Vineyard Views

Sunday, June 21, 2009

Parsing Change

As we all recall, the campaign message was "We will not take a dime from lobbyists." That's what Obama said over and over. Yet, as with Guantanamo, torture photographs, Cheney's interview with the FBI, the release of e-mails and visitor logs, the wiretaps, etc., it depends how you define the word "change".

Take, for example, this past week. On Thursday night Obama raised $3,000,000 but not from lobbyists, they were barred. Yet, disinterested Obama supporters paid $30,400 for a photo with the president. Some of these donors also had lunch on Thursday with Biden, Pelosi and Reid.

Friday morning was reserved for lobbyists, but Mr. Obama was not expected to attend and he did not. The Democracts were having a 'leadership conference' to which all lobbyists were invited, at $5,000 per person.

I wonder where the money raised from each event went. Probably to help stimulate the economy.

Saturday, June 20, 2009

"The sewage is destroying the fish"

So says a Gaza fisherman. But the water problems in Gaza are destroying more than fish.

Water is usually a problem in desert climates. Naturally, Gaza has had water problems for quite a while. But the recent war and the Israeli embargo have escalated Gaza’s problem. The local water authorities claim to have provided

Israel

with information about water locations but the war destroyed a lot of Gaza’s water network resulting in a heck of a lot of untreated sewage to cover farmland and home sites. The embargo means either a long wait for parts to repair things or never getting the necessary parts and chemicals; e.g., pipes are on the list of banned items. Getting chlorine is also a problem.

Hell on earth!

Do we really know what's going on in Iran?

An anonymous Iranian student tells us that we really don't know 21st century Iran; our media are still stuck in the days of the Revolution. For example, Iran is no longer the rural nation it was seventy years ago; now 70% live in cities. Tehran is not as unique as it was, now most Iranian cities have a lot in common. It is no longer true that one part of Tehran was Westernized, the other 19th century farmers. The culture has seen unbelievable changes: the rise of women, the expansion of education, the acceptance of divorce.

The student argues that this election campaign was unique in that there were six face-to-face debates televised nationally. It was in these debates that Ahmadinejad lost it. Just before election day, the tally was 44% for Mousavi and 38% for Ahmadinejad. How true this is is anybody's guess. His argument is that there are no really strong political parties in Iran, much of the campaigning is personal. And such a turnaround has happened before where the favorite was defeated because of a last minute swing.

What really impresses the student - and me - are the demonstrations. They've been spontaneous and inspiring. Will they persist now that Khameini has spoken? Let's hope so.

Thursday, June 18, 2009

Where are the teeth?

I suppose that I shouldn't have expected an attempt to junk the current banking system. After all, Geithner seems to be intent on business as usual, even if the way it has been conducted has brought us to this not so pretty pass. And, like so much of the pronouncements of the past five months, it's more sound and fury signifying very little.

Joe Nocera points out some of the more egregious failures, the most serious of which violates the basic rule of capitalism: companies no matter how large should be allowed to fail. All that the new regulations will do with regards to large banks that fail is monitor these "Tier 1 Financial Holding companies" more "robustly". Then, the new rules would establish an exchange for basic derivatives, although it was the derivatives that no one really ubderstood that were really toxic. And for these little is being done.

The list goes on, but the conclusion is obvious: it wasn't the current financial system that did us in; it was the gods.

Monday, June 15, 2009

Coming around again

More than forty years ago I worked on IBM's attempt to develop time-shared computing. Basically, the idea was that desktop terminals would be connected to a huge mainframe computer and result in great cost savings as well as a fantastic increase in access to corporate data. They even had a couple of graphics terminals, the 2250 and 2260.

Well, lo and behold, in the 21st century they're adopting the same idea. This time it's called virtual desktop services.

Ahmadinejad Has to be Worried

Why else would he ban reporters of foreign news organizations from reporting, arrest some of them, block Al-Aribya, cut off cell phone networks and jam the BBC satellites?

Sunday, June 14, 2009

Pakistan

Ben Arnoldy thinks it’s almost impossible for the Taliban to succeed in Pakistan.

The geography is against them. If they move away from the Frontier they become more exposed. “If you have 100 truckloads of Taliban on the Peshawar Highway, all you need is two helicopter gunships" to wipe them out, says Rifaat Hussain, a military expert at Quaid-i-Azam University in Islamabad.

They will have trouble once they move to non-Pashtun areas as well as wealthier and more modern areas of Pakistan

They are outgunned. 5000 Taliban vs. 500,000 Army soldiers.

They are hated by the people they have ‘conquered’.

But, they have been able to infiltrate major Pakistani cities where they have bombed themselves and others into oblivion.

Arnoldy concludes with this warning: “In other words, the real threat isn't the Taliban occupying urban territory. It's their ability to attract followers and sow chaos. One reason given for the conversions: US meddling. "The mujahideen are not the products of the madrasas," says Syed Yousef Shah, who heads one of the largest religious schools. "They are the product of American actions." He argues that the militants attack because of its cooperation with America and its intervention in the region. "A person whose house is destroyed by a drone attack and sees his parents and his brothers dead, what will he do? A suicide attack demands no lecture."

