Archive for February 2008

Our CEO in Charge

February 29, 2008

The Wall Street Journal is facing a real conflict of interest.  Its news reporting is among the best and is considered even and balanced.  Its editorial page makes the leaning tower of Pisa look like the Eiffel Tower, and to be clear the lean is towards a biased right agenda.  Now what are they going to report about our failed CEO, President George W Bush?  Will they spin and obfuscate or will they disown and dump him overboard in favor of saving the election for John McCain?

1. In today’s WSJ, front page and center, is a report on the price of oil and the value of the dollar versus the Euro (you know the currency that old Europe uses).  As our dollar has deteriorated in value, the price of oil has zoomed up.

  • So asking the Saudis to pump more oil is just a White House smoke screen.  The supply of oil is not the issue, it is the value of the dollar which now too many people think is worth less.
  • So claiming that the Chinese are using too much oil and driving up the price is a deception, it is the perceived lower value of the dollar.  (Note finding someone to blame and hate is a staple of the Republican Bush Administration.

2. Also reported today is that the Federal Reserve Chairman Ben Bernake thinks the economy will recover later in 2008 and that further interest rate cuts do not pose too much of a fear of stimulating inflation.

  • With the dollar falling, all the goods made from all those jobs shipped overseas as well as all the other things that Americans consume made overseas, will simply cost more.  Same things, cost more, that is the definition of inflation.
  • With the price of oil rising (even if only on the basis of a weakening dollar), it will drive up the cost of everything we do in America.  They call that inflation.
  • With the availability of cheap dollars, this time due to low interest rates, prices will escalate as more dollars chase fewer goods.  This is also called inflation.

3. The Iraq War without end is costing us all a small but measurable fortune.  And the bargain in this deal is that the American public gets little or nothing from it. 

  • In financial terms, the Bush Administration has gotten out its VISA card and charged the whole event.  This free lunch is now costing Americans each year about $ 30 billion in interest just to carry the $ 600 billion of debt.  (This $ 600 billion grows each day and is expected to top $ 1 trillion soon.
  • In financial terms, the Bush Administration’s budgeted Defense spending is over      $ 500 billion yearly.  With the overall national budget also running a deficit, this in effect means part of our Defense spending is also on the tab.  Why should other nations support this reckless and irresponsible financial behavior?

If the US Government were a corporation, they would be put it in receivership.  If President George W Bush were the CEO, he would be fired.  Will the WSJ write this?  Will the WSJ offer some answers to these perplexing problems?  And even more important, will any of the candidates speak to this serious issue with clarity and a plan?

Zap – Zapped

February 28, 2008

John McCain yesterday showed us his less pretty underside.  In mocking, non-adult tones, he said, “I have news for Barack Obama…” and went on to state the obvious that “al Qaeda in Iraq” is in fact in Iraq.  John’s point was to undermine a response Obama had made the day before that Obama as commander in chief would not hesitate to take action against al Qaeda in Iraq if after he had brought the troops home, al Qaeda in Iraq became a problem again.  We all got an insight into how weak the surge position is with Obama’s reply.

Barack said that before John McCain and President Bush decided to invade Iraq, there was no “al Qaeda in Iraq” (just as there were no connection between Iraq and 9/11 or active programs or stockpiles of WMD… my words, not Barack’s).  This exchange exposes the soft under belly of the pro-war Republican position.  There is to this day no justification for the war and few if any apologies for how the post invasion period has been handled.  On top of that no one has stood up for the enormous cost in real terms of lives and dollars, and the tremendous lost opportunity cost these represent.

Today there is expected to be testimony in Congress where estimates of the War’s cost will be made.  I normally use figures of $ 600 Billion heading to $1 trillion and these are based largely on actually cost for men and bullets that are put on the US charge account.  Not in my numbers are estimates to cover the costs for how long we will actually remain in Iraq at roughly the same troop levels as now.  The testimony today will add to this the estimated long term costs of Veterins benefits (mostly medical) that will be due our injured and the figure is not small.  Reports cite a total of $3 trillion as not being unrealistic.

