On the Contrary

If you went through Tuesday with dry eyes you have no heart.  It doesn’t make any difference if you voted for Barack Obama or not, Tuesday was a great day for America.  Watching people who never thought they would see this day stare up at the podium with tears coming down their face was truly moving.  For a few short moments we really were all one.  Who would not be subject to strong emotion to see the celebration of that jubilant crowed estimated between 1.8 and 2 million culturally diverse people shedding tears and smiling ear to ear at this great moment in history?  Well, the majority that live in my county, but I live with Neanderthals.

On Sunday I watched the “We Are the One Concert” and I kept saying where the hell is Aretha?  You can’t have a concert about America without Aretha Franklin, although Garth Brooks definitely lit a fire.  By the way I shed a few tears at that one too.  But on inauguration day there was Aretha adding the topping on a great warm-up to the swearing in.  I just wish they would have let her do a couple other numbers to really warm up the crowd.  My guess is that her version of the national anthem would have been a barn burner.

I got up at 5 a.m. (PST) so I wouldn’t miss anything and sadly I didn’t miss the pundits try to rain on the party.  It is amazing that they don’t get it.  They wanted to revert to discussing the politics, pick the old partisan fights, and put limits on what can be accomplished.  I guess it is all they know.  If they had listened to the President Obama’s speech they would know that “the ground has move under our feet”.  People want to give this man a chance.  The old fights and conservative approaches have gotten us nowhere.  Now the feeling in the nation is let’s try it his way and see if it works.  But I think they started to get it when they saw and were moved by the masses that turned out to be part of this moment.  Maybe we are not so limited by old thinking.  As much as they wanted to dash out our hope with their old politics, it was not possible on this day and even they were moved by the moment.

I thought the speech was good, but not great.  But then every time I heard it again, I realized how much more was in that speech than when I heard it the first time.   I recalled that at Gettysburg, the crowd did not respond to Lincoln’s great words, probably stunned by the shortness of it.  Although I won’t pretend this was a Gettysburg Address, President Obama really did eloquently establish a new and different path for this country and one many of us have been hungering for.  I thought Reverend Joseph Lowery added just the right touch to close the ceremony, “In the joy of a new beginning, we ask you to help us in the day when black will not be asked to get back; when brown can stick around; when yellow will be mellow; when the red man can get ahead man; when white will embrace what is right.  Let all those who do justice and love mercy say Amen.  Say Amen. And Amen.” Watching 2 million culturally diverse people he had just described wave their flags made me so proud to be an American.

It was a wonderful day.  But if you really want to understand what this man is about, you just needed to watch the endless marching bands at the end of the day.  You know that he, Michelle, Joe and Jill Biden had to be exhausted and cold, and then to stand and watch every single band march by when most were going home, was an act of kindness and respect.  He really does care about us.  We are very lucky to have him.

Today we put a black man in the highest office in the country.  But whether he is white, black, blue, or green, it is apparent he is the man we need in these difficult times.  It really doesn’t make any difference anymore.  I don’t really see this as overcoming racism, so much as rationalism triumphing over emotionalism.  It was a good day.  Oh did I memtion George Bush has been sent packing back to oblivion in Texas?  It was a great day.  Tomorrow is our future and it is in good hands.  Seeing that the Republicans delayed Hillary’s appointment needlessly tells me it will be back to things as usual from them.  This could be their final undoing if they keep this up.

A breath of fresh air is blowing in from Washington.  For me it is like leaving the 80’s and going straight to the 21st century.  It’s a chance to stop doing stupid things, to be free to think new thoughts.  It is like losing 30 pounds and having this new body where there are all kinds of new possibilities.  It’s like being twenty-something again and having your whole life in front of you.  The change has already been palpable in the celebrations that speak to a younger generation and the look of hope in the participant’s eyes.  The reins of government may have finally been wrested from fat old white guys with tired ideas.  Hope instead of fear may be the order of the day. Rational thought and fact may finally overcome ideology.  Ignorance may no longer be a badge of honor.

But least we forget where we have been, here are a few of the tidbits from the weekends news to remind you of how much we have to overcome:

• In the last three months, at least 24 detainees have been declared improperly held by courts or a tribunal — or nearly 10 percent of the population at the detention camp in Guantánamo Bay, Cuba, where about 245 men remain (New York Times).  Think about it.  10% of your life being held, mistreated, and quite possibly tortured, and then released with a  “Never mind”.  Those that are truly guilty and should face trials will not be tried because out treatment so tarnished our behavior that a fair trail is no longer possible.  We might as well just release them and face the consequences.  If they didn’t hate us before, they do now.
• As Representative Pelosi pointed out in her differing position from President Obama on repealing the Bush tax cuts, “Nothing contributed more to the budget deficit than the tax cuts for the wealthiest people in America.”  Now we are starting a major fight against a downturn in our economy with a debilitating debt run up by the Bush Administration (Associated Press).
• Judge Vaughn Walker rejected the ridiculous claim by the Bush administration that no one can sue for illegal wiretapping unless the government admits the surveillance.  This puts the Bush administration’s violation of Americans’ rights when it intercepted their phone calls and emails without seeking a court’s permission back in play and maybe we will finally get a full airing of what went on and how our rights have been violated (San Francisco Chronicle).
• Abstinence-Only Programs to be challenged.  The Bush administration spends $176 million to push abstinence only programs that have been shown to be ineffective to deterring teen sex and in fact may lead to more frequent occurrences of unprotected sex.  But stupidity and ideology dies hard and in places like Georgia (the South, where else?) they are going to continue to throw their money away on this program.  For some people facts are just too hard to accept but maybe we won’t be wasting federal dollars on failed ideas any more (Plain Dealer).
• Paul Krugman made an elegant argument why we can’t just look the other way on torture, politicizing the Justice Department, illegal wire taps, et. al., and move on (New York Times).   We know President Obama will move immediately to make sure that even the CIA won’t torture anymore, but we don’t know if he has the political courage to face the war crimes and other laws we have broken.  We must hold those who committed these crimes against America accountable.  If it is a new day in America, actions must have consequences and the rule of law must prevail.
• And finally maybe we can end that moron approach we have to Cuba that has been driven by right wing Cuban refugees that has been totally counter-productive, made Cubans suffer, and helped prop up Fidel Castro.  Wouldn’t that be a breath of fresh air?  If we could make this change maybe we could even understand that gays threaten no one.

It is a truly new day and hopefully we can start looking at policies we have been promulgated and judge them truly on their efficacy, not on partisan ideological need.  That is the promise so many of us are so excited about.  Welcome President Obama.  May the wind be at your back.

As President-Elect Obama is inaugurated as President of the United States, you are going to hear over and over again the refrain, “It really is true, anyone can be President.”  It is a great moment for this country.  But don’t be fooled by the rhetoric.  Atheists and Muslims need not apply.  We still have a religious test for office and if you are not a mainstream Christian you don’t have a prayer, so to speak.  But the most important lesson to be learned here is that not just anybody can be President.  The case in point is the last occupant of the White House.

The latest polls indicate that at least 73% of us (only 27% approval rating) understand that the presidency of George W. Bush has been an unmitigated disaster.  One has to wonder what the other 27% are thinking about.  In the San Francisco Chronicle Saturday, that minority was heard from in a letter to the Editor from Mr. Randy Kelly thanking President Bush for:

• “Standing up to the terrorists and keeping us safe for seven years” – Of course he totally ignored warnings up to 9-11; there are more terrorist attacks throughout the world than ever before; you can’t prove the negative; intelligence tells us that Al-Qaeda had other strategic goals; and our own National Intelligence Estimates tell us that the threat is greater than it has ever been
• “For freeing the people of Iraq and Afghanistan from unthinkable tyranny” – Ignoring that Afghanistan according to Adm. Mike Mullen, the Joint Chief of Staff, is a war we are losing; and that Iraq is really a theocracy whose stability is very much in question; and there are still 4 million displaced Iraqis
• “For 6-plus years of economic expansion, low interest rates/inflation and record home ownership” – Ignoring the question of economic expansion for whom since the middle class is actually losing ground; the gap between the rich and the poor is greater than it has been since the Great Depression; low interest rates allowed plenty of available capital to fund the housing bubble; and more people are losing their homes than in any time in our history; we have the greatest run up in national debt of any President; and the economy is in shambles as he leaves office
• “For appointing justices and judges that respect the Constitution and the rule of law” – Mixed message here as the retired judge he appointed to oversee the Guantanamo trails finally called proceedings failed due to torture, but what he really means is justices and judges who agree with him where his definition of activist judge is anyone who doesn’t agree with him or his interpretation of the law
• “For respecting life, including the unborn and millions of AIDS victims in Africa” – Ignoring that along with his aid to AIDS Victims was the denial of condoms to prevent AIDS; his stand on stem cell research that prevented advances in medicine that could save millions of existing suffering human beings; and dividing this country once again on the abortion issue which most of us hope is settled law
• “For being a commander in chief that the military respected and supported with unprecedented re-enlistments” – Ignoring that Americans always answer the call when their nation is attacked; that it is now clear that he lied to them and us about Iraq (think Pat Tillman); and that for many the only jobs available are in the military
• “For carrying yourself with class, dignity and integrity even in the face of classless attacks from a biased media and way too-liberal Congress” – Ignoring that that “way too-liberal Congress” was Republican for six of the eight years he trashed our Constitution; that that dignity and integrity led to Abu Ghraid, and Guantanamo; and that biased media basically went along with him to get us into the Iraq War

I guess the devil is in the details.  And it is the details that either makes a great President or a failed one.  Chris Matthews, who can drive me to distraction with his interrupting style of interviewing, hit upon the underlying truth about this President in his commentary after President Bush’s farewell speech.   Paraphrasing Chris, President Bush did not have the intellectual depth to be able understand the complexities of the issues or have the historical perspective to deal appropriately with those complexities.

Take his simple-minded approach to spreading democracy.  What we got was the election of radical terrorists in Lebanon and Gaza.  Had he a better understanding of the Enlightenment that proceeded our own awakening constitutional democracy, he may have understood that voting alone is not democracy.  Had he an understanding of the history of the Middle East and their culture, we may not have invaded Iraq or failed so miserably in Afghanistan.  Had he an in depth understanding of how capitalism and its abuses have lead to economic collapses, he may not have been so ready to deregulate everything.  Had he a real understanding of human rights, he would have understood that torture violates everything we stand for and the short-term gains result in our long-term demise as a moral leader and force in the world.

