The Mandate of Clear Thinking: Real Issues (continued)

3) Crony capitalism:

Yeah, the permanent political class – they’re doing just fine. Ever notice how so many of them arrive in Washington, D.C. of modest means and then miraculously throughout the years they end up becoming very, very wealthy? Well, it’s because they derive power and their wealth from their access to our money – to taxpayer dollars. They use it to bail out their friends on Wall Street and their corporate cronies, and to reward campaign contributors, and to buy votes via earmarks. There is so much waste. And there is a name for this: It’s called corporate crony capitalism. This is not the capitalism of free men and free markets, of innovation and hard work and ethics, of sacrifice and of risk. No, this is the capitalism of connections and government bailouts and handouts, of waste and influence peddling and corporate welfare. This is the crony capitalism that destroyed Europe’s economies. It’s the collusion of big government and big business and big finance to the detriment of all the rest – to the little guys. It’s a slap in the face to our small business owners – the true entrepreneurs, the job creators accounting for 70% of the jobs in America, it’s you who own these small businesses, you’re the economic engine, but you don’t grease the wheels of government power. So, do you want to know why the permanent political class doesn’t really want to cut any spending? Do you want to know why nothing ever really gets done? It’s because there’s nothing in it for them.
Gov. Sarah Palin, from speech at Indianola, Iowa Tea Party meeting
September 3, 2011

Gazooks! Sounds awfully close to an OWS rant! Back to Populism? Well, funny thing. Even groups radically opposed to each other’s ends often agree on why they want to get there. Look over what she said and compare it to, say, the pile of money handed over to Citibank, Goldman Sachs, General Motors, Chrysler. The latter two especially, “this is not the capitalism of free men and free markets, of innovation and hard work…” No, it’s spending $2 million for every UAW job (and vote and campaign contributions to the DNC and Democrat candidates), an unsubtle vote-buying plan. And, of course, it’s often not the ballot box vote that counts, but the future (or past) contribution vote:

The Solyndra scandal has ignited fury among congressional leaders who are chastising the commander-in-chief for responding to an economic recession with a failed “green energy subsidy experiment.” …House committee released a special report blasting the president for wasting nearly $100 billion to create “green jobs.” Undue political influence has determined how much of the money has been disbursed, investigators found…As President Barack Obama’s disastrous and costly green energy agenda becomes the focus of a congressional investigation, the administration celebrates the multimillion-dollar “green makeover” of a public housing facility in Washington State…The festivities come on the heels of a major scandal involving a California solar panel company that folded after receiving more than half a billion dollars from the government. The White House helped the bankrupt manufacturer (Solyndra) get the money over the objections of federal budget analysts and news reports have identified one of the company’s major investors as an Obama fundraiser… Obama's green jobs agenda rife with corruption, says ranking lawmaker, Jim Kouri, Examiner, 9/29/2011

As has been widely reported, even in MSM, even White House officials tried to stop this loser, a five hundred million dollar gift to an Obama supporter to uphold a company that its auditors said would fold in less than a year. (It did). This is the kind of deal you’d expect from Hugo Chavez in Venezuela – hey, you scratch my back and I’ll give you some money I took from the people.

Last week General Motors introduced its $41,000 Volt electric vehicle…a massive new product program that likely wouldn't exist in a free market, focusing much of the ailing company's attention on a product that won't move in any volume without thousands of dollars per vehicle in government subsidies…Volt has raised new criticisms of the GM bailout for having wasted billions of taxpayer money. Back in April GM and the Obama administration attempted to deflect some of this negative feedback by announcing that GM had repaid $6.7 billion in government loans. What was missing from this announcement, however, was the fact that the money to repay this loan had come from a working capital fund provided by the federal government's TARP program. Switching money from one pocket to another seldom does much for financial health…But all these criticisms miss the most costly aspect of the government bailout: By intervening in the bankruptcy process, the Federal government kept GM's assets and employees in essentially the same management hands that have underutilized them for decades… The High Price Of The GM Bailout, Warren Meyer, Forbes, 8/10/10

Note the key points. The Volt has an $8000 subsidy for to keep the price down to one still far above a middle-income person’s likelihood of purchasing a vehicle that has hardly sold any copies. The so-called payback of government loans to GM was simply borrowed from the TARP money GM received (contrary to the 2008 law’s intent). Further, the profitability of GM is itself an illusion generated when the government’s reorganization plan allowed them to spin off prior debt and liabilities. That old GM is a sinkhole of losses, most picked up by you and me. But friends is friends, eh? Anything for a union brother, and anything not to upset the old management so much that they might not support the President in 2012. The writer hated it when Carter’s administration bailed out Chrysler in the 1970s, but, look closely, and you’ll find that Lee Iacocca’s version of the company paid back every dime of principal and interest without any restructuring of the loan.

President Obama’s administration claims that there is no cronyism involved in granting waivers from provisions in the Obamacare law, but when AARP becomes exempt…it really makes you wonder…The Department of Health and Human Services (HHS)…decided to exempt providers of “Medigap” policies. AARP just so happens to be the nation’s largest seller of such policies. And oh, by the way, the AARP donated millions to the Obamacare advertising campaign, and millions more on lobbyists…Not only did the AARP advocate for Obamacare, they also included in their support an attack on their biggest competitor. Of course, the White House and HHS are trying to claim that favoritism didn’t play a role when deciding this exemption, but come on, who honestly believes that?... The AARP break exempts the health care provider from publicly releasing and explaining health care payment rate increases on their supplemental insurance plans….Senate majority Leader Harry Reid (D-NV) and Senators John Kerry (D-MA) and Max Baucus (D-MT) wrote to HHS Secretary Kathleen Sebelius last October asking her not to make this exemption: “Some beneficiaries enrolled in the United of Omaha Life Insurance Company will see their Medigap premiums increase by approximately 40 percent between 2010 and 2011,” they wrote. “An increase of this magnitude raises serious concerns about premium-setting practices and rate review procedures in place for Medigap policies.”…This comes just days after learning that 20 percent of the latest round of waivers granted went to upscale hotels, restaurants and nightclubs in Nancy Pelosi’s home district…Those who were in the position to grant these waivers obviously knew that these businesses were in the former Speaker’s home district….If the bill is so great, why should any company want a waiver, even if it’s temporary? Also, if the process for determining who gets the waivers is meant to be transparent, why isn’t the HHS releasing the names of rejected waiver applicants? More Cronyism With Obamacare Waivers, Ashe Schow, Action for America, 5/20/2011

Hey, if everybody’s in on it, eh? Such cronyism makes hash of any kind of management decision-making in companies in the same business, or under the same threat from government programs. The government is, in effect, saying “We don’t care if you’re good; we don’t care if you create jobs; all we care about is if you can do us a favor. Get it?” (Enter Rahm Emmanuel with a club) Gangsters in Brooklyn have more style.

Obama’s connections to less than reputable…groups like Goldman Sachs, the Chicago Climate Exchange, “Fannie and Freddie,” former Chicago Governor Rod Blagojevich, Franklin Raines, Bill Ayers, Van Jones, Reverend Jeremiah Wright, etc…have placed Americans in the unfortunate position of having to question everything that the government says and does. This epiphany has forced the Central Illinois 9/12 project to investigate the suspiciously preferable treatment Obama and his cohorts have provided to the Chicago-based, community-based investment bank, Shorebank…Shorebank is “focused on domestic and foreign microfinancing, is heavily engaged in the financing of ‘green’ projects and ‘green’ jobs, and has a host of ties to the Obama and Clinton administrations.” … Shorebank contributed heavily to the campaigns of Barack Obama, Rep. Jan Schakowsky, and Sen. Dick Durbin…They’ve also donated to left-wing organizations like MoveOn.org…Over the past decade, ‘green’ Shorebank has become a shill and a front for the cap-and-trade crowd and those with a radical environmentalist agenda.” Perhaps most intriguing is that the Joyce Foundation is a major shareholder of Shorebank, the same foundation that has been interconnected to the Chicago Climate Exchange and the entire cap-and-trade scheme. .. While 10 other Illinois banks were closed in 2010 alone, local and federal government agents have fought vehemently to keep Shorebank afloat. In 2009, Shorebank received $35 million in federal funds for grants and tax credits. Unfortunately, the bank still reported losses of $50 million in the same year, prompting a “cease and desist “ order by the FDIC, as well as by the Illinois Department of Financial and Professional Regulation…Chicago Congresswoman Schakowsky and Senator Durbin favored providing state help to the bank, but when Shorebank discovered another route for financial support in February 2010, they seized it. The Chicago Daily Observer cites the 9/12 project: “Secretary Geithner proposed ‘enhancement’ to TARP funds specifically aimed at community development banks that would allow them to receive capital investment funds at a 2 percent rate (compared to the standard 5 percent rate) and to receive federal TARP funds that would be matched to funding received from private institutions.” In a furtive attempt to assure that Shorebank is eligible for the funding, Schakowsky argued that the funding would function as a “jobs program for the area…In order for this to work, Shorebank must be recognized as a “Community Development Financial Institituion.” If so, it is eligible to receive TARP money and prevent seizure by the FDIC… Shorebank: Another Example of Cronyism, Raven Clabough, The New American, 5/21/2010

This is sort of how Mafia controlled businesses work. It may look like a restaurant, may even serve good food, but its real function is to launder money from drug sales and other criminal activity. And, it’s a long part of the current Presidential team’s historical background:

As state senator, Obama’s interest extended to medical programs as well as to hospital real estate matters. Soon after his election he unsuccessfully requested a $1 million state “earmark” for the Chicago Medical Center hospital. His wife, Michelle, had been selected for an executive position there by board member and close friend Valerie Jarrett. In 2005 her part-time salary was raised from $120,000 to $317,000, about twice what Obama made as senator…Ms. Obama’s primary role was to create what has been described as a low-income “patient-dumping” program called the “South Side Health Collaborative”. It featured a gang of “counselors” that advised unprofitable low-income patients they would be better off at other hospitals and clinics. Jarrett gave her approval to the concept, and David Axelrod was hired to promote it. Soon Chicago’s inner city populations began hearing that the program would “dramatically improve health care for thousands of South Side residents”, and that the medical center was generously willing to provide “a ride on a shuttle bus to other centers”. In late 2007 Dr. Eric Whitaker became the hospital’s Executive Vice President for Strategic Affiliations and Associate Dean for Community-Based Research. He had worked with Ms. Obama and was recommended to Blago for the job by Senator Barack Obama through mutual pal Tony Rezko. Whitaker had also been hired to an earlier position as director of the Illinois Department of Public Health based on Obama’s recommendation, and remains a good friend and member of the President’s inner circle. He has vacationed with the Obama family in Martha’s Vineyard and Hawaii. Dr. Whitaker’s name has recently surfaced in connection with a federal investigation into an alleged cash-siphoning scheme involving funds awarded by the Illinois Department of Health and Public Services to Margaret A. Davis, a former director of the Chicago Chapter of the National Black Nurses Association. Special focus is being directed to a no-bid contract and seven AIDS and cancer-related grants from which she may have embezzled $500,000 for personal use. While there are no known subpoenas linking Whitaker to any illegalities, Davis’ June 9 grand jury indictment is part of a larger criminal investigation involving health department and other state agencies he oversaw during his time as department director. Obama Kick-Back Cronyism - Part 2: Illinois Health And Human Disservices, Larry Bell, Forbes, 11/02/2011

Read the whole story and part 1. The remarkable thing about such deals, as with any high level gangsterism, is the utter shamelessness of the parties, not that this is new. You can find the same gleeful pursuit of personal gain in the Gilded Age among politicians like James Blaine and Rosco Conkling. Thought we’d escaped all of that with the transparent administration? Hey, if you didn’t get that with the clean Clintons, or now from this administration, you won’t get the hilarious scene in The Devil’s Advocate when half the real politicians in New York, and a few from outside, get together in a party thrown by the Devil (Al Pacino in one of his more endearing roles). In the crony world, sleaze is king. Making dirty deals is their entitlement program. You’re unsophisticated and don’t belong there if you don’t get it. No, that’s not true. The way this writer sees it, people who get it and participate in cronyism don’t belong in office; they belong in jail.

Now you know why the President said of Gov. Palin, “if you put lipstick on a pig, it’s still a pig.”

Luther

The Mandate of Clear Thinking: Real Issues (continued)

2) The Communist Resurgence

When the hammer and sickle came down over the Kremlin in 1991, a seventy-four-year-old experiment collapsed in bankruptcy, political disintegration, and cheering. Trillions in treasure, many millions of lives, more than forty years of struggle, four decades of the Strategic Air Command being on alert, the underlying agreement between both parties on partisanship ending at the border – it all ended that night, preceded by the demolition of the Berlin Wall. Across Europe, east and west, millions danced in the streets. Small wonder.

Even in its late stages, the communist experiment guided from Moscow was a murderous, oppressive monstrosity. In its home country, it had murdered millions under Lenin, twenty million or more under Stalin, with periods of mass starvation as forced collectivization failed, and an endless succession of show trials, conspiracies, and military interventions to enforce the party’s grim rule. Life in Russia’s client states was only slightly better. Gorbachev’s loosening of this totalitarian state provided the excuse the general population needed to toss them all out, with hardly a shot fired. “Why waste bullets on a corpse?” was a popular saying in Moscow in 1990. Ammunition wasn’t needed elsewhere either, except in Rumania, where one of the nastiest Red thugs, actually a couple, were gleefully, horribly tortured, mutilated and murdered by crowds, rather like Mussolini had been during the Second World War. There were remarkable intellectual circles, such as those around Havel in Czechoslovakia, intellectuals devoted to the idea of free thinking, freedom of action, liberty of the individual, and capitalism, albeit a somewhat more restrained variety than you might find in a movie about America’s Wild West. It was shocking to Western intellectuals, many of them sympathizers with the Soviet Union, Communism, and socialism. The astonishing wave rising against the Soviet occupation of Eastern Europe between 1978 and 1989 pushed aside all allegiances and standard explanations (much like the Arab Spring of now). Even old Lefties like the late, great Leonard Bernstein were delirious when the Berlin Wall came down, though it is hard to imagine Maestro Bernstein as easily inviting Vaclav Havel’s drinking friends to a party on Sutton Place as he had once done for the Black Panthers. The Left, we know all too well, picks its cocktail and dinner companions very carefully.

Just before, Soviet armor had already left Poland, most of eastern Europe. Trains rumbled east daily with tens of thousands of Red Army troops. In an extraordinarily astute gesture, Helmut Kohl, chancellor of the reuniting Germany, arranged to pay salaries for, and feed, the Red Army until they could be resettled in Russia. Good thing. Imagine a million or so guys in uniform, jobless, still armed, hungry, with no future? The collapse was a dangerous moment. As a Russian KGB chief from the bad old days remarked about Cuba in 1962, “some colonel could have started a shooting war without anybody finding out it until it was too late.” It didn’t happen. The world had the good fortune of having a brilliant team, led by George Bush, Sr., who used the impending collapse to negotiate settlements of Cold War disputes across the world, reducing tensions, clearing the Iraqis out of Kuwait. For a while, it looked as though we’d entered the end of history, as Francis Fukuyama addressed it in a famous, if someone dreamy, essay.

The old regime tried a comeback through a military coup, but after the standoff, with new hero Boris Yeltsin standing on a tank with a bullhorn, promising never to surrender to the old days, the Bolsheviks, like their fascist brothers from Franco’s era in Spain, acknowledged that their day was over. It was a moment of rare beauty in political affairs. But, as in the remarkable, 5-year television series Babylon 5, an unsubtle rendering of the story into science fiction, the dismissal of Bolshevik shadows marked the end of one war, and the beginning of another. Optimists who saw nothing but a rosy future for the newly-dominant democracies had forgotten an important lesson: the Left never gives up.

All during the 90s, the Left continued to subvert institutions in the United States in a process described by Wonker’s posts regarding the Gramsci strategy. In sum, it’s a method of undermining American political, social, religious and cultural institutions, employed in the U.S. by the Left (a strategy encouraged by Saul Alinsky and disciples) because our politics and culture are so strongly aligned against collectivist thinking and organization. While it’s true that almost all union leadership were socialist or communist before World War I, by the 1930s, with the bitter experience of the Soviet Union, it was a rare labor union that openly aligned itself with Communists, already notorious for forcing Russian unions into being tools for forced labor under Lenin and Stalin. By the 1950’s, most U.S. unions disavowed the worldwide Communist movement, and were as much targeted by KGB as were the State Department and the CIA. As notorious as the Red Scare eras were, especially in Leftist mythology, the McCarthyites in the late 40s and early 50s forced many Soviet agents out of government departments, unions, and colleges and universities. These Reds were not there as free agents of different ideas, the favored myth of tenured radicals, but to subvert, destabilize and attack a sworn enemy.

But, as we watched the hammer & sickle come down, there came a natural urge to celebrate, to swear off strategic military expenditures, to demilitarize society, to spend the peace bonus (as we had after World War Two). For those too young to remember, we had emerged from an often grim, two-generation struggle. How dangerous this bipolar world was, how close the confrontation between Red and Free could get to an outbreak of war likely to destroy the planet, popped up in Red scares, television, international crises, and the movies, as it did in Stanley Kramer’s drama, Fail Safe, and Stanley Kubrick’s black comedy, Dr. Strangelove… in 1964. Fail Safe presumed something slightly fantastic (as did strategic planners in the Kennedy and Johnson Administrations), that a reasoned negotiation could end in an acceptable trade, at however terrible a cost, could stop all-out war in case of an accidental attack (an all-too-likely possibility -- for all its safeguards, nuclear war is automated war). As a cultural artifact, Kramer's film is a remarkable reminder of the inhuman chess game being played, which created an environment of terror described by Elie Wiesel as “the universal concentration camp.” Dr. Strangelove…, on the other hand, presumed something quite a lot less fantastic, that human frailties, which planners believed could be checked with orders of battle and structuring of confrontation, would win out regardless. “Some colonel” would start the ball rolling. In the film, the commander of an air force base launches a nuclear attack on the Russians without orders from Washington. The subsequent efforts to fix this “mistake” are shown as the futile efforts of clowns masquerading as general officers, timid leaders, and a lunatic ex-Nazi unsubtly based on Henry Kissinger. It is deliriously funny, even now, even as the song “We’ll meet again…” is belted out over the end of the world (actual footage of hydrogen bomb tests in Russia and in the Pacific). Strangelove… is the most horrifying film about this period conceivable, largely because its director, Kubrick, and its writer, Terry Sothern, felt that we weren’t smart enough to play with our own toys.

A later generation got the very frightening “Day After”. In 1991, it seemed, all was well. The East, like the West, comprised just folks, eager to get on with uncomplicated things: making businesses work, raising families, settling international disputes with talk instead of terror, getting along. The notion of a worldwide conspiracy began to achieve the status of either an old and discredited scare story, like the boogie man, or as a sign of a political commentator trying to go back to the old days to get back some of his friends' old power.

