I know you are, but what am I?

Recently, the most prolific images on the network news has been the town hall meetings all across this country. The idea behind the town hall meetings is that elected officials would go back to their constituents to hear their wishes and concerns. The idea that we can have differing opinions and present them to our elected officials in person without fear of legal reprisal is something that makes this country truly wonderful.

In most years, town hall meetings go unnoticed, but this year is very different. This year these meetings have become increasingly more volatile. The issue that has dominated many of these meetings has been the issue of health care. There have been several people at these meetings who have called the President and his supporters “fascist.” There have been a whole host of images with the president in an SS uniform with a Hitler mustache and so forth. These people also suggest that if government fixes healthcare, it will lead us down the path to socialism and worse. There is something in these meetings that reminds me of fascism, and it isn’t Obama’s Kenyan birth certificate or a single payer healthcare system.

Before continuing with my observation, it may be helpful to put fascism in its historical context.

In the years after the First World War, Europe (particularly Germany) was in a very bad state. The war had left Germany, along with most of Europe, devastated. After Germany lost the war, France ordered Germany to pay exorbitant reparations. The Allied Forces said that Germany started the war and that they should have to pay the cost of not only the damage in Germany, but the damage in France and all the other Allied Countries as well. Germany began making these payments because if they did not pay, they would have been in violation of the peace treaty that ended WWI. When Germany claimed they could not pay anymore, the French took over the most lucrative industrial sectors within Germany.

So Germany, already bad off, had to pay reparations, then the sectors that could make the most money were taken out of German control. These actions left Germany effectively bankrupt. In the coming years the Great Depression would lead to massive unemployment and more poverty. The German government tried to fix this problem by printing more money, but this led to runaway inflation. Even if you had a job, the cost of everything was quickly rising so what little money you had was worthless. At the same time, the German government was becoming more inadequate. The government was ill equipped and unable to meet the needs of its people in changing world.

Into this disaster steps a young WWI veteran. He is charismatic and he takes the fear and frustration that the German people are feeling and is able to twist it to his political advantage. He takes the legitimate anger that people are feeling toward their government and channel that energy into action. He is able to target that anger toward what he finds politically undesirable in the country. He realized that people who are economically desperate will allow things to happen if there is a chance they can gain some measure of security. That someone, of course, is Adolf Hitler. And by the time Germany is defeated in 1945, Nazi Germany will have committed some of the most horrible acts of the 20th century.

Back to the 21st century.

As I said above, there are some things in the news cycle that remind me of the SS and I don’t mean Social Security. America is changing in many ways. It is changing demographically. There are more non-white people in this country and the percentage of minorities is growing. There are also more non Christian religions being practice now than there were when this country was founded. The country is changing in the sense that places that were at one time centers of industry are now being replaced. There are some people who are threatened by these changes. This changes for some create an feeling of uncertainty. We as a country are also facing many challenges economically. In my opinion, there is a group of people that are using the legitimate fear that people are feeling to gain political advantage.

I actually like John McCain. I would never say that a decorated war hero and a man of his accomplishments is a Nazi. What I am saying is that he allowed the fears of desperate people to be used for a political advantage. He ran a campaign in which his vice presidential candidate played on religious, racial, and economic insecurities of people to win votes. She took noble ideals like education and community service and turned them into something bad. She capitalized on the fear that some people have toward Muslims and tried to use that in the political arena. Thankfully this strategy didn’t work.

I am not suggesting that everyone who apposes Obama is a fascist. It would be silly to say that everyone who disagrees with his ideas about government is a Nazi. There are legitimate policy concerns with lots of what this administration is purposing. What I am saying is that some of his opponents are using economic uncertainty and prejudice to advance a political agenda. They are using a campaign of fear and generalization as the centerpiece of a political argument. They are making statements that fan the flames of political anger but are just shy of inflammatory (very skillfully done). I don’t think that these politicians are all racist, but I do believe that it may be a sound political maneuver to encourage the racism that some people are already feeling and try to win votes with it.

