Thursday, July 31, 2008

The compelling EM Forster

Zadie Smith, in the latest NY Review of Books, has written a marvelous and uplifting review of a book of transcribed broadcast speeches from the great novelist and writer, EM Forster. My favorite Forster quote from the article:

Do we, in these terrible times, want to be humanists or fanatics? I have no doubt as to my own wish, I would rather be a humanist with all his faults, than a fanatic with all his virtues.

This may appear weak to some who, in these times, demand that we succumb to the level of the Islamic fundamentalist fanatics in order to fight back against such fanatics. However, this statement is in fact courageous in its willingness to fight with flaws known and exposed, than fight the way a fanatic fights, which is to refuse to admit one's own flaws.

There is another quote of Forster's, noted in the article, that in my view made him a worthy novelist:

The simple view is that creation can only proceed from sincerity. But the facts don't always bear this out. The insincere, the half sincere, may on occasion contribute.

These speeches are similar in tone and structure to Forster's essays. I am a proud owner of a series of essays (and few of the same broadcasts) from Forster which he delighted in calling "Two Cheers for Democracy" (Harcourt, 1962). Again, the essays in that collection read much like his broadcasts. The essays and broadcasts are great tributes to empiricism, pluralism and kindness, especially during a time of fanatic worship of ideologies, whether religious or political in the early to mid 20th Century. See here for an example from the book.

Whether Forster was always a nice person in his private life, of course, is subject to more debate than Ms. Smith's article may imply. For example, I recall Gore Vidal being rather caustic about Forster in Vidal's memoir, "Palimpsest" (original hardback, Random House, 1995) (see pages 190-191 of Vidal's memoir, for example). Still, I thought, at the time, and still do, that Vidal was probably too harsh regarding Forster's gossiping, the way some are too harsh about Vidal's tales of literary figures he has known.

The Forster book of speeches appears to be a worthy companion to Forster's essays and his deliciously mannerist novels. While I normally say my three favorite British authors are Graham Greene, Charles Dickens and Thomas Hardy, I place Forster closer to those three than many other British authors, whether they be Thackeray or Trollope, or, to stay closer in time to Forster's contemporaries, PG Wodehouse, Kingsley Amis or Somerset Maugham. This may be a matter of taste, of course...

The importance of this review, however, is that, contrary to the way we normally think of Forster, Forster's non-fiction oriented essays and literary criticism also remain powerful more than seventy years after many were published, which in our faster-moving times, is an amazing accomplishment.


David Brooks finds his inner FDR and TR

I long ago lost interest in David Brooks, who started out as a thoughtful conservative and turned into a hack not long after joining the NY Times op-ed page (more hackery here and also here). However, this latest essay from Brooks is one of the finest he has ever written. Note its structure, and succinct analysis of sources, just for starters.

While I don't subscribe to his single-bullet answer that education or skills improvement will restore this nation's economic greatness, it is definitely true that restoring our nation's commitment to improving educational opportunities, and redeveloping our infrastructure and manufacturing base, are vital domestic policies the next president should pursue.

Also, while I disagree with Brooks' gratiutous attack on economic populists, I found these two paragraphs of his essay breathtaking--coming from such a pro-Republican as Brooks:

Second, there is a big debate under way over the sources of middle-class economic anxiety. Some populists emphasize the destructive forces of globalization, outsourcing and predatory capitalism. These people say we need radical labor market reforms to give the working class a chance. But the populists are going to have to grapple with the Goldin, Katz and Heckman research, which powerfully buttresses the arguments of those who emphasize human capital policies. It’s not globalization or immigration or computers per se that widen inequality. It’s the skills gap. Boosting educational attainment at the bottom is more promising than trying to reorganize the global economy.

Third, it’s worth noting that both sides of this debate exist within the Democratic Party. The G.O.P. is largely irrelevant. If you look at Barack Obama’s education proposals — especially his emphasis on early childhood — you see that they flow naturally and persuasively from this research. (It probably helps that Obama and Heckman are nearly neighbors in Chicago). McCain’s policies seem largely oblivious to these findings. There’s some vague talk about school choice, but Republicans are inept when talking about human capital policies.

It has long been my view that the Republican Party leadership has run out of substantive ideas. They feed like zombies on income tax cuts, the protection of zygotes and whipping up racial hate and homophobia--try to imagine a working class leftist doing this in our time, for example (I guess we should be glad the guy didn't shoot at the children performing the play at the Universalist Unitarian church).

This failure to promote any substantive economic and nation redevelopment ideas also explains why McCain has gone negative against Obama so early. The corporate broadcast media can still help McCain prevail in the presidential race, but I am starting to believe that Obama can defeat McCain this fall, despite earlier concerns that still linger...As Michael Berube says in his brilliantly satiric post, this election should not be close, even though it is very close, no matter what polls say. Obama is clearly the superior candidate to lead our nation and potentially restore our nation's health. McCain, however, is looking worse and worse in his ability to process and articulate public policy, and looks more like the old guy shouting, "Get the hell off my lawn, you go-for-nuthin' kids."