If I were John McCain, I would wish I was running on Barack Obama’s or Hillary Clinton’s platform, or second best, I would make sure I renounced the decision to invade Iraq and all those who conspired to fool the American public.

The Boat is Beginning to Lean

February 27, 2008

I have been waiting to see how the Democrats might snatch defeat from the jaws of victory again this time.  With the playing field of common sense wide open, it should be child’s play to elect a Democrat this time around.  Unfortunately, both Hillary and Barack have been playing a dangerous tune in their bids for Texas and Ohio primary’s voters.  Following the John Edwards’ populist line is not only unnecessary, it is unwise.  Anyone who thinks that workers who supply automobile manufacturers are losing their jobs because of NAFTA simply are living in denial.  Anyone who thinks China is the cause of unemployment only is seeing part of the issue.  And any candidate that panders to these fears is playing with fire.

There are certainly big problems in the rust belt States where once middle class America thrived on great industrial jobs.  Unfortunately a combination of greedy management and senseless union management combined to create gridlock in labor negotiations.  The result which became clear over the 60’s, 70’s and 80’s was an American industrial base that was becoming uncompetitive around the world.  When was the last time you road in an American train or bus?  Look at the success both Honda and Toyota have enjoyed right here in America!

But American ingenuity has not been asleep the whole period.  We created Enron to buy and sell energy and make money out of nothing.  We allowed MCI to grow into Worldcom and then come crashing down.  We sold the world CDOs (collateralized debt obligations) and now we are looking at huge write offs by our most respected investment and banking institutions.  We have forgotten about “creating” value and instead have focused on “extracting value” (by and for a few).

It is proper for John Edwards, Hillary Clinton, and Barack Obama to focus on the crumbling manufacturing segment of American but it is cruel and unfair to promise unreasonable, unaffordable, and unworkable solutions.  Our country is tittering on the verge of “bankrupcy” and the economy is poised to head into a recession.  The national debt has doubled in the last 8 years and the 2009 proposed budget has a $600 billion built in deficit.  Telling people that we should take back the jobs that went to Mexico or China is hiding the fact that whatever goods are involved would cost a lot more if made again in the US in the manner they were made in the past.  That’s called inflation!

America’s global industrial competitiveness should be a worry to everyone.  To regain our leadership position, however, is going to require a bottom to top rebuilding. 

  • Our high schools must prepare more students with vocational skills so that they can perform technical tasks upon graduation.
  • Our colleges and universities must graduate more with critical thinking skills and practical aptitudes to apply what they have learned.
  • Math and science must be elevated from second class status.

The jobs that have left the US for Asia and other lower wage countries represent terrific jobs for those countries and no one will work at those wages in the US. The route back to American competitiveness will involve a clean sheet of paper.  Because we have such a relatively high standard of living already, labor content will need to be much less for something made in America than the same thing made in Thailand, India, or China, for example.  The jobs so many Americans have known in the past simply will not look the same in the future.

This new reality probably can not be explained during a campaign.  John McCain has come the closest by telling Michigan voters that their lost jobs were not coming back.  Hillary and Barack, beware!  If you mislead the voters now, how can they trust you later.               

The Primary Blues

February 26, 2008

We have been at this primary thing for well over a year and there are still 9 months to go.  What more could be said and what difference would it make anyways?  The McCain campaign is in the “wait it out” mode, opening no new offenses until he has enough delegates to wrap up the Republican nomination.  The Clinton campaign is searching for a “difference” that voters will care about.  So far all Hillary’s team has found matters only to a few die hard Clinton fans.  The Obama campaign is rerunning all the successful ads and stunts that have worked so well before Texas and Ohio in other States.  People who are buying his lines (and there are increasingly greater numbers) are hearing someone who is speaking to their aspirations and not their fears.

The question of whether Obama would be a successful President is almost beside the point.  While that is a legitimately important point, the voters have just experienced 8 years of someone who has been a total failure as President (unless you count getting your picture taken as Presidential).  The Bush Administration has invoked fear and hatred as everyday political tools.  They have constantly pointed out what was broken or what would soon break down, but have been silent or insincere on how to fix these problems.