These are the things in the news that remind me of fascism. I am concerned as an American when I see the legitimate fear that many people have, being exploited. There are reasons to be afraid. We need to have a serious debate about where this country is going. I believe that we are at a turning point in our history. We will emerge from this experience as a completely different country. Whether this change is good or bad is something yet to be determined. What will determine the effectiveness of this change is the ability of this country, its leaders and its citizens to make sound decisions. I would feel better if these decisions were rational and not driven by fear. The people of Nazi Germany allowed hatred for their own government, fear of economic uncertainty and a distrust of peoples in ethnic and religious minorities to guide their decision making. Something is dangerous in this news cycle and it is not a government run public health care option or Medicare.

The role of government in our lives is a debate that we need to have. Both sides have valuable ideas as well as legitimate concerns. I believe that this debate cannot happen as long as our leaders are using fear and misinformation to shape the debate. This debate will not be helpful if people allow themselves and their fears to be played on by politicians. This debate will not be productive if politicians on both sides are counting on fear and prejudice to win the debate. Let’s stop the liar liar pants on fire 4-year-old B.S and have a serious discussion about where we are going as a country.

I KNOW YOU ARE BUT WHAT AM I INFINITY!!!!!

fool me once...

It is no secret that our country is facing serious economic challenges. One of the biggest challenges has to do with the bank bailouts. I have never been a fan of the bank bailouts. I think they should have been handled differently. (You can see my article titled “Bail THIS” written Friday December 12, 2008 to see what I think).

The thing I have been most upset with is that the people who got us into this mess are the ones being trusted to get us out. Some have argued that they are the ones who know the most and are the most qualified to fix this system. Some would say that these men are extremely motivated to fix things. I still think we should not allow people who blew TRILLIONS of dollars to be put into a position to do it again. This is just really flawed logic to me. Many people in these positions have made the argument that this crisis was unforeseeable; no one could have seen this coming and they are thus not responsible. I completely reject this argument because there were plenty of people who saw this coming. And, the people who saw this coming should be the ones we look to when forming a plan for getting out of this mess.

Here is a list of people who saw this mess coming.

Byron Dorgan

One of the things that intensified the great depression was the failing of thousands of banks. Banking as an institution failed, and people lost all confidence in the banking system. When FDR took office, he tried to put a system in place that would prevent this from happening in the future. One of his solutions was to separate commercial banks from investment banks. A commercial bank is a bank that most of us are familiar with in our everyday lives. These are the banks that have checking and savings accounts and loan money for things like houses and cars. An investment bank is a bank that raises capital for the purpose of investing. It does this by issuing and selling securities and other more exotic things like credit default swaps and junk I don’t understand. This system is to ensure that the banks responsible for keeping people’s money are separate from the banks that make money by taking the risks that come with investment. The legislation responsible for this was the Glass-Steagall Act. It was passed in 1933. It stayed in place until 1999.

In 1999 all the people who wanted less government got their way and the Glass-Steagall act was repealed. Although this was a Republican controlled congress, and this bill was conceived by three Republicans (Graham, Leach and Bliley), this bill was signed into law by Bill Clinton. The repeal of this act means that the government would stay out of the way of big business and let banks organize themselves the way that they want. Banks would now be free to make things more convenient and more marketable without government interference. The final version of this bill was passed 90-8 in the senate. Most would argue that this was a bipartisan effort. One of the senators that opposed this vote was Byron Dorgan. He realized the conflict of interests in commercial and investment banking could be catastrophic. He said “this bill will in my judgment raise the likelihood of future tax payer bailouts.” He also said “I think we will look back on 10 years time and say we should not have done this, but we did because we forgot the lessons of the past and that which was true in the 1930’s was true in 2010”. Here are clips from his senate speech in 1999 TEN YEARS BEFORE IT HIT THE FAN!

http://video.google.com/videosearch?hl=en&source=hp&q=byron%20dorgan&um=1&ie=UTF-8&sa=N&tab=wv#


