Transparency II?

Surely one of the more secretive branches of government is the Federal Reserve. It refuses to tell us - or its own Inspector General - anything about specific borrowers, even months after the borrowing has occurred. We can find out such information for the TARP. Why can't we do so for the Fed which has given out a lot more money than that given under TARP?

Ron Paul has introduced the Federal Reserve Transparency Act which asks the GAO to audit the Fed. Yet, few Democrats are supporting it and it seems unlikely to pass.

Transparent?

Members of the House and Senate receive an annual expense allowance for office, travel and other expenses associated with the position. The allowances vary from $1,300,000 to $4,500,000 per year and must be used up in the year or the politician loses it. As with the expense account of many organizations, some misuse it. One representative leased a Lexus for $24,720 a year. Another bought a $1,435 digital camera. A third bought two large screen Sony televisions. And some don't spend it all; Pelosi returned $57,000, Boehner $228,000.

It is not easy to get this information, as it is only printed on paper and there's a lot of paper: 3,000 pages each quarter for the House. There are no plans to produce the data electronically; I think they're waiting until the 22nd century.

He doesn’t like McChrystal

Tom Englehardt calls McChrystal, our new leader in Afghanistan, the general from the dark side because that’s essentially where he has been for the past five years when he commanded the Joint Special Operations Command (JSOC), which did things we don’t want to know about.

Englehardt sees the recent Obama moves in “Af-Pak” as an all around expansion of the conflict: more troops, more drones, more interference in internal affairs (i.e., Khalilzad as CEO), more war (in Pakistan), more dead and injured civilians, more anti-Americanism.

His conclusion as to where such expansion will take us:

For those old enough to remember, we've been here before. Administrations that start down a path of expansion in such a war find themselves strangely locked in -- psychically, if nothing else -- if things don't work out as expected and the situation continues to deteriorate. In Vietnam, the result was escalation without end. President Obama and his foreign policy team now seem locked into an expanding war. Despite the fact that the application of force has not only failed for years, but actually fed that expansion, they also seem to be locked into a policy of applying ever greater force, with the goal of, as the Post's Ignatius puts it, cracking the "Taliban coalition" and bringing elements of it to the bargaining table.

Moving towards Vietnam

It’s an assumption I know, but it is likely that Graham E. Fuller, former CIA station chief in Kabul and former vice-chair of the CIA’s National Intelligence Council, knows something about Afghanistan and terrorism in general. He’s worried that Obama is making things worse in the area. His knowledge of the area leads him to the following conclusions:

• Military force will not win the day in either Afghanistan or Pakistan; crises have only grown worse under the US military footprint.
• Most Pashtuns see the Taleban -- like them or not -- as the primary vehicle for restoration of Pashtun power in Afghanistan, lost in 2001. Pashtuns are also among the most fiercely nationalist, tribalized and xenophobic peoples of the world, united
only against the foreign invader.
• It is a fantasy to think of ever sealing the Pakistan-Afghanistan border.
• India is the primary geopolitical threat to Pakistan, not Afghanistan. Pakistan must therefore always maintain Afghanistan as a friendly state.
• Pakistan will therefore never rupture ties or abandon the Pashtuns, in either country, whether radical Islamist or not. Pakistan can never afford to have Pashtuns hostile to Islamabad in control of Kabul, or at home.
• Occupation everywhere creates hatred, as the US is learning.
• The situation in Pakistan has gone from bad to worse as a direct consequence of the US war raging on the Afghan border.
• The deeply entrenched Islamic and tribal character of Pashtun rule in the Northwest Frontier Province in Pakistan will not be transformed by invasion or war.
• Anti-American impulses in Pakistan are at high pitch, strengthening Islamic
radicalism and forcing reluctant acquiescence to it even by non-Islamists.

Only the withdrawal of American and NATO boots on the ground will begin to allow the process of near-frantic emotions to subside within Pakistan, and for the region to start to cool down. It would be heartening to see a solid working democracy established in Afghanistan. Or widespread female rights and education - areas where Soviet occupation ironically did rather well. But these changes are not going to happen even within one generation, given the history of social and economic devastation of the country over 30 years.

What can be done must be consonant with the political culture. Let non-military and neutral international organizations, free of geopolitical taint, take over the binding of Afghan wounds and the building of state structures. If the past eight years had shown ongoing success, perhaps an alternative case for US policies could be made. But the evidence on the ground demonstrates only continued deterioration and darkening of the prognosis. Will we have more of the same? Or will there be a US recognition that the American presence has now become more the problem than the solution? We do not hear that debate.

Will the Chinese Wall Prevent Corruption?

Geithner has determined that the only people who can do the basic work in evaluating the banks are people who have spent most of their careers working for the banks in some capacity - employee, attorney, consultant, etc. - and are still working with the banks. It is these people who talk with Geithner & Co. often to give the Treasury the benefit of their opinions and advice. But we should not worry as these firms have a "Chinese Wall" which prevents their work with the government from influencing their non-government work. If you believe that, I have a bridge to sell you.

Elana Schor has an excellent article in The Washington Independent that names names with regard to this issue. She also reminds us of another useful technique of the Resolution Trust Corporation - audit the contractors to ensure that there is no actual conflict of interest.

More Waste

Have you heard of Alhurra? It's a televison station that you and I fund. The station aims to tell our truths to the Arab world. It is not doing that well, as not many Arabs watch it; in fact, the number watching it is decreasing. In 2008 it had a 2% audience share, now it's 0.5%, which is below the statistical margin of error. It is the least watched station in the area. Yet, it's budget has increased by 20% in the past two years and it has now spent $500,000,000 of our money since 2004.

The station is run by the Broadcasting Board of Governors, which does not seem to be a paragon of excellence. The Office of Personnel Management ranked the board at the bottom of 37 government agencies it evaluated. According to a ProPublica study, the board has staff problems and does not manage our money very well. A report by USC found that Alhurra "fails to meet basic journalistic standards, suffers from poor programming and is plagued by perceived bias".

Afghanistan, Iraq, Pakistan

We're moving into Pakistan in a very big way. Obama is asking Congress for $736,000,000 to build a new embassy in Islamabad. This is only $4,000,000 shy of our Baghdad embassy, which just happens to be our largest. And, this is not all we are spending on embassies in Pakistan. We've just upgraded our consular facilities in Karachi, will be buying the only 5-star hotel in Peshawar and will upgrade the facilities in Lahore.

Will all this building defuse the anti-American feelings in Pakistan or will it intensify them?

