Saturday, March 21, 2009
The Meaning of the CIA's 3,000 Pages of Destroyed Interrogation Tapes
What does the fact that the CIA destroyed numerous videotapes of Guantanamo interrogations, but has 3,000 pages of transcripts from those tapes really mean?
Initially, it means that CIA's claim that it destroyed the video tapes to protect the interrogators' identity is false. Why? Well, the transcripts contain the identity of the interrogator. And the CIA is refusing to produce the transcripts.
Obviously, the CIA could have "blurred" the face of the interrogator and shifted his voice (like you've seen on investigative tv shows like 60 Minutes) to protect the interrogator's identity. And since the CIA is not releasing the transcripts, it similarly could have refused to release the videos.
The fact that the CIA instead destroyed the videos shows that it has something to hide.
Indeed, Pulitzer prize winning journalist Seymour Hersh says that children were tortured as part of the "war on terror", as does respected political scientist Michael Haas. A videotape would instantly show whether the detainee was a child or an adult, while a transcript could easily hide age.
Finally, the top interrogation experts in the world agree that torture doesn't work. Indeed, it has been known for hundreds of years that people will say whatever they think the interrogator wants to hear to stop the pain.
Videotapes would likely clearly show detainees saying things like "okay, okay, if you want me to say I blew it up, I'll say it. Okay, yes. It was me. Will you stop torturing me now?"
The fact that the CIA destroyed the videotapes speaks volumes.
CBO Forecasts $9.3 Trillion Deficit in 10 Years
According to the International Herald Tribune , the Congressional Budget Office forecasts that Obama's budget will produce a $9.3 trillion deficit in the next decade, "much more than the White House has predicted".
We Not Only Have a Shadow Banking System, But also a Shadow Government
Everyone is talking about "the shadow banking system".
But we've also got a shadow government, as shown by the following quotes from Rolling Stone:
No one knows who's getting that money or exactly how much of it is disappearing through these new holes in the hull of America's credit rating....
"They're supposed to be temporary," says Paul-Martin Foss, an aide to Rep. Ron Paul. "But we keep getting notices every six months or so that they're being renewed. They just sort of quietly announce it."
[S]enator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include "deliberations, decisions and actions on monetary policy matters." The exemption, as Foss notes, "basically includes everything." According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter....
In January, when Rep. Alan Grayson of Florida asked Federal Reserve vice chairman Donald Kohn where all the money went — only $1.2 trillion had vanished by then — Kohn gave Grayson a classic eye roll ....
Grayson pressed on, demanding to know on what terms the Fed was lending the money. Presumably it was buying assets and making loans, but no one knew how it was pricing those assets — in other words, no one knew what kind of deal it was striking on behalf of taxpayers. So when Grayson asked if the purchased assets were "marked to market" — a methodology that assigns a concrete value to assets, based on the market rate on the day they are traded — Kohn answered, mysteriously, "The ones that have market values are marked to market." The implication was that the Fed was purchasing derivatives like credit swaps or other instruments that were basically impossible to value objectively — paying real money for God knows what.
"Well, how much of them don't have market values?" asked Grayson. "How much of them are worthless?"
"None are worthless," Kohn snapped.
"Then why don't you mark them to market?" Grayson demanded.
"Well," Kohn sighed, "we are marking the ones to market that have market values."
In essence, the Fed was telling Congress to lay off and let the experts handle things. "It's like buying a car in a used-car lot without opening the hood, and saying, 'I think it's fine,'" says Dan Fuss, an analyst with the investment firm Loomis Sayles. "The salesman says, 'Don't worry about it. Trust me.' It'll probably get us out of the lot, but how much farther? None of us knows."
When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what's happening in the Fed amounts to something truly revolutionary — a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. "We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion," says Sen. Bernie Sanders. "It is beyond comprehension." ...
And the Fed isn't the only arm of the bailout that has closed ranks. The Treasury, too, has maintained incredible secrecy surrounding its implementation even of the TARP program, which was mandated by Congress. To this date, no one knows exactly what criteria the Treasury Department used to determine which banks received bailout funds and which didn't — particularly the first $350 billion given out under Bush appointee Hank Paulson.
The situation with the first TARP payments grew so absurd that when the Congressional Oversight Panel, charged with monitoring the bailout money, sent a query to Paulson asking how he decided whom to give money to, Treasury responded — and this isn't a joke — by directing the panel to a copy of the TARP application form on its website. Elizabeth Warren, the chair of the Congressional Oversight Panel, was struck nearly speechless by the response.
"Do you believe that?" she says incredulously. "That's not what we had in mind."
Another member of Congress, who asked not to be named, offers his own theory about the TARP process. "I think basically if you knew Hank Paulson, you got the money," he says.
How To Curb Fraud At Financial Institutions
This interesting 16 minute talk by behavioral economist Dan Ariely gives some interesting - and counter-intuitive - tips for how to reduce fraud at financial institutions:
Friday, March 20, 2009
"Sources Say Toxic Asset Plan Near Completion"
That's the headline from the Associated Press.
