On the Contrary

What to do about Pakistan?  Everyone will tell you that we have to solve the Pakistan problem before we can solve the Afghanistan problem.  Here, I think, is the challenge:  Pakistan is a nuclear-armed country in a continuous conflict with India, based upon primarily religious and border disagreements.  Add to that it has a large portion of its population that basically lives as tribes, are fundamentalist Muslims, and are closely allied with the Taliban.  In other words Pakistan stands astride two different worlds, tribal 7th century, and a nuclear power in the 21st century.  And then pile on that we know very little as a society about their society.  In the past we have paid them exorbitant amounts of money to pacify their tribal areas, much of which may have been diverted to buy weapon systems to deal with India.  None of this has been effective as the problem in the tribal areas worsens and the stability of the country degrades.

We have to care because they have nukes, a rising internal  instability due to radical Muslim terrorism, and the safe haven provided for the Taliban in the tribal areas of Afghanistan.  So what should our Presidential candidates be telling us?  Our history there has not been sterling with us perceived as keeping Pervez Musharraf in power as our best bet, but an unpopular ruler who ran rough shod over their democracy.  Our incursions into Pakistan from Afghanistan have been deeply resented throughout the country.  In other words, anyone tied to us may have problems forming a government or ruling.  On the other hand the Pakistanis have taken a hands off approach to the tribal areas to calm down the situation, and this just allows the radicals more room to maneuver in.  In order to calm the country, they may be sowing the seeds of their own destruction.  The border between Afghanistan and Pakistan was an artificial line drawn by the British so that the Taliban are closely related to the Pakistanis along the border.  So what to do or said another way, what can we do?

There is no easy answer and even if you want Osama Bin Laden dead or alive, barging in there to get him could cause more trouble than we bargained for.  We could ask India who are their neighbors and have some insight into the problem.  You, know, consult the international community.  Rory Stewart, an ex-British diplomat who has walked across this country offered the following in an interview with Fareed Zakaria on CNN’s GPS:

STEWART: I think we need to contain and manage the situation. I don’t think there’s a solution. There’s no silver bullet out there.

What you can’t do is try to remodel a whole society and imagine those people don’t exist.

If a Presidential candidate said that, they would be perceived as weak.  But I have the feeling that Mr. Stewart has described the situation and our approach to it in the best possible terms.  It is a very complicated situation with no 30-second sound-bite answer and being more aggressive could considerably worsen the situation.  It will be interesting to hear what the candidates have to say about this in the debate.  I wonder which one will pander to the “bring’em on crowd” and which one will paint a more complex and difficult road.   Said another way, I wonder which one has the courage to explain the limits of our power and what we can really control in the world?  Who ever that is, that would be my candidate for President.

Every now and then it pays us great dividends to stop, think, and evaluate and examine some of our preconceived ideas.  As I am totally absorbed by the economic crisis, on this Monday morning in our rush to fix the problem, maybe it is time to slow down and think, not just about the economy, but some of our other assumptions especially with the upcoming debate.  So here goes:

• The conventional wisdom is we need to act fast to save our economy.  My simple mind understands the economic rescue plan as an attempt by the Fed to buy up bad credit instruments to restore liquidity and capital for borrowing so necessary to the function of our economy.  But the first thing that crosses my mind is that this Republican Administration that touts small government, low regulation government is expanding government and its supreme control over the economy in ways that tower over anything we have ever known.  From an administration that rails at the mention of a government controlled medical system we get a government controlled economy.  Second thought is will it work?  Why should we be bailing out these businesses if the $700b could be used to simulate the economy in other ways?  Exactly who controls this money and what assets will secure these outlays?  Who are the winners and losers in this thing and what is the impact on our ability to rebuild our infrastructure and make investments in alternate energy that are also critical to our financial survival?  If our economy impacts the world economy, why aren’t they offering to help in the bailout as we have helped them in the past?  The people who are structuring this plan are the ones that presided over this debacle, so why are we giving them the benefit of the doubt?  I think it is time for some calm debate about what our choices are instead of being rushed into a 3 page plan for $700b hatched in a backroom and rushed to Congress for a rubber stamp.
• The conventional wisdom is that the surge has worked in Iraq and this works in the favor of John McCain.  This claim and belief is based upon the fact that the violence has been reduced during the surge, ergo, the surge is working.  But this ignores the fact that the policy of paying Sunnis (the Awakening) came into play and full fruition about this time and that as the surge started the segregation of the population into sectarian groups was just completing.  There are an estimated four million displaced Iraqis, half of which left the country and the other half in sectarian enclaves to protect themselves.  So we put more cops on the beat and street thugism is down, but are we not still sitting on a seething caldron of unresolved hate?  Add to that as the Shiites take control of the country, they are not incorporating the Sunnis into the military or police in any meaningful way.  Meanwhile the Kurds are solidifying their control of oil rich areas.   I think we are sitting on a ticking time bomb which has little to do with al-Qaeda.  One might ask John McCain what his definition of winning is and just how much longer can we be responsible for holding the lid on this thing.
• The conventional wisdom in Afghanistan is that this is where the real war is, we had almost won it, and now we need to recommit to it with more troops and strong investment in the soft forms of power (read economy and nation building).  In a highly informative and basically non-partisan discussion, five previous Secretaries of State on CNN’s “The Next President: A World of Challenges” reflected this view.  But in an equally informative interview on Fareed Zakaria’s GPS, the 85 year-old wise ex-Prime Minister of Singapore gave this advice on Afghanistan:

“You’re going to bring democracy to Afghanistan? They have been warring with each other for hundreds of years. They enjoy warring with each other. Thirty-plus years ago they killed a king who was nominally holding the country together, and it’s been shattered ever since.

How do you restore the writ of Kabul? By some 30,000 NATO troops, ISAF, and a few more brigades of Marines or special forces?

The Russians had 140,000 boots on the ground with tanks, helicopters and the lot. And they left.

I think nation-building is not doable. I mean, are you going to do nation-building in Pakistan? If you can’t get Pakistan right, you will never get Afghanistan right.

That Durand Line was arbitrarily drawn by the British between the Northwest Frontier Provinces and Afghanistan. They are the same tribes, brothers, cousins — porous borders. They’re in and out.

Now you’ve not only got Talibans, you’ve got Pakistanis joining the Talibans — or that’s the latest intelligence that I’ve been reading.

