Sunday, March 8, 2009

Is The Bailout Healthy For Us--Now?

Could the bailout(s) be really, really bad for us? Right now, I’m not sure anybody can definitively say. We’ll all have a much better idea a year down the road when we have the advantage of hindsight. But there is room to wonder right now.
But what if? (What if’s are wonderful games to play in history—what if Nye had been reinforced with infantry at Waterloo? What if Lee had side-slipped Meade at Gettysburg and gone straight for Washington or Philadelphia? What if Patton had had more fuel in the summer of 1944, etc.) So let’s play “what if” with the American/world economy.
I tend to think of economic ups and downs as being subject to the same sorts of natural laws that impact objects in nature. Take away support and gravitational forces will bring a boulder down. Bring a comet near a planet and its orbital path will be affected—and so on.
(Nor am I, may I quickly add, any sort of useful prognosticator when it comes to individual stocks or companies. I have sometimes been accurate in my predictions about general movements in the economy, but not about any particular element in that economy.
For example, should you buy Google because its version of “cloud computing” is going to alter the world and make its shareholders stinking rich? I have no idea. Is Windows based computing likely to be supplanted over the next few years (maybe by Microsoft?)? Logic says yes. Windows (and its DOS foundation) is too inefficient to be useful far into the future. See what I mean?)
It is my belief—and has been for decades—that costs of things like housing and automobiles have gone far beyond the reasonable in the United States. People come out of college with massive debt; they buy a “starter” house for hundreds of thousands; they buy automobiles that cost the price of a nice house when I wasn’t all that much younger. I don’t believe this is sustainable.
We’ve got too much competition out there that is willing to work for a fraction of the wages Americans need to maintain their debt. This competition is increasingly well educated—and, increasingly, leaving the United States after getting degrees from MIT, Stanford or Wharton. They are going back to China or India because opportunities are better there.
What if the entire American economy NEEDS to downshift? Just to survive? Millions of members of the new world middle class already know that if you own a roof over a thousand square feet, if your belly is full, and if you have public transit or a $10,000 car to get you to work, life can be satisfactory.
One television, one computer, one phone—that sort of thing. That’s what we are competing against.
What if the present downturn in the American economy is an attempt (by natural economic forces) to get us back to a sustainable level of living in a competitive world? What if just letting it all go down until it reached a “natural” bottom might be the best thing we could do?
What if letting this happen to its full extant and immediately (bye bye GM, bye bye Bank of America, bye bye whatever else needs to fail) would get us back to where we need to be to compete. Hitting that “bottom” would be the logical moment to take the massive resources we are currently using for a bailout today and put the economy back together.
What if, by attempting to bail everybody out NOW and keep income and prices up at their current levels, we are just ensuring a much harder landing? What if all the money we can borrow will have by then been frittered away on the bailouts and we won’t be able to borrow any more to get things rolling again after the real bottom has been reached?
What if? What if? What if? Is anybody in Washington or New York thinking of this possibility?
Just let it all drop until it reaches its natural bottom—where we are competitive again. Then coming in with a huge bailout to get the wheels turning again—at a level we can sustain and compete at—could be very good for us.
The college I went to cost me $360 for the first year’s tuition. Books, fees and materials were another hundred. I could earn that in a summer. Can any summer job earn the $27,000 it costs to go to the same school now?
Maybe the bottom won’t be as bad as it sounds. Especially if we have the bailout money intact, held in reserve for the strategic moment. Imagine if your kid could earn his tuition working at the corner grocery store!

