Obama Report Card (Part 2)

Barack Obama has been president for a little more than a year. There are mixed feelings concerning the job he has done. Some claim he has done absolutely nothing, whereas others claim that he has done a great deal when you consider he has only been in office for a year. People tend to have very strong opinions about this president. The intention of these last 2 blog posts is to evaluate this administration. In my last article, I began the process of giving the Obama administration grades for the work they have or have not done. These are the areas that I have evaluated so far. You may see the previous article for my explanation.

Economy: B
Environment/Energy: C
Health Care: C-
Military: C

Here is the second half of the report card.

Foreign policy: A

In my opinion, this is one of the areas that has declined the most during the last 8 years. Although the economy has been in a downturn during the last 2 years, systemic forces have been in play long before this decade that made our economic situation dubious. The last administration may have pushed the economy off a cliff, but there was decades of bad policy that preceded them. In contrast, the last 8 years of foreign policy have been a disaster. Although many of the forces in play had their origins well before the year 2000, a lot of this disaster in my opinion was caused by the Bush Administration. There are some things that the Obama Administration is doing to change this.

One of the first people appointed by Barack Obama was Hilary Clinton in the role of Secretary of State. Although Clinton is defiantly qualified for this position, the political implications of this hiring cannot be over looked. Hilary Clinton may have been the most visible person in American politics (with the most noticeable exception being Obama himself). In the short term, it makes the statement that the State Department is one of the most important parts of our foreign policy. There are people (such as myself) who think the State Department has been under-emphasized during the last 8 years. To many, a revitalized State Department signals an emphasis on diplomacy that has been lacking. As painful as it is to admit, we don’t have enough troops to fight everyone two hates us. Helping people to realize that they share interests in America and then getting them to help us solve our problems is a much more realistic strategy. This president has made it very clear that he is going to use all of the tools in the tool box, not just the hammer.

The Obama administration has also done a lot to engage our traditional allies. Some people think that having allies in Western Europe is a sign of weakness. They believe that by finding common ground with others we are some how giving away what makes us American. I personally think they could not be more wrong. I think this administration has realized that having allies that think differently is not a bad thing.

I think this administration has done well to realize that there are two sides to every situation. Sometimes we disagree with the other side, but to not even admit there is another side is the thing that DOOMED the foreign policy in the last administration. This policy is no more evident than in our policy with Israel. To acknowledge that there is another side even when that other side is not necessarily in our best interest is a sign of strength, not of weakness. If there is going to be peace in the Middle East, it will be because both sides make concessions and because both sides acknowledge that the other position is legitimate.

Nuclear disarmament was proposed by John McCain during the Republican primary and he got BLASTED by his own base for it. I think to make the world safer we are going to have to scale down our nuclear arsenal. We can’t go around telling others not to build nuclear weapons when we have them in abundance. We are also the only nation to ACTUALLY USE A NUCLEAR BOMB. If we want to live in a world without nuclear weapons, then the nation with the most nuclear weapons must take the lead. The Obama Administration has also pushed for this.

The United Nations has been criticized for being an ineffective organization. I submit that it will never be effective when the greatest county in the world doesn’t take it seriously. It would be in America’s best interests to have an international body that could get things done and be respected. This will never happen until the most powerful nation in the world takes the United Nations seriously. This is something the last administration was absolutely horrible at. Fighting a preemptive war that most of the world did not agree with also hurt out relations with most of our allies. When this war ultimately went badly, it created further tensions between us and our traditional allies.

Some say all Obama has done is made a few speeches. I acknowledge that making speeches is not enough. These speeches are the first step in re-engaging our traditional allies and attempting to bridge the gap with our enemies.

National Security: A

I believe that the approach this administration is taking will be much better in the long run than the strategy previously employed. Not a week goes by when either Dick or Liz Cheney is on TV telling us how unsafe we will be with the Obama administration. I believe that the Bush-Cheeney approach has been detrimental to our image and ultimately ineffective.

The first issue I have with the Bush-Cheney approach is torture. Torture historically has never been a reliable means of extracting information. The chance that the info you are getting is true is equal to the chance that the person being tortured is just telling you what you want to hear. There is no way to reliably tell which of these scenarios is playing out. Even if torture were a good way to get information, it still violates agreements that we have made in good faith. The United States as a country is on the record for NOT TORTURING PEOPLE. Our Bill of Rights states that there will be no “cruel or unusual punishment.” The war on terror is a war of ideas. When we violate our own rules in an attempt to win this war, THE TERRORIST ULTIMATLY WIN. In a war of ideas we have to be the example of democracy for those who don’t have it. Torture sends the message that “we believe in democracy until things get tough.” Why should any country that does not currently have a democracy want a democracy when they see us torture people or throw people in jail without due process? We loose all credibility in the non-democratic world when we torture people. Why would anyone in the Middle East want to aspire to democracy when we torture our own citizens? Why should the government of a developing nation choose democracy when we abandon our fundamental principles as soon as things get a little rough? Why would they think that this government is better then the one they have? I wish the people that argue so passionately for the right to bear arms would also argue for the government not torturing people.

Torture also allows our enemies to present the case that America is evil. They can site our torture as evidence that they are right and that we are wrong. This out weighs any information we could learn by torture.

Employing a strategy based on intelligence and not torture may also generate more information. It is possible that more people will be willing to help us when we don’t torture. Consider the Christmas Day bomber. Most of the Intel we got was from his family members. Do you think his family would turn him in if they thought he was going to be tortured? This bomber also continued to talk (and is still talking) even after he was read his Miranda rights (contrary to what Fox News would have you believe). Why are we as Americans less safe because we follow our own rules? The idea that we need better intelligence is not in dispute. How we go about getting and organizing that information is critical. I believe that the current president has a much better approach then the last one.

