Sunday, September 28, 2008

We Were Warned (by George W. Bush no less)

Fannie and Freddie, the lynch pin in the current financial crisis, had the Bush Administration's attention as far back as April 2001.

Watch this short Youtube video from the "We report,You decide people..." And when you see the same characters that brought you this mess declaring that they have negotiated the bailout be very afraid!

I have given FOX News a lot of heat for being an unserious news network, however, they are the only network giving us any of this information. All of which is demonstrably true since the congressional record and video clips do not lie.

Friday, September 26, 2008

Good News: OPEC Stumbles, Chavez bungles

Dateline Sept 10th 2008

At OPEC's spiffy headquarters in Vienna, Austria, Saudi representatives got up and walked out. They said they would not honor the cartels proposed production cuts. They were also quite tired of Hugo Chavez's ranting and raving about the U.S.

Even as prices have fallen due to so-called over supply the Saudis do not believe cutting production is in order with cold weather just around the corner. Demand will rise. “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate told the New York Times. “We will see what the market requires and we will not leave a customer without oil."

With Russia, Iran and Venezuela wanting to punish the U.S. and the European Union the Saudis seem to recognize a losing strategy when they see it. Brazil has also recently confirmed another huge oil deposit to add to one it discovered off-shore earlier this year. The first one discovered by Petrobras has the promise of being one of the largest in the world. In the competitive world of big oil driving prices up will only make it easier for Brazil to bring this new crude into the global supply.

The same is true for the possibility of major finds off America's OCS in the next few years. Congressional Democrats have lost their game of chicken with the Republicans in front of this fall's elections. The Democrats will let congressional ban on offshore drilling expire on Oct 1st. With President Bush having lifted the executive ban earlier this year the door is open for more domestic production. Regardless if American oil simply enters the global supply it is still a good thing.

So is it over for OPEC? Well, it is the Saudis who essentially set the terms of pricing and supply. It is the Saudis who control OPEC's bully pulpit. They need the Saudis to have any credibility. Frankly, without the blessing of its most powerful member OPEC forfeits its leverage.

There has been no announcement about any possibility of OPEC dissolving, but for all intents and purposes the process has already begun. (OK, this is some wishful thinking, but it couldn't happen to nicer bunch of guys!)


Tuesday, September 23, 2008

More on The Mortgage Mess: A Must Read

The Investors Business Daily has an excellent piece on the Fannie/Freddie meltdown. It is a short but powerful must read.

Here are a few key excerpts:

---> Barack Obama has repeatedly blasted "Bush-McCain" economic policies as the cause, as if the two were joined at the hip.

Funny, because over the past 8 years, those who tried to fix Fannie Mae and Freddie Mac — the trigger for today's widespread global financial meltdown — were stymied repeatedly by congressional Democrats.

This wasn't an accident. Though some key Republicans deserve blame as well, it was a concerted Democratic effort that made reform of Fannie and Freddie impossible.

---> It all started, innocently enough, in 1994 with President Clinton's rewrite of the Carter-era Community Reinvestment Act.

Ostensibly intended to help deserving minority families afford homes — a noble idea — it instead led to a reckless surge in mortgage lending that has pushed our financial system to the brink of chaos.

---> Meanwhile, Fannie and Freddie also became a kind of jobs program for out-of-work Democrats.

Franklin Raines and Jim Johnson, the CEOs under whom the worst excesses took place in the late 1990s to mid-2000s, were both high-placed Democratic operatives and advisers to presidential candidate Barack Obama.

Clinton administration official Jamie Gorelick also got taken care of by the Fannie-Freddie circle. So did top Clinton aide Rahm Emanuel, among others.

On the surface, this sounds innocent. Someone has to head the highly political Fannie and Freddie, right?

But this is why crony capitalism is so dangerous. Those in power at Fannie and Freddie, as the sirens began to wail about some of their more egregious practices, began to bully those who opposed them.

---> President Bush, reviled and criticized by Democrats, tried no fewer than 17 times, by White House count, to raise the issue of Fannie-Freddie reform. A bill cleared the Senate Banking panel in 2005, but stalled due to implacable opposition from Democrats and a critical core of GOP abettors. Rep. Barney Frank, who now runs the powerful House Financial Services Committee, helped spearhead that fight.

