11.30.07

Democrat Plants at the Republican Debates

Posted in Snark and Snarkier, Politics at 7:34 pm by steve

Evil Democrats have been working overtime this year to embarass the bejesus out of Republican candidates. And it’s just not right. It’s just not fair. Take this, for example. During a recent debate a person who is giving paid advice to the Clinton campaign asked a question of the Republican candidates. I mean, how fair is that? These guys are candidates for the Presidency of the United States, for gosh sakes. It’s arguably the most powerful and influencial position in the world. What right do people who might have opinions that are different from the candidates have to ask potentially embarassing questions, especially questions about matters of public concern and public policy?

After all, recent history has shown us that Republican Presidents are answerable to nobody. So once one of these persons assumes the Presidency they will not be expected to answer these kinds of questions. We have been taught during this presidency that it’s just not done. So how can it right or proper to ask Republican Candidates for the Office difficult or embarassing questions?

Things like “Do you think America is a good country?” That’s okay. Things like “Can you tell us what you had for breakfast?” that’s borderline. It requires a President or candidate who can remember that far back or at least who can clearly articulate some breakfast-related food item. For Republican Presidents since Richard Nixon this kind of question borders on badgering. There is a risk that they will not be able to answer it. In some cases it is only because of memory problems. In more recent ones, no sensory information penetrates, so the existential world is such a blur that the distinction between a breakfast menu item and a tenet of existential philosophy is an impossible one. This is true even for those who don’t know any tenets of existential philosophy.

Questions of national policy are completely inappropriate. This is because The President, aka, The Decider - see also the one who decides, the same all-knowing and all-wise person - has decided on national policy all on his own. Only he knows; Only he comprehends. The policy is handed down to him from God like the ten commandments to Moses, only without the use of stone tablets. And any questions, including questions that are simply meant to clarify His position on policy issues are strictly forbidden. Asking means there is some question. And the idea that there is some question is suggestive of wavering or unsteadiness or unclear leadership. So asking is forbidden.

Polite people will probably notice, too, that asking a President to clarify his position on a policy issue when he is incapable of articulating what he has had for breakfast is a little like asking a boa constrictor to sing Italian opera knowing that it cannot even hum a simple children’s tune.

No, it is simply wrong to expect a typical panel of Republican Presidential Candidates to answer hard questions. They are practicing for the august position of President.

In the interest of promoting democracy and good taste I have assembled a list of approved questions for Republican Candidates.

1) Do you like America?
2) What is it about America that you love so much?
3) Is America’s military powerful?
4) Is America’s military very powerful?
5) What is it about America’s military that makes it so powerful?
6) Terrorists are bad people, right?
7) Terrorists are really bad people, right?
8) What is it about terrorists that makes them bad?
9) The President protects all of us from bad people, right?
10) Many people have compared you to Ronald Reagan, what do you say to that?

Pretty much every other question is off-limits because it requires the candidate to discuss or approach discussing some issue of public policy about which there is or might be some controversy. And that means there might be issues of disagreement among voters. And if issues of disagreement are broached in presidential debates there is a possibiility that people will vote for candidates on the basis of whether candidates positions seem reasonable or unreasonable. It will encourage debate about issues that are divisive, thorny, embarassing. And it will lead to the misapprehension that people are alowed to have an opinion about these issues that is not prescribed by The President.

So it is practically criminal that people, especially Democrats, ask difficult questions of Republican candidates. Really, there ought to be a law…

11.29.07

The Idiot

Posted in Politics at 5:22 pm by steve

Calling Bush stupid is certainly satisfying. It is, in a number of respects true; for Bush’s ideas are original in approximately the way tape recorders play back sounds never heard before. And originality is a sign of genius. Furthermore, it is a habit of the educated middle class meritocracy to equate stupidity with failure. So by calling Bush stupid we call him a failure. There certainly are ways in which the Bush administration failed. But we do ourselves a great disservice in dwelling on this idea; for it is not the ways in which Bush has failed but the ways he has succeeded that will define the most dangerous legacy of the administration.

