Moving the Earth with 'Clean' Coal

A Liberal Jew's View of Israel

Avraham Burg, former Knesset president, does not have kind words to say about the actions of his country over the past several years. Some quotes:

"so many of my fellow countrymen are in love with war -- as the solution for everything"

Avigdor "Lieberman doesn't talk about the West Bank and the borders of 1967. He brings us back to 1948, when tens of thousands of Palestinians were expelled from their homes. Now Lieberman wants the remaining Israeli-Arabs to leave the Jewish state."

"The Israeli society has been kidnapped by the settler movement, which follows a one-state solution of the biblical Eretz Israel. Likewise, the Palestinians were kidnapped by Hamas, which follows the Greater Palestine vision on the basis of the Islamic sharia law. And in both societies there is kind of a Stockholm syndrome: We have affection for our abusers."

"Oslo itself was a great event. For the first time, the two sides met on the basis of a vision of a two-state solution. The mistake behind the creation of the Palestinian entity was that it was more a real estate arrangement and not the beginning of a reconciliation between two enemies. And between the time of Oslo in 1994 and Camp David in 2000, Israel doubled the presence of the settlements in the occupied territories. For the Palestinians, that's the icon of occupation. At the same time, the Palestinians did not put an end to incitement and the culture of hatred in the mosques and schools -- so the collision was inevitable."

"if everything is compared to the Holocaust, then you would also have to reject the alternative offered by US President Barack Obama for a diplomatic process and take immediate harsh measures to prevent the next Holocaust. Moreover, when you use the Holocaust as a total example to compare everything against, by the end of the day you annihilate so many things. You say to yourself, Gaza? Well, it was not nice, but it wasn't the gas chambers, either. This is the logic: Because nothing is the Holocaust, everything is permitted."

"You ask what the actual difference is between the Nazi's, who screamed "Juden raus" (Jews get out), and Israelis who are yelling "Arabs get out."

What's Good for the Goose

We say China's record of protecting human rights is not sterling. They say we have a lot of crime, we discriminate against races and our young people "have personality disorders."

Investors are also worried that Citigroup’s performance could suffer.

The title is a quote from an article in the NY Times announcing that we will be boosting our ownership of Citicorp from 8 to 36%. Here's a company that has lost $27.7 billion in the last year and investors are worried that things could get worse? We've given them $45 billion already, guaranteed billions more in bad loans and still the stock tanks. Government ownership could make things worse?

Now is the time to try Susan Woodward and Robert Hall's idea of good bank/bad bank. Even though this infusion will make some changes in the board, Pandit should be dropped as well.

I prefer Tebaldi

My wife played Tebaldi as Mimi earlier today. I couldn't find it on YouTube. But this one as Cio-Cio San is almost as good.

What's Wrong with This Picture?

For 19 years photos like this were verboten. Now, if the family of the slain soldier approves, we will be seeing these photos again until a miracle occurs and we stop going to war.

Photos like these did have an effect in stopping the foolishness that was Vietnam.

Get it now

A commercial from the Coen brothers supports the view shown here.

You can't play unless all the parties are there

A group of people many of whom have been successful in negotiating peace agreements around the world sent the following to the "MidEast Quartet"(EU, UN, U.S. and Russia) to point out the futility of their boycotting Hamas. (Emphasis mine)

There can be no peace without Hamas

If every crisis is also an opportunity, it is now time to rethink the strategy for achieving peace in the Middle East. The latest and bloodiest conflict between Israel and Hamas has demonstrated that the policy of isolating Hamas cannot bring about stability. As former peace negotiators, we believe it is of vital importance to abandon the failed policy of isolation and to involve Hamas in the political process.

An Israeli–Palestinian peace settlement without Hamas will not be possible. As the Israeli general and statesman Moshe Dayan said, “If you want to make peace, you don't talk to your friends. You talk to your enemies.” There can be no meaningful peace process that involves negotiating with the representative of one part of the Palestinians while simultaneously trying to destroy the other.

Whether we like it or not, Hamas will not go away. Since its victory in democratic elections in 2006, Hamas has sustained its support in Palestinian society despite attempts to destroy it through economic blockades, political boycotts and military incursions. This approach is not working; a new strategy must be found.

Yes, Hamas must recognise Israel as part of a permanent solution, but it is a diplomatic process and not ostracisation that will lead them there. The Quartet conditions imposed on Hamas set an unworkable threshold from which to commence negotiations. The most important first step is for Hamas to halt all violence as a precondition for their inclusion in the process. Ending their isolation will in turn help in reconciling the Palestinian national movement, a vital condition for meaningful negotiations with Israel.

We have learnt first-hand that there is no substitute for direct and sustained negotiations with all parties to a conflict, and rarely if ever a durable peace without them. Isolation only bolsters hardliners and their policies of intransigence. Engagement can strengthen pragmatic elements and their ability to strike the hard compromises needed for peace.

The new US administration and the appointment of George Mitchell as the Mideast Envoy give hope that a new strategy grounded in realism and not ideology will be pursued. Without this, there will be no two-state solution and no peace and security for either Israelis or Palestinians. We must recognise that engaging Hamas does not amount to condoning terrorism or attacks on civilians. In fact, it is a precondition for security and for brokering a workable agreement.

Where should the state spend its money?

In today's Boston Globe Kevin Cullen asks why the Gardner Auditorium, the hall at the Massachusetts State House which has seen many historic hearings and speeches, can't be maintained as well as the offices of our politicians, some of which have $10,000 drapes and fireplaces.

And in the same paper these same politicians seem to be unaware of today's world as they have met for less than 20 hours since the session began on January 7, almost 2 months ago.

Lentils and Pasta Make Great Bombs

That is probably the idea behind Israel's refusing to allow lentils and pasta into Gaza. They know something we don't know as to the hidden talents of Hamas bombmakers. Two U.S. Congressmen, supporters of Israel, visited Gaza last week and were amazed at the devastation, particularly that caused by weapons that were made in America.

