TheCenterLane.com

© 2008 – 2017 John T. Burke, Jr.

The Weakest Link

Comments Off on The Weakest Link

November 2, 2009

Everything was supposed to be getting “back to normal” by now.  Since late July, we’ve been hearing that the recession is over.  When the Gross Domestic Product number for the third quarter was released on Thursday, we again heard the ejaculations of enthusiasm from those insisting that the recession has ended.  Investors were willing to overlook the most recent estimate that another 531,000 jobs were lost during the month of October, so the stock market got a boost.  Nevertheless, as was widely reported, the Cash for Clunkers program added 1.66 percent to the 3.5 percent Gross Domestic Product annualized rate increase.  Since Cash for Clunkers was a short-lived event, something else will be necessary to fill its place, stimulating economic activity.  Once that sobering aspect of the story was absorbed, Friday morning’s news informed us that consumer spending had dropped for the first time in five months.  The Associated Press provided this report:

Economists worry that the recovery could falter in coming months if households cut back on spending to cope with rising unemployment, heavy debt loads and tight credit conditions.

“With incomes so soft, increased spending will be a struggle,” Ian Shepherdson, chief U.S.economist at High Frequency Economics, wrote in a note to clients.

The Commerce Department said Friday that spending dropped 0.5% in September, the first decline in five months.  Personal incomes were unchanged as workers contend with rising unemployment.  Wages and salaries fell 0.2%, erasing a 0.2% gain in August.

Another report showed that employers face little pressure to raise pay, even as the economy recovers.  The weak labor market makes it difficult for people with jobs to demand higher pay and benefits.

*   *   *

. . .  some economists believe that consumer spending will slow sharply in the current quarter, lowering GDP growth to perhaps 1.5%.  Analysts said the risk of a double-dip recession cannot be ruled out over the next year.

With unemployment as bad as it is, those who have jobs need to be mindful of the Sword of Damocles, as it hangs perilously over their heads.  As the AP report indicated, employers are now in an ideal position to exploit their work force.  Worse yet, as Mish pointed out:

Personal income decreased $15.5 billion (0.5 percent), while real disposable personal income decreased 3.4 percent, in contrast to an increase of 3.8 percent last quarter. Those are horrible numbers.

The war on the American consumer finally bit Wall Street in the ass on Friday when the S&P 500 index took a 2.8 percent nosedive.  When mass layoffs become the magic solution to make dismal corporate earnings reports appear positive, when the consumer is treated as a chump by regulatory agencies, lobbyists and government leaders, the consumer stops fulfilling the designated role of consuming.  When that happens, the economy stands still.  As Renae Merle reported for The Washington Post:

“The government handed the ball off to the consumer and the consumer fell on it,” said Robert G. Smith, chairman of Smith Affiliated Capital in New York. “This is a function of there being no jobs and wages going lower.”

The sell-off on the stock market also reflected a report released Friday showing a decline in consumer sentiment this month, analysts said.  The Reuters/University of Michigan consumer sentiment index fell to 70.6 in October, compared with 73.5 in September.

Rich Miller of Bloomberg News discussed the resulting apprehension experienced by investors:

Only 31 percent of respondents to a poll of investors and analysts who are Bloomberg subscribers in the U.S., Europe and Asia see investment opportunities, down from 35 percent in the previous survey in July.  Almost 40 percent in the latest quarterly survey, the Bloomberg Global Poll, say they are still hunkering down.  U.S. investors are even more cautious, with more than 50 percent saying they are in a defensive crouch.

*   *   *

Worldwide, investors and analysts now view the U.S. as the weak link in the global economy, with its markets seen as among the riskiest by a plurality of those surveyed.  One in four respondents expects an unemployment rate of 11 percent or more a year from now, compared with a U.S. administration forecast of 9.7 percent.  The jobless rate now is 9.8 percent, a 26-year high.

Even before the release of “good news” on Thursday followed by Friday’s bad news, stock analysts who base their trading decisions primarily on reading charts, could detect indications of continuing market decline, as Michael Kahn explained for Barron’s last Wednesday.

Meanwhile, the Obama administration’s response to the economic crisis continues to generate criticism from across the political spectrum while breeding dissent from within.  As I said last month, the administration’s current strategy is a clear breach of candidate Obama’s campaign promise of “no more trickle-down economics”.  The widespread opposition to the administration’s proposed legislation to regulate (read that: placate) large financial companies was discussed by Stephen Labaton for The New York Times:

Senior regulators and some lawmakers clashed once again with the Obama administration on Thursday, finding fault with central elements of the White House’s latest plan to unwind large financial companies when their troubles imperil the financial system.

The Times article focused on criticism of the administration’s plan, expressed by Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation.  As Mr.Labaton noted, shortly after Mr. Obama was elected President, Turbo Tim Geithner began an unsuccessful campaign to have Ms. Bair replaced.

