BartBlog

George Soros, Financial Times, January 22, 2008

The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the second world war at intervals ranging from four to 10 years.

However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.

Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognise a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available. A bubble starts when people buy houses in the expectation that they can refinance their mortgages at a profit. The recent US housing boom is a case in point. The 60-year super-boom is a more complicated case.

Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. The system was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism. Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets themselves. Nevertheless, market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.

Read More Here

William Rivers Pitt, TruthOut, January 23, 2008

I put a dollar in one of those change machines. Nothing changed.

                                        – George Carlin

Change, right?

That’s been the big buzzword since the middle of December or thereabouts. While the last days of 2007 bled away one by one, and as the pre-Iowa political bedlam became loud beyond endurance, “change” was the word on the lips of every candidate. One could not swing a dead cat by the tail in Ames or Des Moines without swatting campaign literature pledging “change to come,” but only if they got the votes.

Giuliani described himself as an “agent of change.” Clinton talked about needing experience in order to be able to bring change. Obama fairly waxed rhapsodic on the topic, setting the pre-caucus benchmark late in November by using the word four times in one sentence. Romney vowed to bring change to Washington, DC. Even McCain and The Artist Formerly Known As Thompson were grudgingly forced to work the word into their speeches after a while. It was everywhere, and any credulous folks in the crowd must have gotten to a point, after hearing it so often from so many candidates, where it felt safe to assume “change” was really coming no matter who wins come November.

“Change.” Let’s talk about that word, and what it involves. Certainly, making change in America’s domestic and foreign policy priorities is a necessary activity. Consider …

Iraq – A suicide bomber blew himself up in front of a school, wounding 22 teachers and students who were arriving for the beginning of the academic day. Another suicide bomber blew himself up at a funeral in the oil refinery city of Biaji, killing 15 and wounding ten others. The bodies of six family members who had been kidnapped the day before were found shot execution-style in Diyala province. Seven other bodies were found in different Baghdad districts. A bomb went off in Baghdad and wounded a policeman. Gunmen in Baghdad attacked and wounded three other policemen in Baghdad. A roadside bomb detonated on the Diyala Bridge killed an employee of the Transport Ministry and wounded six others. Two US soldiers were killed in Kirkuk, bringing the total number of American soldiers killed in Iraq to 3,931, with 27 of those deaths coming in the month of January to date.

Read More Here

Robert Scheer, The Huffington Post, January 23, 2008

It was smart of the top Democrats to cut presidential candidate Rep. Dennis Kucinich out of that South Carolina debate, where they lamely attempted to deal with the dire consequences of the banking meltdown without confronting the banks. They made all the proper concerned noises about millions of folks losing their retirement savings and homes, but none was willing to say what Kucinich would have said: Bankers are crooks who will steal from the public unless the government holds them accountable.

How do I know Kucinich would have said that? Because I interviewed him for the Los Angeles Times back when he was mayor of Cleveland and the banks foreclosed on his city after he refused to sell the public power plant. Others can talk a populist line, but Kucinich lived it. He was forced out of office that time, but voters realized 10 years later that Kucinich had been right. Thanks to the public power alternative that Kucinich refused to sacrifice, Cleveland had cheap power, and he was elected to the Ohio Legislature and then to Congress as his reward.

I bring this up now not to push a Kucinich presidential candidacy, which seems quite forlorn given the power of big money and big media to set the stage for permissible political debate, but rather to hold out a yardstick for measuring the “progressivism” of the top three Democrats. Sure, they all would be preferable to their likely Republican alternatives, although Sen. John McCain has been far better than all three Democrats on both campaign-finance reform and taking on the defense contractors who have been bleeding us dry since 9/11. I got a little worried when Sen. Hillary Clinton said she could do the best job in confronting McCain on national security; she is shameless in throwing money at war profiteers, while McCain has held the line on some of the more egregiously wasteful military expenditures.

With a military budget that has more than doubled since 9/11, soaking up trillions of dollars in obligations for future generations, it is stupid to argue about whether the Democrats or Republicans would spend more on needed domestic programs, because the money for those programs will not be available. Kucinich was the one candidate on the Democratic side willing to do what Rep. Ron Paul has in the Republican debates–challenge the phony patriotism of ripping off the taxpayers for war-fighting expenditures in Iraq and elsewhere, leaving us less secure.

