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HUMANITY DOOMSDAY CLOCK - Moves forward to 2125 due to election of US President trump.

Estimate of the time that Humanity will go extinct or civilization will collapse. The HUMANITY DOOMSDAY CLOCK moves forward to 2125 due to US President trump's abandonment of climate change goals. Clock moved to 90 seconds to doom at December 2023. Apologies to Bulletin of the Atomic Scientists for using the name.

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There Are Alternatives to Free Market Capitalism [https://miepa.net/taa.html]

Specific Country Economic Policy Analyses - More Than 50 Countries from Argentina to Yemen [https://miepa.net/]




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Sunday, December 28, 2008

Corruption and Regulation

Originally posted October 2008:

Perhaps it was Karl Marx who predicted that the capitalist and communist economic systems would converge someday.

That day seems to be coming closer and closer with recent events trending toward increasing market and administrative regulation in the USA as a capitalist beacon and Russia as the former home of socialism.

In Russia President Medvedev is fighting corruption since he thinks that it hinders economic growth. In the USA, unregulated free market actions have created a financial panic that has created demands for stricter regulation from Democrats, Republicans, CEO's, the SEC and the general public.

Russian Sergey Vadimovich Stepashin, chairman of the Russian Federation Comptroller's Office, has proposed a comprehensive corruption elimination campaign, according to an interview article in the Rossiyskaya Gazeta, September 24, 2008 by Tatyana Panina.

He singled out Russian Law No N94-FZ "On Distribution of Orders for the Delivery of Goods, the Performance of Work, and the Rendering of Services for State and Municipal Needs" as providing opportunities for corrupt behavior.

In the United States, Christopher Cox the Chairman of the Securities and Exchange Commission [SEC] has blamed a lack of regulation for the current financial crisis. ['S.E.C. Concedes Oversight Flaws Fueled Collapse', By STEPHEN LABATON, New York Times Published: September 26, 2008]

The question naturally arises: What is regulation? It's an important topic that needs a lot of discussion.

I'll try to provide an overview from a layman's, i.e., not a lawyer, point of view. Perhaps a Western economic student's perspective will be useful - even though it may contain a few legal blunders.

REGULATION OF BANKS AND FINANCIAL FIRMS

In 21st Century economies, banks and financial institutions control part of the country's money supply. Thus, regulating them correctly is a national security matter - poorly or crookedly managed banks can harm the country.

Any firm which manages a part of the country's money supply should be examined regularly by the Central Bank or other appropriate institution to be sure it is being run soundly and honestly.

If the bank examiners conclude that the bank or firm has problems, the examiners should insist that the problems be corrected. Failure to correct the problems will lead to the bank being closed and its assets sold to another bank.

This is a case where separation of powers and extensive processes to ensure fairness to accused individuals can be compromised in the interests of the country.

MARKET REGULATION OF UTILITIES AND MONOPOLIES

In a market economy where most goods and services are provided by private, for-profit enterprises, sometimes firms are granted a monopoly by the state in providing a specific product or service. The economic justification for the monopoly is that the economies of scale compared to the size of the market dictate that a monopoly can be more efficient. In other words, the amount of investment to get the lowest cost is so high that a company will make the investment only if it can get a sufficient volume of business. This usually happens in utilities like electricity, garbage collection, sewer and water systems and so forth.

The economic problem is that any monopoly has an incentive to raise the price too high in order to make high profits. This then defeats the purpose of granting the monopoly in the first place.

Before some deregulations in the USA, many state governments created Public Utility Commissions [PUC's] which regulated utility monopolies. The basic idea is that before the firm can change any price or service level, it has to justify that change to its PUC. Failure to secure approval meant that the firm would be fined the total amount of the inappropriate price or service level. This took away the firm's economic incentive to cheat - what's the point in cheating if you will lose any gain to a fine?

The PUC's based their decisions on allowing a return on investment [ROI] sufficient to attract capital for expansion and no more. If a company needs to pay 10% on bonds or loans to get the money for the expansion, then the PUC allowed a price to be set which made a 10% ROI likely.

In exchange the firm received a safe and steady market but was prevented from risky and possibly more profitable ventures. Investors received a certain income with little growth possibilities. The system worked fine until deregulation.

Most PUC members were elected by voters under their enabling legislation.

REGULATING INDIVIDUAL BEHAVIOR WITH CRIMINAL LAWS

Making regulation effective in preventing bad behavior by individuals requires that the rules are clear, specific and indisputable. After all, a person prosecuted under such a law stands to lose considerable wealth and/or freedom if convicted. He can be expected to mount a vigorous defense.

First Principle - Prevent Bad Behavior

Effective regulation tries to prevent specific behaviors, whether by individuals acting alone or for a company, bureau or government or behaviors by such organizations as a matter of organization policy.

Second Principle - Describe Bad Behavior

This creates a need for a detailed description of each behavior to be prevented. After all, how can a person or organization be accused of behaving badly if the behavior is not listed as prohibited behavior?

It is critical to describe the prohibited acts specifically so that there is little room for judgment. Such phrases as 'corruption' or 'bribery' are too vague to use in a law. Perhaps a phrase is useful such as: 'An individual employee granting an exemption to a legal requirement for an applicant in exchange for a payment of money or goods to the individual granting the exemption.'

In practice, this means that no behavior can be prohibited until that behavior is described and listed as prohibited. So, if taking a bribe for a favor is described and prohibited in a law passed on January 1, 2009, I cannot be prosecuted for taking a bribe on December 31, 2008. Of course, I can be prosecuted on January 3, 2009 for granting the favor that day, assuming that granting a favor has been described as prohibited behavior.

Third Principle - Describe Specific Punishments for Bad Behavior

The instrument which describes behavior as bad will also specify what is the punishment for the behavior. This may be a range of possible punishments, but the range of possible penalties should be specified. Failure to do so creates another problem where corruption can enter: negotiating or bribing away the punishments.

Fourth Principle - Separation of Powers

This is a Western approach; but, it seems to have merit in difficult areas like corruption.
Entities which participate in the identification and punishment of corrupt behavior should be different entities. For example, suppose a criminal law exists which states that a national government bureau employee who takes money or property and provides an exemption for an applicant to the bureau is guilty of a crime and will be fined a sum of money and be fired from the bureau.

Ideally, the national government's prosecutor prepares a case against the employee with all the relevant facts. The prosecutor's office then presents the case to a national government judge who listens to the prosecution and the defense, then makes a determination of innocence or guilt and assigns the punishment.

If the prosecutor's office also has the power to determine the guilt or innocence, the process is more likely to be viewed as corrupt and is also more susceptible to corruption since only one person has to be bribe.

Fifth Principle - Laws Conform to the Jurisdiction

The above example concerns a national or federal law, prosecutor and judge. If the case concerned a city law, then the prosecution would proceed under a city law with a city prosecutor and judge.

City judges cannot prosecute federal crimes and federal judges cannot decide offenses against city laws.

Sixth Principle - Separate Powers Chosen Separately

While one part of the prosecution process can be chosen by one part of the government, the other part should be chosen differently. For example, federal prosecutors can be appointed by the federal government directly, but federal judges should be either elected in a national election or appointed by the government subject to confirmation by the legislature.

Seventh Principle - Consumer/Worker Lawsuits

As an additional check on institutional abuses, consumers and workers are allowed to sue for damages. If this power is weakened, then regulations before the fact of abuse become even more important.

Thursday, December 18, 2008

US National Security

Back in March of 2007, I wrote a list of nine areas that are critical to the future national security of the United States.

Now is the time to revisit the list, shown in order with the biggest threat listed first.

1. Political corruption - the government of the USA is corrupt. The legislative system requires that candidates raise money from rich interests to be elected; then the elected legislators grant favors to their campaign contributors.

The national security suffers when only money interests receive favorable laws.

2. Military/Industrial Complex - Contractors receive money from providing products and services to the armed forces. With that money they influence policy to encourage wars.

Our national security is damaged by public wars for private gain. Our military is corrupted when wars are started or encouraged by companies who profit from a war.

3. Energy - Oil interests damage the national security by promoting our dependence on oil.

We simply must reduce our oil dependence - there is no alternative.

A bill was proposed in 2007 in the House of Representatives to fund searches for oil alternatives. This is a good idea.

Here's another: let's treat oil like a public utility. After all, everyone needs it, just like water and electricity. So let's create a national oil commission that will plan for energy alternatives and regulate the price of oil so that oil companies can earn a reasonable rate of return but not any excessive profits.

Failure to deal with our energy problem will damage our future security.

4. Labor and Consumer Unions - Corruption favors business interests over workers and consumers. It is time to restore a more equal balance between labor and business and consumers.

Continued weakening of labor and consumer power will damage the working family, the backbone of America.

A case can be made that all the laws which favor capital creation should be weakened and all the laws which promote higher wages and more jobs should be made stronger. Our national security depends on a strong economy and the economy depends on consumers having enough income to buy products.

5. Income and wealth Disparity - we are becoming a two tier country; the middle class is becoming weaker.

Our idea has been that Americans are mostly middle class. Losing the middle class will damage our long term security.

6. Elections - The foundation of the American idea is that voters can change the government if it is unresponsive. But, if the voting process is manipulated for partisan purposes or private gain, our security is damaged.

7. Judicial Independence - Judges must be above politics to protect our values.

8. [Was 9] Financial Regulation [was Usury]

Unregulated banks have caused the current mess. We cannot tolerate cowboy capitalism.

9. [was 8] Trade Deficits - trade deficits reflect an economic imbalance that will eventually damage the American way of life.

A word about climate change - it is a global problem, not just a US problem, so is not listed here.