On Friday, economist James K. Galbraith was interviewed by Bill Moyers.  Here’s what Professor Galbraith had to say about the Obama administration’s response to the economic crisis:

They made a start, and certainly in the stimulus package, there were important initiatives.  But the stimulus package is framed as a stimulus, as something which is temporary, which will go away after a couple of years.  And that is not the way to proceed here.  The overwhelming emphasis, in the administration’s program, I think, has been to return things to a condition of normalcy, to use a 1920s word, that prevailed five and ten years ago.  That is to say, we’re back to a world in which Wall Street and the major banks are leading, and setting the path–

*   *   *

. . . they’ve largely been preoccupied with keeping the existing system from collapsing.  And the government is powerful.  It has substantially succeeded at that, but you really have to think about, do you want to have a financial sector dominated by a small number of very large institutions, very difficult to manage, practically impossible to regulate, and ruled by, essentially, the same people and the same culture that caused the crisis in the first place.

BILL MOYERS:  Well, that’s what we’re getting, because after all of the mergers, shakedowns, losses of the last year, you have five monster financial institutions really driving the system, right?

JAMES GALBRAITH:  And they’re highly profitable, and they are already paying, in some cases, extraordinary bonuses.  And you have an enormous problem, as the public sees very clearly that a very small number of people really have been kept afloat by public action .  And yet there is no visible benefit to people who are looking for jobs or people who are looking to try and save their houses or to somehow get out of a catastrophic personal debt situation that they’re in.

This is just another illustration of how “trickle down economics” doesn’t work.  President Obama knows better.  He told us that he would not follow that path.  Yet, here we are:  a country viewed as the weak link in the global economy because the well-being of those institutions considered “too big to fail” is the paramount concern of this administration.



wordpress visitor


An Ominous Drumbeat Gets Louder

Comments Off on An Ominous Drumbeat Gets Louder

August 13, 2009

Regular readers of this blog (all four of them) know that I have been very skeptical about the current “bear market rally” in the stock markets.  Nevertheless, the rally has continued.  However, we are now beginning to hear opinions from experts claiming that not only is this rally about to end — we could be headed for some real trouble.

Some commentators are currently discussing “The September Effect” and looking at how the stock market indices usually drop during the month of September.  Brett Arends gave us a detailed history of the September Effect in Tuesday’s edition of The Wall Street Journal.

Throughout the summer rally, a number of analysts focused on the question of how this rally could be taken seriously with such thin trading volume.  When the indices dropped on Monday, many blamed the decline on the fact that it was the lowest volume day for 2009.  However, take a look at Kate Gibson’s discussion of this situation for MarketWatch:

One market technician believes trading volume in recent days on the S&P 500 is a sign that the broad market gauge will test last month’s lows, then likely fall under its March low either next month or in October.

The decline in volume started on Friday and suggests the S&P 500 will make a new low beneath its July 8 bottom of 869.32, probably next week, on the way to a test in September or October of its March 6 intraday low of 666.79, said Tony Cherniawski, chief investment officer at Practical Investor, a financial advisory firm.

“In a normal breakout, you get rising volume. In this case, we had rising volume for a while; then it really dropped off last week,” said Cherniawski, who ascribes the recent rise in equities to “a huge short-covering rally.”

The S&P has rallied more than 50 percent from its March lows, briefly slipping in late June and early July.

Friday’s rise on the S&P 500 to a new yearly high was not echoed on the Nasdaq Composite Index, bringing more fodder to the bearish side, Cherniawski said.

“Whenever you have tops not confirmed by another major index, that’s another sign something fishy is going on,” he said.

What impressed me about Mr. Cherniawski’s statement is that, unlike most prognosticators, he gave us a specific time frame of “next week” to observe a 137-point drop in the S&P 500 index, leading to a further decline “in September or October” to the Hadean low of 666.

At CNNMoney.com, the question was raised as to whether the stock market had become the latest bubble created by the Federal Reserve:

The Federal Reserve has spent the past year cleaning up after a housing bubble it helped create.  But along the way it may have pumped up another bubble, this time in stocks.

*   *   *

But while most people take the rise in stocks as a hopeful sign for the economy, some see evidence that the Fed has been financing a speculative mania that could end in another damaging rout.