My only objection is that the prison at Guantanamo Bay is not closed. This is something Obama said he would do in his first year. I can blame him for making a promise in the middle of the campaign that he could not keep. I think this move must be well thought out; and, although I am disappointed that it is not done yet, I won’t take too much off his grade for being prudent.

I am also mildly disappointed that this administration has not done more to find out which of our officials may have broken the law in their search for actionable intelligence. Since this is not political feasible, we will leave the prosecution of John Yoo and others for another day and another article.

Education: A+

I believe that so far this is Obama’s best area. The amount of money at Arne Duncan’s disposal is unprecedented. What is even more encouraging is the way this money is to be spent. Too often in the past money is given to districts with the highest level of dysfunction. Part of the money at the Secretary of Educations disposal will be given to school districts that show the most improvement. The idea is that there is an incentive for school districts to become more efficient and try new things. This is a system that should reward innovation.

Domestic Issues: B+

The idea that women should be paid the same amount for the same work seems like something that people should agree with. This president signed the Lilly Ledbetter Act this year. This closed a loop hole in the Civil Rights Act that has been in place since 1964. The president has also pledged that gay people will be allowed to serve in the military and will not be fired if their sexual identity is discovered. I think this is something that absolutely has to be corrected. I can criticize him for not moving fast enough but I do believe this will get done this year.

FINAL GRADE: B+

I give Obama an over all grade between a B and a B+. I do think you have to grade him on a curve when you consider where we were a year ago. Most people who hate Obama say they hate him for his policies. Then I ask what policies specifically do they hate. They say they hate the bank bailout, but that was set in motion before he got there. Then they say they hate the Omnibus bill, but that was done before he got there. Then they say they hate the socialist policies, but the economy was in crisis when he took office. They say they hate his foreign policy, but he was handed two wars as well as deteriorating situations in Iran and North Korea. We have no way of knowing how much he could have gotten done if he weren’t thrown into a disaster. The truth is most of this was completely out of his control by the time he took office.

I see this time in American history as a game of hot potato. For 80 years we as a country, both Democrat and Republican, have set up systems that will only help us in the short term. This may be a negative built into our government. The fact that our elected officials have to operate in the short term to keep their careers viable may mean that we have just accept this as part of democracy. Very few presidents will implement a policy that will take 20 years to be successful because their term is only 8 years long. We have employed policies that have been detrimental to our long term success. We as a country benefited from these policies. For 90 years we dumped what ever crap in to the air that we wanted to. For 90 years we meddled in the affairs of other regions with no fear of reprisal. We spent what ever money we wanted and didn’t worry about paying it back. NOW THE MUSIC HAS STOPPED and we are the generation left holding the hot potato. We are the generation that has no choice but to fix these problems.

I believe we do not have the foundation necessary to carry us successfully through this new century. I believe that this president must start building this foundation. It is very possible that the effects of this presidency will not be seen for decades. Fixing our problems will not only need short term solutions, but long term considerations. I am an optimist and I believe that we can rise above these problems. I believe this presidency can truly be transformational.

Obama Report Card (Part 1)

A few weeks ago Barack Obama delivered his first State of the Union address, just a little more than a year after he won a decisive victory to become the 44th President of the United States. And now that a year has passed, there are people who are not pleased with the job he has done so far. There are even some who believe he has done nothing at all. This President inherited a huge list of problems that need attention and action. There are also the promises he made as a candidate. And, there are several things that I want to see this country accomplish. I have decided to evaluate what President Obama has done during this past year, giving him a grade on some of the major issues.

Economy B

Many people will ask, "How can you give Obama a B in this category when every news report says the economy is in the toilet?" Here is how. The Gross Domestic Product is an indicator of how big the economy is. In George Bush’s last year in office the GDP fell 3 out of 4 quarters. The last 3 months of Goober’s presidency the GDP fell by 6% in 3 months. Six months into Obama’s term, the GDP was growing by 4%. Many people have made a big deal about unemployment being at 10% (and they should). One in 10 people not working is not good for an economy. It was reported that last month that the economy lost 85,000 jobs. This sounds like a huge number until you compare it with the 700,000 jobs that were lost the last month of the Bush Administration.

Many of President Obama’s opponents also site the TARP legislation as an Obama economic misstep. The TARP was signed into law in the fall of 2008 WHILE GEORGE BUSH WAS PRESIDNT. Granted, Senator Obama did vote for TARP and Obama was responsible for the distribution of the second half of the TARP. At worst, Obama can only be blamed for continuing the policy of his predecessor. I was completely against the bank bail outs. I stated this in the article titled ‘Bail This’ which I wrote last December (http://spoon-spoonworld.blogspot.com/2008/12/bail-this.html). I think the mistake that this administration made by not demanding more from the banks. The stipulation could have been to ensure that the banks lend instead of buying interests in other banks. Because this stipulation was not made, the big banks got even bigger and at the same time lending did not increase. It also would have been better to attach financial industry reform to this TARP money rather than fight the fight the administration is fighting now. They could have all the reform they wanted while the banks were the most desperate.

Obama was also criticized for bailing out the auto industry. I have a feeling that if he did not bail out the auto industry that he would have been criticized by his opponents for letting the auto industry in this country disappear. I could probably make that same argument for the AIG bailout. Too bad the initial TARP was negotiated by the last guy.