In the decade since 9/11/2001, however, it has become devastatingly clear that our celebrations were fine for the dismissal of one worldwide conspiracy, but had ignored the rapid development of another, what Jamie Glazov has described in United In Terror: The Left’s Romance with Tyranny and Terror, the bizarre support and assistance by the Left for radical Islam’s world-embracing vision of destroying the secular world and replacing it with one unified under sharia law, a vision almost indistinguishable from that of the Comintern (or the Nazis) in 1935.

It is truly strange. If the Left is about Progressivism, and Progressivism includes such things as equal rights for all people, regardless of race, sex, sexual orientation, etc., why would it ally itself with a theological movement that has demonstrated violent opposition to all of those changes? ‘Why did Stalin ally himself with Hitler?’ would be the historical analogy. Answers are not hard to find. Glazov, like many others before him, including Hannah Arendt, puts it in plain view: It’s not about Progressivism. It’s not about anybody’s status. It’s about power, the power of those who claim to be working on our behalf to totally dominate our lives.

And as you look out there at the various uprisings, terrorist acts, and the peculiar unity of purpose in all of them, don’t be as fooled as a number of unions apparently have been. The people burning Oakland, Rome and Athens, like those in the Arab Spring, are the unconscious partisans of a new generation of tyrants.

The fingerprints of the preeminent funder of the activist Left today, George Soros, are all over the anti-American “Occupy Wall Street” movement. The seventh-wealthiest person in America (net worth: $22 billion), Soros has publicly embraced Occupy Wall Street and financially supports a left-wing group that is funneling money to the movement…This Communist sympathizer co-founded the ultra-secretive Democracy Alliance, a billionaires’ club that wants to radically transform America. He has said that European-style socialism “is exactly what we need now” and favors American decline…The nonprofit organization that has taken Soros’s money is the Alliance for Global Justice…As of Nov. 2, the Alliance reported $206,000 in donations earmarked for Occupy Wall Street. Occupy Wall Street and George Soro’s Footprints, Matthew Vadum, Frontpage Magazine, 11/4/11

Countries and groups in the chaotic transition between one stable period and the possibility of a better one always have to be on guard for people like Soros and his colleagues. Far from being entrepreneurs, or real advocates of progress, they are parasites who use political rhetoric and artfully placed gifts to make themselves look like patrons of the a New Way. However, what they intend is to instigate chaos in a particular market, as Soros has time and again, whether his undercutting of the British pound, his illusory support for democracy in the Ukraine (ask someone who actually lived there what happened), or for his ongoing play in the United States, including a major role in elevating the current resident of the White House into office. In these campaigns, Soros has exploited local chaos not for social and political improvement, but for personal financial gain. The Left itself arises during similar periods of chaos and change, offering the same old bad medicine every time. Since its tactics are similar to Soros’s (and a number of similarly motivated wealthy men), especially in its employment of subterfuge, they are an oddly natural match, as are radical Islamists and the Left. Where the Left becomes even more useful is when it decides that the time for backroom conspiracy is over, that the day has come for mass demonstrations and violence. Chaos rises. A currency is destabilized. A compromising deal is made with a frightened, elected political leadership. The smoke clears, the ruins are examined, and, funny thing, the parasite has left town with his money and ours.

OAKLAND -- A majority of Occupy Oakland protesters sought Thursday to distance themselves from masked vandals who they said had undercut the movement by hijacking the tail end of a mostly peaceful protest, damaging downtown buildings and clashing with police…"They are smearing our movement," Raleigh Latham…said to applause at a morning meeting…at the movement's City Hall camp. "People who want to destroy our community are not welcome here." They may not be welcomed by all of Occupy's committed sympathizers. But the hundreds of black-clad activists who coalesced downtown late Wednesday to take over a vacant building, barricade a street and then battle with police and vandalize stores are proving to be a complicated problem for the leaderless movement…Many protesters, while saying they favor nonviolence, believe in provocative actions like marching on businesses and forcefully shutting them down - which happened at several bank branches during the comparatively peaceful daytime hours of Wednesday's general strike….Occupy Oakland Struggles With a Provocative Fringe, by Berton, Bulwa, San Francisco Chronicle, 11/4/2011

Oh, isn’t that the way it always is? A gentle movement, disavowing leaders as too macho, or inhuman, or undemocratic (where do these sleepy children come up with such clichés?), is suddenly confronted by the arrival of fringe actors throwing Molotov cocktails and assaulting the police. Get with it, kids. This is what the Left has always done! And, to make things worse, such provocateurs are a principal tool used by governments for generations, instigating violence to disgrace opponents of its policies, or to encourage support of its own, stalled legislation or ignored decrees! Wake up, America. Get the point. They’re back and they’re serious and they’re just as out of touch with reality now as they were in 1917.

ROME -- Italian police are firing tear gas and water cannons at protesters after some smashed shop and bank windows, torched cars and hurled bottles…as…a small group of violent protesters broke away from the main demonstration in the Italian capital, part of worldwide protests against corporate greed and austerity measures…Some protesters trashed offices of the Defense Ministry and of a labor agency, smashing windows with clubs, throwing paper bombs and firecrackers and setting cars on fire…The "Occupy Wall Street" protests that began in Canada and spread to cities across the U.S. moved Saturday to Asia and Europe, linking up with anti-austerity demonstrations that have raged across the debt-ridden continent for months…Black smoke billowed into the air in downtown Rome as a small group of violent protesters broke away from the main demonstration. They smashed car windows, set vehicles on fire and assaulted two news crews of Sky Italia, the TV reported. Others burned Italian and EU flags… “People of Europe: Rise Up!” read banners in Rome. Some peaceful demonstrators turned against the violent group and tried to stop them, hurling bottles at them, Sky and the ANSA news agency reported. Others fled, scared by the violence…Rome protest against corporate greed turns violent, The Post and Courier, October 15, 2011

Worldwide revolution! Get your picket signs and Molotov cocktails here! Worldwide revolution! Get your gas masks here! Oh, boy, this just never ends. You’re out there in your demonstration best, singing about corporate greed, and about the evil, inhuman one percent, tears in your eyes in being somebody, and doing something , holding hands with the stranger you made love to last night, and all of a sudden the very smart guy in the leather jacket, who was so engaging last night at the organization meeting for the protest at the bank, is running, and, oh, my god, he’s got something burning in his hand. Oh, no, he’s throwing it through the bank’s window. You never intended this. But, now as the tear gas rises, and the riot batons start banging and bloodying, and crowd begins to scream, the blood lust of political violence begins to explode and, as terrifying as it is, you know that nobody is the target of the police but you. And before long – yes, it’s you picking up the bottle rolling back from the burning bank, the one that’s still lit, the one that didn’t explode, and, as your new sweetheart gasps, you raise your arm….

That’s right, kids. You’ve just become a murderous tool of the Left, and of all the parasites that use such irrational politics as a means to ends unrelated to progress, corporate greed, or world peace. You have, despite your best plans, become the enemy of all that you believe in.

That’s what the Left does, has done, and always will do, forever and amen.

Eternal vigilance!

Luther

The Mandate of Clear Thinking: Real Issues

1) Prohibition II and the Border War with Mexico

The political elites in this country have employed a level of mendacity to cover up the real issues regarding the American/Mexican border that boggles the mind. The complete refusal of the federal government to deal with this has left people who live on border counties throughout the Southwest with their property overrun, widespread violence and intimidation, murders, and, on occasion, armed interventions inside the United States by Mexican nationals wearing military uniforms.

When presidential candidates casually toss out a talking point about “the need to secure our border,” that bland phrase doesn’t even remotely convey the catastrophic reality of life along the Rio Grande. Our rhetoric needs to catch up.
The Texas Department of Agriculture released a fascinating but alarming report late last month entitled Texas Border Security: A Strategic Military Assessment. It confirms what rural Texan farmers and ranchers already know: that our fight against narco-terrorism has taken on “the classic trappings of a real war” and that “all of Central and South America have become an interconnected source of violence and terrorism,” with Texas as “operational ground zero.”
The fact that the Department of Agriculture is now conducting strategic military assessments instead of crop reports is in itself an eye-opening indication of how serious the war being waged at our southern border has become. Compiled by 4-star General Barry McCaffrey, former Director of the Office of National Drug Control Policy and former Commander of all U.S. troops in Central and South America, and Major-General Robert Scales, former Commandant of the U.S. Army War College, the report offers “sobering evidence of cartel criminals gaining ground on Texas soil....” Border Insecurity: The War In Texas, Frontpage Magazine, Mark Tapson, Nov. 11, 2011

This war of private gangs and American law enforcement has easily discovered origins, the beginning of The War On Drugs, the great Second Crusade of Prohibition. It started under that great liberal reformer, the racist Woodrow Wilson, with the Harrison Tax Act of 1914, which prohibited the sale of heroin and cocaine, the first restriction in American history on opiates, presumed until then, to be excellent pain killers, especially useful when no other medical treatment was available.

Next came FDR. Despite having apparently learned the lesson of Prohibition’s first Crusade against booze, FDR’s administration, and Congress, passed and brought into law The Marihuana Tax Act of 1937 (love that phonetic spelling!). The ban on mary jane was sold with the concept of “gateway drug.”