One important event that gave everyone a really good scare took place on Tuesday’s Morning Joe program on MSNBC.  Elizabeth Warren, Chair of the Congressional Oversight Panel (responsible for scrutiny of the TARP bailout program) discussed the fact that the “toxic assets” which had been the focus of last fall’s financial crisis, were still on the books of the banks.  Worse yet, “Turbo” Tim Geithner’s PPIP (Public-Private Investment Program) designed to relieve the banks of those toxins, has now morphed into something that will help only the “big” banks (Goldman Sachs, J.P. Morgan, et al.) holding “securitized” mortgages.  The banks not considered “too big to fail”, holding non-securitized “whole” loans, will now be left to twist in the wind on Geithner’s watch.  The complete interview can be seen here.  This disclosure resulted in some criticism of the Obama administration, coming from sources usually supportive of the current administration. Here’s what The Huffington Post had to say:

Warren, who’s been leading the call of late to reconcile the shoddy assets weighing down the bank sector, warned of a looming commercial mortgage crisis.  And even though Wall Street has steadied itself in recent weeks, smaller banks will likely need more aid, Warren said.

Roughly half of the $700 billion bailout, Warren added, was “don’t ask, don’t tell money. We didn’t ask how they were going to spend it, and they didn’t tell how they were going to spend it.”

She also took a passing shot at Tim Geithner – at one point, comparing Geithner’s handling of the bailout money to a certain style of casino gambling.  Geithner, she said, was throwing smaller portions of bailout money at several economic pressure points.

“He’s doing the sort of $2 bets all over the table in Vegas,” Warren joked.

David Corn, a usually supportive member of the White House press corps, reacted with indignation over Warren’s disclosures in an article entitled:  “An Economic Time Bomb Being Mishandled by the Obama Administration?”  He pulled no punches:

What’s happened is that accounting changes have made it easier for banks to contend with these assets. But this bad stuff hasn’t gone anywhere.  It’s literally been papered over. And it still has the potential to wreak havoc.  As the report puts it:

If the economy worsens, especially if unemployment remains elevated or if the commercial real estate market collapses, then defaults will rise and the troubled assets will continue to deteriorate in value.  Banks will incur further losses on their troubled assets.  The financial system will remain vulnerable to the crisis conditions that TARP was meant to fix.

*   *   *

In a conference call with a few reporters (myself included), Elizabeth Warren, the Harvard professor heading the Congressional Oversight Panel, noted that the biggest toxic assets threat to the economy could come not from the behemoth banks but from the “just below big” banks.  These institutions have not been the focus of Treasury efforts because their troubled assets are generally “whole loans” (that is, regular loans), not mortgage securities, and these less-than-big banks have been stuck with a lot of the commercial real estate loans likely to default in the next year or two.  Given that the smaller institutions are disproportionately responsible for providing credit to small businesses, Warren said, “if they are at risk, that has implications for the stability of the entire banking system and for economic recovery.”  Recalling that toxic assets were once the raison d’etre of TARP, she added, “Toxic assets posed a very real threat to our economy and have not yet been resolved.”

Yes, you’ve heard about various government efforts to deal with this mess.  With much hype, Secretary Timothy Geithner in March unveiled a private-public plan to buy up this financial waste.  But the program has hardly taken off, and it has ignored a big chunk of the problem (those”whole loans”).

*   *   *

The Congressional Oversight Panel warned that “troubled assets remain a substantial danger” and that this junk–which cannot be adequately valued–“can again become the trigger for instability.”  Warren’s panel does propose several steps the Treasury Department can take to reduce the risks.  But it’s frightening that Treasury needs to be prodded by Warren and her colleagues, who characterized troubled assets as “the most serious risk to the American financial system.”

On Wednesday morning’s CNBC program, Squawk Box, Nassim Taleb (author of the book, Black Swan — thus earning that moniker as his nickname) had plenty of harsh criticism for the way the financial and economic situations have been mishandled.  You can see the interview with him and Nouriel Roubini here, along with CNBC’s discussion of his criticisms:

“It is a matter of risk and responsibility, and I think the risks that were there before, these problems are still there,” he said. “We still have a very high level of debt, we still have leadership that’s literally incompetent …”

“They did not see the problem, they don’t look at the core of problem.  There’s an elephant in the room and they did not identify it.”

Pointing his finger directly at Fed Reserve Chairman Ben Bernanke and President Obama, Taleb said policymakers need to begin converting debt into equity but instead are continuing the programs that created the financial crisis.

“I don’t think that structural changes have been addressed,” he said.  “It doesn’t look like they’re fully aware of the problem, or they’re overlooking it because they don’t want to take hard medicine.”

With Bernanke’s term running out, Taleb said Obama would be making a mistake by reappointing the Fed chairman.

Just in case you aren’t scared yet, I’d like to direct your attention to Aaron Task’s interview with stock market prognosticator, Robert Prechter, on Aaron’s Tech Ticker internet TV show, which can be seen at the Yahoo Finance site.  Here’s how some of Prechter’s discussion was summarized:

“The big question is whether the rally is over,” Prechter says, suggesting “countertrend moves can be tricky” to predict.  But the veteran market watcher is “quite sure the next wave down is going to be larger than what we’ve already experienced,” and take major averages well below their March 2009 lows.