Is there really a change in our policies in South Asia? It's starting to look like there will not be.

It's how you define it?

Golden parachutes were forbidden by the TARP legislation. The parachute was defined as a payment made solely because an executive was leaving. What do you call a payment made when an executive leaves and signs a non-compete? You call it "services rendered" and hope no one notices.

That's what Associated Bancorp, to whom we gave $525,000,000, did when their president left. She got a payment of $1,650,000 for her services of not competing by working for a company in a nearby state or for one of the bank's competitors for one year.

Update
One day later we learn of Hampton Roads Bankshares giving its president a golden parachute. This time the president will provide consulting duties for three years, in exchange for which he'll be paid $1,300,000 plus the usual perquisites.

Who's next?

Another Friend of John

John Murtha does look out for his constituents. He is not loath to give them our money. The most recent beneficiary of his largesse to be come known is Mountaintop Technologies, which was started in 1993 to make and sell computer-based training. Since then, it has branched out to a wide variety of fields – distributing grants ($10,000,000 so far) to small police forces in Murtha’s district, robotics, battlefield anesthesiology, emergency communications, airport management and autism therapies. Over the past eight years, we’ve given Mountaintop $36,000,000. The firm did spend money to get this money; they’ve paid lobbyists, including Murtha’s brother, $725,000 since 1999

Why the firm is needed is a question. They seldom face competition; in only 11% of their contracts have they won against another firm. Their profit margins apparently are not bad; they took in $121,000 to distribute $1,800,000.

How long will Murtha last before being indicted?

Testing Obama?

Is that what North Korea has been doing over the past couple of months? First, they arrested the two journalists. Now they have tested a nuclear device and shot three surface-to-air missiles into the sea between North Korea and Japan. The device is quite a bit more powerful than the one tested in 2006. The first one was .8 kilotons, this one is between 10 and 20 according to Russian scientists.

A 21st Century House in Gaza

In the foreground are the mud 'bricks' that will be used to build some more houses similar to those in the background. Gazans are limited to such construction materials because the Israelis have banned the import of building materials into Gaza since 2007.

I'm sure that you're aware of the sewage problems in Gaza. Well, the Red Cross has joined other Gazans in scavenging materials needed to live. The organization is using cement slabs that were once part of the border wall with Egypt to help fix the sewage system.

I wonder what Netanyahu thinks of all this.

Another great deal by the Treasury

Using the wonderful Old National Bank model of selling warrants back to TARP recipients, the Treasury sold back to Iberiabank for $8.66 per share warrants that by most reasonable calculations were worth $19.78 a share. If they continue at this rate, we can expect to forfeit almost $10 billion of gains to the TARP recipients.

The Treasury also has difficulty buying these warrants, at least they did with the Goldman-Sachs warrants. Buffet bought them with a resale value of $82.18, Treasury at $72.33.

Who the hell is Geithner working for? Why doesn't Obama rein him in? Where is the Council of Old Men (the Economic Recovery Advisory Board) in all this? These deals are so @#$%^ bad. They defy logic.

The Hub of Economic Development

Many remote regions of the country are convinced that their economic salvation lies in having an airport. Last week I wrote about Johnstown, PA. and the subsidies we are giving them largely to transport Congressman Murtha to Washington and back. Today, it's Somerset, KY, hometown of Rep. Hal Rogers, and site of the Lake Cumberland Regional Airport, for which we paid $3,000,000 to have built and $1,000,000 to subsidize its operations while it attempts to demonstrate its viability.

The airport, which is a 45-minute drive from Louisville airport, is not yet very busy. It flies four times a week (not a day) to Nashville, a 45-minute flight. It will soon fly to DC every Monday morning and fly back on Friday night. Hmm, I wonder who will be on that flight?

The $1,000,000 operating subsidy is in the form of a grant from the Small Community Air Service Development Program, a government program which has distributed $110,000,000 of our money since 2002. Somerset could have also applied to the Essential Air Service program for a grant; this program gave away $1 billion of our money in the past ten years. Only 30% of the airports that have received these grants are still in business.

Is this a good use of our money when a major airport is less than an hour's drive away? Heck, it usually took me an hour to drive to Logan Airport in Boston from Wellesley.

Sense

Every so often you read something that resonates with you and are surprised at who wrote it. A year ago I wrote about Lee Iacocca’s words. Today, I read a speech by Leo Hindery and was surprised at how sensible he was. Hindery is not an academic. He is a very successful businessman in the telephone industry - CEO of AT&T Broadband and its predecessors, Tele-Communications, Inc. (TCI) and Liberty Media. He now runs his own investment company.

Like any human, he is not without problems, one of which was his association with Daschle that forced Daschle to withdraw as nominee for Health and Human Services Secretary.

Nonetheless, he has some worthwhile things to say about our economic quandary. Hindery lays most of the blame on the shift from advancing the cause of the middle class to advancing the cause of the rich, which was really a change in the sense of responsibility of corporate leaders. Hindery speaks approvingly of Reginald Jones, CEO of GE, who in 1972 said that his job was to work in behalf not only of shareholders but also in behalf of employees, customers, communities and the nation. Hindery writes that Jones then went on to say that a large fully-employed middle class growing from the bottom up would be the very best thing for his company, its shareholders, and the United States.

Jobs are a major concern for him and he’s not talking about any old job. He’s convinced that good-paying jobs are the heart of a good economy. He asserts that if you add in those who are underemployed we are really looking at a much higher unemployment rate, something on the order of 15+%.

He makes the interesting point that in other developed countries consumer spending accounts for less of the economy than in ours. Here, it was 71%. But we are now moving to a lower ratio; this movement has to be considered in any economic planning. And, of course, he laments the size of our trade deficit, the loss of manufacturing jobs and the size of the credit losses.

Hindery does not think the current economic plans are up to the job because they are

• Too small by half;
• Not nearly timely enough in some of its spend-out rates;
• Too focused on small one-time individual tax cuts [$233b]; and, most important,
• Too underperforming against the only measure that really counts, which is job creation.

He thinks we need our own Marshall Plan.

More specifically, he advocates the following:

1. A genuine national industrial & manufacturing policy plus trade policies that put American workers first and are as mercantilist as the policies that exist in the major emerging markets - especially in China, India and Brazil - and in some of the other major developed countries such as Germany.