So back to my point:  No, Virginia, there is no Santa Clause and no, not everyone can be President.  If you want to be President, you need to be well prepared with an in depth understanding of history and culture. You need to be one of those pointy headed intellectuals that President Bush and his minions, who have brought this country to its knees, so often disparaged.  You also need to be exceedingly emotionally mature, to be able to listen to criticism and learn from it instead of just reacting to it.  You will know the difference between being confident and being arrogant.  You will know what you don’t know.  And most importantly, you can learn from your mistakes.  Those that are truly qualified are few and far between.  Barack Obama may just be one of those few.  He certainly will be tested soon enough.

In the news are three related law and order stories that may say a lot about us as a people.  They are the Madoff scandal, the killing of an unarmed detainee by a BART policeman, and the Supreme Court’s latest ruling on the exclusionary rule.  They say a lot about us because in the first two cases we seem to not understand our criminal justice system, and in all three, raise questions about the abuse of power.

You all are familiar with Bernie Madoff and his Ponzi scheme that destroyed fortunes (ABC News).  The issue in the Madoff scandal is the mob demanding punishment before a trial.  How can a man who has destroyed many people’s lives be allowed to stay in his million dollar town house while normal criminals are sent to Riker’s Island to await trial?  Is he being giving special treatment because he is a white collar criminal with lots of money?  “Throw the guy in the clink.  He deserves worse.”

I am sure Bernie did do all the bad things that he is being accused of.  But the operative work here is accused.  If you follow the logic of throwing him in the clink now, then why bother with the trial at all. Get out the rope! Bail is not supposed to be punitive, because you have not been convicted of anything.   Remanding him to jail is based upon flight risk and the danger he poses to the community of which both are negligible.  Yes he is being treated differently than a common crook, because in general the common crook is both a flight risk and a danger to society.  As much as I think Bernie should be punished for what he has done to people, the idea of punishment prior to a trial and a conviction because we have already convicted him in our minds violates the whole basis of our justice system.

You are all probably also familiar with the BART (Bay Area Rapid Transit) Cop who apparently shot an unarmed detainee in the back as he lay on the floor (San Jose Mercury News).  This has been followed by riots in Oakland and calls for the end of police brutality.  I watched an activist on CNN call for an end to all police brutality and racism especially in communities like Los Angeles and Oakland as though these violent communities and police brutality are unrelated.  As far as the rioting is concerned, consider it a symptom of why the police brutality might occur.  As for the act itself, I think what people are assuming based upon eye witness testimony and a cell phone video seems damning, but we don’t know yet what happened and quite frankly I doubt that in full view of his peers and witnesses, the policeman in question meant to shot and kill the suspect.  It will be sometime before we know that answer and as in the first case, what is being exhibited is lynch mob mentality.

When the dust clears, regardless of the culpability of the BART cop, one has to focus on two issues if this problem is every going to be solved.  One of course, is the issue of police brutality that we have seen exhibited all too frequently.  One would have to ask how police forces hire people who have a proclivity to abuse their power.  But the other side of this coin is that sometimes the environment they work in brutalizes them.  Oakland is a very rough neighborhood where the murder rate is one of the highest in the country.  If you are a cop in this environment, it would take a true saint not to start stereotyping your protagonists for self protection.  It may not be right, but we have to understand that the community and their lawlessness may bred a police force that is prone to force and brutality.  I haven’t seen this acceptance yet that this may be a two-way street so that both the police and the community can work on this problem instead of pointing fingers.

The last item was a ruling by the Supreme Court that innocent procedural mistakes by the police should not necessarily exclude evidence in a trial (New York Times).  On this one I have mixed emotions.  The point of the exclusionary rule was to prevent police from abusing their authority and power in an investigation to gain a conviction.  It was deemed that any infraction of the rules in gathering evidence should result in the evidence being excluded because that would be the only effective way to check police “stretching” and quite frankly violating constitutional rights even of the innocent.  On the other hand where the mistake is an honest one, why should the guilty be allowed to go free?  Well the devil may be in the term, “honest mistake”.  But on this one, I am going with the court majority on a trial basis.  One size never fits all and over broad laws have a tendency to be unjust.  On the other hand flexibility begets abuse.  But I think we are better served if we see if this change can be implemented effectively to provide justice instead of outcomes based upon technicalities.  The real test will be whether the police and our judges understand the difference between honest mistakes and incompetence.  We will see.

Paul Krugman has written an intriguing book called “The Return of Depression Economics and the Crisis of 2008”.  It is an important read for most Americans because it probably says more than any other piece I have read so far about our way forward.  Oh, I know what you are thinking.  “Paul Krugman is that liberal economist who just wants to spend, spend, spend.”    Well that is what he is recommending for our present situation, but unlike most Republicans he doesn’t spend, spend, spend, while cutting taxes.  But this book, whether you agree with his prescription for curing what may become a Depression or not, is more about the state of economics.  He goes through each of the various “cycles” that we have gone through in the last century in the world economy and tries to make sense out of their cause and effect, and the lessons learned.  Since I know that most of you won’t read his book, I am going to try to synthesize the main points (which Dr. Krugman may dispute) which should be non-partisan.