It can go on for decades. Do we want to be in Afghanistan for decades?”

So the bottom line here is we are starting down the same road we went down in Iraq.  I think we ought to have a real debate on what is doable and what we can afford.  We may have to weigh whether improving our security through improving our economic strength and position in the world is a better investment that occupying countries in the 7th century who are still engaged in tribal warfare.

Just some idle thoughts of a Contrarian as we move toward the debates and understand that every question asked comes with hidden assumptions that may not stand up to the test of reality.  Thus the answer may be the answer to the wrong question.

I don’t think the American people have any idea how much trouble we are in yet.  Right now the high priests of “let the market place decide” and keeping government’s hands off the tiller are jumping in to control the market place and have government take over the market with assets and regulations.  This ought to give you pause, not in their perceived hypocrisy, but on how bad and how dangerous things are.  I personally think Secretary Henry Paulson and Fed Chairman Ben Bernanke are working as hard as they can to try and keep the system in operation.  They are doing what really good mangers do in a crisis;  they throw out the conventional wisdom and do whatever it takes to keep the ship afloat.  There will be a lot of Monday morning quarterbacking and falling back on old dogma, but right now you have to make decisions on the fly, right or wrong.

Okay, we know we have a problem, but what is the cause of the problem?  The problem itself and the cause are two different things and until we fully understand the cause, solutions are hit and miss.  Right now Paulson and Bernanke are focusing and treating the problems to keep the system afloat, but the solutions will come later if they can plug the leaks for now.   Is capitalism basically flawed?  Is absolute faith in the market place misplaced? What should really give you pause is that the people who are answering these questions are the ones who got us into this problem, didn’t see it coming, and marginalized those who warned of the coming debacle. But now they are all talking heads telling us what our next move should be.

I will now use my PhD in Economics (I don’t have one) and my many contacts in the incestuous pool of economic/market talking heads (I don’t have any) to tell you what I think has happened.  The housing bubble is not the cause of this problem, just the vehicle that manifested the underlying problems.  Note problems, plural here.

First lets start with basic conservative economic belief, that has to some extent been co-opted by the Democrats.  The first element of this is that the market place is the engine that drives our well-being.  Yes it is and that hasn’t changed for us or the world.  The next element of this is that government interference just hinders the natural working and balance of the market place.  This one, which should now be obvious, is flawed.  Good capitalist are always gaming the system to gain an advantage.  It is government’s role to keep the marketplace a level playing field for all, including investors and workers.  The key is smart regulation, not necessary burdensome regulation, but you have to keep your eye on those who came to the party saying all regulation is bad. They will promise rules, but then will fall back into old habits.

Now the third element is the one that has gotten us in real trouble:  Greed is good and your goodness and success are measured by your accumulation of wealth, and the more wealth you accumulate the better it is for the entire economy.  These are perversions of the maxim in capitalist thinking that if everyone seeks their own your self-interest, the market will balance these for the benefit of all.  Self-interest implies that you look at the long-term effects of your actions and their results.  Greed and wealth accumulation as a measure of good and success means a short-term evaluation.  Once the focus is on short-term gains, long-term consequences are ignored.  We as a society have come to this short-term thinking if you look at the debt we are incurring as individuals.  The increase of wealth by the wealthy benefits all has been a failure that is obvious in the increasing reduction in the middle class.

So in an ideological atmosphere of low regulation, the market is always right, and greed is good, wealth for the wealthy makes us all gain, what happened?  The first hint was an interview on the Bill Moyer’s Journal last year with John Bogle, when he maintained that the financial sector of the market had become way out of balance, where wealth was being created through obscure financial instruments and not in the investing in goods and services that give people jobs.  In other words the investment in real industry was being robbed by the profit being taken out of the system in creating financial instruments that were highly profitable, but created no jobs, no products.  The system always needs capital, but when the creation of capital becomes the dominate factor, the system becomes self destructive.

You have this system that is looking to primarily create wealth through financial instruments, you have financial instruments created to be outside regulation of banks, you have a greed is good philosophy, managers and CEO’s compensated based on high rate of returns in the short term, no transparency of their financial institutions or their instruments,  low interest capital, no requirement for minimum capitalization, and what you get is massive leveraging to place bets on the latest income producer, and that was the instruments to finance mortgages.  If it hadn’t been mortgages it would have been something else.  Although the current feeling is that we need to go punish all those evildoers that participated in this system, the real culprit is the system itself.  It reminds me of steroids in baseball.  We want to go out and punish all those cheating baseball players but we don’t take a hard look at a system that looked the other way and athletes were left to compete with other athletes who were cheating.  Soon they are all cheating if they wanted to stay in the big leagues.  It is no different in the financial markets.

So not only do we need structural changes in the market to address all those problems identified above, we need a whole change in mindset.  The world is no longer the place we knew.  America has lost its place not only in world affairs, moral leadership, but now in financial leadership.  The challenges that we are going to face are nothing like what we think they are going to be. There going to massively larger.   Thomas Friedman, in his book “Hot, Flat, and Crowded”, describes our economy and our level of consumption of resources and energy in the United States as a unit he named an Americums.   He points out that there have been two Americums in the world, one in Europe and one, of course, in America.  But now China has created one, with another about to develop, with the same in India.  These levels of growing consumption of energy and resources simply cannot be maintained without disastrous consequences to our climate, our ecosphere, and our economies.  The approach to all these problems is not more regulation, lower taxes, or some other dogma driven approach that the marketplace will solve all these problems.  It is a comprehensive approach to our future that was best represented by Mayor Michael Bloomberg on Meet the Press on Sunday:

“There are two crises.  One is the crisis in the financial market, a lack of confidence that almost closed down the financial system this past week and that Hank has to address.  And it’s up to the Treasury with the acquiescence of Congress, but to do something quickly.  And nobody knows exactly what they should do, but anything is better than nothing.  You’ve got to restore the public’s belief and the market’s belief that we will go on.  And this is not just an American problem, it’s financial markets around the world that are all interlinked and they’re all collapsing.

The second problem, which is up to Congress, it’s a much longer-term problem and may be the genesis of the problem that we have today in the financial markets, and that is that people are losing their homes, deserted homes are destroying neighborhoods, people are losing their jobs.  We have some industries that Congress tried to protect, and instead of protecting them they’ve caused them to not keep up in a competitive world with new products.  We have an education system that isn’t preparing us for the future, and we have a retirement system that’s just not going to be there when we need it.  So there’s two things here:  One you got to do quickly; one you really need a lot more thought about and that Congress should spend that time debating.”