2. A ten-year (not a two-year) program of significant public investment to upgrade and rebuild our nation's infrastructure, which will immediately create 18,000 new jobs for each $1 billion we spend [source: Univ. of Mass.-Amherst PERI] and help American companies succeed in the global marketplace.

3. Policies that encourage private investments in wind and solar PV energy, together with targeted [i.e., $50b] federal government spending related to:

• Improving energy efficiency in manufacturing facilities,
• Smart grids and smart meters,
• Ready-to-go transportation projects and clean-energy public transit vehicles, and
• Building retrofits.

These initiatives alone would very quickly create 3 million new jobs, including nearly 1 million construction jobs and 800,000 manufacturing jobs.

4. A very strong "Buy American" requirement related to all federal procurement, which now comprises about 19% of our economy, along with policies which encourage the domestic manufacturing of green energy component parts.

5. Major tax incentives for businesses of all size to invest in state-of-the-art laboratories, domestic jobs-focused R&D, and follow-on manufacturing plants and equipment.

6. Programs similar to Roosevelt's Civilian Conservation Corps and later programs like VISTA and CETA, in order to provide employment opportunities for this year's 6.4 million high school and college graduates and the graduates who will follow. To appreciate the magnitude of just this one challenge, the unemployment rate of workers with only high-school diplomas is already 19.6%, not even including the high school classes of 2009.

7. Significant expansion of job training and apprenticeship programs.

8. Public-sector employment initiatives that target urban renewal and, especially, enhanced inner-city K-12 education.

9. Passage of the Employee Free Choice Act so that the 60 million or so workers who would like to join unions can do so without obstacles, since expanding union membership is one of the clearest signposts on the road to growing the middle class from the bottom up and less income inequality.

Beyond these nine points, Hindery urges a restructuring of the financial world as well. He is at a loss to understand why TARP money was given without any charter that loans had to be made. And the stress tests which accept a 25:1 debt-to-net-capital ratio are laughable.

He closes by discussing what he feels are the root causes of the current problems, corporate irresponsibility and excessive executive and management compensation.

For the 35 years following the end of the Second World War, the critical component of making the pursuit of the American Dream fair for all Americans was how honorably government and business behaved and interacted, and for the most part they did pretty well. Now, however, Corporate America often uses the excuse of needing to "stay competitive" in the global economy to justify breaking its social contract with workers.

But the global economy doesn't have to mean more job insecurity, stagnant wages, and little or no health care or pension benefits. And it also doesn't have to mean threatening workers with moving their jobs overseas and slashing their benefits, just because multinational corporations have almost complete mobility of capital and technology and American workers have almost no mobility.

Every day in America, we tolerate the needless offshoring of millions of jobs, when CEOs could instead be demanding immediate tax cuts for manufacturers, tax credits for U.S.-based R&D expenditures, and trade agreements that incorporate anti-subsidy and anti-currency manipulation provisions and strong labor and environmental standards.

Every day in America, we are foreclosed from the benefits that would come from a meaningful carbon cap-and-trade system, because just one member of the 160-member Business Roundtable - Exxon Mobil - opposes this system, despite the fact that nearly every other developed nation in the world is in the process of implementing one.

Every day in America, a handful of insurance companies keep universal health care from the 100 million or so citizens who are either uninsured or chronically underinsured.

In my opinion the reason these things are happening is because also every day in America, the average public company CEO earns about 400 times what his average employee makes, while thousands of other managers in both business and financial services drink heartily from the same frothy trough.

For most of the last century, CEOs in the U.S. earned roughly 20 times as much as the average employee [source: EPI per NY Times, 12-18-05 and 1-01-06], and even today the ratio of CEO pay to that of the average employee has remained around 22-times in Britain, 20-times in Canada, and 11-times in Japan. But in just ten years time or so, we in America abandoned this fair and equitable relationship, both in business and in financial services.

And in the process, we not only shot our own economic foot off, but that of nearly every other economy in the world. For not only is our current extreme disparity in compensation an ethical embarrassment and an affront to workers and shareholders, but it also sadly underpins, in my opinion, almost every major corporate misbehavior of the last decade, especially including this great "financial crisis of 2008". As the infamous bank robber Willie Sutton said when asked why he robbed banks, "It's where the money is."

The Zogby Poll

Marc Lynch summarizes the most recent poll of six Arab countries. Some of the results:

• While the most important issue seems to be Iraq, an Israeli-Arab peace remains very important. 51% would like us to withdraw from Iraq, 41% want peace with Israel.
• Fatah and Hamas should get together to create a united government in Palestine.
• Surprisingly the most admired leader is Bashar al-Assaad of Syria.

Murdoch's Changes

Liza Featherstone doesn't think too highly of what The Wall Street Journal seems to be moving towards - less business, more news and entertainment and all delivered in short bursts. She has a point.

Take the simple matter of mistakes in grammar, punctuation and facts. They have increased because there is no longer a copy desk. And, I'd wager that the closing of the library has added to the errors of fact.

Personally, I was shocked to see a Sports page in The Journal. Sure, Allan Barra has had a column for a while and it was usually quite interesting. But why does what was the premier business paper in this country need to waste a page on the same sports news we can get anywhere?

Time was when many Journal articles went to another page. That day is rapidly diminishing. The mantra seems to be shorter, faster and more current. That is not what made The Journal great. Featherstone asks whether the dropping of The Journal's competitive advantage of being #1 in quality, comprehensive, business reporting will result in the newspaper becoming another run-of-the-mill part of the mass media.

Line by Line

Jonathan Landay and Warren Strobel examine about twenty of the points Cheney tried to make in his speech yesterday. Need I say that they demolish each one? Why does Cheney still get so much press?

Another About Face By Our Congress

The statements by Reid and Feinstein are classic.

Visit msnbc.com for Breaking News, World News, and News about the Economy

How is this possible?

From a brochure touting California wine:

"A brilliant wine that offers aromas of delicate orange blossom and citrus followed by flavors of melon, pear, honey and almond."

And, of course, there is always the flavor of grape.

Making deals for the taxpayer

Another indication of the Treasury's difficulties in managing our money well is highlighted by Linus Wilson's discussion of the repurchase of warrants granted by Old National Bank in exchange for TARP money. Wilson thinks that the warrants were worth between $1,500,000 and $6,900,000. How much did Treasury accept for them? $1,200,000. If Wilson is right - and at least James Kwak thinks he is - we lost at least $300,000.

Did they do anything right?

