Sure, things can get worse

I remain in continual awe of "Tyler Durden" at the zerohedge econoblog, who is an amazingly fecund and trenchant analyst (pretty good adjectives, huh?) of the American economic and financial market scene. Durden (his nom de blogue borrowed from the main character in "Fight Club") does not simply repeat the same tired stats one can read everywhere, e.g., the American economy is 70% consumer spending, we borrow a lot from China, et cetera. By now everyone knows that stuff, and yet blogsters like Jim Kunstler simply use those stats over and over, dressing up the doomsaying with artistic, novelistic writing (entertaining, to be sure) and leave you about where you started.

Not so our man Tyler Durden. His latest Sunday reading (and like many who read his blog, I don't know when the man sleeps) undertakes an analysis of a question I was wondering about: given that U.S. society is now so economically stratified, with both wealth and income so heavily skewed toward a very small ultra-rich investor class, shouldn't any discussion of an American "recovery" take such obvious data points into account? That is, recovery for whom, and how? Tyler to the rescue: http://www.zerohedge.com/article/detailed-look-stratified-us-consumer.

It takes more than one reading, but it's all pretty much there. President Obama and his fearless band of economic tinkerers really have no good options at this point, and it relates to this stratification and imbalance within American society. Things are so messed up, due to the relentless "financialization" of the economy and the systematic destruction of the former middle class, that we've arrived at a point where the top 10% of the population (the Upper Class decile) and the Middle Class (the middle 50%) account for about 42% and 46% of all consumer spending, respectively. The poor (the bottom 40%) only account for about 12% of consumer spending. The Middle Class, however, carries about a 200% leverage of debt to net worth, substantially above the 130% national average, and about 50% of all of the net worth of the Middle Class is tied up in residential real estate, a declining asset base (versus 25% for the upper decile).

Add to these data the observation that it has been the middle and lower end of the residential real estate market that has been hammered most senseless by the economic downturn and you arrive at the salient point: it is really only that Upper Decile which is in any shape whatsoever to "resume" the American consuming orgy which drove the economy in its "boom" years (and made Asia the manufacturing colossus it was). The Middle Class is in deep debt, with heavy unemployment, and with its home ATM system (equity borrowing and re-fi money) completely on the fritz, as larger and larger percentages of Middle Class homeowners see their home values sink below the mortgage debt. The big Obama stimulus was simply palliative, designed to forestall disaster. The stimulus spending and all the bailout money (which began under Bush) do have the implacable effect of increasing the national debt and yearly deficits by trillions of dollars, and it becomes inevitable that at some point Congress is going to have to substantially raise taxes to deal with the deficits, if only to make debt service payments. Yet increasing marginal rates, much as I hate to admit it (being a kind of populist), will slam that Upper Decile where the only slack in consumer spending can be taken up, given the pathetic stratification we have allowed to take hold in this country over the last thirty years or so.

So there are really no good options, which is often where the Designers of Perpetual Motion Machines find themselves at the end of their efforts. The Middle Class feasted for a long time oncheap credit made possible by easy money flowing onshore from Manufacturing Asia and from the Petrostates. That much we know; it is now part of the American Economic Catechism. That game is over; we are fortunate that China and the other investors in Treasury obligations retain any interest at all in buying our mountains of debt, especially at the piddly rates of return available, but they have been captured to a large extent by the huge prior investments they have made in the dollar. But it is simply not realistic to think that the American Middle Class, having lost trillions in equity from the real estate debacle, and with their wages stagnant (a situation which has persisted for a decade), are going to rebound and begin sprees which fulfill their 46% of the national obligation to Buy Stuff to keep the economy going.

I always thought that the MBS (mortgage backed security) disaster, and the "toxic asset" problem generally, was not really the efficient cause of America's economic reversals. More a case of whistling past the graveyard, because if that's all it is, then a few simple fixes (TARP, TALF, some other acronym) would take care of it. Rather, I thought the MBS craze was sort of the final orgy before the lights were turned out. The Middle Class, struggling to survive in an economy that required ceaseless consumption and materialism to keep things going, were given the opportunity by Wall Street Banksters to Go All In, to hock it all, to take debt right up to that ceiling where it was just barely affordable based on income, and then way beyond. The fees and commissions were earned at the front end by Goldman Sachs, Merrill Lynch, JP Morgan Chase, Lehman Brothers, Bear Stearns, Countrywide, Bank of America, Washington Mutual. The pain was reserved for those who signed the promissory notes.

So that's now where we are: the Morning After the Party, and the floor is littered with empty bottles and there are plates of guacamole going bad and the sink is filled with dishes and there's a Repo team out front hotwiring cars. The Middle Class folks are tapped out, the poor were never much in the game to begin with, and the Upper Decile are simply playing games with all the taxpayer money they were given in an effort to swipe what's left. Bernanke's liquidity injections (money printing) have found their way into the stock market, but this isn't real prosperity and it will not endure past the end of "Quantitative Easing" (QE) which ends next month, according to Bernanke, because of all the "green shoots" in the housing sector (uh-huh, right). At some point we have to deal with the reality that the Recession may be "over" in the sense that GDP stops contracting, but that only means that the economy has reset at a substantially lower level of activity and prosperity. It does not mean a return to things as they were in mid-2007. Meanwhile, the banks are zombified with bad debts (held at unrealistic mark-to-fantasy levels to conceal the truth, FDIC is bankrupt, and the Fed and Treasury are scrambling desperately to keep the T-Bill auctions going (playing all sorts of games in the process) to hold the creditors at bay.

The situation is simply too tenuous to imagine that more rude shocks are not in store. It's indeed possible that in a year or so we'll see where we are now as the Good Old Days.

I think we're going to be stuck in the doldrums for a long time, until we recognize we can't get out of a gimmicky economy with more gimmicks.

No Honor Among Thieves

This is pretty hilarious stuff, the news that Dick Cheney is starting to bad-mouth W about Bush "going soft" and paying attention to irrelevancies like "public opinion" and the sentiments of the American people during his second term. Dick was always the True Believer: a thoroughly corrupt and manipulative schemer who used his office to enrich Halliburton and KBR, who disregarded any law he found inconvenient, who walked roughshod over the Constitution. It took quite a while for Bush, never that intellectually quick, to realize how much he had been pushed around by Cheney. The wars, the Unitary Executive, the high crimes, the treason of disclosing a CIA operative's identity, the war profiteering. Cheney always figured he could play his ultimate trump card at the end and assure himself and his henchmen of a Presidential pardon that would leave them free to enjoy their wealthy retirement beyond the reach of the law.

The W went wobbly on him. Bush's failure to grant a full pardon to Scooter Libby (as opposed to the commutation of sentence) meant that Libby remained a convicted felon, disbarred, his civil rights impaired. To Cheney that was a bad sign. Bush was beginning to talk against the Family. Then Bush started rambling on a lot about the "judgment of history," his legacy, his library, his freedom agenda. Cheney must have thought: WTF? Who is this guy?

So it must have come as no surprise to Cheney, but a rude moment nonetheless, when Bush decided against what I called the pardon pas-de-deux, where Bush would pardon Cheney, resign, and accept Cheney's pardon in turn. It had the elegance, the outrageousness, the contempt for public opinion that Cheney prized above everything. And Bush wouldn't do it. So Cheney, who knows that bum ticker in his chest could tock for the last time at any moment and has the recklessness such a condition begets, began a program of telling anyone who would listen that Bush himself authorized the torture regime, that he was in on the ground floor. It was almost like listening to Sammy The Bull on the witness stand, taking the Mob down with him.