Eliot Spitzer

Eliot Spitzer was the governor of New York from January 2007 till March 2008. He left the governorship in disgrace after having really kinky overpriced sex with a bunch of call girls in a scandalous prostitution ring. What was he doing before he got caught with high priced hookers? PROSECUTING AIG!!!!!!! That is right, when Eliot Spitzer was the state attorney general of New York in the late 90s, he made his reputation by prosecuting white color crime. In 2004, Eliot Spitzer brought a fraud case against AIG. He charged that AIG was developing financial machinery that was being used for deception. He stated that "these were transactions created for the purpose of deceiving the market”. He saw AIG as being the center of a system that needed tighter regulation. He also recognized the conflict of interest at AIG. The current system incentivizes short term risk taking. He actually won this case and AIG paid a settlement. Some could argue that Spitzer tried to ruin AIG to make a political name for himself. I say he realized that it was too big to fail and tried to bust it up, but Tim Geitner and the New York fed wouldn’t let him.

Mable Yoo (pseudonym)

Investments get rated by certain firms. Moody’s, Standards and Poor, and Fitch are the most notable ones. These companies rate things based on how safe an investment is. A rating of AAA is an investment that the rating system deems very safe. The idea is that if you invest in a AAA asset you may not make a ton of money, but you probably will not loose. AAA assets are considered the safest of investments. Two problems occurred that made this rating system less reliable.

In the housing market the mortgages people get are rated by taking into account the reliability of the person being loaned the money, the market, the house, the amount of the mortgage and a whole bunch of other factors. All these factors are plugged into some crazy equation and you get a rating. The problem was that when people with bad credit histories were given loans there was no past history to judge how good or bad these loans were. There was no historical evidence to indicate the likelihood these loans would be paid back. There were unknown variables in the equations being used to compute these ratings. Also, these mortgages were bundled together as one asset. The logic seems sound. Maybe a few people will default, but if they are bundled with people who pay on time then the overall asset makes money. The problem was even though the data was inconclusive, these bundled mortgages were STILL GIVEN TRIPLE A RATINGS!!!! Mable Yoo was an analyst at an unspecified investment firm. She looked at these assets and asked the question, “How can these be AAA assets when so many factors were unknown?” She was told by her boss to go home, get some sleep, not to worry, and cash her paycheck.

Nassim Nicholas Taleb

Nassim Taleb is a financial analyst from Lebanon. He did his grad work at the University of Penn. In his book “The Black Swan” he argues that there are certain events that are catastrophic and unpredictable. We make rules based on what we perceive, but we do not take into account the things we don’t know. We look for things to prove our point, not for things that disprove our point. It is a very interesting theoretical read. The point is that he predicted the housing crisis before it happened. He not only made some vague prediction, but put his money where his mouth was and made a fortune in derivatives and credit default swaps.


THESE ARE THE PEOPLE TO WHOM WE SHOULD LISTEN TO GET OUT OF THIS MESS. I am not gonna say I saw it coming since I didn’t have a blog so there is nothing on the record. But if you read The Elephant and The Dragon by Robyn Meredith (which I did) you would have been alerted to the difference in the savings rates between America and China. If you would have looked at the housing markets (which I did because I had quite a few friends flippin’ houses) you would have concluded that when the cost of living rises faster then the average wage that one of those numbers has to move drastically. If you looked at the Bureau of Labor and Statistics website (which I did) you would see that while unemployment remained steady, underemployment was out of control. I had to listen to Hannity and Glen Beck and all these PINHEADS tell me that I was a paranoid liberal and that everything was wonderful in the George Bush economy. I had to listen for 20 years that if the rich get richer it will trickle down to the rest of us. Some of these goobers didn’t even admit we were in a recession till after the presidential election. I admit I am not as smart as I think I am. I do think that there are very smart, insightful people who saw this coming. THESE are the people we should be asking “what do we do next?” I disagree with the idea that the people who broke the system are the only ones who can fix it. To quote George Bush “fool me once shame on you …YA CANT GET FOOLED AGAIN!!!”