1. In a race of Clinton versus McCain, we will see two who can clearly lead and manage the Government enterprise and can command a full view of international politics.  Neither will be as unrealistic or mean spirited as the Bush Administration but at the same time neither offer much reason to believe it will be new day.

2. In the race of Obama and McCain, we will see inspiration versus practicality.  We will see excitement versus “ho-hum”.  We will see “oil on the waters” versus “shiny saber rattling”.  We will likely see McCain being forced to move further right rather than risk everything on moderates and independents.  And if Obama is smart, he will move more aggressively into the middle right behind McCain.  The country is tired of this failed Administration and will give Obama the break on whether he is up for the job.  They will conclude he is simply a much nicer person than George Bush and probably more competent, and that’s good enough.

Regardless of who the final two candidates are, there is likely to be little invoking of God in this race.  Fortunately, all the candidates profess faiths that are important to them but have so far not seen the need to push them on anyone else. 


February 25, 2008

There is still a mixed view among Americans on whether President George W Bush and his boss, Vice President Cheney’s decision to invade Iraq was legal, justified, and done in keeping with American traditions.  Despite there having been no connection between Iraq and 9/11, and the total absence of any WMD (despite White House claims), some still cling to the thought that Sadaam was a really bad person and the world is better off without him.  Looking around today, you have to scratch your head and ask what has the United States gotten for ridding the world of Hussein?

1. We have about 150,000 troops stuck in one Middle East country with no end in sight.

2. We are unable to send more troops to Afghanistan where they are needed to fight the real culprits of 9/11.

3. We have no more influence over the Saudis, Syrians, or Iranians than before the War.

4. We have spent over $ 600 billion and are well on our way to $ 1 trillion.  We have cleverly “charged” this war and increased our National Debt to cover the cost.  This is the gift that will keep on giving for our children and theirs.

5. We have accomplished a “regime change” that transformed a stable, if despotic, Iraqi Government into largely sectarian leaning, impotent Government.  The simple problem in Iraq is that no one has any concept of Democracy but they do know that he who controls oil will in the end be the winner.

6. Simply stated George and Dick have gotten us into a mess and they have no idea at all on how to get out.

The issue that should be in front of the American people during this election is not about the surge and who supported it, or who voted for the War Powers, but how the US can extricate itself from this mess.  Getting out of Iraq is not simply bringing the troops home.  It will involve a new and more comprehensive foreign policy that

1. Looks at the Middle East holistically and treats with respect all parties.  This means returning to the role of honest broker.

2. Looks at the rest of the world and neutralizes the reasons other great (or near great) powers might want to keep the Middle East inflamed as a surrogate to their national interests.  (In short, the US can not keep jabbing a stick in Russia or China’s eye and expect them to be helpful versus the Middle East.)

Like most Americans, the US Government under George W Bush has been living well beyond its means.  Our Country must return to fiscal responsibility and we need to concentrate on “value creation” if we are to have any chance of surviving this century.  The views expressed in the Project for the New American Century (PNAC) are simply naive and out of touch with reality.  Failure to heed this warning will result in a rapid fall in our standard of living and the rise of several stronger and competitive nations.

So Near, Yet So Far Away

February 24, 2008

The 2008 Presidential election is still so far off it could make one despondant if you are interested in rational leadership and change from the Bush Administration.  Either Hillary or Barack have yet to “die”, metaphorically at least, before we embark upon the general election.  One of these two will go on to Presidential campaign where the winner will get a treasure chest of literally billions of tax payer dollars to spend.  Will any of the candidates spend it wisely?

The next election should be about two issues:

1. The election should repudiate President George W Bush and his boss, Vice President Dick Cheney.  While 2004 would have been immensely better in timing, 2008 is not too late.

2. Change the course of the executive branch so that the Country begins to deal with the enormous deficit and projected budget deficits.  Without  dealing with the budget issue, how can we expect to finance a war effort or even better, to attack the real scourges of America, the crumbling infrastructure and the widening rich-poor gap.