Friday, July 25, 2008

Three amazing posts at one blog...

UCLA Professor Mark Kleiman's blog, the Reality-Based Community, lives up to its name with three posts in a row, ironically from posters other than Professor Kleiman:

1. A smackdown of one particular right wing attack on Obama's Berlin speech;

2. How a new President and Congress may use the international criminal courts if Bush pardons himself and his cronies to avoid prosecution for torture and other war crimes; and

3. A truly insightful post about the changing water usage among urban and agricultural sectors in California, which shows us once again how a non-ideological approach to public policy is often the best way to approach public policy. The author's point is not to attack the wonderful book, Cadillac Desert, published in 1986, but merely to show that there have been significant changes in water usage in California since that book was published 22 years ago. To be sure, the poster's analysis is not the last word--but that would be his point, too! My only cute comment is that even the Bible is not the last word, according to most Rabbinic scholars. It is a document that often itself has multiple meanings and interpretations over time.

Saturday, July 19, 2008

Dr. Horrible: Worthy of Sondheim

This is free only until Sunday night. Watch it. Now.

It's the best musical since "A Nightmare Before Christmas." And it is truly worthy of Sondheim in terms of direction, song structure and how it moves the plot forward in an amazingly smooth manner. Dr. Horrible is an outstanding achievement.

Thanks to Pharyngula for the link.

Life imitiates art...again

NBA player Stephon Marbury has tattooed his head with the logo of the sneaker company he is endorsing. In 2008, we only roll our eyes, but ten years ago, this would have been greeted with disbelief. Thirty years ago, we'd be outraged at the sports player's "sell out" to corporate ideology. How times change...

I personally found it interesting because, in the original version of my novel, "A Distrubance of Fate" (Seven Locks, 2003), which I began writing in late 1998, I had a science-fiction opening of the year 2033, including the creation of a time machine that leads a time traveler back to 1968 to save Robert F. Kennedy. I dropped the entire time travel opening, after first condensing it, because I finally recognized it got in the way of telling the story of the alternative history where RFK survives and becomes president.

Appropos of the NBA player, however, this is how the manuscript originally opened in the "time travel" version, written almost ten years ago:

The tattoo on her forehead said, “Enjoy Coca-Cola!” The rest of her head was completely shaved. After all, she thought, why let something as useless as hair get in the way of ad space?

She had tattoos of product logos on and about her head, arms, legs and chest. There were ads patched and pasted on the few clothes she bothered to wear. She seemed to have a perpetual smile, which one might have mistaken for a vapid bliss. But she was full of information, and rich with visions, of how your future would be brighter if only you bought and used the products she sold.

She wore a nose ring that contained a small receiver blasting a variety of product slogans and jingles. She sang along with the jingles while floating on her air board. The speed of her air board moved with the jingles, faster with the upbeat jingles, slower with the softer sounding ones, her arms waving with dramatic emphasis. Through all the sight, sound and flowing movement emanating from within and about her, it was difficult to notice her olive eyes, the slight acne on her face, her somewhat pear-shaped body, or even that she was barely twenty-two.

Were the sounds music? Were her logos art? Her movements dance? Or was it all simply commerce? The difference was no longer of any consequence. Over the decades leading into the 2030’s, music, painting and dance had ceased being an art. Each had become a commodity no different than peanut butter. As early as the end of the first decade of the 21st Century, technique and proficiency resided more in the computer software programmers and marketers than the people we used to call artists. By the start of the third decade of the 21st Century, art, dance and music became the province of sales floaters such as the Coca-Cola girl, who went by her legally contracted name, “Cokie.”

Cokie was a professional sales floater with multiple contracts. To start as a sales floater, you signed a contract with a corporation to exclusively consume a corporation’s products as opposed to competitors’ products. You also agreed to sell those products by advertising them at your home, on your clothes and on your body.

Sales floaters often named themselves after the leading product of their main contracting company. This was all voluntary, and conceived in liberty and free enterprise—meaning that most people agreed to it because it meant more money to pay the bills. The discounts for a floater were terrific, which added to the allure, but the sales volume purchase requirements could sometimes be steep.

In the streets of every city in North America and Central America, it was common to see professional sales floaters. To add to the commercial charm of the streets themselves, sidewalks were painted with product slogans, and sounds spurted through speakers within the sidewalks. Corporations paid for this advertising, which meant that the taxpayers no longer directly subsidized what used to be called “public works.”

Every home or office had its windows, doors or walls filled with messages of buy this or sell that. Corporate logos in hologram banners projected above people’s heads from the computer chips planted inside their heads. Some still wondered how or why people agreed to such implants. But it wasn’t hard to understand. Besides the money, the computer chips allowed one instant access to the World Wide Web of the Internet, projected on anything out of an eye of one’s choosing.

The symphony of commerce was everywhere and anywhere anyone wanted it. And most people, it seemed, wanted it.