I am sure that the plan will be toxic, as advertised.
Nobel Economists Slam Obama's Economic Policy
Nobel economists Paul Krugman and Joseph Stiglitz slammed Obama's economic policy this week.
Krugman said:
At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.Stiglitz said the Obama administration has failed to address the structural and regulatory flaws at the heart of the financial crisis that stand in the way of economic recovery and that Obama has confused saving the bankers and saving the banks. He also said:
This was bad analysis, bad policy, and terrible politics. This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that it’s owned by the wheeler-dealers.
We got cheated, to put it bluntly. What we don’t know is that—whether we will continue to get cheated. And that’s really at the core of much of what we’re talking about. Are we going to continue to get cheated?...Do American taxpayers want to be bailing out institutions abroad? That’s a question we ought to be debating....
The fact that there was so much campaign contributions from the financial sector at least raises the concern [that the Obama administration is throwing money at the bankers because of their campaign contributions].
And Nobel economist Myron Scholes has slammed the business-as-usual approach of the Obama administration to credit default swaps:
The “solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and let us start over,” he said, referring to credit-default swaps and other complex securities that are traded off exchanges. “One way to do that, through the auspices of regulators or the banking commissioners, is to try to close all contracts at mid-market prices.”Update: Nobel economist Ed Prescott is slamming the Obama approach as well.
Ter·ror·ist (noun): Anyone Who Disagrees with the Government
The Department of Homeland Security and police forces label anyone who they disagree with - or who disagrees with government policies - as "terrorists".
Don't believe me?
Well, according to a law school professor, pursuant to the Military Commissions Act, "Anyone who ... speaks out against the government's policies could be declared an 'unlawful enemy combatant' and imprisoned indefinitely. That includes American citizens."
And according to an FBI memo, peace protesters are being labeled as "terrorists". Indeed, police have been terrorizing children, little old ladies and other "dangerous" people who attempted to peacefully protest.
And a 2003 FBI memo describes protesters' use of videotaping as an "intimidation" technique, even though - as the ACLU points out - "Most mainstream demonstrators often use videotape during protests to document law enforcement activity and, more importantly, deter police from acting outside the law." The FBI appears to be objecting to the use of cameras to document unlawful behavior by law enforcement itself.
And the Internet has been labeled as a breeding ground for terrorists, with anyone who questions the government's versions of history being especially equated with terrorists.
Now, the state of Missouri has labeled as terrorists current Congressman Ron Paul and his supporters, former Congressman Bob Barr, libertarians in general, anyone who holds gold, and a host of other people.
In other words, anyone who disagrees with the "acceptable" way of looking at things is a terrorist.
How is this different from Stalin or Mao's use of labels such as "enemy of the state"?
Is the Fed the Last Buyer of Long-Term Treasuries?
CFR economist Brad Setser writes:
Foreign demand for long-term Treasuries has disappeared over the last few months....The rolling 3m sum bounces around a bit, but foreign demand for long-term Treasuries in November, December and January was as subdued as it has been for a long-time. ...
For all the talk of safe haven flows to the US — foreign demand for all long-term US bonds has effectively disappeared....
What have foreign investors been buying? Short-term Treasury bills. In huge quantities.Setser notes with respect to China:
[The] surge in demand for [treasury] bills now seems to be fading....
If — as seems likely — foreign demand for Treasuries fades long before the US fiscal deficit, the US Treasury will need to sell an awful lot of Treasuries to American investors. For the past several years I have argued that it was almost impossible to overstate the impact of central bank demand on the Treasury market.That may no longer be the case going forward.
Over the past three months, almost all the growth in China's Treasury portfolio has come from its rapidly growing holdings of short-term bills not from purchases of longer-term notes.And with respect to Russia:
Russia also, interestingly, added to its holdings of short-term Treasury bills.With foreign governments shifting from long-term to short-term U.S. treasuries, the Fed itself may be one of the last remaining players of any significance still buying long-term treasuries.
Does a Single Independent Economist Buy the Geithner-Summers-Bernanke Approach?
Does a single independent economist buy the Geithner-Summers-Bernanke approach?
On the left, you have:
- Nobel economist Joseph Stiglitz saying that they have failed to address the structural and regulatory flaws at the heart of the financial crisis that stand in the way of economic recovery, and that they have confused saving the banks with saving the bankers
- Nobel economist Paul Krugman saying their plan to prop up asset prices "isn't going to fly". He also said:
At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached. This was bad analysis, bad policy, and terrible politics. This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that it’s owned by the wheeler-dealers.
- Prominent economists like Nouriel Roubini, James Galbraith, Robert Kuttner, Dean Baker, Michael Hudson and many others slamming their approach (and Paulson's as well)
On the right, you have:
- Leading monetary economist Anna Schwartz saying that they are fighting the last war and doing it all wrong
- Former Assistant Secretary of the Treasury and former editor of the Wall Street Journal Paul Craig Roberts lambasting their approach
- Economist John Williams saying "the federal government is bankrupt ... If the federal government were a corporation … the president and senior treasury officers would be in federal penitentiary."