Yet, Lawrence Korb etal think the problem won’t be solved only in Pakistan by Pakistanis. We’ve got to get deeply involved. They recommend:

1. Build on recent regional and international diplomatic initiatives such as the trilateral U.S.-Pakistan-Afghanistan talks and the Friends of Pakistan forum.

2. Initiate a comprehensive diplomatic engagement with a broad range of Pakistani institutions and actors.

3. Formulate and sign a bilateral strategic framework agreement with Pakistan

4. Strengthen the police and judicial component of counterterrorism assistance.

5. Increase assistance for internally displaced persons.

6. Enhance efforts to keep Pakistan’s nuclear arsenal safe and secure.

7. Launch a comprehensive effort to advance Pakistani civilian government capacity and expertise in coordination with proposed bilateral development assistance increases.

8. Include careful oversight and accounting mechanisms in assistance legislation.

9. Reform the leading institutions of U.S. diplomacy and foreign development assistance.

10. Engage with Congress and the American people on the importance of Pakistan.

Accept Reality

Image via Wikipedia

In the July issue of The Atlantic Andrew Bacevich continues his crusade to convince us that it is better to accept our limitations and the reality in Afghanistan now than to continue to waste people's lives and money on the quixotic war in Afghanistan.

On the money side he projects a cost in Afghanistan of at least $1 trillion, which is what Iraq has cost so far, without counting the future bills for veterans' medical expenses. In Bacevich's view it's money we don't have. He has a point.

He advocates an acceptance of the Afghan world where tribal chiefs rule, as long as we motivate them (with money, of course) to keep the really bad guys out. He has a point.

However, I doubt our government will follow his advice. Someday there may be a monument to our soldiers like the monument to the Russian soldiers shown here.

Saturday, June 13, 2009

One in Thirty Million

17 Days

Image via Wikipedia

That's how many days left before U.S. troops move out of major Iraqi cities. But, McClatchy asserts that Mosul is not ready for such a move. There are a number of problems, the Army being a major one. Politics has been a major factor in staffing the army, particularly at the officer level. A shortage of weapons and ammunition is another factor. Corruption is evident in the attempt to rebuild the country with local workers.

And then there's Baghdad. The bombings continue. Yesterday a major Sunni leader was assassinated by a 15-year-old.

Keeping Secrets

The EPA will not reveal the sites of 44 coal ash dumps as it fears what do you think? The terrorists might learn of them and use them to harm us. Another example of the continuation of using fear to justify government actions or inactions, just as Bush did.

Aren't these dumps next to coal-fired power plants? Wouldn't they show up on Google maps? Why don't they keep secret the location of other hazardouse waste sites?

How independent are they?

The Boston Globe lists several prominent Senators who have financial ties to the medical industry, primarily drug companies. Dodd, who is spearheading the bill, has a wife who is on the board of four companies from which she earned $350,000 in cash and stock last year. But there are more - Hatch, Rockefeller, Harkin, Coburn, Kyl, Gregg - who have invested in companies that will be affected by what these senators do.

And we can't ignore Baucus, the Chair of the Finance Committee, and his cohorts. In his campaign last year he was able to raise $1,826,652 from health care organizations. In all, members of the Finance Committee received $13,000,000 for their campaigns from health care organizations.

Friday, June 12, 2009

What's happened to the Army Corps of Engineers?

When I was a kid, the Army Corps of Engineers was cosidered a top notch organization. Lately, I've been wondering as to my judgment then. Could the organizations have deteriorated as badly as it seems to have done? Katrina is the classic example of the Corps difficulties. Iraq is also proving an example, as well. Their work there for the Department of State, as noted by the GAO, is proving problematical. Part of the problem is the State Department's lack of management and frequent changes in policy. But the Corps apparently can't exercise reasoanble financial controls.

When is a board not a board?

When it's the board of the Pension Benefit Guaranty Corporation (PBGC). PBGC has been in the news because its recent change in policy has resulted in huge losses. Part of the problem seems to be that the board did not review the policy change in any depth partly because they don't meet very often (they haven't met in 15 months). But a stronger criticism can be made that the make-up of the board is just wrong; the three members are the Secretaries of Labor, Commerce and my hero, Treasury. Do they have the time or expertise needed to advise an organization that is responsible for seeing that millions of Americans receive their pensions? It certainly doesn't look that way.

Thursday, June 11, 2009

Can it get any worse?

There has been a lot of talk about the tunnels in Gaza, how people have been able to import goods of all sorts from Egypt. Well, I guess there are

Image by Marius Arnesen via Flickr

always people looking for ways to make a buck. So what if you screw your neighbor? Opportunity called in the form of the tunnels. Some of the locals who cared not a fig for their neighbor decided that they could make some money by 'selling' an interest in a tunnel. These evil people were able to swindle at least $100,000,000 from their neighbors who have to be living in one of the worst situations on earth. There is no limit to man's depravity.