They called Bill Clinton the “Teflon Man” because there he seemed immune to any charges that Republicans would sling.  Somehow, Bill just shook his head and it all fell off.  Barack and/or Hillary have got to get good at that because assuredly, the slander and false charges are on the way. 

Barack and Hillary are at a cross roads.  They both possess strong platforms and supporters.  They both have the strength and drive to serve well.  John McCain is also ready to serve and arguably could make a good President.  There will be mud slinging by both parties and we will possibly lose sight of what really counts.  What should they do?

 If I were Barack, I would tell the American voters that I had a secret plan for Iraq and I was confident it would bring a honorable solution to the situation while keeping America strong.  If pushed, I would tell every one that “diplomacy” is the only route to a successful solution and the exit from Iraq must be considered in the context of all other domestic goals and other foreign obligations. 

If I were Hillary, I would assure voters that I could be trusted to remain calm in any future storm, either on domestic or foreign policy issues.  I would also say that all of my proposals carried on my web site were open for bi-partisan discussion and although the goals were fixed, the routes to those ends were open to discussion.

If I were John, I would disown the Iraq War as having been foolishly begun and poorly managed.  I would also reiterate that you were committed to fixing Iraq and would not simply pull out leaving a mess that would certainly breed further violence.  I would also emphasize that you planned to show what fiscal responsibility was all about and would put getting the US financial house in order was your number one priority.  All options were on the table including letting the Bush tax cuts lapse.  You would say that social security and Medicare were promises from the American Government to the American people, and the American Government does not break promises as long as you would be the President.

With these promises it might not make any difference who won. 

Nader’s Choice

February 24, 2008

Today Ralph Nader once more announced his candidacy for the office of President of the United States.  There was a chorus of groans, snarls, and some cheers.  Why has Ralph decided to run again?

No one really knows the answer but if you believe Ralph, he is running to save America from itself.  Ralph sees a tissue paper difference between the Democrats and the Republicans and believes the country must hear someone speak to the real issues facing the nation.  How anyone could see the current Administration as benign and similar to either history or today’s Democratic Party, I do not understand, unless

1. He thinks that George W Bush is not an abberration and does represent the compassionate conservatives who are the real Republicans.

2. Both parties are fueled by special interests and lobbyist who provide immense amounts of cash in return for favors.  Ask yourself why do people run for offices that pay $140,000 per year and then spend multi-millions on their campaigns?

3. Both parties, year after year, promise one thing and deliver quite another.  The institutional mind of both the media and the public is very short.

4. The Green Party platform is not fully embraced by either the Democrats or the Republicans and therefore it is Nader’s duty to run.

5. Ralph is getting older and less able to separate self actualization from destiny, and both from reality. 

Ralph Nader is not a force to worry about in this election.  He could, however, trigger other third party entries and they could alter the current outlook.

New York Times and John McCain

February 23, 2008

This past week the New York Times published a front page article that recounted almost 10 year old information about McCain and lobbyists and one female lobbyist in particular.  What in the world was the NYT thinking and what purpose did they have in mind to publish?

1. It was not late breaking news.  Apparently the NYT had been negotiating (or discussing) with McCain people the specific content for a few months.  Why now, why at all?

2. The article contained no smoking gun or apparent death blow to McCain’s campaign.  His work with lobbyist is indistringuishable from any other Congressman, especially those who head important committees.  All politicians need to cultivate lobbyists in order to gain financing for their campaigns.  From time to time, some politicians put some of the lobbyists contributions into their own pocket.  But that was not alledged in the article. Was the purpose to remind voters of how Congress works?

3. With respect to McCain’s potential romantic involvement with a lobbyist (man or woman), what difference does it make and who cares?

4. Is the NYT really a deep covert right wing appendage, and the real purpose of the article was to wave a red flag in front of Laura Ingram and Rush Limbaugh?  These two oracles of doom were set on beating up McCain and now reflexively, will focus on the NYT without losing face.

5. Why page 1?  The story deserves to be on page 10 or higher and should have been part of a larger expose on earmarks and the role lobbyists play.