Which brings up an interesting misconception. Indoctrinated as we are with "Godfather" myths, a lot of us operate on the assumption that mobsters conduct themselves with some sort of courtly honor, high integrity and a somewhat admirable philosophy of simply doing what's necessary - the other side of the street from the power structure, which, in their self-serving view, is just as corrupt. It makes good fiction. But if you've ever read any of the many accounts about actual life in the actual Mob, it becomes apparent that the personalities, of course, are really detestable scumbags - sociopaths, characterological misfits, liars, betrayers without any sense of personal loyalty, who (when the FBI listens in on wiretaps) talk about other mafiosi in the most profane, gossipy, disloyal way imaginable. I mean, how could it be otherwise? These are people who routinely use violence and the threat of violence to get what they want, who have no respect for organized society, who look with contempt on the honest strivings of decent people and see them as suckers. Public enemies.

And so we find out now, as we were bound to find out, that Bush & Cheney also detested each other. I'm inclined to think that W was more the dupe and Cheney more the master, but there wasn't a whole lot to choose between the two. They were both hugely and proudly indifferent of all the suffering they caused, too cynical even to count the civilian dead in Iraq or to assess the effects of the endless deployments to war zones required of the soldiers unfortunately trapped under their command. Fighting utterly useless wars concocted solely for BushCo aggrandizement. They paid no attention as the nation's economy went down the crapper, then mortgaged the country's future while they got out of town before the roof fell in, leaving America a smoking ruin.

And now Cheney turns on Bush. Almost too good to be true.

Senator Feinstein Answers the Mail

I mentioned a while back that the ACLU, famed for their championing of the Blacklisted and other undesirables, urged me to write to President Obama about the "indefinite detention" policy under consideration by his Administration, whereby detainees who cannot be convicted (because there is either no evidence they've done anything illegal or the evidence does not amount to a prima facie case) can nevertheless be held forever because they might be a problem in the future. Prez O himself did not respond, but I guess the ACLU, always hard at work perserving my and your freedoms, sent copies to my Congresspeople.

Senator Feinstein's computer took the time to respond. My comments in blue.

Dear Mr. Swimmer:

I want to thank you for contacting me to share your concerns about indefinite detention and the U.S. policy for holding suspected terrorists. [Not at all. It was my pleasure.}

President Obama has ordered that the detention facility at Guantánamo Bay, Cuba be closed within a year. [Actually what he said was, "Within a year of taking office." That obviously won't happen.] He has also established task forces to review U.S. interrogation and detention policies and evaluate how individuals currently held at Guantánamo should be handled - whether to prosecute them, transfer them to the custody of other nations, or continue to detain them in other circumstances. [It's actually the "other circumstances" that I was writing about.]

I support the President's efforts and, as Chair of the Senate Select Committee on Intelligence, believe there are sufficient and secure alternatives to holding detainees at Guantánamo. For example, individuals could be tried in civil or military justice systems and held in maximum security and super-max prison facilities. Federal courts are capable of prosecuting individuals who have violated U.S. criminal laws and have successfully handled international terrorism prosecutions in the past. The President has also indicated that a fair and reformed military commission system, consistent with due process laws, may allow the U.S. to prosecute individuals who have violated the laws of war. [Every successful terrorist prosecution has been conducted in open federal district court, from the Blind Sheikh to Timothy McVeigh to the Shoe Bomber to Ramzi Yousef to Zacarias Moussaoui. Why do we need a parallel kangaroo system? To convince Dick Cheney we're tough? If you're concerned about terrorists "in our midst," do you want to take a look at the twelve million illegal aliens in the country and see if any of them pose a problem? They're "in our midst" and we have no idea who they are. Otherwise, it seems kind of like scaremongering to impress the Right Wing.)

The Administration has signaled that the U.S. may consider prolonged detention as an option for detainees who are determined to be too dangerous to release. According to the Administration, any such system would be required to have Congressional authorization and would include periodic reviews to evaluate the national security threat posed by detained individuals. [Okay, see - that's sort of the problem. You cite as authority, "According to the Administration" and "Congressional authorization." What I was actually writing about was the United States Constitution, and specifically the Due Process Clause. “It was not left to the legislative power to enact any process which might be devised. The [due process] article is a restraint on the legislative as well as on the executive and judicial powers of the government, and cannot be so construed as to leave Congress free to make any process ‘due process of law’ by its mere will.” Murray vs. Hoboken Land (1855), U.S. Supreme Court. And while I'm sure you need no reminding, what the Due Process Clause actually demands is that no person be deprived of life, liberty or property without a judgment following a fair hearing before a neutral judge on the basis of evidence introduced according to the fair procedures. The Founders adopted the Fifth Amendment's Due Process Clause from Magna Carta (1215) and King John's edict to the same effect. Also, you may have noticed that since the Supreme Court handed down the Boumediene case and allowed Guantanamo inmates the opportunity of habeas corpus (which your Senate unconstitutionally wrote out of existence in the Military Commissions Act), 28 out of the 33 inmates who have brought peititions have been exonerated by the courts, and many of the judges ruling on the habeas petitions have been conservative, even Bush-appointed judges. Which gives you an idea of how pathetically weak the cases are against these detainees. If the same percentage applies against those held forever without a case the feds can prove, then about 85% of them will be innocent people locked up forever in a cage waiting for a "review" to set them free.]

I am following this review process closely, and I am committed to working with the President to carefully evaluate these alternatives and what changes in law may be needed. Please do not hesitate to be in touch with my Washington, D.C. office at (202) 224-3841 if you have any questions or additional input. Warm regards. [Right back atcha, but if you're going to change the law and operate under the Constitution, then I think you need to float a Constitutional amendment repealing the Fifth and Fourteenth Amendments.]

Sincerely yours,

Dianne Feinstein
United States Senator

America Calms Down Just in Time for Fall TV

I guess the recession is over indeed. Everyone is saying so. In truth, I was wearying of the Armageddon/End of Days talk on Zero Hedge, Mike Whitney, Clusterf**k Nation, Peter Schiff and the rest. It's boring to admit, but as Paul Krugman writes today, the administration actually managed to maneuver the U.S. through the shoals and submerged reefs of financial calamity and avoided Great Depression II. James Kunstler, at Clusterf**k, has been reduced to bringing out W.B. Yeats and his "rough beast slouching," this time in the form of U.S. Treasury insolvency. When a Peak Oil guy has to resort to the same line of attack as Pete Petersen and his hysterical crew, you know he's running on empty. I'm just not impressed.

Yes, it's true the United States is in hock up to its eyeballs, but oddly enough this is also true of most modern democracies. That might surprise you, but the CIA (always our first line of defense) maintains figures on the public debt of other countries, and the U.S.A. is pretty far down the list when you measure our public debt versus our GDP. Japan is much worse, Germany and France are not as well off as we - and Zimbabwe? In a class by itself, fortunately. Now it's true that in absolute numbers the United States owes more than anyone (the "biggest debtor nation"), but after all - our GDP accounts for about $14 trillion of the world total of $55 trillion. We're bound to be bigger in every category than everyone else, including, of course, the sheer mass of our people - we're the fattest people on Earth, too. Well, obesity (historically) has been associated with prosperity, instead of diabetes and heart disease; we've just decided to give it a bad rap.

As usual in such discussions, it's important to define terms and know what the Central Intelligence Agency (and it's cool the spooks actually publish such useful stuff on the 'Net) means by "public debt." It's not money a country owes itself. The U.S. owes a tone of money in the form of "intra-governmental" obligations, such as the Social Security Trust Fund. Once upon a time, the idea was that S.S. would sustain itself by current FICA payments until 2017 or so, but the Recession (and it has been that) has probably moved that date up to 2013 - which, of course, is really not so far away. Resort will then have to be made to the "Trust Fund," which currently has zero dollars in it, and will have zero dollars in 2013 as well. That is because Congress spent the Trust Fund surplus over the last 26 years or so. People with lively senses of humor talk about Congress's sacred commitment to "honor" the Trust Fund and "redeem" the "bonds", and I just wish they wouldn't do that when it makes coffee splurt out of my nose.