The last excerpt forces me to amend something I spouted off about in an earlier post: Apparently President Bush DID raise the issue, over and over.

Take the time to read this important IBD article...


Saturday, September 20, 2008

The Panther

"The Panther"

18X24 (acrylic)

Here is a new painting. "The Panther" concludes my African Silhouette Series (see the whole series here) This painting was inspired by a screen saver I saw on, so, unfortunately I don't know who the original photographer is.

Please check out my online art gallery when you have a minute.

Thursday, September 18, 2008

Bend Over

UPDATED: Please click this link for a "fun" look at Fannie Mae debacle

The mortgage mess fallout seems to producing no Ken Lays or Scott Sullivans, someone the public can finger as the culprit. Instead the culprit is the Bush Administration, the Republicans and that nebulous character "Wall Street". Clearly all three deserve some fraction of the blame, if for no other reason than it was happening on their watch. It is, frankly, less than clear that they should be alone in the blame game. In fact with just a little digging on my part we learn once again that the major media in this country is selective in its coverage of this and every other scandal. The culprits hail from every corner of Wall Street and Washington DC. The only hero, Henry Paulson, the current Treasury Secretary, is the man on the white horse in all of this. Did you know he was once the Chairman and Chief Executive Officer of Goldman Sachs, one of the world's largest and most successful investment banks... Quick, name me one of the two large investment houses still standing...

So if I am to castigate the President and the Republicans for not seeing - or at least not reacting to - the freight train barreling down the tracks then a little examination of the good folks on the other side of the isle is warranted. Holy shim stock Batman! You mean to say the Democrats have dirty hands too?

The year is 2005 and Daniel Mudd the new CEO of Fannie Mae is attending the swearing-in ceremony of the Congressional Black Caucus, including Barack Obama. He says:

"So many of you have been good friends to Fannie Mae and our mission. You've been friends through thick and thin. We have indeed come upon a difficult time for Fannie Mae. There is much to be done inside my company and I humbly ask you to help us and to help me. If there are areas where we are missing. If there are areas where we could do better, we'd like to hear it from our friends and I'd be so bold as to say our family first. " It is true that Fannie Mae has lent more money to more minorities and more underserved individuals than any single company in history." "In many ways I want to tell you today you are also the conscience of Fannie Mae."

Using Google I find that no news outlet has mentioned this speech despite the fact of Obama being present and later receiving $126,349 in contributions from Fannie Mae. The real question? If a similar "family" speech given to any Republican group who had received big donations from Fannie Mae wouldn't we expect this to be splashed all over CNN, ABC, CBS etc etc.

Well, the blindness at CNN, ABC, CBS etc etc doesn't stop there. The first of the mortgage giants to begin to float belly up was Countrywide and soon after that rumblings of trouble over at Freddie and Fannies place could be heard. Along the way we heard little tidbits of improper treatment for the connected crowd in Washington and Wall Street. In June, Condé Nast disclosed the names of five V.I.P.-loan recipients: Senators Christopher Dodd and Kent Conrad, former Clinton cabinet members Alphonso Jackson and Donna Shalala, and former United Nations Ambassador Richard Holbrooke, also a Democrat. The Wall Street Journal reported that James Johnson and Franklin Raines, both former C.E.O.’s of government-sponsored mortgage buyer Fannie Mae, received favorable rates.

Other V.I.P. borrowers have also been named including former Countrywide director Henry Cisneros, who served as secretary of Housing and Urban Development in the Clinton administration; former Clinton White House staffer Paul Begala, now a commentator on CNN; and Postmaster General John Potter. Countrywide also offered special discounts to Congressional staffers involved in housing issues.

It seems incredible that so many former members of team Clinton who pushed for the loosening up of the home loan industry were later high ranking officials in Fannie Mae and or obtained extremely favorable treatment from Countrywide for their own home loans. Remember Jamie Gorelick? In the Clinton White House she erected the now infamous "wall of separation" that stopped the FBI and CIA from collaborating on intelligence in the battle against the terrorists. She went to Fannie and raked in some 20 million while the ship was sinking. Franklin Raines, also of team Clinton, was removed as CEO of Fannie Mae because of the imminent collapse. Oddly, he is one of Obama's economic advisors.