It is not pointing the finger at evil funds manager, send them to prison,  and create some rules for the future.  It is a comprehensive approach to our economy that includes, infrastructure improvements, innovation, acknowledging the limits of our power, and real energy solutions.  I strongly recommend that you click on that link and read his idea and vision of what we need to do.

Finally I will leave you with the words of Fareed Zakaria of CNN’s GPS last Sunday after a most enlightening interview with international economic experts and an interview with Singapore’s former Prime Minister,  Lee Kuan Yew:

ZAKARIA: “Thirty-three years ago this week, a young woman with a thin resume was elected leader of Britain’s Conservative Party. Thus began the remarkable career of Margaret Thatcher, who both spurred and symbolized one of the most dramatic eras of change in modern history — the rise of free markets, free trade, privatization and deregulation.

Addressing herself to the core problems of the 1970s — inflation, stagnation, over-regulation, slow growth — Thatcher, and with her, Ronald Reagan, enacted their economic agenda. Initially highly controversial, as Britain and America prospered and the Soviet Union collapsed, Thatcherite ideas became mainstream, accepted by the likes of Bill Clinton and Tony Blair.

But the problems of today do not seem as easily solved by Thatcherism — tax cuts, deregulation, privatization. People are worried about widening inequalities of wealth, soaring health care costs, the competition from emerging market countries.

The next governing ideology is likely to be something that, while still friendly to markets and trade, finds a way to address itself to these problems and anxieties. Whoever captures this new ground will dominate the next era, as Thatcher did hers.”

I don’t think this person is  reactive John McCain who lives in the 80’s or the Republicans who are less likely to embrace real change than the Democrats, but if you select him and them, enjoy your poverty as they have no plan to deal the massive problems that face us.

This is one I really don’t get:  Barack Obama is an elitist.  This will be the attack of the Republicans to keep your focus off issues.  So the first question you have to ask is what does this mean?  From a CNN report:

“Branding a rival elitist is not new in politics. Republicans for years have successfully labeled Democratic presidential candidates as the liberal elite. Portraying their rivals as latte-sipping, sushi-eating insiders, Republicans have connected with some voters by arguing that they understand the values important to the everyday person.”

If this is what they mean then I am rolling on the floor laughing.  The Republican Party is the party of fat white men who have historically represented the interests of the wealthy.  The have faked “small town values” while they implemented policies of lower taxes on the rich and removed regulations that would protect these small town folks. They had the biggest insider good old boy and crony network we have ever seen in Washington.  Ever heard of the K-Street Project? Now if they mean Barack is too smart and refined for me to identify with, then I have to ask you how the last guy you elected who related to you did in office?  You remember George Bush, the simple guy you can trust?  The country is in shambles under Republican small town values.

Related to that is the issue of can this guy relate to my problems and do something about them?  Here once again the Republicans have thrown up the smoke screen of small town values.  We have small town values and we relate to your values.  Bring on the cultural wars.  This argument is the way to hide your racial bias and invoke class warfare.  Labeling a guy who came from a single parent family, went to college on student loans, worked in the community to improve the lives of less fortunate, out-of-touch with the common man while thinking John McCain, from the military elite (there is a difference between officers and enlisted, and Admirals and Captains), celebrated as a hero, and then married to a fabulously wealthy woman, 26 years as a Senator, is somehow feeling your pain is just plain irrational.

But then if you consider a very good education, smart, thoughtful with complex views of the world, an elitist then I would ask you to consider this:  Would anybody not consider Franklin Deleno Roosevelt (FDR) an elitist?  He was wealthy, he attended Harvard University and Columbia Law School, he was very intelligent and who else would you want to lead the country through the Depression and a war, a high school drop out?   Let’s get the hockey mom who thinks she is a pitbull and her cohort a reactionary old man stuck in the 19th century and can’t keep his facts straight.  I simply don’t get it.  I would want my President to be smarter than me.  I know I couldn’t run the country and I would want someone extremely intelligent who can consider the complexities of each challenge.  Abraham Lincoln liked to seem folksy, but the man was highly complex, loved Shakespeare, was widely read and self educated, and can anybody forget the Gettysburg Address or his eloquent Second Inaugural Speech both enshrined in the Lincoln Memorial?  The Founding Fathers were not the common man, but well educated elite of this country, thank Providence.

No what I am detect is that we are dumbing down America.  We want a President who we might want to have a beer with, but is totally unequipped to deal with the complexities of a world that is leaving us behind.  Look around you.  The power of America, both diplomatic and military is waning due to misuse or in the case of diplomacy, under use.  The treasury is empty and our economy is in shambles.  Simple-minded approaches to our security have shredded our Constitution and any semblance that we might be morally above the rest of the world in our adherence to our basic values.  But the Republicans have nominated a Presidential candidate wedded to the past with frozen conservative ideology that doesn’t work anymore, and an anti-intellectual VP who knows nothing of the world, world history, just small town values and folksy superiority which may all come undone if we can ever really examine her record.  It is an anti-intellectual assault that is a recipe for disaster in a world that is rapidly evolving while they are firmly anchored in the 19th century.

The qualities of the next President are first and foremost a top-notch intellect.  Secondly, he/she must have the self-confidence to listen to dissenting points of view without the ideological baggage that closes down the discussion and innovative solutions.  Third, they must be able to thoughtfully consider options, without thoughtless over reactions (“I would fire the SEC Chairman”) based upon blame instead of looking for root causes.

I hear people say all the time that they will vote for McCain because of his experience or are afraid of Barack’s perceived lack of experience.  I find that almost laughable.  John McCain’s experience is solidly planted in the past and that experience will lead him to make decisions based upon a worldview that is no longer viable.  When this nation faced one of the gravest trials of our time, we elected Abraham Lincoln who saved the nation and took us in a whole new direction.  He had less experience than Barack Obama and that is probably what allowed him to think, as we like to say today, outside the box. It made him unafraid to utilize his rivals and their good ideas to bring the country together.   It is time for new thinking or sinking into oblivion.  Are you mentally up to the choice?