Not Mincing Words

The Center for Strategic and International Studies just issued a report on the status of our military aircraft programs. They are not optimistic when they say:

No military service has currently shown that its leaders can create affordable procurement programs. Every service has, to some extent, mortgaged its future by failing to contain equipment costs, and by trading existing equipment and force elements for developing new systems that may never be procured in the numbers planned.

The end result is an ill-concealed struggle to solve the resulting procurement problems by either raising the defense budget or somehow getting more funding at the expense of other services and programs. The US defense procurement system has effectively become a “liar’s contest” in terms of projected costs, risk, performance, and delivery schedules.

More and more 'experts' are saying the same thing. Will our government act?

Tone Deaf

It is truly amazing at the number of people who are still stuck in the belief that the excesses of the last several years is something that should be continued. The latest is, as you might gather, a bank, Northern Trust. This Chicago-based bank is the sponsor of a golf tournament in LA and also the recipient of $1.6 billion of our money, even though they didn't ask for it.

Being the primary bankroller of a golf tournament is, using the lexicon of Catholicism, probably a venial sin. It was the non-golf hoopla that brought their activities to the level of a mortal sin. TMZ has cataloged these sins, so I won't repeat them here, but they include a fair number of over-the-top activities given today's world.

What will it take for these people to get the message?

Strategic and Covert

Two words that have become very popular in the 21st century. They're really popular with the Pentagon which is now spending almost $5 billion a year of our money winning hearts and minds. We saw one part of this program last year which relied on former military brass to push the Pentagon's stories. This story by the Associated Press goes into a lot more detail. One particularly interesting area in something called Joint Hometown News Service, whose small-town name belies an expansive, sophisticated covert PR operation.

Throw the rascals out.

That's essentially what Simon Johnson is advocating. In his view the government should take over failing banks and fire the board of directors, who, when you think about it, may be more culpable than bank management. The new board can select better management (one hopes) and then buy its way out of government control.

Not looking good for AIG

It looks like they want more money from us. When do we say no and cut our losses?

He certainly is an individual

Joe Lieberman, that is. It doesn't seem to matter who he deals with. His latest acquaintance is Avigdor Lieberman, who has rather conservative views. Some would say that 'conservative' is not the correct adjective. Fascist is.

Something in the water?

That's one theory as to why a small town in Brazil has such a high rate of twins. There are 30 pairs of twins in the 80 families that live in Candido Godoi. Adding further to the mystery is that the rate of identical - as opposed to genetic twins is much higher here.

Another theory blames it all on Mengele.

Reserves or Aid?

Any charity has to make that decision, assuming, of course, that the charity does have reserves. The Army Emergency Relief (AER), a charity that is legally separate from the Army, has decided that reserves are more important than aiding its constituents, members of the Army. In the period 2003 - 2007, AER put $174,000,000 in reserves and doled out $64,000,000 in aid. This, at a time when their Navy and Air Force counterparts did exactly the opposite. While maintaining anywhere between one and three years expenses in reserves is considered sound practice, AER has twelve years in reserve.

While AER is separate from the Army, it is controlled by it. The Army even pays the salaries for most of AER's employees. Because of this tight control, the Associated Press found:

• Superior officers come calling when AER loans aren't repaid on time. Soldiers can be fined or demoted for missing loan payments. They must clear their loans before transferring or leaving the service.

• Promotions can be delayed or canceled if loans are not repaid.

• Despite strict rules against coercion, the Army uses pushy tactics to extract supposedly voluntary contributions, with superiors using language like: "How much can we count on from you?"

• The Army sometimes offers rewards for contributions, though incentives are banned by program rules. It sometimes excuses contributors from physical training — another clear violation.

• AER screens every request for aid, peering into the personal finances of its troops, essentially making the Army a soldier's boss and loan officer.

Simple but makes sense

There has been tons of articles about good banks and bad banks written in the past few months; most of these articles are fairly arcane. This article by Susan Woodward and Robert Hall is not arcane and makes a lot of sense.

The key point of the article is that the bad bank owns the good bank. Further, that's about all the bad bank does; in the banking sense it has no operations except trying to get some money for the 'toxic' assets it now owns. Citibank is the example used to illustrate the concept.

The example does something most banks are loathe to do: mark the assets to market. It also values the equity at the current market of $11 billion. (As an aside, the $11 billion market cap for Citigroup today includes the $50 billion we gave it plus the guarantees we supplied. Does that say anything about Citi's future?)

After dividing the assets into good and bad and parceling them out to the respective entities, the current capital ratio of 1% becomes 32% for the good bank and remains at 1% for the bad bank. The current stockholders and bondholders own the bad bank, which, you'll remember, owns the good bank. So, these investors are no worse off then they are now. But we have one healthy bank that can actually be run as a bank and one unhealthy bank that, if the toxic assets cannot be resuscitated, does not need more of our money and could simply go into Chapter 11, where the stockholders and bondholders can fight over the carcass.

If Citi stays as a single entity and the market gets worse, what panic will be there if it becomes insolvent? Whereas, with this approach, it is extremely unlikely that the good bank will go belly up and, if the bad bank goes bankrupt, the taxpayers are not on the hook any further than currently.

Paying for losses

In today's NY Times Gretchen Morgenson provides several examples of why there should be clawbacks of executive pay. Here are a few. The amount AIG lost in 2008 ($37.6 billion) was equal to everything the company earned since the second quarter of 2004. Citogroup's $18,7 2008 loss wiped out all earnings since the second quarter of 2006. The numbers for Merrill: $35.8 billion and quarter 2 of 1996. During the good years the CEOs of these companies made a bundle. Those in retirement are also doing quite well. Should they pay back some of these ill-gotten gains?

An example for U.S.?

At least 100,000 Irishmen came out to protest their government's handling of the economic crisis. True, they're complaining about a tax on the salaries of public employees. We're not as government-centered as Ireland, at least not yet. But 100,000 is about 2.5% of Ireland's population. That's a huge turnout. It would correspond to 7,500,000 protesters here. We, the people, need to speak up more.