- Prominent economist Marc Faber and many others tearing their approach to shreds.
Sure, the economists for the banks and other financial giants which are receiving billions at the government trough think that the Geithner-Summers-Bernanke approach is swell.
And perhaps a couple of economists for investment funds which use their giant interventions into the free market to make some quick money.
But other than them, no one seems to be buying it.
Thursday, March 19, 2009
A.I.G. Sues U.S. for Return of $306 Million in Tax Payments, Some Involving Tax Deals in Offshore Havens - Uses Taxpayer Money to Pursue the Lawsuit
As the New York Times notes:
A.I.G. sued the government last month in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company’s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens....
A.I.G. is effectively suing its majority owner, the government, which has an 80 percent stake .... The company is in effect asking for even more money, in the form of tax refunds. The suit also suggests that A.I.G. is spending taxpayer money to pursue its case....
The lawsuit ... details, among other things, certain tax-related dealings of the financial products unit, the once high-flying division that has been singled out for its role in A.I.G.’s financial crisis last fall.
You Know Things Are Bad When . . .
CNBC runs a front-page article entitled:
"What the Pros Say: US Is Now 'Bankrupt' "
Pressure Mounts on the Dollar
There are various attacks on the U.S. dollar at the moment, including:
- The IMF is considering printing hundreds of billions of dollars worth of its own currency
- A U.N. panel will recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies
- The Fed is buying $300 billion (in the first round) of long-term treasuries
- China is saying it will diversify out of the dollar
- The rumor is that both Russia and China are pushing for the dollar to be replaced as the world's reserve currency
Financial Giants Are Too Big to Bail, But Not Too Big to Jail
Too Big Has Failed
The head of the FDIC says that the "too big to fail' strategy must end.
Similarly, Senator Leahy said "If a company is too big to fail, it is too big to exist."
And Kansas City Fed President and veteran Fed official Thomas Hoenig says:
Too big has failed....
Many of the [government's current policy revolves around the idea of] "too big to fail" .... History, however, may show us a different experience. When examining previous financial crises, both in other countries as well as the United States, large institutions have been allowed to fail. Banking authorities have been successful in placing new and more responsible managers and directions in charge and then reprivatizing them. There is also evidence suggesting that countries that have tried to avoid taking such steps have been much slower to recover, and the ultimate cost to taxpayers has been larger. ...So it should be obvious that the "too big to fail" idea is wrong.
Even large banks can be dealt with in a way in a manner which imposes market discipline on management and stockholders, while controlling taxpayer losses....
Banking regulators need to be willing to write down losses, bring in new managers and sell off businesses if institutions can’t survive on their own, no matter what their size.
Too Big To Bail
Instead of too big to fail, the proper concept is "too big to bail".
Financial giants that are so big that bailing them out would impoverish taxpayers or bankrupt America should be allowed to go bankrupt.
Not Too Big To Jail
Moreover, a lot of the top guys at the giant financial companies should be in jail.
It is clear that many of these guys cooked their books and made fraudulent promises to investors.
And "at least 13 firms receiving billions of dollars in bailout money owe a total of more than $220 million in unpaid federal taxes". These guys should be in jail for non-payment of taxes (that's how they got Al Capone).
And remember that - in certain cases - too big can itself be illegal.
Specifically, criminal penalties can be imposed on companies which have violated anti-trust laws, and used their size and power to manipulate the market.
Corporations engaging in unlawful restraints of trade by price fixing, bid rigging, customer and territorial allocation agreements or other blatantly anti-competitive acts can be prosecuted for criminal violations of the Sherman Act, and can be punished by up to a $100 million dollar fine. Indeed, individuals found guilty of criminal violations under the Sherman Act can be sentenced to up to 10 years in jail and up to a $1 million dollar fine.
I am 100% certain that the biggest financial players engaged in anti-competitive conduct. It would only take one aggressive prosecutor to prove it.
Clean up Wall Street, or the boys will keep breaking laws - in bigger and more destructive ways - in the future.
These giants may be too big to bail, but they are not too big to jail.
“By the Time its New Steps Are Done, the Fed’s Balance Sheet Will Reach $4.5 Trillion, or About a Third of GDP”
Paul Krugman has been calling for more government intervention into the economy than just about anyone else.
Krugman is calling for stimulus in the US and European Union of 4% of GDP:
“My back of the envelope says on both sides of the Atlantic we should be having a stimulus that peaks at 4 percent of GDP annually .... The United States is not doing enough to fight the crisis and Europe is doing a bit less than half as much as the United States.
However, as noted in the Economist:
By the time its new steps are done, the Fed’s balance sheet will reach $4.5 trillion, or about a third of GDP, up from less than $1 trillion a year ago, Capital Economics estimates.I understand that dollars spent on stimulus and the size of the Fed's balance sheet do not necessarily have an exact correspondence. But the size of the Fed's balance sheet does give an indication of the massive scale of Bernanke's tinkering.