One note:  Lynn Forestor d’Rothchild, ardent supporter of Hillary Clinton and member of the Democratic Platform Committee, defected to the Republicans with the statement about Barrack: “I don’t like him,” she said. “I feel like he is an elitist.“  She would know one.  So if you supported Hillary for woman’s issues, and a progressive approach to our problems, you don’t like Barack, so you support someone who is against all these things?  No, I think she went over to the Republicans because she is the true elitist and she is afraid Barack just might allow the common people into the party and government.  As she said to Wolfe Blitzer (CNN) when he asked her if she was getting any grief from the Democrats of her switch,  “I’m getting it all the time, particularly from the likes of you, the liberal elite,” she quipped. “You’re the elite, not me.” How dare you ask me questions even if I am being used as a tool by the Republicans.  I personally think she thinks Barack is uppity and she was going to find a party that keeps that kind out.

The media bashing I am talking about is not the GOP’s, but mine.  The mainstream media has a long way to go before they are really doing “fair and balanced” coverage, and except for FOX noise, Glenn Beck, Lou Dobbs and some of the other blovators (yes even Keith Olberman from time to time), they are really trying to be balanced.  Their approach to this daunting task is fatally flawed by removing any judgment from their interviews by representing both sides with a passive moderator.  In effect they simply monitor the food fight.  They have eschewed any responsibility to ascertain the truth to avoid the appearance of bias and they will let the viewer decide.  So what is the problem?

The problem, which was described much more eloquently by Ruth Marcus in he Washington Post Op-Ed, True Whoppers, talking about misrepresentations and lies goes like this:

“All campaigns fall short, but some fall far shorter than others. And it is a phony evenhandedness, comfortable for journalists but ultimately misleading, that equates these failures without measuring the grossness of their deviation from the standard of decency.”

Said another way if the viewer isn’t given some frame of reference for the veracity of the statements being made by the participants from the moderator, he/she is left to let their own partisanship decide whose facts to believe.  If you have a debate between flat earthers and people who claim the world is round and you accord their claims equal footing, you are misleading people about the equality of the facts of each argument.  Note the media did this on the issue of Intelligent Design until the whole edifice of this faith-based system was destroyed in a Pennsylvania court room.   Now they try to avoid the whole debate because it seems rude to challenged faith with facts.  The economic argument may be proceeding in the same fashion.

At any rate, this kind of coverage is increasing the impact of the misrepresentations, and not clearing the air.  The critical thing that the journalist has to bring to these exchanges is knowledge of the facrs and push back.  Instead of allowing known misrepresentations to be voiced by one partisan spokesperson or the other, they push back where they know the facts are being misrepresented.  Of course they have to know the facts to push back which may be a reach for some of them.  The key is that the push back has to be unbiased i.e. usually David Schuster of MSNBC as opposed to Fox News or Lou Dobbs of CNN.  Then the debate would be on more level playing ground.  But because of their passive interview style of moderating debate, they are being run over by partisan flacks and their mission of balanced reporting goes out the window as they become a bullhorn for one side or the other.

I witnessed an example of what I call the passive aggressive attack on CNN’s Rick Sanchez as he was trying to inform the public about what is going on with the investigation of Sarah Palin in Alaska.  The moderator is passive, while the interviewee is agressive.  Having spent a portion of my career negotiating with bonding company lawyers in construction contract defaults, I immediately recognized the tactic.  A lawyer representing the McCain organization in Alaska was laying out their case for why the proceedings investigating Trooper Gate, in their view were tainted.  The technique is to begin a non-stop monologue/diatribe and get as many of your allegations in as quickly as possible so that the conclusion seems obvious while not allowing your opponent to question any of the allegations that makes up your argument.

The only journalist I have seen push back on this technique is Rachel Maddow, trying to stop the dialogue and examine some of the false allegations.  Well in this case poor Rick was trying to be fair and let the person state their case, but he got submarined by this technique as he let this monologue go on forever.  Worse, he appeared to not have a good grasp on the history of this investigation that could challenge some of the lawyer’s allegations.  He asked for a Democrat to come on the show to counter this argument, also showing his naiveté  in that no Democrats wants to get involved with this internal state investigation and make it a distracting (for the Democrats) campaign issue.

Here were some of the specific questions that Rick needed to ask to get a more balanced view of the claims of the McCain team.  The lawyer claimed the whole process was tainted by the Obama Campaign, but Rick never asked him how this could be when there was a team of twelve McCain Campaign people in Alaska helping manage this attack on the investigating board, but no personnel  with the Obama Campaign. He did press the lawyer for any evidence for contact with the Obama campaign and of course there wasn’t any except an alleged rumor.  He never asked why this investigation was biased when it started before the Governor was a candidate for VP and approved by a unanimous vote of the Republicans and Democrats in the legislature.  He never asked why the commission that was conducting this investigation made up of three Republicans and two Democrats could be biased if the majority were Republicans and could control its actions.  He never asked why the requested move to the personnel board would then be an unbiased review if the board was made up of Palin appointees that serve at her pleasure.  So all in all it was another example of nice try, but you became a soapbox for a very partisan view and participated in more disinformation.

Finally on Friday, I watched David Gregory of MSNBC (and of the famous quote, “I asked all the right questions before the invasion of Iraq” but never followed up on the lies he was told) ask his panel of commentators, isn’t this whole disaster on Wall Street due to the housing bubble?  In other words fix this problem and the rest of the system can press on which indicates to me he had little understanding of the real issues.  They had to explain to him that the housing crisis was just the effect, and the cause was the underlying structure of wall street to increase profits, short term gains and CEO compensation based upon those gains, greed and a culture of greed, and lack of regulation leading  all of which led to under capitalized and grossly leveraged firms.  I still don’t think he gets it so how is he going to help inform us of the choices for the future as each side makes their pitch and he has no basis for understanding their arguments?

I don’t know why journalists allow themselves to be abused by these partisan flacks.  I don’t know why they are so passive and allow themselves to be used to reinforce miss-information.  I don’t understand why they don’t fight back and start standing up for their profession.  I don’t know why we get pertty faces instead of smart and well informed journalists.  An interview should be a trial by fire for all concerned, not a chance to repeat your talking points.  Come on guys, get up to date, learn your subject, and start pushing back.  The fate of this country depends on you guys doing your job.  So far you get an F.