But I'm just not in the mood to crack on the White House, and not only because I don't want to be reported to flag@whitehouse.gov, Obama's snitch line for those spreading "disinformation." A threshold question always arises - who determines what "disinformation" is? The Bureau of Labor Statistics - should they be reported? You see how easy it is to fall into negativity and wind up being denounced. Do I have to remind you that Guantanamo is still open for business?

So in years like 2013, we'll have some adjustment problems, I think, but look at it this way: just because 2013 arrives doesn't mean that suddenly Social Security will have no money. There will just be a shortfall. At first Congress will borrow the money "from abroad," or the Federal Reserve will lend it to itself, or whatever. The details are not as important as realizing that the U.S.A. is a country of immense resources, and we'll figure something out. Such as telling people who don't need Social Security they can't have it anymore. That's known as "means testing," and it will become a happening thing.

The other thing Kunstler was complaining about again today was ugly suburbia. He's got this thing about the hideous appearance of Subdivision America. Well, okay - it's not so great, I'll grant you that. It so happens I grew up in a kind of West Coast Levittown (orig. NY version pictured above) - actually, a lot more than "kind of." Such places drive the Clusterf**k Man up a wall - sanitized, amenity-free, uniform, boring, etc. Well, look - you're only going to grow up once. Should you really spend your adult life hating your hometown? And here's another question - did you see "Slumdog Millionaire"? Neither did I, because I can't stand Indian cinema, but nevertheless - I'll bet you the conditions in Bombay or Mumbai or whatever where all these slumdogs live are just atrocious, and I can personally attest that the slums around Mexican cities like Guadalajara are unbelievably primitive and depressing - so was it so terrible to grow up in a housing tract where the sewage system worked, we had running water, reliable electricity and plenty to eat? Only if you're like Kunstler and want to complain for a living, and that's only because his novels don't sell.

So "Curb Your Enthusiasm" starts next month and damn if I'm going to spend my time worrying about an economy that's well on the road to recovery, thanks to the steady hand of our surprisingly boring new President. It's okay to be boring, Barack. Ike was boring, too, you know. You will preside over a country where the standard of living has locked in at a level considerably, noticeably, definitely lower than we thought it was about three years ago, based on the consumption levels made possible through 133% household debt-to-asset ratios. The 33% is gone, that's for sure, so settle in, choose your premium channels carefully, and thank your lucky stars you don't live in Bombay. Or Mumbai, or wherever.

There's a Sign Post Up Ahead

In some ways it just doesn't matter why the Dow Jones and S&P are climbing: they are. Various Baroque theories are advanced to explain the improvement. For example, a lot of the trading is actually the result of Wall Street banking institutions playing games in the equity markets with essentially free cash from the Federal Reserve. This one makes particularly good sense. The Wall Street-Washington Axis is now one of the more seamless connections in world finance. It's all manipulation, all the time. One must titter a little at those who are terribly concerned that Obama is a "Socialist." (Even stranger are the claims that he's a Fascist; huh?) Where were such critics when George W. Bush and Paulson held a gun to Congress's head and said, give us the $700 billion or we blow this place up? From TARP to TALF to giving Goldman Sachs a library card as a "bank holding company" so it could have free cash from the Federal Reserve's discount window, the federal government has essentially taken over the financial sector completely. Add that control to its ownership of the military-industrial complex, and what's really left that you would call "private?" Why is what has happened under Obama any different at all from the policies of his predecessor? Okay, aside from the fact that Obama is partly African-American?

My own current obsession is an attempt to understand the Treasury-Fed Reserve-Wall Street shell game. It's fascinating. Is Bernanke conducting business as usual, or is something really funky going on? You have to read around to get any feel for this area. For example, when approaching the latest stats on unemployment from the Bureau of Labor Statistics, you might notice first that Rod Serling, for some reason, is standing on the right hand shoulder of the road. Smoking, of course. "Consider Wally Swimmer, just an average blogger going about his day like any other. Driving down a quiet road, he sees a sign - 'BLS Ahead.' The next stop: The Twilight Zone." (Cut to creepy horn fanfare.)

We lost another 250,000 or so jobs last month, as computed by the Bureau, but the unemployment rate dropped a tenth of a point or so. How can that be? you wonder. Well, hell -- you have to understand "seasonal adjustment" where people get hired this time of year in the auto industry (although they don't get actually get hired, of course), and stuff like "nonfarm payrolls," et cetera and -- just stop asking so many questions. The unemployment rate is better, ok? That's the important thing. The market goes up again. Because of the job numbers? Not really. The pros will tell you all of that has already been "priced in." The market's going up because the market's going up, and if you had invested about a million in the Dow Jones Index in May, maybe you would have made about $350,000 or so by now.

But nah - you're addicted to "conspiracy theories" about Wall Street. Look, just because the Big Boyz are down below with a hand crank and that's what is making the escalator rise doesn't mean you won't ride up with them if you get on board. See? So tell me - why isn't Obama an unqualified financial success? The Dow is going up, isn't it? What happened to all that talk of an "Obama Recession?" Remember? The First Dude was being blamed for absolutely everything before he had a chance to unpack his good suit.

Confusing, isn't it? Infuriating, frustrating? Welcome to The Twilight Zone. What the hell is the Treasury/Fed (Tred?) doing? Paul Craig Roberts, the former Treasury official in the Reagan Admin, has been busting the U.S. pretty good for quite a while about its deficits. His idea: there just isn't enough loose cash in the world to buy up $2 trillion in deficits. So what's the answer? Are Ben Bernanke (BB) and Tim Geithner (Eraserhead) monetizing the deficit? That's another word for printing money and calling it....well, money. (Great line from Danny DeVito in some movie: "Money's really important. That's why they call it money.") The truth is, there have been a couple of dodgy Treasury auctions lately that were almost cancelled for lack of interest. So at a very recent auction, the participating banks (member banks of the Federal Reserve which are required by the terms of their charter to participate in such auctions - the "PBs") bought a bunch of Treasuries of various terms, held them about a week - and then the Fed Reserve stepped in and bought them right back. The same Treasuries, down to the identifying CUSIP number (see? I've been doing a lot of reading for you). Does that make you wonder whether a deal was set up beforehand so it would look, you know, like the auction was real and there were actual banks interested in buying Treasuries, instead of the Fed (the Treasury's bank) bidding on Treasuries auctioned by the Treasury? It made some people wonder that very thing.

Was that a case of the snake eating its own tail? Does this indicate that the famous Chinese, Bank to the Americas, were losing interest in this low quality scrip that pays virtually no interest? I ask questions - you decide. BB (no doubt with Eraserhead's concurrence) announced just now that the Fed would cease its purchases of Treasuries in September, no doubt to mollify our Dragon-Country Bankers who are wondering about the bona fides of this cannibalistic financing we're doing. You know, they're doing what I'm doing - not reading the New York Times, but behind-the-scenes stuff to try to figure out just what the hell we think we're doing. I mean, isn't this a shell game? If we're financing our own debt by printing money and using it to buy our own Treasuries, isn't something a little shaky going on? Wouldn't that dilute the hell out of the dollar, and is that related to the dollar slump?

Well, maybe not. The Fed always buys Treasuries - it's one of the ways it stabilizes interest rates and maintains a market. Yeah, but the way it gets the money these days is by, is by...

Sorry, it's only a half hour show. Tune in next week when Wally Swimmer sees a carousel and realizes for some reason not only is everything black and white, it's 1955.

