October 2014 Archives

Dear America,

With the portent of an even more Republican congress on the horizon for next Tuesday, speculation about the consequences of the poor judgment of the American electorate is already in...and on...the air.  You may recall that the Republican rants against "entitlements" swirled about like dust devils after the last election along with votes (46 of them) to repeal the Affordable Care Act, otherwise affectionately known as Obamacare.  That term, entitlements, is code for Medicare, Medicaid and Social Security primarily, although there are other entitlements that get far less attention.  Of the three programs, Medicaid does cost the federal government money, which means that it has an effect on what we pay in taxes, the deficit in the annual budget and the national debt, which is the aggregate of all surpluses and deficits from the past...the amount we owe as a nation.  With that in mind, it is fair to talk about the cost of Medicaid, though the moral and social issues surrounding the program make it unseemly at best.  With regard to Medicare and Social Security however, so far neither program has cost the federal government a dime, though Medicare's trust fund is running close to the bone and will need to be replenished somehow within the next decade.  Social Security, on the other hand, has a surplus in its trust fund of something on the order of $2 trillion, which will last in tandem with current and future contributions to the fund from wage earners, given the rate at which benefits are now being paid, for anywhere from 20 to 30 years.  So, while Social Security will need to be adjusted some time in the next two to three decades or so, the issue of how much to pay in Social Security benefits won't arise until then because as long as The Fund is solvent, Social Security benefits cost the federal government nothing.  In fact, while the current rate of benefit payouts does exceed The Fund's income from Social Security contributions, it's only by about $100 billion per year, but that is where the Republicans see opportunity.  That is because the money in the fund...that $2 trillion...has been lent to the federal government, which would be the case with any surplus of income in The Fund over the course of a given year.  But when there is no surplus--and there hasn't been a surplus for the past few years--and The Fund needs more than it takes in from future beneficiaries' earnings, the government not only loses one source of borrowed cash, it has to pay back money it has borrowed from The Fund in the past so that The Fund can make ends meet.  That's why reducing Social Security benefits is so appealing to the Republicans.

There has been a deficit in the country's operating budget every year since the second year of the George W. Bush administration.  (In his first year, he had a surplus to work with, which had been created by his predecessor, Bill Clinton's administration.)  And while some of that deficit could be borrowed from the Social Security Trust Fund back then, that is no longer the case since, as I just noted, Social Security has been costing The Fund more than it takes in over the past few years.  Thus, not only can the government no longer borrow from The Fund, each year the government now has to pay back to The Fund some of the money borrowed in the past--about $100 billion--and that serves to increase the federal budget deficit.  But what if you could reduce what The Trust has to pay out in an amount like $100 billion per year; then the federal government wouldn't have to pay that $100 billion back to The Fund and the result would be $100 billion less deficit spending.  That is the inducement to reduce cost of living raises for Social Security beneficiaries by, for example, using the "chained CPI" instead of the CPI calculated as it is now.  And now the timing is just right because if the Republicans effect such a change, they can say that they reduced the deficit, about which they have been complaining since President Obama took office despite the fact that it was a non-issue to them when it was Bush spending the money.  What they don't tell the public of course is that doing so just defers repayment of the debt to The Fund, and thus serves no purpose but to pass the debt on to a future generation, another thing about which the Republicans complain when it comes to deficit spending in general.  But this doesn't look like deficit spending to most people because the Republicans have been so assiduous in misinforming the voting public about the nature of Social Security, asserting that it is a drain on the economy and it costs our society too much.  They also don't mention the fact that reducing Social Security benefits reduces the amount of money that the recipients of those benefits have to spend.  Less consumption means less demand on business inventories, which means less production, which means fewer jobs.

In the final analysis, reducing Social Security benefits is a bad idea for those and several other reasons, including the vulnerability of our senior citizens to downward fluctuations in their often already marginal standards of living that would be caused by reducing their benefits, or in the case of chained CPI reducing the amounts they can count on to compensate for rising prices.  And the Republican effort to accomplish the end of reducing Social Security benefits, being relentless as it has been for decades, will be a bigger threat in 2015 than it was in 2014 because there will be more Republicans pushing it.  As I always say, on election day the majority always gets what it deserves, but this time, that could be a very bad thing.

Your friend,

Mike

Dear America,

I don't know whether my mind works differently from everyone else's or our politicians just know something that I don't about the mental processes of the voting public.  But here in Connecticut, where the Democratic governor, Dan Malloy, is up for reelection and he is being opposed by the Republican business man, a Mitt Romney clone named Tom Foley, whom he beat four years ago in order to become governor, all of the campaigning in print, by mailing and on television is not just negative, it is appalling.  But while I would think that the course to take would be to put the lie to the negative stuff, neither of them actually rebuts what the other says.  They just reiterate all of the same accusations about each other over and over again.  Many of them seem to lack credibility, but since neither cares to respond to the other...to defend himself...we are left to believe the worst about each of them and the process of deciding for whom to vote devolves to a decision about who is the lesser evil rather than who is the potentially better governor.  Sometimes in this political melee, the accusation is effectively true, but is really a prevarication, that is, it's enough of the truth not to be an outright lie, but just enough truth to lead anyone who hears it to the wrong conclusion.  Such was the case with a mailing I received from the Foley campaign yesterday.