Vine:  Harvest Begins!! Another warm week with average temperatures in the 90’s has fully ripened the Syrah and they were picked today.  It is going to cool off into the low 80’s starting today.  You know they are going to harvest when you see the bins and tractor parked in your vineyard the day before.

A Sure Sign Harvest will Begin in the Morning

Oh, you say, I thought you decided when to pick.  Hardly.  I can taste and measure the brix and tell you when they are close, but the winery makes the decision when they should be delivered to the winery for processing.  This is as it should be.  We growers work hard to bring the fruit to top quality, but the flavors in the fruit change daily at this stage and it is left to the refined palates of the wine makers to decide when the flavors that they are looking for have fully developed.

The harvesting process is fairly straightforward.  The vineyard workers (los hombres) simply go through and cut it bunch by bunch, leaving any damaged bunches or any secondary growth and drop the bunches into buckets.

Steep Slopes and Hard Work - Viva Los Hombres

The buckets are then gently (to prevent damage to the bunches) poured into the bins.  The bins are then transferred to the winery. The harvest and transfer started at about 0545 am and take place in the early morning hours (it takes about 3 hours to havest the Syrah) to keep the grapes cool and to prevent any unwanted fermentation in the grapes from alien yeasts.  These grapes are going to A Donkey and Goat in Berkley, there to be cold soaked for 24 hours, sorted, foot stomped and then fermented in large oak casks.  More about different styles in the winery next week.  It looks like about 2.5 tons, but we will see when I get the weights and numbers from the winery.

I will dump the water to the Syrah now to give them a good drink and a nice rest after working so hard this year.  I really withheld the water until absolutely necessary and we will see what Jared and Tracey from Donkey and Goat think about the quality.

Upper Vineyard Bounty Mixed with the Viognier

I measured about 26° to 27° Brix the day before with a nice fruit, and complex flavors with very nutty seeds and mild skins.  The rest of the vineyard, the Grenache, the Mourvedre, and the Counoise, is sitting at about 22°-23°.  The primary difference is that the Grenache is moving faster on its tannins with the skins only slightly bitter and the seeds browning nicely.  The Mourvedre is still very green in its tannins.  Hello mid-October.

Wine:  Well, last weekend was Tour de Wine up here and it was a lot of fun.  Each winery served food and gave tours/presentations in their barrel rooms and vineyards.  There were 20 wineries involved, for a two-day event, but I was going to spend some quality time at my favorites and I had house guests (Rhyans) who I was cooking for that night, so we went to four and spent quality time.  It is fun when every winery you go to, they know your name (oh no, Steve again!).  Holly’s Hill is always fun and it is great to see the Coopers (owners) and Josh and Carrie (wine makers), and they make first quality Rhones.  They were giving people a chance to do some pressing and taste the juice, and cooking delicious Carne Asada Tacos that went well with the Patriarche Blanc (Roussanne-Viognier blend) and taste some wonderful local olive oil (Winter Hill)

Tomorrow the Journey Begins from Quality Grape to Fine Wine

From there we went to what I think is one of the best up and coming wineries in the area, Miraflores.  They had a wonderful selection of cheeses and small sandwiches, with barrel tasting of last year’s wines.  Victor Alvarez, who is the owner, was there and his passion for his wine was expressed in his willingness to share some of his not yet released wines that he is so proud of, and rightly so.  He has a passion for the terroir and it is expressed in his wine.  I love his Syrahs because they have a vegetative or earthy flavor, sometimes called forest floor.  The 2003 Syrah and the 2005 Methode Ancienne are real treats.

Next up was Narrow Gate Winery which makes delicious Rhones.  Frank and Teena Hildebrand are owners and Frank does all the wine making.  Frank was giving a wonderful presentation on his wine making philosophy and technique.  Frank does whole grape fermentation and focuses on a gentle process of extracting the juices without (he says ) extracting too many tannins.  If you listen to the technique, you would think the wine would lack the complexity of well balance tannins, but you would be wrong.  It was an interesting approach to wine making, and his wines speak for themselves.  You have to try his Rhone blend, Dunimas.

Lower Vineyard Bountry/Sophie Supervising

Finally there was a stop at Madroña and sure enough there was Paul Bush working the tasting.  Paul is making the wine and managing the vineyards.  He is a delightful person to talk to and he loves to share his wines with you.  The Malbec was killer.  We got there after the event was officially over, but that did not slow down Paul.  All of these wineries are making exceptional wines and you cannot beat the value for the quality.  His reserve Syrah is a true delight.

Then it was back to ‘Chateau Lightner’ to sit on the patio and sip a hearty Petite Syrah and cheese while I cooked filet mignon in a heavy wine sauce (garlic, shallots, mustard, heavy cream, and of course red wine, reduced) with haricots verts (sautéed fresh green beans with shallots and lemon) with a nice Patriarche (Holly’s Hill Syrah, Grenache, Mourvedre).  Yes it was too much food, too much wine, and I dragged myself around all day Sunday, but worth every minute.  Life is short, seize the day…Carpe Diem.

Nine Bins Total - About 2.5 Tons of Syrah - Ready for Their Journey

In the last few blogs on the economy I have pointed out how conservative thinking on the economy is outmoded and as a result is the cause of many of the problems we are now facing.  The same is true for our approach to foreign affairs and that was on display during the Russian incursion into Georgia.   John McCain came out with a bellicose, “We are all Georgians” and Sarah Palin with her statement that we might have to confront them militarily.  It is vintage 1980’s stuff that is totally removed from where the world is today.

I have maintained in earlier blogs (”John McCain Experience?” and “Ticking Time Bombs”) that the reaction exhibited by John McCain and the conservatives is cold war thinking that has not evolved as the world has changed.  My contention is that Russia may find, as we did in Iraq, that these kinds of expeditionary adventures are extremely expensive and counter productive.  While the Neocons are seeing Russia as this big monolithic threat that must be met at the door, many others are understanding this will only exacerbate things when a more cool and calculated response will be much more effective.

First and foremost this was an exercise of Russian power near their borders on what they see as an ever-increasing United States threat.  How would you feel if Russia put missiles on our borders as we are doing in Turkey?  Oh, I forgot, they did and it was the Cuban missile crisis.  Secondly have you ever asked yourself what NATO does anymore and wouldn’t you be threatened by the expansion around your borders.  Of course Russia’s move was thuggish although goaded on by Georgia’s imprudent acts in that volatile region.  It is also funded by their oil wealth which we are contributing to.  But the reality is that it was counter productive.  Consider what Fareed Zakaria said on his show GPS:

“From Caucasian countries like Azerbaijan, to Poland and Ukraine, to the Baltic republics, everyone has been rattled by Russia’s behavior, and now seek stronger ties with the West.  Europe and the United States are more united than at any point in two decades. And outside the West, no country in the world has followed Russia and recognized South Ossetia and Abkhazia.

