Tuesday, September 30, 2008

On Newsstands Now

Is This the "Tipping Point" They Warned Us About?

I just stumbled across this in The Independent and, if it doesn't send a quiet chill through you, it probably should.

"The Independent has been passed details of preliminary findings suggesting that massive deposits of sub-sea methane are bubbling to the surface as the Arctic region becomes warmer and its ice retreats.

In the past few days, the researchers have seen areas of sea foaming with gas bubbling up through "methane chimneys" rising from the sea floor. They believe that the sub-sea layer of permafrost, which has acted like a "lid" to prevent the gas from escaping, has melted away to allow methane to rise from underground deposits formed before the last ice age."

Orjan Gustafsson of Stockholm University in Sweden, one of the leaders of the expedition, described the scale of the methane emissions in an email exchange sent from the Russian research ship Jacob Smirnitskyi.

"We had a hectic finishing of the sampling programme yesterday and this past night," said Dr Gustafsson. "An extensive area of intense methane release was found. At earlier sites we had found elevated levels of dissolved methane. Yesterday, for the first time, we documented a field where the release was so intense that the methane did not have time to dissolve into the seawater but was rising as methane bubbles to the sea surface. These 'methane chimneys' were documented on echo sounder and with seismic [instruments]."

Arctic seabed methane, as a greenhouse gas, is considered greater than the carbon locked up in the entire planet's coal reserves. Elevated levels of dissolved methane in Arctic waters have been detected since 2003. I wonder if this has any connection with the unexplained record ice melt last month despite our cooler summer temperatures?

Remember When We Worried About Global Warming?

Anybody notice how much attention has been paid to environmental problems since the housing bubble burst triggered the subprime mortgage crisis that triggered the derivative securities crisis that triggered the debt crisis that triggered the credit crisis?

The environment? Global warming? Go away kid, I'm busy saving banks here!

And so it goes. The Environmental News Network has a story today that shows how intractable the carbon emissions problem can be. Norway had plans to be the leader in curbing carbon output. Way back in 1991 Norway enacted a carbon tax. It also imposed powerful emissions regulation on its offshore oil industry. So where is Norway today? Carbon emissions are up 15%.

"Although the tax forced Norway's oil and gas sector to become among the greenest in the world, soaring energy prices led to a boom in offshore production, which in turn boosted overall emissions. So did drivers. Norwegians, who already pay nearly $10 a gallon, took the tax in stride, buying more cars and driving them more. And numerous industries won exemptions from the tax, carrying on unchanged.

Norway's sobering experience shows how difficult it is to cut emissions in the real world, where elegant theoretical solutions are complicated by economic changes, entrenched behaviors and political realities.

A few countries have cut emissions without injuring their economies. Sweden and Denmark, both of which introduced a carbon tax, have reduced their greenhouse gas emissions by 14% and 8% respectively since 1990 while maintaining growth. Their emission reductions can't be attributed to the tax alone, economists say. Additional moves to encourage energy efficiency and renewable energy, which are government-subsidized, played a part."

Wait a second, did I read that correctly? These countries have had carbon taxes since 1990 - almost two decades - and they didn't explode? What's that? Their economies remain strong? Didn't they get Stephen Harper's "Be Afraid, Be Very Afraid" memo?

By the way, New Zealand has just enacted a "green shift" policy much like that proposed by Stephane Dion. Maybe our Furious Leader can let us know when the folks down under fall into the sea.

Karzai a Human Shield for Taliban?

Speaking of futile gestures, Afghanistan president Hamid Karzai says he'll protect Taliban leaders from American and NATO guns if they want to pop by Kabul for a chat.

"Don't be afraid of the foreigners. If they try to harm you, I will stand in front of them," he said.

Great, now Karzai is offering to put a bullseye on his chest and his back!

Stiglitz Weighs In on US Meltdown

I was wondering when we'd hear from Joe Stiglitz on the US economic meltdown. Fortunately that happened today in the form of an opinion piece from the Nobel Prize winning US economist. As expected, Stiglitz brings some much needed clarity and insight to the problems:

"...the rescue plan that was just defeated was far better than what the Bush administration originally proposed. But its basic approach remained critically flawed. First, it relied – once again – on trickle-down economics: somehow, throwing enough money at Wall Street would trickle down to Main Street, helping ordinary workers and homeowners. Trickle-down economics almost never works, and it is no more likely to work this time.

Moreover, the plan assumed that the fundamental problem was one of confidence. That is no doubt part of the problem; but the underlying problem is that financial markets made some very bad loans. There was a housing bubble, and loans were made on the basis of inflated prices.

Even if a bail-out plan were implemented quickly – which appears increasingly unlikely – there would be some credit contraction. The US economy has been sustained by a consumption boom fueled by excessive borrowing, and that will be curtailed. States and localities are cutting back expenditures. Household balance sheets are weaker. An economic slowdown will exacerbate all our financial problems.

We could do more with less money. The holes in financial institutions' balance sheets should be filled in a transparent way. The Scandinavian countries showed the way two decades ago. Warren Buffet showed another way, in providing equity to Goldman Sachs. By issuing preferred shares with warrants (options), one reduces the public's downside risk and ensures that they participate in some of the upside potential.

This approach is not only proven, but it also provides both the incentives and wherewithal needed for lending to resume. It avoids the hopeless task of trying to value millions of complex mortgages and the even more complex financial products in which they are embedded, and it deals with the "lemons" problem – the government gets stuck with the worst or most overpriced assets. Finally, it can be done far more quickly.

At the same time, several steps can be taken to reduce foreclosures. First, housing can be made more affordable for poor and middle-income Americans by converting the mortgage deduction into a cashable tax credit. The government effectively pays 50% of the mortgage interest and real estate taxes for upper-income Americans, yet does nothing for the poor. Second, bankruptcy reform is needed to allow homeowners to write down the value of their homes and stay in their houses. Third, government could assume part of a mortgage, taking advantage of its lower borrowing costs.

Investment banks and credit rating agencies believed in financial alchemy – the notion that significant value could be created by slicing and dicing securities. The new view is that real value can be created by un-slicing and un-dicing – pulling these assets out of the financial system and turning them over to the government. But that requires overpaying for the assets, benefiting only the banks.

In the end, there is a high likelihood that if such a plan is ultimately adopted, American taxpayers will be left on the hook. In environmental economics, there is a basic principle, called "the polluter pays principle." It is a matter of both equity and efficiency. Wall Street has polluted the economy with toxic mortgages. It should pay for the cleanup.

There is a growing consensus among economists that any bail-out based on Paulson's plan won't work. If so, the huge increase in the national debt and the realisation that even $700bn is not enough to rescue the US economy will erode confidence further and aggravate its weakness.
But it is impossible for politicians to do nothing in such a crisis. So we may have to pray that an agreement crafted with the toxic mix of special interests, misguided economics, and right-wing ideologies that produced the crisis can somehow produce a rescue plan that works – or whose failure doesn't do too much damage."

I think there's enormous merit in Stiglitz' approach. You don't buy bad mortgages. They stay with the outfits that were stupid and greedy enough to buy them. Instead you inject government money into those same companies to restore their liquidity, taking back a preferred share position that means the taxpayers' interest stands above all others. The taxpayers' money has to be repaid - out of the good mortgages if it comes right down to it - before the other investors see a dime.

Do As I Say, Not As I Did

I'm no historian when it comes to Israeli politics so bear with me. Remarks being attributed to outgoing Israeli prime minister Ehud Olmert reminded me of an article I read not too long ago that claimed outgoing Israeli leaders tell truths they were never willing to embrace while they held power.

The main truth is the one coming from Olmert today, namely that Israel will never achieve peace with the Palestinians and Syria until it returns the lands it seized in 1967. From The Globe & Mail:

"In an interview published in the Yedioth Ahronoth newspaper yesterday, a week after his formal resignation, Mr. Olmert said that Israelis need to make a "supremely difficult" decision about whether or not they really want to have peace with their neighbours. If the answer is yes, he said, Israel will have to withdraw its soldiers and settlers from the Golan Heights and nearly all of the West Bank, including East Jerusalem."