Saturday, March 7, 2009

A Knighthood For The Last Kennedy

This past week, British Prime Minister Gordon Brown knighted Senator “Teddy” Kennedy. Actually, the queen knighted him—at the British government’s request—but the PM brought the news and the accolade when he visited Washington.
How the circle goes around. That’s one of the things I find so fascinating about history. Here’s the queen of England—old enough to well remember—knighting the son of Joseph Kennedy. In many ways this has to be a very definition of the word “irony”.
Perhaps it’s proof that if enough time goes by even the most offended of cats can learn to appreciate a dog. Or vice versa. What makes it all the more delicious is the fact that a great part of the knighthood honors the senator for his behind the scenes work in making peace between England and Ireland.
I’m an admirer of the senator. If you ask me he proved to be the best and most useful of the four Kennedy brothers. So I have nothing against him being knighted—for all of me they could have made him an honorary Grand Duke. It’s just the irony of it.
His father, Joe, a Roosevelt stalwart and a member of FDR’s administration finally was finally offered the job that comes to a lot of wealthy political supporters—ambassador to the court of St. James. It takes money to do that job; Joe had it.
So, on the eve of World War II, he arrived in London as our ambassador. There was only one negative and, unfortunately, it was a big one. Joe Kennedy sprang from that wave of Irish immigrants who had eight centuries of memories to remind them of how much they hated the British.
As they used to say in Chicago, with its large Irish population, you ran for mayor of Chicago by running against the King of England. Things were little different in Boston where Kennedy came from. There were long and bitter memories of the potato famine that left so many Irish to starve.
Memories of the Battle of The Boyne where so many Irish were killed by the English that the north of Ireland was repopulated by Scotch immigrants (thus the northern counties that remain loyal to England). Memories of the more recent “Troubles” in which Irish revolutionaries fought three long years to oust the hated English “Black and Tans” after World War I.
As the war began, Ireland immediately turned on lights as beacons to guide German bombers to British cities. Rather than take the risky route home through the North Sea to Germany, German submarines were welcome to refuel and rearm in Irish ports. German seamen took their leave on the streets of Irish cities.
As if that were not enough trouble for beleaguered Britain battling its way through the “Blitz”, they had to put up with a pro-German American ambassador. After the British were driven out of France in June, 1940, and the bombing began, Churchill and Roosevelt struck up a close relationship.
They would call each other nearly daily to update each other on the war effort. American and British general staffs had been collaborating on long term war strategies since the fall of 1939—and this required collaboration at the very top. (The allied general staffs would not sign off on the final version of American strategy in World War II until April, 1941, only a few months before Pearl Harbor.) This collaboration had to be conducted behind the back of the American ambassador.
In fact, Churchill and Roosevelt made a joke out of finding ways to communicate with each other without involving Joe Kennedy. Finally in November, 1940, Kennedy went on record saying that England wasn’t fighting to save Democracy—that “Democracy was about finished in England”, and that it didn’t have much future in America either.
He was politely removed within weeks. The threat from Ireland continued until a month after Pearl Harbor when two divisions of American troops were sent to Northern Ireland as a very explicit threat to Ireland proper. German subs were suddenly no longer welcome and the Irish turned off the beacon lights.
Ireland became the first Hitler ally to quit. She was out in January, 1942. Kennedy’s political hopes lay in ruins and he had to turn to his sons to fulfill his ambition to see an Irishman in the White House. The son who made it paid homage to Mr. Churchill by making him an honorary American Citizen in 1961.
And now, the same English Crown that Mr. Kennedy hoped so fervently would fail and fall has reached out to his youngest son and made him an honorary knight of the realm. For finally making some kind of peace between England and Ireland.
Ireland really ought to turn those beacon lights back on in salute.