Next came Dwight Eisenhower, under whom the Boggs Act of 1951 established mandatory sentences for possession of marijuana, cocaine and opiates. Shortly thereafter came the Narcotic Control Act of 1956. But he wasn’t done. Ike established the US Interdepartmental Committee on Narcotics, from which the President himself called for a war on drugs. But, the best was yet to come. In 1970, Congress passed, with President Nixon’s strong urging, the Drug Abuse Prevention and Control Act of 1970, followed three years later by the creation of the Drug Enforcement Administration.

It is worth nothing that in the years between the Boggs Act of 1951 and the establishment of the DEA in 1973, that perhaps as many as a million people were killed by drunk drivers, and perhaps forty million people died of the side effects of smoking cigarettes. Unknown tens of millions had lives damaged by inappropriate consumption of prescription drugs. In such paradoxical comparisons, one has to draw an obvious conclusion: the war on drugs from the beginning, like that on alcohol, was primarily a moral crusade. Alcohol prohibition failed because, to be blunt, too many people liked to get high, and alcoholic beverages were far cheaper than opiates. Further, you didn’t have to smoke your bourbon or scotch or inject it into a vein. Market simply blew away the Prohibitionists. However, opiates and marijuana, for as long as you look back at this, were associated with either an extreme lifestyle (black jazz musicians working in bordellos); strange, dark-skinned people (take your pick); and with vivid and terrifying addiction scenarios. A combination of the often racist public relations campaign with the fact that only a small minority of Americans used opiates for getting high made the Second Crusade possible. To what end?

MEXICO CITY – MEXICO CITY (AP) — After 40 years, the United States' war on drugs has cost $1 trillion and hundreds of thousands of lives, and for what? Drug use is rampant and violence even more brutal and widespread…Even U.S. drug czar Gil Kerlikowske concedes the strategy hasn't worked. "Forty years later, the concern about drugs and drug problems is, if anything, magnified, intensified… We've never worked the drug problem holistically. We'll arrest the drug dealer, but we leave the addiction…." After 40 Years, $1 Trillion, US War on Drugs Has Failed to Meet Any Of Its Goals, AP, May 10, 2010

Arrest the dealer, leave the addiction , pronounced, one supposes, with tragic gestures and a resigned sigh, rather like former Speaker Pelosi’s moan that, if we’d just had ten times the Stimulus, all would be well. Fact is, the War on Drugs, and the Prohibition on marijuana and opiates, have led directly to massive corruption in Mexico, to where the oldest nation in North America is becoming more like Sudan than America, its public officials, law enforcement and military on the run from (or run by) drug cartels more violent than any criminal organizations in the past, including those run by Chinese overseas nationals. The War on Drugs has led to brushing aside property rights (the DEA and state and local polic can take anything a drug suspect owns, and never return it, even if the suspect is judged innocent at trial). It has also led to a popular expectation that law enforcement will act with the brutal thuggery of the Russian KGB or the German SS, smashing down doors without warrants, beating up or killing suspects without warning, creating social mayhem to protect somebody from getting high.

Alcohol Prohibition ended with the following changes in the wine and spirits business.

1) Standards of product quality were established. You couldn’t sell a product that, in modest quantities, would injure or kill your customer. (Prohibition bootleggers weren’t much concerned with a client’s survival, on his or her money)
2) Taxes were to be paid on the product, and a tax stamp required to sell it. The enforcement efforts were changed to tax prosecutions and Eliot Ness, the greatest of them, did not carry a gun! Believe it or not....
3) Over the next seventy years, torts law began to settle the sourest issues of alcohol consumption: how it was sold to minors; its role in automobile and other transportation accidents; and its role in domestic violence.

Despite all of this law and regulation, the wine and spirits business now makes ten times more money, in real terms, than it did during or before Prohibition. Further, despite continuing emergence of new Carrie Nations, society has determined that drinking as a means of enjoyment, sociability, and getting high is just fine, thank you.

Ending opiates and marijuana Prohibition would entail the same changes.

Under product quality, no manufacturer of pleasure giving drugs could sell something like crack cocaine, because of its devastating, almost instantaneous infliction of addiction and the obliteration of natural restraints on violence. Nor, could someone cut cocaine with rat poison or baking soda. Needle delivery systems would probably be prohibited except for medical intervention in otherwise unrelieved pain from illness and injury.

Under the tax changes, dealers would have to be, like cigarette and alcoholic beverage vendors, licensed, prohibited from selling to minors, and barred from selling anything without a genuine tax stamp indicating that taxes would be added to the sale. Strong tax enforcement would be the rule.

Torts law would address the gaps, as it has with alcoholic beverage consumption and its effects.

As a consequence, the entire DEA and its army, including vast numbers of agents from other police agencies, here and in Mexico, not to mention state and local police, would either be relieved of drug duty, at a savings of perhaps fifty to one hundred billion a year. The million and a half prisoners whose offense was drug possession, or use of illegal drugs, could be released, reducing the pressure cooker population in US prisons, and, no small detail, make the prison population more reflective of people who had actually done damage to society.

One of the country’s great conservatives, Bill Buckley, the founder of National Review, author of almost a dozen delightful spy novels, not to mention dozens of other more substantive books, advocated the immediate legalization of drugs, on the same terms as the end of alcohol Prohibition, thirty-five years ago. He was old enough to have seen or heard about the horrors of the original Prohibition, where criminal gangs, in bootlegging hootch and beer, turned civil society upside down with their violence, and undermined government and law enforcement with corruption of civil authorities. He shocked a lot of conservative colleagues and outraged liberals, needless to say. But look closer.

As violence along the U.S.-Mexico border escalates, Mexican drug cartels have found a new and lethal weapon, borrowed from the bloody annals of Mideast terror – the car bomb. This summer, the Juarez drug cartel used a remote-controlled car bomb to kill four and wound 20 in Ciudad Juarez, Mexico's murder capital, creating a massive blast within walking distance of downtown El Paso, Texas, and a second car bomb exploded outside a police station in Ciudad Victoria.
An internal Department of Homeland Security document describes the car bomb used in Ciudad Juarez as the latest tactic that the armed wing of the Juarez cartel, La Linea, has lifted from Islamic jihadis. "La Linea," says the document, "has used terror tactics generally seen in Iraq and Afghanistan – mass video-recorded decapitations, targeting of civilians, and most recently the July 15 VBIED [car bomb] – to instill fear among rivals, law enforcement and the general public." Mexican Drug Cartels' New Weapon In Border War – The Car Bomb, Richard Esposito, ABC News, August 12, 2011

And again:

Down in Gov. Perry's backyard in west Texas, where they supposedly have the Mexican border under control, another Border Patrol agent has been prosecuted and sentenced to prison for doing his job in arresting drug smugglers. His name is Jesus Diaz, and if you rely on the mainstream media for news of the border region, you have never heard of him…In October of 2008, Diaz, a seven-year veteran of the Border Patrol, was part of a team of border agents who apprehended a small group of young drug smugglers…In questioning one of the apprehended smugglers, officer Diaz allegedly tugged or lifted the young man's handcuffed wrists and caused the smuggler some discomfort. Later that day, while being processed back at the Border Patrol station, the smuggler lodged a complaint with the Mexican consul, which resulted in prosecution of Diaz…The young smuggler in all probability was not facing jail time, only a swift return to Mexico, and he knew it. Nevertheless, he and his Mexican government compatriots pressed charges against agent Diaz for being "roughed up."… Diaz was cleared of any wrongdoing by two investigations – one by the Border Patrol's own Office of Professional Responsibility and then a second investigation by the Department of Homeland Security's inspector general…If it had not been for the pressure from the Mexican government, it would have ended there…Under persistent pressure from Mexico, the U.S. attorney convened a grand jury and brought an indictment against Diaz. After the first prosecution ended in a mistrial, Diaz was prosecuted..and…convicted after the government gave immunity to the drug smuggler in exchange for his testimony against Diaz – even though the smuggler admitted in a deposition that he had lied at the first trial…Earlier this month Diaz was sentenced to 24 months in prison for use of "excessive force" and depriving the smuggler of his civil rights…The Mexican government's war on U.S. Border Patrol, Tom Tancredo, WND, October 28, 2011

You see the effects of the Drug War? On policy, officials, and the police, it becomes a tail chasing game. As Tancredo points out, it was probably because small traffickers aren’t prosecuted (unofficially of course) that Diaz got into trouble. The corruption had set in, and it was okay to let something small pass by. In a way, that quiet refusal to pay attention to the law is also a reflection of officials knowing that the War on Drugs is more about headlines and big property and drug seizures than stopping trafficking. The same could be said, and was at the time, about the FBI’s pursuit of “star” bootleggers before Prohibition was ended.

People get upset when you discuss ending Prohibition II. “What about the children? What about our community? What about the sickness in society?” Hey, look around in the Southwest, El Paso, Los Angeles, San Diego, border counties in Texas? Look at national parks overrun by armed marijuana farmers. Look at the cost, the bridge of the drug war is not a bridge from evil to Prohibition but to huge wealth for thugs, and inappropriate, and arguably unconstiutional power to law enforcement and federal agencies. The War on Drugs, from the beginning, was a Protestant Crusade directed at a problem that can’t be solved by either law enforcement or by moral pronouncements. At the time, they compared it to the Abolitionist movement to end slavery, a truly noble effort! What utter crap to make such a comparison! People like to get high. People who do are not slaves, unless they choose pleasure at the exclusion of everything else. And some people do. We can help them in far more effective and inexpensive ways (Nixon's early efforts on the War on Drugs were primarily directed at helping addicts get free of their favorite high, especially veterans returning from Vietnam.) Stopping this head-on is like conducting a guerrilla war in someone else's country. We know what happens there. The foreigner cannot win unless he acts like a Roman and never leaves.