So have you been hearing much about this on the nightly news? (crickets chirping) I thought not. What about the top officers of these companies and GSE's, hearing their names dragged around? No? Could it be that if these guys start talking more Democrats are going to be exposed? What about the Bush justice department? Shouldn't they be "going after" the culprits in this fraud? Might Henry Paulson's former employer (where he is most likely to return to after Bushs' term is up) be sensitive to the fact that he ochestrated a takeover of one of Goldman Sachs chief rivals while heading up the U.S. Treasury department?

Is anything being done?

The revelation about the senators sweetheart deals brought to the forefront a longstanding loophole in the personal financial-disclosure requirements for members of Congress. Lawmakers are required to report their financial assets— in general —but they do not have to divulge anything about their primary residences. In an era of wildly inflating home values it was a ready made playground for these shenanigans.

To clean up the the disclosures rules, John Cornyn, the top Republican on the Senate Ethics Committee, last month offered an amendment to the sweeping housing bill crawling through Congress. The two-page amendment simply requires Senators to report the terms of their home mortgages. Unfortunately the barn door was left open for too long - the cows have all gone.

Mr. Paulson is threading the needle trying to keep the world finacial system from collapsing. So far it's hanging on by a (Goldman Sachs) thread. With so much damage having been done by these greedy, corrupt bastartds in Washington DC and on Wall Street it's hard to believe in a system and country I once loved. If I believed for one minute that socialism was even slightly better... Oooohh... shudder... That was close. Our system may not have a heart, this is true, but socialism has no heart and has no soul.

So much for the American dream. Play by the rules, work hard, do a little saving , do a little investing and retire healthy, wealthy and wise. Sure.

So, in the 90's the players got rich on the tech boom driving the stock markets through the roof with cooked books and phony valuations before the wheels came off and millions of "normal" investors got screwed. Well, I for one took some solace in the fact that the wealth I lost in my retirement accounts was more than made up for in the rising value of my other real asset, my house. Well, you know what happened there - yes, screwed again.

Aren't we all getting tired of this yet?


Wednesday, September 17, 2008

Chuckie The Horrible

Few politicians or public officials turn my stomach like Chuck Schumer does. (Just look at those beady eyes) The New York (D) Senator is a regular on the the Sunday talk show circuit and never fails to make my skin crawl when I hear his partisan spiel on every subject under the sun.

He is an evil little man who does damage to this country for partisan reasons that have nothing to do with making life better for anyone.

You may or may not have heard of IndyMac. It WAS a bank in California that has now been taken over by federal regulators and its assets have been sold off. Why? How? Well, it was a bank in some trouble, but it was working it out and stood a decent chance of getting the ship upright again. It seems that Schumer was "concerned" having viewed the situation from his perch as a member of the Senate Finance Committee. His initial contact with federal regulators assured him that the Feds were already working with the bank. For reasons I assume were nefarious, Schumer, in late June, sent a letter to regulators expressing his concerns over Indymac Bank's liquidity and ability to stay afloat. Schumer then published the letter to the public through a Pasadena newspaper. This blatant tampering with the public trust caused a run on the bank insuring a liquidity crisis and the complete failure of the bank.

I am not defending IndyMac, they may have eventually failed, but Schumer guaranteed it and he knew what he was doing. It is not the job of our elected officials to hasten the demise of a private business using the power of his status and his office. His actions were reprehensible.

So, in the latest Schumer move to hurt this country for purely partisan reasons, Chuckie and his good friend Sen. John Kerry essentially handed over the contracts for access to the oil wealth of Iraq to the Chinese.

After the U.S. relieved Iraq of a tyrant and beat back al Qaeda with the blood of 4,000 soldiers Schumer and Kerry stood in the way of the American oil industry from getting temporary contracts to bring Iraqi oil to market. These were no-bid temporary contracts being offered by the Iraqi government to get the oil industry back up and into profitable operation. But Schumer and Kerry among others urged and cajoled the Iraqi government into waiting until the revenue sharing agreements were in place. They did everything in their power to prevent American oil companies from getting these contracts. A victory for American oil companies would have been a victory for Bush. Schumer and Kerry would have none of that.