Enough Said

Derrick Jackson in today's Boston Globe:

PRESIDENT Obama, this is your moment. This is your time to beat Buicks into bullet trains, Suburbans into subways, and Hummers into hybrid buses. To borrow from your speeches, there is a moment in the life of every generation, if you are to make your mark on history, when you must tell an iconic industry that its incompetence is inoperable.

It is time, Mr. President, to take General Motors and Chrysler off taxpayer life support.

Politically, this is even more difficult than ending the Iraq war. In your very first press conference as president-elect, with Michigan Governor Jennifer Granholm standing behind you with your transition economic team, you declared, "The auto industry is the backbone of American manufacturing . . . a critical part of our attempt to reduce our dependence on foreign oil."

That was nice to give them the benefit of the doubt, Mr. President, but all GM and Chrysler have done since then is connive for more time on the federal respirator, despite the flat line on the boardroom monitor. They have been on notice for months to come up with a revolutionary restructuring plan in exchange for the $17.4 billion in bailout aid it has already received. This week, GM said it may need another $16.6 billion from the United States and another $6 billion from the governments of Canada, Germany, Britain, Sweden, and Thailand. Chrysler says it needs another $5 billion from you and me. For that, it came up with a projected loss of another 50,000 jobs, with plans so vague that the Wall Street Journal wrote that it contained "only a relatively few major new restructuring steps."

That is not even the final straw for pulling the plug. Within the restructuring plan submitted this week to the Treasury Department, GM wants an additional $8.4 billion from the Department of Energy to produce "alternative fuel and advanced propulsion" vehicles, with yet another request coming by March 31. This is a stunningly unjustifiable level of welfare for a company that arrogantly peered out of its SUVs and pickups, sneering down on the smaller Japanese cars.

Behind any greenspeak is grease. The auto industry opposes California's tough proposed greenhouse gas emission standards. The Bush administration blocked them, but Obama is reconsidering them. In its restructuring statement, GM said "compliance with other regulatory schemes, including the California CO2 program, will be addressed as any such programs are finalized." Translation: GM will scheme to soften or evade the standards. Deep in its restructuring report, Chrysler still whines about oncoming environmental standards. It said it will "try its best to comply," but warns that "as a last resort it may be necessary to restrict sales of certain vehicle models." Translation: Chrysler is so far behind in developing efficient cars, it may have to hold back its muscle cars and behemoths to meet California fleet-average fuel economy rules.

Mr. President, just yesterday you warned the nation's mayors that they must spend their share of the $787 billion stimulus "without waste, without inefficiency, without fraud." You told them, "I will not compromise or tolerate any shortcut." The US auto industry, holding us hostage by claiming it employs one out of every 10 workers, has lobbied for every shortcut to inefficiency known to Capitol Hill. The Detroit Free Press is saying the bailouts of automakers and suppliers may total nearly $100 billion - with no plan.

It is time to stop compromising with the comatose. There is no question the short-term pain that pulling the plug will cause. I write this knowing how large the auto industry loomed for my family and relatives in Wisconsin and Michigan. But it is bleeding to death anyway, as outdated for America's industrial future as a typewriter is to a computer hooked to the Internet.

In the race for fuel efficiency, Japan has already put a figurative man on the moon. While we sneered out of our SUVs, Europe and Japan began moving people between cities on 200-mile-per-hour trains. Mr. President, you have said it is time to put away childish things. That includes the gas guzzlers of the US auto industry. It is time to beat Pontiacs into the plowshares of public transportation.

It gets worse

Just a couple of days ago I expressed my outrage at two judges in Luzerne County, Pennsylvania, who sent kids to a detention center simply so the judges could make money. Now it's starting to look as though the courthouse in Luzerne was a bed of corruption.

The county probation officer has been charged with obstructing justice and altering an official record to cover up some of her nefarious actions. The court administrator, a cousin of one of the disgraced judges, was convicted of stealing $70,000 in gambling proceeds that should have gone to the county.

And there is another possible charge against the two judges, fixing another case.

Getting back in the news

The Westboro Baptist Church has not been in the news for a while, at least in this country. Perhaps, that's why they felt an urge to make the news in Britain. But, Britain is getting tougher about admitting extremists - witness the recent example of Geert Wilders - and Rev. Phelps and his daughter were not allowed in and, thus, were unable to protest the performance of "The Laramie Incident" at a small college in Hampshire.

American Foreign Legion

William Astore is a former Air Force officer who also taught at the Air Force Academy. He is saddened by what he sees as the conversion of our military into something very much akin to the French Foreign Legion. He sees it in our recruitment in the barrios and other places "natives" stay away from and in the absence of many of our best and brightest from serving in the military. He sees it in the increasing reliance on private military contractors. He sees it in the multiple deployments of our troops. He sees it in the abandonment of the notion of national sacrifice in times of war.

He asks, " Now, approaching our eighth year in Afghanistan and sixth year in Iraq, what exactly is that force defending?"

Money doesn't talk

Or, maybe I should say money can make people keep quiet. Here's a weird article in today's Boston Globe.

A prostitute blackmailed a wealthy client and was able to get $280,000 out of him. When she came back for more, the John turned her in. Now, this John is apparently a very prominent businessman in Boston with tons of clout. So, although the typical penalty for the crime is 3 - 4 years, the court gave the woman a term of six months, which is how long she had been held pending trial. She was set free and will start a three year program of supervised release. During the three years she cannot reveal the name of the John.

What do you suppose would have been the disposition of the case if the John did not have such clout?

Give it up for Lent

Lent was the time when most of my friends and I gave up something for Lent. After all, we were in a Catholic grammar school and wanted to be sure we would get to heaven. Usually, we gave up candy or, every so often, movies. But, I haven't fasted during Lent for decades and have given it zero thought in the 21st century.