Friday, March 6, 2009

Cops For Columbus--The Rest Of The Story

Barack Obama flew to Columbus, Ohio, today to celebrate the graduation of 25 new officers from their police academy. These men will have jobs for at least this year because of the stimulus package which will give Columbus one million dollars to pay their first year’s salary.
That was the big story on network radio this morning. Public Radio added the fact that Columbus remains in such bad shape that even with these new cops they will have fewer police officers next year than they have now. Attrition, layoffs, etc.
And, it added, no new academy classes are expected. So what did that million dollars actually buy Columbus? Take away the cost of flying Obama and his entire entourage to Ohio, and it’s just about a wash. That’s typical for presidential politics.
This morning’s story brings to mind an experience I had during the election year of 1964. That was the year Lyndon Johnson buried Barry Goldwater under the biggest presidential landslide in history. I like to think I contributed a tiny bit to that landslide.
I was the newbie that spring, working for the Diabetes and Arthritis Program of the US Public Health Service—my first step on the government ladder. Our program had shelf upon shelf of articles and pamphlets on these two diseases. Some were twenty and thirty years old. Or older.
Whenever someone wrote to us—or a Congressman forwarded a letter to us—asking for help with either of these two diseases, we loaded up an envelope with the most recent materials and fired it off to him. No one had taken the time to weed the obsolete materials so they just sat on the shelves gathering dust.
One day that spring we got a memo from on high. Our program—and probably every other program in the federal establishment—was ordered to go through our obsolete materials, throw them away, and send back an account of how much each item had originally cost.
It took me a few days to do this, but I dutifully cleared out the shelves and sent off the report. About a month later, there was a small headline in “The Washington Post” and several other papers. President Johnson was announcing that he had saved the American tax payers such and such million dollars by eliminating superfluous publications. I laughed a lot.
(No one bothered to factor in the cost of my time and the time of all the other program newbies in the entire federal government who spent the hours tossing and counting. Take that away and the savings would have been a lot smaller.)
About a year or two later as the “Great Society” was being alternatively stitched together and unraveled, the papers were full of another health program for the underprivileged that was funded by Congress to the tune of $100 million—serious money in the ‘60s.
How much of that $100 million did this new program actually receive? Two million. About enough to rent space, acquire desks and phones, and hire staff. The other 98 million was re-allocated by the White House to pay for the war in Vietnam.
(Supposedly re-allocating Congressionally appropriated money should require some input from Congress—but boys will be boys, as every president eventually proves.)
This was not unique during the Sixties. I suspect it was not unique before or after the Johnson administration. I just happened to be on hand for this one. So I listened to the story of Obama’s flight to Columbus with a strong sense of déjà vu.
Another way to put it is every time you hear something wonderful about what the stimulus package is doing, listen for that little Paul Harvey voice saying, “And now for the REST of the story.”

Thursday, March 5, 2009

Rush Limbaugh--Republican Leader?

Rush Limbaugh bothers me. I stopped listening to him in 1993—but that didn’t make him go away. I even stopped reading about him after he made the papers six years ago for taking too many drugs. That didn’t make him go away either.
I was introduced to his radio show probably in about 1990 or so. A brilliantly precocious high school age young man started raving to me about Limbaugh when his family, ours and a few others met for coffee after church. I was impressed enough by the young man’s intelligence to start listening.
At the same time, something about the young man disquieted me. He was very bright. I agreed with much of what he said—but I was struck by something about him. For all of his perceptiveness and insight, he was without ruth, lacking in a basic sense of human kindness and very ready to be contemptuous of people who disagreed with him.
In short, he might have been a close relative of Rush Limbaugh. After all, what is Mister Limbaugh but a grown up version of the sneering high school big shot who sits, surrounded by his nodding and giggling sycophants, deriding everyone and everything not in his immediate group.
One of the reasons his followers stay with him is his accuracy. He sees sometimes all too clearly the foibles of his fellow humans. (One wonders how accurate that same vision is when he looks in the mirror.) But he is without pity. There is nothing in him of the gentleness implied in the very word, gentleman. There is no empathy, no kindness, no understanding of a different point of view.
I’ve dealt with many of these jeering—often genuinely intelligent, even insightful—self-proclaimed high school savants during my years of substitute teaching. I’ve sent a few out of the room; I’ve embarrassed a few into silence; I’ve ignored some. But, in any case, they do not make anyone’s day easier or more productive.
Pollsters say Limbaugh has an audience of about 14 million devoted fans. As a percentage of 300 million Americans, that’s about the same percentage of followers—in a room of 30 students—as each of these high school wiseacres had.
The rest of the room would just shake their heads, look blank, work on their assignments. There would be an occasional laugh as the junior Limbaugh said something actually funny—but the general attitude was one of disapproval and even annoyance.
Polls say that more than 60 percent of Americans have an unfavorable impression of Rush. That fits. After all, what else is Rush Limbaugh but a sophomoric kid who hated school, had a quick mind and a sharp tongue? We all remember a few. Limbaugh is merely the “best” of that type of student.
Non-student, really. He hated class so much that he quit school and went to work as a radio jockey. Soon enough he realized the monetary advantages of being what we call a “shock jock”. He had the wit and the utter indifference to human decency to be good at it. Very good.
They say he may be the best there ever was. His earnings certainly suggest that. He’s still on the radio, commanding a huge audience, jeering, sneering, occasionally making the entire nation laugh with a well placed mot.
Furthermore, when reporters ask the Democratic leadership who actually leads the Republican Party, they answer to a man: the Shock Jock—Rush Limbaugh. Newsweek reports that the new chairman of the Republic National Committee has already backed down in front of Rush Limbaugh.
I’m sorry. However correct Mr. Limbaugh may often be in what he sees, however perceptive—his sneers and his jeering contempt keep me from being at all comfortable with such a man as a leader of a party I want to be identified with.
We Republicans are too often accused of being the party of those indifferent to the human plight for there not to be some smidgeon of truth to it. Must we loudly affirm our mocking inhumanity by allowing a Rush Limbaugh to become our de facto leader?
It took years for Republicans to find the nerve to oppose the equally glib and cruel Senator Joe McCarthy; how many months or years will it take until the entire Republican establishment stands up and censures this manifestation of the darker side of conservatism?
(In fact it took losing both houses of Congress in 1954 for the Republican leadership to realize McCarthy was hurting them. Only in the lame duck session that December did they finally censure him.)
If Rush Limbaugh is allowed, unchallenged, to go on speaking for Republicanism and conservatism, then we deserve to be out of power again—for a long, long time.