Thursday, July 17, 2008

Obama's Judgment Trumps McCain's/Bush's Experience

Two items:

1. Obama was mercilessly and often maliciously attacked for saying he'd use diplomatic approaches with the Iranian government. Now, the Bush (Cheney) administration is doing just that (Hat tip to Kevin Drum at the Washington Monthly blog).

2. Obama, back in May, said it was necessary to increase troop presence in Afghanistan. McCain said he would merely "consider" it, but did not see it as pressing. Now, the Joint Chiefs and McCain are in favor of increasing troop levels there.

Sometimes it's best to elect an Illinois lawyer with good political judgment, even if he has little or no military experience.

Abraham Lincoln's only military experience, it should be noted, was his very limited involvement in the so-caled "Black Hawk War" in the early 1830s, where he was a captain in one of the militias. He admitted in later life he fought "mosquitoes" not Native Americans, meaning his unit did no fighting. He also met only one old Native American along the way, and Lincoln kept some blood thirsty men in his unit from killing the old man.

Had enough of the Republican theme of "military experience necessary" yet? Especially considering McCain's experience is thin and mostly non-existent with respect to miltary strategy and wartime military leadership?

ADDENDUM: Here we go again. Iraq's Prime Minister agrees with Obama's 16 month timetable, right down to Obama's wiggle about the "possibility of slight changes." Again, judgment trumps experience in this election at least.

Wednesday, July 16, 2008

The prosecution of Bush, Cheney, et al for murder?

Yes, there is a new book on that by Vincent Bugliosi, entitled "The Prosecution of George W. Bush for Murder"(Vanguard Press, 2008) but I admit to not having read it yet. And I also admit Bugliosi still needs to repair some credibility with me after his ridiculously long tome (1,600 pages) about the JFK Assassination that managed to obscure the growing recognition that JFK was the victim of a Mob hit that may have included renegade anti-Castro CIA folks. See, most recently, David Kaiser's new book from Harvard University Press (yes, that should raise some eyebrows!), "The Road to Dallas."

But see this interview with investigative journalist Jane Meyer, one of the Wall St. Journal's top reporters--and one of the most respected among colleagues and official sources, too--in the past two decades. She is talking about her new book, "The Dark Side" (Doubleday, 2008). The interview is a persuasive introduction as to why Bush, Cheney, and Gonzalez, among others, should be investigated for potential criminal prosecution.

They knew what they were doing, they were lying and covering up what they were doing, and recognized they were on flimsy legal grounds for what they were doing. When one adds in what it was in fact they were doing, that is the type of conduct that raises the need for an investigation for criminal prosecution. Had enough Democrats and Republicans had the guts to impeach Bush and Cheney, we might already know more information to further support this conclusion. A shame, but at least things are starting to move a bit forward on that front now.


Monday, July 14, 2008

Um, this is getting intense, isn't it?

IndyMac taken over by the Feds.

Now, Fannie Mae and Freddie Mac are being bailed out.

Dean Baker (over at Josh Marshall's web site) makes a salient point or two about how the well off get bailed out compared to the rest of the nation.

Regardless of the politics, this financial "correction" is starting to get intense. We could be in for a major bank run if this spreads to an entity such as Citibank or Bank of America. Still, I recall similar fearful sentiments during the Savings & Loan Crisis of the late 1980s, which followed in the wake of deregulation of savings and loans, which, before deregulation, had been seen more like we now view credit unions (credit unions are expressly non-profit, unlike savings and loans, among other differences, however). Despite the magnitude of the failures of many large savings and loans around the nation, the US managed to avoid anything like the 1929 and 1930s financial meltdown.

We shall see how lucky we'll be this time around when major banks are in a position of having to significantly write down their real estate holdings--and may also need to be bailed out due to solvency concerns.

One hunch: The oil companies may have become motivated to try and stop oil prices from going to $5 a gallon--at least before the election. The oil companies' boards of directors have too many friends in banking to allow this meltdown to happen without at least some attempt to control price increases. It would be silly to suggest the oil companies control prices at will. However, their influence, in terms of refining and distribution, which can and does affect pricing, is also undeniable.

ADDENDUM: I guess market traders had the same view as I did. A big decline in oil prices today. Now, if the oil companies start to refine more crude oil and send it to market, there will be a small glut for awhile, which will lower prices nicely for the duration of the election season (I know this would help Republicans, but of course, that's why I say the oil companies may be expected to do this...).


Are "conservatives" having a "malaise" moment?

Much has been written and discussed about former Senator Phil Gramm's comment that there is only a "mental recession" and that we have become a nation of "whiners."

Seems, too, like at least one "conservative" commentator, George Will, agrees with former Senator Gramm.

This situation reminds me of what happened when, back in 1979, then-President Jimmy Carter made a speech about "a crisis of confidence" that was enveloping Americans, and it was immediately labeled as an attack on the American people. Carter's opponents immediately attacked Carter's speech, and began calling it the "malaise" speech--despite the fact the word "malaise" did not appear in the speech. The speech itself does not read so badly at all, but at the time, it was seen as "defeatist" by many who were losing confidence in Carter, as opposed to the nation.