In the mailing, Foley accuses Malloy--and it is Foley rather than some PAC that doesn't consult with him--of, among other things, "tax[ing] Social Security!"  That's what the single layer, oversized post card says at the bottom of the front side: "Malloy even taxes Social Security!"...Social Security in red, no less.  I didn't remember seeing Social Security on my Connecticut tax return...ever...but I tool last year's out just to be sure, and I was right.  The only mention of Social Security on the return was when the form asked for my wife's and my Social Security numbers.  It is the case however that I receive Social Security, and on our federal return, I was required to calculate how much, if any, of the amount I received was taxable, and Connecticut income taxes are calculated on the basis of the federal AGI ( Adjusted Gross Income), which as I said, included some of my Social Security.  Technically then, Connecticut personified by Governor Malloy, did assess me for taxes on my Social Security, which it has done ever since the federal government did so, starting in 1984 in consequence of a bill signed into law with much fanfare by conservative saint Ronald Reagan.  And it is also true that when Newt Gingrich was in power as speaker of the federal House of Representatives, he forced Bill Clinton to sign a bill increasing that tax for the richest of us.  Notably, both Reagan's and Clinton's laws were touted by them, in Reagan's case as "a new American Revolution" and in Clinton's as "the end of welfare as we know it."  Both laws were boons for the most wealthy of us and a further burden on the rest of us, but that is fodder for another cannon.  So, if Foley were telling the whole truth, he would have said, "Folley's government assesses your taxes based on a federal calculation of income that includes your Social Security, and Connecticut always has since income taxes started being paid here."  But who would get upset about that.  In fact, most people wouldn't even try to figure out what the significance of what he was saying, but that's how the truth is sometimes.  It doesn't justify prevarication though.  So, when I received Molloy's tract on Foley the same day, I expected to see an explanation that exculpated him from something that he never really did, but all I got was more criticism of Foley.

Malloy's mailing did come from some PAC, and it was accurate in that it was just about Foley's positions on things, with footnotes providing the sources at which the allegations could be checked.  But still, I would have thought that Malloy would have responded by characterizing Foley's claims as half truths, and self-serving ones at that given that a Republican patron saint created the taxes Foley decried and Foley is a Republican.  It would be natural lead-in to the vituperative litany that has been Malloy's mainstay thus far: that Foley did the same things that Romney did with companies that his "private equity" investment firm did by buying companies, eviscerating them, suppressing their employee's wages and ultimately exporting their jobs, then selling off the assets at multi-million dollar profits.  It's all true, as it is that Foley, a multi-millionaire, paid only $675 in federal taxes last year despite the fact that he had $10 million to spend on his last campaign, but they we've all heard that one already...and it should be enough.  Add to that Foley's claims that he would stop including Social Security in Connecticut's taxable income and reduce taxes on cars, seniors' real estate and electricity while he freezes spending, which he would pay for by cutting nothing but education and those are ideas that the voters of Connecticut should consider if Malloy wants to be reelected.  But that argument, simple as it is, only now is getting made.  

In the final analysis, Connecticut's gubernatorial campaign seems to be today's typical stand-off between a Democrat and a Republican.  These days, as they do with President Obama, the Republicans tell less than all the truth, like about "Obamacare," and then offer nothing credible as an alternative, letting their negative claims go unchallenged as the Democrats try to respond in kind.  The problem is that since the Republicans haven't done anything lately, there isn't much to say about them, not even much that's negative.  Instead of touting their achievements, the Democrats just point fingers back at their conservative foes and run away from what they have done because the Republican strategy has been so successful.  I guess if you are a politician, morality doesn't enter into the process, so the Republicans can't be blamed for what they have become.  But there's no excuse for the Democrats.  If they are afraid to run on their record, they should stop making one.  That's why I think that the best thing that could happen to the national Democratic Party would be for the Republicans to take the Senate.  Let them take the blame for awhile.

Your friend,

Mike

Dear America,

I had something else in mind for today's epistle, but two pieces in the New York Times this morning struck me as more timely.  First, The Times reported that an Ebola vaccine was developed ten years ago and went as far in development as tests on monkeys which were 100% successful.  That success rate in other primates is promising, but it doesn't always presage success in human trials.  Still, the indicia of success that animal trials represent are the best indicator of the prospect of human efficacy, so further development was indicated...except for one thing.  Ebola is a rare disease despite the fact that it is in everyone's mind and on the tip of everyone's tongue these days.  For that reason, the profit motive that is the life's blood of a free market economy was absent, and thus, further development of the vaccine, which had been brought to the point of the successful animal trials in either government labs or in research institutions like colleges and universities I assume, was left to languish on a dusty shelf somewhere without further prospects of culmination in a useful human medicine.  The human tests are now in the offing, but for thousands of victims it is too little too late.