Read More Here

Maureen Dowd, The New York Times, January 23, 2008

GREENVILLE, S.C. – If Bill Clinton has to trash his legacy to protect his legacy, so be it. If he has to put a dagger through the heart of hope to give Hillary hope, so be it.

If he has to preside in this state as the former first black president stopping the would-be first black president, so be it.

The Clintons — or “the 2-headed monster,” as the The New York Post dubbed the tag team that clawed out wins in New Hampshire and Nevada — always go where they need to go, no matter the collateral damage. Even if the damage is to themselves and their party.

Bill’s transition from elder statesman, leader of his party and bipartisan ambassador to ward heeler and hatchet man has been seamless — and seamy.

After Bill’s success trolling the casinos on the Las Vegas Strip, Hillary handed off South Carolina and flew to California and other Super Tuesday states. The Big Dog relished playing the candidate again, wearing a Technicolor orange tie and sweeping across the state with the mute Chelsea.

Read More Here

George Will, The Houston Chronicle, January 19, 2008

In 2004, one of John McCain’s closest associates, John Weaver, spoke to John Kerry about the possibility of McCain running as Kerry’s vice presidential running mate. In No Excuses, Bob Shrum’s memoir of his role in numerous presidential campaigns, including Kerry’s, Shrum writes that Weaver assured Kerry that “McCain was serious about the possibility of teaming up with him,” and Kerry approached McCain. He, however, was more serious about seeking the 2008 Republican nomination.

But was it unreasonable for Kerry to think McCain might be comfortable on a Democratic ticket? Not really.

In ABC’s New Hampshire debate, McCain said: “Why shouldn’t we be able to reimport drugs from Canada?” A conservative’s answer is:

That amounts to importing Canada’s price controls, a large step toward a system in which some medicines would be inexpensive but many others — new pain-relieving, life-extending pharmaceuticals — would be unavailable. Setting drug prices by government fiat rather than market forces results in huge reductions of funding for research and development of new drugs. McCain’s evident aim is to reduce pharmaceutical companies’ profits. But if all those profits were subtracted from the nation’s health care bill, the pharmaceutical component of that bill would be reduced only from 10 percent to 8 percent — and innovation would stop, taking a terrible toll in unnecessary suffering and premature death. When McCain explains that trade-off to voters, he will actually have engaged in straight talk.

There are decent, intelligent people who believe that equity or efficiency or both are often served by government setting prices. In America, such people are called Democrats.

Read More Here

Blue Girl, Watching Those We Chose, January 17, 2008

Well! Here is some good news for the “free markets solve everything!” crowd!

Iraqi farmers, desperate to make ends meet while simultaneously facing escalating fuel and fertilizer costs, as well as cheap imported fruits and vegetables, have taken to growing opium poppies. Poppy cultivation is spreading rapidly all across Iraq, but is especially prevalent in Diyala province, where local police and security forces are so preoccupied with the ethnic conflicts among the residents of the region, as well as a tenacious insurgency that brings the war and it’s associated chaos home – suffice it to say that the drug trade is low on their list of priorities.

Put one more hashmark in the “Law of Unintended Consequences” column, I guess.

The shift to opium cultivation by Iraqis is a very recent development. The first fields, underwritten by Afghani smugglers who supplied the lucrative markets in Saudi Arabia and the Gulf states, were discovered less than a year ago near Diwaniya in the south, but the practice has now spread to the lush orchards of Diyala, north of Baghdad. A local agricultural engineer identified as M S al-Azawi said that the local farmers received no government support, and turned to opium production as an effort to offset high production costs and low sale prices.

Read More Here

Paul Krugman, The New York Times, January 21, 2008

Historical narratives matter. That’s why conservatives are still writing books denouncing F.D.R. and the New Deal; they understand that the way Americans perceive bygone eras, even eras from the seemingly distant past, affects politics today.

And it’s also why the furor over Barack Obama’s praise for Ronald Reagan is not, as some think, overblown. The fact is that how we talk about the Reagan era still matters immensely for American politics.