This administration is criticized most for the economic stimulus package that it passed. Many conservatives denounced the stimulus as a prelude to communism. The argument is that the stimulus and many related policies exemplify government interfering in the markets. After the stimulus passed and the free market did not collapse, people began to say that the stimulus didn’t work or that we need a second stimulus. I suggest that the only thing that was wrong with the stimulus is that there were too many tax cuts and not enough infrastructure spending. The tax cuts were added to perhaps appease some of the opponents to the stimulus package.

Critics of the stimulus package also site that unemployment rose past 10% when the administration claimed that the stimulus would keep this from happening. To me this seems like the administration is being blamed for not having a crystal ball. They can be blamed for making a bad guess, but to say that the stimulus had no effect I believe is inaccurate.

One cannot talk about this economy without talking about the deficit. The federal deficit is out of control and this issue is one that is constantly sited as a weakness in the Obama administration. I would first like to say that for the last 10 years I have been YELLING about the deficit to anyone that would listen. In fact, most Republicans I talked to really didn’t care about it. Also, many people have made a big deal about the Obama budget being so expensive compared with George Bush’s budget. There are a couple of factors to consider. First, the two wars in Iraq and Afghanistan were funded with a supplement and not included in the George Bush's budget. The Bush Administration passed the federal budget, and then passed additional spending that was not included in the budget. The Obama budget accounts for this war time spending without using a supplement. The war spending is included in the Obama budget. The clean up and federal spending for hurricane Katrina was also a supplement. I am not saying that the government should not have spent money on New Orleans, I am simply pointing out that that number is not included in the Bush budget. Obama’s budget, in contrast, includes a disaster relief fund.

The prescription drug plan passed by the Bush Administration in 2003, in my opinion, is the thing that is most responsible for our current deficit. This results in most of the budget deficit. When this drug plan was passed the estimated cost was $434 billion deficit. Then, in 2005, it was revealed that the new estimate for this program was $1.2 TRILLION over 10 years. This number was not included in the Bush budget. During the time all of this legislation was happening, the Bush Administration also had TWO tax cuts. You can’t spend more money and at the same time reduce the money you are taking in. Even Ferris Beuller's teacher can tell you about voodoo economics. All of the discretionary spending that Obama is being criticized for makes up ONLY 8% of the deficit. All the pinko communist liberal programs that are going to in theory bring down capitalism and turn us into France are less than 10% of the annual deficit.

My feeling is that when your house is on fire, YOU DON’T WORRY ABOUT THE TERMITES. The first thing you have to do is PUT THE FIRE OUT. The unemployment rate and the economy not growing is the equivalent of our economic house being on fire. The termites represent our long term deficit. It must be fixed. The termites will eventually eat our house. We must fix our fiscal deficit. I am, however, willing to give this administration time to put out this economic fire. It is a fire that they did not start, but they are the ones who must put it out.

Bill Clinton's last year in office left us with an $800 billion surplus. The Obama budget will result in a $1.2 trillion deficit. That trend happened during the last 8 years and fixing this problem will take more than 1 year to fix. If you are driving a car 80 miles/hour in the wrong direction you cannot simple throw the car in reverse. Blaming this administration for the economy after 1 year when we have been going in the wrong direction for the last 8 years, in my opinion, is unrealistic.

Environment/Energy C

This is the most important issue to me. I think this should have been the first thing this administration really pushed for and not health care. The health care issue may make more political sense, but I think the environment is the biggest problem this generation faces. The administration has done work in this area. They have proposed some very good things. However, I believe that we have a very limited amount of time to fix these problems. I think if we stay on the course we are on for next 30 years we will be facing environmental catastrophe. I also believe that any solution we come up with will take decades to implement. WE HAVE TO FIX THIS NOW!!!!!!! We do not have time to wait for people to come around nor do we have time for moderate procedures that slowly will bend us in the right direction. This is not the time for a smooth transition. This is the time for drastic emergency measures. In this context I cannot give this administration a good grade for this despite the good they have done.

This is most evident in the stimulus package. This could have allowed us to rebuild some of our infrastructure to be more environmentally friendly. We could have invested in magnetic rail. Imagine if there were no 18 wheeled tractor trailers using gas because all of the things shipped in this country where shipped by magnetic rail that uses NO GAS. It would use electricity, so we would need to invest in solar power – A 90 YEAR OLD TECHNOLOGY THAT WE KNOW WORKS. Instead of that, this administration let the Republicans talk them into more tax cuts. Five years ago I would have been thrilled with an administration that did as much as Obama has in terms of our energy policy. In this context, however, it is just simply not enough.

My other criticism has to do with the Copenhagen Climate Conference in 2009. I think this conference was completely ineffective. They failed to hit all of the targets they proposed. They failed to address many of the concerns that the world's climate experts had. Obama cannot be blamed for a world wide failure. He did do about a billion times more than his predecessor. The major stumbling block at Copenhagen has to deal with the gap between developed and growing countries. The prevailing logic is that climate change is a problem that affects everyone so everyone should share equally in the solution. I completely disagree. The developed countries have had an 80 year head start to do any kind of environmental damage they wanted to. Now that the problem has to be fixed, the developed countries are going to tell under-developed countries to have an equal share of the responsibility. We are going to ask countries that are just beginning to acquire industry to completely retool their infrastructure without any aid. How much compensation and help poor developing countries get to develop their industry is the major sticking point of these talks. A related issue is how we deal with the growth of emerging economies (India, China, and Brazil). I do not think that the environment is only America’s problem to fix. I am suggesting that America has benefited the most from a destructive environmental policy. I think that we are the biggest part of this problem and we have to be the biggest part of the solution. The leader of America has to bear the biggest share of the blame. Sucky deal, but that is how it is.