What's radical about that? All Olmert is stating is what everybody knows. The profound part is that no Israeli leader has been willing to do what it takes.

Don't go spinning off into the usual uber-right diversions about Hamas or Hezbollah. Olmert, like his predecessors, didn't qualify his opinions with that nonsense because he knows that gets his country nowhere. That's Fox News drivel. Give Olmert and his Israeli predecessors a bit of credit. Maybe, just maybe, they understand their region's reality better than Sean Hannity and the rest of the rightwing rabble.

Monday, September 29, 2008

A Gaffe Big Enough To Drive a Truck Through

Canadian prime minister Stephen "McSame" Harper says fear not, the Canadian economy is "strong."

Today, we see more volatility in the financial markets due to the crisis in the United States. Remember, Canada is not the United States. The fundamentals of the Canadian economy are sound.”

Harper is right, in part. We're not the United States, not that he can claim a lot of credit for that. Harper's outspoken support for deep integration with the United States is on record and it speaks for itself.

Here's one fundamental of the Canadian economy that's anything but sound - our unhealthy reliance on trade with the United States. In trade, we've been putting almost all of our eggs in one basket, the one with all the stars and stripes painted on it.

It's the United States of America that creates our terrific balance of trade surpluses. It's the United States that generates our balance of payment surpluses.

The rest of the world, those countries that Harper has so often shown a cold shoulder? You don't find Canada enjoying a lot of balance of trade surpluses with them. In fact we're running a serious balance of trade deficit beyond the U.S.

So Harp needs a sharp one up alongside his goofy head. Our hull may not be leaking but when you're the rowboat tied fast to the Titanic, you've got a problem, one that you need to acknowledge and address and resolve.

The guy at the wheel of the Tory clown car doesn't want to talk about this. Harper is afraid that simply talking about what's in store for us could upset his plans when he's so close to an election win. Shouldn't we be afraid of a guy who acts like this?

So, Mister Dion, it's time to act like the leader of the Liberal Party. The Globe reports that a group of Toronto Libs are urging Dion to appoint a panel of prominent Liberals to, "...to study the situation and suggest ways Canadians can keep their life savings and deal with the Wall Street crisis."
They're touting names like Paul Martin, Frank McKenna, John Manley and Don Johnston - men whose financial talents are unheard of in the Tory ranks.

“We believe this task force idea would help Dion recover at the 11th hour, because at the very least, it would remind Canadians of the stellar Chrétien/Martin record on the economy,” one of the Toronto Liberals said. “Desperate times call for desperate measures, perhaps. This is not a desperate measure but a smart one.”

Harper has taken his stand. The economy is sound, nothing to see here, move on. It's a position that defies reality and would leave Canadians at severe risk to an American meltdown. Harper hasn't given Mr. Dion many opportunities as good as this and Mr. Dion can't afford to pass on this one.

Time For Straight Talk, Steve!

Steve Martin, sorry, he's that other comedian, - Steve Harper has been running an empty campaign. No issues, no platform. Vote for me because I'm better than the others. Don't worry about what I'll do with your vote, that'll be none of your concern after the election.

Harper has told us that there's a Bad Moon Risin' south of the border and therefore we should put our trust in him to do - well he doesn't want to say what he's got in mind.

That's just not good enough now that America's boiling pot of red ink and bad paper is threatening to spill over. C'mon Steve, what gives? Just what do you see coming? What is it likely going to mean for Canada and Canadians? What can we do about it? What are our options? What do you plan to do about it if you get another minority? What do you have in mind if you get a majority?

Steve, if you don't seek a mandate by giving us a clear platform, a plan of action to deal with what's coming, don't claim afterward that you've got a mandate. That'd be a goddamned lie and that's a serious sin for a pious man like yourself, Steve.

Listen Steve, what's that sound? It's something flying off the blades of the fan down America way. We'll need a lot more than sweater vests to get through this winter, Steve.

Time for some straight talk, Steve Harper. You called this scam election. You owe us that.

Red State, Blue State - Tale of the Tape

The rightwingnutjobs like nothing more than to promote the outlandish myth of conservatives as the guardians of fiscal restraint. That it's an outright lie doesn't trouble them because lies are the only thing that can hold their preposterous narrative together.

The chart above shows, administration by administration, how American presidents have tackled America's debt. Debt is shown as a percentage of GDP represented by the lines - blue for periods of debt reduction, red for periods when debt was allowed to skyrocket.

Suffice to say the red line for George w. Bush will spike sharply upward this year as federal debt (exclusive of enormous unfunded liabilities) begins to approach 80% of GDP. ...And where it stops, Nobody Knows!

Watching America Stumble

Items I've posted on this blog and elsewhere in recent weeks have focused on certain themes:

1. The United States of America is now in the first major spasm of its decline as the dominant nation of the world.

2. America has surrendered much of its strength, even its sovereignty, through its dependence on foreign lenders.

3. Globalization and the evolution of America's rentier class, the richest of the rich, has powerfully undermined that nation's future prosperity in the pursuit of immediate, temporary gain. These have resulted in the investment of America's wealth into growing its rivals economies, rivals that are now its major creditors and key lenders.

John Gray restated these points in an excellent article he wrote for yesterday's Guardian. If you're concerned about what lies in store for the United States (and if you're Canadian you have every reason for concern) you should read his piece, "A shattering moment in America's fall from power."


Here is something to keep in mind while you're mulling this over. After the bailout, if it goes through, the American federal debt this year will swell to $11.3-trillion. That omits unfunded liabilities such as Social Security and Medicaire which would triple that figure.

America's Gross Domestic Product - the value of everything made in the country, comes in at about $14-trillion. So, even leaving out the lion's share of the government's red ink, the deferred and unfunded Social Security and Medicare liabilities, Washington is getting awfully close to a full year's GDP in direct debt.

But it's not just Washington's debt that has to be fed out of that GDP. You have to squeeze in all the indebtedness of other levels of government and the private debt - you know, mortgages and the like. The best estimate of the total American debt (excluding Social Security and Medicaire) is $53-trillion.

And only a small part of that $14-trillion GDP can go to debt. A lot of it goes into direct spending - people have to eat, they have to put fuel in their cars, they have to send their kids to school; businesses need to pay their employees and buy supplies; governments need to pay for bureaucracies and buy tanks and jet fighters for their military, states have to maintain highways, cities have to pay their cops and on and on and on. At the end of the year the Feds alone have added another $400-billion in debt that just goes right on top of the pile along with the accumulated deficits anyone else is running.

Geez, ask yourself what the United States would look like today if it actually had to balance all of its budgets - individual, corporate, municipal, state and federal? I'll bet there would be massive, widespread poverty to the point of provoking dangerous social upheaval. Wouldn't that be a gruesome spectacle?

The Death of Free Market Capitalism? You Must Be Joking!

The ongoing housing/mortgage/securities collapse south of the border is an unprecedented example of what can happen when a variety of bad things occur at the same time.

An economy driven by its housing market. What were they thinking? Homebuyers who believed that the value of their properties would increase forever on the back of near nil interest rates? What were they thinking? Mortgage lenders who were, in reality, mortgage bundlers and hawkers. What were they thinking? Securities giants who thought they could reap billions in buying and selling securitized mortgages. What were they thinking? Regulators who dismissed this as so much "froth" in the marketplace? What were they thinking? Congressional leaders who greased the wheels with legislation to keep this scam rolling. What were they thinking?

You see, this fiasco was delusional at every level. It was a society, a nation on full bore "TILT." From the homeowner/mortgage borrower to the mortgage lender/reseller to the bundled mortgage buyer/reseller to the investors who bought the securitized mortgage bundles to the economic watchdog regulators and to their political masters, they all bought into the same, rightwing laissez-faire ideology, the very same message of madness.

From the moment, eight years ago, that former Senate Banking committee chairman (and McCain advisor) Phil Gramm pushed through the legislation that permitted unrestricted warfare on America using securitized derivatives in lieu of torpedoes, TODAY has been not merely foreseeable. It's been all but inevitable. It's not that people couldn't see it coming, it's that they chose not to look. When a whole nation does that, it's scary. When it's the most powerful nation on earth that does it, it's pathetic and scary.