Bill Clinton knew that in 1991, when he began his presidential campaign. “The Reagan-Bush years,” he declared, “have exalted private gain over public obligation, special interests over the common good, wealth and fame over work and family. The 1980s ushered in a Gilded Age of greed and selfishness, of irresponsibility and excess, and of neglect.”

Contrast that with Mr. Obama’s recent statement, in an interview with a Nevada newspaper, that Reagan offered a “sense of dynamism and entrepreneurship that had been missing.”

Read More Here

Frank Rich, The New York Times, January 20, 2008

Contemplating the Clinton-Obama racial war, some Republicans were so excited you’d have thought Ronald Reagan had risen from the dead to slap around a welfare deadbeat.

Never mind that the G.O.P. is running on empty, with no ideas beyond the incessant repetition of Reagan’s name. A battle over race-and-gender identity politics among the Democrats, with its acrid scent from the 1960s, might be just the spark for a Republican comeback. (As long as the G.O.P.’s own identity politics, over religion, don’t flare up.)

Alas, these hopes faded on Tuesday night. First, the debating Democrats declared a truce, however fragile, in their racial brawl. Then Republicans in Michigan reconstituted their party’s election-year chaos by temporarily revivifying yet another candidate, Mitt Romney, who had been left for dead.

The playing of the race card by Hillary Clinton’s surrogates to diminish Barack Obama was sinister. But the Clintons are hardly bigots, and the Democratic candidates all have a history of fighting strenuously for inclusiveness. By contrast, the Romney victory in Michigan is another reminder of how Republicans aren’t even playing in the same multiracial American sandbox.

The conservatives who hyperventilated about the Democrats’ explosion of identity politics seemed to forget that Mr. Romney also dragged Rev. Martin Luther King Jr. into this campaign — claiming that he “saw” his father, a civil-rights minded governor of Michigan, march with King in the 1960s. The point of Mitt Romney’s invocation of the race card was to inoculate himself against legitimate charges of racial insensitivity; he had never spoken out about his own church’s discrimination against blacks, which didn’t end until 1978. Instead, the tactic ended up backfiring. Late last month The Boston Phoenix exposed this touching anecdote as a fraud. George Romney and King never marched together.

Read More Here

Larry Beinhart, AlterNet, January 19, 2008

The New York Times made it official. The Economy is a problem!

So, now, at last we can discuss it.

Not just discuss it, in rapid order “recession” became the word of the day, from White House, Congress, the Fed and the media.

It’s blamed, mostly, on the subprime crisis.

But that’s not the problem. It’s a symptom. It is the logical, and probably one of the necessary results, of Bushenomics.

Along with low, or no, job growth. Little or no business growth. Depressed wages. And the crashing dollar. (The president has a different vision of the economy. In his vision it’s booming! And the number of jobs is growing! Though there is this little blip.)

The idea under which Bushenomics was sold is this:

* The rich are the investor class.
* If the rich have more money, they will invest more.
* Their investments will create more business.
* Those businesses will create more wealth, thus improving everyone’s lives and making the nation stronger. They will also create new and better jobs.

Read More Here

HillaryClinton.com, December 12, 2007

Press Release

… Those that don’t think experience counts in politics haven’t been listening to Sen. Hillary Clinton. The combination of her proven track record and positive vision for America make her our choice in the Democratic primary.

Sen. Clinton earned our admiration as the First Lady and respect as a U.S. senator from New York. Today she’s an engaging personality able to unite people behind a common cause regardless of their political affiliations. She hit the Senate floor on the run and she can do the same thing in the White House.

She is sincere and passionate about restoring fiscal responsibility, providing health care to all Americans, protecting the environment, keeping the tax burden off the middle class and earning the faith and trust of the American people.

But no president can do it alone. She must break recent tradition, cast cronyism aside and fill her cabinet with the best people, not only the best Democrats, but the best Republicans as well.. We’re confident she will do that. Her list of favorite presidents – Washington, Adams, Jefferson, Lincoln, both Roosevelts, Truman, George H.W. Bush and Reagan – demonstrates how she thinks. As expected, Bill Clinton was also included on the aforementioned list.

Read More Here

Here’s the reality: whichever of the “big 3″ assume the position, they’ll bring us essentially the same administration. I think the next Pres will be working with a Democratically controlled Congress so implementing a platform shouldn’t be tough for any of them.