The best you can hope to do, as the enders of Prohibition I determined, is to manage the problem so that it does the least amount of damage possible to civil rights, communities, and, of course, to our children. For the latter, the best solution, however, is to make sure they’re eager to do something besides get stoned.

Luther

The Mandate of Hell, Pachyderm 3, The Burning Witch

If you've been following the previous three posts, we've been looking at what our so-called elites won't discuss, the underpinnings of political action, the responsiblity of the citizen, the causes of events -- big subjects, but each a previously ignored elephant in the national living room. Here's another:

When the writer was a high school student, part of his boyish naivete was exploded when his teacher, a brilliant, eccentric character who was an exact twin (physically, including the straight bourbon & Camels voice) of the late actor Lee Marvin, responded to my proud claim of having Cotton Mather in the one WASP string of my heritage by slamming a hammy fist on his paper-strewn desk. The ash flew off his cigarette; another butt, still smoking, fell to the rug unnoticed. Then he stood up, leaned so close I began to get high on his breath, and shouted “that son of a bitch burned one of my ancestors!” Turned out he was right. As the WASP string fades in all Americans (I’m barely a WASParoon myself), this probably strikes many as an amusing anecdote of a lost world. Really….

Then what is that smoke coming from the living room? Why does it smell like that piece of steak you forgot to take off the grill an hour ago? Why was it preceded by screams, and by so many chanting voices? Is there any coincidence in the fact that it’s three in the afternoon?

At this hour we all might be anyone,
It is only our victim who is without a wish,
Who knows already (that is what
We cannot forgive. If he knows the answers,
Then, why are we here, why is there even dust?),
Knows already that, in fact, our prayers are heard,
That not one of us will slip up,
That the machinery of our world will function
Without a hitch, that today, for once,
There will be no squabbling on Mt. Olympus,
No Chthonian mutters of unrest,
But no other miracle, knows that by sundown
We shall have had a good Friday….

from “Terce,” Horae Canonica, W.H. Auden


Smell that burnt fat aroma yet? It’s easy to discuss this if the subject is, say, Germany between 1933 and 1945, or Russia from 1917 to the death of Stalin. Many Americans still purse their lips and look away when the subject is the American Bureau of Indian Affairs, if not the activities of the Klan. It gets a lot harder for us, though, to respond when the subject is a national leader in 1973, 1978, 1998, 2008, or now. Why? We’re all partisans. Some of us want to burn the Witch. Some of us want to worship Her. The context itself is perverse. There’s no choice to opt out, to say "hey, there's some good with the bad." It’s worse than polarization. Hey, we have that all the time. It’s much, much worse.

It’s the transmutation of an ordinary citizen’s duty, assessment of leaders at each level, into a uniquely American Black Mass. The object isn’t assessment, but to choose between salvation and condemnation. By the time this begins to break out, as in late 1972, again in mid-1998, or again after the shock of the 9/11/2001 bombings had worn off, or yet again now, the Great Man We Have Chosen is put on trial in a witness stand built on a stack of straw and firewood. Initially, the Great One’s partisans, other elected officials, friends in other high places, the press, hold back the crowd. They’re the ones you heard chanting, the ones hoisting torches and waving shotguns and pitchforks, the ones shouting down with him; down with him; down with him! I'll bet some of you are there. Don't get burnt fingers!

In our effort at getting elephants out of the living room, historical and contextual awareness is an obvious objective of this great work. Only a halfwit, or a member of a crowd, is unaware of the fact that the best a Chief Executive can do is to set a tone for what other people do, and how they do it. It is not only true of great and good leader, but of a monster as well. In the assessment of guilt for a vast crime, as the murder of millions of Jews in World War Two, you can’t, as popular historians often do, stop with Uncle Adolf and let everybody else off without penalty. As Raoul Hilberg demonstrated, at least as responsible is the railroad clerk who, knowing full well that his signature to pass a train on to Birkenau would condemn ten thousand people to death, still attached his signature to a form thirty other people had seen and signed, fulfilling his bureaucratic responsibilities (the train is on time; the train is working; the train is safe to operate) at the expense of his moral obligations to his fellow human beings.

The example is horrifying, but let's calm down a bit. In our entire history, despite some near misses (some fortunately assassinated just in time, such as Huey Long), we have never had a monster like Hitler or Stalin in the White House. There have been some small-timers in industry, the military, and private contractors, and the occasional federal official, but nothing that could bear even an ironic comparison to one of those. However, to drive the crowd’s chanting, rhetoric is required that does precisely that, the pitch and fervor raised until individuals coalesce into one beast with a million eyes. Worse, there’s a dirty secret. What could it be?

Let’s discuss one on a somewhat different, but related subject, combat in war. A great journalist, poet, essayist, and daily columnist once sent the writer, after much begging, a package of his poems about the war. They were harrowing, eyewitness stuff, with the quality of strobelit photography, and, the late writer lamented, if you were paying attention, you could read a terrible truth. In combat, despite the horror that sickened the rest of his being, and what he often wrote about with great conviction and truth, there was a boyish warrior’s glee at violent fighting, shedding blood, and the witness of an opponent’s death. He was right; it was there, and because of that the poems were almost held back from publication until a friend said you have to put them out there. The author told me that he had been ashamed of that feeling for his entire life, and had tried to compensate for it with every act toward family and friend. “We were a Cub Scout troop with heavy weapons,” he said. Replace the boys in the woods with cap guns with boys in the woods with M-1 carbines and bazookas – you get the picture. There’s a reason so many movies are dishonest about war; wars almost invariably are fought by schoolchildren. Most crowds are comprised of adults who act like little kids in a schoolyard.

What’s the dirty secret about crowds? I’ve seen it myself at basketball games, "high school fascism" I once observed, to the great distress of a coach. When the beautiful teeny boppers start to scream in unison about killing somebody, they mean it. And the more of them there are, the more their conviction and passion grows. While innocent in a controlled environment like a basketball court in the United States, it leads to murder and riot in European soccer games. Crowds, to be frank, are crazy. And so, in a sense, the Burning Witch invited what’s happening. By appealing to the crowd, and drawing their interest, the leader attracts every aspect of a crowd, including its blind, ravenous will to murder in the cause of the crowd’s satisfaction – never its self-interest. If a crowd acted with genuine self-interest, they would be polite, discuss each other’s favorite players with amusement and irony, buy each other beer and dogs, and be happy to meet each other in the street after the game. But, crowds don’t care. Why?

Crowds strip the executive function from human intelligence. When we dissolve into a crowd, we move as surely on the most irrational response as on any other. How we feel matters; who cares what anybody thinks? We’re the crowd. We can trample you to death. We can push aside the rational discussion of witnesses, prosecutors, and defense attorneys, castrate the judge and hang him from a balcony, throw gasoline under the defendant’s table, and throw a match. We can all throw the matches. Who will stop us now or ever?

The writer participated in crowds during the Mobilization Against the War in the early 1970s, as well as in the general mobilization against Richard Nixon at the same time. Recalling what that felt like, the absolute exhilaration that nobody could shut us up in our demands to get rid of the warmakers, kill Nixon, whatever, even as tear gas and riot batons came near, can make me leap out of bed in the middle of the night, in part ready to go, in part shocked that I participated in that. Okay, no real crimes were committed. A few careers were ruined, perhaps the nation endangered. But we all grew up, didn’t we?

But I saw other sides of the crowd and its wish for witches to burn, as in a march through a western New York town, a lot of faculty members and students, no chanting or signs, just, as Martin Luther King, Jr. put it, a “witness to injustice,” in this case the open exclusion of African-American kids from a school district. On the sidewalks, there were no friendly faces, no familiar faces, no mothers and fathers, instead row upon row of young, tattooed men with belts wrapped around their fists, alcohol-driven rage burning their faces, the crowd that we, such a reasonable crowd, had not expected. Most of the lightly armed sidewalk watchers waited for someone to act. Someone did – was it a provocateur? Did anyone ever ask? Crowds on any side are stupid by nature. Fists flew, and then the bottles and eggs. Our line scattered, falling considerably short of that great line at the bridge in Selma as we ran under a bombardment that lasted for twenty minutes until we had escaped. What we had seen most did not acknowledge, ourselves with another opinion, willing to cut in on somebody’s march to express it, unwilling to submit to any standards of decency, civic order, or law. We had no march permit; we did nothing to negotiate with the people behind the rough crowd on the sidewalks, considering anyone on that side of town too ignorant for rational discussion; each side entered with its prejudices; both crowds ended up looking either naïve or incredibly ignorant. (The issue was later resolved when a committee of faculty, local town officials, a judge in an unofficial capacity, and neighborhood leaders sat down over a week or two of sphaghetti and chianti dinners to bring the town into the world of Brown vs. Education, by then already 14 years in the past.)

But the crowd approach is tempting. It’s like the well-observed neurosis of an otherwise sensible women attracted to gangsters. Their bad guy shows up with blood on his fist, and a smoking gun in his pocket, and she can't resist him. So beautiful and young, with perfect skin, an elegance afoot akin to a gazelle’s, and despite the truck driver diction, he's more charming to her than Robert Redford in a movie about redwoods and ponies. From the evidence, there are far more of us, perhaps a majority, who find the thought of trying and burning a presumed witch more beautiful than a rose in a lover’s hand.