Moscow must be looking at all this and realizing that it has racked up huge costs for little benefit.

If there were to be another cold war, the outcome is preordained. The combined GDP of the West is now $30 trillion. Russia, meanwhile, has an economy that is just under $2 trillion, and that, too, artificially inflated by high oil prices.”

Consider what Tom Friedman (“Hot, Flat, and Crowded”) said in an interview on the same show one week later:

“For me, as someone who opposed NATO expansion at the time, because I felt that it was basically saying to the Russians, look, the Cold War is over for you, but not for us. We’re going to keep pushing our alliance in your face.

At the time they were weak. And at the time, you know, the administration told us, oh, don’t worry. The Russians — they’ll accept it. They’ll get used to it.

Well, guess what. They got strong, and they were never used to it. It was a humiliation. And so, it doesn’t surprise me to see what Putin is doing today.

It’s not an excuse. Putin’s got to get out of Georgia. I think the market’s actually going to punish him a lot more than he realizes and a lot of others realize.”

The bottom line here is that John McCain’s “experienced” response, reflective of the conservative’s view of world politics, is the wrong approach that will simply make things worse.  We need to understand that the Russians have real concerns we need to not just flip off.  Second we need to understand that in a world economy, Russia’s thugism will have negative consequences for the Russians.  The last thing we need to do is start another cold war to reinforce their thugism.  Even more important, we need Russia on our side.  As Tom Friedman put it:

“I looked at the world and I said, is there any problem in the world that we can solve without Russia? Any big problem, whether it’s Iran, Iraq — is there any problem we could solve without Russia?”

Our policy in the future is not reliving the past which is what the conservative Republicans will bring us, but looking for new ways to deal with aggression in a world where that aggression is becoming more and more counter productive as our economies and the welfare of our people are more and more entwined.  Or as Fareed said,

“A calm and deliberate policy toward Moscow is what the world needs, not hysterical overreactions.”

We are not all Georgians.

Congress will be considering a bill to allow offshore drilling this week and there is a lively debate going on about its merits.  We have seen the battle lines drawn and then we have seen the Democrats move the battle lines.  There was the chant at the Republican Convention of drill, baby, drill.  That was the anti-intellectual side of the argument of the Republicans on display.  There was no cost/benefit ratio considered.  What was on display was pure hatred for anything Democratic.   It was a poke in the eye aimed at Democrats, not any considered facet of the policy or honest intellectual disagreement of that policy.  It was a raw look at Republican faith in their conservative philosophy, the arrogance of their perceived superiority, and their distain for anything appearing to be intellectual reasoning.  But there have been some considered opinions on both sides, and they are worth looking at.

The first is “One if by Land, Billions if by Sea”, an op-ed piece in the New York Times by David Abraham who oversaw offshore drilling the White House from 2003-2005.  Mr. Abraham opines that the Republican Plan lead by John Boehner, the House Minority Leader, would give away federal resources to the states:

“Mr. Boehner’s proposed American Energy Act would, over the next decade, give nearly $40 billion from oil and gas royalties and leasing activity to coastal states that support drilling. And that would be just the beginning. After 2019, the federal government would transfer to coastal states 37.5 percent of all federal revenue from offshore oil and gas activity — at least $6 billion annually, based on current production alone. That’s nearly as much as the government spends on environmental-protection programs.”

In other words Mr. Abraham is concerned that the federal government would be giving way too much of its revenue to the states to spend any way they wanted, in effect having non-costal states that would lose this revenue in federal spending subsidizing these costal states that benefited from the drilling.  He wants the issue discussed on its own merits, not on buying votes with oil revenue profits.

The other piece is also appearing in the New York Times, “Save the Environment – Drill, Baby, Drill”, by Robert Hahn and Peter Passell (Robert Hahn is the director of the Reg-Markets Center at the American Enterprise Institute. Peter Passell is a senior fellow at the Milken Institute).  This analysis considers the cost/benefit analysis of drilling by using the income to fund environmental set-asides and offset environmental damage.  They note that the underlying anti-intellectual conclusion of the Republicans that it will help with gasoline prices is false, but then they look at the income and what it could fund, and conclude that it would be foolish not to drill for oil and use this revenue.

“For better or worse, “drill, baby, drill” is now widely viewed as the cure for what ails. Giving the public what it wants wouldn’t lower gas prices by any meaningful amount. But it would create an opportunity to move public opinion (and huge sums of cash) in the direction of good environmentalism and good economics.”

I find several big omissions in both of these discussions.  First and foremost is global warming.  Neither discusses the impact of continuing to burn fossil fuels on global warming and how this further dependence on oil will hinder/delay our development of alternate energy, which is the ultimate solution to this problem.  It is almost as if global warming doesn’t exist or there is no connection to the use of fossil fuels for energy and this massive threat to our environment.

Then there is the addiction issue.  If we continue to look at our problem as just getting more oil, we have done nothing to change our attitude about its use.  What has got our attention is the price of oil and gas so that we are looking for alternatives.  But even more important are the national security issues.  T. Boones Pickens has got this one right.  We are funding and making possible our greatest threats in the world, Iran, radical Muslim extremists, and let us not forget Russia.  When we consume 40% of the world’s oil and only have 3% of the worlds reserves, adding all of the reserve we can find in off shore drilling won’t change this equation in any significant manner.  So the  focus on more drilling is a focus on more consumption which simply exacerbates our national security problems.

Finally and related to addiction of oil use, is the addiction to the income from oil revenue.  Once states start to utilize oil as their principal source of revenue, thereby reducing the need for taxes for infrastructure improvements and other services like education, police and fire services, what do you think is going to happen when the oil starts to run out and citizens of those states have to pony up to pay for these services?  It will be drill, baby, drill, and it never ends.  Look at Alaska and Louisiana for examples.  Both are running surpluses in their state coffers and both totally dependent on oil income.  Once that addiction sets in, do we think they will want to show the sacrifice necessary to get us off oil to both radically improve our national security and deal with global warming?  Hell no.  Taxes are evil.  There is no shared burden in this mindset.