The Credulity of the Birther Morons

Why won't Barack Obama release his "long form" birth certificate from Hawaii? I've been thinking about that, and I've come up with two reasons, equally plausible. Indeed, they may both be in play.

First, authorizing the release of the LF certificate dignifies an entirely specious and racist "controversy" with no basis in fact. The President has a right to privacy, a right which George W. Bush certainly took to heart when he did everything possible to protect his AWOL records from disclosure, and I'm almost certain none of this "birther" stuff would be happening if Obama's name were Adam Smith and if he were completely Caucasian.

The second thing is that there may be something in the long form version which Barack would simply prefer to keep under wraps. Not his citizenship, of course, but something else, probably about his parents. He comes out of an unusual, very difficult background, and it's possible that for political reasons Barack sanitized or sanded off some of the rough edges in one of his two books about himself, things that might be somewhat contradicted by the long form cert. That's just surmise on my part; I don't care, really, not at all. The circumstances of my birth in rural Alabama were not exactly regal, and I instinctively empathize with an individual who can, through amazing diligence and persistence, rise to the heights he has achieved against very formidable odds. His election speaks well of a certain slim majority of the American populace. They looked past his exotic name, his unusual background, his race and numerous other things which are not in the "mainstream" of American politics.

The "birther" movement (and the Tea Baggers as well) remind us that a return to modernity and prosperity is not going to be easy here in the USA, the Land of the Free and the Home of the Booboisie. According to a Pew poll recently, 28% of Americans believe there's been "too little coverage" by the mainstream media concerning Obama's "foreign birth." 39% of self-identified Republicans hold this view. I don't think it's a huge leap of faith to surmise that when people complain there's been "too little coverage," what they're really saying is that the media are covering up Obama's Kenyan birth. I mean, that's what I'm talking about: my utterly crackpot country, right or wrong. It goes right up there with the Gallup finding that only 39% of adult Americans "subscribe" to the theory of evolution (figures on subscription to the theory of gravity were not immediately available at press time.)

Which is probably another reason Obama does not release the long form cert: what's the frigging use? Despite his sunny affability, Barack has traveled this country more than most people and I doubt the Pew or Gallup findings would surprise him. No doubt he has internalized a pretty accurate sense of the dimness of the wits of his not-so-loyal subjects. We just ain't the brightest people in the world, when all is said and done. Barack Obama is trying to lead a technological revolution in a country where only 39% of the populace actually believe in the most basic tenets of modern science. Good luck with all that. Can that actually work?

I suppose the lingering viability of the Republican Party is that they never make the mistake of overestimating the intelligence of their cadres. The Tea Bag Movement, as it applies to health care reform, attempts to convince its drooling foot soldiers that Medicare is not a government program, or that the Veterans Administration does not provide socialized medicine. And they get away with this stuff, easily. How much easier to "prove" to these people that a guy named Barack was actually a Muslim born in Kenya. True, he has a Hawaiian birth certificate, which the state of Hawaii stands behind. The Honolulu Advertiser and Bulletin published a notice of his birth in 1961 and stated that his parents lived on Kalanianaole Highway, which I can not only pronounce but know the exact location of. As Vincent Bugliosi wrote in describing the overwhelming evidence against O.J. Simpson, this is the sort of corroborating evidence that just doesn't happen "in the real world" unless it's true.

Doesn't matter. The Birthers can refute all that. The Obama family, the State of Hawaii, the Advertiser and Bulletin are all in on the same conspiracy. Trying to convince them otherwise is actually proof they're right - otherwise, why would you be arguing so strenuously on the basis of such "old" evidence (you know, the original, true stuff)? They will outlast you every time. You might have all the facts, the evidence, the plain common sense, but they have something more sustaining - their rabid hatred. One of my favorite writers, Michael Shermer, editor of Skeptic magazine and author of Why People Believe Weird Things, puts it this way:

"

"There’s no amount of evidence or data that will change somebody’s mind,” says Michael Shermer, who is the publisher of Skeptic magazine and a columnist for Scientific American, and who holds an undergraduate and a master’s degree in psychology. “The more data you present a person, the more they doubt it … Once you’re committed, especially behaviorally committed or financially committed, the more impossible it becomes to change your mind.”

Yep.

Go Big or Go Home

I suppose one problem about hanging out in the Grand Ballroom of the Titanic post-collision is that the issues to which I might bring more familiarity (such as civil liberties questions regarding America's POWOTS (prisoners of war on terror) recede into the background as the deck begins to list heavily to starboard. It is, indeed, the Economy, Stupid. The economy all the time. Well, as I've noted before, Walden's longest chapter was about the Economy - it's basic, and Thoreau reduced it to its basic basics: maintaining one's vital heat. As I've noted before, the U.S. is actually one of those countries (unlike the Sudan, for example) which could actually maintain the vital heat of its entire citizenry without importing anything. Not saying it would be the most interesting or creative of existences, but it could be done. We could feed everyone and supply the basic energy for keeping warm, which would include insulated residences. As Thoreau warned, we decided instead to use solutions which are more complicated than the problem itself ("to speculate on the world market to buy one's shoelaces"), and through the mechanisms of capitalism some people became as rich as Croesus and others became too poor to own a pot to piss in. And guess which side America's Christians tend to be on (no fair peeking)?

I watched the O Man in Indiana, and he hit the right notes. He was talking to all the out-of-work factory workers about the need for America to build its own electric cars, devise its own hi-tech batteries, build its own wind turbines, and for the government to invest in all these things. Right on! Along such paths America's future prosperity lies. Seriously, no irony for a moment. O's problem, naturally, is that there is a serious competition for scarce resources - the money to keep people afloat who are unemployed and broke now versus funding the future salvation through a new energy regime and domestic manufacturing. Where we are now, of course, is at the starting line of a race we should have begun about 20 or 30 years ago, but we didn't do anything because, to the extent that Congress had anything to do with it, they always think like undisciplined teenagers (boys, in fact) with no thought for the morrow, no planning, spending their entire allowance and borrowing against the future (stealing from the Social Security trust fund). So here we are, with a collapsing economy and with the real solutions years and years off, but with the problems on top of us now. For example, David Rosenberg, Chief Economist at Merrill Lynch, describes it this way:

The details in today's report left something to be desired. Consumer spending came in at -1.2% annualized, twice the decline expected by the consensus. This occurred in the face of gargantuan fiscal stimulus and leaves wondering how this critical 70% chunk of the economy is going to perform as the cash-flow boost from Uncle Sam's generosity recedes in the second half of the year. Imagine, government transfers to the household sector exploded at a 33% annual rate, while tax payments imploded at a 33% annual rate and the best we can do is a -1.2% annualized decline in consumer spending in real terms and flat in nominal terms? What do we do for an encore? In the absence of the fiscal largesse, it is quite conceivable that consumer spending would have shrunk at a 10% annual rate last quarter! Nonresidential construction action sagged at an 8.9% annual rate and this was on top of a 44.0% detonation in the first quarter. Ditto for equipment & software 'capex' spending, also down at a 9.0% annual rate and this too followed a 36.0% collapse in the first quarter. Residential construction slumped sharply yet again, this time at a 29.0% annual rate. These are the guts of private sector spending and collectively, they contracted at a 3.3% annual rate -- the sixth decline in a row. So while there are many calls out there for the recession's end, it remains a forecast as opposed to a present-day reality.

Things are not working out. One problem is that I think Obama picked up the bad habits perfected during the Bush Years - specifically, you can say anything whether it makes empirical sense or not, and if it's what people want to hear, it will go unexamined. "We're fighting them over there so we don't have to fight them over here." This never made any sense whatsoever. Chances are that fighting them over there increases the chances you'll fight them over here. Similarly, borrowing a lot of money to disburse to the general populace is a nice thing to do, and it's what Paul Krugman wanted you to do, and it pushes the problem off for a while so your first year in office is not enjoyed several thousand feet down in the cold North Atlantic. But it does not solve anything long term. It simply inspires Happy Talk from Larry Kudlow & Co. about "green shoots" and the "end of the recession," and they talk that way because they're trying to get suckers back in the market.