Health care C-

Let me say I am for health care reform. I don’t think it can wait. My main problem with health care and this administration is not what was proposed, but how they went about doing it. There are a few things I would like to see done differently. First, they gave Congress too much wiggle room. They tried to learn a lesson from the Clinton administration. In 1992 the Clinton white house tried to spell out a detailed health care plan. This approach failed miserably as the opposition could use parts of the plan that were unsound to discredit the entire process. The Obama approach was to give broad parameters and allow congress to come up with the solution. The problem with this approach is that a significant part of the Congress is unwilling to work with this administration. By not defining what it wants accomplished, the administration allowed the political enemies of the White House to paint any kind of picture they wanted. Obama allowed his adversaries to frame the debate in a context of their choosing. An issue as complex has health care cannot be left to the enemies of reform to explain to the American people. This was a fundamental failing of the administration.

My second criticism regarding health care is that the administration was not more confrontational with Congress (at least in public). They allowed a few senators to dictate the debate with no political cost to them. They could have done more to make it more costly to oppose health care reform. I think putting the negotiations on CSPAN may have been impractical, but I think would have helped the White House. It would allow the administration to go directly to the people and take issue with those that opposed reform.

Now, after all the back room deals and compromises were done and after a year of headache and a ton of spent “political capital,” THERE IS STILL NO BILL!!!! Truthfully I am not even sure I want the proposed bill. Any other year I would be happier than a pig in slop, but fixing this problem is so necessary for our success as a country. I think this reform has to be transformative. Our health care system does not need to be tweaked. IT NEEDS TO BE FIXED!!!! The plans that Obama campaigned on were outstanding. The things that the White House eventually proposed were great. I think the administration underestimated their position. I do not believe the health care debate is over. THIS ISSUE IS NOT GOING TO GO AWAY. The problem is too big and too important not to be dealt with. I have confidence that in the future this president will get this done. This is one of the top 3 things I wanted to see this administration do. This grade is based on what he has done not what I think he can do.

Military C

Barack Obama inherited 2 wars. He inherited a war in Iraq that I will always argue should never have been fought. He also inherited a war in Afghanistan that has been grossly mismanaged during the last 8 years, and criminally under funded. The Iraq War shows signs of improvement. Most analysts are optimistic. The problem is that the best estimates still claim we will still have 50,000 troops in Iraq 2 years from now. This is a far cry from the campaign promise that all of our troops will be out by “next year.” Truthfully, although I am disappointed, the campaign promise may have been unrealistic. I do not have any major problems with the way the administration is dealing with Iraq.

I have stated in an earlier article (The Big A: http://spoon-spoonworld.blogspot.com/2009_11_01_archive.html) that I have major problems with the strategy in Afghanistan. I believe we are making a fundamental mistake. We have terrain that does not lend itself to conventional war. We have a culture and a language that we are struggling to understand with many times less than reliable intelligence. The most important factor is that we have a corrupt government that is COMPLETELY WORTHLESS. To be successful in Afghanistan we have to make deals with completely unscrupulous people. Because of the decentralized nature of the country, we are not only going to make these deals, but we are going to have to make lots of them. Most people in Afghanistan trust the local government more than the national government. In many cases, the Taliban is the local government. I believe the amount of resources we will have to commit to win this war will not be worth it. I will say that this war has been messed up for 8 years so Obama at least gets 2 years to try to fix it.

Very closely related with Afghanistan is the conflict with Pakistan. I think this administration has done well to link Pakistan with success in Afghanistan. The major issue I have with Pakistan is the use of drones. We are inflicting collateral damage on civilian populations in an attempt to kill terrorists. This introduces an element of American hypocrisy when we tell Israel and Palestine not to hurl rockets at each other in the name of freedom or national security. I think this policy completely undermines the good we are trying to do in the Muslim world. Using drones make the people in Pakistan less likely to help us and at the same time allows radical Islamic factions to make a good case against us when recruiting.

One of the most reckless aspects of these 2 wars was how ill prepared America was. I am not referring to technology or the readiness of our military. I am talking about the cost of having a prolonged engagement. We did not have the necessary infrastructure to support a multi-year engagement. Paying medical benefits for hundreds of thousands of people, the GI Bill, and providing counseling for all those that need it are things that should have been in place BEFORE THE LAST ADMINISTRATION COMMITTED US TO 2 WARS. Obama’s legislation to reform the VA and to fund them a year in advance were important steps to fixing this problem.

This is only half of the things I am rating this president on. This article has grown longer than I have anticipated. I will post the rest of my evaluation as well as my total grade for this administration in the next article. In the interim, I would love to hear how you rate this administration on what they have done in these areas so far.

Haiti

During the last few weeks we have seen horrifying images coming from Haiti. We saw crying children, mountains of rubble, a destroyed capitol building, and a level of destruction in Port-au-Prince that we have not seen in recent memory. The real tragedy, however, is that even before this earthquake, this country was in a very desperate situation.

Many people have wondered how a country could be so poor and so desperate. Some have even suggested that a pact with the devil is the only explanation for Haiti’s misfortunes. Others would say the Haitians have just been a very unlucky people. I would say luck had very little to do with it.

Haiti is on the island of Hispaniola. Christopher Columbus landed on this island on December 5, 1492. The Spanish enslaved the native population to mine the gold and the natural resources of this island. After the native population was virtually wiped out by smallpox, the Spanish imported African slaves to augment their gold mining endeavors.