Well, this makes hash out of the reasonable man idea, an Enlightenment conception that’s been bashed awfully hard for the last, say, century of war, Holocaust, Gulag, Kampuchea killing fields – take your pick. “It is one sin offering,” said Auden a little later in his great poem of the early fifties. How to get this bitch of an elephant out of the room?

It’s not unlike the transition the old anthropologist observed (read “The Golden Bough”) between tribal superstitions, which are utterly binding on behavior and expression, and modern Christianity, Judaism, some forms of Islam, Buddhism, Shinto, etc. You have to give up certainty for discussion of theological points. You have to consciously consider issues in terms of morality and practicality, politics and society, past and future, the Lord’s word and our interpretations, what Karl Jung, the great proto-psychologist of the human mind, described as the “greatest human project, to become self-conscious, to become truly aware.” Wow, big job to get this big mammal out of the living room, eh?

Maybe not. Think of the difficulty of a parent confronted by a child. What do you have to do to succeed with this frequently raving little maniac? You have to become conscious of yourself, which allows you to be aware of the little one, who has no experience, no background, little awareness beyond your loving eyes or breast. By gaining consciousness of yourself, you can work with the little ignoramus until he begins to act almost as lovably as he looks. It’s the same process. Translate it into an equally important task. Banish the Burning Witch. She and her terrible Black Mass never existed anywhere except in our imagination, an invisible elephant only too happy, at a moment’s notice, to draw us into such foolish acts as lighting matches we cannot extinguish.


Luther

The Mandate of Hell, Pachyderm 2, The Housing Disaster Nobody Was Responsible For

If you’ve been following (see previous two posts, easily identified by the "Mandate…" header), we’ve been trying to look at what our virtuous elites seem unable to examine, contemplate, discuss, or even acknowledge, what the writer has described as the elephants in the national living room. We’ve talked about about one of them, US, you and me, at least the ignorant version of US that won’t see beyond its own nose (until now of course ;-)). Here’s another elephant approaching, breaking the floorboards and knocking the Impressionist prints off the walls.

An observation: in courtship, one learns, as much as you might hope for an easy catch, if you haven’t got anything to deliver to he or she, the object of your affection will look elsewhere. It’s not cultural. It’s basic biology, basic family, basic community. A useless mate is a lot more difficult to manage than having no mate at all. The preference for one with something to offer is natural. Find someone else, or go it alone. Sadly, this does not obtain in the vast movement we call politics, as much as sexual attraction may play a part. Political leadership, we have noted, like the pioneer wagon master, depends largely upon the hopes and fears of a large, loosely connected, and often ill-informed, population. The wagon master couldn’t turn to his train of Conestogas and shout “we’re going my way or nowhere,” not unless, under the panicky faces he surveyed, there lay enough sober minds to realize that the fellow might have a point, that crossing a very long stretch of barren rock might be safer than trying to force the wagon train over the Grand Canyon without the benefit of angels’ wings, or at least a 747. Sadly, this common sense protection more often disappears in crowds than not.

Back in the 70s, as part of the White House and Congress's efforts to overcome a decade of stagnation, the Community Development Act brought the idea of subsidizing housing for those who couldn't afford standard term mortgages. Very American, everybody owning a house, part of the Dream...However, Congress and the White House, besieged by an electorate sick of a failing administration, didn't go the extra mile. They decided not to fund the CDA. Instead, through successive administrations, especially the Clinton and second Bush administrations, they used the law to force the financial services business to violate the primary principals of a loan market, to wit: 1) the borrower has to be able to pay; 2) for weak borrowers, an underwriter is the only way for the lending institution to protect its capital for loaning out to future borrowers. Both standards protect the borrower, the lender, and the market's future.

Promoted by community organizers, middle class (call them liberal or compassionate) friends of the less-well-off, usually without knowing how the mortgage market (or any market) works, they prodded Congress over the years into a new, take-it-or-leave-it, requirement that would, WE claimed, save the poor, liberate us from bad consciences, and help build the American dream. As such, CDA started out by violating both tenets of the mortgage trade. When came the industry complaints that all that weak or bad mortgage debt would be lost, loan officers and their bosses were told to game the system to beat the odds. It was like requiring a compulsive gambler to win at blackjack to assure funding for her child's college education. Hey, education is good, right? In essence, the law said “if you expect to do any mortgage business, you have to cheat. If you lose money cheating, find the money somewhere else, however you can. The ends justify the means.” WE agreed, like it or not. Acorn may have conned lots of people, acted with malfeasance, and what not, but I know folks in Acorn. Most of them are well-scrubbed, attractive Americans with big hearts, and a willingness to blithely lie about the consequences of what they want done, just like most of the rest of us.

If Congress and the White House had said, No! we have to have a reserve fund for risky loans, provided by general revenue, the disaster we are still enduring might not have happened. They didn't do that, however. They felt, justifiably, that if they tried pay for an open-ended program with tax revenues they might lose four classes of constituents, not only those dependent upon the program to buy houses, but builders, taxpayers, and most of all, you guys who thought it was righteous to subsidize housing for people who couldn't afford it, that is to say, most of us. So, in the best cowards' tradition of politicians across the planet, they legislated that banks and other lending institutions were to bury bad assets with the good - or else! Sweep it under the rug, eh? No problemo.

The writer spent a lot of time working at banks in the 80s and 90s, and learned an important lesson. If you inspire a numbers & finance guy to develop a way to make money out of nothing, there's never a shortage of volunteers. And some of these kids, male and female, were prodigiously gifted, working with mathematics that would do a high energy physicist proud, and standing on the shoulders of the banking giants from the 70s and 80s. (See previous post)

And were they ever good! They created mortgage products that made the most advanced betting systems look like a high school kid's effort to outdo Murray Gel-Mann. The derivatives market they created was probably the most extravagant con game ever developed in high finance, and there have been some big ones. And it was politically mandated, popular with the customers who mattered, investors and depositors, and let's not forget politicians and regulators! Market realities be damned! Progress ahead! And, what made the politicians and their constituents so happy, and for a long time, was that this horseplaying system actually worked! OMG, truly did it ever! Profits flowed, hand over fist, exchanges larger than the economy of the known universe, with fabulous parties, bonuses the size of a small country's national budget, a commonality, almost a communion, of private and political interests, and then....

Well, you know. Blooey. As with the wisest bettor’s system, the derivatives market in mortgages blew up, nearly taking down the world's financial system. Hey, listen, OWS, it's easy to stand on a streetcorner, subsidized by the SEIU or George Soros, and bitch about the evil one percent. It's easy to shriek about your loss of an entitlement. But to be honest, look at it differently. If the loser was a trust fund baby, would you give a damn if he or she suddenly had to work for a living? What's the difference between that person's “entitlement” and a secretary in a government shop who's “earning” three times what a secretary gets in a private company? In the real world, if the economy shrinks, everybody has to adjust, the sooner the better. As a chess-playing, Ph.D. holding survivor of the Holocaust once told me, “I'd rather drive a cab in NY than take a check from a government official.” He knew where that could lead, and Zwi was a very good hack. Point?

We need to get real. We need to stop pretending that the elites have anything of value to offer in the way they analyze these things. Half the time they’re fantasizing based on political allegiances; the other half they’re just lying out of fear, ignorance, a need for approval, and spite. And the real issue in this disaster is how it happened, who the actors were, and why they fell for, or fought for, the CDA trick on the mortgage market. Politicians, regulators, business people, and individuals are not discussing this, or are openly lying about it.

Let’s look. The housing disaster began with irresponsibility among constituents and politicians who wanted a quick fix (give Louise a home so she’ll vote for me and we’ll all vote for you), regulators and mortgage brokers who wanted more power and more money for booked loans, builders who wanted more orders, shortsighted investors who thought that markets were no different from casinos -- an irresponsibility based on the all-too-human willingness to suspend disbelief when the prospect of sudden, unearned wealth and power appears. And it wasn't as if it was something new in human nature. The Dutch nearly bankrupted themselves buying tulips in a similar market five hundred years ago. And you don't have to back up that far. Think of the lunatic irresponsibility of investment bankers pouring billions of dollars onto kids who'd done nothing but develop a storefront on the Web in 1998-1999, before the dot.com crash. There was nothing behind their pretty pictures, nothing but the chance of money and power, all based on hope and dreams, as long as you weren't the owner when someone realized the product was worthless. And they thought, as did Barney Frank, or Bill Clinton, or George W. Bush on housing, that they had found nirvana, a heavenly state where millions of dollars or votes would be automatically given, an entitlement of their own! And it was a long chain. The irresponsibility of one actor depended on the irresponsibility of another, from the constituent looking to get an unearned benefit, to the politician looking for a contribution, to the homebuilder looking for more orders, to the lending institution trying to book more mortgages.

The essential feature in the housing disaster was an irrational demand to violate basic understandings about how the economy, or a given part of it, functions. Frosted with lots of sweet talk, wishful thinking, jealousy, distress that things take time – an attitude more akin to a badly parented child in a toy store than to an adult, the political support from us was powerful enough to encourage politicians, bankers and builders to take insane risks. Politicians and bankers, buoyed by the hope and belief that we expressed, became so confident that they legislated a mandate on a vital core of economic activity, requiring a market to behave as they wished it to, forcing lending institutions to violate hard won business and regulatory standards for prudent and profitable business practice. By pretending that the old standards were nothing but the imposition of arrogant elites on the rest of us, WE imagined that one day, houses, and perhaps even skateboards, would be free. We passed that on to politicians. They took the measure of their other contributors, the billionaire construction magnates, the building trades, the suppliers, the tract development crowd, and said, hey, great idea! It wasn’t. With risk thrown out the window, people of quite ordinary means began to bet their net worth in this market, using houses bought on spec as chips. Boom! Bust!