Okay, so now we have a trillion dollar "bail out" of Wall Street, the nationalization (pure socialism) of America's top economic sector, the financial sector, and the media are howling on about the end of "free market capitalism." Who says?

America has been a free market capitalist state since it invented the idea. It has remained a free market capitalist state even when, in the past, it had to resort to getting taxpayers to bail out bad capitalists - remember the Savings & Loan scandals? What happened in the wake of that sort of debacle? Not much, hardly anything at all.

You see, if this was going to be the end of free market capitalism there would have to be another economic model put in its place and the appropriate (and enormous) adjustments run through every stratum of society.

What new model is being ushered in to replace America's free market capitalism? A government bail out isn't an economic system like capitalism or socialism or communism. Heaping debt on future generations of wage earner-taxpayers isn't an economic system. Restoring (at least until the ruckus dies down) a healthy degree of essential regulation to the capitalism isn't a new system.

There is no new economic system for America on the horizon. All that's happening is the shifting of debt from failed economic giants to the shoulders of wage earning taxpayers. That's it. That's anything but the end of free market capitalism.

Until you hear John McCain say that America can no longer afford Bush's tax cuts for the rich, free market capitalism is very much alive and well in the United States. It may have been sent to its room for a little "time out" but that's about it.

Fareed Zakaria - Sarah, Just Go!

The esteemed editor of NewsWeek International has joined the chorus of voices - left, right and in-between - urging John McCain's living, breathing, senior's moment - Sarah Palin - to pack up her moose hides and go home.

"Will someone please put Sarah Palin out of her agony? Is it too much to ask that she come to realize that she wants, in that wonderful phrase in American politics, "to spend more time with her family"? Having stayed in purdah for weeks, she finally agreed to a third interview. CBS's Katie Couric questioned her in her trademark sympathetic style. It didn't help. When asked how living in the state closest to Russia gave her foreign-policy experience, Palin responded thus:

"'It's very important when you consider even national-security issues with Russia as Putin rears his head and comes into the airspace of the United States of America. Where--where do they go? It's Alaska. It's just right over the border. It is from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia, because they are right there. They are right next to--to our state.'

"There is, of course, the sheer absurdity of the premise. Two weeks ago I flew to Tokyo, crossing over the North Pole. Does that make me an expert on Santa Claus? (Thanks, Jon Stewart.) But even beyond that, read the rest of her response. "It is from Alaska that we send out those ..." What does this mean? This is not an isolated example. Palin has been given a set of talking points by campaign advisers, simple ideological mantras that she repeats and repeats as long as she can. ("We mustn't blink.") But if forced off those rehearsed lines, what she has to say is often, quite frankly, gibberish."

Zakaria focuses on this Palin answer in response to a Couric question, "designed to see if Palin understood that the problem in this crisis is that credit and liquidity in the financial system has dried up."

PALIN: "That's why I say I, like every American I'm speaking with, were ill about this position that we have been put in where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health-care reform that is needed to help shore up our economy, helping the--it's got to be all about job creation, too, shoring up our economy and putting it back on the right track. So health-care reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americans. And trade, we've got to see trade as opportunity, not as a competitive, scary thing. But one in five jobs being created in the trade sector today, we've got to look at that as more opportunity. All those things under the umbrella of job creation. This bailout is a part of that."

Nothing could make it plainer that Sarah Palin has no business standing as a potential "next in line" to the presidency of the United States. She is vacuous - an empty vessel from the neck up. She is Dan Quayle minus the intellect. The McCain people have been trying to groom her for weeks and yet she still has no grasp of even the most major issues of the day.

Okay, fairness demands that I acknowledge Fareed Zakaria is an elitist. Yes, he is well educated. Yes, he is highly experienced and very knowledgeable. Yes these are the qualities that fuel the righteous indignation of you fundamentalist nutjobs. There you go. Now, bite me.

Sunday, September 28, 2008

Top McCain Aide Really, Really Outed

John McCain's problems with campaign manager Rick Davis just keep getting worser and worser.

First there was the problem of Davis serving as an influence peddler to the now ruined mortgage giant, Freddie Mac.

McCain's first line of defence was to claim that Davis had cut his ties with FMac long before he joined the campaign.

Then it came out that, right up to death's doorstep, Freddie Mac kept paying $15,000 per month to Davis' old "consulting" firm, Davis Manafort.
That's Davis (as in Rick) Manafort.

McCain's next line of defence was to claim that his campaign manager had also cut his ties with Davis Manafort before joining the senator's campaign. The reality there was that Rick Davis had supposedly resigned from Davis Manafot but.. there's always a but... he retained his equity interest in the firm.

McCain's people lashed out like cornered rats at The New York Times for leaking that one. But now the Rick Davis calamity is back, this time courtesy of Newsweek.

It goes like this. If Rick Davis severed his ties with Davis Manafort when he joined the McCain campaign, why did he ask that his $20,000 a month campaign salary be paid directly to Davis Manafort? From Newsweek:

"The McCain campaign told reporters the fees were irrelevant because Davis "separated from his consulting firm … in 2006," according to the campaign's Web site, and he stopped drawing a salary from it. In fact, however, when Davis joined the campaign in January 2007, he asked that his $20,000-a-month salary be paid directly to Davis Manafort, two sources who asked not to be identified discussing internal campaign business told NEWSWEEK. Federal campaign records show the McCain campaign paid Davis Manafort $90,000 through July 2007, when a cash crunch prompted Davis and other top campaign officials to forgo their salaries and work as volunteers. Separately, another entity created and partly owned by Davis—an Internet firm called 3eDC, whose address was the same office building as Davis Manafort's—received payments from the McCain campaign for Web services, collecting $971,860 through March 2008.

In an e-mail to NEWSWEEK, a senior McCain official said that when the campaign began last year, it signed a contract with Davis Manafort 'in which we purchased all of [Davis's] time, and he agreed not to work for any other clients.'"

So which is it. Is John McCain no longer capable of discerning the truth or just incapable of telling the truth?

Palin's Election Pump

This one is almost too good to be true. The Times of London speculates that Sarah Palin may be gearing up to give the McCain campaign a popularity boost by marrying off her pregnant daughter, Bristol, to her high-school dropout boyfriend, Levi, just days before the November 4th vote.

The paper claims the McCain camp sees this as a blessing to be milked for everything it's worth:

"It would be fantastic," said a McCain insider. "You would have every TV camera there. The entire country would be watching. It would shut down the race for a week."

Who would've imagined that a 17-year old's uterus could play a pivotal role in a US presidential election?

Dealing With the Taliban

Remember how we were supposed to be saving Afghanistan from the Taliban? Times change, ask Harpo. Two years ago he was wetting his panties, flying to Afghanistan, making rousing speeches to the troops and bagging photo ops galore. Lately he's dummied up. No more jingoism about what we are going to do to the Taliban or what we are going to do for the Afghan people. No more boasting about democracy or women's rights.

We may have begun this half-assed adventure believing we were going to save the Afghans from the Taliban but it seems we're now focused on saving part of Afghanistan for the Taliban.

The Guardian reports that the Saudis, backed by the Brits, are brokering high-level peace talks with the Taliban leadership.

"The unprecedented negotiations involve a senior former member of the hardline Islamist movement travelling between Kabul, the bases of the Taliban senior leadership in Pakistan, Saudi Arabia and European capitals. Britain has provided logistic and diplomatic support for the talks - despite official statements that negotiations can be held only with Taliban who are ready to renounce, or have renounced, violence.

Last week the French Prime Minister, François Fillon, referred indirectly to the talks during a parliamentary debate on Afghanistan. 'We must explore ways of separating the international jihadists from those who are acting more for nationalist or tribal motives. Efforts in this direction are being led by Sunni [Muslim] countries such as Saudi Arabia,' he said.
This summer's fighting season in Afghanistan has been the most violent since the invasion of 2001. The deterioration of the situation has provoked a major review of strategy among the 40-nation international coalition pitted against an increasingly confident and effective insurgency."