There is, interestingly, some belief that Gramm's statement was also taken out of context. However, looking again at Gramm's comments, the argument that he only meant to say political leaders and not the people is hard to support. His phrase was "We have become a nation of whiners," which is pretty broad.

While McCain has distanced himself from Gramm's commments, this may not be enough. People may continue to sense that the Republican Party as a whole may not be very sympathetic to the plight facing many Americans this election year.

Friday, July 11, 2008

Fascinating: Obama born in US and is eligible to be President. McCain...maybe not? (Revised)

(A Commenter rightly castigates me for using the word "naturalized" when I was confusing the narrow legal definition of the term with a more broad sense of the term (I got caught up in the 14th Amendment as I was posting, which uses "born or naturalized..."). I have revised this post to clarify the overall point that McCain has more problems with eligibility to be president than Obama, but that McCain should be deemed eligible to be president).

I have had the distaste of receiving emails and hearing from people that say Obama is not eligible to be president. See this debunking of that lie.

But now, legitimate questions are being raised that McCain, born in the Panama Canal zone in 1936, is not eligible to be president. See this New York Times article for details. Essentially, McCain, was born a year before a law was enacted to deem people born in the Panama Canal zone as "born" in America. To be eligible to be president, one has to be either born in the US or deemed by Congress to be "born" in America.

Obama was born in the US. End of analysis. He is eligible to become president.

McCain, however, was not born in any of the States of the United States, which means he can only be deemed by Congressional law to be a citizen "born" in the US. The NY Times article quotes an article from a law professor who says McCain is not eligible to be president because a law that said someone born in the Panama Canal zone is a "born" in America had not yet been passed in 1936, the year McCain was born. It was not passed until 1937.

My argument against the law professor is that the Constitutional provision, the 14th Amendment and the 1937 law may be reasonably interpreted to allow Congress to retroactively make someone deemed to be "born" in the US as long as it is a rationally based law. The 1937 law appears rationally based because it concerns (at the time) American occupied land, the Panama Canal zone, and American citizens were serving there in the military, including McCain's father, at the time McCain was born. The statute said that anyone born in the Canal from the year 1904 forward, a key year as that is the year the zone was formally placed under American occupation, is a citizen "born" in the US.

This situation is far different than if Congress suddenly decided to unilaterally make the current governor of California, who was born in Austria, "born" in America. He was not born in the US nor any territory akin to the Panama Canal. Such an action by Congress would therefore likely be an unconstitutional attempt to get around the eligibility requirements to become president.

So, count me on McCain's side that he is eligible to become president. But then again, I am not the type of legal mind McCain would endorse for a judgeship. Ironically, one can easily see Scalia and Roberts, for example, deciding to screw over Obama if he was in the position of McCain...

(Rewritten to avoid confusion and error in use of the term "naturalized")

Thursday, July 10, 2008

McCain is as stupid as Bush II regarding economic policy

Hilzoy has a nice explanation here.

It is amazing how, after 20 years in Congress as a congressman and senator, McCain can be so ignorant of basic economic policy. And yet we have to hear attacks on Obama for not having "experience." Obama has excellent policy knowledge, a significantly diverse set of life-experiences and largely good judgment. I don't have to agree with all or even most of his specific policy proposals, but he is more than competent to lead and protect our nation--unlike McCain, who is even clueless about foreign policy.

ADDENDUM: Now, the McCain camp, including McCain, are lying. They are saying that Obama's plan to eliminate the Bush (Cheney) income tax cuts will hurt "21 million" "small businesses". A corporate media writer (!) finds this statement preposterously untrue. More discussion of this at Media Matters here.

BONUS ADDENDUM: McCain lies about his adultery. See this LA Times article here, where it says:

In his 2002 memoir, "Worth the Fighting For," McCain wrote that he had separated from Carol before he began dating (current wife and beer heiress Cindy) Hensley.

"I spent as much time with Cindy in Washington and Arizona as our jobs would allow," McCain wrote. "I was separated from Carol, but our divorce would not become final until February of 1980."

An examination of court documents tells a different story. McCain did not sue his wife for divorce until Feb. 19, 1980, and he wrote in his court petition that he and his wife had "cohabited" until Jan. 7 of that year -- or for the first nine months of his relationship with Hensley.

Although McCain suggested in his autobiography that months passed between his divorce and remarriage, the divorce was granted April 2, 1980, and he wed Hensley in a private ceremony five weeks later. McCain obtained an Arizona marriage license on March 6, 1980, while still legally married to his first wife.

Since corporate media seems to think lying about sex is more damning of a politician than lying about war, I would expect broadcast corporate media to trumpet this, despite my continuing view that a politician's private life should be off limits. We should not care about these things. However, if the broadcast corporate media does not cover this, in light of their continued fixation about Bill Clinton's private life, then we merely have another example of broadcast corporate media shilling on behalf of McCain.