Forget about "ending the recession." This is simply a meaningless milestone indicating that the economy has temporarily suspended its contraction because it's been flooded by government handouts. The huge government deficits are sinking the dollar, driving up the cost of imported oil and food, and getting us nowhere.

A few modest suggestions for Prez O:

1. Do one of two things with your hairstyle: Grow a 'fro or shave your head. Stop looking so non-threatening. Start puttin' it to the Man.

2. Start using some in-your-face terminology. The Wall Street Banksters, for example, should be called part of the "Traitor Class." They insist on greed while 95% of the populace suffers. Why such deference to these creeps, Barack? They're part of the "multinational cabal" (feel free to use) that does all that business with China (& Asia generally) even though China violates every worker's right in the book, cheats on patents and copyright, and uses protectionism to guard its key industries from import competition. Let's impose tariffs to protect our own nascent hybrid and battery-powered vehicle industries, and our wind turbine and solar industries. Stop pussyfooting around. America First, goddammit.

3. End those stupid wars and cut the Pentagon budget in half. Do I really even have to explain it?

4. Bag the Bipartisanship. Look, there's a very ugly segment of this society, probably 20% in number, who are racist to their bone and are never, ever going to give you a fair shake. How would I prove my American citizenship? The same way you have, but they don't care. Look at those Tea Baggers! Their faces are contorted in the same twisted hatred we saw in pictures from the Southern integration fights of the 50's and 60's. They're all still around, as you know better than I. Write them off. Don't water anything down anymore. Win with your majority or lose, but don't lose by giving the game away before you start.

O Man, you're pretty much where Butch and Sundance were in Bolivia. It's going to get ugly, and to switch metaphors, you can either quietly and politely help the stewards and mates with the deck chairs, while everyone blames you for the disaster, or you can begin separating yourself from the causes of the problem and at least begin the American Renaissance. It won't work to play politically correct games of doing acceptable things which are guaranteed to fail. Go Big or Go Home.

Schiff's Jeremiad, or a Voice Bumming Us Out in the Wilderness

I don't know why, exactly, Peter Schiff is so right all the time - but he is. Is it just because he's a Cal man? There must be more to it than that. In some respects I suppose his politics are different from mine, but maybe in a collapsing economy the apparent differences are narrowed to triviality. Once the government runs out of options, it doesn't much matter whether its comprehensive bankruptcy prevents it from pursuing liberal or conservative policies - it can't really pursue either one.

I never really bought into the idea that took the basic form, "well, the American economy is bad, but the economies of foreign countries are much worse." It seemed like way too much of a coincidence. One can understand why the American economy would grind to a halt - it's based on personal consumption, which was fueled in large part by debt, which in turn was financed by lines of credit and inflating housing prices. So when the preconditions were removed (the housing market always goes up!), it makes sense that what Peter Schiff calls our "phony economy" would collapse. That has now happened. But our misery-loves-company argument smacked of the usual American Exceptionalism and arrogance. Schiff sets the record straight on that score - the sag worldwide owes to the intricate interplay between foreign economies and ours (such as buying all that bad paper based on securitized mortgages), but that does not mean that all foreign economies suffer from the same underlying malaise of bubble economics.

If Schiff sounds over-the-top, bear in mind that he hasn't really been wrong yet. Ben Bernanke, on the other hand, has been so wrong over the last few years that it would be hilarious if it were not so horrifying. Schiff believes that the desperate attempts by the political establishment to stave off the day of reckoning, when we come to terms with the essential phoniness of an economy based on borrowing vast sums of money in order to buy things from each other, most of it imported, will simply make the problem worse. This was my essential problem with Obama's stimulus package. What happens when the money is gone? And what is the effect on the deficits and the increased need to borrow even more when federal tax revenues are falling off a cliff (down 18% over the last year)? Advocates for stimulus, such as Paul Krugman, never answer that question, so mesmerized are they by Keynesian thinking. But Keynes was not writing about economies which were past their prime and sustained by life support - he was writing about cyclical downturns.

The dollar is sinking, foreign investment in U.S. Treasuries is drying up, and we're running out of gags to keep the circus going. The dollar is losing its former sheen. And manipulating the Dow Jones, like the patriotism of another era, is probably just the last refuge of scoundrels.

http://www.zerohedge.com/article/peter-schiff-phony-us-economy

Audit the Fed?

Friday's Happy Face entry was, I guess, somewhat satirical. Actually, I simply do not see how the United States economy can recover in anything under a decade or so. The interesting part for me is the study of the various components, or shells, under which the Powers That Be are hiding the grim truth from their subjects. In this regard, the "Audit the Fed!" Brigade forming in Congress strikes me as a kind of Suicide Cult. It's borderline treason, in fact, for otherwise estimable pols like Ron Paul to suggest we really, really ought to kick over the slimy rock called the Federal Reserve Bank and see what slithers out. I'm pretty sure we don't want to know.

We don't want to know because the only thing actually propping up the American economy at this point is the ability of the United States Treasury to issue the world's fiat currency. The consequences of losing that capacity, or the worldwide, coordinated denigration of that ability, would spell almost instantaneous disaster. The Fed and the Treasury are playing an elaborate game of creating money out of thin air through the interplay between the two institutions. It is made deliberately complicated and confusing by the principals involved. The last thing they want is clarity. I heard Bill Maher the other night on "Real Time" express his fundamental inability to understand "how it all works." Bill's a smart guy, so you can rest assured he doesn't understand it because no one who could explain it wants him to understand it.

Who or what is propping up American consumer demand? Who or what is propping up the Dow Jones Industrial Average? Who or what is filling in the massive shortfall called the American federal budget deficit? Is the recent stock market rally (March to the present) the result of an improving economy? If it is the American public actually investing in the stock market, why is it that there is no apparent significant transfer from savings (such as money market) into equities?Of the $2.7 trillion runup in the stock market since March, only $400 billion can be traced to transfers from money market and savings. So the balance of $2.3 tril is coming from...? The usual place: the bailout money, laundered through financial institutions which turn around and invest in order to drive up the value of their own equities. And the bailout money comes from? Borrowing?

The surge in the GDP? Well, government spending is up 11%, and government spending (as faithful readers know) is one of four parameters used in computing the GDP. And half of all government spending is borrowed money at this point. So 5.5% of the increase is actually a non-offset liability which is being counted as a positive sign of growth.

The stimulus package (borrowed money) is temporarily boosting consumer activity, somewhat. And when America's payday advance runs out?

Are foreigners actually buying U.S. Treasuries at this point, or has the Treasury/Reserve figured out a way to create the illusion that they are to disguise the Fed's own purchase of America's own debt (through straw men, through compliant foreign banks, through...look, quick, over there!) ? As Dmitry Orlov says, have we moved from IOU to I-Owe-Me? Do Bernanke/Geithner have the fastest set of hands in the history of all shell games?

So where do all these illusions come from? I suppose from the usual source: the inability of the political system ever to admit how dire things really are. We've "stabilized" the banks by allowing them to mark-to-fantasy all those trillions in toxic debt (mortgage-backed securities, other flimflammery) stuffed away in their reeking vaults. It allows them to pretend they are solvent when they are not, to use fraudulent accounting to impress federal "regulators" who are all too willing to believe in the first place.

Audit the Fed? I don't think so. Move along. There's nothing to see here. We're in the middle of an amazing rebound, that's all. Without really dealing with anything (because we can't), we've managed to solve everything. Do you believe it? Good, glad to hear it. Really, that's all we were after.