“Well below” the Hadean low of 666?  Now that’s really scary!

Jobs And Propaganda

Comments Off on Jobs And Propaganda

August 10, 2009

On Friday, Wall Street celebrated a “less bad” Employment Situation Report from the Bureau of Labor Statistics.  Although the consensus estimate for jobs lost during the month of July was 345,000 — the report from the BLS on Friday recited that non-farm payrolls decreased by 247,000.  You may have heard the BLS referred to as the “Bureau of Lies and Statistics” by those who see BLS reports as “cooked data” for propaganda purposes.  Criticism of the spin given to the report could be found at the Zero Hedge website, which featured an entry with the title:  “The Truth Behind Today’s BLS Report” with quotes from such authorities as consulting economist John Williams and economist David Rosenberg.  Mr. Rosenberg was quoted as providing this caveat:

It may be dangerous to extrapolate today’s report into a view that we are about to turn the corner on the job market front.

At The Atlantic Online, Daniel Indiviglio wrote a piece entitled:  “Did the Unemployment Rate Really Go Down?”  Among his points were these:

As a recession drags on for this long, and people are unable to find jobs, they begin leaving the workforce.  They become discouraged regarding job prospects.  BLS offers an unemployment rate that includes these discouraged workers.  In June 2009, that was 10.1%.  For July, it was 10.2%.

Given this change in unemployment including discouraged workers, I think it’s pretty clear that the 0.1% decrease in the reported unemployment rate can be misleading.  In reality, those who would like a job but don’t have one increased by 0.1% up to10.2%.

*   *   *

I just think we need to be careful not to get too excited about today’s numbers.  Although they appear to show a decrease in the unemployment rate, the deeper numbers show the contrary.  We may see the light at the end of the tunnel, but we’ve got a ways to go.

Claims of “good news” about the unemployment picture are regularly contradicted, if not by our own personal experiences, then by those of our relatives and friends.  Beyond that, we see daily reports of middle-class families using food stamps for the first time in their lives and we read about escalating bankruptcy filings.

One article I found particularly interesting was written by Nancy Cook for Newsweek on August 7.  It concerned the problems faced by teenagers this year, who sought summer jobs.  They weren’t able to get those jobs because they found themselves “competing with unemployed adults who are now willing to take positions that were considered entry-level in prerecessionary times.”  Ms. Cook discussed how the inability of teenagers to obtain summer jobs impairs their personal and professional development:

Where does that leave high-school- and college-age students, apart from spending their summers lying on the couch?  It leaves them with little income and, worse, few job skills, says Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston.  “It hurts their ability to get jobs in the future,” he says.  Teens who work in high school and college on average earn salaries 16 percent higher than teens who don’t work, according to the center’s research.

*   *   *

Working summer jobs certainly translates into higher earning power in the long term, but more important, it gives teens “soft skills.”  Those skills teach them to be punctual, write professional e-mails, and work well in teams.  “There’s lots of evidence that shows that employers place a high premium on those skills,” Sum says.  “If you don’t work, you develop cultural signals from other kids, from the streets, or from sitting at home in front of a computer, which is the worst way to learn how to get along with people.”

I find it difficult to believe that normal, human, retail investors would find so much encouragement from reading about the BLS report.  The use of the BLS data to justify Friday’s market pop appears as just another excuse to explain the ongoing inflation of equities prices, caused by banks playing with TARP and other bailout money for their own benefit.

The Second Stimulus

Comments Off on The Second Stimulus

July 9, 2009

It’s a subject that many people are talking about, but not many politicians want to discuss.  It appears as though a second economic stimulus package will be necessary to save our sinking economy and get people back to work.  Because of the huge deficits already incurred in responding to the financial meltdown, along with the $787 billion price tag for the first stimulus package and because of the President’s promise to get healthcare reform enacted, there aren’t many in Congress who are willing to touch this subject right now, although some are.  A July 7 report by Shamim Adam for Bloomberg News quoted Laura Tyson, an economic advisor to President Obama, as stating that last February’s $787 billion economic stimulus package was “a bit too small”.  Ms. Tyson gave this explanation:

“The economy is worse than we forecast on which the stimulus program was based,” Tyson, who is a member of Obama’s Economic Recovery Advisory board, told the Nomura Equity Forum.  “We probably have already 2.5 million more job losses than anticipated.”

As Victoria McGrane reported for Politico, other Democrats are a bit uncomfortable with this subject:

Democrats are all over the map on the stimulus and the possibility of a sequel, and it’s not hard to see why:  When it comes to a second stimulus, they may be damned if they do and damned if they don’t.