Now the question applies to KBR's electrical skills. Another report on KBR's actions in Iraq accuses the company of putting more soldiers and contractors at risk. At least two have died, hundreds have received electrical shocks and there have been over 200 electrical fires due to such sterling electrical work as improper installation of inferior fixtures.

Of course, we paid the company a bonus in the millions for such sterling work.

Sure, there will be waste in the stimulus program

The question is how much. If the Energy Department has its way with regard to the cleanup of 18 nuclear sites, the waste could be fairly high as this is a $6 billion program. The GAO has designated past cleanup projects as "high risk because of fraud, waste, abuse and mismanagement". Yet, the same companies that couldn't pass the smell test with the GAO will be the recipients of our money. Not a good start.

It's starting all over

Well, I suppose that we should be thankful that there is a Special Inspector General for Afghan Reconstruction (SIGAR). Otherwise, we would never have guessed that there may be some mismanagement of the reconstruction funds allocated to Afghanistan, just as there was with the reconstruction funds for Iraq.

Thus far, $18 billion has been allocated to the Afghanistan reconstruction fund. SIGAR investigated a relatively small portion of this. They looked at a $404,000,000 contract to provide training at 17 locations in Afghanistan. Mistake #1: responsibility for overseeing this contract resides in Maryland. Mistake #2: Only one representative of the contract overseer was based in Afghanistan. Mistake #3: The representative was ineffectual in that he never visited the sites. Result: There was no oversight. Has our money been wasted? You tell me.

Remember the name Arnold Fields; he is the IG for Afghanistan. If he does his job, he'll be as well known as Stuart Bowen.

WWII Propaganda

How the world has changed.


Courtesy of Vagabond Scholar.

Making it happen

In my business experience I've always been fortunate in being able to work with creative people, people who generated a number of ideas for addressing the matter at hand. It was difficult to select the best idea and even more so to make it happen. I have my doubts as to Geithner's ability to select the best idea (assuming he does get a raft of ideas), but I am not alone in thinking he has a very hard time making it happen. David Cho at the Washington Post raises this issue in today's newspaper.

I was shocked to learn that Wagoner is still on the GM payroll because Treasury can't make a decision about his severance package. But I was not surprised that Geithner still seems to be in thrall with his former boss, Summers.

And, then, there has been the issue of personnel. It's now almost four months since the inauguration. How many has it been since Geithner's appointment? Where are the senior staff that should be working for the Treasury by now?

This is no way to operate when the house is burning.

Black Shirts of Guantanamo

I made the mistake of reading this article by Jeremy Scahill just after dinner. It's tough reading, not because it is poorly written but because of the subject. The point of the article is that Americans are still exhibiting vicious, inhuman behavior at Guantanamo. While waterboarding and other "extreme" measures are no longer being practiced, the behavior of the Immediate Reaction Force (IRF) is really just as nasty.

The IRF was established as part of the Standard Operating Procedures for Camp Delta at Guantanamo. The IRF consists of groups of five MPs who are on call for emergencies. An IRF team specializes "in the extraction of a detainee who is combative, resistive or if the possibility of a weapon is in the cell at the time of extraction". According to some detainees who have testified at a Spanish investigation into Guantanamo, the IRF has gone into action with very little, if any provocation; an Army Chaplain claims the behavior could be brought on by not answering a guard.

And when they go into action, they really go into action, starting with "spraying the detainee with mace twice before entering the cell". What they do after that is a catalogue of brutal behavior: mass beatings by MPs, forcing heads into toilets and flushing, sticking fingers in eyes, squeezing testicles, urinating on the detainee, banging heads on floors and walls, throwing the detainee in the air and letting him fall, smearing feces on the detainee's face, force feeding in a brutal, unsanitary manner, covering toilet paper with pepper spray. In some cases medical personnel observed this behavior and did nothing.

According to the Standard Operating Procedures all interventions were to be video taped and sworn statements given by the IRF. The ACLU was unable to obtain any of this information. One IRF member says that either the video camera would never be turned on or it would be focused on the ground.

One strong example in the article is that of Sgt. Sean Baker, who played the role of an uncooperative prisoner as part of a training drill. Although he was given a code word to use if things got too much for him, it took quite a while for the IRF to stop. Today, Baker has 10 -12 seizures a day as he has traumatic brain injury. Again, there was no video tape available of his beating.

The saddest part of the article is that this behavior is still going on. Why?

"Management needs to be evaluated,”

That's Sheila Bair, head of the FDIC, talking about the banks we are financing. Percahnce, the evaluation will mean replacing some of the management. The market didn't like this too well as the KBW Bank Index fell 3.8%.

I guess the market thinks the bankers who got us here are still doing a wonderful job and should be retained. Talk about stupidity and wishful thinking.

Transparency

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They took their kids to work

I had thought that "Take Your Children to Work" day had passed into oblivion. But, it's still on the calendar, at least in Florida and especially with the Department of Correction. In two of the prisons celebrating this day, the guards - i.e., the kids' parents - shot the kids with stun guns. I kid you not.

Sensible Words

Leslie Gelb's recent article in Foreign Affairs is a very good summary of our current conditions. He begins with

The United States is declining as a nation and a world power, with mostly sighs and shrugs to mark this seismic event. Astonishingly, some people do not appear to realize that the situation is all that serious. A few say it is serious and hopeless. I count myself among those who think it is most serious yet reversible, if Americans are clear-eyed about the causes and courageous about implementing the cures.

And ends with

Every great nation or empire ultimately rots from within. One can already see the United States, that precious guarantor of liberty and security, beginning to decline in its leadership, institutions, and physical and human infrastructure, heading on the path to becoming just another great power, a nation barely worth fearing or following. It is time to send up flares signaling that the United States is losing its way and its power, that it is in trouble. But it is even more important to reaffirm the belief that the United States is worth fighting for both across the oceans and at home. There should be no doubt that the United States, alone among nations, can provide the leadership to solve the problems that will otherwise engulf the world. And for all the country's faults, there should be no doubt that it remains the last best chance to create equal opportunity, hope, and freedom. But to restore all that is good and special about the United States, to rescue its power to solve problems, will require something that has not happened in a long time: that pragmatists, realists, and moderates unite and fight for their country.

Emphases mine

A wonderful discovery

I just came across the MAPLight. org web site. It is a treasure trove for those who want to examine the connection between money and politics in this country. Here's a sample of what you can find:

• 73% of Barney Frank's campaign contributions do not come from Massachusetts. And more than 25% comes from? You guessed it - banks and brokers.
• On the other hand Bill Delahunt, the Congressman who represents the Vineyard gets 48% of his contributions from outside the state. And lawyers are his biggest s0urce of funds, supplying about 15%.