Wednesday, July 09, 2008

If Al Gore "invented" the Internet, then John McCain called Social Security a "disgrace"

Back in 1999, CNN's Wolf Blitzer was interviewing then Vice President Al Gore, Jr. about various things and the topic of the Internet came up. Here is the exchange between the two men that led to the most famous "spin" of modern times (scroll down a bit in the transcript of the Blitzer interview of Gore):

BLITZER: I want to get to some of the substance of domestic and international issues in a minute, but let's just wrap up a little bit of the politics right now. Why should Democrats, looking at the Democratic nomination process, support you instead of Bill Bradley, a friend of yours, a former colleague in the Senate? What do you have to bring to this that he doesn't necessarily bring to this process?

GORE: Well, I will be offering -- I'll be offering my vision when my campaign begins. And it will be comprehensive and sweeping. And I hope that it will be compelling enough to draw people toward it. I feel that it will be.

But it will emerge from my dialogue with the American people. I've traveled to every part of this country during the last six years. During my service in the United States Congress, I took the initiative in creating the Internet. I took the initiative in moving forward a whole range of initiatives that have proven to be important to our country's economic growth and environmental protection, improvements in our educational system. During a quarter century of public service, including most of it long before I came into my current job, I have worked to try to improve the quality of life in our country and in our world. And what I've seen during that experience is an emerging future that's very exciting, about which I'm very optimistic, and toward which I want to lead.
(Bold and italics added for ease of reading)

From that almost throw away line, somewhat carefully qualified, the spin from the Republican National Committee to everywhere on the planet was that Al Gore said "I invented the Internet," as if he was one of the scientists who "invented" it. There was no context given that he was talking about his time as a political leader in Congress, which is the first part of the sentence "bolded" for your ease of reading. There was no reasonable interpretation that Gore was saying "created" in terms of a Congressional Act, and note that the word "invented" appears nowhere in the statement.

Still, the spin was on and the rest is the horrible political history. See here for how the corporate media trashed and twisted Gore's statements throughout the 2000 campaign. And see this email from two of the scientists who were actually instrumental in "inventing" the Internet, expressing their outrage that Gore was being villified--when in fact, they said he was instrumental in helping to create the Intenet, again from a public policy perspective.

This brings us to John McCain's statements about Social Security at the town hall meeting he conducted in Denver, Colorado on Monday, July 7, 2008. In response to a question about Social Security, McCain said this:

"Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace, and it's got to be fixed."

Jared Bernstein, of the Economic Policy Institute (EPI), said in an email to Mother Jones (see above link where McCain was quoted) that McCain shows how stupid he is because that is how Social Security always works, and noted McCain must have meant Social Security, as a system, was a disgrace:

"That is truly an amazing quote. It's like he's saying, "I just found out that taxes come from people...that's a disgrace." It betrays a really quite scary lack of knowledge about basic government.... I know he's not into this kind of stuff, but ... it would be hard not to know about the intergenerational financing of Social Security. It's the biggest government transfer—1/5 of the damn budget. I guess the quote suggests he knows about the financing, but the way he says it, it sounds like he just found out and is shocked.

"I can't imagine how this will play if it goes at all viral. Maybe Social Security is no longer the third rail, but to call it a disgrace ought to be seen as over the top. On the other hand, maybe people will agree with him."

It will be interesting to see how the corporate media buries this ridiculous statement from McCain. Or whether they will actually admit the statement shows McCain's stupidity regarding Social Security's funding system. Somehow, I doubt we'll start to hear a mantra that John McCain thinks Social Security is a disgrace. It should be noted, in this regard, that the Mother Jones magazine blog informs us that McCain has previously expressed support for privatizing Social Security and has previously said the system is somehow "broken" or wrongly funded by having current taxes paying for retirees.

The biggest ironies are not stated, however. Since 1983, when Social Security taxes were significantly increased, the system has been running a surplus, with those surpluses invested in US Government Treasury Bills, to ensure that the Baby Boom generation (1946-1964) could largely fund their own retirement years. And, of course, if we simply use a realistic annual average economic growth rate, consistent with the previous years since the 1980s, we see Social Security surviving the death of every single Baby Boomer with no problems.

And here is the irony of ironies: The Social Security system is working and will continue to work as predicted by the original founders of the system. If, however, the system fails, it will be because the larger US economy fails--and the fact that Bush's tax cuts will result in revenue shortfalls three times as large as the projected and misstated Social Security shortfall--and because we keep electing idiots like Bush II and McCain.


Tuesday, July 08, 2008

Handy economic chart of Bush (Cheney) years

Forget stem cells and abortion. Forget homosexual rights. Forget wars against "terror". Forget raw meat attacks on Al Gore, Michael Moore, Alec Baldwin, etc.

This chart from Paul Krugman's blog represents the consequences of actual, existing Republican or so-called "conservative" government.

Remember when Bush ironically told a truth at a swank gathering when saying the following:

"This is an impressive crowd. The Haves, and the Have-Mores.

"Some people call you the Elite. I call you my Base."