There Is Still Hope
In response to the gloomy economic times we are in, I am re-posting 3 pieces I wrote a couple of years ago [edited slightly to fit the times].
Each of our Individual Voices Is More Important Than We've Realized
I just read a study which says that even one dissenting voice can give people permission to think for themselves. Specifically:
Solomon Asch, with experiments originally carried out in the 1950s and well-replicated since, highlighted a phenomenon now known as "conformity". In the classic experiment, a subject sees a puzzle like the one in the nearby diagram: Which of the lines A, B, and C is the same size as the line X? Take a moment to determine your own answer...Get it so far? People tend to defer to what the herd thinks.The gotcha is that the subject is seated alongside a number of other people looking at the diagram - seemingly other subjects, actually confederates of the experimenter. The other "subjects" in the experiment, one after the other, say that line C seems to be the same size as X. The real subject is seated next-to-last. How many people, placed in this situation, would say "C" - giving an obviously incorrect answer that agrees with the unanimous answer of the other subjects? What do you think the percentage would be?
Three-quarters of the subjects in Asch's experiment gave a "conforming" answer at least once. A third of the subjects conformed more than half the time.
But here's the good news:
Adding a single dissenter - just one other person who gives the correct answer, or even an incorrect answer that's different from the group's incorrect answer - reduces conformity very sharply, down to 5-10%.Why is this important? Well, it means that one person who publicly speaks the truth can sway a group of people away from group-think.
If a group of people is leaning towards believing the government's version of events, a single person who speaks the truth can help snap the group out of its trance.
There is an important point here regarding the web, as well. The above-cited article states that:
when subjects can respond in a way that will not be seen by the group, conformity also drops.What does that mean? Well, on the web, many people post anonymously. The anonymity gives people permission to "respond in a way that will not be seen by the group". But most Americans still don't get their news from the web, or only go to mainstream corporate news sites.
Away from the keyboard, we are not very anonymous. So that is where the conformity dynamic -- and the need for courageous dissent -- is vital. It is doubly important that we apply the same hard-hitting truthtelling we do on the Internet in our face-to-face interactions; because it is there that dissent is urgently needed.
Bottom line: Each person's voice has the power to snap entire groups out of their coma of irrational group-think. So go forth and be a light of rationality and truth among the sleeping masses.
Hope In a Time of Hopelessness
Several long-time activists have told me recently they are overwhelmed, worried, and think that we may be losing the struggle ....
One very smart friend asked me if there is any basis for hope.
But hope is an act of will, not a passive mood. Admittedly, things are easier when circumstances bring hope to us, and we can just receive the hopeful and inspiring news.
But if we care about winning, we have to be able to decide to have hope even when outer circumstances aren't so positive.
I have children who are counting on me to leave them with a reasonably safe and sane planet. As I've said elsewhere, "I care too much about my kids and my freedom to be afraid. I care enough about them that it gets my heart beating, connects me to something bigger than myself, and that gives me courage, even when the chips are down."
If I allowed myself to lose hope about exposing falsehoods, about protecting our freedom and building a hopeful future, I would be dropping the ball for my kids. I would be condemning them to a potentially very grey world where bigger and worse things may happen, where their liberties and joys are wholly stripped away, where every ounce of vitality is beholden to joyless and useless tasks.
Many of us may be motivated by other things besides kids .... Only you can know what that is. But we each must dig down deep, and connect with our most powerful motivations to win the struggle for freedom and truth.
I don't know about you . . . but I don't have the luxury of giving up hope. When I get depressed, overwhelmed or exhausted by the stunning acts of savagery, treason, and disinformation carried out by the imperialists, or the willful ignorance of many Americans, I will myself into finding some reason to have hope.
Because the struggle for liberty is too important for me to give up.
If you lose hope, somehow you lose the vitality that keeps life moving, you lose that courage to be, that quality that helps you go on in spite of it all. And so today I still have a dream.
- Martin Luther King, Jr.
Do not let your fire go out, spark by irreplaceable spark, in the hopeless swamps of the approximate, the not-quite, the not-yet, the not-at-all. Do not let the hero in your soul perish, in lonely frustration for the life you deserved, but have never been able to reach. Check your road and the nature of your battle. The world you desired can be won. It exists, it is real, it is possible, it is yours.
- Ayn Rand
Hope is like a road in the country; there was never a road, but when many people walk on it, the road comes into existence.
- Lin Yutang
Hope is passion for what is possible.
- Soren Kierkegaard
Turn your face to the sun and the shadows fall behind you.
- Maori Proverb
- Thomas Jefferson
He who does not hope to win has already lost.
- Jose Joaquin Olmedo
When you do nothing, you feel overwhelmed and powerless. But when you get involved, you feel the sense of hope and accomplishment that comes from knowing you are working to make things better.