Kevin Hall and David Lightman reported for the McLatchy Newspapers that at least one high-ranking Democrat was keeping an open mind about the subject:

“I think we need to be open to whether we need additional action,” House Majority Leader Steny Hoyer, D-Md., said Tuesday.  “We need to continue to focus on bringing the economy back to a place where we’re not losing jobs.”

An informative article by Theo Francis and Elise Craig, in the July 7 issue of Business Week, explained the real-world difficulties in putting the original stimulus to work:

Dispensing billions of dollars, it turns out, simply takes time, particularly given government contracting rules and the fact that much of federal spending is funneled through the states. Moreover, some spending was intentionally spread out over several years, and other projects are fundamentally more long-term in nature.  “There are real constraints — physical, legal, and then just the process of how fast you can commit funds,” says George Guess, co-director of the Center for Public Finance Research at American University’s School of Public Affairs.  “It’s the way it works in a decentralized democracy, and that’s what we’re stuck with.”

Nevertheless, from the very beginning, when the stimulus was first proposed and through last spring, many economists and other commentators voiced their criticism that the $787 billion stimulus package was simply inadequate to deal with the disaster it was meant to address.  Back on December 28, Nobel laureate Paul Krugman explained on Face The Nation, that a stimulus package in the $675-775 billion range would fall short:

So you do the math and you say, you know, even these enormous numbers we’re hearing about are probably enough to mitigate but by no means to reverse the slump we’re heading into.

On July 5, Professor Krugman emphasized the need for a second stimulus:

The problem, in other words, is not that the stimulus is working more slowly than expected; it was never expected to do very much this soon.  The problem, instead, is that the hole the stimulus needs to fill is much bigger than predicted.  That — coupled with the fact that yes, stimulus takes time to work — is the reason for a second round, ASAP.

Another Nobel laureate, Joseph Stiglitz, pointed out for Bloomberg TV back on January 8, that the President-elect’s proposed stimulus would be inadequate to heal the ailing economy:

“It will boost it,” Stiglitz said.  “The real question is — is it large enough and is it designed to address all the problems.  The answer is almost surely it is not enough, particularly as he’s had to compromise with the Republicans.”

On February 26, Economics Professor James Galbarith pointed out in an interview that the stimulus plan was inadequate.

On January 19, financier George Soros contended that even an $850 billion stimulus would not be enough:

“The economies of the world are falling off a cliff.  This is a situation that is comparable to the 1930s. And once you recognize it, you have to recognize the size of the problem is much bigger,” he said.

Despite all these warnings, as well as a Bloomberg survey conducted in early February, revealing the opinions of economists that the stimulus would be inadequate to avert a two-percent economic contraction in 2009, the President stuck with the $787 billion plan.  He is now in the uncomfortable position of figuring out how and when he can roll out a second stimulus proposal.

President Obama should have done it right the first time.  His penchant for compromise — simply for the sake of compromise itself — is bound to bite him in the ass on this issue, as it surely will on health care reform — should he abandon the “public option”.  The new President made the mistake of assuming that if he established a reputation for being flexible, his opposition would be flexible in return.  The voting public will perceive this as weak leadership.  As a result, President Obama will need to re-invent this aspect of his public image before he can even consider presenting a second economic stimulus proposal.

The Haunted Computer

Comments Off on The Haunted Computer

January 8, 2009

On January 6, Slate featured an interesting report by William Saletan concerning a Defense Department proposal request for a new computer application to help children of deployed service personnel in coping with the lack of parental communication.  The concept is described as a “Virtual Dialogue Application for Families of Deployed Service Members”.  It supposedly would provide an opportunity for children (within the specified age range of 3 and 5 years old) to have a “virtual” conversation with a deployed parent who (for whatever reason) would be unavailable for telephone or on-line contact.  The idea is to have a video image of the parent (possibly high-resolution and 3-D) available to “converse” with the child.  The application is to be either PC-based or web-based.  Here is how it was described on the Defense Department’s TechMatch website:

The Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury recognizes that family outreach and advocacy is pivotal for both the psychological health of the family and the resilience of the Service Member.  Deployments put stress on the entire family, especially small children and communication is key.  The ability to reach out and communicate with loved ones from areas of conflict is better than at any time in history.  Nevertheless, the stresses of deployment might be softened if spouses and especially children could conduct simple conversations with their loved ones in immediate times of stress or prolonged absence.  Historically, families have derived comfort and support from photographs or mementos, but current technology SHOULD allow for more personal interactive messages of support.  Over 80% of American children between the ages of three and five regularly use computers, and 83% of families have a computer in their home.  So, computer-based applications would resonate with children and capture their interest and imagination.  The challenge is to design an application that would allow a child to receive comfort from being able to have simple, virtual conversations with a parent who is not available “in-person”.  We are looking for innovative applications that explore and harness the power of advanced interactive multimedia computer technologies to produce compelling interactive dialogue between a Service member and their families via a pc- or web-based application using video footage or high-resolution 3-D rendering.  The child should be able to have a simulated conversation with a parent about generic, everyday topics.  For instance, a child may get a response from saying “I love you”, or “I miss you”, or “Good night mommy/daddy.”  This is a technologically challenging application because it relies on the ability to have convincing voice-recognition, artificial intelligence, and the ability to easily and inexpensively develop a customized application tailored to a specific parent.  We are seeking development of a tool which can be used to help families (especially, children) cope with deployments by providing a means to have simple verbal interactions with loved ones for re-assurance, support, affection, and generic discussion when phone and internet conversations are not possible.