Happy Days Are Here Again

It's good that the recession is over. I don't know how much more we could have taken. Things should shortly return to normal, the Dow should move back up to 14,000, unemployment will move below 5%, and housing prices will regain their 2006 levels. It was a close call but effective and timely government intervention saved the day.

With housing prices restored, equity borrowing and refinancing can resume and the consumer economy will become again the dynamo of world commerce. Chinese manufacturers will have a reliable market for their goods, the Big 3 automakers in the USA will rehire their laid off assembly line workers, oil prices will stabilize, and inflation will remain under control.

The war in Afghanistan, thanks to the Obama surge, will at last be won and added to the victory column next to Iraq.

State and local governments will balance their budgets, tax revenue will increase, Social Security will remain solvent and Medicare will continue to provide health care to the aged.

The very land will flow with milk and honey, a heavenly choir will sing at sunrise, and a lamp will appear at your feet to light your way at night.

It was a near thing. I hope we've learned our lesson.

Chalmers Strikes Back at the Empire

I remember Chalmers Johnson as a preternaturally dynamic professor with a delivery and a voice timbre somewhere between John Cameron Swayze and Jack Benny, if that does anything for you. He was teaching politics of the Far East those days, and he seemed to stop by the class in Wheeler Auditorium on his way to doing something much more important. Such as counseling the government or reading top secret reports from the Rand Corporation. Anyway, he was intellectually intimidating, to say the least, as he addressed us in that staccato, metallic voice.

He was conservative in those days and always seemed faintly disgusted by the radical hijinks going on outside on the Berkeley campus, an impression of him which turns out to be the case, I learn by reading his late writings. Which makes his current position on the American Empire, and his Nemesis trilogy, both surprising and more credible. He's out today with a new post (which can be found on both the Smirking Chimp http://smirkingchimp.com/thread/23038 and Huffington blogsites) where he discusses the 800 pound gorilla that no one ever wants to disturb as they discuss health care reform, or American solvency or our impending bankruptcy. Namely, what to do about those 700 to 800 bases, forts and other military installations the United States maintains around the world, with their huge expense, or what to do about those two ruinously expensive and completely superfluous wars we keep fighting - all against a backdrop of a federal deficit this year of $1.8 trillion dollars.

Chalmers sticks to the official Pentagon number this time around, about $664 billion, which does not count, of course, the "supplementals" for Iraq and Afghanistan; but elsewhere, he does a pretty convincing case of demonstrating that the total outlay for defense and security, honestly counted, approaches $1 trillion per year. I see in the health care debates that Congress and the White House are fighting for the high ground on whose plan will be "deficit neutral." This is such a bad joke. The Republicans chortle that the plan, which, after all, is only concerned with the health and wellbeing of the American people, would cost $1 trillion over ten years, and the Democrats fight mightily to demonstrate this is not the case, that it could all be paid for by "taxing the rich," or employer mandates, or some other conjurer's trick. Suppose it did cost $1 trillion over ten years; gee, where could we get the money?

No one, including our Change Agent new President, ever even brings up the idea of slashing our insanely-too-expensive military budget. Johnson quotes all of Obama's recent speeches to the National Defense University and to the graduates of Annapolis that no matter what happens, America will continue to dominate the world militarily, that we will have unchallenged supremacy. He's so very good at knowing exactly what his audience wants to hear. Of course, in Washington this is simply what almost everyone says. Nothing else is even vaguely admissible.

Other countries don't maintain an archipelago of foreign forts and bases. Only we see the need. We spend just about half of everything spent in the world on defense, but it's never quite enough, because Obama's budget, half of which represents borrowed money, increases the defense budget over Bush's last budget. If we don't figure out how to rein in this spending, nothing else is really possible. The tax base of our sinking economy is not going to produce excess revenue to fund vital domestic needs. $250 billion could be saved annually simply by dismantling the foreign empire of military installations, and another $100 billion could be saved by ceasing the inanity of these pointless conflicts in Iraq and Afghanistan. That's about half of the official Pentagon budget including the supplementals.

Some measure of fiscal rationality could therefore break the surface. But it never even gets discussed, which is one sure way of telling that the august solons and executives in Washington D.C. are not at all serious about responsibility or "change" or anything else that would really help. And until they do come around to that realization (which, as Chalmers sadly notes, will probably not happen until events force them to confront the spectre of bankruptcy), there is really almost no point in following the health care debate, cap & trade, or Barack's keggers with cops and profs.

The Parallax of Nostalgia

I consider it one of my minor contributions to public discourse: coining phrases. This is much easier than research, after all, which is painstaking and time consuming. The parallax of nostalgia is the term I have settled on to explain that nagging problem which hinders so much in the way of progress in the United States: the belief in American Exceptionalism. Clinging to this delusion makes it very difficult to come to terms with what actually has to be done to rejoin the First World, instead of sinking into the debt-ridden obsolescence of a banana republic or Soviet-style collapse.

We can recall the parallax phenomenon from our geometry or astronomy classes, or we could if American schools still taught geometry or astronomy or if there were still American schools. Leaving such caveats aside - broadly speaking the parallax error is introduced by looking at a phenomenon from a different angle; for example, if you have a needle type speedometer, a passenger in the front seat may complain that you're going too slowly (particularly if he is an older Jewish person from New Haven now living in Florida). This error in perception is because the needle appears to be slightly to the left of the numeral which it is actually above because of the different angle of perception.

I borrow the parallax idea to explain the misperception about America so common to my generation and those older. In my case, for example, my mental matrix or "trance" concerning my Homeland (which we never called the Homeland then) was formed during the heyday of American dominance, the 1950s. At that time America stood astride the world like a Colossus. About 67% of everything manufactured in the world was made here, "Made in America" was a guarantee of quality, General Motors was not only the largest car manufacturer in the world but the largest company, period. Chevrolet, all by itself, was bigger than Toyota, Mercedes, Volvo, Fiat, et cetera. Militarily, no one could touch us, despite the hysterical ranting of the Right Wing and their lies about a "missile gap" with the Soviet Union.

Things have changed just a little bit. It's true that militarily we still stand alone, the result of concentrating almost all of our public resources on this one enterprise. For day to day living, however, there is a limit to the utility of a large store of hydrogen bombs. For many people who have never thought it through, the gross slippage in the quality of American life has been masked by this "parallax of nostalgia," the distortions caused by the attempt of a consciousness formed in another era to see the present.

A modest example. A few summers ago, I was in Germany with my daughter for a few weeks. Having 3 or 4 days on our hands at the end of the trip (she had spent most of her time with the exchange student from Ulm who had lived with us for a year and attended our local "high school," although her academics were hamstrung by the inability of the school's math or science departments to offer any course she hadn't already covered by the eighth grade), my daughter and I decided to take a train trip up the Rhine to see the cathedral in Cologne, as well as the superb modern art museum in that fair city. So we did. Our flight was scheduled out of Frankfurt on the third day, so rising at a reasonable hour that morning we boarded the Neubaustrecke - Koln/Rhein-Main Inter-City Express at the Cologne main train station. Color-coded squares along the platform told you exactly where to stand so you could easily board your car and take your reserved seats. These seats were leather recliners with reading lights, and everything in the car was scrupulously clean. The train covered the 177 kilometers (110 miles) in about 70 minutes. The ride was so smooth you were barely aware of motion. The train went directly to the Frankfurt Airport, arriving downstairs an escalator ride away from the check-in lobby.