I think there is a middle ground, but the Republicans won’t think so.  Remember in politics money drives everything so the income going to the voters instead of enhancing our national security is the mantra of the conservatives.  But the answer is that we can allow drilling with the proper environmental controls (meaning expensive) and most of the revenue funding going to what is going to be an expensive national effort to move away from oil.  I would think that the only income to the states to benefit its citizens over all the citizens of the country would be to offset any cost or damage they might have to their state. Note that with oil and gas companies operating in their state, they are already reaping a benefit from the income produced and the state’s taxes on it.  Alaska comes to mind here.  This is the rational approach, but money is king and this will not happen unless we wake-up to the reality of what is happening to us by our own actions or lack thereof.  Thomas Friedman (“Hot, Flat, and Crowded”) describes an interesting analogy that may describe the path we are on right now.  When a man jumps out of a window on the 80th story of a building, for the first 79 stories he thinks he is flying.  It is when he reaches the 80th flight down that reality comes home to roast.  I think we are about 75 stories down already.

The problem with our economy has nothing to do with a few bad apples that Sarah Palin wants to clean out.  The problem is not tax cuts or some tweaking, but that our economic philosophy is fundamentally flawed by conservative dogma that doesn’t address the issues we face in the 21st century.  There was a day when conservative economic dogma worked.  That was in the 18th, 19th, and early 20th centuries.  This is when we were a young and expanding nation, where our individual actions were not so intimately entwined as they are today.  This philosophy embodies small government (“government is the problem not the solution”),  a market place free from government interference and regulation, low taxes, and fiscal responsibility.  It also purports that the rich  deserved their fortunes by staying faithful to this dogma, and the poor deserve their fate by lacking discipline in this system.  From their point of view the system has winners and losers and the system makes a fair selection of who they are.

Except for fiscal responsibility, most of these ideas should have been jettison at the beginning of the 20th century when world economies started to become deeply entwine and complex.  We got a wake up call in the Great Depression, but all those lessons were forgotten as greed got to be a good thing and wealth a measure of merit.  Nobody questioned the ever-increasing chasm between the rich and poor.  Sadly as I have written about before, conservative economic theory is really a religion and it is going to be very hard to shake their faith even though the failures are all around us to behold.  When the rich who benefit from these beliefs hold the strings of power, change is very hard to come by.

The only part of their philosophy that is still viable is fiscal responsibility.  The problem is that fiscal responsibility is what the conservatives think we need to restore immediately to re-energize the rest of their belief system and make it all work again.  But in this world they have made for us in the last eight years with mountains of debt and neglected infrastructure investment,  we can’t afford not to start investing in our future or be forever left behind.  In order for America to rise from the ashes, the government, yes the “problem” government, is going to have to lead us and invest in infrastructure, jobs, energy research, education, and health care.  Industry or the market place is not going to come to our rescue and do these things.  It is simply going to move off shore where they have made these investments so they can maximize their profits.  The road forward is an active and proactive government working with industry and the markets to restart innovation and our economy.  And once our economy gets started, government must play a much more active role in guiding our economy and, oh dare I say it, regulating it and making it a level playing field for all of us.

Conservative philosophy has always said that government is the problem and its role must be minimized so that market forces can drive the economy.  They look at market forces as the hand of God.  Government, they think, only hinders the market and corrupts its true direction.  They have starved the beast and gutted it of capable administrators and managers. They have terrified citizens with the supposed horrors of government provided services such as health care.  The reality is that we face such massive challenges that government is going to have to lead in many of the solutions, to provide money for R&D, to reduce risk for innovation, and to support private industry in acquiring the massive capital necessary for the energy, and infrastructure projects that will restart our economy and provide jobs.  It will have to step in and provide health care using one or a combination of the many successful models used by other advanced nations in the world, removing the profit motive from denying care thereby reducing health care costs and its associated drag on business.

It is also clear that unbridled greed creates an imbalance of wealth that is unhealthy and destructive.  As FDR said in 1936, “..freedom is no half and half affair.  If every citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the market place.”  Our government needs to play a role to ensure that all citizens share in the wealth.  In order for the economy to prosper it is government’s job to build the infrastructure to allow it to be competitive.  It needs to aid and massively invest in research and development, and for major energy systems, help in the master planning to institute such a system. It needs to work with industry to regulate where necessary and streamline where warranted.  And most importantly it needs to provide citizens who are healthy, educated, and prepared to be employed in those new industries.  And in return business and markets will pay reasonable taxes and be regulated so that the excesses of the past, repeating in the Savings and Loan disaster. Enron, and in the latest crisis on Wall Street will never happen again.  There mustl always be a check on unbridled greed so that we all benefit from good financial times.

And here is the really tough one:  We will all have to pay fair and reasonable taxes for all of this.  This is real fiscal responsibility.  Conservatives have made paying your fair share of taxes evil and disruptive to their accumulation of wealth.  Their view is to cut the services that help immoral people but never raise taxes to pay for what we need to drive the engine of the economy which might impact their accumulation of wealth.  Conservative dogma has given all the breaks to the rich because in their world of morals, the rich (both individuals and corporations) deserve to be rich.  The more money they make, the better it is for America.  But sadly it doesn’t work that way as they destroy the middle class with their mindless accumulation of wealth.  Government’s role is to level the playing field by empowering people to succeed.  Instead of unrelenting competition, government must focus on the reality that we are all in this together and unless all are sharing in the gains, we all ultimately lose.   All of this goes against the grain of the conservative belief system since they see all these resources wasted on those who are poor because they are lazy and stupid and investment in them is encouraging immorality.  It has worked well hasn’t it?

Look around you conservatives.  India, China, and the economies of the EU are going right by us because they understand the important role a government plays in industry and the market place in the 21st century.  They understand that unbridled greed produces an unequal distribution of wealth and marginalizes the middle class which is the real engine of the economy.  In most of these countries education is free. So is health care.  Their airports and communication infrastructure are more modern than ours. Their transportation systems allow multiple choices for travel and minimizes the need for an automobile.  They are producing more engineers and scientists than we are.  They just built the largest particle accelerator in the world after we canceled ours because it cost too much yet we are spending $10 billion a month in Iraq for what?.  In these countries governments work hand in hand with industry to create and support capital markets.  And they pay high taxes and almost twice what we do for gas, and they thrive.