What eventually happened is that after the revenue sharing laws passed the Chinese under bid everyone and now have the contracts for access to Iraqi's oil wealth. Thanks Chuckie, you frigging ass!

If this is what amounts to Democratic leadership then we are in huge trouble as a nation. It is already clear that Republican leadership is incompetent. The Democrats lust for power has nothing to do with making America a greater nation, in fact it seems that it's exactly the opposite.


Tuesday, September 16, 2008

How Did This Economic Mess Happen?

Which Bush Economic Policies Destroyed the Economy?

I ask this question because I truly don't know. Up until the final quarter of 2007 the economy during the Bush years was quite good. Things began to get shaky in 2006 when oil prices and subsequently prices at the pump started pushing ever higher. Still the economy grew, unemployment was low, non-energy inflation was low, interests rates were low, overall poverty remained largely unchanged since the 60's, even the dreaded annual federal deficit was relatively small as a percentage of the overall GDP.

If you take into account the mild recession that followed the tech bubble/bust coupled with the corporate earning and valuation scandals that came to light in the first year of the Bush Administration - all of which was inherited - and, of course, 9/11 and the subsequent wars it is amazing the economy did as well as it did.

So what went wrong?

Were there fundamental flaws in policy or a confluence of events that skewered a seemingly robust economy? Maybe both? If we then add such long-term problems as inadequate investment in economic and physical infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and federal deficits, and stagnation of family income particularly in the lower economic groups, you can see that these problems have caused a marked reduction in the value and status of the dollar worldwide. How we got to this place pales in comparison to where we are headed, but I digress.


Certainly the oil situation predates President Bush by decades. The Bush Administration did put forth a comprehensive energy plan that included increasing American produced oil supplies among other proactive things, but it never made it through congress and nothing was done. Whether it would have forestalled the situation we are in is up for debate.

When major oil producers in Venezuela, Russia and Nigeria nationalized their oil businesses it signaled a looming hostile environment for oil supply/price stability. China, India and other emerging southeast Asian economies ramped up demand for petroleum the price pressure increased. Speculators also had a significant role in the run-up of crude oil prices. The prime factor though was a weakening U.S. dollar.

Did the Bush Administration pursue a weak dollar strategy?

The dollar is weak primarily because the U.S. runs such huge trade and budget deficits. The U.S. government borrows nearly $2 billion a day abroad. Many foreign investors have become unwilling to lend us that much money at current low interest rates. This leaves it to central banks to make up the difference. In 2004, fully 49% of the U.S. current account deficit was financed by foreign central banks, with China and Japan the biggest lenders. High Federal deficits can be squarely laid at the feet of the Bush Administration.

Japan and China buy dollars to keep their currencies undervalued and, of course, their products underpriced. This dysfunctional co-dependency creates a terrible cycle. Cheaper Asian currencies and exports aggravate the trade imbalance even further - leading to still more borrowing. A high valued dollar suppresses American exports. So, one could ask, wouldn't pursuing a weak dollar policy help the situation? Apparently not.

What about the Federal Reserve? Keeping interest rates too low has hurt more than it has helped. Since I don't know that much about high finance I can only comment on the effects and not on the theory of such a strategy. If using interest rates to control inflation is the goal then the Fed has failed. Low interest rates hurt the value of the dollar. It dilutes the value of any savings individuals might have. It makes foreign investment in U.S. backed bonds less attractive as described earlier.

The Mortgage Mess

Ridiculously low mortgage rates have caused a huge problem. I am wary of throwing this mess solely on the Bush Administration other than to ask who the hell was minding the store? Certainly the changes in the Community Reinvestment Act during the Clinton Administration that put pressure on lenders to loosen their time tested lending practices was the crack in the dike. Changes in the late 90's to regulatory rules blew the crack wide open. It was a bipartisan fiasco. As part of a decades-long anti-regulatory crusade Sen. Phil Gramm (R) Texas, pulled a crafty legislative maneuver called the Commodity Futures Modernization Act that paved the way to this current multibillion-dollar subprime meltdown. Signed by President Clinton as part of a larger bill it allowed regulatory agencies to cast a blind eye on banks and hedge funds that were gambling on whether an investment (for instance, a batch of subprime mortgages bundled into a security) would payoff or fail. Because of certain provisions of Gramm's bill (which were supported by Fed chairman Alan Greenspan and Clinton's Treasury secretary Larry Summers) a $62 trillion market was essentially unregulated. There was no one to make sure the banks and hedge funds had the assets to cover the losses they were guaranteeing.