Obama's Economic Thinking

So far the thinking of the new economic team is seriously disappointing.

They are reported to have reached out to divergent economists who [wait for it..........] all agree that the stimulus is needed.

So, mainstream economists call other mainstream economists to solve a problem created by mainstream economics. That is just dumb.

The reason we are in this mess is that mainstream economic thinking is wrong. Even Bush understands the mainstream: 'Free people, free markets, free trade.' This is the same thinking that gave us the Great Depression.

It's also the thinking that gave us Enron, the mortgage meltdown and a severe recession tetering on depression.

Throwing money at the problem - - the Obama solution - without examining the framework is a prescription for disaster.

Even in mainstream, textbook economics, monetary policy - throwing money at the problem - does not work unless people want to borrow.

Nobody wants to borrow now and even the few who do want to borrow can't.

Here's the problem: everyone is convinced that the economy will become worse, not better.

Here's the solution: convince people that the economy will get better.

Here's how to do that: point by point, list each situation in the economic framework that has contributed to the problem, Then list each action to be taken and how it will correct that one particular situation.

For example:

Problem: bonds based on sub-prime loans have tanked and frightened bond buyers.

Solution: no bonds based on mortgages will be offered for sale without a rigorous examination of the mortgages which underlie the bond, with the examination's results published in the bond prospectus and verified by an outside regulator. This is not rocket science, it's very similar to the disclosure the SEC used to require for any security.

Problem: rising unemployment.

Solution: reconfigure national labor laws so that the creation of jobs is favored over the creation of capital. There is a real concern that there is already too much capital in the world and not enough jobs.

For details, see the discussion of the jobs theory of economic growth here: http://www.mkeever.com/apply.html

************************

Don't any of these people read economic history??

Sunday, November 30, 2008

Mark-To-Market

One of the problems today is that banks are reluctant to lend to other banks, seemingly so because they are unsure of the borrowing bank's financial status.

One of the reasons for that caution is that the borrowing bank's balance sheet may be too weak to support the new loan. If so, one of the probable causes is the required write down of assets to their current estimated values from the acquisition value.

The Accounting Principles Board is responsible for this requirement which was installed after the Enron debacle.

Before then, a corporation simply amortized its losses over some period of years, maybe five years.

That way, the company could borrow again - provided it had adequate cash flow - and continue to survive.

In this emergency, both the new administration and the APB should consider an adjustment with protections to the mark to market requirement. A change here would help the credit markets flow again.

Tuesday, November 18, 2008

Presidential Speech on the Economy - Proposed

Introduction: Econ 1A

The opinions and speeches from the Office of President are keys to the people's state of mind about the economy. Economic activity is based on people's expectations about the future. If most people think the economy is doing well, then they will invest, buy properties and take on debt. But if most people think the economy is doing poorly, they will save their money for a rainy day and avoid borrowing money to protect their family.

Up until the current President I had not in 50 years of listening heard a sitting President say that the economy was in bad shape, regardless of the reality. That's because the office confers authority on the occupant about the future of the economy.

'If the President says that the economy is doing well, by golly family, we'll go ahead and buy that new house because things will work out. But, if the President says that the economy is in trouble, well gee whillickers, we'd better hunker down and save our cash for hard times ahead.'

The President-Elect's main job, IMHO, from now until the end of his terms in 2016 is to constantly repeat that the economy is doing great and the future is bright. Exactly like he did during the campaign with the mantra of change. The change we want now is economic growth with fairness. And, it is happening before our eyes.

The Speech - Thanksgiving Day

Good evening my fellow Americans, I am taking this time tonight to address you all about the state of the American economy at this joyous Holiday time when we have gathered our family and friends if we can and we are missing them terribly if we cannot be with them. Michele and I offer our prayers for the safe return of all our men and women in harm's way tonight. May God be with you.

I know that you all are concerned about how we are doing here at home and how other countries are doing as well. Well, let me tell you this, I won't lie to you, there are some troubled places in our land tonight and my economic team and I are working tirelessly to craft sensible solutions to those problems - solutions that will harness the incredible energy of the American people to the task of putting all those who want to work back to work quickly. It's our number one priority.

Let's be clear about one thing: the American economy is the strongest economy in the world. It is the strongest in the world because of you folks out there listening to me tonight and your fellow Americans who will read about this tomorrow. The fundamentals of the economy are sound and people are ready and willing to work hard to make our economy grow.

Here are just a few of the things that are right about our economy today:

Just about 95% of you who want to work are working. In my book, when you get something 95% right, you are doing pretty well. We are working hard here to get that closer to 100% and to make sure that the wages you earn can provide you and your family a comfortable living. We have a lot of ideas about how to do that and you'll be hearing about them soon.

The housing market has been difficult for a lot of folks. It is rebounding now and some of you are buying homes and other properties because of the incredible bargains. Banks are lending to home buyers on favorable terms. Interest rates on 30 year loans are close to historic lows.

The government has a responsibility to help out some of the folks who have home loans they can't afford any longer and we are working on the question. We'll have an announcement about our plans soon.

The Christmas shopping and holiday gift giving season starts tomorrow and I hope you all will celebrate this season in the traditions of your family. I see this season as a beginning of hope for our country. Please share that hope with us in the next few weeks by spending time with your family and friends if you can.

The stock market has some incredible bargains now and most of the advice I read about buying stocks is to hold them for long term gains. If your situation permits, it's a good time to think about adding to your portfolio. Our economy is going to grow. You heard that from an insider.

Gas prices have come down a lot in recent days. That's helping with your daily budgets and I'm happy about that. We didn't do it, but I'm still happy about it.

I am here to say that our future is bright in this country. We have a chance to change the direction of our country for the better. We are working very hard to create a bright future. Here are some of the ideas we are working on. I am not going to promise you that each idea here will become reality, but a few of them will.

We are finalizing our plan to bring health care to all Americans.

Some of our banks have seen ownership changes, but no depositor has lost a dollar due to the fine work of the FDIC. All your deposits in single accounts under $250,000 are safe.

Our financial sector has some issues we need to fix. We are working hard here to craft new rules and regulations that will prevent abuses in the future. Some of the banks which have received federal funds are still not lending to credit worthy borrowers at realistic rates; we will be contacting them soon.

We are focusing on the market as an engine of growth. The government has taken some positions in some companies to help us over this tight period. As soon as the situation eases up, we will turn those positions back to the markets. The steps the government has taken are the right steps and you will see the results on Main Street very soon.

It's time to create the future for our kids and grandchildren. What kind of future do we want for them? Here's an idea about energy and the future - just to let you see the kind of fun this job can really be.

We need to reduce our reliance on personal cars as the main method of getting to work. I will propose a giant program of building fixed rail metro systems in large urban areas. This will revitalize our cities, save energy, provide hundreds of thousands of jobs and give us all better lives. I will pay for it by placing a ten cent per gallon import tax on foreign oil so that the revenues will be placed into a fund for urban rail projects. At current prices, that's a five percent fee for a better future.

We are also going to ask the Big Three US automakers to create energy efficient cars so that they will survive into tomorrow.

Let me say in conclusion that we understand exactly where we are. There are a lot of good things about our country now and it is appropriate to celebrate those. There are also some problem areas. We are identifying the problems and creating solutions to fix them.

You are already working to get America moving again. I will be with you in January. Yes we can!

Thursday, November 13, 2008

Chinese Chips: They Ain't French Fries

Are the Chinese stealing US tech secrets with implanted chips in all computers??

read here: http://cryptome.info/manchu-chip.htm

Food for thought......

Wednesday, November 12, 2008

New Day Dawning

A lot of water under the bridge in the last thirty days.

First, because this blog focuses on issues critical to the national security of the US, it is appropriate to say that national security has been greatly enhanced by the victory of the Obama and the Democrats in the recent election.

Second, the world turns and there is no time to relax before dealing with issues. Problems like Iraq, Iran, health insurance, energy policy and the economy demand immediate attention.

Third, two pressing issues cannot be delayed until January and demand the President-Elect's immediate attention.

THE ECONOMY

Incomprehensibly, Obama gathered some 25 or so famous economic and business leaders and produced nothing of interest to economic actors. How is that possible?

The economy and the markets are in turmoil and panic. Obama is required to make a statement immediately. Let me repeat: Obama is REQUIRED to make a statement immediately. Failing to do so may possibly turn a recession into a depression. The fear is almost a living thing.

Here is what the statement should say:

'My fellow Americans, we all know that our economy is a little weak right now.

I am not yet the President and will not be until January, but I know that markets need some reassurance that my future adminisration will act responsibly.

I have looked carefully at the situation and I will develop some solutions very soon that will ease the crisis. They are not ready yet but they will be soon.

In the meantime I can tell you that the underlying structure of the economy is sound and there are a lot of things going right as we speak. For example, the real estate market is adjusting to new prices and people are buying houses and borrowing money from banks. Of course, there are many homeowners in some difficulty, but we are working on a solution to that problem.

The FDIC is performing just as it should and all the depositors insured by the FDIC have not lost a penny. Some banks have been acquired by other banks and, while their CEO's and shareholders have lost some equity, their depositors have remained whole.

The auto industry is asking for some help right now and it employs a lot of workers. There is precedent for helping that industry, but it is too soon for me make a specific recommendation.

My administration will fix the things that need fixing and make the good things stronger. As a country we are committed to a market structure as our engine of economic growth. We may tinker a little with the rules and regulations that govern the market, but in the next few months we expect the markets to return to normal."

[BTW - I am available to write economic speeches for a very reasonable fee.]

RUSSIA AND THE COLD WAR

The Cold War was a horrible thing and it is over. Sadly, there are some Americans who seem to have an interest in re-creating it.