The second piece was David Brooks' editorial about the deficiencies in American politics and their institutions.  It started out looking like a liberal tract on the subject of how to revive our economy and on whom such efforts should be concentrated.  But it quickly fell into the rut that conservative social theory always runs in: some people don't want to work and government should abandon them; we should educate everyone in college so that he can get a good paying job; we shouldn't be considering wealth stratification as the problem because people could get more out of college degrees than they could out of redistributing the recently gotten gains of the top 1%.  (As to this last point however, despite Brooks' assertion that doing so would be relatively insignificant, such redistribution of accrued wealth in the top 1% to the entire bottom 99% would yield $7,000 per household.  Apparently David Brooks does very well, but $7,000 is big money to me, and its retention by such a small contingent in our society looks like a problem to me as well, but I digress.)  While he suggests remedies for the malaise among members of our workforce precipitated by the fact that, while the rich have done very well in the past thirty years, the rest of us have not accrued wealth at all in real terms, and that while many of us have gone back to work, our jobs pay less and are more menial, they are a mixture of measures to encourage the holders of capital to invest more by reducing their taxes with more regressive ideas like eliminating social programs that support people who are not employed and helping them to relocate to where the jobs are.  He does advocate infrastructure projects, but he specifically mentions public transportation so that those who are not where the jobs are can more easily get there, while he makes no mention of raising the minimum wage.

I have thoughts on David Brooks' take on the dysfunction of our economy, and perhaps that will be the topic of discussion next Tuesday, but my focus at this moment is on the role of government in both of these ambits.  I mentioned the role of government on Tuesday, and my point was then, as it is now, that there are some things that, not only is government most appropriately suited to do, but that will not be done unless government does them.  While David Brooks' insouciance about the role of government in the lives of those who for one reason or another are less fortunate than he, programs like unemployment insurance and Social Security do more to support our economy by putting money into circulation through consumption than investment by those with capital has ever done.  Things like Eisenhower's interstate transportation system and our public school system--which is far from perfect but still provides a modicum of education to tens of millions who otherwise would have none--would never be undertaken by those with the resources necessary to indulge in large scale philanthropy or even self-serving investment.  It takes government to marshal the not just the resources, but the will to accomplish much of what makes a society like ours not just a free market, but egalitarian as well.  And if we put more stock, and more money, into institutions like the National Institutes of Health and the Centers for Disease Control, we might have had an Ebola vaccine when the first case in the current epidemic occurred, and it might not have become an epidemic at all.  And if we don't start investing in our infrastructure soon, it portends to fall into disrepair and will undermine our free market because those who profit from its existence will never be willing to invest in it...even for their own benefit collectively.  Collectively is the operative word in all this.

Our politicians are the only ones who can recognize these truths to the effect of changing our currently emerging ethos, which would have us draw back from the tradition of government tending needs toward the end of mutual well-being for all of us.  We can set aside the moral issues, though I don't believe we should, but to ignore the practical ones is like whistling in the dark.  Our problems will not be solved by paying off the national debt, though that may be a useful goal.  We will not again flourish because we reduce taxes putting more money in the hands of people who are not our benefactors, but rather seek only to enlarge their fortunes.  And to allow the unemployed to become homeless as well just creates another problem to take the place of the federal deficits that are created by feeding them and housing them.  Our national destiny may be a function of our diversity and the initiative and self-reliance that has inspired us to thrive as a people.  But what has created our nation is the manner in which we are organized, and by that I mean our system of government and the policies that it has spawned.  There is a role for government to play in our national life...big government.  And we ignore it at our peril and the world's.

Your friend,

Mike

Dear America,

I happened upon an invitation in the New York Times from the Bay Ridge United Methodist Church to submit entries for "The Economic Wellbeing Award."  The entry must be in the form of an explanation of the disparity between our economic success from 1946-1971 to that from 1972-2012, and in the course of proffering the invitation to make a submission they have provided several statistics that are interesting in themselves.  Average unemployment, budget deficits, national debt as a percentage of GDP and inflation rate were all up from the earlier period to the latter while numbers of budget surpluses and average GDP were down.  Of course the explanations that economists might offer the ostensible decline in our economy's health would vary according to dogmatic affiliation, but it is safe to say that supply-siders would attribute the adverse trends indicated by the chosen statistics to the amount of taxes we paid along with the allocation of government resources dedicated to social well-being while the Keynesians would attribute the poor performance of our post Vietnam economy to taxes that were too low and diminishing public works spending coupled with hawkish defense budgeting.  But there was one other statistic in the mix that tells the real story; the average number of people on the federal payroll was5.8 million during the earlier, more prosperous period and only 4.7 million in the later, less prosperous period.  If we assume an inflation-adjusted average annual salary of $60,000 per employee, that 1.1 million employee disparity represents $66 billion less spent by the federal government per year--good for deficits and the national debt but concomitantly bad for the economy in general because that decrement in payroll expenses is also $66 billion less spent by consumers, which has a profound effect on GDP as consumer spending represents 70% of it.