Sunday, March 1, 2009

Islam And The West (2)

As I wrote before, quarrels with Islam are nothing new to the United States. The US Navy was created to fight Muslim pirates on the North African coast in 1794. (Constitution, Constellation, and so forth.) American ships were being seized; Americans were being sold into slavery by the Barbary Pirates.
By 1800, as much as 20% of the federal budget was going to pay tribute to Muslim pirates so that they would not attack American shipping. It didn’t work. We just didn’t have the kind of money Britain or France could afford to pay them.
From 1801 to 1805 we fought the First Barbary War off North Africa. When Stephan Decatur made a national hero of himself by slipping into Tripoli Harbor and destroying a captured American warship in 1804, Britain’s Admiral Lord Nelson called it the most daring naval raid of the era.
We were forced to fight a second Barbary War in 1815. This finally slowed the pirates down, but we dared not withdraw our military forces until 1830 when France occupied much of the coast of North Africa and brought piracy to a momentary end.
I said “momentary end”. After the French left in 1962, piracy resumed. Ten years later, my sister-in-law was backpacking across Europe after graduation. She spent a night on the beach of the Spanish island of Majorca facing the Mediterranean. In the morning she learned the Muslim pirates had struck only a mile down the coast and kidnapped several European girls.
(The British went into East Africa in the 1880s to finally end the slave trade. Like piracy, slavery only stopped until the Europeans were gone. It has resumed today—yes, that’s the same Muslim slave trade we bought into in the 1400 and 1500s.)
There has always been piracy along the North African coast. The Romans dealt with it, and so did their later European offspring throughout the past two thousand years. The recent rash of piracy is attributed to the fall of Granada in Spain in February 1492.
The Muslim Moors were driven out of Spain—after a seven century war by the Spanish to recapture their country—and they sought revenge by attacking from their homes in exile in North Africa. They ranged as far as Iceland, attacking up and down the English Channel and rendering the whole Mediterranean coast of Europe unsafe for settlement.
Perhaps a million or more Europeans were captured and enslaved (a few wealthy ones were ransomed), and hundreds, perhaps thousands, of ships were captured, looted and destroyed. Not since Viking times had there been such a seaborne threat to Christian Europe.
Of course the Muslims were free to do this because for much of this period Europe was wracked with wars and rivalries between Europeans. The Wars of Religion—between Catholics and Protestants, the wars of empire between France and Britain (involving Holland, Austria, Russia, Spain, Portugal and Prussia), and the Napoleonic Wars kept Europe too busy to worry about piracy.
In fact Europeans often encouraged the Muslim pirates to attack ships of their Christian rivals. This situation didn’t stop until after the Congress of Vienna in 1915. Then the increasingly industrialized European states could turn on their Muslim tormentors and bring piracy to a halt.
When the Europeans—notably the French and British—pulled out of this part of the world after World War II, it should not have surprised us to find ourselves facing an increasingly dangerous power vacuum into which we HAD to interpose our own forces. If nothing else, other Europeans would have.
The Russians tried during the Cold War. Today we see something similar to the machinations of the Eighteenth Century as we watch the Russians and the French salivate over oil fields in Iraq and Iran, just waiting for us to weary and pull out.
After all—as someone who has read any history at all—knows, the fight between Christians and Muslims has gone on in that area since the AD 600s.
If it hasn’t stopped in 1400 years, it is hard to see why it is going to stop anytime soon—no matter who has a “reach-out” strategy. The wars which we westerners fight with that part of the planet actually far predate Islam or Christianity.
As we slog through Iraq, we are following in ancient West European footsteps—Alexander the Great led the way; Caesar followed; then came Byzantium and the Crusaders. After them came the Spanish navies, followed by French, British and Italian colonial powers.
Now come the Americans—somehow imagining that ours is a new experience. No, the comedy has been playing itself out for about 2300 years now. It is somehow fitting that our first naval ships were built to carry on in the wake of the Romans and the Greeks.
We call ourselves Greco-Romans, and we are. This—war in the Middle East—along with Pythagoras, the Iliad and the Odyssey is part of our European heritage. Trapped by oil and history, we will not quickly shake it off.
Those who imagine we can just shout, “We quit”, and go home in August of 2010 are sadly wrong.