He had a better idea

Charles Millard was Director of the Pension Benefit Guaranty Corporation (PBGC) from May 2007 to January 20, 2009. While PBGC has had some rough years recently, Millard was able to wreak more damage in the twenty months he was in charge than any other director. Millard's basic error was deciding that the policy of investing in conservative bonds was not producing sufficient revenue to cover the organization's growing liabilities. The answer? Invest in higher risk entities such as real estate, stocks and emerging foreign markets. The problem? He decided on this changed policy in February 2008. The result? By September the portfolio was down 23% and the deficit was at $11 billion. The comeback? Who knows as no information as to the portfolio's status has been released. It gets worse.

Millard realized that he would not be re-appointed by Obama, so he started looking for a job. Since he came from Lehman Brothers, he wanted to work on the Street. Unfortunately, he was barred from contacting Wall Street firms for the purpose of finding a job. Millard contacted the firms anyway; he even contacted the firms who were trying to sell their services to PBGC. Of course, Millard feels he did nothing wrong.

The Biblical Kingdom

Israel has begun to make Jerusalem even more of an attraction for tourists by building parks and tourist trails linking sites of historic interest to Jews. The problem is that the section of Jerusalem where the Biblical Kingdom will be located is one that is of interest to Christians and Muslims as well as Jews. The parks will be located on public and private land - some of which is now owned by Palestinians and contains homes - and will be fenced in. Some believe that this will mean the transfer of land to the control of the settler organizations, which are actively involved in planning and implementing the Kingdom.

As with almost everything concerning Israel, there are multiple interpretations. Here's one from a liberal Israeli organization:

"This will mean that territorial compromise would only be possible in the northern and southern parts of Jerusalem, beyond the area immediately surrounding the Old City. It fans the flames of the conflict and threatens to change this from a conflict of national claims that is controllable and solvable into a pointless regional confrontation."

What do you think?

Maybe Not As Gloomy As Projected

There have been a number of articles about the problems with Social Security and Medicare in recent days. The Center for Economic Policy and Research argues that it is not so bad. Should things get better for Social Security in this recession/depression? The Center's answer is, of course "No".

Further, they point out that we are dealing with estimates. The Social Security people are assuming a 1.7% annual productivity growth; from 1995 - 2005 growth was 2.3%. We've been in a period where some have made more money than social security limits So that 83% fall under this limit as compared to 90% in 1983. If we move closer to the 1983 number, things will not be as bad predicted.

The questioning of these estimates does not make me sanguine that we'll not have a problem with Social Security at a not too distant point in the future. At a minimum, we should increase the base taxable salary .

Overdiagnosis

In the late days of the last century we began to believe that we should be able to live lives free of pain and suffering. A pill, an operation, a doctor would make us better. By diagnosing thar we were susceptible to, for example, a certain cancer, medicine could prevent us from getting that type of cancer. It mattered not what the odds were nor at what age we might actually get cancer. We needed to be treated now. Relatively recently there appears to be a movement in medicine to accept the fact that, at times, we do live in a vale of tears. One such indication is an article by David Dobbs in Scientific American.

Dobbs argues that we are attributing to PTSD the 'normal' problems of depression and anxiety that many veterans experience. He makes it easy to understand his argument by starting the article with this list of "Key Concepts"

• The syndrome of post-traumatic stress disorder (PTSD) is under fire because its defining criteria are too broad, leading to rampant overdiagnosis.
• The flawed PTSD concept may mistake soldiers' natural process of adjustment to civilian life for dysfunction.
• Misdiagnosed soldiers receive the wrong treatments and risk becoming mired in a Veterans Administration system that encourages chronic disability.

"If I'm corrupt, it's because I take care of my district"

That's a quote from John Murtha, Pennsylvania Congressman and chairman of the House Appropriations defense subcommittee. Some of the "taking care of his district" includes the National Drug Intelligence Center in Johnstown, which seems to duplicate the work of other intelligence centers; Concurrent Technology, a Johnstown-based "charity" which actually is a defense contractor; and the John Murtha Airport in where else but Johnstown, PA.

We have given this airport $200,000,000 so that someone could fly to Dulles a couple of times a day and it flies to and from only Dulles. Hmm. This airport is vital to the nation so it just received $800,000 in stimulus money to widen the runways.

Don't think that this is just a backwater airport. Jumbo military aircraft could be stationed there. If Pittsburgh Airport were unavailable, Johnstown could warehouse military supplies. It could be used to train National Guardsmen in using its high-tech radar system. I hope you notice the use of the word 'could'; but it is a Marine helicopter base.

May 15 - Nabka Day

May 15 is the 61st anniversary of what Palestinians refer to as Catastrophe Day. The American Friends Service Committee have produced this video

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I told you - Start a religious non-profit

They are a wonderful way to make money. Don Stewart started the Don Stewart Association to produce his services on television. He also started 22 more charities that had links to the Association.

He or his lawyer also studied the tax code and was particularly interested in gifts in kind, which are non-cash donations. Now, one of the things most charities strive for is to indicate that they are successful and have the ability to raise a lot of money because their services meet such a large need in the world. Stewart found that gifts in kind, if used imaginatively, could boost the reported revenue of a charity. The higher the reported revenue, the more likely that you'll raise some cash along the way. So, Stewart set about boosting the revenues of the 22 charities in his network by having them donate gifts in kind to each other.

Along the way he raised $29,000,000 in cash over a three-year period. Most of that cash went to pay the people running the charity and for such items which charity A donated to charity B such as expensive cars (Hummer, BMW), rent for a private home, land in Montana.

Only 5% of the cash escaped from the network. Not a bad business, heh?

Lawrence Wilkerson does not like Dick Cheney

Wilkerson was Powell's chief of staff. Here are some excerpts from an article he wrote for The Washington Note.

First, more Americans were killed by terrorists on Cheney's watch than on any other leader's watch in US history. So his constant claim that no Americans were killed in the "seven and a half years" after 9/11 of his vice presidency takes on a new texture when one considers that fact. And it is a fact.

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Second, the fact no attack has occurred on U.S. soil since 9/11--much touted by Cheney--is due almost entirely to the nation's having deployed over 200,000 U.S. troops in Iraq and Afghanistan and not to "the Cheney method of interrogation."