My "modest" proposal:

White working-class males who continue to vote for Republicans should have this chart glued at the end of a stick that is placed on their forehead so they can see what they are really voting for: Their own wages being squeezed, while corporate profits go up.

And every time they hear Sean Hannity rave against liberals and unions, they can look at the handy chart and say, "Whoa, wait a minute. Why is it that my wages don't keep up with the cost of food and gasoline? And home heating oil? And why do rich people keep getting richer while I struggle?"

To which Sean Hannity will no doubt reply, "Hey, whiner! What are you, anyway, a liberal-left-winger? I bet you hate America and want the terrorists to win." And then he'll add, "I also bet you want homosexuals to get married and join with feminists to kill babies in the womb!"

Yup. That's how the political discourse goes, doesn't it?


Sunday, July 06, 2008

Straight outta Theodore Dreiser and Sinclair Lewis

This is must reading, slow-it-down, and pass the popcorn reading, on the fall of the investment house, Bear Stearns, in this month's Vanity Fair.

Here is a sampling from this eight page (on the web) article:

"Eventually Bear, like most on Wall Street, branched into asset management, forming a series of large funds that put investor money to work in a variety of stocks, bonds, and derivatives. Unlike some firms, however, Bear promoted its own traders rather than outsiders to run these funds, and decided that each would specialize in a specific type of security, rather than a diversified mix. As co-president, Alan Schwartz, for one, questioned the move, thinking it was a bit risky, but deferred to the thinking of Spector and others.

"Everything went swimmingly, in fact, until poor Ralph Cioffi ran into trouble. Cioffi, 52, was a Bear lifer, a wisecracking salesman who commuted to Midtown from Tenafly, New Jersey, to oversee two hedge funds at Bear Stearns Asset Management, an affiliate known as B.S.A.M. His main fund, the High-Grade Structured Credit Strategies fund, plowed investor cash into complex derivatives backed by home mortgages. For years he was spectacularly profitable, posting average monthly gains of one percent or more. But as the housing market turned down in late 2006, his returns began to even out. Like many a Wall Street gambler before him, Cioffi decided to double-down, creating a second fund. Whereas the first borrowed, or “leveraged,” as much as 35 times its available money to trade, the new fund would borrow an astounding 100 times its cash.

"It blew up in his face. As the housing market worsened during the winter of 2006–7, Cioffi’s returns for both funds plummeted. He urged investors to stay put, promising an imminent turnaround. (Cioffi and a colleague, Matthew Tannin, were indicted in June for misleading investors.) When the market downturn accelerated last spring, leaving Cioffi with billions of dollars in money-losing mortgage-backed securities no one would take off his hands, he concocted an audacious way to rescue himself, planning an initial offering for a new company called Everquest Financial that would sell its shares to the public. Everquest’s main asset, it turned out, was billions of dollars of Cioffi’s untradable securities, or, as Wall Street termed it, “toxic waste.”

"Foisting his garbage onto the public might have worked, but financial journalists at BusinessWeek and The Wall Street Journal discovered the scheme in early June. Once the truth was out, B.S.A.M. had no choice but to withdraw Everquest’s offering, at which point Cioffi was all but doomed. Investors were beginning to flee. Worse, some of Cioffi’s biggest lenders, firms like Merrill Lynch and J. P. Morgan Chase, were threatening to seize his collateral, which was about $1.2 billion. In a panic, Cioffi and his aides convened a meeting of creditors, where they asked for more time and more money. The gathering turned angry when several in the audience urged Bear to pony up its own money to save the funds, an alternative Bear executives dismissed out of hand.

"Afterward, Warren Spector got on the phone with a series of Cioffi’s lenders, including a group of J. P. Morgan executives. “I’ll never forget this,” one recalls. “Spector gets on and goes, ‘You guys don’t know what you’re talking about—you don’t understand the business; only [Cioffi and colleagues] understand the business; only we are standing in the way of them finishing this [rescue] deal.”’ It was a classic display of Bear-style arrogance, and it incensed the Morgan men. Steve Black, Morgan’s head of investment banking, telephoned Alan Schwartz and said, “This is bullshit. We’re defaulting you.”

"Merrill Lynch, in fact, did confiscate Bear’s collateral—an aggressive and highly unusual move that forced Cayne into the unthinkable: using Bear’s own money, about $1.6 billion, to bail out one of Cioffi’s two troubled funds, both of which ultimately filed for bankruptcy. It was a massive blow not only to Bear’s capital base but to its reputation on Wall Street. Inside the firm, much of the blame fell squarely on Spector, who oversaw Cioffi and other B.S.A.M. managers.

“'Whenever someone raised a question, Warren would always say, "Don’t worry about Ralph—he’ll be fine,”’ one top Bear executive recalls. 'Everybody assumed Warren knew what was going on. Well, later, after everything happened, Warren would say, "Well, I never knew his actual positions." It was one of those things where everyone thought someone else was paying attention.”