Eventually, the French came to rule this island, and they continued many of the practices of their Spanish predecessors. By the late 1700s, the French empire was in ruin. It could no longer hold onto many of its possessions in the New World. In 1804, Haiti won its independence from France and became a nation. France’s response to this was to make Haiti pay reparations. France claimed that if Haiti was independent, France would loose the investment that they had made in the slave population of Haiti. If Haiti did not want to fight a prolonged war, they would have to PAY NOT TO BE SLAVES. France charged this new nation of Haiti (which had no money) 21 billion dollars plus interest. For the next 90 years, 80% of Haiti’s economy was being used to pay back the French. When they couldn’t keep up this pace, they took other loans from other countries to pay this debt. They were even loaned money by the United States in 1922, and had to pay that off as well.

As of last year, Haiti still owed 1.8 billion dollars. This amount seems reasonable when you consider that the U.S. debt is in the trillions. The difference is that 80% of Haiti’s population has an annual salary of less than 100 dollars per year. In fact, after the earthquake, Haiti was LOANED more money (not given) to rebuild the infrastructure of the country.

Add to this situation a genocide that took place in 1922 when the US established a border between Haiti and the Dominican Republic. The response of the Dominican dictator Rafael Trujillo was to execute 20,000 Haitians on the Dominican side of the border. For the next 50 years there were policies put in place that fostered discrimination toward the Haitian people. I am not excusing the corrupt government that existed in Haiti in recent times, but this county is not cursed or unlucky, but rather the result of economic and social policy.

This story is repeated all around the world. When you look at the countries in Africa, Asia and South America you can observe a similar pattern. The people in these countries are often categorized as lazy and unmotivated. I will acknowledge that greed and corruption on the part of their governments has often played a part in the lack of development in these countries. I also admit that the destiny of these countries is ultimately in the hands of their citizens. I also am of the belief that the history of exploitation and colonialism of these countries is something that Europe and America should realize.

This history should be taken into account when forming both opinion and policy regarding the developing nations. There is no greater example of this than the continent of Africa. The African slave trade has not existed in the world to the extent that it did in the 17th century. Although the practice is no longer tolerated as an institution, its effects are felt even today. Imagine you live in an African country in the 1600s. The youngest and strongest members of your population are taken away on ships. The smartest people in your population are executed. All of the scientists, teachers, craftsmen, and political figures are killed are imprisoned. This is done for a period of hundreds of years. How long do you think it would take the people that are left to rebuild this country? In addition to that, the process of colonialism strips your land of all of its natural resources during the course of the next 100 years. Even if the remaining population wants to build an industry, the country has been stripped of its natural resources. Add to that the psychological effect of slavery and colonization through generations. When some of these countries such as Haiti do manage to win their freedom, they will face considerable challenges.

Variations of this theme have played in Indo-China and South East Asia as well as in Central and South America, and in countries in the Caribbean like Haiti. I do not think that it is helpful for developing nations to foster a guilt complex in the psyche of the west. I think that is ultimately not good for anyone. I do think that Western Europe and America must share in the responsibility of aiding these countries. We must realize our hand in their misfortune.

There are several countries around the world that are in desperate situations (East Timor, Central African Republic, Guinea-Bissau, Congo, Solomon Islands, Liberia, and on and on). There are a whole list of countries that bear the scars of slavery and colonialism. They have desperate economic challenges that stem from a crushing debt that they have no hope of paying back. I am not suggesting that America and Europe have to help all of them. I am suggesting that it is in our long term best interests to help many of them. Decreasing the amount of suffering in this world ultimately makes us all safer. It is in our best interest to help the people of Haiti, but it is also in our best interests to help other countries that need our help. Jeff Sachs in his book “The End of Poverty” makes several suggestions of how to end extreme poverty. He makes the point that industrialized nations rarely take this opportunity seriously. He also points out that America gives more than any other country but that is still 0.16 of 1% of our GDP.

When we see this interconnected world that we live in and we see the results of the devastation in places like Haiti, I must ask, “Is 0.16 of 1% enough?” When we consider the role that failed states play in our national security I must ask “Is 0.16 of 1% enough?” I believe that the people in these societies must ultimately decide to help themselves, but I do think that we as the only super power have a very important role to play. I wonder if we can effectively play this role when we commit less than 1% of our resources. I still think that if the world works together we can solve all our problems. For the first time in history we have the technology, knowledge, and the resources to fix many of these problems. The question is "Do we as a country and as a planet have the will to fix them?"

As I am writing this article I cannot shake the sense of inadequacy and guilt that I am feeling. I do not feel this way because of American indiscretions. I do not feel guilty because I have so much and others have so little. I feel inadequate because I do not feel I am doing enough. I gave to the Red Cross, I did the text message thing, and I gave to the missionaries that a community church is sending to Haiti next month. I am going to give to the clothing drive at the place I work. I wonder when those Red Cross workers see the insurmountable circumstances all around them if they feel they are doing enough. I wonder if doctors who go to these areas think they can ever do enough. In light of these observations I have to come to the conclusion that I could do more – but I choose not to. Then I come to the conclusion that the people I care most about an even respect and admire could do more but have made the same choice I made. Finally, I come to the conclusion that this country that I love so much could do so much more and makes the same choice that I have.

Addendum

As I trail off to sleep after writing this article, I am reminded of the power of the individual. In the wake of all this suffering, it would be easy for me to see the futility of my efforts and the efforts or others. The idea from which I can derive some hope and get 4 hours of sleep is the idea that collectively our good works – no matter how small – can be significant. I cannot rewind time and fix the wrongs of America’s past. I cannot undo hundreds of years of racism and oppression. I cannot undo the earthquake. I can only hope that my efforts – no matter how small – when teamed with the small (and not so small) efforts of others can bring about a change for good in this world.