We have enough security problems without mindlessly creating new problems in Europe.

Russia under Putin and Medvedev are engaged in a long term process to build a democratic society. You can easily see the details by reading Medvedev's recent state of the union speech at: http://www.kremlin.ru/eng/speeches/2008/11/05/2144_type70029type82917type127286_208836.shtml

It is a speech remarkable for its focus on securing a good future for Russians.

The Russian government thinks that its national security interests have been slighted and ignored by NATO and the USA for some time. The missile defense bases in Poland and the Czech Republic are major irritants to Russia.

Obama spoke with Medvedev on the telephone recently and opened a dialog. It is critical that this dialog be encouraged and expanded. There is no reason, IMHO, that Russia cannot partner with the US on many issues.

Tuesday, October 28, 2008

Today is the Future of Economics

Today is the Future of Economics

When even Alan Greenspan, the epitome of Ayn Rand's Objectivist philosophy, says that unregulated markets created the current financial problem, it's safe to say that unregulated, winner-take-all, cowboy capitalism is dead as a serious policy recommendation.

Its results are harmful to most of the population. It is entirely predictable that income maldistribution and criminal behavior will follow the introduction of cowboy capital.

But, what is the alternative?

Right now, serious politicians are crafting laws and regulations to restrain some of the poor behavior of free markets. Sadly, they are doing so in an intellectually handicapped framework. As a result their actions may be less than effective.

This is an attempt to create a framework for policy.

GOAL

The overriding goals and first priorities of any new policies and regulations should be to protect consumers from harm, to create jobs for the population and to correct income and wealth maldistributions so that a tolerable level of well being is provided throughout the society.

Part of securing this goal is to recognize that providing the means to create additional capital to the already wealthy in the hopes that they will use that capital to create more jobs is a foolish hope.

The world already has too much capital - there are more goods being produced than consumers have the ability to buy. It is time to reduce the amount of capital and to increase the wages of workers.

MARKETS

Markets wherein entrepreneurs use capital to create businesses and jobs are necessary in any modern economy. Without markets, a society is likely reduced to barter and subsistence farming.

But, markets are inherently flawed and require supervision to ensure the common good. The philosophy that equates the freedom to create wealth with the betterment of the entire society is a myth. We have seen the results of believing that myth again and again.

Managing markets for the common good allows for reasonable profits and entrepreneurial incentives.

But, that market supervision prohibits and punishes criminal behavior, monopolies and maldistribution of income and wealth.

FINANCIAL MARKETS

Commercial banks and investment brokers of every kind created the current situation because of ineffective market supervision.

What should effective supervision look like?

Any effective market control should allow for the global interdependency of financial markets.

Currency exchange markets operate virtually in cyberspace and around the clock pretty much unsupervised.

Capital routinely seeks safety and returns globally without concerns about borders except as borders affect risk.

FINANCIAL TRADE ORGANIZATION [FTO]

Create the FTO. Give it the task to write international standards for bank management, bank lending and investment disclosure and control.

Seek membership of all developed economies in the FTO and allow any developing country to join.

Central banks of FTO members reinstall or create separations between commercial banking activities and investing activities. Commercial banks are constrained from selling investment assets, definition to follow.

Central banks take responsibility to manage commercial banks with regard to lending standards, management competence and balance sheet ratios. The central bank has the power to institute changes in bank management where required in its judgment.

Central banks and deposit insurance agencies guarantee all deposits in commercial banks regulated by the CB and guarantee all loans to member banks. To prevent the moral hazard problem, bank principals' deposits are exempt from the deposit guarantee and they are forbidden to borrow from their bank.

FTO members create an SEC type disclosure process for ALL investment properties. This will eliminate derivatives.

The goal of the FTO is universal membership and compliance. A compromise which attracts more members should be taken. Capital will seek the greatest reward, smallest risk location. If the regulation system is not consistent in every country, then capital will find the weak link.

INTERNATIONAL TRADE

Free [unregulated] trade brings the good and the bad of unregulated markets wherever it is tried: economic growth, criminal behavior and poor income distribution.

The philosophy behind it rests on the idea of a general world equilibrium where every consumer in every country is well off.

This is a pipe dream. It will never happen. Policies which support that idea create the evils of unregulated markets.

Each country must manage its trade to take advantage of the benefits and avoid the problems trade brings.

Trade should be encouraged. It should be managed so that there is neither a deficit nor a surplus from trade, i. e., the current account balances in each country are even every year. A country should not buy more from other countries than it sells to them, as measured in currency. See my article on balanced trade at www.mkeever.com

Consumers should be protected from dangerous imports. Hypothetically only, if China were to allow melamine in dairy products - which it does not - then any country which prohibits melamine in dairy products has the right to ban the import of diary products from China without penalty.

If the WTO requires a country to allow Chinese dairy imports, then the WTO should be scrapped.
***************************

The above is only a start toward a rational economic policy framework.

Mike McKeever
McKeever Institute of Economic Policy Analysis
www.mkeever.com
October 28, 2008
Permission to reproduce in whole or part with attribution is hereby granted.

Sunday, October 19, 2008

Too Dumb - 8, Gazprom in Alaska

'As Palin assails Russia, Gazprom meets with Alaskan officials'

see the story: http://www.iht.com/articles/2008/10/14/business/gazprom.php

Monday, October 6, 2008

Corruption and Regulation

CORRUPTION AND REGULATION - A LAYMAN'S PERSPECTIVE

Perhaps it was Karl Marx who predicted that the capitalist and communist economic systems would converge someday.

That day seems to be coming closer and closer with recent events trending toward increasing market and administrative regulation in the USA as a capitalist beacon and Russia as the former home of socialism.

In Russia President Medvedev is fighting corruption since he thinks that it hinders economic growth. In the USA, unregulated free market actions have created a financial panic that has created demands for stricter regulation from Democrats, Republicans, CEO's, the SEC and the general public.

Russian Sergey Vadimovich Stepashin, chairman of the Russian Federation Comptroller's Office, has proposed a comprehensive corruption elimination campaign, according to an interview article in the Rossiyskaya Gazeta, September 24, 2008 by Tatyana Panina.

He singled out Russian Law No N94-FZ "On Distribution of Orders for the Delivery of Goods, the Performance of Work, and the Rendering of Services for State and Municipal Needs" as providing opportunities for corrupt behavior.

In the United States, Christopher Cox the Chairman of the Securities and Exchange Commission [SEC] has blamed a lack of regulation for the current financial crisis. ['S.E.C. Concedes Oversight Flaws Fueled Collapse', By STEPHEN LABATON, New York Times Published: September 26, 2008]

The question naturally arises: What is regulation? It's an important topic that needs a lot of discussion.

I'll try to provide an overview from a layman's, i.e., not a lawyer, point of view. Perhaps a Western economic student's perspective will be useful - even though it may contain a few legal blunders.

REGULATION OF BANKS AND FINANCIAL FIRMS

In 21st Century economies, banks and financial institutions control part of the country's money supply. Thus, regulating them correctly is a national security matter - poorly or crookedly managed banks can harm the country.

Any firm which manages a part of the country's money supply should be examined regularly by the Central Bank or other appropriate institution to be sure it is being run soundly and honestly.

If the bank examiners conclude that the bank or firm has problems, the examiners should insist that the problems be corrected. Failure to correct the problems will lead to the bank being closed and its assets sold to another bank.

This is a case where separation of powers and extensive processes to ensure fairness to accused individuals can be compromised in the interests of the country.

MARKET REGULATION OF UTILITIES AND MONOPOLIES

In a market economy where most goods and services are provided by private, for-profit enterprises, sometimes firms are granted a monopoly by the state in providing a specific product or service. The economic justification for the monopoly is that the economies of scale compared to the size of the market dictate that a monopoly can be more efficient. In other words, the amount of investment to get the lowest cost is so high that a company will make the investment only if it can get a sufficient volume of business. This usually happens in utilities like electricity, garbage collection, sewer and water systems and so forth.

The economic problem is that any monopoly has an incentive to raise the price too high in order to make high profits. This then defeats the purpose of granting the monopoly in the first place.

Before some deregulations in the USA, many state governments created Public Utility Commissions [PUC's] which regulated utility monopolies. The basic idea is that before the firm can change any price or service level, it has to justify that change to its PUC. Failure to secure approval meant that the firm would be fined the total amount ot the inappropriate price or service level. This took away the firm's economic incentive to cheat - what's the point in cheating if you will lose any gain to a fine?

The PUC's based their decisions on allowing a return on investment [ROI] sufficient to attract capital for expansion and no more. If a company needs to pay 10% on bonds or loans to get the money for the expansion, then the PUC allowed a price to be set which made a 10% ROI likely.

In exchange the firm received a safe and steady market but was prevented from risky and possibly more profitable ventures. Investors received a certain income with little growth possibilities. The system worked fine until deregulation.

Most PUC members were elected by voters under their enabling legislation.

REGULATING INDIVIDUAL BEHAVIOR WITH CRIMINAL LAWS

Making regulation effective in preventing bad behavior by individuals requires that the rules are clear, specific and indisputable. After all, a person prosecuted under such a law stands to lose considerable wealth and/or freedom if convicted. He can be expected to mount a vigorous defense.

First Principle - Prevent Bad Behavior

Effective regulation tries to prevent specific behaviors, whether by individuals acting alone or for a company, bureau or government or behaviors by such organizations as a matter of organization policy.

Second Principle - Describe Bad Behavior

This creates a need for a detailed description of each behavior to be prevented. After all, how can a person or organization be accused of behaving badly if the behavior is not listed as prohibited behavior?