So I was surprised to see a story about fasting for Lent in the Wall Street Journal. But, it's the 21st century and these people aren't doing such pedestrian things as giving up candy; they're giving up Facebook. I'm not talking about kids here; some of these quoted in the article are in the 50s. One woman has even joined a support group specifically designed for those fasting from Facebook.

It's all a dream

All that buying of securities that Madoff did in at least the last 13 years was apparently a dream, or he picked some real winners earlier in his career. The trustee liquidating the firm has found no records of any purchases in that time period.

Truly Disgusting

Two judges of a juvenile court in Pennsylvania jailed kids so that the judges and their friends could make money. To make it more likely that the kids would be convicted, they denied them the right to counsel in half of the cases and, in many cases, they denied the pleas of the prosecutors that certain kids not be jailed. Many of the kids came from difficult family situations; many did stupid things, such as, in one case, putting up on the Web a caricature of an assistant principal.

The judges' goal was to get as many kids as possible into private detention centers owned by a friend. Before the judges were caught they had pocketed $2,600,000.

A sidelight of the stimulus - $800,000,000 is allotted to the construction of private prisons. Who really benefits from this? We have got to move away from our belief that prisons are the answer to our problems.

All Executives Need a Private Jet

It doesn't matter if the executive is the CEO of GM or the CEO of the DEA. They have to travel in style and be protected from the hoi polloi. The DEA has 106 planes at its disposal. Yet, when the administrator had to go to Colombia back in October, the DEA had to hire a jet from a private contractor. Let me correct that last statement, the DEA hired a firm to hire a company that had a jet available for its leader.

Now, our government has a lot more than 106 planes. However, it would have seemed tacky if the DEA asked to use one of these planes. So, $128,000 later the DEA administrator was able to fly to Colombia in style.

Can he be trusted?

He's from Chicago. You have to wonder what world Illinois politicians live in. Yesterday, Senator Burris admitted that he did not tell all to the impeachment committee. Now, he admits that he did try to raise money for Blago. What will tomorrow bring?

A First

Saudi Arabia has appointed a woman as deputy education minister. She will be in charge of a new department for female students.

There must be something new in the water there now as the King has made other changes in the government. Two ultra conservatives, the chief of the religious police and the country's most senior judge, were replaced. One of the judge's rulings was that it was okay to kill owners of satellite television channels which broadcast immoral programs.

Neither is without sin

Israel has not stopped building settlements, the latest may grow to 2,500 houses in the fullness of time. Hamas has expanded its confiscatory powers from food to bombs; the UN reports the theft of the bombs from a warehouse guarded by Hamas.

Another View of the War on Terror

The International Commission of Jurists, which is by no means some half-baked, self-anointed protector of their own definition of freedom, feel that the war on terrorism has not been good for human rights. They have been working on their report for over three years and have held public hearings and private meetings all over the world. Here's how the report begins (emphasis mine):

This report of the Eminent Jurists Panel, based on one of the most comprehensive surveys on counter-terrorism and human rights to date, illustrates the extent to which the responses to the events of 11 September 2001 have changed the legal landscape in countries around the world.

Terrorism sows terror, and many States have fallen into a trap set by the terrorists. Ignoring lessons from the past, they have allowed themselves to be rushed into hasty responses, introducing an array of measures which undermine cherished values as well as the international legal framework carefully developed since the Second World War. These measures have resulted in human rights violations, including torture, enforced disappearances, secret and arbitrary detentions, and unfair trials. There has been little accountability for these abuses or justice for their victims.

The Panel addresses the consequences of pursuing counter-terrorism within a war paradigm, the increasing importance of intelligence, the use of preventive mechanisms and the role of the criminal justice system in counter-terrorism. Seven years after 9/11, and sixty years after the adoption of the Universal Declaration of Human Rights, it is time for the international community to re-group, take remedial action, and reassert core values and principles of international law. Those values and principles were intended to withstand crises, and they provide a robust and effective framework from within which to tackle terrorism. It is clear that the threat from terrorism is likely to be a long-term one, and solid long-term responses are now needed.

It is a different world

If you were operating in an industry where many have lost their jobs, would you pay bonuses to your current staff? If your company had received billions of dollars in taxpayer money, would you pay bonuses to your current staff? If your answers were "no", then you would not be in the brokerage business.

Morgan Stanley recently took control of Citibank's brokerage unit (probably using taxpayer money). Now they will be paying $3 billion in so-called retention bonuses to the brokers. And, the bonuses will be based on what the brokers did in 2008.

It really is a very different world these people operate in. Will the guardians of the TARP let it happen? Do you have any doubts?

30 Years Work Lost in Seconds

Lee Redmond had been growing her fingernails since 1979. According to Guinness, she has the longest fingernails in the world; her longest is 2'11". Unfortunately, she no longer has the title of longest fingernails as she was involved in a car accident in which the nails were broken.

Designer Babies?

Fortunately all of our kids were born without any serious defects and, thus far, have lived normal lives without debilitating diseases, either physical or mental. In the days of the 20th century, the only control we had relative to childbirth was abortion We did not choose that option and preferred to let nature take its course once my wife become pregnant.

In the 21st century the idea of nature taking its course is becoming unfashionable. Humans, or some of them, want to exert more control over the process of having and raising kids. These people want to raise perfect children, the very notion of which is ridiculous. Howsomever, there are purported takers of the Hippocratic oath who are perfectly willing to make a dollar or two by catering to those who seek the impossible (that is, if you consider children as more than physical beings).

One such person who at one time was required to swear to "do no harm" is a fellow named Jeff Steinberg. Dr. Steinberg is director of the Fertility Institute, on whose web site is a declaration that those who sign up for embryo screening will soon have the option to make "a pre-selected choice of gender, eye color, hair color and complexion, along with screening for potentially lethal diseases."

Now I can fully understand why some people may not want to raise a child who is extremely likely to require an extraordinary amount of care for the child's lifetime. I may not agree with that, but I can understand it. I can't understand why it is vital that the normal child have certain physical characteristics, such as being tall, blonde, and have blue eyes. Yet, that is the goal of Dr. Steinberg and others.