At the moment it appears that Karzai is dragging his heels and yet he seems to understand quite well what the future may hold for him if this initiative fails.

We sure have lowered our sights on this one. It's only taken seven years for us to realize we're just going to have to settle for what we can get and, right now, that seems to amount to driving a wedge between the insurgents and their al-Qaeda terrorist brethren.

Don't get any fanciful ideas that peace in Afghanistan is just around the corner. It isn't. Even if a power-sharing deal was worked out with the Taliban it's not likely to hold for long. The Taliban and many Afghan warlords, want the West - NATO and the US - out of their country. At some point they're going to want to settle their differences themselves, their own way. Then there's the country's criminal elements - its drug barons, warlords and corrupt central government with its predatory security services.

Don't let this get you down. We were never in this to win in the first place. Afghanistan may go down in the books as one of the most thoroughly botched military adventures in Western history since WWI. Seriously, all those generals? Idiots. And those cheerleaders, Bush, Scheffer, Harper? Ditto.
If you want to know just how screwed up Afghanistan has become, read the following article from BBC that explains who's arming the Taliban.

Saturday, September 27, 2008

Will McCain "Disappear" Palin?

Maybe it's just one of those giddy ideas that gets a bit of traction yet some pundits are talking about whether the McCain organization has decided the only safe thing to do is ditch Sarah Palin.

Where was she after last night's debate when her Democratic counterpart, Joe Biden, was making the rounds of the TV networks? It turns out the McCain people wouldn't make her available for interviews - no live TV appearances for Sarah Palin.

The Huffington Post has this from radio talk show host Ed Schultz:

"Capitol Hill sources are telling me that senior McCain people are more than concerned about Palin. The campaign has held a mock debate and a mock press conference; both are being described as "disastrous." One senior McCain aide was quoted as saying, "What are we going to do?" The McCain people want to move this first debate to some later, undetermined date, possibly never. People on the inside are saying the Alaska Governor is 'clueless.'"

Now, in fairness, Schultz is a progressive and he's said some pretty scathing things about Palin before. But what about the uber-uber-right, National Review? HoffPo links to this opinion piece by the NR's very conservative commentator, Kathleen Parker, who claims Palin should take a powder:

As we’ve seen and heard more from John McCain’s running mate, it is increasingly clear that Palin is a problem. Quick study or not, she doesn’t know enough about economics and foreign policy to make Americans comfortable with a President Palin should conditions warrant her promotion.

It was fun while it lasted.

Palin’s recent interviews with Charles Gibson, Sean Hannity, and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League.

No one hates saying that more than I do. Like so many women, I’ve been pulling for Palin, wishing her the best, hoping she will perform brilliantly. I’ve also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted.

Palin filibusters. She repeats words, filling space with deadwood. Cut the verbiage and there’s not much content there.

If BS were currency, Palin could bail out Wall Street herself.

If Palin were a man, we’d all be guffawing, just as we do every time Joe Biden tickles the back of his throat with his toes. But because she’s a woman — and the first ever on a Republican presidential ticket — we are reluctant to say what is painfully true.

What to do?

...Only Palin can save McCain, her party, and the country she loves. She can bow out for personal reasons, perhaps because she wants to spend more time with her newborn. No one would criticize a mother who puts her family first.

Do it for your country.


As if the McCainsters don't have enough problems without lugging about this anchor, Biden made it clear last night that Palin has no reason to expect any kid glove treatment from him when they square off in the vice-presidential debate. Conservative Kathleen Parker is right. Palin does exhaust your cringe reflex.
Poor old Johnny McSame. He hired her for the bump and now he's stuck with the grind.

h/t Unrepentent Old Hippie

Round One- McCain v. Obama - Even

I expect that everybody was happy with the performance of their guy in last night's presidential debate. My assessment is that viewers saw that debate pretty much according to the leanings they had when they came into it. I can't see that it would have shifted too many voters one way or the other.

One network said Obama won their focus group of undecideds 60-40 but there's no way of knowing how reliable those numbers are, at least not until some serious polling is conducted.

McCain, as expected, took the low road and, at times, looked very much the wizened up Old Geezer, the kind who yells at the kids in the street from his front porch rocker. In my view, Obama wasn't nearly as aggressive as he ought to have been but, of the two, he alone seemed presidential. McCain didn't even look at his opponent. He couldn't look him in the eye as he told some genuine whoppers.
Then again, it was the "foreign policy" debate which the McCain camp maintains is their guy's real strong suit. On that basis it was probably up to McCain to trounce Obama - to put him away - and he didn't do it.

One of the Greats is Gone - Paul Newman, 83

Paul Newman, dead at 83 - lung cancer. A true progressive in the very best sense of the word.

Friday, September 26, 2008

EU Report Card on Afghanistan - F

The European Union's foreign affairs commissioner, Benita Ferrero-Waldner, warns that the Afghan insurgency is becoming increasingly dangerous and spreading into the once tame northern provinces. From Associated Press:

"We have seen that unfortunately the insurgency has come back," Ferrero-Waldner told a business forum on the sidelines of the U.N. General Assembly.

"Now some of the (troop-contributing) countries are going all to the south," she said. "But what about the north, the north is falling apart again

What wasn't pointed out is that the insurgency is spreading beyond the Pashtun/Taliban regions as other Afghan warlords start to side with the insurgents to oust US and NATO forces. This is no longer just us versus the Taliban. This is on the cusp of becoming a much more generalized civil war and that ought to be of real concern to us given that we've never had more than a fraction of the troop strength necessary just to deal with the Taliban alone.

Some of the Taliban's former enemies, nasty characters like the warlords Hekmatyar and Haqqani, have recently thrown in with the insurgency.

What's most remarkable about this isn't the growth of the insurgency or its spread but the total refusal of our political and military leadership to even acknowledge what's going on. They can't be honest with us about it because that would force them to explain what they intend to do about it.

We know Canada's response. Harper announced just a couple of weeks ago that, come 2011, we're gone - period. My guess is that Harpo is praying this doesn't turn into a total shitstorm in the meantime.

The Mighty Coquihalla - Free at Last!

British Columbia's invisible man, Premier Gordon Campbell, surprised everyone by announcing that, effective immediately, the Coquihalla highway is no longer a toll road. Jaws dropped throughout the province at the announcement.

The Coquihalla was built as a super expressway by the long vanished Social Credit government. It provided a high speed link between the lower mainland and Kamloops, allowing traffic to bypass the sometimes treacherous and always challenging Hope-Princeton highway.

It was built as a toll road with the promise that, once the construction costs had been recouped, the tolls would end. That, of course, never happened. Last I checked the toll revenues had paid for the thing twice over and then some.

Harper's Petro-Whopper

Yeah, right. Is this like fixed election dates, or accountability, or transparency in government?

Our Furious Leader has - get this - said that, "...if elected in October, the Conservatives will prohibit oil sands companies from shipping bitumen from Canada's oil sands to countries that do not have equivalent emission reduction targets." (National Spot).

So, let's see. I guess that rules out China. Australia is definitely out. Remind me how much of Alberta's bitumen they're getting anyway.

Oh yeah, but what about the States? Well, you see, that's where the hoax part comes in. What did he really say? If they have "equivalent emission reduction targets" they can have all the tar sludge they want. Nobody ever said anything about actual equivalent emission reductions. You just have to announce a "target" that sounds nice.

And, if you don't announce a nice-sounding target, why we'll always be happy to refine the damned stuff here. Harp will make damned sure that Canada's targets leave lots of room for bitumen upgrading plants galore.

One thing we know about Harpo is that he doesn't let things like his word stand in his way when he wants something and he wants the mantle of Energy Superpower so bad he'd say anything. So, given his impressive record of lying his ass off, this assurance is bound to be as empty as Harper's integrity.

Hey Steve, wasn't the election supposed to be next year?

Rossy Does It - Crosses Channel

It's the stuff of Greek mythology but now, more than two millenia after the Greeks wrote of him, we have a real, 21st Century Icarus - a man who straps on a wing and takes flight.