It is critical to describe the prohibited acts specifically so that there is little room for judgment. Such phrases as 'corruption' or 'bribery' are too vague to use in a law. Perhaps a phrase is useful such as: 'An individual employee granting an exemption to a legal requirement for an applicant in exchange for a payment of money or goods to the individual granting the exemption.'

In practice, this means that no behavior can be prohibited until that behavior is described and listed as prohibited. So, if taking a bribe for a favor is described and prohibited in a law passed on January 1, 2009, I cannot be prosecuted for taking a bribe on December 31, 2008. Of course, I can be prosecuted on January 3, 2009 for granting the favor that day, assuming that granting a favor has been described as prohibited behavior.

Third Principle - Describe Specific Punishments for Bad Behavior

The instrument which describes behavior as bad will also specify what is the punishment for the behavior. This may be a range of possible punishments, but the range of possible penalties should be specified. Failure to do so creates another problem where corruption can enter: negotiating or bribing away the punishments.

Fourth Principle - Separation of Powers

This is a Western approach; but, it seems to have merit in difficult areas like corruption.
Entities which participate in the identification and punishment of corrupt behavior should be different entities. For example, suppose a criminal law exists which states that a national government bureau employee who takes money or property and provides an exemption for an applicant to the bureau is guilty of a crime and will be fined a sum of money and be fired from the bureau.

Ideally, the national government's prosecutor prepares a case against the employee with all the relevant facts. The prosecutor's office then presents the case to a national government judge who listens to the prosecution and the defense, then makes a determination of innocence or guilt and assigns the punishment.

If the prosecutor's office also has the power to determine the guilt or innocence, the process is more likely to be viewed as corrupt and is also more susceptible to corruption since only one person has to be bribe.

Fifth Principle - Laws Conform to the Jurisdiction

The above example concerns a national or federal law, prosecutor and judge. If the case concerned a city law, then the prosecution would proceed under a city law with a city prosecutor and judge.

City judges cannot prosecute federal crimes and federal judges cannot decide offenses against city laws.

Sixth Principle - Separate Powers Chosen Separately

While one part of the prosecution process can be chosen by one part of the government, the other part should be chosen differently. For example, federal prosecutors can be appointed by the federal government directly, but federal judges should be either elected in a national election or appointed by the government subject to confirmation by the legislature.

I hope that we will see a lot of discussion about this important topic.

Monday, September 29, 2008

Capitalism is Dead

What happened?

The short answer is that the mortgage packagers lied to the buyers. The folks who created the bonds mixed good loans with bad loans and then lied about it.

It's a rookie mistake: NEVER lie to money.

Now the money - bond buyers - is frightened. They will likely stay frightened for some time.

They'll stay away longer if there is no bailout. They will come back eventually, but they will be very leery of new bonds.

The solution is to provide very detailed disclosure and expect mistrust. After all, when you lie to a nervous buyer, it takes a long time to rebuild trust.

It'll happen, so have patience.

Why did they lie to money?: because no one told them they could not. There was no regulation - no cop on the beat - , so they got away with it.

But what are the long term effects?

Basic long term effect is that free market capitalism with no oversight and ineffective regulation has once again proved to be a disaster.

It is predictable and avoidable. So, why do we have to re-learn that lesson again and again??

The Great Depression, the Dot.com bust, Enron, etc., etc.

We have to re-learn it simply because there is too much money to be made privately by acting greedily.

The money goes to buy loose regulations from Congress.

Congress took down the firewall between banks and investments we had built after the 1930's depression.

We took them down in the 1970's and promptly got the S&L meltdown and bailout and now the mortgage meltdown and eventual bailout.

Will we learn the lesson this time? Who knows? It's a crapshoot.

One thing is for sure.

Capitalism is dead.

The capitalism that insists on a laissez faire, laissez passer, i.e., zero regulation or government oversight, is dead because it does not produce good results for most people.

The United States founding fathers broke from England to secure both liberty and property. The current debacle has destroyed property for many of our citizens. This happened because businesses insisted on the liberty to pursue their selfish gains regardless of the cost to the country.

The world declared that communism and socialism were dead upon the demise of the Soviet Union. The declaration was made because the system failed to provide a good life for its subjects.

Free market capitalism is dead for the same reason - it has failed to provide a good life for most of its citizens. Many in the United States believe that our citizens have one of the highest standards of living in the world. This is not true by most objective measures.

Capitalism's apologists insist that letting entrepreneurs work for personal gain is good for the economy because they will build capital in the form of money for themselves and that they will use that capital to invest in new businesses. From the new businesses will come jobs and economic growth.

That idea is wrong. It is wrong because the individuals who accumulate the wealth have little or no necessary incentive to risk it on new businesses. They are just as likely to buy a yacht and an Italian villa as they are to invest in a new business.

There are people who make such investments, but allowing their ranks to grow in the hopes of creating more new businesses just does not work.

Today, the world had too much capital. Capital markets are worldwide and operate on a 24/7/365 basis thanks to the internet.

There is so much capital around that its owners have a hard time placing it in secure investments. At the same time, just about every sound business idea is able to receive funding. In addition, investors spend much of their time on financial or non-productive investments. Thus we have the derivatives that brought the financial system to the brink of collapse.

This is happening at the very time when more and more people around the world are sliding into poverty, despair and violence.


Copyright, 2008 by Mike P. McKeever, Santa Rosa, CA. This text can be posted in any electronic forum. For publication in printed form please request permission from the author: email: mpmckeever@earthlink.net.

Too Dumb, 7 - 'Let them eat cake'

Seems like Sara will do what she wants when she wants, responsibilities be damned.

Sounds familiar.

See details here:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/29/MNL7137MLQ.DTL&hw=Palin&sn=002&sc=907

Thursday, September 25, 2008

Too Dumb, 6 - 'McCain is Dangerously wrong,' Joe Biden

"John is more than wrong -- he is dangerously wrong. On a question so basic, so fundamental, so critical to our nation's security, we can't afford a commander in chief so divorced from reality and from America's most basic national interests," Biden said.

Read the article at: http://www.boston.com/news/politics/2008/articles/2008/09/24/biden_says_mccain_often_wrong_on_national_security/

Wednesday, September 24, 2008

Too Dumb, 5: 'disconnected from knowledge and principle'. G. Will

Here's a short quote from George Will:


Under the pressure of the financial crisis, one presidential candidate is behaving like a flustered rookie playing in a league too high. It is not Barack Obama.

Channeling his inner Queen of Hearts, John McCain furiously, and apparently without even looking around at facts, said Chris Cox, chairman of the Securities and Exchange Commission, should be decapitated. This childish reflex provoked the Wall Street Journal to editorialize that "McCain untethered" -- disconnected from knowledge and principle -- had made a "false and deeply unfair" attack on Cox that was "unpresidential" and demonstrated that McCain "doesn't understand what's happening on Wall Street any better than Barack Obama does."

read the rest at: http://www.washingtonpost.com/wp-dyn/content/article/2008/09/22/AR2008092202583.html

Tuesday, September 23, 2008

Bailout Prevention: Derivative Disclosure

Here's my idea to prevent a recurrence of the present debacle:

Broaden the definition of a 'security' to include all financial instruments sold in any market and require that each be subject to full disclosure laws just like stocks and bonds.

Apparently, the salesmen selling the junk could not even understand it - no wonder we have a disaster.

If you use the idea, the price is $1.00

For more, read Pat Buchanan here: http://www.humanevents.com/article.php?id=28670

Monday, September 22, 2008

Palin/McCain - Too Dumb, 4 - Reckless

From The Sunday Times
September 7, 2008

The fright begins as John McCain reveals his reckless side

Sarah Palin has opposed his key policies, so why did he pick her?

Andrew Sullivan

There is one reason the job of vice-president exists. In a system with a single executive, you need someone to fill in if the president is incapacitated or dies. In war time this is especially important. More salient: McCain just turned 72 and would be the oldest first term president in American history with four cancer scares and the awful residue of Vietnamese torture in his bones.

The pick is also the first presidential-level decision a candidate has to make. You learn a lot about the candidate. And with Obama and McCain, we have two men who have never been executives - just legislators, book-writers and celebrities. So the decision is the first time we can compare the two men on a presidential decision
level.

In Joe Biden, Obama revealed his core temperamental conservatism. It was a safe choice of someone deeply versed in foreign policy, and with roots that connected to the working class white ethnics he needed. It wasn't flashy; and was even a little underwhelming; but it was highly professional.

What we have learned about John McCain from his selection of Sarah Palin is that he is as impulsive and reckless a decision-maker as George W. Bush. We know this not because of what we have learned about this Pentecostalist populist since she exploded on the scene last Friday morning (and God knows we have learned more than we ever wanted). We know it because of how McCain made the decision. He wanted his best friend, Joe Lieberman, the former Democratic vice-presidential candidate for Al Gore. That pick would have been remarkable for its bipartisan nature, would have impressed independents, and signaled a centrist presidency centered on foreign policy.

It would have been bold while not being rash.

But McCain is in charge of a party that is now, at its core, religiously motivated. Joe Lieberman, for all his political talents, is Jewish, pro-choice on abortion, gay-inclusive, and domestically liberal. McCain faced an insurrection in his party base if he picked him. Without the evangelical base, he wasn't going to win. So last week, McCain picked someone he had only met once before.

I repeat: he picked someone he had only met once before. His vetting chief sat Palin down for a face-to-face interview the Wednesday before last. It's very hard to overstate how nutty and irresponsible this is. Would any corporate chieftain pick a number two on those grounds and not be dismissed by his board for recklessness?