So my question is when are we going to start pointing out the obvious conclusion that conservatives offer us nothing for the future?  They don’t have big thoughts or ideas.  When are we going to realize they can’t clean their own house because it is their basic fundamental beliefs that are the problem.  They would have to all renounce many of their beliefs.  This is not a call for socialism.  It is a call for a rational market place that we will make work for all of us instead of an entitled few.  Progressives over the years have co-opted many of conservative good ideas such as individual responsibility and that markets can be the best place to solve many problems.  But conservatives with their religious devotion to their dogma never recognized or incorporated the good ideas of the Progressives, or imagined how a government might be the catalyst for the really big ideas.

Conservative ideas are mired  in the 19th century.  It is time to move on boys and girls.  It’s time to say out loud that conservative philosophy and economic dogma is stagnate and it is strangling us.  It is time to jettison the whole bunch.  Oh how I yearn to think the big thoughts again, of what is possible and what we can do as a nation if we come together and let our government lead.  We did that in the 60’s and government and industry went to the moon.  We could do it again.  There is still time, but not much.

I guess you could say that America is facing the greatest crisis of its history in the pending collapses of the economy and the capital markets on Wall Street.  Yet the answer to all our problems according to the anti-intellectual, anti-rational thought Republican Party was reflected in their chant at their convention, drill, baby, drill.  Recently during Congressional hearings on drilling   Senator Sheldon Whitehouse of Rhode Island made this point abundantly clear:

WHITEHOUSE: “Gentlemen, we’re in the middle of a near total mortgage system meltdown in this country. We have a health care system that burns 16 percent of our GDP, in which the Medicare liability alone has been estimated at $34 trillion. We’re burning $10 billion a month in Iraq.

This administration has run up $7.7 trillion in national debt, by our calculation. And there is worsening evidence every day of global warming, with worsening environmental and national security ramifications. In light of those conditions, do any of you seriously contend that drilling for more oil is the number one issue facing the American people today?”

Do you remember any speeches at the Republican Convention on the economy?  Nope just what great character ex-POW John McCain has and Sarah’s speech of derision without any substance.  It was mocking arrogance.  Maybe those rural voters will finally wake up as our economy is going up in smoke and realize that these fat rich white Americans do not represent their interests.  Conservatives believe in small government, little regulation, and a free market.  The excess in those beliefs got us to where we are today.  Simply stated, there will be corrections in the market, and the present correction is for unbridled greed.    Regulations are intended to prevent the corrections from being too severe.  What Wall Street did was circumvent the regulations by creating new unregulated financial institutions and instruments that allowed their unbridled greed to soar.  There absolute belief in the marketplace and that greed creates wealth for all ran amok.

Now the Democrats are not blameless here, but there is a big difference.  Conservatives have an absolute faith in the market place; that the more wealth created all will benefit and  “corrections” will keep it honest rewarding the good guys and punishing the bad guys.  Democrats have always favored regulation to limit the impact of these corrections.  The Republicans have weakened any regulation bowing to their god, the unfettered marketplace.  The Republican’s solution to the mortgage crisis that is at the root of this problem is to blame the borrower, in this case the homeowner.  The fact that they crafted loan instruments that sucked these people in has no bearing on the borrowers poor judgment in accepting these loans.  So their solution was to let the homes foreclose and the market place would provide the punishment for bad choices (read poor discipline).   But if the home foreclosures domino into bank foreclosures that creates a loss of investment capital in the marketplace, then the whole country and possible the world will suffer, while the marketplace “corrects”.  Note that they blocked any attempt to help out homeowners.  The point here is simple.  Blind faith in the marketplace and its corrections without the moderation of government regulation  may make the correction more than any of us can stand, yet this is the conservatives creed.

What voters now have a chance to reflect upon is whether the Republican stewardship of the economy and their absolute faith in the market place has improved their lives.  We have been creating wealth, but in a precious few at the top, and the net effect is that more and more people are poor.  Inequality in terms of separation between rich and poor is growing rapidly.  Even without this catastrophe, it was clear that this economic philosophy of flow down and deregulation was bankrupt.  We were shipping our economy overseas and borrowing to maintain our lifestyle.   But what came next  and encouraged by the conservatives was unbridled greed that was looked upon as having merit in that it benefited the whole country (seek your self-interest and we will all prosper).  Enron did not teach us the lesson sufficiently and the mortgage crisis could be the mother of all crises.  Note that all our recent big financial failures from the Saving and Loan crisis, to Enron, to the latest mortgage crisis have all occured while Republicans were looking the other way fattening their nests.

The lesson here is that counter to Republican “me-firstism and seek your own self-interest and we will all gain”,  we are all in this together.  Unbridled greed brings unbridled tragedy.  If you want to continue this insaneness then I strongly suggest you vote for John McCain and Sarah Palin. Fat white rich people will because they have benefited from this robbing of the American treasury and transfering of wealth to a few.   By the way, I am a fat white, moderately successful white person and I think this choice is insane.  Remember John’s chief financial advisor, Phil Graham, said the economy is just fine and Americans are whiners.  Sarah has been living in a oil welfare state her whole life.  Real economic issues, hard decisions and economic suffering are all alien to them and they have bought into the blind faith of the marketplace because it has benefited them personally.  John is saying to elect him and he will clean up the abuses in Washington that has allowed this.  It never occurs to him that those abuses are his basic conservative philosophy.  That’s like the Pope telling you he is going to convert to Judism.  Fat chance.

We have a long painful road ahead of us.  The Republicans will ignore their role in this catastrophe, blame Democrats, and encourage you to trust in them for the future as “businessmen”. Somehow this will be the Democrats fault.   I would just say that their basic philosophy is flawed, their mindless adherence to it has gotten us in the condition we are in, and it is time for change. If we get anymore of this businessmen who want to run government like a business we are sunk.  If you morons in rural America can’t figure this one out, you deserve your fate. Keep clinging to your guns, religion, and small town values.  Pretty soon we will all be living in small towns.

On a positive note in the middle of this morass of trouble, I would suggest that many of you read Thomas Friedman’s new book, “Flat, Hot, and Crowded”.  He provides a way out of this morass, but it will take a whole change in perspective, and the willingness to sacrifice for our future.  I not sure Americans have the discipline to do that anymore.