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Third--and here comes the blistering fact--when Cheney claims that if President Obama stops "the Cheney method of interrogation and torture", the nation will be in danger, he is perverting the facts once again. But in a very ironic way.

My investigations have revealed to me--vividly and clearly--that once the Abu Ghraib photographs were made public in the Spring of 2004, the CIA, its contractors, and everyone else involved in administering "the Cheney methods of interrogation", simply shut down. Nada. Nothing. No torture or harsh techniques were employed by any U.S. interrogator. Period. People were too frightened by what might happen to them if they continued.

What I am saying is that no torture or harsh interrogation techniques were employed by any U.S. interrogator for the entire second term of Cheney-Bush, 2005-2009. So, if we are to believe the protestations of Dick Cheney, that Obama's having shut down the "Cheney interrogation methods" will endanger the nation, what are we to say to Dick Cheney for having endangered the nation for the last four years of his vice presidency?

Likewise, what I have learned is that as the administration authorized harsh interrogation in April and May of 2002--well before the Justice Department had rendered any legal opinion--its principal priority for intelligence was not aimed at pre-empting another terrorist attack on the U.S. but discovering a smoking gun linking Iraq and al-Qa'ida.

Another Supply Screwup by KBR

A Houston television station alleges that our soldiers had to steal water to survive in Iraq. It's unclear when this happened but it looks like there were water problems as recently as 2008, per Sgt. Porter.

“I mean it’s yellow, and it’s filthy,” said Sgt. Casey J. Porter.

Porter, an aspiring filmmaker, took video footage of rust-colored water from faucets at Camp Taji in 2008. By that time in the war, Taji appeared less like a war zone and more like a mall.

“You can eat Subway, Burger King, you can buy a $1,200 Oakley watch, but you can’t have clean water to brush your teeth with, what’s the real priority here,” Sgt. Porter said.

Some soldiers complained of being rationed to 2 - 3 liters a day; Army manuals say you need at least a gallon a day. The water storage trucks that accompanied the soldiers were hard to find at times and, when found, often contained chemically treated water that was almost as bad as remaining thirsty. Yet, when the men went to water storage areas maintained by civilians they found - and appropriated - plenty of water.

And the water they did get at their bases was far from clean.

Turns out, at many similar bases, the water was supposed to be processed by Houston-based company KBR. In an internal KBR report, the company sites “massive programmatic issues” with water for personal hygiene dating back to 2005. It outlines how there was no formalized training for anyone involved with water operations, and one camp, Ar Ramadi, had no disinfection for shower water whatsoever.

“That water was two to three times as contaminated as the water out of the Euphrates River,” said former KBR employee Ben Carter.

Carter, a water purification specialist, was the one to blow the whistle on it all. He said he first noticed a problem when he found a live maggot in a base toilet at Camp Ar Ramadi. He subsequently discovered that instead of using chlorinated water, the soldiers’ sinks and showers were pouring out untreated wastewater.

What did we get right in Iraq?

Your GP

I know that we are in the 21st century and the medical profession is nothing like it was in the 20th century but it is rare when a medical journal retracts an article it has printed and when the employer of the doctor does not speak highly of the doctor even though it appears that medical ethics have been violated. But that is what has happened with the British Journal of Bone and Joint Surgery and Walter Reed Hospital.

It seems that Dr. Timothy Kuklo, formerly with Walter Reed Hospital, submitted an article to the journal touting the virtues of Infuse, a product developed by Medtronic. It so happens that the good doctor claimed to have co-authors of his article and forged their signatures. It also appears to be the case that the number of patients treated by this drug does not square with the numbers maintained by the hospital. Of course, the fact that the good doctor was a paid consultant to Medtronic had nothing to do with the matter.

Drugs for Breakfast

Apparently the FDA thinks that 1 in 8 Americans who eat cereal are taking drugs along with their cereal. General Mills claims that 1 of 8 boxes of cereal sold are Cheerios. The FDA claims that General Mills, via the labels on the box of Cheerios, is making claims that you'd usually see on a drug. The claims are

• "you can Lower Your Cholesterol 4% in 6 weeks"
• "Did you know that in just 6 weeks Cheerios can reduce bad cholesterol by an average of 4 percent? Cheerios is ... clinically proven to lower cholesterol. A clinical study showed that eating two 1 1/2 cup servings daily of Cheerios cereal reduced bad cholesterol when eaten as part of a diet low in saturated fat and cholesterol."

In the FDA's view General Mills is claiming that the cereal is for use in lowering cholesterol and it has not been approved for such treatment. Will General Mills take Cheerios off the shelf or, much more likely, they'll come to an agreement with the FDA.

The Straw

The straw that has almost broken my back came in the current issue of Foreign Affairs. The back to which I refer is my wish not to believe that this country is controlled by conspiracies. The straw is an article entitled "Diplomacy, Inc." by John Newhouse. The diplomacy discussed is that engendered by lobbies, specifically lobbies for foreign countries.

AIPAC is well-known for its influence in matters concerning Israel; they've been around so long it's relatively easy to accept their existence and bemoan their influence. What really frosted me was learning of the Congressional Caucus on India and Indian Americans. Yet, the author claims that their influence is second only to that of AIPAC. In today's world, you'd expect the major lobbyists to have a web site and the Congressional caucus does not disappoint. Would you believe that 152 of our Congressmen are members of this caucus? That's almost 35% of the lower house that has a large say in determining the fate of this country. Apparently, Senators are not as interested in India as the web site lists 37 senators (a larger percentage, I know), but that was as of 2005; the congressional site is current.

Yes, India is a major player in the world and we need to be aware of what's going on there and how we should try to shape our relationship. But does belonging to this caucus make Barney Frank or Bill Delahunt, the leading members of the Massachusetts delegation, more aware of what should be done? I can't see how they would get anything but propaganda - and , most importantly, money - from the people who run the caucus. Are there so many Indians in Massachusetts that they constitute a strong voting bloc? I would not expect many Indians (other than American Indians) to live here on the Vineyard, but my experience living on and visiting the mainland tells me that there are not enough to be considered as even a weak voting bloc.

I must confess that, until recently, I have been an admirer of Congressman Frank. However, I've never really studied his record in depth. His actions re OneUnited Bank certainly would give anyone pause. Some of his comments and actions as chair of the Committee on Financial Services have certainly not been of the quality a dispassionate observer would prefer.