The distortions this disaster caused in our economy are bad enough, but there's another effect. The political action that declared entitlement more important than following well thought-out procedures and practices has put a lot of us in the position of Greek public employees, demanding what can no longer be afforded, unwilling to play our part by considering what’s actually happened. Driven by our own irresponsibility, fear, and greed, amplified by political and regulatory action in pursuit of power and influence, the notion of entitlement has replaced our sense of whether or not we have earned something. This is no different in character or quality from the attitude expressed by indigent welfare clients.

That's what political mandates do. Their progenitors, authors, and legislators are not required to consider the consequences in the world we live in. But, friends, WE are the progenitors. Want it to stop? Stop it yourself.

To help in that great work, let's summarize:

The CDA mandate, and its pretense of providing social justice, created a casino out of the largest fixed asset market in the world. In a regular casino, the house always wins. In this casino, we ended up with a lot of empty houses and more bad debt that we can afford to repay. Who’s talking about this out there?

It has nothing to do with Governor Perry's affinity for the dull phrase, nothing to do with Governor Romney's plainfaced sobriety and happiness to work with real people, nothing to do with the President's friendship with Bill Ayres, nothing at all to do with silver or gold-backed currencies. Who's talking then?

We are.

This writer supposes that there won’t be much talk from the political and economic elites, however, because the Community Development Act has proven so enormously self-serving and profitable for them. We know all too well from reports, even in MSM, about the fabulous salaries and bonuses for these people about who’s getting the good stuff. Far from providing housing for the less favored, which we all wanted, CDA and its associated institutional authorities, have provided vast piles of cash rewards for the principals in Fannie Mae, Citibank, a dozen other institutions, political fundraising, votes, and, in the process, so badly damaged the credit markets that, despite historically low rates, it is harder to get a mortgage now than it has been since the 1970s. But, not to forget, WE participated in this, through our hopes, deluded wishes, ignorant advocacy, and foolish denial. As such WE need to talk about the responsibility of political constituencies and citizens, to make sure the likelihood of another foolhardy gambit like this doesn’t happen. A citizen's job is not only to vote, but to check an overly ambitious fool from making a mess. That’s what the Tea Party movement has been at for years.

In politics as in courtship, false hope is the poison that leads to alienation, rage, and divorce. We can stop this by refusing to play the blushing bride. We can start paying attention to whom we court or who is courting us.

The Mandate of Hell, Pachyderm 1, Unacknowledged Roots

If you've been following (read the prior post below), the concern of unseen elephants in the room has been raised, a cheap metaphor for what we and our leadership refuse to see or discuss.

Turns out there was more than one elephant in the room. Here's one now. Let's call the huge beast walking down your hallways, for want of a better word, Ignorance. Sorry, don’t mean to irritate the sensitive, but hope you're aggravated enough to succumb to the temptation to use a search engine. Why? As a tool to navigate the rivers and channels of (drum roll) the ghastly spectre of the past. That’s one of the biggest pachyderms in the room. It can stomp you, sit on you. So, what to do? Get to know it, pet it, feed it, and encourage it to go back to where it came from. The experience can change a beast into a friend, if not a dinner partner. If you don’t know and acknowledge it, however, historical ignorance can make Godzilla look like a kitty cat.

This elephant then is US, at least the version that refuses to acknowledge anything beyond our generation’s, or peer group’s, purview. Take a look at yourself in the mirror. Like those big ears, that very long extension on your nose? The ivory tusks are cool; just don’t try to sell them in the United States. Okay, open the search engine, or a book (a block-shaped thing with lots of leaves pressed between cardboard). Let’s consider hope and change as national aspirations.

You’ll soon find that hope and change has had more than one day in America. In the hagiography of FDR, JFK, LBJ, RMN, Jimmy, Jerry, Reagan, Bush 1, Clinton, Bush 2, Obama, etc., you'll find an array of angels of hope and change, come to deliver us. Sadly, imbibing in that kind of history makes you even more ignorant. Fact is, all those Great Ones and Devils (depending on which fantasy you believe in) were wagon masters whom WE elected, hoping that their exhortation, threats and experimentation would lead us across the Great Divide between the nightmare of the old world and the dream of a new. As WE cheered, they all hooted about hope and change, as uncertain about what was going to happen next as is the current resident of 1600 Pennsylvania. The key point is uncomplicated. WE not only believed in the rhetoric of each of these generations of leadership, WE encouraged politicians as to what we wanted to hear, what promised changes, what hopes. And then, WE elected them. And, when THEY fell short, or failed disastrously, WE turned on them like children disappointed by the Christmas gifts they themselves had picked out in the toy store. Notice, the active group isn’t THEM, or the EVIL ONE. It’s US. WE came, WE saw, WE liked, WE selected, WE were disappointed, WE raged about the Devil incarnate, WE ran him off the farm, and then WE started the cycle again. It’s the American way. Take your pick, but a favorite for this writer, who played every part in the melodrama, was Richard Nixon.

The U.S. in 1968 was like a freebasing junkie awaking one morning to discover that all that fun he’d been having had left the house wrecked, looted by thieves, with the spouse departed for a more promising partner, and somebody’s children, gaunt and in tattered clothes, looking at him for where the next meal was going to come from. How could this have happened? the junkie cries. We’ve gone to the Moon! We’ve waged an unfunded war for five years in a country that posed no threat to us! We’ve had an unfunded War on Poverty! We’ve encouraged our kids to do their own thing, and a lot of them did, wowing us with their shockers. But now, they’re standing around, staring at us, wondering just what the hell is going to happen next, with Woodstock over, and the adult realities all around and – gasp! involving them, personally, like me, you know? The civil rights movement had transmuted into a zany and violent black power thing. The thrilling and horrifying assassinations had led to nationwide riots. Cities were burning. Millions were staging what looked like an uprising. Oh, my God! Me? I had nothing to do with this. Send me a hero! Do it now!

Someone heard the junkie and, from behind a burning hardware store, softly intoned in a low, somewhat thuggish voice: “you are not silent to me, oh majority,” an announcement that sounded a lot like Someone who had once said I AM.

So, after our pleas, prayers, organizing, cheering, polling answers, and broadly expressed fears created Nixon’s political direction, WE elected him as an enforcer to get mobs off the street, and as a fixer to straighten out this mess already. He did just that. A few samples: Nixon and his administration forced the fight for integrating schools off the streets into the courts. Whereas Johnson’s Department of Justice had only succeeded in integrating 80 school districts, Nixon’s broke the barrier in twenty-one thousand. Legal, as opposed to violent, recourse calmed the country, and marginalized radicals. Unfortunately, the vast debt rung up by Nixon’s predecessor had sucked the future out of the economy. To address that, he played the standard cheat for a spendthrift country; he separated the currency from gold and monetized the debt with fiat money. Americans were just going to have buck up, pay off their overextended credit lines, get used to higher prices and wage stagnation, and wait for better times. WE did! A new foreign policy, aimed at crossing the Great Divide between imperial America, a fantasy we couldn’t afford in blood or treasure, and prudent partner America, began with an alliance with mainland China substituting for massive intervention in South Vietnam as a way to confront the Soviet Union. Very smart, very prudent – it is possible many of us are alive because this administration came into being. And yet, for all this miraculous fixery, Nixon’s administration was cut to pieces by a marginalized opposition’s truly malicious slander and smear campaign, which WE joyously participated in, and by the President’s own paranoia. Both finally forced the old Quaker out in 1975. Why? WE came to agree with the marginalized radicals and, somewhat more reasonably, to fear the President’s paranoia. WE pressured Congress to impeach Nixon. WE cheered when charges were brought. WE wept and sighed when Nixon resigned and vanished into the helicopter with a sad wave. WE and our dreams drove the process from beginning to end. Were we right?

Certainly, we were required to instigate the process. Even dictators and kings don't survive without popular support. We got that role correct. A fabulously dangerous era in American life ended when Richard Nixon took the oath of office on January 20th, 1969. While the machinations of international affairs kept the war simmering for four years before we officially left, fact is, we came out of Nixon’s triumphant beginning to his second term at peace, on reasonably stable terms with our most dangerous opponent, our credit standing somewhat less embarrassing, and enjoying a domestic peace tranquility in much of the country unseen since the early 1960s. Blessed are the peacemakers – hey, this wasn’t said for nothing. But, though WE should have been ashamed to do this, WE acted anyway because WE were disappointed in Nixon, life itself perhaps, and, more deadly, entranced by the rich temptations of mob behavior. WE didn't care or know that the economy was still recovering from its 1960s binge. So, aware that Nixon hadn’t been the Lord, just one of his less attractive servants, WE ignored the fact that his administration had delivered us from a national disaster. Then WE acted like spoiled children instead of as adults (often), taking our revenge on the Loser, Satan, etc. It’s not a uniquely American ritual,of course. However, it bears close witness. Do you detect any parallels between then and now? Think about it. That's what reading in history helps with; you can compare then and now.

Awareness of this common cycle in American politics can remove a lot of the danger of its reoccurring in as destructive a fashion. WE are responsible for doing that. WE are the main actors in this drama, and, as such, have to be at least as responsible as the people WE select to lead us.