RocketMan Yves Rossy has successfully flown himself from France to the white cliffs of Dover. The former Swiss fighter jockey and Airbus pilot, strapped on his home-made jet wing and launched himself from a light aircraft over France before crossing the English Channel.

If you've never seen Rossy in action, you must check out this clip

Arms Race Update - Russia to Upgrade Nuke Arsenal

The insanely bellicose Bush Doctrine continues to stoke the world's arms races (in case you didn't know, there are several underway).

Russian president Medvedev says his country will have a "guaranteed nuclear deterrent system" up and running by 2020. BBC reports that Medvedev is calling for a new fleet of nuke subs to go along with the missile shield programme.

He said it was necessary to build "new types of armaments", and to "achieve dominance in airspace", according to quotes carried by the Itar-Tass news agency.

"We plan to start serial production of warships, primarily nuclear-powered submarines carrying cruise missiles and multifunctional submarines," Mr Medvedev said.

Before he stepped down to become prime minister, Vlad Putin, announced Russia would develop its own new generation of nuclear weapons and an advanced missile designed to defeat the latest American anti-missile systems.

Can somebody tell me why we're starting this Cold War thing again? Just who is getting precisely what out of this? Or is it just bloodyminded idiocy?

We Don' Need No Steenking Bailout!

Actually, that's where you're wrong.

Listening to both sides on this crisis, there's one thing conspicuously absent in their discourse - the rest of the world. Both sides on the bailout debate act as though this was an internal matter, no dirty linen to be aired in public. Americans - whether that be the elitists or the mob - will sort this out as they see fit.

They don't seem to understand that they forfeited that privilege a long time ago when they became so woefully dependent on foreign lenders to finance their wars, their tax cuts, their government and, now, their bailout options.

The United States government does not have a spare trillion dollars stuffed away under some mattress. That trillion dollars is sitting in a whole bunch of foreign banks in accounts belonging to a whole lot of foreign lenders. These guys are watching what's going on very, very closely because they'll be the ones to decide whether America gets the funding for this bailout and on what terms.

When you're feeding yourself from the begging bowl, it pays not to make your benefactors nervous. Right now, the United States of America, its government and its financial institutions are making foreign lenders very, very nervous.

If these lenders get too nervous and if they perceive America as too weak, too indecisive, there's two things they might do right off the bat - demand higher interest rates and, worse, lend to America in another currency or a basket of currencies, anything but unstable US dollars.

The currency swap issue has been a Sword of Damocles hanging over America's head for some time. An unnoticed live microphone at a recent OPEC meeting broadcast secret discussions about taking the oil market off the America dollar standard and moving it into Euros instead.

America gets huge benefits from being able to trade and borrow in its own currency. If its currency plummets against other currencies, its foreign debt obligations, all in American currency, have an offsetting decline in value. However if the US has to begin paying in other, stronger currencies, it will face some real economic problems.

So Johnny McCain can play electoral silly bugger if he likes and the American people can howl in rage and frustration but their country faces dire consequences if its leaders don't (as Krugman writes) start acting like adults and get a reasonable bailout plan in place and soon.

They really don't have any choice. I'll bet John McCain knows that too.

Bev McLachlan - 1, Chuck McVety - 0

The Canadian Judicial Council has rejected out of hand a ploy by uber-right, religious nutjob Charles McVety to have Chief Justice Beverly McLachlan pulled from the bench for supposedly playing an inappropriate role in getting the Order of Canada for Dr. Henry Morgantaler.

The Council said the complaints - 11 in all, comprising copies of McVety's own letter signed by supporters - were utterly without merit and based on hollow allegations readily disproved by publicly available information.

McVety, greaseball to the end, couldn't resist taking a swipe at the Council. "When you're appealing to the very council that the chief justice is a part of, fairness is not to be expected and in my view fairness has not been delivered by the council." What a sphincter!

Bush Blocked Israeli Air War on Iran?

The Guardian is reporting that George w. Bush derailed Israeli plans for air strikes on Iranian nuclear facilities earlier this year. Bush is said to have told Israeli prime minister, Ehud Olmert, that Washington didn't believe that Israel could take out Iran's nuclear plants without a prolonged air campaign that would ignite a major Middle East war. He also said it would likely spark Iranian attacks against American forces in Iraq and Afghanistan and on oil shipping in the Persian Gulf.

The newspaper's account is third hand. They're relying on statements from two aides of a European head of state who informed them of what Olmert had told him during a visit to Israel. So, Olmert reportedly revealed this to the European head of state who subsequently related the account to his aides who, in turn, let it slip to the English paper.

Does this rule out an American air campaign against Iran? That remains an open question. There is some speculation that, should Obama win the November election, Cheney might pressure Bush to take out Iran's nuclear facilities before leaving office.

The McCain Gambit

America's credit crunch crisis is trouble for plenty but a golden opportunity for some - like Senator John McCain.

McCain, while he appears to be suffering in the polls due to voter discontent with the Republicans and their ways, has decided his way out may be to turn those lemons into lemonade. How? By positioning himself to claim that he is the guy who saved America's bacon in this emergency.

Forget all the Repug spin about this crisis being the fault of the Dems. The whole derivative scam was the handiwork of McCain's own cherished economic advisor, former Senator Phil Gramm, who, while chairman of the Senate Banking Committee instituted and pushed through two pet projects, the Gramm-Leach-Bliley Act of 1999 and the Commodity Futures Modernization Act of 2000. "Commodity" "futures" "modernization" put'em all together and they spell poison for the masses.

Throughout his campaign, McCain has regularly revealed his avaricious, craven, manipulative and exploitative talents and they are powerful indeed. He's also shown a steady hand at the worst of Rovian tactics.

Credit crunch. Problem. Widespread public ignorance. Advantage. Populism factor. Enormous. Fear. Bonus.

Most Americans have a weak, incomplete or misguided understanding of just what's going on. It's hard to blame them, given the deterioration in the quality of their mass media which no longer bothers trying to understand or analyze but offers itself up as a repeating station for political messaging. What filters down are words like "greed" "700-billion dollars" "trillion dollars" "Wall Street" "bail out."

What's not explained to people is constipation. How is the American economy dependent on the free flow of credit and what risks does the economy face of America face if their country encounters credit constipation? This is a subject that doesn't have high drama. There are no heroes, no villains, no guilty faces to throw up on screen. Here's how Krugman sees it. From the New York Times:

Many people on both the right and the left are outraged at the idea of using taxpayer money to bail out America’s financial system. They’re right to be outraged, but doing nothing isn’t a serious option. Right now, players throughout the system are refusing to lend and hoarding cash — and this collapse of credit reminds many economists of the run on the banks that brought on the Great Depression.
So the grown-up thing is to do something to rescue the financial system. The big question is, are there any grown-ups around — and will they be able to take charge?
...one non-rank-and-file Republican, Senator John McCain, is apparently playing spoiler. Earlier this week, while refusing to say whether he supported the Paulson plan, he claimed not to have had a chance to read it; the plan is all of three pages long. Then he inserted himself into the delicate negotiations over the Congressional plan, insisting on a White House meeting at which he reportedly said little — but during which consensus collapsed.

The Iraq War scam shows that an awful lot of Americans don't want to know. They get stirred up and then they react. That's what John McCain is counting on to turn his pig's ear into a silk purse. When the mob hits the streets with their torches and pitchforks, McCain knows the safest place to be is right in front leading them on.

He knows that it's critical for him to ride this wave. He has to be seen to be the voice of the American public's anger and frustration. If that means killing the deal, he'll do what it takes.

McCain realizes that, with the election just weeks away, he might just pull this one off. If he wins, kills the bail out, and it backfires on the American economy, the election will have come and gone before people start pointing fingers at him. By then he'll either be safely headed for the White House or drifting off to retirement.

If, however, he loses, he can claim the mantle of champion of all those upset Americans who are being ignored "as usual" by those damned politicians in Washington, those elitist bastards. Once again, he wins.

Will the American people see through McCain's gambit? I wouldn't bet on it. With his recent shenanigans about suspending his campaign and postponing debates he might have overplayed his hand. Then again, maybe not.