- Pauline R. Kezer
Hope is a state of mind, not of the world. Hope, in this deep and powerful sense, is not the same as joy that things are going well, or willingness to invest in enterprises that are obviously heading for success, but rather an ability to work for something because it is good.
- Unknown
We should not let our fears hold us back from pursuing our hopes.
- John Fitzgerald Kennedy
Your hopes, dreams and aspirations are legitimate. They are trying to take you airborne, above the clouds, above the storms, if you only let them.
- William James
Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.
- Helen Keller
The capacity for hope is the most significant fact of life. It provides human beings with a sense of destination and the energy to get started.
- Norman Cousins
When I despair, I remember that all through history the way of truth and love has always won. There have been tyrants and murderers and for a time they seem invincible but in the end, they always fall -- think of it, ALWAYS.
- Mahatma Gandhi
We must accept finite disappointment, but we must never lose infinite hope.
- Martin Luther King, Jr.
There is no medicine like hope, no incentive so great, and no tonic so powerful as expectation of something better tomorrow.
- Orison Marden
- William Ellery Channing
Hope is medicine for a soul that's sick and tired.
- Eric Swensson
Hope has two beautiful daughters. Their names are anger and courage; anger at the way things are, and courage to see that they do not remain the way they are.
- Augustine of Hippo
- Emil Brunner
The very least you can do in your life is to figure out what you hope for. And the most you can do is live inside that hope. Not admire it from a distance but live right in it, under its roof.
- Barbara Kingsolver
Hope is not the conviction that something will turn out well, but the certainty that something makes sense regardless of how it turns out.
- Vaclav Havel
Hope is the companion of power, and mother of success; for who so hopes strongly has within him the gift of miracles.
- Samuel Smiles
- Abraham Cowley
Every area of trouble gives out a ray of hope; and the one unchangeable certainty is that nothing is certain or unchangeable.
- John Fitzgerald Kennedy
Let perseverance be your engine and hope your fuel.
- H. Jackson Brown Jr
Develop sincere desire for the goal. Out of fire of desire comes success.
- Unknown
- Mohandas Gandhi
Everything that is done in the world is done by hope.
- Martin Luther King, Jr.
Don't lose hope. When it gets darkest the stars come out.
- Unknown
Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.
- Dale Carnegie
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.
- Winston Churchill
The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless and yet be determined to make them otherwise.
- F. Scott Fitzgerald
It is from numberless diverse acts of courage and belief that human history is shaped. Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current that can sweep down the mightiest walls of oppression and resistance.
- Robert F . Kennedy
Courage
It all comes down to courage . . .
If you have courage, then you're willing to face that really stinky mess in the garage and clean it up.
You have faith you can clean it up, because you've cleaned up other really stinky messes, or seen other people do it. In other words, you have faith because you have experience of succeeding in the past.
Fat and Happy
We Americans have led a very pampered life for the past couple of decades. Sure, there has been inequality and exploitation, and some have had it a lot worse than others. But, other than stopping extreme forms of racism (Ku Klux Klan, etc.), we haven't had to defend our borders or our liberties.
Basically, we complain if our tv goes on the fritz, or our team loses the game, or we can't afford that new, nicer whatzit, or if our boss is mean. We think those are big, Earth-shattering, history-changing events. But they are quite small in the grand scheme of things
And even those of us who think of ourselves as brave heroes usually only act like that when we know it is within the bounds of safety, within the limits of what we can handle. "Tough guys" tend to turn into meek mice whenever they are really threatened.
So we're basically lazy and timid, but we don't know or admit it. We like to pretend we are like the Founding Fathers or John Wayne (at least the cowboys had to rough it a little).
But we have no experience of successfully standing up to tyrants, so we have no faith that it can be done, and while the evidence is right before our noses that our current leaders are tyrants, we're so terrified that we have our knickers in a bunch.
What Would They Do?
Even if you haven't experienced success in standing up to tyrants, remember that the Founding Fathers did just that. They were just men, not gods. Sure, they were too persistent and stubborn to give up, but that's because they CARED about something: freedom and the possibility of a better life.
They may have lived hundreds of years before our time, but that doesn't matter -- we can still learn from their experience as if it were happening now. Time is an illusion, since human nature is the same now as it was then. Just as many people of faith ask "what would Jesus do?", we can also ask "what would the founding fathers do?" If they could do it, we can do it.
Take Heart
There is a real misunderstanding of what it means to be courageous. In America, courage is often thought of as a testosterone-driven toughness. There's nothing the matter with testosterone. Masculinity is a great thing. But many American men secretly fear that they don't have sufficient testosterone to really be brave when the chips are down. As I said above, even those of us who think of ourselves as brave men usually only act like that when we know it is within the bounds of safety, within the limits of what we can handle.
We might jump in a bar room brawl to protect our buddy, but that's because we know we're only going to get knocked around a little bit -- nothing but bruises that will go away in a little while. The stakes just aren't that high.