So, if we look at the Obama administration's economic stimulus package passed in 2009, we see that $480 billion has been taken out of the economy by reduced employment while only $600 billion was put back since of the $1 trillion in the stimulus package, $400 billion was in the form of tax cuts that disproportionately benefited business and the top 20% of  households by income  relative to the effect on the bottom 80% of us.  Put concisely, the net stimulus The Act provided was about $120 billion effectively spread over 6 years for the economy as a whole on the consumer end of the economic spectrum.  But that is only a narrow depiction of the effect of reduced federal employment for two reasons.  First, that diminution of gross household earnings for the nation occurred not just for six years, but annually over the course of four decades.  Thus, during the period of our economic decline from 1972-2012, we removed $2.2 trillion worth of consumer spending from our economy, but even that isn't the full dimension of the impact of this particular form of austerity.  States and municipalities have had to remove similar numbers of employees from their payrolls because of the emphasis on parsimony in federal budgets, effectively doubling the impact of government payroll reductions on the nation's economy.  We have taken probably $4 trillion out of circulation over the course of that period from the end of the Vietnam War to the present, and the impact of that figure has to be profound regardless of your philosophical affiliation.  While the Picketty theory seems intuitively accurate, though far too obvious and simple to justify a 700 page tome on the subject in my opinion, the real answer to the question of what caused our economic decline and the accompanying increase in the stratification of wealth is as simple as this: government austerity is not monolithically healthy.  It has an impact far afield of the desired budgetary effect of cutting federal payroll--assuming that there really is one in the case of payroll reduction once one considers the reduced federal revenue that is an ineluctable bi-product of reduced payroll spending--not just in terms of the economy directly, but in terms of the things that only government can do, like develop vaccines for rare illnesses like Ebola and cures for rare forms of cancer that are not sufficiently profitable to merit the attention of our bloated pharmaceuticals industry.

Economics is little more than mass-psychology with an overlay of discipline-specific jargon and ersatz dogma.  When economists have been able to effectively diagnose problems, explain the past or predict the future, it has been an aleatory effect of persistent exaltation of a questionable "science," and never do economists agree on them because economics is not empirical once you get past the collection of raw data. The reality is far more obvious than economists would have us believe, and perhaps it is even as simple as addition and subtraction; but it is nowhere near the enigma that those who would make it so would have us believe.  If you take massive amounts away from one side of an equation, you lose the cognate amount on the other.  It isn't calculus.  It's arithmetic.  And that's what happened to our economy.

Your friend,

Mike

Dear America,

On the subject of the power of our central, federal government, there are two issues that I see as ripe for discussion, and when juxtaposed they present the dilemma faced by the Obama administration ever since it became apparent that the Republican call for cooperation between the parties and compromise in Washington, D.C. was nothing more than the bait to which newly minted President Obama rose in his 2009 inaugural address.  The two issues in question are the ebola threat that becomes more menacing every day if you listen to the news media, even though there have been only three diagnosed cases in this country so far, and the danger that criminals and radical militants represent if we citizens are allowed to hold our "papers and effects"...in this instance our cell phones..."free from unreasonable searches and seizures" requiring our government to get a warrant if it needs access to them for a legitimate, legally cognizable reason such as national security.  The former is bound to be a full-blown campaign issue for the next couple of weeks, and the latter will be in the 2016 presidential campaign, somewhat like the Patriot Act was after 9/11.

As to Ebola, so far all of the ebola morbidity we have seen stems from treatment of the first patient treated in this country, who contracted the disease in his native Liberia in consequence of an altruistic act, which blossomed into ebola symptoms only after he arrived in this country.  The story has been amply covered in our news media, and it only bears mentioning again so as to posit the underlying principles involved in the political debate.  Thomas Duncan was coming here to marry the mother of his child...his finance...and just before departure from Liberia, he helped a pregnant neighbor in Liberia who was sick with ebola to get to the hospital for treatment, at which time he apparently contracted ebola.  When his symptoms began to emerge, he went to Texas Health Presbyterian Hospital in Dallas where he was turned away because the staff didn't think the presence of a high fever and vomiting in a recent émigré from Liberia, the center of the font from which all ebola infections in the world today flowed, merited further attention.  The hospital has apparently apologized to Duncan's family for failing to give him the fighting chance of which early diagnosis might have availed him, as it did American health workers who contracted the disease in Africa but came back home to be treated successfully for the 70% fatal disease.  With those facts as predicate, Texas Governor Rick Perry has called for exclusion of travelers from West Africa who attempt to fly into American airports, which is something he presumably wants the Obama administration to do.  Of course, Perry still went to Europe to grand stand about economic development in Texas after the first healthcare worker was diagnosed with ebola in Texas, but he did come back home to manage the crisis when the second one came down with it.  Of course, regulation of hospitals in Texas is primarily a function of Texas state government, and Perry, to his credit, seems to be acknowledging that, though he is hedging that acknowledgment with the caveat that the state can do only so much and the federal government needs to do the rest.  But that isn't quite the tone he struck on the issue of the Texas abortion clinic bill, which closed almost all of the clinics in the state for lack of doctors' privileges at local hospitals.  Regarding that law, he has demonstrated full support, but what is he going to do about ebola?  If he's truly concerned about the performance of health care procedures in Texas, maybe he should be concentrating his attention on the lapses in treatment protocol that have resulted in contagion so far in Texas instead of advanced-campaigning in Iowa, New Jersey and Connecticut on the basis his "pro-life" credentials.