She needs permission

It's going to be a slow ride for Saudi Arabia's first female minister, the deputy minister of education. Apparently, she can't appear on television unless the higher-ups give her the okay. Maybe, she prefers it that way as she also thinks it's too soon for girls to engage in sports.

Wednesday, June 10, 2009

Words or Deeds

ProPublica has been keeping track of promises made by the administration. It's latest report on Geithner's January promise - that all TARP investment agreements would be put on the Internet “so that taxpayers can see how their money is being spent and the terms these institutions must agree to.” - is not being kept. True, some progress has been made. But, five months later less than half of the TARP contracts have been posted to the site.

Another Plea for Sanity

Joseph Stiglitz once more makes the case that the banks are running the madhouse. The administration continues on the path of bailing out the people who caused most of the mess. As Stiglitz writes, "the administration has confused bailing out the bankers and their shareholders with bailing out the banks." He equates the "too big to fail" mantra with the sensible insight "too big to be managed". With all this money we have advanced, has lending increased? It sure doesn't look that way. We have (had?) an opportunity to change the system to minimize a recurrence of this mess or a worse one.

Then, one reads about the administration's backpedaling with regard to improved regulation of the financial industry. And what does one get? Worries about turf wars between agencies.

But what are we doing? Rewarding the people who brought us to this. Shame on our leaders. Shame on us.

Sunday, June 07, 2009

Questions for Mr. Obama

Sandy Lewis and William Cohan, both with many years on Wall St. and environs, have some questions about the current financial mess, which has not yet run anywhere near its course.

Six months ago, nobody believed that our banking system was well designed, functioning smoothly or properly regulated — so why then are we so desperately anxious to restore that model as the status quo?

Why is so much effort being put into propping up those at the top of the economic pyramid — the money-center banks, the insurance companies, the hedge funds and so forth — when during a period of deflation like the one we are in, any recovery will come only by restoring the confidence of the people down at the bottom of the pyramid?

Instead of promising the imminent return of good times, why isn’t Mr. Obama talking more about the importance of living within our means and not spending money we don’t have on things we don’t need?

Why is the morphine drip still in the veins of the financial system? These trillions in profligate federal spending are intended to make us feel better again even though feeling pain, and dealing with it responsibly, would be healthier in the long run. It is time to stop rescuing the banks that got us into this mess.

Is there to be any limit on bailouts? We have now thrown money at the big banks, any number of regional ones, insurance companies, General Motors, Chrysler and state and local governments. Will we soon be bailing out Dartmouth, which just lost its AAA bond rating? Is there no room left for what the Austrian economist Joseph Schumpeter termed “creative destruction”? And what is the plan to get the American people out of all these equity stakes we now own and don’t want?

Why has Mr. Obama surrounded himself largely with economic advisers who are theoreticians and academics — distinguished though they may be — but not those who have sat on a trading desk, made a market, managed a portfolio or set a spread?

Why isn’t the Obama administration working night and day to give the public a vastly increased amount of detailed information about what happens in financial markets?

Why is the government still complicit in making the system ever less transparent, even when it comes to what should clearly be considered public information?

Why do we still not know why Mr. Paulson, Mr. Geithner and the Federal Reserve chairman, Ben Bernanke, allowed Lehman Brothers to file bankruptcy last Sept. 15 but then, a day later, saved A.I.G.? Or why last November this trio decided to absorb potential losses on $301 billion of Citigroup’s shaky assets, when conventional wisdom among insiders held that they were worth only $150 billion at best?

Also, before Dick Fuld, Lehman Brothers’ chief executive, appeared before the House Committee on Oversight and Government Reform last October, it demanded from company executives boxes of documents about what happened at Lehman and why. Where are those documents?

Why hasn’t President Obama insisted on public hearings over what happened during this financial crisis?

Why are we not looking to change our current civil and criminal racketeering statutes, which are playing a perverse role in investigations of the crisis?

We are in one of those “generational revolutions” that Jefferson said were as important as anything else to the proper functioning of our democracy. We can no longer pretend that our collective behavior as a nation for the past 25 years has been worthy of us as a people. Many of us hoped that Barack Obama’s election would redress the dire decline in our collective ethic. We are 139 days into his presidency, and while there is still plenty of hope that Mr. Obama will fulfill his mandate, his record on searching out the causes of the financial crisis has not been reassuring. He must do what is necessary to restore the American people’s — and the world’s — faith in American capitalism and in our nation. Answering our questions may help us get back on track. But time is wasting.

War on Drugs: An Update

In the upcoming budget year (FY2010) the federal government plans to spend $15.1 billion in the war on drugs. This is a slight increase over FY2009. 40% of the budget is going to Interdiction and Intenational Counterdrug Support, i.e., stopping drugs from coming into the country. How much of our money is spent on this war by the state and local governments is unknown at this time, but I'm sure it's substantial.

Would we not save the bulk of this money and increase tax revenue by legalizing drugs as we have legalized alcohol and tobacco?