I used ‘HillaryClinton.com’, ‘JohnEdwards.com’, and ‘BarackObama.com’. I clicked on the “Issues” option on each page then did a tab-by-tab comparison on the issues noted. I did NOT read the actual position papers. I used the summaries and details as listed on each candidate’s site. While it may be true that the websites are just stump speeches in writing, each of these sites is essentially the same so if you don’t like Barack’s, you don’t like Hillary’s, either.

Iraq: Clinton says that within 60 days of taking office she will convene a committee to develop a plan to bring home America’s combat troops as soon as possible and begin working toward a diplomatic solution. Edwards says he’ll immediately start drawing down combat troops with a goal to have them all out within 9 to 10 months and begin working toward a diplomatic solution. Obama says he’ll immediately start drawing down combat troops with a goal to have them all out within 16 months and begin working toward a diplomatic solution.

(more…)

If you’re paying attention to the actual positions of the actual candidates, you’ll find that what we are left to debate are non-issue items since the candidates have each staked out their own little variations on the same positions. In the BartCop item ‘challenge to the Obamaistas’ the writer asks “ What has he done lately???” Um, he’s been running for President, just like Hillary.

Clinton supporters say we should give Hillary a “pass” on her war vote and, frankly, I agree. I’m swayed by the argument that we don’t know what kind of BS bushco laid on Congress (although Kucinich claims he distributed contradicting – read “accurate” – information to all members of Congress) and more importantly, dubya clearly overstepped his authorization as granted in the use of force. I grant Clinton another “pass” on the funding votes – along with Obama – because the Democrats have engaged in a shameful “strategery” of giving the Repugs the rope to hang themselves. (Shameful because while Repugs are being allowed to hang themselves figuratively, GI’s are dying literally and it’s all part of the political calculation…)

(more…)

Max Blumenthal, The Nation, January 18, 2008

As South Carolina’s Republican primary election draws nearer, Mike Huckabee has ratcheted up his appeals to the racial nationalism of white evangelicals. “You don’t like people from outside the state coming in and telling you what to do with your flag,” the former Arkansas governor told a Myrtle Beach crowd on January 17, referring to the Confederate flag. “If somebody came to Arkansas and told us what to do with our flag, we’d tell them what to do with the pole. That’s what we’d do.”

Making coded appeals to white racism is nothing new for Huckabee. Indeed, well before he was a nationally known political star, Huckabee nurtured a relationship with America’s largest white supremacist group, the Council of Conservative Citizens. The extent of Huckabee’s interaction with the racist group is unclear, but this much is known: he accepted an invitation to speak at the group’s annual conference in 1993 and ultimately delivered a videotaped address that was “extremely well received by the audience.”

Descended from the White Citizens Councils that battled integration in the Jim Crow South, including at Arkansas’ Little Rock High School, the Council (or CofCC) has been designated a “hate group” by the Southern Poverty Law Center.

In its “Statement of Principles,” the CofCC declares, “We also oppose all efforts to mix the races of mankind, to promote non-white races over the European-American people through so-called “affirmative action” and similar measures, to destroy or denigrate the European-American heritage, including the heritage of the Southern people, and to force the integration of the races.”

Read More Here

Paul Krugman, The New York Times, January 18, 2008

Mexico. Brazil. Argentina. Mexico, again. Thailand. Indonesia. Argentina, again.

And now, the United States.

The story has played itself out time and time again over the past 30 years. Global investors, disappointed with the returns they’re getting, search for alternatives. They think they’ve found what they’re looking for in some country or other, and money rushes in.

But eventually it becomes clear that the investment opportunity wasn’t all it seemed to be, and the money rushes out again, with nasty consequences for the former financial favorite. That’s the story of multiple financial crises in Latin America and Asia. And it’s also the story of the U.S. combined housing and credit bubble. These days, we’re playing the role usually assigned to third-world economies.

For reasons I’ll explain later, it’s unlikely that America will experience a recession as severe as that in, say, Argentina. But the origins of our problem are pretty much the same. And understanding those origins also helps us understand where U.S. economic policy went wrong.

Read More Here