As to the privacy issue, Apple and Google have announced that the latest iterations of their smart phones are imbedded with an encryption program that renders the phones themselves impervious to scrutiny if they are confiscated by law enforcement officials pursuant to criminal investigations.  The federal government, for one, is complaining.  The argument goes that law enforcement officials need to be able to scrutinize those phones when they are in the possession of criminals and terrorists when they are arrested.  The argument runs parallel to this: you can't buy a safe that the federal government can't open because the federal government might want to open it some day...without a warrant.  It goes along with the claim that the NSA should be able to listen to all of our phone calls just in case there is one somewhere that occurs pursuant to a criminal motivation or activity.  Essentially, the federal government's opponents to the Apple/Google encryption program is that the contents of your cell phone aren't covered by the fourth amendment of The Constitution; the right to privacy goes only so far as it is convenient for the federal government.  But the advocates of increased governmental intrusiveness seem to have forgotten that the argument they are now invoking is exactly why the fourth amendment was included in The Constitution 250 or so years ago.  Basically, government cannot be trusted with carte blanche.  

So, the debate over the reach of federal agencies is in full bloom in Texas and Washington.  Texas's governor wants the federal government to do more about ebola, and he certainly will complain about it if President Obama...well, does anything because the good governor is a good card-carrying conservative, and states' rights are his signature issue.  On the other hand, the federal government wants to do more on the issue of access to our personal information, and that affects Texas just like Ebola has.   I can't wait to hear what Governor Perry has to say about that.

Your friend,

Mike

Dear America,

Chuck Grassley is a senator from Iowa, and he is probably one of the ten most prominent names in the Republican contingent in The Senate currently.  Last week, he accused President Obama of playing politics with the nomination of the attorney general candidate to be named to take the place of Eric Holder, the incumbent.  Of course, if anyone is playing politics just before the November election it's Grassley, which begs the question, why do his constituents...why do all Republican constituents for that matter...keep sending these transparent political hacks to congress.  They accused President Obama of playing politics when he deferred issuance of executive orders to fill the interstices in our immigration laws left by the refusal of John Boehner to put any of the immigration bills passed by The Senate on the floor of The House for a vote.  No one on the Republican side of the aisle in either house of congress is accusing Boehner of playing politics with immigration, but when The President defers rectification of the abdication of responsibility to amend our outmoded immigration laws that Boehner's omission constitutes, that is political maneuvering in their eyes.  The hypocrisy is plain, yet the voters seem to be leaning toward giving the Republicans more power in Washington next year after the coming mid-term election.  Even this business about the nomination of Holder's successor is hypocritical.  There are many nominations to the federal bench languishing in committee because the Republicans have put "holds" on them, but when it comes to the attorney general, all of a sudden they are in a hurry.  That is plain and simple hypocrisy, but do the voters hold that against the Republicans? I don't think so.  Thus, as far as hypocrisy goes, the voters are demonstrating plenty.

All of the polls show that the American people are disaffected with both houses of congress to the extent that the popular approval rate for those two bodies is in single digits.  Nothing gets done, the people complain, yet when people like Chuck Grassley talk out of both sides of their mouths, they don't pay a price politically; they get reelected.  It's the same thing with the ISIL problem in Syria and Iraq.  The American people don't want us to get involved in another war there, yet when Republicans chide President Obama by claiming that he has been indecisive and they complain that he is responsible for the rise of ISIL--not the government of Iraq that George W. Bush installed and we all left behind, and not George Bush himself for getting us into this mess in the first place--the American people seem to respond by endorsing those complaints about the Obama presidency as if to say that we are morally obligated to baby sit the Arab world from here to eternity.  The fact that the Obama Doctrine embodies what the American people claim to want--that is, disengagement from Arab chaos to the extent that we will not send ground troops into the region again--doesn't seem to resonate with us Americans.  We don't want him to send troops, but when he doesn't and the Republicans complain, we side with them.  Then of course there is Obamacare.

At present, 10.3 million Americans have signed up for insurance through the healthcare.org insurance exchange.  That includes probably five million or more people who didn't have health insurance before the Affordable Care Act, many of whom have never had health insurance.  Those aren't statistics that demonstrate a failure of the program, yet not only is it the case that the success of the law isn't being touted, the Republican pule that Obamacare has been a miserable failure seems to continue to have credence among the majority of Americans.  Thus, the Republicans are responsible for another outright deception that the American people not only accept and believe, but agitate on the basis of as well.  Ask around about Obamacare and you will find that there are more people who think it an abuse of government power than a boon for the people of this country on the whole.  Frankly, I do blame President Obama for the failure of the American people to confront the truth about Republican politics.