Upon reading about this, the first question that came to my mind concerned situations where the parent unfortunately is killed in the line of duty.  Is the child to continue using this application to have “virtual conversations” with a deceased parent?  Would that be healthy?  William Saletan voiced a similar concern in his article:

The deployed parent still has a body, of course.  But, being deployed, he’s at risk of becoming disembodied the old-fashioned way.  At that point, real-time video is no longer an option, and the language of the DoD project — to provide verbal interactions “when phone and internet conversations are not possible” — takes on a whole new meaning.

*    *    *

I’m not saying this kind of ghost is for everyone.  Some of us don’t like our parents.  Some of us find the idea of keeping them around bizarre or sacrilegious.  But I dare you to tell a child who has lost her father in Iraq or Afghanistan that she can’t keep a virtual rendition of him to help her go to sleep.  And I dare you to stop the millions of others who will want ghosts of their own when today’s military project becomes, once again, tomorrow’s mass market.

The reaction to this idea from those involved in the mental health field should be interesting.  Whether or not the military ever embraces such a computer application, Saletan’s point about the “mass market” deserves further pondering.  There will be the inevitable pornographic variations on this project’s theme.  Nevertheless, could such an application be configured in other ways to be of use to adults?  How about “Virtual Seance” — a website that allows users to “communicate” with dead historical figures or celebrities?  Will living celebrities (or, should I say, “has beens”) have websites where fee-paying fans can have a “virtual conversation” with that celebrity?  Will politicians use this technology to allow their constituents “virtual face time” with the pol to vent their spleens?

Healthy or not, this computer application seems like an idea that will not quickly go away.

Money Falling From The Sky

Comments Off on Money Falling From The Sky

November 17, 2008

The debate concerning a possible bailout of the “big three” automakers (General Motors, Ford and Daimler Chrysler) has now reached the House of Representatives.  House Minority Leader, John Boehner (Republican from Ohio) has voiced his opposition to this latest bailout, indicating that it will not receive much support from Congressional Republicans.

In the words of Yogi Berra, we are experiencing “déjà vu all over again”.  This process started with the plan of Treasury Secretary Henry Paulson, to bail out banks and other financial intuitions holding mortgages of questionable value, at a price to the taxpayers in excess of $700 billion.  Back on September 22, when that bailout bill (now known as TARP) was being considered, Jackie Kucinich and Alexander Bolton wrote an article for TheHill.com, discussing Republican opposition to this measure.  Their article included a prophetic remark by Republican Congressman Cliff Stearns of Florida:

“Bailout after bailout is not a strategy,” said Stearns, who said that taxpayers could be left with a huge bill.

Yet, “bailout after bailout” is exactly where we are now.  On November 15, T-Bone Pickings appeared on NBC’s Meet the Press.  Tom Brokaw asked T-Bone Pickings for his opinion on the proposed “Big Three Bailout”.  The response was:

I wonder what you’re going to do about the next industry.  Is it going to be the airlines or what if Toyota and Honda want some help, too?  I don’t know.  I don’t know where it stops.

Once again, we are presented with the need to bail out yet another American industry considered “too big to fail”.  However, this time, we are not being asked to save an entire industry, just a few players who fought like hell, resisting every change from rear-view mirrors, to fuel injection, seat belts, catalytic converters, air bags and most recently, hybrid technology.  Later on Meet the Press, we heard the BBC’s Katty Kay quote a rhetorical question from unidentified “smart economists” that included the magic word:

Can it withstand the shock to the economy if GM were to go?

Later on the CBS program, Face The Nation, Massachusetts Congressman Barney Frank, Chairman of the House Financial Services Committee, used similar logic to that expressed by Katty Kay, when he stated:

When you talk about the negative shock that would result from bankruptcies of these companies, right now  …

The magic word “shock” is once again playing an important role for the advocates of this newest rescue package. I was immediately compelled to re-read my posting from September 22, concerning the introduction of the Paulson bailout plan, entitled:  “Here We Go Again”.  At that time, I discussed Naomi Klein’s 2007 book, The Shock Doctrine: The Rise of Disaster Capitalism.  Klein’s book explained how unpopular laws were enacted in a number of countries around the world, as a result of shock from disasters or upheavals.  She went on to suggest that some of these events were deliberately orchestrated with the intent of passing repugnant laws in the wake of crisis.  She made an analogy to shock therapy, wherein the patient’s mind is electrically reformatted to become a “blank slate”.  Klein described how advocates of “the shock doctrine” seek a cataclysmic destruction of economic order to create their own “blank slate” upon which to create their vision of a “free market economy”.  She described the 2003 Iraq war as the most thorough utilization of the shock doctrine in history.  Remember that this book was released a year before the crises we are going through now.