If you read my blog, The Dismal Science, you know that way forward for our present predicament depends upon your political perspective.  The big debate is between tax cuts versus public spending, and how big should the public spending be.  One very enlightening exchange was between Nate Silver of Fivethirtyeight.com and Professor Greg Mankiw’s article in the New York Times on Sunday (Is Government Spending Too Easy an Answer?) where the debate revolved around a study that Mankiw claimed showed that tax cuts are highly effective in producing economic stimulus and Silver claimed this was a complete misreading of the study.  You can read it for yourself, my point here is not who is right (Silver obviously is, but that is my political perspective), but that cause and effect in economics is still being argued and disputed along partisan political lines instead of scientific logic.  For those of you who care, the problem is that there are too many variables so the root cause is always up for grabs depending on which variable you think had more impact.

What Professor Krugman does is try to make sense out of all this mish-mash, and even if you don’t totally agree with his cause and effect analysis, the overall thrust is undeniable if not disturbing.  This, simply said, is that there is a lot more risk in the economic world that we ever imagined, and our ability to control this risk and our economy is a lot less than we imagined.  As we go through each crisis from Japan, Asia, Mexico, Argentina, Brazil, or the United States what we find is ever increasing complexities of investments and financial instruments that are more and more susceptible to controlled or uncontrolled changes in the market.  Currency fluctuations and the attendant currency speculation impact investment viability and financial arrangements.  What becomes most evident is that a fix for one nation’s problem exacerbate another’s.  Add to that the free flow of world capital and what you have is a system that is driven by expectations and confidence, said another way, psychology and rumor.  Where in the past runs on banks could be localized and controlled, massive movement of capital (pulling it out of one market to go after another) is now internationalized and computerized.  The bottom line here is that even normal downturns in the business cycle are now reflected across nations, and in some cases magnified worldwide.

We have assumed that we could control our fate by normal monetary policy (interest rates and liquidity) and we are finding out that these are less effective than we thought in a global market place.  We are finding out that our evaluation of risk in investments is much more an iffy proposition.  We are finding out that things we thought weren’t critical to the safety of our economy (and thus required little or no regulation) can cause catastrophic changes across the entire economy.  If you are a fan of chaos theory, think about this:  predicting weather accurately requires the input of almost an infinite number of variables.  It is not really a chaotic process, just that there are so many variables and their interaction so complex that ignoring just a few throws the whole prediction process off.  Welcome to our complex international economy.

We have allowed the free enterprise system run free, or at least controlled those things that we thought could prevent or reduce the impact of major downturns.  Think about simple things like a Federal Reserve System and Federal Deposit Insurance that prevent bank runs, or keep banks solvent during a run  (even if that run has no rational basis).  While these controls have worked in the past, new markets and their mechanisms may make them obsolete.   If we want a world economy that is less volatile, then we may get a free enterprise system that is a lot less free.  Otherwise we are just starting to see this volatility as a normal part of the business climate.  Businesses thrive when they can control their risk, in other words to have some certainty about their investment.  When they can’t, they withdraw from that market or place marginal bets and that starts the downturn of a cycle.  Controls were designed to minimize these perturbations and they aren’t working.

The real issue with all of this is that there is no real agreement on what steps can be taken to reduce this risk.  We don’t yet know or at least don’t have an agreement on how to fix this volatility, what needs to be regulated and protected, and what doesn’t.  What you are left with is that the old answers that have been our conventional wisdom about our economy may now be obsolete.  Think of Einstein’s Theory of Relativity’s impact on Sir Isaac Newton’s Laws of Gravity:  Newton wasn’t wrong, just overly simplistic as we came to understood the complexity of the universe around us.  As these arguments go on around partisan political ideology, our economy may be truly adrift (My conclusion not Professor Krugman’s).  We are truly in uncharted waters and the way forward is quite unclear.  Depressed Yet?

It is the start of the new television session and one of my favorites, 24, has returned.  I enjoy a good thriller as Jack Bauer shoots and tortures his way through the plot to save the world, but to enjoy it I have to suspend my disbelief.  In other words, I know it is fiction.  That is apparently not the case for some of our conservative columnists who watch the show and then say, “see, torture works.”  The prime example is Debra Saunders of the San Francisco Chronicle on Tuesday morning (From Jack Bauer to Leon Panetta).  She used the show as an example of times when “extreme interrogation techniques” might work and once again cited the claim that the torture of Abu Zubaydah “disrupted a number of attacks, maybe dozens of attacks” when performed by “professionals.  This has been widely refuted elsewhere and there is not one shred of evidence to support this claim, but Debra picks her sources of information selectively to support her misguided views. I will leave the refutation of these misguided ideas to others, but let’s focus on the Jack Bauer thing because it tells us a lot about the misinformation about torture.

The plot starts out when Jack is before a Congressional committee meeting being attacked for his “extreme interrogation techniques”.  The failure in logic in all this is that you have to assume that the torture worked.  You have to believe that they got the facts and they prevented some horrible act against the American people, thus your suspension of disbelief.  My suspension of disbelief arises from my training during the Viet Nam war to resist torture.  To make a long story short, most of us flying combat missions were trained on how to resist interrogation.  It began with the basic premise that name, rank, and serial number wasn’t going to cut it, and eventually they were going to get more.  Second was that if you had any information that would help the enemy, it probably was only good for about 24 hours (plans are changed once you are compromised).  So we were taught how to obfuscate effectively.  I won’t bore you with the training or the simulated prison camps and interrogation we were put through, but we were taught that one technique was to lie effectively.