The recklessness was much more fatal in the new media world than in the old one. In the old media world, the Republicans could try to control the flow of information, browbeat the press and prevent the entire weird family background and series of scandals and rumors of quite incredible events from getting into the mainstream. But those days are over. Within minutes of the announcement, everyone reached for oogle. I recommend for starters the two following stories that appeared in the Anchorage Daily News last March and April.

Within hours, the McCain campaign was under siege, as the vetting process the professionals didn't do was done by thousands of bloggers and citizen journalists. Palin's reality show family life, her vendetta against her ex brother-in-law, her endorsement of a mayoral candidate who ran against her own mother-in-law, her attempt to ban books in her local library, her friendship with one of her husband's former business partners, and on and on: this was the first major campaign event that was covered by the underground media before it reached the mainstream. The American mainstream press spent a large part of last week wondering how much truth the public could bear to hear.

McCain's entire campaign, moreover, was based on his superior experience to Obama, who was allegedly too unknown and risky for the Oval Office, and too jejune on foreign policy. And then McCain turned around and picked a total unknown who
had been a mayor of a town in Alaska of a few thousand and then had only just got elected as governor of a very strange state with 700,000 people. More to the point, there is virtually no record anywhere of her views on foreign policy in the public record.

There is one documented instance. It came in an interview with the Alaskan Business Monthly in December 2006. She was asked about the central issue of McCain's campaign: the surge in Iraq, which he championed. She said she hadn't focused on the war with Iraq but had heard about the surge "on the news." She then said that she hoped there was an "exit plan." That was it. So on the central issue of McCain's campaign, Palin took the opposite position to John McCain.

McCain's major domestic issue in the election, moreover, is the economy and the rocky time many middle class Americans are having. All the polls show that he needs to offer something tangible to counter Obama's reconstructed Clintonomics and universal healthcare. By his own admission, he has never been that interested in economic issues. And his vulnerability is the sense that he doesn't get how distressed many Americans feel. So who does he pick? A governor whose state is essentially an oil company and whose major problem in the two mintes she has been in office has been what to do with a $5 billion oil surplus! She decided to send half a billion dollars' worth of checks to every Alaskan this summer. And people wonder why
she's popular in her state.

It would be very hard to pick a governor in America who knows less about the struggles of most Americans in the current economy. Alaska's economy is currently like Russia's: booming because of commodity prices. And her one key policy issue in Alaska has been drilling for oil in the protected Alaskan National Wilderness Reserve - a policy McCain, against most of his Republican colleagues, has always opposed! Oh, and she's against protecting the polar bears as well. This is McCain's
green conservatism: building pipelines, drilling in protected wildernesses and screwing the polar bears.

There are other obvious liabilities with Palin. To say the very least, her private life and family are colorful. The rumors about them do not stop coming, and the tabloid press has only just arrived in what can only be called Arkansas with penguins.

Palin, moreover, currently has two ethics investigations into her conduct in the 18 months she has been in office - and one report is scheduled to go public days before the election. What was McCain thinking? And Palin's edcuation? Six colleges in five years ending in a degree in sports journalism from the University of Idaho. That's the background of someone who could be president of the United States at any moment after next January.

Who does John McCain think he's kidding? And what on earth was he thinking? This was a rash, impulsive, reckless pick. We have no idea where it's headed - and i wouldn't hazard a wild guess what we will have found out about Palin in a week's time. Maybe it will win some votes from evangelicals. Maybe Palin will reveal herself as something more than a former sportscaster who can deliver a speech. But it shows a deep unseriousness about governing the most powerful nation on earth at a time of great peril.

If you thought a president who went to war on flawed intelligence with no plan for the aftermath was reckless, then I have news for you. You haven't seen anything yet. Imagine the kind of decision-making McCain has just demonstrated applied to life-and-death decisions with respect to Iran and Russia.

Yes, you have permission to be afraid.

Read www.andrewsullivan.com for daily updates

Thursday, September 18, 2008

Palin/McCain - Too Dumb, 3

Senator Chuck Hagel of Nebraska:

"She doesn't have any foreign policy credentials," Hagel said Wednesday in an interview. "You get a passport for the first time in your life last year? I mean, I don't know what you can say. You can't say anything."

See the interview at: http://www.omaha.com/index.php?u_page=2835&u_sid=10435997

Monday, September 15, 2008

Palin/McCain - Too Dumb, 2

Columnists Matier & Ross, San Francisco Chronicle, September 15, 2008:

The former Alaska public safety commissioner who refused to fire a state trooper embroiled in a domestic dispute with Gov. Sarah Palin's sister says he holds no grudge, but still believes the GOP vice presidential nominee is too thin-skinned for the job she hopes to fill.

"She apparently has difficulty compartmentalizing personal feelings from official acts," said Walter Monegan, who spent 33 years in the Anchorage Police Department - five years as chief - before Palin named him as the state public safety commissioner late in 2006."

Read the rest at: http://www.sfgate.com/columnists/matierandross/

Saturday, September 13, 2008

Palin/McCain - Too Dumb To Serve

This duo would be a disaster for the United States.

McCain's primary claim is that he is strong on defense because he stood up to torture. The reason he was shot down and captured is that he disobeyed orders from smart people and flew where he was not supposed to fly.

At the first news of the Georgia/Russia dust up, he pronounced that he was a Georgian and that we should invade South Ossetia and fight Russia.

Even the blood drunk Cheney/Bush duo is smarter than that. The Bush administration took force off the table right away.

Imagine a President dumber than Bush.

Now imagine a President dumber than McCain. That would be Sarah Palin.

McCain will die in office if elected - even Matt Damon knows that.

Then Palin will be President. She echoed McCain's 'Let's fight the Russians' after the issue was firmly in hand by smart people: the EU headed by Sarkozy of France.

The EU made an agreement with Russia that has Russian troops withdrawing and European observers guaranteeing the peace.

C'mon folks, pay attention.

Saturday, September 6, 2008

Paranoid, Delusional Rant

Sometimes I don't sleep all that well. And, the mind wanders in trying to fit a theory to the facts. So, be warned - the following has no verifiable link to reality and may cloud your mind permanently. Read at your own risk.

It was 2.45 PM on a sunny August afternoon in Washington DC as Lord Darth Cheney paced relentlessly in his shuttered and darkened room. His mind was in a turmoil. 'Fear is money. fear is money', he muttered endlessly.

'My precious, my precious, what will happen to my precious?' he sighed.

His concerns knew no bounds. The Iraq situation was becoming almost stable, just a few deaths per day. Afghanistan was old news.

'How can I get more fear? After all, my precious babies need more food. What will happen if I can't get new contracts for Blackwater, KBR and Halliburton.? I need more fear. Will my precious starve? The democrats and that BLACK Obama will win and undo all my work. Woe is me, woe is me.'

Then a thought, a bolt of inspiration: 'The Cold War! I can bring it back! Oh joy, oh joy. Even Obama can't stop a Cold War.'

A caution crept in to his mind: 'But, Russia is acting maturely and everyone else just wants to live life. How can I bring back the Cold War if no one wants it?'

The answer came in a flash: 'Perception is reality! Ah Ha! I don't have to do anything but create an illusion of Cold War. That's simple. All I need is a trigger.'

Like a bolt from the black, a call on the secure line from Tbilisi: 'Dickie, this is Saak. Just for your info, the usual rocket attacks are happening near South Ossetia. Nothing to get your panties in a bunch...'

Lord Vader, oops.....Cheney, hung up the phone and thought for a bit.

'Ya know,' he said out loud, 'it's perfect. Saak shells the Russian peacekeepers in retaliation for the rocket attacks - oops, I forgot to ask Saak where the rockets were coming from. But, it doesn't matter anyway. Rockets is rockets.

The Russians get pissed and invade Georgia to protect their citizens. Presto. Cold War. It's perfect. No one gets hurt except for a few Georgian and Russian troops and maybe some collateral damage to civilians. What a genius I am'

He calls Tblisi. "Oh, Saak, listen I know it's three in the morning there but we have a real problem. Listen I have reliable reports the Russians and Ossetians are killing and raping Georgian women and children. I can send you photos. You need to get the Ossetians now, right now. The Russians, not a problem. We got your back. NATO is behind you all the way.

No, no, don't worry about our Pres. He can't even find Georgia on a map. He'll probably just confuse your country with our state with the same name. You know, the state in the south, where "Gone with The Wind" was set. Yeah, Atlanta. You got it.

Congress? Don't worry about them, we have the Constitution so screwed up, they never will figure it out. And that's only if they find out at all, which they probably won't.

That's right, Saak baby. Go get 'em. The coast is clear.'

Thursday, September 4, 2008

Corruption in the USA - Primer

[Used with permission.]

Lobbying is a sore topic with me.

I have a seminar on "Corruption" which has dealt with it. In short- the US has legalized corruption through our lobbying "regulations."

There are 535 members of congress and many times that number of lobbyists. They in the aggregate spend several million per member each year.

In theory they represent legitimate interest groups. In practice there are very few of my interests represented!

Here is a quick example: a quote from a lobbyist explaining how the laws regulating lobbyists are worth less than the paper we wasted celebrating their passage.*

There is plenty of additional dirt on Google.

"Put it this way, legally, I could donate an unlimited amount of money to anyone I want.

I will give you a generic example, a law is in the process of taxing computers. Some environmental group is stating that the additional costs of recycling a computer is costly and that the people buying them should pay a 10% additional tax to cover the costs. They hired a lobbyist firm to make their cause and now there is a percentage of congress that is on board with this. Now we got tech firms calling us right and left (in this example). The problem is the law states that I can only donate a $5,000 or so per company. IE: The company can only donate $5,000 to a politician. But the system is so freaking backwards that when something like a tax on computers show up in congress that I could spend huge amounts of money for my lobby effort. In this example, I want to stress that this isn't happening.. it's just an example of how much money I could gather in about 8 hours if I needed it for this or that effort.