ROLL TIDE

On Thursday January 7^th the 2009-10 college football season came to an end. It was a very competitive matchup even though Texas lost its QB on the first drive of the game. Alabama will be crowned the national champion by virtue of winning this championship game. While I agree they should be the national champion I think a few other schools have a very good argument. I have been saying for years that the only fairest way to decide the national championship is to have a playoff. While this year seems to have worked out fairly I think this system is still flawed and still want to see a playoff. This is the article that I posted last year about a college football division 1 playoff and I will post it every year until I see a playoff. Happy New Year everyone.

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There are many (including myself) who would like to see a playoff system decide college football. People who oppose the playoff system site several reasons. The first reason against a playoff system is that it would make a very long season longer. College football is one of the most expensive sports to maintain. Adding time to already costly season would be devastating to most programs. The second thing to consider is that the student athlete would be affected by extending the length of the season. Another reason against a playoff system is that the money generated by a playoff would not equal the money generated by the bowl games. Yet another argument is that having a playoff would reduce the importance of the games at the end of the year. Having said all these things I still think there is a way to have a meaningful play off and still have some remnant of the bowl system. Here is what I would do.

I would start the season 3 weeks later. August 28 is way too early to start the football season. I would play 10 games with one bye and every conference plays a championship game. That gives every one between 10 and 11 games and the regular season would be done by the first week of December. The next thing I would do is cut the number of bowl games. There are just way too many. I would have enough minor bowl games to play a game or two every day between Christmas and New Years Eve. We could still have the same number of bowl games but keep in mine we are going to play 8 more playoff games at the end of the year.

On New Years Eve play the Cotton and Gator Bowls. On New Year’s Day play the Rose, Sugar, Orange and Fiesta Bowls. After that I would have the top 8 teams play in a single elimination playoff. This would take 3 weeks. I would also assign the first round games to regions of the country. I would have a game in the Southeast, a game in the Midwest, a game on the west coast, and a game in the northeast (in a dome of course because it is January). When the final 2 teams were done playing we would have a definitive national championship.

This system I think would have many merits. First we would have a definite national. A champion that was decided in games and not by a bunch of computers and writers. Second it would get rid of all the cupcake games at the beginning of the year. It may also encourage coaches to schedule competitive games at the beginning of the year. In the current system there is no reason for a team in a power conference to play a tough opponent in the beginning of the year. Teams are currently in a system where two losses completely eliminates a team from the national title picture. In a playoff system it would be advantageous to schedule a tough opponent in the beginning of the year to give your team tournament experience. Also an early season loss wouldn’t completely ruin your national championship chances as it does in the current system.

The second advantage to this system is that every bowl game could affect the outcome of the national championship picture. In the current system the BCS game is the only one that really affects the outcome of the national title. If teams were playing their bowl games to get one of the 8 playoff positions every game would mean something. All of a sudden that garbage bowl on December 28 with the #9 team in the country is a HUGE game with national championship implications. The bowl games are more important not less with a playoff system.

We still have all the tradition and pageantry of the bowl games. The bowl people are making money. The season isn’t any longer because we cut the beginning of the season. We could be done by the time most schools opened for the spring semester. We replaced non competitive games that didn’t really matter with meaningful ones. TELL ME WHY THIS CAN’T BE DONE!!!!!!

THE BIG A (messy and long in both form and content,be warned)

We as a country are facing a tremendous amount of challenges. The headlines during the past year have been dominated by health care, the economy, unemployment rates and a host of other things. The the Iraq war has significantly impacted the news cycle during the last eight years. But, there is one subject of prime importance that I feel has not gotten its due attention from the American press or the American people: the war in Afghanistan.

This is one of the biggest situations that President Obama has been stuck with. Having said that, there are some issues with how I think the President has handled this situation so far. To put it more directly, I think there is a high probability that Obama will “F” THIS UP.

Before I discuss my criticism of Mr. Obama, I feel it necessary to remind everyone that THIS IS GEORGE BUSH’S FREAKIN’ MISTAKE!!!!! On September 12, 2001 most of the world was on our side. Even people who are normally unsympathetic to America sympathized with our plight (or at the very least said they did). Most western societies recognized the danger of global terrorism and religious fanaticism. Most of the world was on our side. The response of the Bush administration to this action was to put 28,000 troops into Afghanistan. This seemed sensible to many because a lot of the organizational structure of the terrorist organization that attacked us was in Afghanistan. A year later we decide that a place that had nothing to do with al Qaeda or 9-11 was the next theater to wage the war on terror. The Bush administration decided that Iraq, not Afghanistan, was a place that we should commit 250,000 troops. WE PUT 10 TIMES AS MANY TROOPS IN THE PLACE THAT HAD NOTHING TO DO WITH 9/11!!!!

At the same time, the Bush administration blew off the UN and most of its allies and fostered a “go it alone” mentality. To the rest of the world, this invasion was the final straw in a relationship with America that had already been strained. From all of this, several negative affects developed with regard to our situation in Afghanistan.

First, the invasion of Iraq diverted our focus away from Afghanistan. One could make the argument that if we put 10X as many troops in Afghanistan we would have increased our chances of finding Osama bin Laden. We would not have had to outsource efforts to catch Bin Laden to Afghan troops with less training and who may have been less loyal. I would contend that this diversion of resources into Iraq also effected the troop levels of our allies. If we would have committed close to 300,000 troops, our allies conceivably would have committed more. At the start of the Iraq invasion, 9,200 troops were committed by England. England also committed 45,000 troops to Iraq. It is logical to assume that if we weren’t planning to invade Iraq we could have had many more allied troops in Afghanistan.