I've said it many times, and I'll say it again.  If you want the people of this country to hear you, you have to go on television after the majority of them eat dinner, and before they begin watching the pap that television offers them every night.  Bill Clinton, for example, used to have press conferences that preempted regular television programming, and he probably did so on average more than once a year...usually at a crucial time politically...and he remains popular with the American people to this day, largely because he spoke directly to us rather than through Diane Sawyer and Scott Pelley on the nightly news.  Yet, when this president has a press conference, it is at some factory in the mid-west at lunch time, and all we hear of it is the few questions and partial answers that interest the network news programmers.  And I have news for our president, they are not on his side.  They say what they think Americans want to hear, and give short shrift to what they don't.  It isn't antipathy toward him; it's just pandering.  I am willing to bet that if President Obama held an evening press conference now, the trend of the November election would be substantially altered for the better, that is, for the Democrats.  Mind you, the Democrats have their share of hypocrites as well, but I would rather see them as incumbents in trouble for it than Republicans.

Your friend,

Mike

Dear America,

With three books criticizing the Obama administration and The President himself for diffidence in the area of foreign affairs coming out within the past year or so--one by former Secretary of Defense Robert Gates, one by presidential hopeful Hillary Clinton, and now one by former White House Chief of Staff and Director of the CIA Leon Panetta--credence is growing for the rampant notion that President Obama is responsible for the intractability of the ebola epidemic, and for the rise of ISIL.  But we are putting more money into the ebola epidemic than any other nation, and we will be putting men and women in the way of that harm shortly.  As for the Rush Limbaugh types who aver that "...we elected people in positions of power..." , which I read as President Obama given Rush's proclivities, "who think this in terms of this country being responsible" (that we owe it to Liberians to let them into the United States because the country was created in response to the manumition of the slaves we held and thus we are responsible for ebola), there will always be nuts like him around and acolytes to carry his message far and wide, but the effect of the lunatic fringe is marginal fortunately.  On the issue of ISIL however, people like Gates, Clinton and Panetta may be opportunists, but they are not on the fringe of our body politic at all.  They are mainstream figures whose opinions on the subject gain credence when they are repeated, as they have been in the media in all three cases.  But through the prism of recent history, it is easy to see that ISIL didn't come to be during the Obama administration in any way but name.  ISIL is just the latest iteration of the reactionary Islam advocated by Osama bin Ladin, whose terrorist sway among Muslims inclined his way didn't start even in this century.  His hegemony among jihadists goes back at least as far as the Soviet invasion of Afghanistan and Congressman Charlie Wilson, who circumvented the CIA policy of letting the Afghan Mujahideen and the Soviets wage a war of attrition from which we could only benefit, and he arranged to arm bin Ladin's army through third parties, which arms they have used subsequently against us.  From that era sprang al Qaeda, the Nusra Front, and now ISIL in consequence of our refusal to leave the middle east alone by invading Iraq and Afghanistan in two failed efforts to seed the Levant with American values.  But all that aside, the chickens have come home to roust on the Turkish border, and this, not those other occasions is the turning point in the war against terror and reactionary Islamism.

There is a small Kurdish enclave on the Syrian border with Turkey that has been in the news lately.  Kobani is the latest discreet target of ISIL's expansion in the reason, and it is virtually under siege now.  Meanwhile, Turkish military assets...tanks in particular...are arrayed along the border in positions from which the conflict around Kobani can actually be observed, but the Turks still refuse to intervene, or even to allow Turkish Kurds to cross the border to join the battle in support of their fellow Kurds.  The arguments for the Turkish policies is first that the Kurds are a recalcitrant minority in Turkey, as they are in Syria and Iraq as well, and assisting them to gain strength, or even survive, is inimical to Turkish suzerainty over Kurdish areas within Turkey, and lately, that Turkish intervention in Syria would be like Russian intervention in Ukraine.  Thus, the Turks sit and wait as if they have impunity from the ISIL goal of a single Islamic caliphate.  But first, both arguments are absurd in that helping the Kurds in Syria could not do anything but redound to the improvement of relations between Turkey and its Kurdish minority.  And second, if Turkey were to ally with ISIL, that would be analogous to the Russian activities in Ukraine, whereas smiting ISIL could only be seen as a friendly act to Syria's regime in that ISIL is a common enemy.  So the real issue is whether the Turks fully appreciate their current policy of non-intervention in Syria, and I don't see how they could given the price they may well pay for those policies.

The Turkish army may be formidable, but so was Hussein's Iraqi army, and so was the army we left behind in Iraq.  And the Syrians have a military establishment that has managed to hold off an adamant insurgency for three years, but neither they nor the Iraqi legacy army that we equipped and trained has been able to resist the ISIL onslaught, so the dubious belief that tanks on the Turkish border will be sufficient to stop ISIL from advancing across it seems like whistling in the dark.  For that matter, the idea that Iran, Saudi Arabia, Jordan, Lebanon and even Israel, whose military has failed to subdue once and for all the Islamist resistance to its very existence in Lebanon and Gaza, are exempt from the ISIL threat of a single caliphate subject to Sharia law and brutal enforcement thereof.  This is President Obama's moment, and he has seized it.