In this case, I would just inform a counterpart of this problem, and they would address their client within a day I start the ball rolling to have millions of dollars in Washington.

The key is not to have the checks come from my office, the key is to have it come from other like minded areas. So in reality, I generally call another Lobbyist that represents the firm in question.

I would get $5,000 from AOL because they want to continue to throw that 'buy AOL now icon on your desktop.

I would get another $5,000 from Intel because they want to continue to sell processors.

I would get another $5,000 from AMD because they want to continue to sell processors

I would get another $5,000 from Microsoft because they want to sell Vista.I

would get another $5,000 from Norton, because they want to sell their anti-virus stuff

I would get another $5,000 from Valve, because they want to sell video games

I would get another $5,000 from CDW, because they want to sell more products

I would get another $5,000 from Google, because they want more people to visit their site

I would get another $5,000 from Ebay, because they want more people to buy stuff from their site

I would get another $5,000 from Yahoo, because they want more people to visit their site.

I would get another $5,000 from Redhat, because they want to sell more servers

The funny thing is I didn't even get to the computer manufacturers yet

I would get another $5,000 from Dell so their product isn't taxed

I would get another $5,000 from HP so their product isn't taxed

I would get another $5,000 from Apple so their product isn't taxed

I would get another $5,000 from local firm ABZ so their product isn't taxed

I would get another $5,000 from regional firm ACB so their product isn't taxed

When all is said and done, my 8 hours of effort (1 business day) I could have anywhere between 5-10 million - all in $5,000 dollar donations from all the industries and firms that touch the PC."


--
Professor Bruce W. Bean
Lecturer in Global Corporate Law
September 2008

Wednesday, August 27, 2008

Swagger, Democrats

We are leading and we will win.

We are kicking ass and taking names.

Many Democrats are women who have been scorned by Republicans.

We have long memories.

We are coming for you, IF:

You are Enron and laughed about stealing from little old ladies by manipulating the energy markets. Where is Ken Lay now?

You are oil company directors who bribe congressmen and candidates for tax breaks, then use the money to buy back stock instead of investing in energy alternatives.

You are doctors who scam Medicare for profit.

You are investment bankers who packaged bad loans with good loans and lied about it, thus killing the mortgage market and creating a housing depression.

You are an industrial polluter who relies on Bush appointees and other crooked administrators to look the other way when you break the law.

You are members of Congress who sent our troops in harm's way with inadequate equipment.

You torture or approve torture including waterboarding in the name of the United States of America.

You falsify or distort election returns.

You are anyone who pillages our grandchildren's future for personal profit.

If you recognize yourself above, it is time to get religion or get out.

Bush will be there until January, then we will be looking for change.

Tuesday, August 26, 2008

Russia

Obama should begin talking with Putin and Medvedev now.

Putin has promised, according to an article by Vladimir Socor, that there will be more problems.

[http://georgiandaily.com/index.php?option=com_content&task=view&id=6624&Itemid=67]

Cheney and McCain are sure to make the situation in Europe worse.

What will Obama do?

Let's see a coherent Europe policy that leaves Russia baiting out, focuses on diplomacy and avoids war.

Obama's statement:

www.barackobama.com
Statement from Senator Obama on Russia's Decision
to Recognize Abkhazia and South Ossetia as Independent States
August 26, 2008

Chicago, IL -- "I condemn Russia's decision to
recognize Abkhazia and South Ossetia as
independent states and call upon all countries of
the world not to accord any legitimacy to this action.

"The United States should call for a meeting of
the United Nations Security Council to condemn
Russia's decision in coordination with our
European allies. The U.S. should lead within the
UN and other international forums to cast a clear
and unrelenting light on the decision, and to
further isolate Russia internationally because of
its actions. The OSCE must also send a serious monitoring group to Georgia.

"Georgia's economic recovery is an urgent
strategic priority that demands the focused
attention of the United States and our allies.
That is why Senator Biden and I have called for
$1 billion in reconstruction assistance to help
the people of Georgia in this time of great
trial. I also welcome NATO's decision to
establish a NATO-Georgia Commission and applaud
the new French and German initiatives to continue
work on these issues within the EU. The Bush
Administration should call for a US-EU-Georgia
summit in September that focuses on strategies
for preserving Georgia's territorial integrity
and advancing its economic recovery.

"Russia's government must respect the territorial
integrity and sovereignty of Georgia and other
independent states. Its refusal to do so calls
into question its commitment to the
responsibilities of membership to organizations
such as the OCSE and the Russia-NATO Council, its
application to join the WTO and the OECD, and
makes it impossible for Congress to enact the
civil nuclear agreement. If Russia's government
continues to violate the norms and practices of
the international community, the United States
and our allies must review all aspects of relations with Russia.

"Let us be clear, no one wants to see another
Cold War with Russia. The United States and
Russia have many mutual interests, and Russia has
the potential to become a critical stakeholder in
the international system. But Russia's recent
choices --not American or European decisions --
are threatening this potential and reminding us
all that peace and security in Europe cannot be
taken for granted," said Senator Barack Obama.

DMITRY MEDVEDEV on CNN:

'I have talked about this more than once. We will be ready to work with any American administration that the American people choose. We believe that the most important thing is that the new leaders of the US be guided by the real interests of the American people rather some farfetched ideological scheme. And if this does indeed happen, then I am sure that we will be in a position to reach an agreement on the very widest range of issues. We want to avoid any controversies and we would like to avoid a new edition of the Cold War. We would like to have full-value constructive relationships with our western partners including with the US. But to do so we need a dose of pragmatism and mutual respect.....

As to the missile defense problem, of course we
do not like to see new missile bases and radar
stations being built along our borders. We have
repeatedly stated our displeasure on this
account. But nevertheless, we never interrupted
the negotiating process, we are ready to continue
exchanges on this difficult problem. The issue is
the explanation that was given to us when we
asked why such bases are needed, why these radar
stations and missile bases are being built. They
told us they are designed to confront the threat
posed by rogue states, but than you have to prove
that. Meanwhile, our perception is that all these
weapon systems are being created around our
borders to put further pressure on Russia. We
don?t like this but nevertheless we are quietly
and constructively engaging in dialogue on this topic.'

Tuesday, August 19, 2008

Next For Obama

It's a horse race.

Recommendation: Confront McCain on his American beliefs.

For example, McCain thinks the market should solve social issues - let the strong survive.

But, America is a compassionate country, we believe in taking responsibility for all our people. We don't let the weak die from neglect.

That's why the Marines leave no one on the battlefield.

It's the American thing to do.

Tuesday, August 12, 2008

Cheney/Bush: Please Shut Up Now

You are lame ducks.

Sadly, some people may actually believe you. Then, other people will die.

Take a vacation from now until next March, in God's name.

Medvedev outlines six principles to normalize situation in Georgia
1449 GMT

MOSCOW. Aug 12 (Interfax) - The Russian and French presidents have adopted a joint statement calling on the parties to the Georgian-South Ossetian conflict not to use force and stop all military actions.

The statement outlines six principles to settle the conflict, and the two presidents urged the conflicting parties to follow them, Russian President Dmitry Medvedev said at a press conference in Moscow.

"First, they must not resort to force. Second, they absolutely stop any military actions. Third, there must be free access to humanitarian aid. Fourth, the Georgian armed forces need to be returned to their permanent bases. Fifth, the Russian armed forces will be moved back to their positions before the military actions. Sixth, the beginning of international discussion of South Ossetia's and Abkhazia's future status and ways to ensure their stable security," Medvedev said.

Sunday, August 3, 2008

Advice to Obama: Attack - Don't Be Kerry

John Kerry focused on not losing because voters did not like Bush.

He did not attack.

Sound familiar? read this piece:


http://www.latimes.com/news/printedition/opinion/la-oe-chait31-2008jul31,0,6008771.story

Tuesday, July 29, 2008

McCain Economic Advisor = Neocon

Same old, same old. Bush Redux.

McCain economics represents the classic management philosophy of failed companies: 'If it does not work, do more of it.'

Fresh Air from WHYY, July 24, 2008

Douglas Holtz-Eakin: The Man Behind McCain's Economic Plan

Douglas Holtz-Eakin has previously argued that keeping taxes low and health care costs down are instrumental to reviving the economy.

Economist Douglas Holtz-Eakin is the senior economic adviser for John McCain. Prior to working with the presidential candidate, Holtz-Eakin served as director of the Congressional Budget Office. He held positions on the President's Council of Economic Advisers during the administrations of George H.W. Bush and George W. Bush.

At present, Holtz-Eakin is a senior fellow at the Peterson Institute for International Economics. See at: http://www.iie.com/

Sunday, July 27, 2008

Two More Banks Fail

Is this the beginning of a deluge??

Let us hope not.

Let us ask the FED to do more.

Thursday, July 24, 2008

900 Banks in Trouble

'Every day in every way, things are getting better and better", probably misquoted from Candide by Voltaire.

The Fed says that 90 banks are in trouble. Independent observers say that the correct total is closer to 900.

Another stink bomb from Phil Gramm.

To repeat the call:

The FED has to be more proactive in bank regulation.

Failure to do so now will damage the national security of the United States.

Monday, July 21, 2008

Gramm Gone - Huzzah!!

Gramm resigns.

That's the good news.

The troubling background is that there are many mini-Gramms lurking around the Republicans.

'The price of liberty is eternal vigilance.'