Back to the plot line in 24:  Jack has to get the location of a renegade government agent and he threatens to poke the bad guy’s eye out with a pen after the bad guy refuses to talk.  Note that the information is highly time sensitive, which is the whole justification for the extreme interrogation measures.  Now, of course, when the bad guy is threatened he agrees to spill the beans (here is where you have to suspend your disbelief which is the part Debra doesn’t get).  All the guy really has to do is send them on a believable wild goose chase.  Not only would he have stopped the torture, but he would have tied up their resources on a wasted effort.  In the case of the plot line, he could have sent them to last location they were at because they would have moved once he was compromised.  In these situations you simply have to cause a delay because the information is time sensitive and the good guys have no way to determine if the information you are giving them is true.  In the real world think about “Curve Ball” here who gave Cheney all the false information he could ever want.  We have been misdirected in Iraq now for almost five years.

In the second instance, a captured bad guy is on a ventilator, but can talk (ever seen anyone on a ventilator talk?) which requires another suspension of disbelief.  But the FBI agent who sees that shouts and threats are going nowhere, decides to crimp his ventilator line and of course, he spills the beans.  Now in this case his lawyers are right outside the door so all he has to do is delay a minute or two.  So fake your terror, tell this agent some bogus, but believable location, and off she goes on a wild goose chase wasting time and resources.  In other words, from my training and rational mind, these scenes are not believable, but I go with the flow to enjoy the story line.

So in the popular medium we have this idea that torture works.  My naive mind assumes that everyone else can see through the failures in this logic, but after reading Debra, I see that even though she rejects Jack’s simple minded approach to torture, she thinks a more reasoned approach to it is effective.  But keep in mind the time sensitive nature of most information you are seeking.  It makes the information you are seeking uncheckable and as a result highly unreliable.  There is a high probability of misdirection and wasted time.  Second, as soon as you compromise the source, you are assuming your enemy is not smart enough to change his plans to thwart the information you are getting.  Back in my Viet Nam days, torture was very effective and getting you to say anything they wanted, eventually.  Note that none of the information they wanted was of tactical value.  They wanted you to disown the actions of your country for propaganda purposes.

But if you still reject my logic consider this:  I flew missions where there was the probability that I might be shot down and subjected to torture.  What gave me the courage to do my job was knowing that I fought for a country that did not treat people that way and followed the Geneva Conventions.  Debra and her bunch want us to jettison that important value.  My question to her is simply what would I be fighting for anymore if we have become them?

I am going to start focusing on the economy, especially since the Conservatives have started beating the drum that the New Deal failed (see Republican’s Talking Points:  The New Deal Failed).  It is such a lie, and will further weaken our country if they succeed.  Our biggest problem is that most of the population doesn’t read so their knowledge and understanding of where we have been is minimal, probably fating us to repeat the failures of history.  But there were a couple of items in the Sunday talk shows that need some clarity:

• On Meet the Press David Gregory is still no Tim Russert.  David’s biggest flaw is that he is still a creature of the conventional wisdom and has a hard time really challenging respected pundits of that conventional wisdom.  In particular, Paul Gigot from the Wall Street Journal was arguing that the Federal Reserve had pushed $2 trillion into the system and that this will have the desired effect down the road, no matter what Congress does.  What he is really arguing is that there is no need for a New Deal and that we should focus on the tax cuts, “I think a, a tax cut, a big corporate rate tax cut, for example, or an across the board tax cut would be a lot more stimulative than this public spending, which has to come from somewhere.”  I wonder where he thinks the cash for the tax cut is coming from? I have several thoughts here:  First our infrastructure and its ability to support a vibrant economy in the future is degrading.  So what is his plan for investment in these things?  I’ll give you a hint; he doesn’t have one.  Second, isn’t this tax cuts for the rich again?  How does this help considering the tax cuts they got over the last eight years?  What about the GAO study that shows that two-thirds of businesses don’t pay taxes?  Finally, looking at the Japanese experience and other stagflations, monetary policy never cured the problem without the extra help of massive spending.  In other words private spending is not enough to get the economy going.  Why doesn’t anyone challenge these “pundits” of yesterday’s conservative economic ideology that is all based upon flow down economics, with these facts?  Like I said, David Gregory is no Tim Russert.
• CNN did some really good reporting over the weekend on the economy, especially the film on the deficit called I.O.U.S.A, which showed how the deficit ballooned under Ronald Reagan, was actually coming down at the end of the Clinton years, and has tripled under George W. Bush.   What all this demonstrated was that conservative economic ideology is a road to devastation, but played into the conservatives hands to make you afraid of the deficit so that the short term spending required to stimulate the economy will be tempered by this fear.  In almost every other show, deficit spending was advocated with a mixed message.  This was especially exemplified by host Christine Romans of CNN who would mouth the words, “we need to increase the deficit in the short term”, but the sighs and eye rolling (body language) was giving the stronger message of be afraid.  What really drove me crazy was that although everyone seems to agree that at some point we will need to reign in the deficit, no one had answer for how.  It is a legitimate question for the press to ask what that plan is, it is not legitimate to let the “loyal opposition” criticize the Obama plan, and not give their own plan for this.  As I noted Sunday (The Dismal Science), World War II began the biggest deficit spending as a percentage of GDP we have ever experienced and healed the Great Depression.  The Obama administration will not have the advantage of this kind of focusing event so that people understand that the short term is our future.
• Then there was the discussion of the Israeli/Hamas war on Fareed Zakaria’s GPS.  After some lively debate, one of the guests, Hanan Ashrawi from the West Bank, a moderate Palestinian was asked a direct question:

ZAKARIA: Hanan Ashrawi, you are a Palestinian moderate by everyone’s acknowledgement. So, let met ask you, what do you want from Israel, from the United States right now? What do you think would bolster your power and influence in Palestine and in the region?

ASHRAWI: I think there should be an immediate, immediate cessation of violence. Stop the assault on the Palestinians.

People don’t see this as an attack on Hamas, which is, of course, a large movement with a small militia or military wing. And a regular army cannot defeat irregular forces, as you know.

And the casualties and the victims have all been, on the whole, the innocent civilians. This has to stop. Men, women and children are being killed. Whole families are being obliterated.

This is very, very painful. And it is creating a sense of anger, hostility, extremism among the Palestinians, and tremendous pain and suffering.

Let’s find quickly, quickly a solution that addresses the real issues, that addresses the real causes. We cannot afford anymore a business-as-usual approach to peacemaking.

She said nothing.  Where was the risk taking to find a solution?  What she said was stop the violence and then find a solution.  Isn’t that what has been done in the past in this ever spiraling circle of violence?  Here is the problem in a nutshell.  It is time to let violence run its course.  When people get desperate enough, then they will compromise (Disproportionate Response?).

Another week where hard questions are being either dodged or not asked.  Oh well…

“It is often stated that the Victorian historian Thomas Carlyle in the 19th century gave economics the nickname “dismal science” as a response to the late 18th century writings of The Reverend Thomas Robert Malthus, who grimly predicted that starvation would result as projected population growth exceeded the rate of increase in the food supply.” (Wikipedia)  Eventually he may still be right.  I like to think it is a dismal science because it really isn’t a science at all.  If you are listening to competing economists today recommending what our way forward should be, it is clear that each has a different set of “facts” or root causes.

Recession, depression, deflation, inflation, stagflation, pick your economic malady.  For fixes we have monetary policy (interest rates and controlling the money supply), and economic stimulus (direct government spending and tax policy).  We all know that there are business cycles.   Sometimes people spend and sometimes they don’t.  When they don’t, we go into a recession.  When people are spending (assuming they have money to spend) then goods and services are flowing, there are jobs and incomes.  If they are spending enough, then the economy grows to match their demand.  So what causes them to not spend or not to spend enough to keep us growing?  That is the critical question of economics because if we understand the root cause of these problems, we can prevent downturns or at least control their severity.  But based on the recent battling economists made all the more shrill by the ideological needs of the Republicans, and our inability to control our problems in our current economy with monetary policy, it is clear that the evidence for root causes is still open to debate.

Our current condition certainly was caused by the housing market bubble, or more specifically the implosion of the financial markets.  Michael Lewis and David Einhorn wrote an intriguing piece in the New York Times a week ago about the multiple factors that lead to the financial bubble and burst (“The End of the Financial World as We Know It”).  So much for the Masters of the Universe and unrestricted/unregulated capitalism.  One more conventional wisdom hits the dust.  I am probably oversimplifying, but what this did was take a great deal of money out of the system (devaluation or outright loss of equity).  So this shrank the system, but more importantly made people fearful.  And here is the bottom line on the economy:  Confidence.  Not only did a great deal of wealth go away (ability to buy and invest), but people’s willingness to spend or invest went away also, beginning the contraction of our economy.  Coupled with that is the unwillingness of banks to lend (if people wanted to borrow) because they know there is still a great deal of bad debt out there that is unexposed (another outcome of no regulation) and banks have no confidence in who really has the ability to pay it back.  Put another way, risk is out of control right now and everybody is holding on to their money.

So one way to look at what the Fed did was to put a whole bunch of money back, and lower interest rates (increase the money supply), but it was not near enough and did not restore confidence. People are still turning inward and hunkering down, financially speaking, for the bad times (except for me of course doing my best to keep the economy running through Amazon.com).  In other words the economy is still shrinking and it is feeding on itself and continuing to shrink.  Confidence said in another way, is the mood in the nation that says tomorrow will be better than today, I can buy stuff today (or invest) because I will be able to pay it off tomorrow (still have a job, with an increasing income), or my investment will grow.  Now monetary policy has failed to stimulate the economy and we are left with our only other tool, direct economic stimulus.  That leaves us with direct government spending and cutting taxes.  That is where the games begin.