Saturday, February 28, 2009

Islam And The West (1)

Allah only forbids you [to make friends]
respecting those who made war upon you
on account of [your] religion, and drove
you forth from your homes …
whoever makes friends with them,
these are the unjust.
The Examined One 60.9
The Koran

Allah does not love the unjust.
. The Elephant
The Koran 105.2

These are two very interesting passages from the Muslim Koran. Especially since, in the eyes of most of the Muslim world, we have made war on them on Iraq and Afghanistan—and with our air strikes in Pakistan. Not to mention our policy of backing Israel.
If we take the Koran literally—as many, many fundamentalist Muslims do—then they we see that their faith forbids them to make friends with us. If they were to make friends with us, they would be unloved by Allah himself. I should imagine that this type of passage will make life difficult for people in the American government who want to reach out to Islam.
In Muslim eyes we made war on Iraq; we drove tens of thousands out of their homes into neighboring Jordan and Syria; and we are guilty in Sunni eyes of backing Shiites, in Shiite eyes of backing Sunnis. It is still remembered by Muslims that President Bush spoke of making a “crusade”.
In their eyes we have done much of this “on account of their religion”. The passages give justification to those who train in Middle Eastern camps and dream of carrying the war to the very shores of “The Great Satan” as they did on September 11, 2001. How could Allah love them if they did not?
Like our crusading ancestors of centuries ago, we have grasped a tiger by the tail. It is a tiger with great patience—it took two centuries to dislodge the crusaders from Palestine and Syria, but they never quit trying. They made truces; they sent gifts; various factions even made temporary alliances.
But they never gave up their fundamental strategy of war to the finish against the Christian invaders. I hope quite fervently that our top diplomats all take a few hours to read a short history of those crusades.
They won’t like what they learn, but the consequences of not learning at all will be far worse. Like the crusaders who eventually had no home in Europe to go back to, we can’t just pack up and go away. The crusaders had their homes to defend; we have our oil necessities to defend.
We—the Christian West, primarily England and America—have had our hands on Middle Eastern oil resources since the first wells came in a century ago. By now Saudi and Kuwaiti oil wells are as essential to our survival as are the Great Lakes and California vegetable fields.
We’re as stuck as the crusaders were in the Twelfth and Thirteenth Centuries. We can make truces, send gifts, make temporary alliances—but we must accept the fact that the price of oil will always include blood. Ours and theirs.
The Twentieth Century hiatus that came when repeated defeats at Western hands rendered Islam quiescent, shocked into momentary acceptance of Western power, are over. They ended forever when the Shah was thrown out of Iran in 1979. We will never go back to the days when Armco was the biggest power between the Mediterranean and Indian Oceans.
The British, French and Turkish troops that once kept the peace in the region are gone. Now all that is left are American forces—facing a far more rebellious populace than those earlier occupiers ever did. The creed of religious conquest that sent desert hardened warriors out of Arabia to conquer the world for Allah in the Seventh Century has had a renewal—in Gaza, Iran, Pakistan and a dozen other nations.
Sending our armed forces into harm’s way in Muslim waters is scarcely new. Our first naval squadron was sent to the southern Mediterranean at the founding of our Republic. They stayed there until the French and British took over in the 1830s.
The Marine Hymn celebrates our conquest of Mexico AND our incursion into Muslim North Africa over two centuries ago. We’re kind of back where we started.
From time to time, I will go back in history and explain how, over the past 1,400 years we Europeans have been engaged in non-stop warfare with these same people. We should refresh ourselves in this background in order to understand what is going on now.
I hope Mrs. Clinton and Mr. Obama are doing the same. Islam, with its vows to convert or conquer us will be there long after the present financial crisis is dealt with.