This line was rebuilt between 1995 and 2002 at a cost of about 6 billion Euros, which in those days was about the same amount as in dollars. The engines had to be very powerful to maintain speed over some stretches where the train pulled a 4% grade, and of course the railbed needs to be buttressed to ensure safety at high speeds. $6 billion is about what the United States spent every three weeks in Iraq during the height of the war ($2 billion per week being the most often quoted figure). If you look to the clock on the right, you'll note we're inching up on $670 billion for Iraq at this point, and this is the simplest calculation of the cost - money out the door so far. Using my 1950s math skills, I conclude that the United States could have built about 112 Neubaustrecken of its own with the same money during the same time period, or about 12,320 miles of high speed track. This is enough to connect many of America's main metropolitan areas with German-quality Inter-City Expresses.

Everyone more or less concedes now that the Iraq war was simply an act of political idiocy. I don't think we often stop to consider how much our stupidity costs us. I could quit right there, but I noted recently that Tom Friedman, the "porn-'stached" columnist for the New York Times (Matt Taiibi came up with that absolutely priceless image), and a major cheerleader for the Iraq war, was writing one of his usual pugnacious columns about our "competition" with China where he noted:

"Eventually, I decided that the only way to respond was with some variation of the following: “You’re right. It’s your turn [to use dirty energy]. Grow as dirty as you want. Take your time. Because I think America just needs five years to invent all the clean-power technologies you Chinese are going to need as you choke to death on pollution. Then we’re going to come over here and sell them all to you, and we are going to clean your clock — how do you say ‘clean your clock’ in Chinese? — in the next great global industry: clean power technologies. So if you all want to give us a five-year lead, that would be great. I’d prefer 10. So take your time. Grow as dirty as you want.”

Clearly, Friedman has an advanced case of Parallax Nostalgia, yet he is the kind of "opinion-maker" who dominates our national conversation about such things. Earth to Friedman: the technologies have already been invented. Israel, Germany, Denmark and China lead the world in wind turbines, Germany and Japan have a huge headstart in photovoltaics, and China is already manufacturing all of this stuff. You're dreaming. That huge military establishment you're so fond of, enabling you to travel to all of America's "theaters of war," ensures that we're not going to clean anyone's clock, except maybe literally, as one of the "service industries" we specialize in.

My anger issues

I'm not actually angry at anyone or anything. I'm a little too dispassionate and philosophical for that. I keep my "thought diary" as Orwell suggested, which records the evolving American scene, and since I'm not (a) a religious zealot or (b) an uber-capitalist, I find it dismaying and depressing at times, but it's still possible in this country to live a satisfying life. Mostly, things still work, after all. The police and fire departments still respond, there are groceries at the store, gasoline at the pump. The emergency rooms are open for business. I can indulge myself in my pursuits of interest. This state of affairs is likely to persist for the foreseeable future.

I think it's wise to conduct one's life in light of reality, that reality which is likely to (a) "interface" with yours and (b) which magical thinking will not dispel. For example, financial commentators keep reporting on the latest outrages to emanate from the New York Stock Exchange. Now it's that Goldman Sachs (and undoubtedly others) have gamed the system by anticipatory computer programs which use algorithms to detect the direction of trades by the general public and other Suckers and use the milliseconds of delay built, conveniently enough, into the Exchange's computer systems to extract tiny advantages, multiplied millions of times over until it becomes real money. Such as the huge profits which Goldman mysteriously continues to pile up in a depressed economy. This HTF scandal (High Frequency Trading) takes its place in the queue with the old scandals involving preferential treatment of insiders by mutual funds; "laddering" of IPOs by the investment bank underwriters; the sale of fraudulent derivatives and corruption of the ratings agencies; and general insider trading, all of which were attacked by the Sheriff of Wall Street, Eliot Spitzer. So of course he had to go.

In some sense I suppose it's still possible to make money as a general-public investor, in the same sense that "liberal" slots in Reno will also allow you to make money. You simply have to recognize the game is rigged and accept those gains which the Big Boyz leave on the table for you. Their return is guaranteed, because they cheat. Yours is subject to the whims and vagaries of the market. Any reform of these outrages, we know going in, will be tepid and ineffectual.

Does pointing that out make me an Angry Person? I don't think so. It just makes me someone without a dime invested in the stock market (see rules above). If I had a high speed computer located a few feet from the NASDAQ mainframe, like Goldman Sachs, and could use algos to guarantee my returns, and I had no conscience whatsoever as the Gnomes of Wall Street do not, then - bonanza! But that's not the way it works.

Similarly, the corruption of Congress is now so complete that it's become one of the "factors" that everyone openly considers in adjudging the outcome of legislative battles. Think about that one. When Greg Palast wrote The Best Congress Money Could Buy he was considered something of a crank and conspiracy theorist. Simply a prophet not honored in his prime, that's all. Now we have websites such as Opensecrets.org, which tell you to the dollar who's on the take. It's a bipartisan game, to say the least. Some of these pols, such as Chuck Schumer and Dick Durbin, have enormous war chests overflowing at any given moment, and as pointed out here too many times, it seems unlikely that Schumer's advocacy for the hedge fund manager's exemption from ordinary income tax rates (they're allowed to use capital gains rates) is coincidental. Wall Street is his home turf.

American commoners can compete with Big Money at the presidential level; Barack Obama raised more than $650 million from individual donors. But at the less glamorous level of Congressional races, we don't have a chance mixing it up with the lobbyists. And Congress is where the laws are written (or where the lobbyists write the laws). The influence of Big Money tends to ossify Congress by keeping old, malleable and corrupt members permanently in power, and the ongoing process of concentration of wealth in this country means that Big Money is in fewer and fewer hands (a process accelerated by Congressional passage of tax reduction laws at the high margins). So they can dictate the parameters of allowed "reform," which is why Congressional enactments tend to look like votes of confidence for the status quo. The Bankruptcy "Reform" Act (improving the position of credit card companies versus the individual bankrupt), the anemic "cap and trade" bill for global warming, the tiny little "victory" in voting down a completely unnecessary piece of military hardware (the F-22 - although, Senator Boxer, don't think I didn't notice that you voted to keep building them.) And on and on.

The McCain-Feingold Act on campaign finance reform set limits on "soft money" and on the maximum amount of money that any individual can contribute to a candidate, but when they pass the hat at Goldman Sachs they come up with a lot more money than you do. The systemic corruption of Congress (Washington generally) means that responses to crises will always look like grudging accommodations, and more often simply token gestures. This is why we do not have a real public transportation system in this country, nor socialized medicine, nor a progressive energy policy, nor fuel efficiency standards, nor an FDA which actually protects public health, nor...And why we do have a massive military establishment and armaments industry, and why we fight wars all the time which are not only unnecessary, but counterproductive.

If you're not outraged, you're not paying attention. Still, I'm not angry. It's all very interesting in a macabre way. The energy flowing through a system defines the system, as the engineers say, and the energy in American government life comes from concentrated wealth flowing through public media (where advertising is done) to the election of corporate bag men who keep things profitable for their bosses. As to health care reform, this is more the exception that proves the rule. It must be a measure of how absolutely dire the problem has become; the situation is so desperate that even Congress has been backed into such a corner that assisting the general public is the only way out. Otherwise, Congress would do nothing.

Wow -- I had no idea the health care system had gotten that bad.

Actual Political Solutions to Problems Are Nonviable in the United States

It took a while to crystallize the essential problem, but I think I'm zeroing in. Maybe that's why the airwaves now are filled with Birther conspiracy theories; why the hell not?, I guess you could say. Could we broaden this perspective and challenge the American citizenship of all 535 members of Congress? Would it make any real difference? Also, I'd like us to prove that Scalia and Alito are actually Italian citizens never naturalized as Americans. I'm positing that now as a "theory." That's my right, correct? Where are their "long-form" birth certificates? Okay, suppose they have those. How can I know, for certain, they aren't forged?