Newhouse does not stop with Jews or Indians. He reports on the doings of lobbyists for the former Soviet republics, Turkey and China. Newhouse sees the result of all this lobbying as a "privatization of U.S. foreign policy". In his words, "Over the past several years, however, these governments (the lobbying countries) have lost that confidence (that we would redirect our foreign policy back to a sensible course). They have learned that the control of policy, once lost, may not be restored to capable, disinterested hands. Instead, they see a uniquely American habit of sustaining the democratic process with money; they see a broad and deepening pattern of corrupt and corruptible members of Congress making self-serving deals with lobbyists working for foreign entities." (emphasis mine)

The LA Times and the LA Schools

The Times seems to be after the Los Angeles School District. First, there was the report of the "rubber room" where teachers accused of wrongdoing spend their day and collect their pay. Now, the newspaper feels that the School District has been lax in handling teachers accused of sexual misconduct.

This is not an easy matter, as the testimony of young children is not always truthful. But, the newspaper cites at least four cases where the School District seemed more interested in the accused teacher than the students. The district seemed to drop the ball if the police did not find sufficient evidence to try the teacher. The district transferred the teacher but none of the records recounting the accusations, so that the new school had no idea that the new man should be watched carefully.

Times Will Be Tough

Wellesley, one of the wealthiest towns in Massachusetts, is building a new high school, whose cost is estimated at $135,000,000. Naturally, there is a lot of pro and con about the project. One issue that caught my eye is that of parking during construction. There has been over a month's worth of letters to the editor, kaffee klatch talk, cocktail party musings, even a web site about where the students will park their cars.

It must be nice to have such triviality as one's major concern.

A Word or Two On Nationalizing the Banks

The following is part of the conclusion of an excellent article by Simon Johnson and James Kwak in their Baseline Scenario.

As a result, the banks have largely preserved their existing management teams and bonus plans: on Wall Street, first-quarter accruals for bonuses returned to the levels of the glory years of 2006 and 2007. Creditors and counterparties have been kept whole, most notably through the AIG bailout. And shareholders have seen their share prices supported by the promise of sustained government support. The incentives we have ended up with are more similar to those of a nationalized system than those of a free market. Instead of state-owned coal mines run for the benefit of miners (the U.K. in the 1970s) or state-owned oil and gas companies run for the benefit of bureaucrats (the Soviet Union in the 1980s), we have state-backed banks in the U.S. run for the benefit of bankers and their creditors.

The smart economists in the Obama administration must know what is going on. But having insisted that large bank takeovers are tantamount to nationalization and therefore off the table, the administration is betting that the financial system will repair itself – or “earn their way out,” as StatsGuy put it.

This is possible. With the competition in both investment banking (Bear Stearns, Lehman) and mortgage lending (most of the specialist mortgage lenders) gone, the survivors all enjoy larger market shares and higher prices, contributing to their somewhat healthy profits in the first quarter. Even the large banks that receive the lowest grades in the stress tests will be given relatively cheap capital by the government; Treasury will use its resulting stakes to apply behind-the-scenes pressure to the banks (more government influence), but without taking decisive steps to clean up bank balance sheets. Instead, it will hope that the PPIP will do the trick, using cheap government financing.

But success is by no means certain. And we cannot know for how long the government will have to continue propping up weaker banks, at growing taxpayer cost, while they absorb funds that could otherwise help the economic recovery.

In the end, when a financial system is dominated by banks that are too big to fail – and they do fail – the only options are an FDIC-style takeover or the kind of public-private co-dependency that we see today. As far as the current crisis is concerned, the die is cast and the big banks won.

The Cheapest Insurance Around

The people who run the Securities Insurance Protection Corp. (SIPC) must have a strange definition of insurance. SIPC, which is privately run but owned by us, provides insurance for brokerage accounts. Each account is insured up to $500,000. So, if, for example, the Madoff brokerage went belly up, SIPC would cover some of the loss. As we know, this is not quite the case; this is probably due to the supposed size of the claim. But the fact that the annual insurance premium is the grand sum of $150 per year no matter who the brokerage firm is may have something to do with it, as well. Further, SIPC covers only cases where the broker did not serve as a proper custodian.

How SIPC managed to amass a fund of $1.7 billion charging these premiums baffles me, but that's what they claim their fund has. And they can get another $1 billion from us via the Treasury.

One more case of an agency that seems to have existed primarily to employ people.

He got a waiver, didn't he?

Stephen Friedman's resignation as chair of the NY Fed is just another case of the incestuous relationships in the world of government and finance. Not only was he a fairly large holder of Goldman stock while he was passing judgment on Goldman, but he bought still more stock while doing so. Does Bernanke or Geithner have any say in who is chosen as chair of a federal reserve bank? Shouldn't Bernanke?

We're getting screwed again.

A Test That Proves Nothing

This cartoon from the Washington Post expresses the opinions of Krugman, Stiglitz and who knows how many others.

Deeper and Deeper

GM's report on its Q1 results is bleak. Sales down 40%, net loss almost double that of Q1 2008, running through cash at twice the rate of Q4. Can bankruptcy be any closer?

Note that Geely Motors of China is interested in both Volvo and Saab.

I feel better

The 19 largest banks only need $75 billion to survive even nastier times than today. And, of course, the definition of those nastier times is spot on; we'll never see 10% unemployment. The fact that one of the banks, BofA, needs almost half that amount ($34 billion) doesn't worry me. The examiners are veritable seers in that they know just how to value those toxic assets that, until now, were impossible to value by anybody else. The frosting on the cake is that the banks agree with the results. Sure, they had to sit through some negotiating sessions. But, hey, they're regular guys and are looking our for the nation's welfare.

Every thing is fine.

New York City is not alone

In March I wrote of the 'rubber room', a place where teachers who have been accused of a wrongdoing assemble every day, do nothing but collect their pay and benefits. New York City is not alone. Los Angeles has its version of the rubber room. It's costing them $10,000,000 a year.

"We have the most moral army in the world,"

Those were the words of Ehud Barak with regards to the UN report on Israel's actions in Gaza. Here, courtesy of the BBC, is a summary of the findings:

Israeli army responsible in six cases in which UN property was damaged and UN staff and other civilians hurt or killed

No military activity was carried out from within UN premises in any of the incidents

Israeli military's actions "involved varying degrees of negligence or recklessness"

Israeli military took "inadequate" precautions to protect UN premises and civilians inside

Moving from $9,000,000 to $454,000,000 in a couple of months

When the AIG testimony before Congress began a couple of months ago, the CEO said that 2008 bonuses totaled $9,000,000. In March the AIG PR person said the number was $120,000,000. Last week AIG submitted a report to Congress which listed 2008 bonuses by division. The total was $454,000,000, or fifty times the original number.