Is this another sign that we are in the end days?

Russia in Afghanistan

George Wilson contends that Gates' long tenure with the CIA has made him quite sensitive to the mistakes Russia made in Afghanistan. This is not the first time someone has looked at the experience of Russia in Afghanistan. To advance his argument, Wilson also quotes from Defense Intelligence Agency reports of twenty-five years ago:

Thanks to the National Security Archive at The George Washington University, inspired by former Washington Post reporter Scott Armstrong, many of the formerly hush-hush U.S. intelligence reports which shaped Gates’ views on Afghanistan are available to the public. The Defense Intelligence Agency, for example, wrote in 1983 that “the effect of the Soviet occupation of Afghan­istan has been catastrophic for the development of the Afghan economy.” Another formerly secret intelligence report that applies to U. S. forces in Afghanistan today states: “Given the mountainous terrain and numerous passes throughout the border area, we believe that even with a few additional divisions the Soviet force level would be too small to stem insurgent infiltration appreciably. Although the Soviets can drive insurgents from an area temporarily and will occasionally score victories against individual bands, they will be unable to establish control over much of the country. Soviet estimates of the force necessary to seal the border with Pakistan have varied from nine to 17 divisions.

“We do not believe the Soviets foresee an early ‘vic­tory’ in Afghanistan or have any compelling reason to seek one,” continued the formerly secret intelligence report on the Soviets’ 1979-89 occupation. “In our view, they probably cling to the hope that — despite the dis­mal results thus far — their efforts to buy support for the Kabul regime, rebuild the Afghan armed forces and seek converts by promoting social and economic re­forms will eventually bear fruit.”

Sound familiar? It should to any government official or general who tried to quell the insurgencies in Viet­nam and Iraq. In both those conflicts, U.S. presidents eventually — after thousands of U.S. and civilians lives were lost — concluded that the only way to get American troops out of the quagmires was to hand the counterinsurgency wars over to the native armies. Will Obama listen to Gates, our first Defense secretary who is truly an expert on what can and cannot be done in Afghanistan, or follow President Lyndon Johnson’s di­sastrous path and keep throwing American troops into the quagmire in pursuit of “victory?”

Facts about CEO Pay

Sarah Anderson and Sam Pizzigati demolish most of the myths about the fairness of the compensation of Fortune 2000 CEOs:

• The compensation is small potatoes in our modern economy.
• Companies are better run now.
• Bigger companies mean bigger pay checks.
• It's a supply-demand situation.
• Why don't you complain about Alex Rodriguez' pay?
• They really don't make that much.

Each myth is shattered quite simple and effectively.

Getting Back Together

Ten years ago GM spun off its auto parts division into Delphi Corp. If you think things haven't gone well for GM, Delphi has fared far worse; they have been operating under bankruptcy protection for over three years, despite having been subsidized by GM for almost its entire life. Now, GM wants to bring Delphi back into the fold. Why? So that Delphi can, as part of GM, get some of the taxpayers' money. Our leaders have already committed $13.4 billion to the GM dinosaur, but it's still hungry for more taxpayer money.

Millennia ago, the dinosaurs may have been thought too big to fail, but they did and the world moved on. It was a different world, but it absorbed the loss. Some species throve because there were no more dinosaurs.

Another First?

Hampshire College was the first college to divest itself of investments in South Africa thirty-two years ago. Now, students at Hampshire are announcing that the college will be divesting investments in Israel .

The college trustees deny that the divesting was based on Israel's actions in Palestine. They say that their decision was made "without reference to any country or political movement." They decided to pull the college's money out of State Street Global because the fund had investments in companies that violated the college’s policy on "socially responsible investments."

Getting Worse and Worse

Now the Taliban can attack Kabul with seeming impunity. They can attack government buildings with a collection of troops, or they can convince people to go to heaven by detonating a bomb.

You have to wonder where the Taliban got its weapons as we can't keep track of the weapons we gave to the Afghan Army and Police. Over the past several years we have given them 242,000 weapons. We're having trouble finding a third of them.

A Modern Politician

This business attracts sleazy people at all levels, federal, state and local. Here's a little tale of a politician in Massachusetts.

His name is John Brennan. He served in the State Senate for sixteen years and was considered a leader there. After he left the Senate, he sat on the board of the library in his home town of Malden for almost nineteen years. Things went well for Mr. Brennan. He started a company. Can you guess what business his company operates in? You win the prize if you said 'lobbying'.

Now he's getting old and is considering his retirement options. He did serve in the Senate for a lot of years and is entitled to a pension for this service. Now the Senate does not pay much, so Mr. Brennan will get a little over $19,000 a year for this service. However, the State will actually pay him an annual pension of $41,000 as he has served the state for almost thirty-five years. Huh?

Wasn't he in the Senate for sixteen years? Yes, he was but in 1998 the Senate authorized time spent as a library trustee to be counted toward one's pension if the town accepted the terms of the Senate legislation. Well, it seems that the mayor of Malden at one time shared a law partnership with Brennan. In a spirit of friendship and open government the mayor asked the city council to accept the provisions of the Senate act; of, course, he did not actually say what the act was, he just gave the number. The council accepted the mayor's request.

The frosting on the cake? Mr. Brennan had a hard time attending monthly meetings of the library board. In his last four years of service he missed 90% of the meetings.

Moving into Africa?

According to the NY Times our new Africa Command has helped Ugandan troops trying to defeat the Lord's Resistance Army, a truly inhuman group of people doing what they believe is their Lord's work, that is if you define Lord as Joseph Kony. We have not actually fought alongside the troops, but we have helped in planning how to defeat Mr. Kony and company. Not only did we help plan the operation, we also gave equipment and $1,000,000 in fuel.

Now, tell me again how we got involved in Vietnam.

They'll play politics until they die

I know that the stimulus bills are in a state of flux, but when I looked at Saturday's NY Times comparison of the House and Senate versions it seemed to me that our leaders are still trying to appeal to certain populations at the cost of the nation as a whole.