But most American men secretly doubt whether they are macho enough to pull it off under fire. They may watch alot of action movies, and talk tough, and stand up when its not really dangerous (or when they clearly outgun the other guy), but they are secretly terrified that they don't have quite enough backbone to pull it off against the big boys, such as tyrants.
I would argue that this view fundamentally misunderstands the nature of courage, and ensures that we will never have true courage when it counts.
By way of analogy, the word "discipline" comes from "disciple". If you are a true "disciple" of an idea of a plan or a strategy or a religion, then you will stick to it and "have discipline" to reach your goal. It is not just a matter of willpower; it is also devotion to something bigger than ourselves.
Similarly, the word "courage" comes from the French "with heart". Why does it have this root meaning? Because it takes heart to act bravely. That's how my childhood Karate teacher used the word: when I was practicing with courage, power and focus, he would say "you have alot of heart today" (indeed, many old-school warriors use the phrase "fighting with heart" in that way).
If courage is acting "with heart", we've lost heart. And without heart, we cannot face the truth.
So how do we regain our heart? Well, let's start with what gets our hearts beating.
Remember that the mother bear is one of the fiercest animals of all. Just get between a mother bear and her cub and you'll see what I mean. It is her love of her cub which gives her the heart to face any enemy when her cub is threatened. It is not her level of testosterone, but rather her love for her cub which makes her so fierce.
Just as discipline is more than just willpower, courage stems from something bigger than just cajones. In fact, the strongest courage comes from the love of something we care about, since our heart will sustain us even when the chips are really down and we are really up against a tyrant. As the ancient Chinese philosopher Lao Tzu said: "Being deeply loved by someone gives you strength, while loving someone deeply gives you courage. "
In addition, we're no longer living in the old west. Individualism is very important in numerous ways, but we can only win against the tyrants as a team, as a community, as a nation. And only by opening our hearts to what matters will we be able to work together, to fight for all of our kids, and all of our freedom. Only then will we be able to put the crooks and the looters and the tyrants back in the box.
Do we care about our kids, our significant others, our parents, our friends? Do we care about the freedom to choose what we want, instead of having our "great leader" choose for us?
If not, what DO we care about? Because if that is where your heart is, that is what will give you courage.
I care too much about my kids and their future to be afraid. I care enough about them that it gets my heart beating, connects me to something bigger than myself, and that gives me courage, even when the chips are down.
Courage is an innate human quality. It is within each of us, waiting to reveal itself when we open our hearts. When we act with heart, by definition, we are courageous.
Those who would trade safety for freedom deserve neither.
– Thomas Jefferson
Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing.
- Hellen Keller
Whatever you can do or dream you can, begin it. Boldness has genius, power, and magic in it.
- Goethe
Courage is not the absence of fear, but rather the judgment that something else is more important than fear.
- Ambrose Redmoon
Courage is an everyday thing. When we look reality squarely in the eye and refuse to back away from our awareness, we are living courage.
- Anonymous
To have courage for whatever comes in life - everything lies in that.
- Mother Teresa
It is from numberless diverse acts of courage and belief that human history is shaped. Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current that can sweep down the mightiest walls of oppression and resistance.
- Robert F . Kennedy
It is not because things are difficult that we do not dare; it is because we do not dare that they are difficult.
- Seneca, Native American
Courage is the first of human qualities because it is the quality which guarantees the others.
- Aristotle
Courage is being scared to death but saddling up anyway.
- John Wayne
Courage is doing what your afraid to do. There can be no courage unless you're scared.
- Eddie Rickenbacker
Courage is fear holding on a minute longer.
- George Patton
One man with courage makes a majority.
- Andrew Jackson
Be bold and courageous. When you look back on your life, you'll regret the things you didn't do more than the ones you did.
- H. Jackson Brown, Jr.
You gain strength, courage, and confidence by every experience in which you really stop to look fear in the face.
— Eleanor Roosevelt
Within each of us is a hidden store of energy. Energy we can release to compete in the marathon of life Within each of us is a hidden store of courage. Courage to give us the strength to face any challenge Within each of us is a hidden store of determination. Determination to keep us in the race when all seems lost.
- Roger Dawson
We must never despair; our situation has been compromising before; and it changed for the better; so I trust it will again. If difficulties arise; we must put forth new exertion and proportion our efforts to the exigencies of the times.
- George Washington
We must remember that one determined person can make a significant difference, and that a small group of determined people can change the course of history.
-Sonia Johnson
Never doubt that a small, group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.
- Margaret Mead
Bush White House Pushes Revisionist History of 9/11 and the Iraq War
Condoleezza Rice told Charlie Rose yesterday that no one in the White House pushed a link between Iraq and 9/11:
ROSE: But you didn’t believe it had anything to do with 9/11.
RICE: No. No one was arguing that Saddam Hussein somehow had something to do with 9/11.
ROSE: No one.
RICE: I was certainly not. The President was certainly not. … That’s right. We were not arguing that.
The truth is that the White House repeatedly made that linkage, and it is demonstrably provable that they intentionally made that linkage even though they knew it was false.