"As one of Bear’s lenders told me, “The B.S.A.M. situation confirmed to me my impression, which was that [Bear’s] subsidiary businesses were run in silos—basically the guys ran their sub-businesses as they saw fit. So long as they were hitting their P&L targets, no one asked any real questions. To my mind, that contributed in a very large part to what happened later.”

This is, however, just the beginning of what appears in some ways to be a defense brief for the executives, but really, right out of Dresier's "The Financier" (1912) and Sinclair Lewis' "Babbitt" (1922).

Suffice it to say that, assuming the truth of this article, Bear Stearns was filled with arrogant jerks who took one too many reckless risks. But there was also reckless "reporting" at CNBC and other business outlets, and, worse, some power politics by those who fly below the radar who are also arrogant jerks, and who were not much better at recognizing the growing housing bubble that was bound to burst.

This primer on the Glass-Stegall Act from the New Deal, essentially repealed in 1999 by Clinton and the Republican leadership in Congress, shows why New Deal values trump Wall Street values--which reigned in the 1920s and in the 1990s and 2000s--nearly every time (The article is written in that "government regulation=bad, private sector=good" style that looks rather silly in this instance at least). I was one of those lonely voices screaming at this repeal of an act that did far more good than any imaginable harm. I saw the repeal of the Glass-Stegall Act as opening the floodgates of greed. I admit, however, to thinking the housing bubble was going to collapse in 2003, not 2006 and 2007.

Bottom line: There is a reason for government regulation--because the guys (mostly guys) at the top are not as smart as they think they are, and certainly not worth the billions they accumulate at the expense of most everyone else.


Saturday, July 05, 2008

So you think you're covered, eh?

Just read this and weep for workers everywhere...

I started screaming about this back in 1987, when the US Supreme Court decided, in an unanimous decision called Pilot Life v. Dedeaux, 481 US 41 (1987), that employees with employment medical insurance plans could not sue the medical insurance companies for "insurance bad faith" because they interpreted the Employee Income & Security Act (ERISA) as having a plenary pre-emption--meaning, it was federal law always trumping state law, and where there was no federal right to sue an insurance company for insurance bad faith. How convenient. At the time, I was an active member of the Democratic Party in Orange County, and I would ask various congressmen and even Senators (and Senate candidates) that I met what they were going to do in Congress to close this judicially-made loophole. The answer I got most often was "I don't know anything about that" and of course, nothing was done because, by the late 1980s, the Democrats in Congress were being bought off with insurance company money. Then, when Congress went Republican in 1994, it was completely off the radar screens among even most policy wonks.

In this decade, there have been a few court cases where people somehow sneak through and recover against insurance companies and HMOs, but the cases mostly involve non-employment related plans, or they involve actual fraud and courts twist their way around Pilot Life and its progeny to uphold the jury verdicts. More often, we see people losing these cases involving their employment received policies, as explained in this article from back in 2000 (The article deals with HMOs, which are essentially the same as insurers in most situations).

(And I laughed with a deeply felt cynicism at how seven of the nine justices decided, about six months ago, that ERISA did not preempt suing your stockbroker for bad faith investment decisions, which meant an employee could sue his or her stockbroker for bad faith trades. This decision was reached even though one can make the same argument for preemption as under managed care and employee health care plans. Obviously, these wealthy Justices and their wealthy friends care more deeply about their own investments than their and your medical coverage.)

For those who believe Obama is the second coming of RFK or FDR (I may hope that from time to time, but I don't really see it yet), please don't count on Obama to close that Supreme Court loophold regarding bad faith claims against insurance companies and HMOs, either, unless there is a groundswell in a new Democratic Party dominated Congress. Even then, we should not expect much to happen considering how much money insurance companies can throw around Capitol Hill.


Saturday Night Review of Book Reviews

A writer for the New Republic offers an elitist review of a new book on the economic anxieties of the upper middle professional classes in America. I have had those anxieties for years, but unfortunately, the New Republic writer shows his economic ignorance in thinking the problem is that foreign competition is a cause that has no solution. Such ignorance, however, is economically rewarding to the writer as it does get him a byline in the NY Times Op-ed or Sunday Book Review, which strongly supports foreign worker competition to hold down wages and benefits in the US.

There are of course ways to redistribute wealth, including passing the Employee Free Choice Act to reform unions and help grow more unions, eliminating the Bush era income tax cuts, raising the capital gains tax, instituting Medicare for all, employing a tariff policy that protect wages, not profits (even China fights harder for its industries and workers in this one area than our leaders do--which should be a cause for shame if we did not have a biased pro-corporate media), and reinvesting in the infrastrucure of our nation.

Here is an interesting review of a new "breezy" book on mathematics. Still, I found I could not describe most of the specifics discussed in the review even after reading it, which says everything about the disconnect between otherwise semi-intelligent humanities majors like me and true math lovers. I may have to check out the book in question, "One to Nine: The Inner Life of Numbers" (WW Norton & Co., 2008) by Andrew Hodges, because, unlike science books written for laypersons, math books written for laypersons seem much more hard to follow--at least to me.