I wonder if it's occurred to President Obama that the opposition party, the GOP, has become a cult? It meets all the operational definitions - I recommend a book by a Northern California psychiatrist named Arthur Deikman entitled Them and Us for further explication. By such operational definition, you cannot do business with cults or persuade them of anything contrary to the founding myths and belief systems of the cult. The revelation that there is a kind of Christian boarding house on C Street in Washington where The Family meets, including such wackos as John Ensign of Nevada and Jim DeMint of South Carolina, fits right in (there are a couple of Democrats in residence as well). It is Congress's version of Jim Jones & the People's Temple, nuts elected by nuts in their home states, such as Tom Coburn of Oklahoma who advocates the death penalty for doctors performing abortions, which, as far as I know, is the first instance of a sitting United States Senator advocating execution for a doctor performing a Constitutionally protected medical procedure.

I'm sure it has occurred to Barack Obama, since another feature of the contracting, deliquescing Republican Party is that it's becoming home to frank racists who refuse to accept the idea that a native-born American man of partial African heritage has actually been elected President. Yet he's forced to continue talking to them, maybe for infrapsychic reasons arising from his own innate decency, as if a DeMinted party dominated by wingnuts and religious psychos are "legitimate partners" in solving America's problems.

How is he going to keep that up for another 3-1/2 years? I can't believe it's possible. The lingering viability of the Republican Party, at the national level, meanwhile ensures that no "radical" solutions (meaning: effective solutions) are viable for America's real problems. The shitty legislation wending its way through Congress to solve the healthcare crisis reflects this reality. The assertion of the "Christian" belief that people should die if they have the bad judgment, or ill health, to be priced out of the health market arises from the Wingnut Brigades of the Republican Right (meaning: Republican), with their precious, death-grip adherence to "private enterprise" and to the inalienable rights of large insurance corporations to do what God put them on Earth to do: to grind the people to death with high premiums and random declinations of coverage. Anything else is "Socialist," like, for example, the military-security state which commands $1 trillion in "taxpayer money" (okay, borrowed foreign money or made-up money resulting from the Federal Reserve buying its own IOUs) every fiscal year. But military spending, since it can be used to crush heathen (non-Christian) religions, is also God-ordained, so no problem.

It's pretty scary, actually, and maybe the signal contribution of Barack Obama's presidency (since actual accomplishments are no longer possible in American life) is that he's brought it all into bold relief. How sick it all is, the racism, the intolerance, the bigotry, the idiocy infecting the values of a broad swath of "patriotic Americans." The one thing that disturbs my equanimity about all this, and never allows me to dismiss the radicalized Christian Republicans as a fringe group on the way to oblivion, is that they currently occupy the approximate place which Hitler and the Brownshirts (Sam Brownback hangs out at the Family too, by the way) occupied in the early 1920's in Germany. Marginalized, nonviable, Hitler in jail for inciting a putsch - it looked like no future at all for them. Then the Great Depression, the vacuum of power at the top, and the Death's Head Cult of the Nazis, the only really well-organized political force in the country, assumed control. So someone as vacuous and ridiculous as Sarah Palin can appear irrelevant and powerless while the vestiges of power remain in reasonably sane hands.

And then the worm turns. Things begin to change, the Zeitgeist mutates, and crazy people begin acquiring a legitimacy they would never enjoy in settled times. That's why I'm never certain whether it's a good idea to criticize Barack Obama or not. Granted, it's going to be the next thing to impossible to ameliorate any of our pressing problems in our corrupt, God-deluded country, but at least the guy's sane, reasonable and compassionate, not to mention secular in his approach. Unconsciously, I'm sure that's one of the main reasons I supported him - McCain would have accelerated our descent into a religion-fueled Fascism. We're not going to have Single Payer healthcare in the USA, we're not going to reduce our nutso defense spending, the government agencies ostensibly overseeing the vital agricultural, pharmaceutical and environmental sectors of American life will remain in the hands of hacks with corporate, anti-human agendas - but at least we haven't arrived at Kristallnacht and concentration camps for political dissidents. Not yet anyway.

Obama - Sane We Can Believe In.

Stop the Torture Carousel, I Want to Get Off

A consensus seems to be forming that what Eric Holder, the Attorney General, has in mind, as far as torture investigations are concerned, is to go after lower level CIA operatives and contractor interrogators who exceeded the Yoo-Bybee-et alia guidelines for permissible torture; that is, those who tortured too much, sometimes to the point of killing their victims. I guess this tendency has become ineradicable in our political culture: the instinct to elevate image over substance. So Holder will investigate whether waterboarders used too much water, hypothermia techs lowered the thermostat too low, wall slammers induced concussion and cerebral hemorrhage instead of just knocking someone silly, etc.

This is a replay of the Bad Apple Theory of Prosecution used in the Abu Ghraib detainee abuse matter. You pick out some low level schlub who didn't read the fine print in the Torture Manual put together by esteemed law professor John Yoo or the Honorable Judge Jay Bybee of the United States Federal Court, who wrote what they did at the instigation of Dick Cheney and his Torquemada, Esq., David Addington, and you wreck the functionary's life by embroiling him in a federal prosecution he can't afford and from which he lacks the political cover of the power elite. This is supposed to show the American people and the world that we just won't stand for torture, that we go after those who commit it hammer and tongs, et cetera ad absurdum ad nauseum.

We've seen this movie and there's no need to produce Bad Apples, the Sequel. We all know what really happened. Bush & Cheney wanted to rough Muslim detainees up, as much as they thought they could possibly get away with; then they commissioned lawyers in the Office of Legal Counsel (that "Little Shop of Legal Horrors," as Sen. Sheldon Whitehouse called it) to write memos justifying torture; then they told the White House-compliant, Republican-controlled House and Senate to include retroactive exonerations for torture in the Detainee Treatment Act of 2005 and the Military Commissions Act of 2006, once the Supreme Court pulled a fast one on them and ruled that Arabs were, after all, human beings for purposes of the Geneva Conventions. The key feature of such exonerations, which tellingly included "all U.S. officials," was that reasonable reliance on the advice of counsel in ordering or committing torture was a defense to criminal prosecution under the War Crimes Act.

Thus, the circle was complete. Write me a memo, John, that tells me I can waterboard Khalid Sheikh, because I want to; if anyone ever bothers me about it, then I'll point to the memo I told you to write so I could "rely" on it.

This is not, of course, absolutely morally satisfying for anyone whose corpus callosum has not been completely cleaved in twain. It's kinda sickening, actually. Here's what I wish President Barack Obama would simply say in answer to a question at a press conference:

Helen Thomas: Are we going to prosecute anyone for torture?

Pres. Obama: No, we're not.

Thomas: Aren't we required to by the Convention Against Torture, the Treaty we signed?

Obama: Yes, we are, but we're going to breach the Treaty.

Thomas: Why are we going to breach the Treaty?

Obama: Because that's the way we do things in this town now.

This approach has the huge advantage of complete honesty, which the Bad Apple Theory lacks. The Bad Apple Theory creates a confused picture; it makes people think we're coming down hard on torture, which we're not doing at all. We're pretending to give a shit when we don't. We're going to lock some CIA field agent up for getting carried way, by being more illegal than the illegal instructions he was given told him he could be. There's no point in that; if anything, it tends to give the official parameters of permissible torture the patina of legitimacy, which they don't deserve. "See? If the field hand had just stuck to the illegal rules, instead of showing off and killing Abu, he wouldn't have these problems."

If Holder doesn't want to to go the origin of the problem, to the top level decision makers (Deciders) who ushered in the Dark Side in the first place, then just forget the whole thing and accept the inevitable consequences. Let the Bad Apples rot and spoil the whole barrel. Torture without consequences: isn't that what we're really saying anyway?