Ms. Klein’s article, “In Praise of a Rocky Transition” appeared in the December 1, 2008 issue of The Nation.  She discussed Washington’s handling of the Wall Street bailout, characterizing it as “borderline criminal”.  Would the financial rescue legislation (TARP) have passed if Congress and the public had been advised that the Federal Reserve had already fed a number of unnamed financial institutions two trillion dollars in emergency loans?  Naomi Klein expressed the need for the Obama Administration to stick with its mantra of “Change You Can Believe In” as opposed to any perceived need to soothe the financial markets:

There is no way to reconcile the public’s vote for change with the market’s foot-stomping for more of the same.  Any and all moves to change course will be met with short-term market shocks.  The good news is that once it is clear that the new rules will be applied across the board and with fairness, the market will stabilize and adjust.  Furthermore, the timing for this turbulence has never been better.  Over the past three months, we’ve been shocked so frequently that market stability would come as more of a surprise.  That gives Obama a window to disregard the calls for a seamless transition and do the hard stuff first.  Few will be able to blame him for a crisis that clearly predates him, or fault him for honoring the clearly expressed wishes of the electorate.  The longer he waits, however, the more memories fade.

When transferring power from a functional, trustworthy regime, everyone favors a smooth transition.  When exiting an era marked by criminality and bankrupt ideology, a little rockiness at the start would be a very good sign.

The Obama Administration would be wise to heed Ms. Klein’s suggestions.  It would also help to seriously consider the concerns of Republicans such as John Boehner, who is apparently not anxious to feed America another “crap sandwich”.

The Narrowing

Comments Off on The Narrowing

October 20, 2008

Halloween is less than two weeks away.  The theme of the perfect horror film for 2008 becomes increasingly apparent as I type this.  We can rely only on the YouTube medium to get this year’s best spooky thriller before the public in time.  Right now, the trees in our nation’s capitol are manifesting the multi-colored transition to autumn.  The time to shoot this movie is right now.  The time to get it before the public is right now.  The Narrowing has the potential to be the “fright film” of the decade.

The horror depicted in this movie is most troubling for the moderate Republicans.  On Sunday, October 19, millions of Americans watched former Secretary of State, Republican Colin Powell, a retired Army General, endorse Democratic nominee Barack Obama for the Presidency.  Among the reasons given by General Powell for his endorsement of Obama included what he described as “the narrowing” of the Republican Party during the course of this campaign.  On that same television program, NBC’s Meet The Press, conservative commentator David Brooks expressed his concern about “the narrowing” of the Republican Party throughout the current election cycle.  In his analysis of General Powell’s rationale for the Obama endorsement, Mr. Brooks said:

He (Powell) was attacking the Republican Party and the key word there was: “narrowing”.  The party is narrowing and leaving a lot of people out – people like Colin Powell.    . . .  They have to ask themselves:  “Why are we narrowing?”

*    *    *

A lot of people who were Republicans, feel like they have been left out  — not by McCain but by the party.  And if McCain has any blame, it is in the beginning of this campaign.  He didn’t say:  “I’m different.”  He didn’t break with the party.  He got sucked up (beautiful Freudian slip) – sucked in at least halfway into the orthodoxy of the party.  That’s narrowing.

As a movie, The Narrowing would feature mobs of “talk radio” – entranced people, wandering through the streets of our nation’s small towns and big cities.  There would be elderly men with racist-attired Curious George dolls.  They would speak with strange little voices, using the Curious George dolls as puppets to complain about how our nation’s public schools would be serving pigs’ feet and black-eyed peas to “red-blooded American children” for lunch.  The movie would depict elderly, white-trash women with “bed head”, repeating the rumor that Barack Obama is uncircumcised.  (It was actually Bill Maher who started this rumor.  In the movie, he would remind these women to include the aspect concerning the scent of curry.)  There would be pit bulls wearing lipstick with small “beehive wigs” and ersatz Kawasaki eyeglass frames, brought to animal shelters and veterinary emergency rooms after horrible maulings and other injuries.  These events would not have been caused from abuse by humans – but from attacks by irate Jack Russell Terriers and Border Collies.  Mobs carrying torches would be chasing after Peggy Noonan and Chris Buckley, yelling: “Traitor!”  John McCain would attempt to transform himself into “the old McCain of 2000” but it would be too late.

