..... That means that the readjustment of housing prices drags on and on and on.....
And as for Mr. Zandi of Moodys with his nonsense that Treasury should MAKE the lenders write down the principal, I have to ask 2 things:
(1) Where on earth did he get his law degree - if any? The Federal government can NOT 'make' the lenders forgive principal without substantive and procedural due process for the taking of their property (the right to the money). And the only way that can be done is through a bankruptcy proceeding which would cram down the loan - and the Republicans have a conniption fit at the idea of allowing primary home loans to be crammed down in the same way loans for business real estate, cars, 2nd homes and everything else is crammed down in a bankruptcy to current market value of the collateral.
(2) No way, absolutely no way in hell, would the vast majority (the 90% not in foreclosure) stand for the taxpayers handing over billions upon billions to the the banks so that (a) the banks don't lose a penny and (b) the defaulting borrower's loan gets paid down for them by the rest of us. ANy suggesstion that the 90% who are paying their mortage or rent should ante up the money to pay down the mortgage of someone who can't pay their bills so that the banks don't lose a penny and the Wall St bankers can get their obscene bonuses would nigh on provoke armed revolt. That would be political suicide for a politician.
These programs are a debacle. Better to just let the inevitable foreclosures run their course quickly and get it down. If there is going to be pain, better fast than slow. Once it is over, then you can pick up the pieces. Closing one's eyes and whistling past the graveyard is not a plan.
10.12.09
1.12.09
What's turning Obama's back to most Americans?
The desicion has been made, we'll escalate our involvement in Af-vietnam-istan...
David A. Stevenson
Bethel, Connecticut
Is it my imagination, or did Presidential candidate Barack Obama pledge to wind down the occupation of Iraq - in order to take care of Afghanistan properly. He properly noted that the Bush administration had failed to complete the mission in Afghanistan.
He is carrying out those campaign pledges. Why is everyone so surprised?
I voted for him - knowing that this was his pledge. I don't understand why others who voted for him are now surprised. Do you think John McCain and Sarah Palin would have done better ? If you do, I suspect you might consider cutting back on your LSD intake.
My take on Afghanistan - from before the election - was that we can only succeed in Afghanistan if we get full cooperation from other nations throughout the world. If America and our President do not get that complete cooperation - then we should pull out of Afghanistan, before what happens to the Soviet Union also happens to us.
Let's allow our President the latitude he deserves now - then comment later.
Jack
New York
Man!, this so deja vu! No clear idea of what we do going in and even more clueless as what will happen to tell us when to get out.
We are fighting an enemy that is an ally and proxy of our 'ally' (Pakistan). The money and arms we give our ally only find their way to our enemy. Is this any way to fight a war?
To get Pakistan's cooperation, we are forced to threaten them periodically with more money and arms (!). It's almost pythonesque: "If you don't do as we say, we'll bombard you with money and guns and you'll be sorry!"
Look, it's real simple: 1. Take the nukes away from Pakistan. This immediately and automatically makes them punch in their own weight class and nervous about 'sub conventional' or 'asymmetric' warfare; 2. Free the Baluchis from their Punjabi oppressors and open up a land route to Afghanistan.
On the nukes, right now we're only looking at 50-60. In five years that number will double and eventually we'll have to take them out anyway.
On Baluchistan, the Khan of Kalat was forced into joining Pakistan so independence is not a new concept for them.
It's not that we can't win in Afghanistan WITHOUT Pakistan. It's that we can't win WITH Pakistan.
Richard S
Novato, California
Obama said he would escalate the war during the campaign, so no one should be surprised here. However, it's up to the Chinese to authorize the expenditure, and they'll likely be happy to do it, because it further reduces our imperial capabilities and puts us further under the sway of our debtors. Lacking the insight and courage to face up to a losing situation and walk away, Obama will likely commit the US to another trillion dollar expenditure plus the suffering of the tens of thousands of soldiers who will sustain life-long mental and physical injuries. And in the end the Taliban (though probably not Al Queda) will own this country because -- guess what? -- they live there and we don't. End of story. Shame on Obama and all the legislators who vote for the DOD war appropriations. This is a massive mistake.
B. Mull
Irvine, CA
It is true that Obama said during the campaign that Afghanistan was the "right" war. I mostly agreed with him at the time. But a year later the country wants to move on, not double down. The war to capture bin laden and shut down the terror camps is over. What was perhaps a war of necessity is now a divisive war of empire. It is a tragic error that will ruin many lives and destroy any remaining hope that Obama would put our country on a better path.
Gefilta
NY
One million dollars. That’s the figure we’re told it costs per soldier per year in Afghanistan. Is there some evil specter in the White House that can turn a bright man into a glass eyed fool? Is it the water in white house sink? Can someone please walk into the oval office (it shouldn’t be too difficult) take hold of the young man sitting there and shake him by the shoulders and say snap out of it! What are you doing man?! Rome is burning!