We can call the illegal invasion and occupation of Iraq a success or a failure. It will take fifty years before we begin to understand the actual consequences of the act. Probably history will judge Bush harshly on Iraq. But it’s certainly too early to be certain. Bush failed at immigration reform. But this has already been forgotten by all but the handful of die-hard fundies who felt betrayed by the legislative effort. Otherwise, Bush’s tenure has been marked by rather remarkable and dangerous successes.

Indeed, what we need to worry about is the successes of the Bush administration: the gutting of environmental law enforcement, the purposeful destruction of function in almost every enforcement agency in the government, and the attempts to transfer to and exercise unconstitutional powers within the executive.

FEMA’s “heckuva job Brownie,” is but one example. In example after example Bush nominated people who were openly hostile to the missions of the agencies they headed. Gonzalez’ attempt to politicize the justice department is a case in point. In another je nominated a person hostile to reproductive rights to head an agencies that guaranteed the exercise of such rights. Time and again his nominees self-destructed in their posts by pushing their personal political agendas in open defiance of law and propriety. Dubya’s nominations to agencies to which his administration had animus set up a wonderful dilemma. If the administrator succeeded he would functionally dismantle the agency. If he failed, he would discredit the agency, raising the question about whether the agency ought to be dismantled. Either way, the Bush point of view was enhanced.

Although one ought to be highly concerned about an executive who succeeds in destroying the machinery of government he is Constitutionally sworn to protect, this habit of clogging the fragile bureaucratic machinery with ideological grit and watching it grind to a painful halt might properly be among the least of the concerns we might have about the Bush administration. The real legacy was the exploitation of the terrorism. The administration used the 9/11 event to push through the so-called Patriot Act. In less than 60 days from the event in question the dubiously named act was winding its way through Congress. It was almost as if the bill was just waiting in the wings for some precipitating event.

A few years later the administration followed up with the Military Commissions Act. Together, these acts transferred an unprecedented amount of power to the executive. The one act gave the President power to name people terrorists and to sieze their assets. The other gave the President power to create his own court system and try people within that system. It was a bold-faced end-run of the Constitutional separation of powers. In the process, Constitutional guaranteed rights such as the right of habeus corpus - the right to be charged or released - came perilously close to being permanently suspended.

The courts have dealt some setbacks to the legislation. But these have been not quite as resounding as they would need to be to assure that democracy continues to flourish in this land. In other words, the success of the Bush administration is to bring the nation perilously close to overturning democracy and creating a tyrannical government in its place.

We imagine that Bush failed. We still evidently have elections, although we know that some of them have been rigged. We still evidently have a Congress, although it has failed persistently to undertake its Constitutional mandate to prosecute members of the executive for known high crimes and misdemeanors: illegal torture, illegal spying on US citizens, for example. Congres still evidently writes or at least votes on law. But the laws it passes are changed by arbitrary “signing statements” that sometimes amount to nothing less than undermining the whole intent of the law. Congress still evidently plays some roll in the selection of appointees within the administration.

But the Bush administration seems to have gotten away with selling Americans on a number of very dangerous ideas. One is that we are “in a time of war,” and that therefore Constitutional guarantees on certain rights can be suspended indefinitely. It’s a bizarre notion because the Constitution requires war to be declared by Congress and this has not happened. So by Constitutional definitions we are not “in a time of war.” But the framers of the Constitution also did not anticipate long conflicts. Three years was then and is now a long time for a real war. Occupations of foreign lands were not what the framers of the Constitution meant. And by that measure, even if the war in Iraq had been declared, it would have certainly been over once Baghdad was under US control in 2003.

Yet the Bush administration persists in pretending that America is at war. Why? Because it is convenient for them. It allows them to assert powers that would be patently illegal to assert under other circumstances.

These are not acts of idiots. These are acts of dangerous men. And if we underestimate them they may yet win. It is for this reason that it is a bad idea to go to far with the “President is an Idiot” idea.