Unlike George W. Bush, President Obama has refused to be roped into doing the dirty work for the sybaritic and hostile regimes of the middle east, and has instead volunteered to help them cope with their menace, but not to invest American blood and lucre in it.  The inception of ISIL occurred under other names long ago, and our campaigns in Iraq and Afghanistan have only driven the movement to its current, abominable and abhorrent form.  We are long past the nascency of reactionary Islam, and blaming The President for it is irrational and misguided.  For the moment at least, Turkey is the nation with the fate of the middle east in its hands, and fortunately, that country is contemplating a "buffer zone" between ISIL in Syria and Turkey, which could function as a natural barrier between ISIL and further conquest in Turkey's direction, for that matter, Iran's, Jordan's and Israel's as well if such tactics become the modus operandi for nations in the area.  If it works in Turkey, the concept might spread, and the Obama Doctrine, as I call it, will pay off not just in American withdrawal from the area, but Arab self-reliance when it comes to radical threats.  That's the goal, I would think, and thanks to President Obama, it may be in sight.  But it is the Turks who will be responsible for the world-wide caliphate if it emerges, not our president.

Your friend,

Mike

Dear America,

The farther we get temporally from the origins of the financial crisis of the last six years the more apparent it becomes that the solutions to the problems that caused it can be nothing short of deep philosophical changes in our concept of capitalism, which has been transmogrified from its original purpose of facilitating economic growth by making capital available to the singular purpose of allowing individuals to accrue personal wealth.  It is apparent not because of new revelations, but because the same revelations keep coming to the fore, and the same people continue to be involved.  Whether by coincidence or design, this past weekend saw such revelations in at least two instances, one on NPR--the national public radio program "This American Life" specifically--and the other in Friday's New York Times.  Both pieces were about the same story: the cozy relationship between Goldman-Sachs and the New York Federal Reserve branch, and the case of a particular regulator who was fired because she was too critical about it, if you ask her, or because she was just too difficult a person if you ask The Fed.  She filed a lawsuit on account of her "wrongful termination"--wrongful termination is a legal term of art for firing someone who had a reasonable expectation of retention for an invalid reason--and that lawsuit has now been dismissed.  Just for perspective, she has appealed the dismissal.

The young woman was hired for her intelligence and background in the financial industry, and she was assigned right from the start of her tenure to supervision of Goldman Sachs...probably the first or second largest problem for The Fed when the financial crisis occurred, and perhaps the highest profile institution when it comes to the issue of the need for scrutiny and supervision.  And shortly after she was placed in that role, an issue arose with regard to a deal between Goldman Sachs and another bank called Santander, which is the name that Banco Santander, a Spanish bank, goes by here, whose branches are popping up all over the place.  Bear in mind that the Spanish economy is in far worse shape than ours, and so are the Spanish banks.  What happened was a mirror image of one of the ways in which the big banks got into trouble in 2007.  Santander had some dubious assets on its books, which, because they involved money invested by Santander toward the end of making profits for the bank primarily rather than its customers, had the effect of diminishing the bank's retained capital.  Banks are required to keep "reserves" of a certain percentage of the total capital in the institution...that is to keep those assets idle and retained by the bank rather than invested...so that if some investment fails, the bank won't.  That percentage of the total amount that the bank has invested in loans and other capital transactions has changed pursuant to the Dodd-Frank Act, but it continues to be in single digits, so the protection for the public and the system that the reserve requirement represents is thin enough without it being eroded by sharp practices.  In the cases of the biggest banks that amounts to billions of dollars, which is a lot of money, but not so much if when it comes to feeding the chickens that sometimes come home to roost in investment banking, as they did in 2007 and 2008.  And in this case, Santander was below even the required figure, so they "sold" some of their riskier assets to Goldman Sachs for a period of time, after which Santander was required under the terms of the deal to buy them back, giving Goldman Sachs a profit on the deal, estimated in the NPR story to be tens of millions of dollars...just for holding those assets for about thirty days or so so that Santander wouldn't show them and thus have to cover them with reserves in the appropriate amount.  It was not illegal, but even some employees of The Fed characterized it as "legal but shady," and it's easy to see why.  Goldman Sachs was helping Santander hide the fact that it was undercapitalized under the law.  It was aiding and abetting by Goldman Sachs, or conspiring if you look at it in another way, toward the end of evasion of legal responsibility by Santander, and it was motivated simply by greed at Goldman and recklessness at Santander...neither being a laudable motivation for bankers.

When The Fed became aware of the transaction, the regulators felt compelled to confront Goldman Sachs regarding some of the details, among them that before Goldman did the deal, they would get a "no objection" from The Fed, which they claimed to have done as required by Santander, but which they never did in fact.  The leader of the team of regulators that had the meeting with Goldman executives said he wanted to fire a "shot across the bow" of these guys, presumably to discourage further instances of the same kind of legal but shady conduct, and specifically he said that he was going to tell them that since he never gave that imprimatur to the deal, how did they satisfy the requirement, but in the end, he simply lobbed the Goldman Sachs big boys a softball, which didn't really require that they account for their failure to do even that minima duty to Santander, The Fed, and hence the rest of us.  It may seem trivial...even technical...but if you think about it you can see why it was so critical.  The need for that "no objection" ruling was the only control The Fed had over Goldman, and Goldman just ignored it.  They went around the law no matter what anyone else might say about it...including the federal regulators charged with seeing to it that Goldman Sachs never brought the country to its financial knees again.  And because Carmen Segarra saw that and pointed it out, she got fired.