The NYT could do its readers a greater service by focusing upon the near bankrupt state of our federal government and the quandry of how can we continue the Iraq War andstill afford to rebuild the competitiveness of our Country.  There is even a larger concern when a major newspaper goes off course and prints something like this.  The concern is whether they have lost their moral and ethical compass and we need to be worried about the relevence of future lead articles.  Shame, shame on the Times.

What’s Rove Up To?

February 22, 2008

In yesterday’s Wall Street Journal’s Opinion page (“Obama’s New Vulnerability” – February 21, 2008), Karl Rove took aim at Barack Obama gratuitously pointing out, in effect, how the Republicans could beat Barack in the general election.  Rove, as we remember, served George W Bush in a highly effective and mean spirited way.  If someone can spot a potential weakness in a candidate, it would be Karl Rove.

Karl may be using last year’s play book, however, when he looks at the Obama campaign and guesses how Barack could be beaten without answering the question of why so many people are supporting him.  Short of some dramatic revelation or unexpected event, Barack Obama is going to win the Democratic nomination and beat John McCain in the General Election.  Here is why.

1. Obama looks, acts, and speaks like a true, caring, honest, and sincere person.  He inspires and presents the hope for reasonable people to find middle ground.

2. President Bush will leave the Country close to bankrupt.  The debt will have doubled during his watch to a whopping $9 trillion dolars.  The Bush 2009 budget calls for a $ 600 billion (with the Iraq War costs included) deficit and there is no reasonable hope of closing this gap (short of abandoning Social Security and Medicare).  The US can simply not afford to carry on the Iraq War as it has for 6 years and it certainly can not afford to start another one for ideological reasons.  Obama is on the correct side of this issue.

3. Obama is not the lightning rod that Hillary Clinton, unfortunately, is.  It will be very very difficult to unite and excite a Republican Party around John McCain when there is so little to hate about Barack.  (Remember in Rove’s book, “hate” is good.)

4. Obama will be able to outspend John McCain because (1) he will raise more money, and (2) McCain will not.

5. And contrary to Rove’s assertions in his Opinion column, Obama does not need the left of the Democratic Party to win.  He does not have to worry about Ralph Nader.  Obama’s appeal is to the mainstream of the Democratic Party, a large section of the Independents and Moderates, and a daily increasing group of young or first time voters.

The one caveat I would throw out is that if the Republican establishment (who represent neoconservatives and big energy interests and not everyday Republicans) decide they need to pull out all the stops, watch for an escalation of international problems and more saber rattling towards Iran.  Maybe we might see the use of military force.  Karl Rove would certainly support this use of Presidential power.

Money Under the Mattress

February 21, 2008

Yesterday’s apparent destruction of a US spy satellite by a earth based US missile was an impressive technical accomplishment.  President Bush authorized the destruction with the safety of others in mind, the White House reported.  It is certainly surprising at how much concern has been expressed by numerous countries including Russia and China.  This incident brings into to focus three things.

1. It is wiser to say less in public since you may end up doing the same thing sooner or later.  When China announced in January 2007, that they had shot down one of their satellites, the holier than thou Bush/Cheney White House denounced China strongly and  claimed they acted irresponsibly.  This was only 1 year ago.

2. Much of the US high tech war making assets are dependent upon the use of satellites for communications or positioning.  The question might be, “do our satellites represent an irresiteble “first strike” target for a future enemy?  The good news is that it does not look like we would have to worry about al Qaeda on this account, however.

3. Our national security is based upon a combination of truly defensive weaponry and a broad array of soft deterrents (such as a strong and competivie economy, an educated and diverse population, a wise and strategic thinking foreign policy, and at the foundation, a real belief that peaceful relations is in the national best interest).   Invading low value targets like Iraq have no part in the world that lies ahead.  We not only lose the moral high ground, we waste money and time that is badly needed to compete successfully in the long term.

The take home message from all this is that keeping some cash money hidden away, say under the mattress, is not a silly idea.  When the space war erupts and the satellites go down, so do all the ATMs!