In either mode, cutting taxes or direct government spending with a contracting economy is going to start pushing the deficit skyward and we have all been conditioned to fear a growing deficit.  But the argument against worrying about the deficit right now is that if we don’t get our economy jump-started, the deficit growth will look like small potatoes to the damage that will be done to our economy.  So the argument has boiled down to, not whether to stimulate our economy, but with tax cuts or government spending and by how much.  Now enter the ideology (Note: An extremely good analysis of how the conservatives are reinventing history to defeat the Economic Stimulus Package can be found on MediaMaters.com).

If you look back at the Great Depression, it is argued that the massive spending program that President Franklin Roosevelt embarked upon saved us and put people to work.  So the argument goes that because private spending will not mobilize the capacity of our economy, public spending must.  Lessons from the Japanese experience (10 years of stagnation) seems to tell us that to be cautious and timid in using government spending to stimulate the economy is worse than no spending at all.  It simply raises the deficit without the commensurate growth in the economy.  I say “seems” because we have different economists interpreting the data differently (The Dismal Science).  But now enter the conservatives.  Most economists are telling us we need a major investment (read spending) by our government.  But government spending is anathema to Republicans.  They would much rather see tax cuts that puts money into the hands of consumers (private spending).  They are also against raising the deficit which ought to give you pause since they created it.  The end result here is going to be a real fight between massive spending and tax cuts, along with an attempt to reduce the overall spending effort.

President-Elect Obama has proposed a spending plan that is about one-third tax cuts and two-thirds public spending.  My and others arguments against the tax cuts are they are very ineffective in stimulating the economy as the last round of tax cuts and rebates demonstrated.  People either spend it on foreign made consumer goods or more likely, save it.  So what we get for the expenditure is nothing.  The other argument is why would business (who get a tax credit for hiring people) hire people in a declining market?  They wouldn’t and once again this is an example of how the Republicans have failed to recognize that private spending can no longer get us out of this shrinking economy.

Finally there is the issue of the size of the spending effort.  Republicans want to limit this using the public’s fear of deficits as their fear card.  They are good at using the fear card but usually not to good ends.  My fear is the same as many Democrats, that President-Elect Obama has not been aggressive enough on the spending plan.  As this argument rages, we sink further into oblivion.  Just keep this in mind:  Public spending on infrastructure gets us something for our money besides jobs.  It gets us the stuff to run our economy on in the future.

So the fight is on.  My thought is that conservative economic ideology, in some ways co-opted by Democrats over the last 30 years starting with Ronald Reagan, has brought us to the brink.  If they win the arguments about being tentative, it may just push us over the edge.  We need real change and that means real courage to try something new.  I am not sure we are up to it and we don’t have a World War II to rally the nation like Franklin Roosevelt did.

Restoring confidence is the key to economic recovery.  That is only going to happen when most of us believe we are on the right path.  Prior to the election almost three-quarters of our population thought we were on the wrong path.  Continuing Republican economic ideology just continues us down a path that we have already rejected.  Real change that will result in confidence in our future means that we have a vision for that future that we all believe in.  I haven’t seen that vision yet, but the outline of that vision is starting to form as we start to formulate our recovery plan.  If it is big enough and is focused on a green and technological future, we may all get our confidence back.  If it is pumping money into the free market so it can decide our future with its magic hands, we are doomed.

Note:  Paul Krugman has written a wonderful book (“The Return of Depression Economics”) if you want to understand how our economy works.  He wrote it for us regular people and it is worth your time.

Whenever we get in a financial crisis you always hear the same thing, “if we could just cut out all the waste.”  I listened to Wolfe Blitzer on Wednesday reveal his Republican heart when he said something to the effect of, “I know lots of people in government, I mean lots of people and they tell me there is waste everywhere.”  So the problem, in his mind is to get rid of the waste and the problem is solved. It’s a Republican heart because they take a grain of truth, simplify the issue to a root cause, and turn it into finding blame. Lou Dobbs is the king of this approach.  It is a common theme, and of course there is waste, but the source of that waste is not primarily bad or stupid people, nor is it easily removable.  Let’s just look at a few examples.

John McCain railed against stupid government spending when he described a $3 million program to study Grizzly bears DNA.  But looking a little closer at this project exposes the fact that this may result in better information about these bears and their delisting from the endangered species list, saving the federal government many times the $3 million spent on the study.  How many other similar projects look wasteful to the layman, but lead to scientific or other advances that benefit us all.  John McCain also railed against the pork spending in earmarks, but as Barack Obama pointed out, the earmarks are only a very small percentage of the budget ($18 billion last year), and a lot of it is not wasteful.  And please note that those railing against waste are the same people who benefited from these earmarks.  Sarah Palin come to mind?

Next there is the problem that one person’s waste is another person’s lifeline.  Many conservatives look at welfare as simply enabling the poor to feed off the government.  Many of the poor look at it as the help they need until they can get back on their feet.  As more people lose their jobs in the upcoming depression, more will change their minds about this “waste”.  There are those who think it is wasteful to coddle drug addicts with treatment programs until their own children get caught up in drug addiction and then they find these programs a lifeline.

Then this is the problem of misunderstanding where the big money really is.  Over Christmas I had a conversation with one of my adopted nieces who works at Google about possible layoffs.  She was not worried and railed (I like this word) against waste at Google.  Her favorite was all the free food/cafeterias.  I of course listened politely, but in my brain I figured that this cost is about $100/per employee while firing one employee could save about $200,000.