The political consequences were two-fold. First, a war that most of the world did not agree with strained our relationship with most of our allies. The fact that we were willing to go to war with Iraq without a consensus kept us from asking for help in Afghanistan. If we would have gone to war with 400,000 troops (US + England + other allies) and had reasonable success, we could have gone back to our allies (the ones who did not contribute troops) and asked them to help rebuild Afghanistan. Maybe they would not have sent troops, but they could have done other things to help the effort. Instead, we pissed away what ever good will was left in Western Europe when we invaded Iraq making our traditional allies less willing and less able to help us in Afghanistan.

The second political consequence of Iraq was that it gave Al Qaeda some sense of legitimacy in the moderate Muslim world. On September 11th, most Muslim governments denounced Al Qaeda's actions. I am of the opinion that in every group of people there are minorities on the extremes whose course cannot be changed. Most people lie in the middle. In my mind (these numbers are not legitimate), 20% of the Muslim world will always hate America and 20% will love the good things American idealism can achieve. The 60% in the middle just want to live their lives and really don’t care about us. They can be won over by our good efforts, and they can be disillusioned by our bad efforts, or the deleterious efforts of others. By waging a war that was so unpopular, it allows Al Qaeda to go to the 60% of Muslims in the middle and say “look at all the evil that America is doing in Iraq.” When America is unable to initially secure the infrastructure and meet the needs of the average Iraqi, it allows Al Qaeda to make a good argument to the moderate Muslim world. Abu Ghraib, Blackwater and outsourcing torture also give legitimacy to the Al Qaeda position. This is an argument that they would have had trouble making if we were only fighting in Afghanistan with a more legitimate coalition.

It also gave Al Qaeda a second front. If you are fighting a guerrilla war against a superior enemy, you want as many fronts as possible so that you can move your troops from one place to another. By fighting the Allies in two places, Al Qaeda is able to use its inherent flexibility to put up more of a fight where it matters – consider the surge in Iraq. Most Republicans say that this is a wonderful thing and Iraq is a better place because of this effort. I disagree. Let’s assume that terrorists have televisions and that they are not stupid. If you put more troops in Iraq, they are going to leave Iraq and go to Afghanistan. If you put more troops in Afghanistan, they are going move to Pakistan. When we put troops in Pakistan, the terrorist are going to go back to Iraq. Are we prepared to go into Yemen and Somalia and fight Al Qaeda when they move again? The more fronts we operate on, the easier it will be for Al Qaeda to wage war against us.

Now it is EIGHT YEARS LATER. The war has been underfunded and neglected for EIGHT YEARS. For EIGHT YEARS the Bush administration has let this situation go into the CRAPPER while they put most of their efforts into Iraq. Now, after EIGHT YEARS of a crap strategy and criminal neglect, the Obama administration has to try to fix this mess.

There are several things that the Obama administration is doing that I think are good. First this administration seems to realize that you cannot deal with Afghanistan without dealing with Pakistan, so to link both of these together is sound. This administration is also doing a better job of realizing that Afghanistan did not attack us on 9/11, Al Qaeda did. The Taliban is a group that is indigenous to Afghanistan who sometimes has the same agenda as Al Qaeda. This administration is doing a much better job of defining who exactly the enemy is. I also think that the administration is wise to consider what strategy they are going to use and not just to throw more money and troops at the problem. History may have shown us that the “shoot from the hip Texas” approach doesn’t always work. I think this administration also gets that this is a war of ideas as much as it is a war of resource. In a war of ideas, popular opinion and what third parties think of you, MATTER. We are not fighting a state or a country or a flag or a group of people, but rather, we are competing for the minds of people. Convincing people that your way is best cannot (at least in the long term) be done with military might. I think that is something this administration understands. I must point out that I believe both this administration and the previous one both love this country.

There are several strategic options that the white house is considering. I fundamentally differ with the administration in the sense that I only see to options even worth considering. Having said that I think the Obama administration is operating on many flawed assumptions.

The first thing that I am not sure that this administration realizes is that Iraq is not Afghanistan. There is a prevailing assumption that the strategy that seems to have succeeded in Iraq will work in Afghanistan. In my opinion there are several factors that make these two theaters not comparable.

At the start of Operation Dessert Storm in August of 1990, Iraq was one of the most advanced countries in the Mid East. They had some of the best technology and they had one of the highest standards of living in the region as well as the second largest military. They did have a ruthless dictator running these things, but they also had some of the best infrastructure in the Muslim world. Years of economic sanctions left many of these state of the art facilities without being upgraded. Afghanistan was at war with the Russians all through the 80s. There was no reconstruction effort, and no economic recovery. Iraq had a functioning central government. Granted it was run by an evil dictator, but it was a functioning government. Afghanistan has a government that is not centralized. The central government exerts very little authority on the outlying sections of the country. Even if you did install a central government in Afghanistan, it would not have any immediate influence in the outlying provinces. The mountainous terrain is another major difference between Iraq and Afghanistan. This terrain further isolates the outlying provinces. The indigenous population also has a tactical advantage. The mountains provide cover for a small guerrilla force and at the same time make it difficult for a large army to supply itself.

The strategy behind the surge was to put extra troops into Baghdad and secure the city. Securing the people of Baghdad would give time for the political forces in Iraq to be effective. This surge in theory also had the effect of making it harder for terrorist groups to operate. This strategy will not work in Afghanistan because the terrorists are not in Kabul, the capital of Afghanistan, but rather in the outlying areas. Securing Kabul will not help the political element because Afghanistan never has had a central government. Kabul has little if any effect of on the lives of the people in the distant areas.