The most egregious example is the home buyer tax credit, which in the Senate version is estimated to cost $35.5 billion. First objection: speed is of the essence in restoring our economic health. The credit is at least a year away. How will it help tomorrow? Second objection: why are we helping new home buyers and not current homeowners?

Granted the alternative minimum tax has to be changed to reflect today's world. Is the stimulus bill the place to do this, particularly when it is estimated to cost $70 billion? Couldn't we improve the rapid transit system of one city for this kind of money?

Why is the House giving government contractors $11 billion? They are doing this by repealing a law that requires government agencies to withhold 3% of the payments to contractors so that they will pay their taxes; there are billions of uncollected taxes from companies that do government work. To emphasize the stupidity of this provision, the law will not take effect for two years. How is this putting money into the economy in 2009?

Again, the Senate. This time it's a provision to make interest and sales taxes on car loans tax-deductible. That's deductible next year, not this.

Of course, we must be 100% safe. So, billions are being given to Homeland Security. And we can't forget AIDS and avian flu; there is money in the House bill to combat these diseases. Sure, we should be researching ways to deal with these diseases. But not in the stimulus.

Lessons Learned from WWII

Jeffrey Record has an interesting analysis of the start of WWII with regards to the U.S. and Japan. His conclusions can be applied to the current war-torn world:

1. Fear and honor, “rational” or not, can motivate as much as interest.
2. There is no substitute for knowledge of a potential adversary’s history and culture.
3. Deterrence lies in the mind of the deterree, not the deterrer.
4. Strategy must always inform and guide operations.
5. Economic sanctioning can be tantamount to an act of war.
6. The presumption of moral or spiritual superiority can fatally discount the consequences of an enemy’s material superiority.
7. “Inevitable” war easily becomes a self-fulfilling prophecy.

Get Your Indulgence Here

When I was a kid (I've got to be an old fart as I start more and more postings with those five words), getting an indulgence was something to be worked for, as it would mean that you were closer to getting into heaven. Sure, we learned that at one time the Church (the word was always capitalized) raised some extra cash by selling indulgences, but that was all in the past. The way you earned an indulgence (i.e., time off from purgatory) in my day was mainly by praying; a rosary might be worth a couple of years, a spiritual work of mercy another few years, visiting a holy place like Jerusalem earned really scads of time.

The practice seemed to go into disuse but is being brought back with a bang now. I suspect the difficult economic times and a conservative pope are largely responsible for the resurgence of the practice.

When does it stop?

Over the Christmas holidays Fannie Mae installed a new board of directors. Since for all practical purposes the company has been completely taken over by the government with our money, you'd think that the directors would be compensated at a reasonable, maybe GS-12, rate. You have thought wrong. Their pay is $160,000 for one year, that's a calendar year but certainly not 52 weeks of work; it is doubtful that any of those weeks will be 40-hour weeks. How much more can they take us for? Where is Congress on this? Where is the administration?

Born Again American

GAO's View of TARP Implementation

Here's part of the report:

Treasury has continued to develop a system for detecting noncompliance with key requirements of the program but has not yet finalized its plans. Further, Treasury has made limited progress in formatting articulating and communicating an overall strategy for TARP, continuing to respond to institution- and industry-specific needs by, for example, making further capital purchases and offering loans to the automobile industry. In addition, it has not yet developed a strategic approach to explain how its various programs work together to fulfill TARP’s purposes or how it will use the remaining TARP funds. While GAO does not question the need for swift responses in the current economic environment, the lack of a clearly articulated vision has complicated Treasury’s ability to effectively communicate to Congress, the financial markets, and the public on the benefits of TARP and has limited its ability to identify personnel needs.

High Risk Areas

Every two years the GAO publishes a list of areas they think have a high risk of wasting money. This is the latest list:

Addressing Challenges In Broad-Based Transformations
• Modernizing the Outdated U.S. Financial Regulatory Systema (New)
• Protecting Public Health through Enhanced Oversight of Medical Products (New)
• Transforming EPA’s Processes for Assessing and Controlling Toxic Chemicals (New)
• 2010 Census (New in March 2008)
• Strategic Human Capital Management
• Managing Federal Real Property
• Protecting the Federal Government’s Information Systems and the Nation’s Critical Infrastructures
• Implementing and Transforming the Department of Homeland Security
• Establishing Effective Mechanisms for Sharing Terrorism-Related Information to Protect the Homeland
• DOD Approach to Business Transformation
• Business Systems Modernization
• Personnel Security Clearance Program
• Support Infrastructure Management
• Financial Management
• Supply Chain Management
• Weapon Systems Acquisition
• Funding the Nation’s Surface Transportation System
• Ensuring the Effective Protection of Technologies Critical to U.S. National Security Interests
• Revamping Federal Oversight of Food Safety
Managing Federal Contracting More Effectively
• DOD Contract Management
• DOE’s Contract Management for the National Nuclear Security Administration and Office of Environmental Management
• NASA Acquisition Management
• Management of Interagency Contracting
Assessing the Efficiency and Effectiveness of Tax Law Administration
• Enforcement of Tax Laws
• IRS Business Systems Modernization
Modernizing and Safeguarding Insurance and Benefit Programs
• Improving and Modernizing Federal Disability Programs
• Pension Benefit Guaranty Corporation Insurance Programs
• Medicare Program
• Medicaid Program
• National Flood Insurance Program

Many of these areas need input from our weak and ineffective Congress, so don't expect much of a breakthrough with the current crop of supposed legislators.

Internal Control, Valuation, Strategy

The Inspector General for the TARP has published his first report. Would you have guessed that the management of the program does not get an "A"? The biggest concerns are listed in my title above.

There really are few controls to ensure that our money is being spent and spent wisely. As for strategy, there is no portfolio management at all (how long should we hold these securities, what should the selling price be). Valuation of those securities purchased thus far seems to be out of whack as it looks like we got $78 billion less than we thought we had bought.