Scott Moore
Seattle, WA
Remember Nixon said he would get us out of Vietnam, and then we went into Cambodia. So now we're getting out of Afghanistan by escalating. I believe I've seen this before. I was younger then, but I still remember it well.
I hope this time will be different, but I can't imagine why it would be.
If I were president I'd bring those troops home and put 10,000 of them on the Mexican border. That's one tenth the troops we plan for Afghanistan, and it would mean three soldiers per mile of border. Take some of those recon planes and have them patrol our coasts. Take some more troops and have the army corps of engineers work on our failing international highways and decrepit railway system.
This would cost us far less than the war in Afghanistan and all the money spent to support the troops would benefit the economy here, as well as our own infrastructure. We might even get out of the economic crisis at the same time.
Our security and economic well being need to start here in the US, not in some hill of sand and rock thousands of miles away. Let Pakistan and Afghanistan wallow in their own mire and muck without our military aid. That money benefits the military industrial complex, not the American people.
Think people. Think...
Giovanni Arrighi (7 July 1937 - 18 June 2009)
Forthcoming Publications
Giovanni Arrighi. Postscript to the Second Edition of The Long Twentieth Century: Money, Power and the Origins of Our Times, Verso, in press, 2009. [PDF]
Giovanni Arrighi and Lu Zhang, “Beyond the Washington Consensus: A New
Bandung?” Forthcoming in Globalization and Beyond: New Examinations of Global Power and Its Alternatives, Jon Shefner and Patricia Fernandez Kelly (editors), Penn State University Press, 2010. [PDF]
Giovanni Arrighi, “Autobiography”, prepared for The Encyclopedia of Comparative Sociology. [PDF]
Selected Publications
Giovanni Arrighi, “The Political Economy of Rhodesia”, New Left Review, 39, 1966. [PDF]
Giovanni Arrighi, The Political Economy of Rhodesia. Mouton, The Hague, 1967. [PDF]
Giovanni Arrighi, “Labour Supplies in Historical Perspective: A Study of the
Proletarianization of the African Peasantry in Rhodesia”, Journal of Development Studies, 6, 3, 1970. [PDF]
Giovanni Arrighi, “International Corporations, Labor Aristocracies and Economic Development in Tropical Africa”, in Giovanni Arrighi and John Saul, Essays on the Political Economy of Africa, Monthly Review Press, New York, 1973. [PDF]
Giovanni Arrighi, “Towards a Theory of Capitalist Crisis”, New Left Review, no. 111, September-October 1978. [PDF]
Giovanni Arrighi and Beverly J. Silver, “Labor Movements and Capital Migration: The U.S. and Western Europe in World-Historical Perspective”, in C. Bergquist, ed., Labor in the Capitalist Wrold-Economy. Beverly Hills, Sage, 1984. [PDF]
Giovanni Arrighi and Jessica Drangel, “The Stratification of the World-Economy: An Exploration of the Semiperipheral Zone”, Review (Fernand Braudel Center), 10, 1, 1986. [PDF]
Giovanni Arrighi and Fortunata Piselli, “Capitalist Development in Hostile
Environments: Feuds, Class Struggles, and Migrations in a Peripheral Region of Southern Italy”, Review (Fernand Braudel Center), 10, 4, 1987. [PDF]
Giovanni Arrighi, “The Developmentalist Illusion: A Reconceptualization of the
Semiperiphery”, in W.G. Martin, ed., Semiperipheral States in the World Economy, Greenwood Press, Westport, CT, 1990. [PDF]
Giovanni Arrighi, “Marxist Century, American Century: The Making and Remaking of the World Labour Movement”, New Left Review, 179, 1990. [PDF]
Giovanni Arrighi and Beverly J. Silver, “Workers North and South” in The Socialist Register 2001. Merlin Press, 2000. [PDF]
Giovanni Arrighi, “Braudel, Capitalism and the New Economic Sociology”, Review (Fernand Braudel Center), 24, 1, 2001. [PDF]
Giovanni Arrighi and Beverly J. Silver, “Capitalism and World (Dis)Order”, Review of International Studies, 27, 2001. [PDF]
Giovanni Arrighi, “The African Crisis: World Systemic and Regional Aspects”, New Left Review, II, 15, 2002. [PDF]
Giovanni Arrighi, Beverly J. Silver and Benjamin D. Brewer, “Industrial Convergence and the Persistence of the North-South Divide”, Studies in Comparative International Development, 38, 1, 2003. [PDF]
Giovanni Arrighi and Beverly J. Silver, “Polanyi’s ‘Double-Movement’: The Belle Epoques of British and US Hegemony Compared”, Politics and Society, 31, 2, 2003. [PDF]
Giovanni Arrighi, Beverly J. Silver and Benjamin D. Brewer, “Industrial Convergence and the Persistence of the North-South Divide: A Rejoinder to Firebaugh”, Studies in Comparative International Development, 40, 1, 2005. [PDF]
Giovanni Arrighi (interviewed by David Harvey), “The Winding Paths of Capital”, New Left Review, II/61, 2009. [PDF]
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