Finely there is the problem that we created the waste purposefully.  I spent 31 years in a government system that did things that could have been done much more cost effectively.  The problems are the rules.  And where did the rules come from?  From some gross violation that wasted money so they put a process in place to prevent such an infraction again.  But one size does not fit all and the result is a very inefficient bureaucracy.  But keep in mind when an excess occurs, it is those who most want to prevent waste and abuse who push these rules that create waste and abuse.  Then there is the secondary effect of rules, in that it gives public servants a huge shield to not make a decision or take risks.  Now my conservative friends would say, “see, those worthless government workers are just too lazy to make hard decisions,” when the reality is that the rules they helped create, took away those public servant’s decision making abilities.  I spent my entire government career figuring out legal ways to work around those rules as most government servants do to get things done.  By the way there is a wonderful book out there on this subject by Philip K. Howard called “The Death of Common Sense.”  Just keep in mind when you are blovating about this kind of waste, you probably helped create it.

One other thought for you who think just getting rid of waste will solve our problems (In my mind that would mean jettisoning the South and their obstructionist politicians living in the last century):  My favorite refrain from conservatives is that we need to just run government like a business.  My friends, we tried that with the SEC, Food and Drug Administration, OSHA, EPA, and many more organizations where we turned the regulatory function over to business and it has been an unmitigated disaster.  Had we turned Social Security over to Wall Street, many more would be penniless today.

Sure there is waste and we need to think about smart ways to do business in the future.  But the simple minded thought that if we just got rid of waste everything would be hunky-dory, is part of the problem of waste.  In this case that waste would be your use of your brain matter.  We all want things from our government and we don’t want to pay for them.  There aren’t any easy answers.  There is no free ride.  We will have to decide what should government provide and then we have to raise income to pay for them.  We can always look for more efficient and cheaper ways of providing those services, but those costs are at the margins of the costs of providing the services we demand.  One possible way forward is to look at each spending program and do a cost/benefit analysis on how it benefits all of us instead of the each state gets theirs based upon seniority of their representatives in Congress. But then everyone is an expert on fixing the budget.

California is giving the nation a lesson on old thinking.  Because of the budget shortfalls, the Governor has curtailed expenditures on highway projects.  One of these is for a High Occupancy Vehicle Lane (Car Pool Lane) (HOV) on one of the main highways into the capital city of Sacramento (HW50).  The Democrats in the legislature, frustrated by the intransigence of the Republican’s no-tax solution to everything (see Changing is so Very Hard to Do),  did an end run around the two-thirds majority requirement to raise taxes by a clever use of fees instead of taxes, but the Govenator crumbled in the face of Republican opposition and vetoed the bill.  He also claimed that he wanted concessions from Democrats on environmental requirements for this project.  The conventional wisdom is that right now we need to put people to work and getting rid of these pesky environmental requirements would accelerate these types of projects.

Here is the problem:  That pesky environmental regulation requires that the project evaluate the environmental impacts and look at alternatives that might be less harmful to the environment (CEQA).  What makes me laugh about objections to this law is that it really doesn’t require the government to do something different, only document why they ignored alternatives.  In this case, an alternative to widening the highway for a HOV lane would be to double track the Light Rail that travels the same corridor.  Many studies have shown that HOV lanes don’t really encourage people to car pool, just moves those that do faster.  Maybe in a future that is looking at $8-$10 a gallon gasoline, expanding the highways (the old solution) is not a solution at all.  It has also been shown that the Light Rail project would actually employ more people and probably get started sooner.  My point is simple:  In the past we looked to infrastructure projects to improve our infrastructure and give people good paying jobs.  But those projects have to make sense for our future instead of just doing what we have always done.  My other point is that those pesky environmental regulations just may make us stop and think before we do something stupid.

In the same vein, “Silicon Valley venture capitalist John Doerr, whose early investments helped launch Google and Amazon, delivered a stark warning to Congress on Wednesday that the United States is on the verge of being left behind in the green tech revolution.” (San Francisco Chronicle).  Note that this was a policy briefing, not a formal Congressional hearing.  He was invited to speak along with Tom Friedman (“Hot, Flat, and Crowded”) and while most of the Democrats on the Senate Environmental and Public Works Committee were there, none of the Republicans showed up.  I guess hearing ideas against your preconceived and failed ideas are just too much to bear.  This says all you need to know about how Republicans will face our future.  Mr. Doerr recommended projects such as modernizing the transmission grid, putting a price on carbon emissions, incentives for utilities to become more efficient, a national renewable energy standard, and more federal energy research.

Mr. Friedman has made the argument in the past that the green revolution is the industry of the future and the country that leads in this revolution will be the country that prospers.  Remember when I said yesterday that tax cuts are a waste of money?  Well this is all part of thinking about our future.  Tax cuts will probably end up as savings in an economy that needs stimulus by spending.  Spending will be the issue, but the spending must be focused not on just providing short-term wages, but a bridge to our future.  So back to the original thought:  Is spending to expand our highways so we can move more cars faster, polluting our environment, and increasing the greenhouse effect smart spending, or is it more prudent to prepare for that future with projects that make our life a little easier when that reality hits?  Once again this is a no-brainer, which is why I can’t figure out why you have to drag the existing political thinking kicking and screaming into the future.