Where will this story end?

Notes from Jane Arraf

Jane is a reporter for the Christian Science Monitor who has been reporting from Iraq off and on since the late 1990s. She writes of Her Iraq. Here are some excerpts:

It's so much safer now that sometimes it seems as if the violence that erupted here was a fevered dream and that the war is over. It isn't.

I sit next to a woman wearing black and an expression that suggests something terrible has recently happened. She lost her brother in a suicide bombing in January at a tribal reconciliation meeting when one of the sheikhs sent in his 14-year-old son to blow himself up.

And then there are currents so far below the surface that you only occasionally see the ripples – of a world where tribal justice trumps any court, where genies mentioned in the Koran can do more harm than men with guns, and where normal people make accommodations to survive in an abnormal society.

"Threats and violence have become the Iraqi way of life," says Nermeen. She takes precautions – not staying home alone, making sure she's not tailed – but believes the only list that determines when you die is that drawn by fate.

In my years going back and forth between Iraq and the US, I've become convinced that it's only distance that makes things look simple. The labels we use – Baathist, insurgent – don't mean nearly as much to Iraqis as they do to us. Even the Iraqis who returned from exile with their fixed ideas of wrong and right found themselves in uncertain territory. And those who lived here through Saddam find themselves strangers in their own country.

A Different View

Dean Baker is not your typical economist. For example, take his argument that top management and high-paying professions have been shielded from international competition for years, whereas manufacturing has not. If you believe this argument, then it makes a lot of sense for Chrysler to be looking for the low-price design and management talent at Fiat. But why didn't Chrysler look earlier? Why haven't other companies done so?

I agree with Baker that top management here has been grossly overpaid when compared with their counterparts around the world. However, I don't think management was shielded from competition. They did compete in trying to make sales against foreign competition. They did not have to compete to earn larger salaries because there was so little competition. They were all greedy and they had no problem getting top dollar from friendly, undemanding boards and complacent stockholders. And, to prove my point, they're still getting the big bucks even though many of their organizations are, in reality, bankrupt. Why is that?

An interesting sidelight: There was a big stink about the "Buy American manufacturing" clause in the stimulus bill, but there has been nary a peep about the fact that those who manage these investments must be headquartered in the U.S.A.

Hoenig again

Late last month I highlighted the Senate testimony of Thomas Hoenig, head of the KC Fed. He inveighed against the 'too big to fail' argument. He has expanded his case in a recent issue of the Financial Times. Herewith some excerpts with regard to the current policies:

● Certain companies have not been allowed to fail and, as a result, the moral hazard problem has substantially worsened. Capitalism is a process of failure and renewal, and a “too big to fail” policy undermines this renewal and makes the financial system and our economy less efficient.

● So-called “too big to fail” firms have been given a competitive advantage and, rather than being held accountable for their actions, they have actually been subsidised in becoming more economically and politically powerful.

● The US government has poured billions of dollars into these firms without a defined resolution process, adding to our national debt. While there will be some repayment, there also will be losses. The longer resolution is postponed, the greater the losses and the larger the debt burden.

● As these institutions are under repair, the Federal Reserve is making loans directly to specific sectors of the economy, causing the Fed to allocate credit and take on a fiscal as well as a monetary policy role. This is reflected in the fact that its balance sheet continues to swell, which may compromise the independence of the Federal Reserve and make it more difficult to contain inflation in the years to come.

● Failing effectively to resolve these non-viable firms has long-term consequences. We have entrenched these even larger, systemically important, “too big to fail” institutions into the economic system, assuring that past mistakes will be repeated.

Smarter Kindergarteners?

Those of you who have read some of my previous postings know that I am continually amazed at the changes in child-rearing that have taken place over the past forty or so years. These changes seem focused on the belief that we live in Lake Woebegone where all the children are above average. Thus, parents have to spend inordinate amounts of time, money and effort to ensure that their child becomes a star as soon as possible. The idea of kids playing unorganized ball or having truly free time and the opportunity to make minor mistakes is just not one for 21st century America. I know that this issue is not simply a parenting issue. Many of society's supposed bulwarks have also succumbed to these fads.

For example, a study of how time is spent in a typical LA kindergarten class found that these 4/5-year-olds spent five times as much time on "literacy" as on free play. Each day they spent 21 minutes on test preparation, but only 19 on free play. Yet, whatever advantage this extra testing gives vanishes by the time the kids reach fourth grade. And, to make matters worse, the time spent in the classroom is augmented by homework assignments given to these kids, which further impinges on the time available to just play around. Maybe the current economy will increase the opportunities for free play for kids.

Today's Nazis

This is one of the featured items on RJ Adams' Sparrow Chat. The speaker is and has been a friend of Israel and its leaders since its founding. He is disgusted with what Israel has become. His plea to the UK government to stop sending arms to Israel is even more relevant to us.

The Season Is Beginning Early

Last month the rumor on this island of Martha's Vineyard was that the first family would be spending their summer vacation in Oak Bluffs. This month the rumor is that Chelsea Clinton will be married in Chilmark.

Either event will be great for the Vineyard's economy.

Why bother having trials?

It looks as though Obama, the president, is overruling Obama, the candidate, by acknowledging that the military tribunal system may continue to be used with regards to Guantanamo detainees. Sure, they will be modified, but the detainees will probably not have many more rights than under Bush's version of the system.

This whole matter is starting to sound like a big game. Let's make this minor change in the rules. Let's try this one by the military and this one by a regular court. They seem to want to parse this issue indefinitely. Does the government have a strong case against these guys or not? Are we a nation of laws or not?

Topping Today's Hit Parade

Who's the socialist?

A quote from Barry Ritholz:

Which region is the true Socialist state?

-Europe has cradle to grave health care plans, generous unemployment benefits, and free or subsidized college costs.

-The US gives away public assets (oil, gas, mineral rights) for pennies on the dollar, has huge subsidies and tax breaks, and bails out reckless speculators.

It turns out that both regions are welfare states — only in Europe, the natural population (i.e., people) is the recipient, while in the US, the corporate population is the beneficiary.

At the same level as in 1971

In 1971 17-year-old high school students scored an average of 285 points on the National Assessment of Educational Progress reading test; in 2008 they scored 286. In the 1973 math test they scored 304; in 2008 306. Clearly, little progress is being made in the way we educate our kids.