As I wrote in 2005:
"Ten days after the September 11, 2001, terrorist attacks on the World Trade Center and the Pentagon, President Bush was told in a highly classified briefing that the U.S. intelligence community had no evidence linking the Iraqi regime of Saddam Hussein to the attacks and that there was scant credible evidence that Iraq had any significant collaborative ties with Al Qaeda".(See also this).
In addition, a Defense Intelligence Terrorism Summary issued in February 2002 by the United States Defense Intelligence Agency cast significant doubt on the possibility of a Saddam Hussein-al-Qaeda conspiracy.
And yet Bush, Cheney and other top administration officials claimed and continue to claim that Saddam was behind 9/11. See this analysis. Indeed, Bush administration officials apparently swore in a lawsuit that Saddam was behind 9/11.
Indeed, President Bush's March 18, 2003 letter to Congress authorizing the use of force against Iraq, includes the following paragraph:
(2) acting pursuant to the Constitution and Public Law 107-243 is consistent with the United States and other countries continuing to take the necessary actions against international terrorists and terrorist organizations, including those nations, organizations, or persons who planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001.
Therefore, Bush expressly justified the Iraq war to Congress by representing that Iraq planned, authorized, committed, or aided the 9/11 attacks.
Grounds for impeachment based on 9-11 lies are just as important as those based on lies regarding Iraq's weapons of mass destruction. Why? Because the administration's false claims about Saddam and 9/11 helped convince a large portion of the American public to support the invasion of Iraq. While the focus now may be on false WMD claims, it is important to remember that, at the time, the Saddam-911 link was at least as important in many people's minds as a reason to invade Iraq....
Indeed, the WMD hoax probably would not have worked if it wasn't for the anti-Arab hysteria after September 11th. And the government policy of torture would not have been tolerated if we weren't misled into thinking that Saddam and Al-Qaeda had formed an unholy, all-powerful alliance on 9/11, and had to be stopped at any cost. Thus, I would argue that the Saddam-911 deception was a necessary precursor to the administration's WMD lies and torture policies.
And polls show that almost 90% of the troops in Iraq are under the mistaken belief that the U.S. mission in that country is “to retaliate for Saddam’s role in the 9-11 attacks.” In other words, our kids are fighting and dying because of this lie....
It has also just been revealed that 5 hours after the 9/11 attacks, Rumsfeld said "my interest is to hit Saddam". This confirms previous reports that hours after the 9/11 attacks, Rumsfeld said "Go massive . . . Sweep it all up. Things related and not." And at 2:40 p.m. on September 11th, in a memorandum of discussions between top administration officials, several lines below the statement "judge whether good enough [to] hit S.H. [that is, Saddam Hussein] at same time", is the statement "Hard to get a good case." In other words, top officials knew that there wasn't a good case that Hussein was behind 9/11, but they wanted to use the 9/11 attacks as an excuse to justify war with Iraq anyway.
In a similar revisionist fashion, the Bush administration also repeatedly stated that Bin Laden was behind 9/11. See this, this, this and this.
But Cheney now claims that the White House never said Bin Laden was behind 9/11.
Wednesday, March 18, 2009
The Geithner-Summers-Bernanke Plan to Prop Up Asset Prices Has Failed
Paul Krugman wrote a couple of weeks ago:
Top officials in the Obama administration and at the Federal Reserve have convinced themselves that troubled assets, often referred to these days as “toxic waste,” are really worth much more than anyone is actually willing to pay for them — and that if these assets were properly priced, all our troubles would go away.
Thus, in a recent interview Tim Geithner, the Treasury secretary, tried to make a distinction between the “basic inherent economic value” of troubled assets and the “artificially depressed value” that those assets command right now. In recent transactions, even AAA-rated mortgage-backed securities have sold for less than 40 cents on the dollar, but Mr. Geithner seems to think they’re worth much, much more.
And the government’s job, he declared, is to “provide the financing to help get those markets working,” pushing the price of toxic waste up to where it ought to be.What’s more, officials seem to believe that getting toxic waste properly priced would cure the ills of all our major financial institutions....
The truth is that the Bernanke-Geithner plan — the plan the administration keeps floating, in slightly different versions — isn’t going to fly ....
Why won't it fly?
One reason is that economic psychologists tells us that consumer psychology has shifted for many years to come, and Americans are hunkering down and not buying anything other than the bare necessities. The Fed can try to play the part of all of the actors in the economy, but it won't work.
Today, Edward Harrison's must-read post explains provides additional reasons why the Geithner-Summers-Bernanke plan to prop up asset prices cannot succeed (if you don't read the whole post, at least read the following excerpts):
Of course, whether or not the banks should be liquidated (the free market solution) or nationalized (the government intervention approach) is subject to debate. But regardless, it should now be obvious that the Geithner-Summers-Bernanke plan to prop up asset prices is not only crazily expensive, but it has not worked and cannot work. Therefore, it has already failed.The U.S. government's efforts point in four directions:
So I lied, there is only one direction the government is headed: increase asset prices (or, at least keep them from falling). Read White House Economic Advisor Larry Summers' recent prepared remarks to see what I mean. (Summers on How to Deal With a ‘Rarer Kind of Recession’ - WSJ) ....