Thursday, July 17, 2008

McCain = Gramm = Enron/Indy Mac

Just in case there was a doubt, Robert Scheer connects the dots in his column 'How about tough love for the bankers?' [http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/16/EDEP11PPMN.DTL&hw=scheer&sn=002&sc=571]

Phil Gramm advises McCain on economic policy. Phil Gramm was the moving force behind the banking deregulation that gave us the housing melt down and the Enron debacle, so far.

With McCain in the Oval Office, we will see more Enron's and Indy Mac's.

BTW: recent reports suggest that more than 100 US banks are in trouble. As economists know, the banking system is a critical part of the domestic money supply and, by implication, the entire US and world economy.

It is time for the FED to get off its chair and act to secure our money supply from stupid and or crooked bankers.

It is in our national interest.

Wednesday, July 16, 2008

Oil Shock Inflation

Seems what we have is a classic cost-push inflation.

Trouble is that monetary policy does not work well to contain cost-push inflation.

Resolution is simple: the FED should let the oil shock work through the economy and not raise interest rates to control price increases.

Seems to me that the Fed is a tad overly concerned about inflation and a great deal under concerned about jobs. A little inflation can result in more jobs.

C'mon Ben, give us some jobs. Prices are going up anyway; at least with a job we can buy food.

Friday, July 4, 2008

Mini-Bush McCain

McCain's recent hiring of Bush's campaign manager creates a need and an opportunity to tie him closely to Bush in the strongest language.

The need is because we can expect Bush-like campaign tactics and policies from McCain in the future - unethical, negative, untrue and perhaps effective.

It is an opportunity because a large part of the voting public really wants no more of Bush.

For example - McCain is a fine American and a genuine hero. But, he wants to win so badly that he has made a deal with the Bush/Rove campaign organization. We can expect more swiftboat tactics; and, a possible repeat against Obama of a similar accusation against McCain that he fathered a black child.

Because McCain is doing poorly in the polls he will probably seek the most divisive form of campaigning possible. He will also studiously disavow any questionable tactics while directing and approving them.

Part of his deal will probably be a sell out to corporate interests. So, with a president McCain we will get more of the Enron/Halliburton forces who have ruined the country.

Instead of peace, with a president McCain we will get more torture and more death - all in the name of national security.

Instead of cooperation with nations we will see our country continue to be the international pariah instead of the beacon of hope that it can be.

We will see more free trade agreements that have killed millions of American jobs and created vast overseas slums where people work on starvation wages.

We will continue reliance on oil as our primary energy source. And, we will continue to send US armed forces to act as handmaidens for the oil companies wherever there may be oil reserves.

The list is endless. But, Obama's campaign must make the links explicit and direct. The voting public has a limited attention span - they need to be reminded every day of the disaster that awaits a Bush/McCain presidency.

For example: 'There is a mortgage crisis and people are hurting. A McCain administration will make it worse because he will sell out to the banking interests instead of helping homeowners.'

It would be wonderful to take the high road, but McCain has chosen the low road by his choice of staff.

Reminds me of a misquote that may have some application: 'Yea, though I walk through the shadow of the Valley of Death, I have no fear because I am the meanest SOB in the valley.'

Monday, June 16, 2008

Obama Anti-Business?

There is a fear - with some justification - among the business community that an Obama presidency with a Democratic Congress will result in more regulation and anti-business laws.

Business interests should ABSOLUTELY NOT be concerned about Obama's business stance.

Here's why: Businesses create jobs and we need more jobs in our country. That means that we need businesses to do well.

In order for businesses to do well markets must function effectively and fairly. To function effectively, markets require stability, transparency and fairness. And, to get better levels of those qualities, markets require effective regulation.

It is no secret that the past eight years has seen a tilting of markets in favor of established interests, away from effective regulation and toward harming the less powerful.

The USA needs to restore a more fair balance of interests in markets. After all, if consumers and investors do not trust businesses - and the polls show that is the case today - then businesses will do less well.

Bottom line is this: businesses need consumers who can afford to buy products.

Business interests should applaud and support any Obama initiatives which level the playing field and provide more stable market environments. It is in their self-interest to do so.

Wednesday, June 11, 2008

Economic Claptrap from McCain

McCain says he does not understand economics.

When you're right, you're right................

Here is a political response to Cainomics.

The McCain campaign fills the air with pretentious nonsense about economics and they do so very aggressively. Obama's best response is to be even more aggressive, but with logic and compassion.

Here are some examples:

1. Cainomics suggests that businesses need more profits to create more jobs. So, taxes on business must be cut or we will lose jobs.

Response: Confusing claptrap. Businesses hire more people only when they expect more sales. If profits go up with no expectation of sales increases, business owners take a vacation or buy a boat. Cutting taxes on business encourages more consumption by business owners - it does not create jobs.

What it really does is to transfer wealth from working people to business owners.

2. Cainomics states that business tax rates are about the highest in the world.

Response: That's true, but only if you consider corporations. If you consider small, unincorporated businesses, US tax rates are about average.

Also, since most jobs come from small businesses, the corporate tax rate has little or nothing to do with job creation.

Here's a proposal - let's cut the corporate, federal tax rate by 5% [to 30%] but in exchange, corporations agree to give up tax treatment that encourages job outsourcing and transferring assets to shell corporation in the Cayman Islands and Vanuatu.

3. Cainomics states that Obama will raise taxes on all people.

Response: This is a flat lie and an embarrassment from a national hero. Come on John - you're better than that.

4. Cainomics states that the economy is fine and that the Bush policies of tax cuts for the rich are working.

Response: They are working to make the rich richer and the poor poorer. The average family is in trouble and Bush tax cuts are making them worse off, not better.

75 million people in this country have no health insurance or inadequate health insurance. They don't dare get sick - they are an illness away from financial disaster. That's 42% of the population between the ages of 30 and 65.

5. Cainomics states that regulating business is a failed policy that we have tried before and that did not work.

Response: Wrong.

Fact: Most high growth economies, including the USA, have extensive business regulation.

Fact: Unregulated markets were tried until 1932 when the lack of regulation created the Great Depression. Since then, every country, including the USA, has regulated markets extensively.

Fact: Unregulated free markets always create monopolies and greater income disparities - the rich get richer and the poor get poorer.

6. Cainomics states that since savings creates the pool of capital businesses need to invest, any tax increase will reduce savings and reduce job creation.

Response: Pure claptrap.

Fact: Most capital creation occurs in corporations today, not from individual savings.

Fact: The capital pool is growing and readily available to sound business expansion.

Fact: Businesses get capital from a world wide pool of banks, venture capitalists, and wealthy individuals. Changing laws in the USA does not affect the world's capital markets significantly.

Thursday, June 5, 2008

Class Act

I wanted you to be one of the first to know: on Saturday, I will hold an event in Washington D.C. to thank everyone who has supported my campaign. Over the course of the last 16 months, I have been privileged and touched to witness the incredible dedication and sacrifice of so many people working for our campaign. Every minute you put into helping us win, every dollar you gave to keep up the fight meant more to me than I can ever possibly tell you.

On Saturday, I will extend my congratulations to Senator Obama and my support for his candidacy. This has been a long and hard-fought campaign, but as I have always said, my differences with Senator Obama are small compared to the differences we have with Senator McCain and the Republicans.

I have said throughout the campaign that I would strongly support Senator Obama if he were the Democratic Party's nominee, and I intend to deliver on that promise.

When I decided to run for president, I knew exactly why I was getting into this race: to work hard every day for the millions of Americans who need a voice in the White House.

I made you -- and everyone who supported me -- a promise: to stand up for our shared values and to never back down. I'm going to keep that promise today, tomorrow, and for the rest of my life.

I will be speaking on Saturday about how together we can rally the party behind Senator Obama. The stakes are too high and the task before us too important to do otherwise.

I know as I continue my lifelong work for a stronger America and a better world, I will turn to you for the support, the strength, and the commitment that you have shown me in the past 16 months. And I will always keep faith with the issues and causes that are important to you.

In the past few days, you have shown that support once again with hundreds of thousands of messages to the campaign, and again, I am touched by your thoughtfulness and kindness.

I can never possibly express my gratitude, so let me say simply, thank you.

Sincerely,

Hillary Clinton

Tuesday, June 3, 2008

What Should Hillary Do?

Hillary asks: What should I do?

OK, I am game - here goes.

1. The country needs a Dem as President and it will be Obama.

2. McCain will not be easy - Obama needs all the help you can give.

3. Yes, you received 18 million votes, but they were for the country more than for you.

4. Do NOT cause a floor fight in Denver.

5. DO - get a say in policy - the country needs that from you.

6. VP - not VP - makes no difference - serve your country by vetting ALL Obama's policies.

7. Do - bring your core to the party: older voters, hispanics, working whites, etc. Make Obama's case to them and win the election. Obama cannot do it without you.

8. May God save the United States of America.

Monday, June 2, 2008

Let's All Be Adequate

What do we all need?

After election - and perhaps as part of the general election campaign - the country needs competence in government.

The Bush legacy is incompetent cronies who systematically encourage law evasion.

The new administration really needs to restore simple competence in governing. As a citizen and taxpayer. I expect at least that from my government.

Let's have a holiday from new laws and just get everything working again.

Markets do a lot of things well, but markets require effective regulation to function best.

The mortgage meltdown is a regulation/Bush failure and not a market malfunction.

Let's fix the problems.

Wednesday, May 21, 2008

Hillary: Policy Attorney

Assuming Obama's nomination, what's best for the country?

We need a tighter campaign from Obama. He needs to go after Hispanics, women, working whites and the Ozarks aggressively and he needs all our help. He should not write them off, or many may vote for McCain.

Second, he needs some guidance on policy matters. He has demonstrated a tendency to shoot from the hip on critical questions.