Again, I'm not sure Bush policies were even partly responsible, but by God wasn't anyone awake at the switch? When the market was saturated with overbuilt McMansions and the first of the foreclosures began pushing home values down the whole thing - relying on ever increasing home prices - crashed and burned.

Fannie and Freddie, IndyMac, Bear and Sterns, Lehman Brothers, Countrywide, Merril Lynch to name a few have been mismanged into financial collapse. Strangley, we learn the high elected officials have their mits all over these entities by either receiving campaign contributions or sweetheart deals on personal loans and mortgages. Again - a very bipartisan group this bunch.

In conclusion I can't say it was purely Bush Administration policies, congressional inaction or a confluence of events that destroyed the economy of a good nation (and maybe the world) but, it was on his watch. I wonder if McCain can actually change anything that goes on in the Capitol or even in the White House, but I'm damn sure that Obama's "raise taxes" plan is not the answer.

What a mess...


Friday, September 12, 2008

Charlie, Charlie, Charlie

Gov. Palin's first interview fails to impress...

While I really like her and what she has accomplished in her short time in politics I was less than "knocked out" after watching the Charlie Gibson interview on ABC.

For one, I don't like when people constantly invoke the name of the person they are talking to. He knows his name for God's sake. It comes off as slightly condescending. She did this constantly.

Speaking of condescending... Charlie Gibson was doing his best pompous ass routine. His body language and tone were unmistakable. Still, this is big time politics and Sarah Palin seemed out of her league with some of her responses.

What I do like is her confidence. It is a trait that is vital to a leader. Make decisions, don't blink. However, it is clear she is not ready to be the President of the United States on day one.

Do I think she can do the job of Vice-President? Yes, with both eyes closed and one hand tied behind her back. While it has been said (by Joe Biden of Barack Obama) the Presidency doesn't lend itself to on the job training - but it would seem to me that the Vice Presidency does.

I watched John McCain on the National Service forum last night and it is plain to see he is man with a command of the issues and the process of government and I say what better mentor could Sarah Palin have?

My own views and beliefs fall in line with McCain/Palin far more readily than Obama/Biden. Palin's international inexperience would not prevent me from supporting McCain provided he is not dying... But she has work to do.

Tuesday, September 09, 2008

Properly Vetted, My A$$

This is truly the pot calling the kettle black. The mainstream media has pulled out all the stops, stooping to any level to get the "dirt" on Sarah Palin. After having had 20 months to properly vet Barack Obama and doing everything they can to ignore gaping credibility holes in this mans past.

For that matter they have also given McCain a free pass. McCain has skeletons in the closet - can anyone say Keating 5. Some say that the embarrassment of the Keating 5 experience transformed McCain into a corruption fighter. OK. But more likely he's learned to be discreet and fly below the radar.

But for goodness sake, Barack Obama has Tony Rezko and William Ayers and Bernadine Dohrn. One is a convicted criminal and the other two avowed domestic terrorists and haters of America. He can claim to be a casual acquaintance of Ayers, but it just doesn't add up when you learn it was Ayers who literally launched Obama into politics.

Obama was also at one time heavily associated with A.C.O.R.N. which is well known for its illegal voter turnout activities amongst other shady dealings. His childhood mentors were known communists. Saul Alinsky was a hero to this man! Obama's 20 year relationship with a Black Liberation Theology Church and its outspoken pastor only became a "media" story because said pastor was a bombastic ego-head who was eager to capitalize on Barack's new found fame. For Obama to claim he never heard such inflammatory "talk" when he was in the pews is really disingenuous yet the media didn't call him out on that aspect of the story. Be that as it may, his associations with terrorists and communists have gone severely under reported.