Over at the Washington Post Book World, I am not sure this review of a book called "Rivals: How the Power Struggle Between China, India and Japan Will Shape Our Next Decade," tells us anything earthshattering, but it does remind us that the China vs. India economic growth competition should be taken far more seriously in American policy discussions. I often personally favor India, because India has been far more courageous in allowing for political pluralism. However, developing our nation internally remains the best policy, and will make it easier for us to best promote liberty and freedom abroad.

This review of a book proves what I have long said--that China followed perestroika without glasnost. The review is vital reading if we are to even begin to understand why it is that our nations' leaders continued rewarding of China's continued oppression of its citizens makes hypocrites of them all. The one constant from the Nixon to the second Bush (Cheney) administrations has been the appeasement of Chinese leaders as they continued to crush most political dissent while reorganizing their economic policies that fit snugly with American corporate leaders' interests. One more thing on this topic: Gorbachev failed and the Soviet Union collapsed because perestroika never took off because there was too much short term greed among each competing province in that nation, while glasnost permeated Soviet society almost immediately.

The irony of China today is that it is economically healthy enough to allow for openness, transparency and political pluralism, which makes this review well worth the read. China's failure to move in that direction will likely stunt its economic growth, which will more than likely benefit India than the US--if we keep electing idiots like McCain who don't know a damned thing about economic internal development. Obama is more open to this, but Obama's time with the University of Chicago stunts his understanding, sad to say.

And heading back to where we began this edition of review of book reviews, here is a wonderful review of a new book on stem cells that appears in the July 2, 2008 London Times Literary Supplement. The book under review is Cynthia Fox's "Cell of Cells: The Global Race to Capture and Control the Stem Cell" (WW Norton & Co., 2008).

Finally, this essay topic is a favorite of mine: Looking at something from an opposite perspective. In this case, we have a book review positing how the European invasion of the Western Hemisphere affected and influenced Europe, not merely looking at the "development" of the hemisphere by succeeding conquerors. This essay is, however, written in a style that presupposes an ability to categorize and use certain nomenclature that I find unnecessarily complicated. Still, if you can make it through most of the article, and then rent "The Mission" (1986), it will allow you to truly laugh with understanding at Randy Newman's amazing anti-imperialist hymn, "The Great Nations of Europe."

Bonus: A beautiful short film on YouTube featuring the art of Edward Hopper and the soundtrack music from Randy Newman for the film, "Ragtime."


Another bigot goes to the Devil

Former United States Senator from North Carolina, Jess Helms, has finally gone to Hell.

Here is a nice recap of a career that preached hatred and ignorance. Helms was not unique, however, and represented the views of too many of his constituents in his time, starting as an aide to a racist Democratic Party Senator in the 1950s, and a radio and television commentator in the 1950s and 1960s, before his election to the US Senate in 1972. Helms added to what is a sad line of racist Senators. Each of these Senators remain a blight on American History.

As George Seldes, a now-departed investigative journalist of the early to mid-20th Century, once said, to the dead we owe only the truth. And the truth is that there is little in the life of Jesse Helms that can make up for his nastiness, coarseness and bigotry (One wonders just what nuggets one would find in his radio and television editorial transcripts from the 1950s and 1960s). That a few years ago, Helms campagined for a judge who was a lesbian--likely because she was his granddaughter--became friendly with Madeliine Albright (Clinton's Secretary of State) and the U-2 rock group's Bono, does not balance the scales.

Let people say it is classless to not mourn the death of a public man such as Helms. In this instance, truth must trump diplomatic commentary.

Friday, July 04, 2008

Corporate media shills for usual

This Media Matters column by Jamison Foser is must reading. Foser nails the various points about the reasonableness of General Wesley Clark's criticism of McCain, the fact that similar and even worse things were said about John Kerry's military service when he was running for president, and the corporate media's continued shilling for McCain.

Hooray for Clark for having the guts to stand up to coprorate media's pro-McCain narrative. McCain is another spoiled and arrogant ignoramous, just like the current "president," and his reign would continue the disastrous policies, both foreign and domestic, that we have seen these past eight years. McCain flying a bomber and getting shot down are not sufficient pre-requisites to be a successful president. Pure and simple.

And here is a whole new narrative worth watching: Somehow the middle class guy, Obama, who only recently came into big money, is the elitist country club fella, while the guy who was the son and grandson of admirals, who married a beer heiress who is worth in excess of $100 million dollars, is a "regular guy." In the linked to article, I was amazed to read about Cindy McCain spending $500,000 in one month in credit card purchases--and one of the McCain children racking up $50,000 in credit card purchases in one month, too. I guess all this fits in with McCain's reckless tax cut proposals and pushing for the continued and expensive US military presence in Iraq.

At least one poll shows that a slight majority of Americans have proven immune to this latest bit of corporate media propaganda.

It's gonna be a long election cycle, filled with lies by and on behalf of McCain, the likes of which future historians will no doubt find astonishing.