In your perusal of where we’ve all been, you’ll find some other suggestive history. For instance, the shenanigans in the credit markets of the last decade have models going back to the Renaissance, where a group of otherwise sane people thought they had found a magic system to escape the bonds of mortality, poverty, and lack of dates, perhaps. Most of these, on discovery, have turned out to be naked scams run not so much by evil geniuses as by common human avarice leading participants to discard the niceties of faith, morality, society and the law to make a fast buck. The worst of these included a lot of liberal sobbing about how this new market trick was going to save the world, or at least a few tarts from suffering rat bites in the Old Quarter.

Here’s favorite version of the writer’s:

Those banking giants of the 70s and 80s, many of them English majors, developed some trickery for loaning money to people who wouldn't pass muster for a loan shark. This was the sovereign risk gambit, where you'd loan five hundred million to some colonel as long as his central government would guarantee the loan. It was rationalized with a lot of frankly embarrassing liberal chatter about saving the developing world...blah, blah, blah. The sovereign risk game served several ends, political and bottom line. The first might arise when your bank's CEO got a call from the State Department insisting that your bank participate in a huge loan to fund an important ally's very important contractor, Mr. So and So, from Nowheresville in the republic of Whoopieland. A big part of the arrangement would be the borrower’s agreement to buy a pile of equipment from Caterpillar or John Deere. A week's due diligence would convince the rawest Assistant Secretary that lending this guy fifty bucks was a bad risk. She’d make her report; and her boss would nod happily at the regional meeting, then say, "Hey, sweets, not to worry. This loan will count as sovereign risk. If the borrower bolts, Uncle Sam's good friend, the President of Whoopieland, guarantees that the bank will at least get the principal back. Considering the fees and interest we're charging, it's a damn good risk." If that Assistant Secretary wanted to become an Assistant Vice President, she’d say, "yes, my lord and master." Six months later, a scenario I often saw: her boss rushes in and gives her the good news, that she's been appointed Assistant Vice President, in large measure because of her decisive support for that loan. The bad news is that Mr. So and So has vanished into thin air, taking the bank's participation of US$500 million with him and his six mistresses. And, worse, the President of Whoopieland has just been overthrown in a coup, and the new government has disavowed any prior international debts. Whoopsie-doodle. "Not to worry, dear. The Chairman has been on the horn with the President of the United States – they went to Yale together, don't you know? And he's got an arrangement, now before Congress, to fund repayment of the principal, and half the fees, in the Fairness to Whoopieland Debt Recovery Act. Sweets, for my part in this, I've been made an SVP and Managing Director, and if you play your cards right, you'll have my old job in a month!"

Eventually, this horseplaying system went as bust as the current housing market, but not for almost fifteen years, when President Clinton was forced by similar sovereign risk arrangements to put up fifty billion to cover Mexico's default. And in all cases, who ended up holding the empty money bag was you and me, just as in the housing crash. The empty money bag is a whole lot bigger now, and, like it or not, we share the blame for the losses.

Now that you’re on your way out of ignorance, you’re probably ready for the next post, regarding the Housing Disaster Nobody Was Responsible For.



Luther

The Mandate of Hell

Beginning some thoughts on what politicians and we might want to talk about as opposed to, say, Herman Cain's remarks to women, Sarah Palin's willingness to appear in public with a loaded gun, or President Obama's fondness for golf.

For some time now, approaching two years, this writer hasn't offered commentary here. Reasons include my spouse's ongoing illness. But another has to with the character of political discussion. To be honest, since early 2009, the only meaningful talk on major issues of our time has come at the popular level, especially local groups aggregating around the Tea Party movement. This national set of conversations, debates and demonstrations has been totally misrepresented by the MSM and by most officials, elected and unelected, of both major parties. At at some point, my interests turned toward participating in that conversation directly, especially since it was so grotesquely misrepresented by MSM and other representatives of the haute bourgeoisie.

We know how. Discussion of taxes has been disputed as racist, homophobic and anti-feminist by extremists, not to mention their useful idiots in MSM. It has been turned aside as irrelevant by a slick twist on the facts by the President and by the Democrats, who declare “half the country doesn’t pay federal taxes.” The national Republican party has added to this by addressing only federal taxes and federal spending, as if there were no other taxes. The political rhetoric’s raving against the Tea Party's arguments bears no resemblance to reality. Content to ignore so many problems, looming and present, the elected, appointed, and presumptive leadership travels down the road to national bankruptcy and the risk of major war in what appears to be a complete denial of the facts.

The Republican national party's argument is not quite as irrelevant as the ravings of MSM, Leftists like Al Sharpton, or the President of the United States, but in some ways it's worse. Its leadership claims to stand in for the complaints of the Tea Party movement, while at the same time completely misstating their arguments. How?

Let's take taxes again. Half the US working population pays no significant federal taxes. Federal taxes, for the middle income individual, are a small factor. The largest problem is local, especially property, school, sales, business, local and state income taxes. While the federal tax bite has become increasingly born by a very small percentage of the population, federal action, from Congress and the Executive, has mandated so many new or enhanced local services, all unfunded, whether for education, medical care, or a raft of other unfunded programs, that the tax burden for middle income workers, especially in states like California, New York, Illinois, Massachusetts, Michigan, and others, has become as unbearable for them as it is for their employers. None of this is direct Federal taxation but is attributable to unfunded Federal mandates. The Feds mandate and localities and states have to tax to get the money. It's ruinous. Don't believe me?

In the last decade, 800,000 middle-income people have moved out of New York City, and more than a million and a half from the state. The number is even higher in California. In western New York, for example, you can travel along stretches of the Finger Lakes resort areas and find no civilization but what the writer calls Medicaid ghost towns, where the only remaining residents are recipients of federally-mandated subsidies. Manufacturers, job-seeking younger people, their families, and their disposable income, have left for where the cost of doing business, and the cost of living, are significantly lower, such as Texas or Florida. In New York City, it is estimated that fifty percent, or more, of the enormous freight of social programs and services mandated by the Feds and by the state is paid for by taxes on fewer than ten percent of workers. The departing middle-income Americans, who produced a prodigious amount of goods and services, have been replaced in small part by wealthy people from the US or overseas, but mostly by uneducated immigrants who serve the wealthy as nannies, drivers, housekeepers, construction workers, home health care attendants, and handymen -- New York’s model now more like Mexico City’s than Paris’s, Berlin’s or Barcelona’s.

The current Mayor has celebrated this by encouraging a "sanctuary city" policy, supporting expensive housing development, an increasingly immaterial economic base (financial services, advertising, TV production, publishing), and provoking the exodus of companies that produce anything that might dirty the environment. (A recent and notorious example: the low bidder on wheelchair-accessible taxi was a Brooklyn group with a good track record. It would have meant 5,000 new, good-paying jobs, not to mention a nice positive contributon to the US balance of payments. The Mayor chose the Japanese bidder in an unsubtle bow to environmentalists). On the street, the most startling change is the departure of services that supported regular folks, the modest family restaurant, the hardware store, the family tavern, the family-owned clothing store. They’ve been closed by astronomical rent hikes, vast over-regulation by the city, and by hostile action by agencies intent on chasing every last bug out of restaurants, bars, or corner coffee shops. Increasingly, the city looks more like an Asian capital, with a small, fabulously wealthy elite, who live a boutique life, and their millions of lackeys, who eat or work at McDonald's. To someone who’s lived here since 1973, the change is hideous, and is entirely attributable to a decision to destroy a modern, middle class society and to replace it with a medeaval system of rich overseers and peasants. It is beautiful to look at -- so is Hong Kong from a distance, but bears little resemblance to the creative, dynamic, struggling city of thirty years ago.

Throughout, this process has been powerfully reinforced by the burden of local taxes imposed to cover the costs of federal and state unfunded mandates. Why hasn't the explosion of mandated, unfunded programs been at the heart of tax discussion then? Let's resort to a little story.

A family living in a nice house of several thousand square feet had a problem. They just didn't have any room. They spent nights at the family get-together each Tuesday discussing what could be done. But, no matter what contribution each family member made, from Lindy and Bob (the parents), to Gma Bertie (the grandmother), to George and Alice (the kids), and to Lucy (the dog, a Great Dane), they couldn't solve the problem: wherever they turned, sat, stood, or tried to sleep, they always bumped into something. One day, Gpops, who’d been missing since a huge fight with his wife of forty-two years (Gma Bertie) returned home. After the tearful reunion of the grandparents, who did love each other, Gpops embraced each family member. George and Alice whispered to him when their turn came. “Hmmm,” Gpops said. Then, Lucy came over, and licked him on the ear. “Hmmmm,” Gpops said. Then came Lindy and Bob, whispering somewhat louder. “Uh-huh,” Gpops said. Finally, Gma came over, hands on her hips, just short of another argument. Gpops asked a dangerous question: “Well? Are you going to tell them, Mother, or shall I?” “They won't listen, Pops.” “Listen to what, Gma?” the family cried. Gpops stood up, surveyed the parlor, and said in a fine, booming voice. “First thing, you've got to get this damn elephant out of the living room.” The family's eyes opened with a chorus of cries, g-rated cursing, and Lucy's harsh bark. A few hours later, an enormous vehicle arrived from Barnum & Bailey, a company headquartered in Washington, and escorted the elephant back to the circus in DC.

That little allegory is what it has been like following MSM, Presidential candidates, Congressional leaders on both sides of the aisle, the White House and not a few bloggers I consider friends. We're not acknowledging the elephant; or we don't want to. Making this worse, there's more than one pachyderm there. We'll be looking at them over the next few posts.

Luther