The film’s most scary moments would take place on Election Day.  Throngs of screaming people would be seen, running from polling places.  The Sarah Palin “wanna-bes” would show up to vote, not having washed their hairdos or having changed their clothes since Halloween.  The gasping exiles from the voting booths would complain of the overwhelming “homeless smell” carried into the polls by these over-ripe Palin impersonators.

At the conclusion of the film, the vanquished, moderate Republicans would be forced in retreat to the shelter of big cities such as New York, Chicago, Los Angeles and (gasp!) San Francisco.  They would form “cells” and organize plots to undo “the narrowing” and hopefully live to fight another day.

Meanwhile, here in “the real world”, The Narrowing is upon us.  It has become painfully obvious to the more astute members of the Republican Party and the conservative community.  If the GOP is to have a future, it must develop an immunosuppressive response to The Narrowing.

Women To Watch

Comments Off on Women To Watch

June 19, 2008

Most of the eulogies about Hillary Clinton’s Presidential campaign have focused on the theme that she was a “groundbreaker”, who proved that a woman could make it to the Senate and become a serious contender for the highest office in the land.  Meanwhile, there are a number of women presently in the Senate, who got there without having been married to a former President (whose surname could be relied upon for recognition purposes).  In fact, two of these women are presently working on closing the so-called “Enron loophole” in the Commodity Futures Modernization Act of 2000, 7 U.S.C. §2(h)(3) and (g), which existed throughout Bill Clinton’s tenure in the Oval Office.  This “Enron loophole” is what has made it possible for speculators to drive the price of gasoline beyond $4 per gallon.  Surely, the increased demand for oil by China and India has explained part of the soaring cost of gasoline here in the United States.  However all authorities on the subject agree that unchecked speculation in the American markets has greatly facilitated the skyrocketing increase in gas prices.  That speculation owes its existence to the so-called “Enron loophole”, which is once again coming under attack in the Senate.

There is abundant interest focused on whatever Hillary Clinton’s mission will be when she returns to the Senate after her month of R&R and what role she might play if Barack Obama is elected our next President.  I suggest that we turn our sights to the Senate right now, to witness what other women are doing there and find out for ourselves who the real “trailblazers” are.  We should also consider these pioneers when looking toward the day when a woman finally makes it to The White House.

Our first potential future candidate is Senator Amy Klobuchar of Minnesota, whose role on the Senate Commerce Committee has found her fighting against the “Enron loophole”.  Looking on Wikipedia.org we learn:

She received her bachelor’s degree magna cum laude in political science from Yale University in 1982, where she was a member of the Yale College Democrats and the Feminist Caucus.  …  Klobuchar served as an associate editor of the Law Review and received her J.D. in 1985 at the University of Chicago Law School.

Bam!  She has made the prerequisite pilgrimage to Iraq (March, 2007) and voiced her frustration with Prime Minister Nouri Al-Maliki upon her return.  She is a member of the following Senate Committees:  the Agriculture Committee, the Environment and Public Works Committee and the Commerce Committee.  She is also a member of the Congressional Joint Economic Committee.

Our second potential future candidate is Senator Maria Cantwell from the State of Washington.  She is also currently working to close the “Enron loophole”. Senator Cantwell received a Bachelor’s Degree in Public Administration from Miami University of Ohio.  She has served in the Senate since January of 2001.  Although she supported the Joint Resolution for the Use of the Armed Forces in Iraq, she explained the qualifications for her support in an extensive press release the day before the vote on that Resolution.   She is a member of the following Senate Committees:  Finance, Indian Affairs, Finance and Entrepreneurship, Energy and Natural Resources, as well as the Committee on Commerce, Science and Transportation.

At this juncture, it remains to be seen whether Hillary Clinton will join these two sister Senators in their efforts to close the “Enron loophole”.  It never bothered her husband during his eight years in the White House and she never spoke up about it during that time.

For our third potential future candidate, we can’t forget about Governor Kathleen Sebelius of Kansas.  Although she is being promoted as a possible running mate for Barack Obama, her five years as Governor of Kansas are considered by many as a bit short for the position of Vice President.  (She faced that criticism when she had served only one year as Governor and was considered as a possible running mate for John Kerry in 2004.)  She earned a Master’s Degree in Public Administration from the University of Kansas after earning a Bachelor’s Degree from Trinity Washington University in Washington, D.C.  (Trinity Washington University is not associated with the late Jerry Falwell, who died and went to hell.  It is a Catholic – affiliated University.)  As Governor of Kansas, she has an established record as an advocate of environmental protection.

As the pundits watch Hillary Clinton’s political future, some of us will be looking toward other American women, one of whom may turn out to become the first female President of the United States.


blogspot stats