Thursday, September 25, 2008

An Issue We Can Still Fight an Election On

Steve Harper, echoing his American Idol, Mr. Bush and the Geezer McCain, says we have nothing to worry about, that the fundamentals of the Canadian economy are sound.

Does that sound familiar?

Then, yesterday, Merrill Lynch Canada released a report saying that we Canadians shouldn't get smug about what's happening in the U.S. and that we'll be next to face our own debt and housing price crisis. I found that pretty hard to believe but the more I thought about it the more I had to wonder what if they're right?

It may or may not be anecdotal but I recalled a recent study that showed that the average, first time home buyers in Vancouver were now paying something in the range of 75-78% of their combined, after-tax income on housing. A Vancouver starter home takes somewhere between three quarters and four fifths of a two income family's take home.

Back in my day it was considered not just prudent but essential to keep one's housing costs below 30% of net income. That got me wondering how this has changed so radically? How does a family get by while paying out three quarters of their disposable income on housing?

What if Merrill Lynch Canada is right? Don't we need a government that's on top of this now? If this danger is real, what measures, what policies do Canadians need to minimize the risks and impact? Is it really enough for Steve to tell us that the fundamentals are strong?

I don't know but it seems to me that when it takes nearly all of a two job family's net income to buy a house, maybe we are in an unhealthy and dangerous housing bubble. Why do I need to find that out from the Canadian subsidiary of a defunct, American securities giant?

In the greater scheme of things it's no skin off my backside. My house may have soared in price but it hasn't gone up a dime in value. It'll still buy me the house next door and that's about it. That's just fine for those of us lucky to be in a low debt/no debt position but the operative word there is "lucky."

What about the unlucky, the vulnerable? I'm talking about the new families that have just taken the plunge, hoping they can stay afloat long enough to get their debt down to something manageable. It's easy to say "that's their problem" except that it's not just their problem, it affects all of us. It affects the prosperity and stability of our communities among other things. It certainly affects their ability to contribute to our communities, to our societies. We benefit when we keep them healthy.

Have our politicians been asleep at the switch, blinded by our petro wealth to the gathering perils to our people?

Housing bubbles are economic cancer. Read my post on that subject from yesterday. It cavasses the approach some other countries have used to tame the destructive fluctuations in housing stocks, to recognize that housing can't be treated as just another commodity for speculation.

Don't look for any answers from Steve "the fundamentals are sound" Harper. I want to hear from the Liberals on this. If this problem is nearly as bad as claimed by Merrill Lynch, we need to identify it and come up with solutions. The Americans have shown us what happens if you don't deal with these threats promptly.

There's no better time to get this on the radar screen than right now, in the midst of a general election.

Kosovo - Who Didn't See This Coming?

There aren't many places that achieve independence and failed state status on the very same day. Welcome to Kosovo. More or less sovereign since February 17th, the notional state appears to be on the verge of itself breaking apart. According to the International Crisis Group, Kosovo is teetering on the edge of de facto partition:

“Major violence has been avoided but the calm is deceptive”, says Alexander Anderson, Crisis Group’s Kosovo Project Director. “Divisions between Albanian and Serb areas have widened. If de facto partition continues, Kosovo’s Serbs south of the Ibar River will be at risk, pressure will mount to redraw borders on ethnic lines throughout the states of the former Yugoslavia, and EU membership prospects for these countries will fade”.

Meanwhile Serbia is putting its own chances at EU membership at risk by, "pressing the UN General Assembly for an International Court of Justice opinion on the legality of Kosovo’s independence." Can't be having that now, can we?

Kosovo currently gets a staggering 30% of its GDP in the form of transfers from ex-pats living in countries that have functioning economies. Much of the rest comes in the form of foreign aid. As an independent state it just doesn't make much sense, except in fulfillment of Washington's foreign policy.

Curiously, in its 4 September, 2008 update on Kosovo, the CIA World Factbook has excised any reference to what had been one of Kosovo's biggest economic sectors - the smuggling of cigarettes and cement. Oh well, maybe they've all kicked the habit. With a per capita GDP of just $1,800, Kosovo has a fast lock on the title of Europe's poorest state.

Canadians Support Insite - Sort Of

An Angus Reid online survey has found Canadians support the Insite safe-injection programme by a margin of 38% to 23% with the remainder undecided.

The Tories, however, seem to have done their job in convincing a lot of folks that Insite actually provides drugs to addicts. Fully 19% of those polled by Angus Reid believe this nonsense.

In BC and Alberta, Insite's support numbers are better than 50%. It seems we're less apt to swallow that "drug pushing" drivel pumped out by the right.


Playing Electoral Hardball

This appeal to Democrats, published in The New Republic, holds an invaluable lesson for liberals everywhere:

One of America's quadrennial rituals is liberal shock. Again the Democrats are surprised by the brutality of the Republicans. They are lying. Yes, they are. They want very much to win. So should we lie, too? "We" already have. (John McCain did not say that America should stay in Iraq for a hundred years.) The Democrats believe that, by running roughly, "we" become like "them. " More grandly, the objection is that the moral character of a campaign is a premonition of the moral character of an administration. I do not see the correlation. The "missile gap" made possible the Nuclear Test Ban Treaty. The "Daisy Girl" was an indirect cause of the Voting Rights Act. And if, as a consequence of exaggerated or erroneous statements about John McCain, universal health care will be established by the next administration, well, the omelette will have been made. And "we" will not have become like "them," because "they" would not deliver this right and this relief to America. I apologize, of course, for my chilliness. I am not unmindful of the relationship of means to ends. I took Kant. But an election is not a seminar; and to worry the means so much more than the ends is also to distort the relationship. The air of ethical exquisiteness in which Barack Obama wraps himself has psychologically hobbled his party. It finds itself elevated and stunned. Yet there is nothing in the history of our democracy that warrants the belief that electoral politics should be elevating: in this regard, we have no height from which to fall. And there is the touchy question of whether the hope for consensus is not also the fear of conflict. Conflict is not--to use Obama's condescending language for whatever gets in his way--always "silly" and "a distraction." As the polls are again demonstrating, this is a divided country, and some of its divisions are honorable, matters of first principle, the effects of worldviews. Conviction is a hardening influence, a partisan thing. All the current talk about political syncretism obscures the fact that there is philosophical gridlock. That is why the "independents" will determine the outcome. Liberals must not perceive the world in the image of their pacific desire.

Another Way of Looking at Things

I heard a cogent point about the Bush regime's $700-billion bailout proposal last night. It's a telling point, one that should give everyone pause.

The keystone issue is that the Feds will be buying those bad debt mortgages at far above fair, actual value. In essence, they'll be paying the scoundrels who ran this awful scam, what John McCain calls a "Ponzi Scheme,"much more than the fair market value of the mortgages they pick up. They'll be paying "value plus a premium" to the very people who laid waste to the American economy.

So, why the largesse? Because these Wall Street predators are holding a gun to America's head. "We'll go down, sure, but we're taking you with us." For the American taxpayer it's a return to the Savings & Loans scandal bail outs only on a much grander scale.

Here's something that strikes me as curious. Even without this housing boom/derivative fueled scandal, the US government has steadily run deficits in the order of several hundred billions of dollars. Even before this current crisis, Bush had swelled the Reagan legacy - America's federal debt - to a staggering $9.7 trillion. Today's government is financing both Mr. Bush's war of whim and its tax cuts for the rich out of foreign borrowings.

So, in a nutshell, you already have a government that pretends it can levitate, pledging the good credit of generations yet to come in order to defy fiscal gravity. Now they're lining up to add another TRILLION dollars (yes it's a trillion plus when you add in Bear Stearns, Freddie Mac, Fannie Mae and AIG to the current bailout) to the obligations of future, wage-earning taxpayers.