Another strategy tried in Iraq was to buy off some of the less radical elements. I think this will only be moderately effective in Afghanistan because that country is a lot more tribal than Iraq. People in Afghanistan view tribal and local affiliations more importantly then being Afghan. I know that is a gross generalization and I have never been there, but it appears that this approach would involve buying more people than in Iraq. For this strategy to work, the US is going to have to get in bed with some pretty horrible people. We are going to have to cut deals with drug dealers and less radical elements of the Taliban to control the provinces. The most glaring thing about the political part of this war is that the government that we are dealing with is completely corrupt. They have no ability to control most of the population, which lives in villages. Recent events even bring into question if this government is actually legitimate. If we are going to be successful, we need an Afghan government that we can work with. This government is far from that.

A counter terrorism strategy will not work because most of the terrorists are no longer in Afghanistan, they are in Pakistan. A counter insurgency strategy will not work because the population is not in the cities but in villages. In many villages the Taliban is the government. So who are you protecting the native population from? What are the ramifications if you are at war with the people providing civil service to the population?

I see two options going forward in Afghanistan. Option one is that we commit this country’s full military and industrial might to Afghanistan. We send upwards of 200,000 troops to Afghanistan. We use all of our resources to ensure the men and women that we put in harms way have everything they need to have success. We commit our selves to completely building (rebuilding would imply that it was there when we started) Afghanistan’s infrastructure. We build new schools, new roads, and we commit all of our know how into making Afghanistan successful. We fight their war on drugs and destroy all the poppy fields. We use our resources to stimulate their economy. We build Afghanistan’s police, fire, military and civil service departments. We totally commit this country’s resources to fixing the mess that we have made in Afghanistan. We commit our troops and our treasure for the next 10 years to make sure Afghanistan is fixed. If we are not willing as a country to commit 250,000 troops and one trillion dollars during the next 10 years then the second option is to GET OUT NOW!!!!!!!!!!

This second option will no doubt devastate Afghanistan. This will be a failure of the United States. The resulting bloodshed will be OUR FAULT. We will be ignoring a moral obligation to make the world a better place. We as a county will have to put abandoning Afghanistan on a long list of immoral acts done by our country. How moral is it to keep putting American forces into a war that we know we ultimately will loose? It is wrong of us to send troops to fight without giving them what they need for a chance at victory. It is wrong to send troops into a situation where their best efforts will result in a corrupt government, more poor people and not really making us any safer. The bravest and maybe the hardest thing we could do as a country is to admit that we are in over our heads.

In the late 60s, America continued to pump hundreds of thousands of troops into Vietnam even though the outcome was already decided. How can we with any conscience continue to spend money and lives in Afghanistan if we cannot define a successful strategy? It is wrong for us as a country to ask people to go on three and four tours of duty without even defining what success is. We should not blame the military for fighting a war that we asked them to fight. We should blame ourselves. If we continue on a strategy without having a higher expectation of success then that is the most immoral thing we as a country can do.

The other argument against leaving is that the security of America will worsen. I argue that every year that we are in Afghanistan and we are failing, that will give the anti-American argument more legitimacy. Every innocent civilian killed in Afghanistan is another example that al Qaeda can use to recruit the native population against us. Everyone that has a mother/father/sister/brother/wife/husband that is killed is a potential recruit for al Qaeda. Every accidental death on the news or YouTube is instantly turned into an al Qaeda propaganda video. Even if we mean well, even if our soldiers do everything right, there is the potential for the enemy to twist our best efforts to their advantage. Everyday that we are unsuccessful in Afghanistan we will be reminding the world of our past mistakes and will undermine all of the good that we are trying to do. We undermine all of our efforts to spread democracy every second that we use our military to prop up a phony, corrupt government that has no legitimacy. Every minute that we are in a protracted war with no realistic chance of success we are less secure as a country, not more.

There are many who would say that we have not yet put in our best effort and we should give it one more shot before we leave. Eight years ago this invasion may have been successful. If we had not let the situation deteriorate it is very possible that Afghanistan would be an American success story and a win for democracy. It is conceivable that if we had not FREAKED UP the last eight years, our troops would be coming home right now and Afghanistan would be a wonderful example of the problems we can fix as a planet if we work together. The reality is this is now a disaster. Once you see this situation for the mess that it is, there are only two clear options. I get the sense that the White House will not pick either one of them.

Our prestige as a country will be damaged, but how much more damage will we do by staying in a protracted war? It is a very uncomfortable thing to admit a mistake whether it is us personally, or collectively as a society. However, I do believe that once you realize you are wrong that you correct your course of action. I hope I am wrong. I hope 20 years from now Afghanistan is a stable democracy. I hope it is a progressive country. I hope the Taliban is defeated. I hope in the process that al Qaeda is dismantled. I hope women can go to school without acid being thrown in their face. I hope the government in Afghanistan does all it can to provide a high quality of life for its citizens. I am not like Rush Limbaugh. I do not hope that Obama fails or the American military fails. I hope that I am wrong. I hope that some middle ground can be reached where we can empower the many good people in Afghanistan to fix their own problems. I hope when this is all over that the world will be a better place because of our efforts, not in spite of them.

In 1964, Lyndon Johnson won a landslide presidential victory. He came into office with the highest approval rating in history. He had a huge social agenda. His presidency was predicted to be transformative. The Vietnam War completely derailed his presidency. In three years his approval rating was in the toilet and he couldn’t even run for a second term because we were in such a pickle. American has a lot of problems that need fixing. I believe it is going to take all of this country’s resolve to fix our problems. I hope our current president truly makes his presidency transformative and does not step on the same landmines that his predecessor did.

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!!!”