Friday, February 27, 2009

Notice of Continued Administration

A friend of ours just got a notification from her brother-in-law’s lawyer. That’s the brother-in-law who’s handling her late father’s estate. All it consists of, after Medicaid and the nursing homes, is one two family house. It’s been for sale since the old gentleman died a year ago.
Three or four years ago, I’m told, people were calling him and asking to buy it. They were offering more than twice what he owed on it. As a duplex it made a nice piece of income property or a home for a family with grandparents to take care of. It was in demand.
The lawyer’s typed note was simple and stark. (She showed it to me.) It reappointed the long-suffering brother-in-law for another year as executor of an unresolved estate (one house that won’t sell) and gave as its reason: “The estate remains under administration.
The continued administration is necessary because Primary estate asset is the real estate, which has been on the market since March of 2008. No offers have been received and the property remains for sale. Estimated time necessary to sell unknown.” Unknown, indeed.
Family members told the old gentleman to sell four years ago. They ran the numbers and showed him how he could use the proceeds to buy into and maintain an assisted living unit where his meals would be just down the hall; he could go on playing with his computer and his television.
But he refused. This house is my children’s inheritance, he insisted. Such an inheritance! If you want to inherit a pain in the derriere. They’re going ‘round and ‘round. Whether to rent it out (with all the grief that comes from being a petite landlord), whether to sell it for what you can get now—even at the risk of a deficiency judgment.
Properties like it are selling, the real estate agent explained to them. But nearly everything that’s moving in the Grand Rapids area is foreclosed property at fire sale prices. Why should a buyer pay more than what he can get it from a bank for?
Just one more example of the kind of grief that’s going around this country now. Even the dead can’t sell out and move on. In my neighborhood, forty miles or so from the above duplex, there was still some movement last spring.
People weren’t getting what they wanted, but they were able to pay off remaining mortgages and move to other jobs. One couple followed her job to Mississippi, another followed his to Texas. Another retired to their riverfront cottage nearby—they had hoped to get enough from their home to pay off the retirement home. That didn’t happen.
Another chap lost his job and got out before he owed any more. They moved in with her folks. Then, in mid-summer, the sales stopped. There were lots of For Sale signs up but no movement. Not far away there’s an empty house—two years old—he found work in Florida last fall. The snowplow used their driveway this winter to dump the snow from the cul-de-sac. No prospects were using it.
I haven’t seen a sale anywhere around here since June, at the latest. My friend’s brother-in-law off in suburban Grand Rapids had no desire to watch over a house for a year! But it has a mortgage and he has family members who’d like a few bucks out of it. He’d probably like some too.
Meanwhile, he’s working his tail off—I’m told—trying to preserve the company he works for in the auto parts supplier industry. They’re laying off like crazy, but he’s still there—making sales calls and holding the hands of surviving customers.
His future doesn’t look happy. Today’s figures on General Motors’ losses raise real questions how long it (or Chrysler) is going to be around to buy parts from anybody. I have friends around here in the same boat. It doesn’t matter how clever an engineer you are, there’s got to be a company in existence for you to create parts for.
Moving to a another job—assuming you find one—gets vastly more complicated when you cannot unload the house you’re in. Double that—become an executor of a second mortgaged house—and life becomes an unbelievable joy.
No wonder people are mailing in the keys. People used to do that—pack the Conestoga and move on West. Only now, they tell us, a lot of the “west” is even worse off than we are.
A “Notice of Continued Administration” would have been so unnecessary only a few short years ago.