DOESN'T ANYBODY THINK THAT AMERICA'S RICH FOLKS OUGHT TO BE TOLD THEIR NATION CAN'T AFFORD THOSE EXTRAVAGANT TAX CUTS RIGHT NOW? Especially given that now, those richest of the rich, have inflicted this very scam on the nation and its wage-earning taxpayers. How can these greasy pols scream "crisis" and "disaster" and blithely ignore the tax cuts for the rich issue? That's because they have no intention, not the slightest, of changing this outrage.

Now that the Repugs are going all socialist on us, effectively nationalizing America's largest economic sector, the financial sector, maybe it's time to talk about America's social compact with its working people. It strikes me this would be an ideal moment to explore the gaping and rapidly expanding chasm between rich and ordinary Americans. Maybe it's time to start closing that gap for the good of the American people and the good of their country.

Bush's "trickle down/top end tax cuts" dogma is nothing more than a revival of Reaganomics - pure Voodoo economics at its very worst. Even the guy who dreamed up this scam, Reagan's budget director Dave Stockman, later admitted it was all contrivance - a means to justify transferring tax burdens from the shoulders of the richest onto the shoulders of those beneath them.

Bush and Cheney have pulled this very same swindle on the American people. Remember how Cheney talked Bush into a second round of rich boy tax cuts by telling him that Reagan showed that "deficits don't matter?" Well they sure as hell matter now.

I suspect the loudly proclaimed "urgency" in getting this bailout in place is at least partly the result of wanting a done deal before little people start asking some very hard questions that these hucksters and fixers don't want asked.

And that's another way of looking at things.

Wednesday, September 24, 2008

McCain Tries to Duck Friday Debates

You can't blame John McCain for wanting to put as much distance as possible between his campaign and the credit meltdown now underway. He damned near went apoplectic today when The New York Times revealed this his key campaign aide, Rick Davis, was getting money from Freddie Mac almost right up to the day it got taken over by the Feds.

The economic crisis appears to have broken the stubborn deadlock between Obama and McCain. Latest results have Obama up 9% and climbing while Captain Sound Fundamentals heads for the tank.

So McCain has announced he wants to postpone the debates scheduled for Friday evening. Sure he does. McCain claims America badly needs him in Washington to sort out this mess. Sure it does. Must "man the post" and all of that. Not that a guy who's shown such a weak grasp of "fundamentals" could make any difference anyway.

It's pretty obvious that, where his political survival is at stake, McCain is as good with the old "cut and run" as they come. Oh I so hope Obama doesn't let the Old Geezer off the hook.

Layton to Renegotiate Lumber Deal?

Pssst, Jack. Don't let on but the American housing bubble that drove our softwood lumber exports has burst. The less demand they have for Canadian softwood, Jack, the less likely they're going to give a hoot when you tell'em you're scrapping the lumber deal.

You also might find that the Americans aren't likely to react positively to an ankle-biter right now. They're dealing with some serious, homegrown problems and I don't think your yapping is going to impress these guys.

And then there's the raw log export business, Jack. Are you saying you're going to pull Canada out of the WTO and NAFTA? Unless you're a complete idiot, you must assume you're talking to complete idiots. You know full well that our hands are tied on the raw log export problem. We surrendered the right to require those logs be processed in Canada.

Are you an idiot, Jack?

Just How Crazy is John McCain?

Is John McCain as crazy as the proverbial s__thouse rat?

The Old Geezer, it seems, has been caught again. He recently claimed that his top aide, Rick Davis, severed all ties with failed mortgage company Freedie Mac a long time ago, going on to add, "...and I'll be glad to have his record examined by anybody who wants to look at it".

Well The New York Times took Senator McSame up on it and discovered - why Davis had been getting paid by Freddie Mac right up to last month, just before it cratered. Now the $15,000 a month wasn't going to Davis directly but to his firm Davis Manafort. However the only thing that FM seemed to be getting for its money from RD was access to JM.

McCain hasn't disputed the Times' claims. No, McGeezer is choosing to attack the NYT, instead. From The Guardian:

"Today the New York Times launched its latest attack on this campaign in its capacity as an Obama advocacy organization," the statement began.
It continued: "Therefore this 'report' from the New York Times must be evaluated in the context of its intent and purpose. It is a partisan attack falsely labelled as objective news. And its most serious allegations are based entirely on the claims of anonymous sources, a familiar yet regretful tactic for the paper."

Johnny, Johnny, Johnny - if you want to slam the Times, at least say what they're claiming isn't true. You gotta say they're lying because, if what they've reported is true, you and Rick Davis are the liars. With your campaign teetering on the edge of abyss, this is no time to cast yourself as a liar - unless, of course, that's all you've got left.

Seriously, John, you're beginning to sound unhinged. And, by the way, it doesn't help to have Davis skip his press lunch today.

Housing Bubbles - Economic Cancer

I ran a bankruptcy practice and so I've had plenty of experience of bubbles and recessions. I've seen a lot of people lose their homes, wiped out, their houses flogged off at distress prices.

I'm old fashioned enough to believe that a home is the essential core asset of any family. It's not like a car or a cottage or a stock portfolio. It's where you go to at the end of the day, where you raise your kids, it's where you live out your life.

Out here in the West we've certainly had our housing bubbles, albeit not as wild as the disaster now unfolding in the U.S. In B.C. they used to follow a 7-year cycle. Property values would escalate and then they'd slump. The more they escalated, the bigger and harder the slump that followed.

The wildest days out here were in the early 80's. We went real estate mad. Just holding an interim agreement was enough to generate a huge return. In some cases interim agreements changed hands several times before the property was actually bought and transferred to the "new" owner who was likely then to simply put it right back on the market.

I can remember taking the elevator with former real estate magnate Nelson Skalbania and watching him turn to the wall of the elevator so he could write cheques on his way up to his lawyers' offices. At the time he said there was no such thing as a bad deal. If you paid too much for a property you only had to wait a couple of months before it became a good deal. There was no bad property, there were no bad deals.

At that time, real estate agents got heavily into the housing market, buying properties themselves on spec. Between the developers and the realtors, they cranked the housing market into a frenzy.

What had happened is that these moneymen turned housing into a speculative commodity, not a basic essential. That led to inflated, runaway prices. Now, if you owned your own home it all looked grand. But if you were a young couple, eager to start a family, desperation set in. People who wanted homes were buying out of desperation, afraid if they didn't take "the plunge," prices would get totally out of their reach in a month or two. So they dived in and paid $450,000 for a $250,000 house.

Wait a minute. If a house is selling for $450,000 it's worth $450,000, not $250,000 right? Maybe if you're selling it but not if you're buying out of fear.

In a healthy housing market, a house is worth no more than someone willing to live in that quality of house can afford to pay for it. Today in Vancouver, with new home ownership requiring close to 75% of the typical buyers' combined takehome pay, that's all gone up in smoke.

Years ago I read about a Scandinavian country, Sweden if memory serves, that chose to recognize that housing was special and that affordable housing met a crucial, social need. So they found a way to make house prices reflect their actual value. They simply taxed away speculative profit.

Everybody got a deal - on one residence. If you owned your home for a set number of years you could sell it without a speculative profit tax. If you sold your house before then it was okay so long as you invested your takings in another residence. But, if you bought a house to flog it on spec, well then your profits would be taxed away on the sale. Obviously it was more sophisticated than that but this is the rough idea.

The policy recognized that houses are supposed to be homes and homes are an important part of a healthy society. Therefore they're to be treated differently than other assets. Stop allowing speculators to whipsaw the housing market and homeowners come out the winners.

In America, it was speculation that destroyed their housing market just as it was speculation in housing that drove the American economy during the Bush years. It was speculation in housing that triggered the credit crisis their government is wrestling with today. It was speculation in housing that accounts for the $700-billion bail out now pending in Washington.

Speculation in housing has undermined the very economy of the United States of America, forcing the most "free market" capitalist government to resort to nationalization of their country's financial sector.

Cut out all the middlemen - the subprime scam artists, the derivative-flogging hucksters of Wall Street - and you're left with housing speculation at one end and economic catastrophe at the other and a powerfully direct, causal link between the two.

Maybe if housing speculation is enough to bring the American economy to its knees, it's time to put an end to it.