The story demonstrates that our chickens are being protected by nothing but foxes and other chickens.  What stands between us and more disasters like the great depression is a bunch of watchdogs who take their teeth out whenever they see a fox so as not to make him mad.  At least there are a few in congress who see the problem, and there are going to be hearings about these concerns: something important and non-partisan for a change.  But what will come of it is at best uncertain.  My fear is that the only thing that will change our form of capitalism--run by financiers whose only motivation is profit for themselves--is a collapse from which we cannot recover, and such a cataclysm wouldn't be any better for us than it would be for them.

Your friend,

Mike

Dear America,

I know that I'm repeating myself, but exclamation points keep getting added to the notion that President Obama--in spite of a reactionary, obstructive congress--has brought us from the brink of a disaster to relative economic health in less than six years.  The latest demonstration of my contention is the current unemployment rate, which is below 6% for the first time since June of the last year of George W. Bush's second term.  Given that we were losing as much as 750,000 jobs per month in the last months of Bush's second term and continuing into the first six months of President Obama's first term...given that the unemployment rate was as high as ten percent at one time early in Obama's first term...that is a remarkable comeback.  Add to that the fact that by consensus the Obama-Democratic stimulus package was what turned the tide and saved us from the abyss, you would think the American people would be thanking the Democrats and The President, but that is far from what is happening.  And now there's ISIL.

If George W. Bush had been in office when those heathens raised their collective ugly head, he would have put on his Texas ten gallon and we would have sent a hundred thousand men back to Iraq to start all over again.  But President Obama is trying to do what the first President Bush did and raise an army from the nations that are, and should be, truly involved in the fight.  We are providing air power to the cause, but there will not be American combat troops on the ground, and thus, this time there won't be names with dramatic music played after every news cast reminding the bereaved of their losses and the futility of fighting for our values in a part of the world that we truly don't understand prevailing values there are not like ours.  Again, you would think you would hear cheers in the streets because one of our leaders finally understands that we cannot bring American democracy to the rest of the world whether it wants it or not, but no.  That isn't what is happening.  What appears to be happening is that perhaps a majority of the American people are preparing to go to the polls in November and vote Republican, as if they are responsible for something good that has happened to the vast majority of us in the recent past.

The economic reports that have come out this month demonstrate a phenomenon that has been slowly undermining our economy and our way of life for three decades.  The rich are getting richer, and in fact, the wealthiest 3% of Americans now own more than 50% of the nations wealth, which might be tolerable but for the fact that such inequity in our society is eroding the quality of the lives of the rest of us while the richest of us resist paying more taxes even though they are paying only slightly more than the least they have paid in a century.  Wages stagnate month after month, year after year, and we Americans keep coming back for more of the same.  It is incomprehensible to me that so many people can be fooled all of the time.  So many people believe one of the conservative mantras that amounts to indictment of the 5 million unemployed Americans for their failure to go where the 1 million available jobs are.  So many people work their $15 per hour jobs and blame the Democrats when the reason that their individual economies are bad isn't that the nation isn't being led to recovery by our president, but rather that someone who owns them--almost like equity in that there aren't good jobs available to go to--is taking more than his share while they do all the work.  It might be comprehensible if the numbers I'm citing were made up, or they were matters of opinion, but they aren't.  They are reported at least once every month so everyone is reminded of them regularly, and the cause and effect relationship between and among those facts is not disputed except by vague Republican rebukes based on nothing but the theory that if you make the rich richer, it will trickle down on all of us despite the fact that we now have thirty years of proof that such is not the case.  For how long will the American electorate be satisfied with self-serving rhetoric that is plainly contrary to the facts of which we are all aware.  Ten million jobs have been created since President Obama took office, which is more in six and a half years than George Bush created in eight, and may approach the sixteen million created by the Clinton administration, which left Bush more than a one hundred billion dollar budget surplus, which he quickly turned into deficits run every year for his entire term of office.  Yet, the Republicans continue to hang deficit spending around President Obama's neck as if he didn't inherit it from his predecessor.

I believe, and I have said before, that the Republicans have hijacked the political discourse in the United States by claiming that they can't be wrong because they also claim to be on the moral high ground.  As to that moral high ground, we can, and we will, always have differences among us because we are not a monolithic nation, but as far as I am concerned, as long as our political system doesn't force someone else's values on me, I have no problem with those other people living by their values as long as they don't hurt me and I don't hurt them.  But as to the connection between moral systems and economic ones, there is obviously no morality in capitalism or in our financial institutions.  So once we get past the illusory claims of capitalism being synonymous with morality, we should be free to consider what is abundantly clear in the real world.  Our society is being stratified along lines drawn parallel to wealth quantification, and we will all be the losers if the trend goes much farther.  Our only remedy is through our political system, and our only recourse regarding what that system has done to us for decades is to change course and vote for other kinds of people.

Your friend,

Mike