Speaking hypothetically, suppose one were a third party with a great deal of political and economic power. Suppose one held a group of political ideas closely resembling those of Dubya. Suppose this is not accidental; for Dubya was born into this group. And he was selected to run for office for his particular set of qualities and ideological beliefs. For instance, he buys the free-trader ideas. He is also powerfully sympathetic to the interests of the elite, believing that the less interference they have from government, the better. And he understands precisely how power flows to and within Washington. Finally, Dubya is incapable of independent thought. There is no risk that he will wake up one day and realize that the whole laissez faire idea of economics does for economic well being what complete anarchy does to physical well being; it concentrates power, making the bottom 90 percent of people completely and utterly dependent upon the upper ten percent for economic well being, physical well being, and protection.

His chief quality, however, is that Dubya can also be quite bumbling. This quality can make it appear that he is actually as stupid as the village idiot. Perhaps he actually is. It is the appearance, however, that is exploited by his most serious backers - the puppetmasters, the men on the other end of the strings from which Dubya dangles. If Dubya seemed bright we might have reason to fear his agenda. Competence and ambition in the same man we might see adding up to serious danger. But we dismiss the Dubya administration because its figurehead appears to be an idiot. Meanwhile, all the heavy lifting is done by heavyweights like Cheney who stay well out of public view.

I have long argued that the Iraq war is nothing but a distraction. It is what we talk about because we understand it. But the Iraq war is not the central thrust of the Dubya administration. It is the Patriot Act, the Military Commissions Act, and the remarkably blatant attempts to undermine or subvert every part of the federal government that have been the main business of the administration. The remarkable level of success came, in part, because we have for the duration of his term seen Dubya as an idiot, an underachiever, a spoilt golden-boy.

It’s time we behave more intelligently.

Why Dodd Cannot Win

Posted in Politics at 3:14 pm by steve

“Dodd is not the planet’s greatest orator and is never going to be. But he has something, at least right now, that is far more important: authenticity and passion about defending the Constitution and the rule of law, along with the resolve to accompany those convictions with action, even if it risks alienating his ‘friends and colleagues,’ in the oh-so-august Senate.”

Greenwald also implies the key question all Democratic voters need to ask as the primary-voting months draw near: What the hell is with the deafening silence coming out of the Clinton and Obama camps on the subject of domestic spying and trampling on Americans’ Constitutional rights?

“Contrast Dodd’s leadership and conviction on this matter with the complete passivity and invisibility of Hillary Clinton and Barack Obama,” writes Greenwald. “Whatever that is, it’s the opposite of leadership. And it is this passivity and amorphous, shapeless, inspiration-free invisibility that has come increasingly to characterize both of their campaigns, along with the leadership of their party.” ( quoted at Bob Geiger )

Dodd is not charming. He does not have the spark we find in Obama. Nor does he have that sense of power that we identify in Clinton. So the animal instincts that people respond to most in Presidential elections are absent. It means that if Dodd did win the inauguration, his candidacy must fail in precisely the way Dukakis’ did. The Wooden Man Principle guarantees the outcome. The only Republican candidate more wooden than Dodd is Ron Paul. Only if Dodd ran against Ron Paul would more people vote for him than for the Republican nominee.

But things are worse than this. Dodd’s appeal to principle - we predict - guarantees that he cannot win regardless of how many people actually might vote for him. A Dodd presidency would transfer too much power from the DC enfranchised. The powerful on both sides of the aisle could not abide such an outcome. More’s the pity. America really needs a President with Dodd’s qualities. End the illegal occupation of Iraq. End the illegal activities of Bush administration abroad and at home. Restore the balance between legislature and exectutive. Restore rule of law. Return to Constitutional values. These are issues Dodd believes in. They are issues he will work to change. And this virtually guarantees he cannot win.

Citicorp’s Titanic Iceberg

Posted in News Commentary at 12:29 pm by steve

Nintety percent of an iceberg is below the surface of the water, hidden from view. And it’s that submerged part of the iceberg that sinks ships. We were reminded of this fact Tuesday when we heard an NPR report on the “bailout” of Citicorp by the Abu Dhabi Investment Group. The group invested over seven billion dollars. It got a guaranteed return of 11 percent. And it got the second largest equity stake in Citicorp.