If he is elected, then the policy guidance will be central to our country's future.

Hillary is great in policy questions.

Here's an idea: make Hillary Clinton the policy attorney in an Obama campaign and administration. Maybe V.P., maybe not.

Good entrepreneurs never ask an attorney what to do, but they do ask an attorney to make sure that their actions are mostly legal.

Don't know about you, but I would sleep better with that in place.

Wednesday, May 7, 2008

Takin' It To The Streets

In North Carolina the senator gives a speech that connects with most Americans. He reaches beyond his base to go after McCain.

See transcript here: http://www.washingtonpost.com/wp-dyn/content/article/2008/05/06/AR2008050603099.html

Please keep it up.

Tuesday, April 29, 2008

The (W)Right Race

With friends like these, who needs enemies??

Here is the problem for us all: McCain is a political idiot who will carry forward the Shrub's policy disasters. This is despite his strong personal integrity.

To Obama: you are probably the Dem nominee, but you have a fatal flaw: you seem unable to connect with most real Americans. Race, elite education, apparent discomfort around average people - whatever the cause, you need to correct the impression so McCain does not win.

Here's how: you are a constitutional scholar, so talk about how great the Constitution is, what geniuses were the framers. Piece of cake.

Talk about how you love the country - at every forum. Swallow the criticisms for a time and kiss the Statue of Liberty metaphorically.

Treat your reverend like a deep pile of sewage - there may be something at the bottom, but you don't want to find out.

Play one-on-one with a Chicago Bull. Laugh while you lose your shorts.

Go to Cubs games, sit in the bleachers and drink a beer. Boo the umpires.

Enjoy the perks, for God's sake.

Talk about who is better: Jefferson/Adams/Washington or Lincoln/FDR/Teddy R.

Talk about the American idea and what it means to you - just like a friggin' middle school essay. Won't kill you.

You can NOT rely on policy to get you out of this.

We all need you to get this, or we are in deep.

Tuesday, April 22, 2008

Pennsylvania

At this writing Hillary is declared the winner by somewhere between 5% and 10% and the baby wild bunny we call Baby is outside in a gentle rain shower, confused that his favorite spot is wet.

Good for Hillary, but what will the Supers do?

So far Obama can't deliver the win. He outspent her at least 2 to 1 and lost. Hillary has won all the big states we need to take the White House.

He seems unable to connect with the rank and file and older women and he will have to do that to beat McCain. Hillary already does both. But, it looks like he will be the nominee.

Let us hope that Dem chiefs figure out how to tighten up the Obama campaign before Mccain wins.

How do we make him appeal to the Dem base??

Anyone...................

Thursday, April 17, 2008

Democratic Convention

Last Sunday I ran for election as a delegate to the national Democratic convention.

I lost, but was truly impressed with all the candidates. There were 25 or 26 people vying for 3 spots. Any of them will do a great job.

It's good news.

Wednesday, April 16, 2008

Fixing NAFTA

Trade has raised its lovely head. So, what is the fuss all about anyway, you ask??

An objective observer who looks at trade deals will see some obvious things.

First, while some merchants who can take advantage of foreign markets are making a fortune, many of us are losing jobs to foreign companies which can make things cheaper than we can.

Second, our standard of living is going down as the costs of everything go up while our wages stay the same or go down.

Third, the same thing is happening everywhere, not just here.

Fourth, our politicians seem to be so completely mesmerized by the potential positive effects of foreign trade that they ignore what is happening to us every day.

What should we do about it?

We should ask our politicians to look out for us first. If an agreement will help the world's markets but will hurt workers in our country, then it is a bad deal and should be rejected.

It is that simple.

Look at NAFTA this way, then decide whether to keep it, change it or scrap it based on the net positive job gain to the US.

For any new trade agreements, the trade agreement proponents should be asked to calculate how many jobs will be lost and gained in the home economy from the new trade deal. If there is a positive job gain, then it's a good deal.

Can we put labor standards and environmental safeguards into trade deals so we won't be hurt?

No, we can't.

If an agreement hurts workers in our country, then it is a bad deal.

What about consumers who are able to buy cheaper goods from foreign countries than they can buy from our own companies? Won't they be hurt?

In the short run prices will go up a little. But in the not so distant future, we will all be better off because we will have more jobs and be able to afford more things.

Besides, prices are going up anyway because of the world oil crisis. Protecting jobs at home will hardly be noticed.

This is especially true in the USA because trade is still a small part of our economy. Despite what we think, products from China are only about 2% of our economy.

Why is it that so many politicians sell these deals so hard if there will be negative effects on our economy?

To fully understand the trade debate about NAFTA and the other trade agreements, we need to look at two things: Economic theory and economic reality, or the dollars lost and gained by vested interests.

Looking directly at the bottom line of economic theory we see some theories about markets and trade. These theories provide the base rationalizations for the Free Trade Agreements the US and other nations enter.

The first theory we see is called Comparative Advantage. This theory was written in about 1776 by David Ricardo. Basically it says that merchants in any country can make a profit from trading with merchants in other countries even if their costs are higher in the home country. Home country merchants will buy products made in the home country which are comparatively cheaper than other products made in the home country even though these products are more expensive than world prices; then the merchants will sell the home country products at world prices taking a loss and use the money to buy world products at world prices which they can sell in the home country at a huge profit.

So, the reasoning goes, all the merchants in the home country will specialize in making products which have the relative, comparative advantage in the home market and sell those products in world markets.

When every country's merchants do this, the consumers in all countries will be better off because the merchants in all countries who specialize will create more goods in total.

This is a really wonderful idea even if it doesn't work. It is such a wonderful idea, and also so difficult to understand, that merchants who benefit from trade use this idea to argue against any interference with their trading rights. After all, any taxes on trade (which are called tariffs) will interfere with specialization and reduce the total amount of goods and services produced in the world.

Here is an argument which promises the best of all possible worlds for everyone and is very hard to understand. Is it any wonder that people who gain from agreements based on this idea will defend them tooth and nail?

Second, the twin ideas of Free Markets and Free Trade sound so very good, they must be essentially American. Who can argue with the idea that a free market economy with free trade will bring us the best possible world? And indeed, it has already, hasn't it?

In fact, the USA does not actually have Free Markets or Free Trade. Most markets are regulated very highly today. Most of our complaints about markets happens when government regulators do a bad job, not when a market fails.

The reason for the mortgage crisis we are in now is that we loosened banking regulation on commercial banks and did not regulate the mortgage markets at all. Our crisis today is a failure of regulation, not a failure of markets.

Is there a way out of this mess?

Yes, there is. The federal government needs to manage trade so the harmful effects of trade agreements are minimized. To see how to do that, go to my essay on Balanced Trade here: http://www.mkeever.com/essay.html

For further background see: GLOBAL TRADE AND CONFLICTING NATIONAL INTEREST, Ralph E. Gomory and William J. Baumol, MIT Press, Cambridge, Mass. 2000 ISBN -10: 0-262-07209-2

Copyright, 2008 by Mike P. McKeever, Santa Rosa, CA. This text can be posted in any electronic forum or quoted with attribution in any printed media. For publication in printed form please request permission from the author: email: mpmckeever@earthlink.net.

Wednesday, April 2, 2008

Pelosi: Vote Your Conscience

WASHINGTON (AP) — House Speaker Nancy Pelosi said the superdelegates who may ultimately decide the Democratic party's presidential nominee have a right to vote as they wish.

See article on link above

Sunday, March 23, 2008

Obama's Iraq Plan

Senator Obama obliges us with a speech March 19 about the war. Read the prepared transcript at the link above.

Sadly, I am underwhelmed and concerned for the future of the country.

Are there any experienced adults who vet the speeches at all?

Some of the material is just embarrassing.

Do you really want to send foreign service officers and USAID staffers to posts where they may be killed?

Has NATO consulted with you about their positions before you chastised them for inadequate action?

Memo the the Senator: We get that you opposed the war in a 2002 speech; you do not have to make an issue of it every time you address the war.

What do we do now?

Wednesday, March 19, 2008

Reflections about Race

So, it's good that Obama talks about race.

But, IMHO, the real question is class.

He missed a great opportunity to talk about race and class.

He chose to talk about race only.

Too bad for the USA.

Tuesday, March 18, 2008

Thursday, March 13, 2008

Snake Oil

Some may ask: what is the problem with Obama anyway?

Good question. Especially in the light of the race issue raised recently. As an old white guy, I am really afraid to even mention the issue. I don't say that lightly.

Watching Chris Matthews' Hard Ball discussion of Obama the other night, I was disheartened to hear the following statement from Chris, to the best of my memory:"If you don't like Obama you are racially prejudiced." I turned off the show at that point.

Here's my problem: his campaign is run at the lowest common denominator of politics. His web site asks you to believe in him on its home page. Then his campaign, very cynically in my view, promises people that he will solve all their problems without mentioning any specifics. It's a religion, not a political campaign.

Reminds me of the frontier years: 'This oil is made from genuine snake skins and is available only today - it will cure your colds, fix your cancer, stop the gout and plow the back 40. You have my personal guarantee. Only one measly dollar a bottle. Who will be the first among you?'

Senator Obama: as a nation we are at a crossroads. Either we will go down the road of increasing divisions between the government and the people or we will reverse the trends and move toward restoring the American Dream.

But, we can't move in the right direction based on hope and trust. We are Americans. We deserve answers, not platitudes.

Senator Obama: I don't care if you are black or purple with yellow stripes. I do care that you insult my intelligence and patriotism with vague promises.

Show us your concrete plans and talk about them. Your website has lots of policy proposals. Now is the time to flesh them out and name some people who will accomplish the specific tasks we need accomplished in a competent fashion.