Panic on Pennsylvania Avenue

Toles, Washington Post

Paul Simon wrote, "...it's all happening at the zoo. I do believe it, I do believe it's true." He wrote that in 1967 but it's spot on to describe the denizens of Pennsylvania Ave. (N.W.) today.

America's fiscal crisis has swept Pennsylvania Ave., from the Capitol building at one end to the White House at the other, like a wildfire racing through a zoo. The beasts are in full panic.

I got the full measure of that last night watching, you guessed it, The Daily Show, when Jon Stewart laid out the conditions US Treasury Secretary, Henry Merrit Paulson Jr., has imposed on Congress before he'll accept their $700-billion bailout money.

Basically, Paulson has described he'll take their filthy lucre but only on condition that there's no oversight on what he does with the stuff. No accountability whatsoever. He even wants a condition expressly stated that how he doles it out - and to whom can't be reviewed by any court.

The beasts, hearing the crackle of flames and choking on the acrid smoke, appear willing to agree to anything if only someone will make this nightmare go away. Anything, anything, just ask and it's yours.

Of course it's not their money anyway, not really. The $700-billion doesn't exist, not within the United States. The government doesn't have it, they're already running multi-hundred billion dollar deficits funding wars of choice and tax cuts for the rich. But there are places to get it. China has that kind of money - and they have it in US dollar holdings to boot. You know, that Wal-Mart money they rake in from filling the shelves of America's top retailer.

It's not like they're going to stiff the taxpayers with it either. No, the Chinese offer easy-credit plans that let you pawn it all off on today's voters' kids and grandkids and their kids and grandkids. Since Bush showed up, that's practically become the American Way. Do whatever you like, just keep the pain out of the immediate voting cycle and hope it won't show up at the ballot box.

Make it go away - for now.

It looks as though the beasts will get their way. The Dems are trying to draw a couple of lines in the sand. They're balking at the zero-oversight demand and they want the bailout subject to conditions that taxpayers be compensated with an equity position in the firms bailed out.
Even some Republicans are now lining up behind Senate Banking Committee chairman Chris Dodd.
The Democrats have also decided to include a group left out of the Bush Bailout - struggling homeowners. Since the Feds are going to wind up owning a lot of these bad mortgages anyway, it actually may be better for taxpayers to find some compromise that keeps these people in their homes and gets them to make payments they can afford.
Now I know a lot of you right-wingers will recoil at the suggestion of writing down some little guy's mortgage debt and settling for what they can pay but let me tell you, from lengthy personal experience, that we've been doing that for businesses for years.
I was involved in a lot of receiverships in the early 80's. Back then the banks would appoint a receiver, trigger a bankruptcy and then just have the receiver-trustee firesale the assets. That led to recoveries of pennies on the dollar. It took a while but finally the banks figured out that the trigger they were pulling led to a barrel at their own heads too. That's when they started looking at work-outs, settlements. Better to write off 20% if it keeps the business going and recovers interest and principal on the remaining 80% than get 10-cents on the dollar right now. That's the same thing they're talking about with home foreclosures.
Just because you don't like it, doesn't mean it's not the right thing to do.

Monday, September 22, 2008

Barack's Next Ad

It doesn't get much better than this.

American voters are casting about trying to figure out just who to blame for the subprime mortgage/derivative/credit crunch/housing bubble scandal. The Repugs, naturally, have their spin machines in overdrive - trying to convince average Americans that both parties are to blame and their Repug followers that it's really the Dems doing.

Time for a photo montage. You can start with Reagan's "trickle down" genius David Stockman, now staring at 30-years in prison for corporate accounting fraud. Then, how about Bush Sr. and Silverado Savings & Loan. Next up, John McCain and Chales Keating and Lincoln Savings & Loan. Then George w. Bush and "Kenny Boy" Lay of Enron fame. Cheney and Haliburton. Finally a Rogues Gallery of the Republican's "look the other way" regulators and then a quick return to John McCain and Charles Keating. Fade to black.

Ouch, ouch, ouch and ouch.

Keep hammering away at four decades of Republican shenanigans that have repeatedly wiped out little folks' life savings while facilitating the skyrocketing wealth of the real elite, America's wealthiest. Bring up clip of George w. at that black tie dinner bragging about his friends, "the haves and the have-mores, my base." Close with clip of John McCain saying he's supported Bush on every important piece of legislation throughout his presidency and his pledge to even further deregulate the financial services sector.

You might have to break that down into a series of three ads. Then but the best airtime you can get and run them in successive commercial breaks.

Bingo. Bye, bye Geezer.

Rescuing Stephane Dion

It didn't have to be this way. If Keith Davey was still around, it wouldn't be.

Stephane Dion's Green Shift has been a disaster in its introduction and in its marketing.

We all know that the Green Shift stumbled at birth. Mr. Dion lost control of its introduction. It was uncloaked before it could be unveiled. It was released when it was most vulnerable to empty, alarmist attack and before it could be explained, defended and sold to the public.

Steve Harper was able to tie the Green Shift around Mr. Dion's neck and keep it there. After that, there was no separating the two which ensured that it would be Dion, not Harper, on the defensive in the critical opening weeks of the election campaign.

Everything we complained about Harper, every excess, every anti-democratic and authoritarian abuse, the scandals, every broken promise - it all got swept away. Harper hasn't had to defend his record at all, not even remotely. It's as though none of that stuff ever happened.

Harper's shield, his cloak of invisibility? Mr. Dion's Green Shift.

At no time since Mr. Dion assumed the party leadership have the Liberals been strong enough to launch an initiative of the scope of the Green Shift. It's much too big for a party to attempt from a position of relative weakness.

The Tories have held a huge financial advantage over the LPC throughout Mr. Dion's leadership and there was no sign he was ever making any inroads on that. That alone ought to have set the alarm bells ringing. The Liberals didn't have the luxury of launching a major and controversial initiative. They couldn't afford it.

The one thing the Liberals didn't have to buy was the litany of Harper's excesses. That was free. People had watched it all unfold - Cadman, Mulroney, Afghanistan, In and Out, accountability, environmental stonewalling, gagging the military, and secrecy, secrecy, secrecy.

So, why isn't Harper being forced to hop and dance around his own record right now? Why is he able to recast himself as an average guy in a sweater vest? It's because he grabbed the opportunity, back when the Green Shift unveiling was so terribly botched, to put Dion on the defensive and to keep him there.

The Liberals didn't have enough money to launch a Green Shift platform. They didn't have enough money or enough time. It's not a policy suited to an opposition party in any case. It takes a massive information campaign, meetings and discussions with the public and every key player, a building of consensus. That's a job only a government can tackle.

Dion needed sage advice and it seems he didn't get it. He needed to take the initiative and go on the offensive. He needed to frame the issues.

A - The first step ought to have been to assure the public that a newly elected Liberal government would absolutely not introduce Green Shift legislation unless certain key conditions had been met. In other words, Mr. Dion ought to have removed the Green Shift as an election issue altogether.

B - Mr. Dion should have promised broad consultations with the Canadian public and the most heavily affected sectors - transportation, energy, agriculture and so on. Mr. Dion ought to have made clear that his party would then seek to hone that input into the strongest possible consensus behind an effective carbon reduction programme. In opposition, the Liberals have neither the funding nor the time for an undertaking of that magnitude. Restating the obvious isn't a sign of weakness.

C - And then - the third condition - would have been to promise a plebiscite. Let the government come up with a policy, explain it properly to the public and then seek public approval. Promise the Canadian people that they would decide the Canadian response to global warming. After all, if you introduce policies they don't support, they'll do the deciding anyway in the next election.

The logic of this approach ought to have been obvious to any Quebecker. This issue shares a lot of the complexities of a sovereignty referendum. It's something that has to be sold to the voting public. They have to decide it's fate, they have to support it or send their government back to the drawing board.

Getting Dion and the cash-strapped LPC off Harper's hook ought to have been as easy as A-B-C. Then it might have been possible to make this election a verdict on Harper's greasy record of the past two years.

I'm not sure there's still time for Mr. Dion to drag himself out of the Green Shift hole that Harper has dug for him. But, damn, he's got to try!