At first this may seem unremarkable; but as the commentators suggested eleven percent is a higher return than junk bonds will bring, currently about 9.4 percent. So the risk must have been big. One would have to be quite desparate to borrow at that rate. But the fact that the investment firm got a huge chunk of equity in addition either makes this the sweetheart deal of the century or it means that Citibang was on the verge of complete collapse. In other words, one of two things must be true:

1) Citibank is in serious financial trouble. It was in imminent danger of collapse in the absence of these funds.

OR

2) The directors of Citibank have ceased to act in the interests of its shareholders and are acting instead in the interest of the holding company in question.

Both could be true. There are other, much less likely possibilities that come to mind. For instance, that Citibank nominated the transaction in dollars; and that it has solid reason to believe that the dollar will slide by much more than ten percent before the loan becomes due. This would be reason enough to take a loan at 11 percent. But it fails to explain why the huge equity transfer.

The first option is most likely. Citibank vaulted to its much vaunted position as one of America’s largest creditors by lending more aggressively than its competitors. One might expect, therefore, that it would necessarily be less picky about its debtors. And it might operate on thinner margins. These factors cause lenders to turn in better results in good times; but they can wreak havoc when the market turns downward.

The big question that is plaguing the market now is whether the credit market has bottomed out: whether we have seen all of the iceberg. Nobody knows. But if Citicorp is willing to sell huge chunks of its own equity on the cheap, imagine the positions of less muscular companies. It is likely that there are financial institutions in worse shape but who have either not figured it out or not figured out what to do about it.

And if the new psychology that the salad days of magically escalating home values are over finally changes the way homes are priced; and if this causes a lot of home buyers to walk away from their home loans, we may discover that the shakeout is not only not over - it has not begun.

On the coasts, four homes may be worth a million dollars . Four thousand homes would be worth a billion dollars; four million homes a trillion dollars. So forty million homes is ten trillion dollars. Half the value in these has been realized in the last ten years. It is not out of the question that home prices retreat by half. If that happened, five trillion dollars of value could evaporate overnight. And that loss of value would risk tempting twenty or thirty percent of mortgage holders into default. No part of our financial system is prepared for a catastrophe this size. And the federal government this time will be completely unable to help. Nobody will lend it a dime right now. So banks will be broke and the federal government will be broke. It could be cataclysmic. It could make the Great Depression look like a children’s birthday party.

One is tempted to think that item 2 is preferable; for it suggests not that the whole financial system is teetering on the edge of collapse but that the whole board of one of America’s biggest companies is completely corrupt. If it were an isolated incident of such corruption, then of course we would have nothing to worry about. But the society of corporate governance is a small one. Many directors sit on a large number of boards. Thus, if Citibank board members are willing to sell out their shareholders, it is suggestive of an atmosphere of corruption that may pervade the sphere of mega-corporate governance. That would be worrysome because it would mean that one could invest in any well run company and without a moment’s notice the board could sell it for pennies on the dollar to some foreign holding company. That company could be owned by the directors themselves. What a nifty deal that would be, to borrow money at an inflated rate from an opaque organization who rewards the directors with major equity stakes in their own financial company.

In the case of this deal, who actually provided the funds is a little unclear. Nobody knows who Abu Dhabi Investment Group represents. Presumably it is owned by the government of Abu Dhabi and/or certain of its high ministers or functionaries. It could, however, be fully or partly owned by members of the politically well connected Carlyle Group or other Bush cronies. In such a case we may be concerned not that the financial system is falling apart because of ineptitude and lack of foresight but because it suits the interests of the powerful insiders. If one is locked in a room with a lion and a lion tamer the most discouraging thing to realize is that the lion tamer is not there for your benefit but for the lion’s.

The great infusion of cash into Citicorp brought sighs of relief to the NYC financial community and bouyed the stockmarket on Tuesday. But if Citicorp made a smart move, one that is in the interests of all investors, either the dollar is in for a vicious pummeling or that company was on the brink of collapse. Either of these possibilities should have us all very concerned. Most of the dangers for Citicoro, its shareholders, and its competitors remain underwater where they will not be seen except when they threaten to sink other titanic companies.