- Increase asset prices. If the assets on the balance sheets of banks are falling, then why not buy them at higher prices and stop the bloodletting? This is the purpose of the TALF, Obama's mortgage relief program and the original purpose of the TARP.
- Increase asset prices. If assets on the balance sheet are falling, why not eliminate the accounting rules that are making them fall? Get rid of marking-to-market. This is the purpose of the newly prosed FASB accounting rule change.
- Increase asset prices. If asset prices on the balance sheet are falling, why not reduce interest rates so that the debt payments which are crushing debtors ability to finance those assets are reduced? This is why short-term interest rates are near zero.
- Increase asset prices. If asset prices on the balance sheet are falling, why not create Public-Private partnerships to buy up those assets at prices which reflect their longer-term value? This is what Geithner's Capital Assistance Program is designed to do.
These plans are not going to work
As aggressive as this campaign by the U.S. government is, it will have limited effectiveness because the extent of the writedowns of assets already on the books is going to be too massive. ...
The U.S. banking system is effectively insolvent
So, it should be pretty clear that we have some serious losses still left to work through in the financial sector. I reckon the U.S. banking system is effectively insolvent. This is what Nouriel Roubini means when he says there will be $3.6 trillion in writedowns before this is all over. This means that banks do not have adequate capital to absorb the likely losses facing them later this year.
To date we have addressed this problem by throwing more money at it -- bailing out the banks and attempting to prevent asset prices from falling. I predict this solution will lead to another panic if continued indefinitely. (Remember, between now and the summer or fall, the unemployment rate could reach 9-10%, while home prices would still be falling and default rates rising.) American citizens would realize the system is insolvent and would cease to trust that a reasonable solution was in the offing.
Confidence in America's banking system is already lacking, especially in the large banks and large regional banks. This confidence can only be restored if banks are adequately capitalized now and in the future. Were we to suffer another round of major writedowns and capital injections into major institutions, I expect all confidence would be lost and bank runs would begin in earnest. This must be avoided at all costs.
Given the lack of capital the banking system now has and the likely level of writedowns, many institutions are fundamentally insolvent. They must, therefore, be liquidated or nationalized BEFORE confidence in the system is lost and bank runs occur.
Buying up assets at inflated prices, halting mark-to-market, and reducing interest rates to zero will not reduce the problem assets on bank balance sheets enough to avoid further massive writedowns.
Conclusion
In sum, most available evidence suggests bank writedowns will be massive -- perhaps larger than the present capital base of the U.S. banking system. While, present measures of recapitalizing and bailing out faltering institutions and buying up toxic assets may prove adequate to prevent further writedowns and capital erosion, I would rather err on the side of caution.
Caution dictates an aggressive response -- one which should include nationalization or liquidation of a significant number of banking institutions. Anything less is wishful thinking, the consequences of which could be very dire indeed.
"Traditionally, Gold Has Been A Store Of Value When Citizens Do Not Trust Their Government Politically Or Economically"
As Time Magazine notes:
Traditionally, gold has been a store of value when citizens do not trust their government politically or economically.
Given that trust in governments all over the world is plummeting due to corruption and mismanagement of the financial crisis, that bodes well for gold.
Note 1: As Time also points out:
The sheer amount of speculation in gold and uncertainty in the foreign-exchange market will keep gold prices as volatile and unpredictable (i.e., risky) as ever. Like any financial market, the gold market is susceptible to manipulation.Note 2: I am not an investment advisor and this should not be taken as investment advice.
Why is the Fed Buying Long-Term Treasuries?
It has finally started . . . the long-threatened purchase by the Fed of long-term U.S. treasuries.
The Federal Open Market Committee announced today:
To help improve conditions in private credit markets, the committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.This may be an attempt to prop up the bond market so that bondholders don't take a big haircut, and to lower the costs of corporate and mortgage debt (often called "quantitative easing").
As CNN wrote Monday:
Whatever one thinks of this, two things are clear: this is a desperate move, and the Fed is going to end up printing money like it's going out of style. See this, this, this, this, this, this and this.If the Fed started buying 10-year Treasury notes, that wouldn't do anything to reduce risk tied to soaring U.S. budget deficits.
But it would provide some support for the value of the bonds, especially if the Chinese start to pull back on purchases as some economists are expecting. ...
What's more, a large purchase by the Fed would help to lower the rates on longer-term Treasurys and other debt that is tied to the bond market, such as some corporate debt and mortgage loans. (Bond rates fall when prices rise.)
Former Fed Governor Lyle Gramley noted the Bank of England's announcement that it would buy about $100 billion in British government debt earlier this month was enough to lower long-term rates by a quarter-point to a half-point, even before the purchases started.
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