The valuation issue affects not only the past. The Fed will be spending another $600 billion buying up student loans, car loans and credit card debt. Who will value these securities? The same rating agencies who valued the CDOs.

If you don't want to read the 189 page report, read this.

The Iraqi Elections

Anthony Cordesman takes a preliminary look at the elections. Like most things about Iraq today, the results are uncertain. True Maliki 'won', but he did not get a majority in any of the nine provinces where the vote count is complete. The best he did was 38%, the worst 11%; maybe with the number of parties running, these results are not bad. The major Sunni party, the Islamic Supreme Council, did not do very well. In general, Cordesman is relatively pleased with the results, but there is always a 'however'.

However, there are many local areas where these results may lead to violence or divisive power struggles. These elections did not resolve any of the political uncertainties and potential sources of violence that Iraq must face in the coming year. They also lay the groundwork for practical struggles to see who controls positions, money, the police, and influence in virtually every province where a vote occurred.

The outcome will bring meaningful local representation to Iraq for the first time and may help put it on a more pragmatic political path. It is clear, however, that they are only the prelude to a year-long struggle going into the national elections and that there is only so long that the Arab-Kurdish issue can be kept on hold.

Many of those elected also have little or no real political experience or experience with governance. This is not a casual problem. Iraqi has dropped from a nation with an unspent budget surplus to a nation caught up in the global financial crisis and which will not get further major donations of foreign aid. Unemployment, poor government services, and infrastructure problems remain critical. The Iraqi government is the source of virtually all surplus income and is the direct or direct employer of roughly 70 percent of the jobs outside the agricultural sector. Iraqis have already shown they want strong leadership and care more about the quality of governance than the way that their government is chosen.

Addition and Guts

When I was a kid and the Senate consisted of 96 good and true men (they were all men then), a bill passed if 49 Senators (or a majority of those voting) voted for it. I guess I missed something that happened at the start of the 21st century - although 51 votes constitute a majority (as mathematics would have it), it now takes 60 votes to pass a bill.

Also when I was a kid, there were filibusters and the country did not wither away. In the 21st century one would think that a filibuster is the worst possible thing that could happen.

Here we are with the world around us sinking into economic ruin and these assholes are still playing politics. Where are the statesmen in the Senate? Where are the people with integrity? Where are the people who live up to their oath of office? Why has the Senate become a body made up of gutless wonders? They should all be impeached.

Another cost of the wars

Last year the Army had a record number of suicides and January is starting off very bad. It looks as though there were four times as many suicide this year as last. The length of the war and the resulting multiple deployments certainly has had an effect. But, it also appears as though the brass does not look kindly on soldiers seeking help with emotional problems.

Would you buy weapons from this guy?

He's Efraim Diveroli and he's an arms dealer who has managed to do quite well selling old, very old, ammunition from China to our government although the law says we won't buy Chinese ammunition. He was indicted last year on 83 counts of selling the Pentagon Chinese ammunition dressed up to look Albanian. His trial is coming up, yet it looks as though we taxpayers are still his customers. Only in America!

Bad Bank Proposal Is Really Bad

Last Fall the IMF issued a study of 124 banking crises. Some conclusions

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.

To relief indebted corporates and households from financial stress and restore their balance sheets to health, intervention in the form of targeted debt relief programs to distressed borrowers and corporate restructuring programs appear most successful. Such programs will typically require public funds, and tend to be most successful when they are well-targeted with adequate safeguards attached.

A Musical View of the Economy and the World

Daschle Drops Out

It would have been better if Geithner had dropped out as losing Daschle is worse than losing Geithner. Geithner may be a mistake, Daschle wasn't.

Killefer Makes 3

First it was Geithner who didn't pay taxes, then Daschle, now it's Obama's nominee for Chief Performance Office, Nancy Killefer. However, where Geithner and Daschle owed thousands, Killefer owed only $947. She didn't pay unemployment tax for a household employee and, unlike the two men, Killefer had a lien placed on her house.

Will there be any more?

It took two months.....

...but the banks will finally appear before Congress next week.

Weapons or Energy?

Did you know that two-thirds of the Energy Department's budget goes to the maintenance of nuclear warheads? I certainly did not. Yet, Energy has 100,000 people involved in this task.

I would have thought that the Defense Department was in charge of all weapons. It makes no sense to me.

Looming Crisis at the Pentagon

That's the title of an essay by Chalmers Johnson that you have to read. Here's part of the introduction.

Given our economic crisis, the estimated trillion dollars we spend each year on the military and its weaponry is simply unsustainable. Even if present fiscal constraints no longer existed, we would still have misspent too much of our tax revenues on too few, overly expensive, overly complex weapons systems that leave us ill-prepared to defend the country in a real military emergency. We face a double crisis at the Pentagon: we can no longer afford the pretense of being the Earth's sole superpower, and we cannot afford to perpetuate a system in which the military-industrial complex makes its fortune off inferior, poorly designed weapons.

Sports Stadiums: The Next Victim?

Over the past several years there has been considerable talk of building new sports stadiums. In some cases, this talk has been backed up by money from companies eager to plaster their name all over a stadium. Among those companies are Citibank and Bank of America, two of our investments. Citibank signed a deal with the NY Mets whereby they would pay the Mets $20,000,000 a year for twenty years for the right to name the new Mets field. BofA will pay the Carolina Panthers $7,500,000 a year for rights to 'name' its stadium.

Should these deals be renegotiated or killled?

Bacevich on American Triumphalism

From a brief essay in Commonweal.

In short, after 9/11 President Bush put the triumphalist hypothesis to the test. As he left office, the results of that test clearly presented themselves. What we’ve learned is this: First, liberalism’s widely touted victory is at best incomplete. Especially in the Islamic world, a stubborn search for alternatives persists. Our insistence that others do things our way exacerbates the opposition we face. Second, unipolarity is a chimera, a dangerous refusal to acknowledge the world’s complexity. Third, to pursue global hegemony is to court bankruptcy. To persist in imagining otherwise will only hasten America’s decline. Fourth, although globalization may be real, the United States can neither direct its course nor fully insulate itself from its adverse effects.

Wanat, Afghanistan

Tom Ricks has a wonderful series of articles about a small battle in Afghanistan that can tell us a larger story about our efforts there. His final entry quotes an Army friend of his.

We are so very exposed in this land-locked country, with no infrastructure, not nearly enough enablers, not enough transport... it's frightening, really.

. . . [R]remind folks that this is an enemy that may in fact look more like Hezbollah in Lebanon 2006 than al Qaeda in Iraq. This is an enemy that apparently has no problem massing force in space and time, and is tactically proficient at understanding our weaknesses. My own view is that we have to employ a properly resourced COIN mission . . . while simultaneously ensuring that those folks out in the hinterland have all the enablers they need. A tough problem.

'Bad' Banks Will Make Things Worse For Us

Dean Baker has a couple of interesting points to make about the 'bad' bank proposal. I've already written about the difficulty of coming up with a fair price for these assets. Baker reminds us that, if we paid a fair price, banks' capital would likely be wiped out as we're looking to write off $2 trillion but the banks only have $1.4 trillion in capital, and some of that is goodwill, whose worth is nebulous especially in these times.

Because the problem of bad loans is not fully known, it is likely, in Baker's opinion, that the bad bank will be dealing with new bad loans for a long time.

Baker advocates nationalization of insolvent banks and nationalization today. "This is not interference with the market. It is the market. Bankrupt banks go out of business, but due to their importance to the economy, we can't let them be tied up in bankruptcy proceedings for years."

He has a point. But, I suspect that Geithner and Summers don't agree. We'll be sorry if they don't.

Gaza - then and now

Elena Qliebo, an Oxfam worker living in Gaza, talks about Gaza twenty years ago and Gaza today.

It was summer 1987 and I had just returned from a refreshing morning swim in a turquoise, clean sea lapping on a deserted powdery beach. I picked some white sea-lillies before joining a family of close friends for a delicious breakfast of fresh green figs.

The family began to prepare lunch, which we later ate in the orchard. Gaza was full of fruit trees back then. One of the most poignant memories I have is the almost suffocating fragrance of orchards of orange blossoms when I first passed through Beit Hanoun, in northern Gaza, on my way to Gaza city.

As I look at what remains of Gaza now an apocalypse would describe the situation accurately. Much of Beit Hanoun's trees, orchards and greenery had already been levelled or uprooted during previous Israeli incursions. But now the foliage and orchards are only a memory.

People are mostly exhausted and bereft of hope. But the head of one agricultural association that I visited voiced cautious optimism that he might be able to export two million flower buds that were stored in refrigerators and had miraculously survived destruction.

I travelled to Beit Lahia, also in northern Gaza, recently to visit some of Oxfam's beneficiaries. The strawberry fields, chicken farms and cow pastures were gone. The stench of dead and decaying animals was choking.

Amongst the mountains of rubble that remained of homes, flattened either by F-16s or Merkava tanks, people were gingerly picking their way through, trying to salvage a few family items and attempting to clean away the debris.

Other residents were too numb to do anything, and just sat around in groups drinking tea. Even the dogs looked stunned, and instead of barking at us as they usually do when we pass, they just stared at us.

The worst hit areas appeared in one area of Jabalia refugee camp on the outskirts of Gaza city. It used to be a nice neighbourhood with double-storey homes and neatly paved roads. Two houses remain. Some people sat in tents while others sat on what remained of their homes.

Approximately 50,000 Gazans were displaced during the fighting. The UN relief agency UNRWA told me several days ago that about 14,000 people had tried to return home only to find there was nothing to return to.

These people are staying in temporary shelters as UNRWA and the World Food Programme (WFP) tries to bring a semblance of normality back to their shattered lives by providing temporary shelter, food and water. Schools that were damaged are being repainted and rebuilt in a bid to provide a less traumatic environment for children.

The destruction is overwhelming to the point where it is sometimes hard to know where to begin after basic necessities have been provided.

Aid is slowly coming in but a lot more is needed. I feel very grim about the future. There are so many people, breadwinners in particular, who are amputees and seriously maimed. They will forever be aid-dependent and unable to live normal lives or support their families.

A Tough January

Benedict XV did not have a good month, at least in the eyes of liberal Catholics. First, he un-excommunicated four bishops consecrated by LeFebvre, who was totally against Vatican II. Now he's made a bishop of a guy who believes that Katrina was God's retribution for the sinful people of New Orleans.

Private or Public?

Is the administration's attempt to preserve a private banking system although the public will be financing it fair to the new group of stockholders, we taxpayers? Paul Krugman would say no. I think he's right. We seem to be moving toward a system where we put up the money and the guys who failed will be running the show.

Krugman also raises the very difficult question of the valuation of bank's assets. He thinks that the administration might use computer models rather than the price these assets would fetch in the marketplace today. What's wrong with letting the markets decide the value?

To make the administration's leanings even more galling, the Washington Post makes the claim that “the administration is likely to refrain from imposing tougher restrictions on executive compensation at most firms receiving government aid” because “harsh limits could discourage some firms from asking for aid.” Which statement on its face is ludicrous.

Stopping Venality

Readers may recall that I have written fairly often about the changing mores of medical journals vis-a-vis the pharmaceutical companies. Part of the problem lies with the FDA, which has remained silent on the issue. However, in the waning days of Bush II, the FDA did speak up by issuing a "guidance" document which authorized drug companies to use articles in medical journals as part of their marketing arsenal.

The FDA did so despite protests by Republicans and Democrats in Congress, the VA, attorneys general of Illinois and Oregon, health advocacy groups, insurers and state prosecutors. Furthermore, in the past five years alone courts have awarded over $6 billion in suits against the drug companies for off-label marketing. Yet, our government thought this was a good idea. Will the new managers of the FDA rescind this "guidance" document? Will medical journals monitor the articles they print? Will pharmaceutical companies rein themselves in?