Bring on Sarah Palin. The media has crawled down into the mud to dig up ANYTHING that might remotely bring embarrassment on Gov. Palin. Now, granted, this is big time politics - it doesn't get much bigger - and Mrs. Palin cannot cry about the treatment she is receiving. I have not heard her being accused of crying foul - but the army of Democratic operatives (read: the media) flying to Alaska is truly unprecedented.

Funny thing, I have yet to hear anyone from her "small town" trash her. In fact, she seems by all accounts to be extremely popular back home and actually quite an effective leader as well.

From outrageous accusations that her son, Trig is actually her grandson to a front page Washington Post article that said she abused per diem spending as the governor, the daily barrage is unrelenting. So far none of it has amounted to anything. She is being accused of being a neglectful mother for daring to have a career and a family. No man running for high office has ever been subject to criticism for choosing a career over family. This is absolutely a double standard. She is accused of attending her church and then talking about God. Oh my, I mean, how could she?

Most of the stories that made it into the "responsible" media could have been checked out in minutes but weren't - or even if they were the original claim was thrown against the wall anyway. For instance Mrs. Palin did not support Patrick Buchanan in 2000, she supported Steve Forbes, a well known fiscal conservative. She was never a member of any separatist political party in Alaska - she has been a registered Republican since the 80's. She has not called for Creationism to be taught in schools in any official capacity, she merely said that debate is healthy and that a discussion about Creationism and Evolution is a good thing. Yet these points are being used to paint her as a right-wing extremist. And her worst sin of all - she has said hypothetically she would not support her own daughters decision to abort a baby even in the event rape or incest. But she did not make a move on Roe v Wade in Alaska despite her personal antipathy toward abortion.

Every similar attack on Obama from the FAR-RIGHT is met with derision from the media's punditry. Several best sellers (New York Times Bestsellers) critical of Barack Obama are not getting reviewed or the authors are not invited to be interviewed in the major media. But any book critical of Bush is reviewed and analyzed endlessly. Just wait for the first book on Palin - soon to be hot off the presses, I'm sure - and you won't be able to avoid the author.

Sarah Palin so far has shown she is not a cry baby. I hope she just knocks the socks off them in all her upcoming interviews, speeches and debates.

I will wait patiently for all the hard journalism on Barack Obama... Zzzzzzzzzzzzzzzz.


Saturday, September 06, 2008

Game On

My friends, my fellow Americans, ladies and gentleman, red staters and blue staters, the stage is set for a pretty historic election. The first black (half black anyway) candidate versus a senior citizen war hero. Also, the first time in a long time their is neither a Bush nor a Clinton on the ticket. In fact the first time in a very long time their is neither an incumbent nor his vice president heir apparent on the ticket. Historic indeed.

I watched just a little of the RNC convention - after all it was in my home town. I watched even less of the DNC convention. The DNC acted like we are in the 8th year of the Great, Great Depression. It was just so depressing to watch. Not even the Messiah himself inspired me with litany after litany of how awful everything is. On the the other side it was attack, attack, attack. Not much to hang your hat on. Honestly John McCain got it about right when he told the nation that the Republicans went to Washington to change it but were instead changed by it. The Republicans wasted any good faith the people entrusted in them in 1994 and a again in 2000. The Democratic congress now in power is living up to expectations I may have had for them - which was nothing.

The next major events will be the debates. The great thing about the debates is the uncivil rhetoric is absent and we can get a sense of the person in an unscripted setting. I know McCain is comfortable in this setting, Biden will have to keep his answers from running on and spilling over but he should be OK too - the other 2 will show us their true colors. It should be good.

Now, you do realize that the 2012 campaign will fire up six seconds after the loser concedes. What fun it will be!


Thursday, September 04, 2008


I was pretty impressed.

For one, considering the unbelievable amount of pressure she must have been under she really performed well. She had some really memorable lines... "by the way, you know the difference between a hockey mom and a pit bull? The lipstick!" C'mon that was good and you know it.

She was the pit bull last night. The VP's job during the campaign is to go on the attack so that the candidate can be more statesmen-like. Well, she certainly did her job. Personally I do hope that McCain can focus more on the positive and less on the attacks and negative swipes at the Dems.

In Denver Mr. Obama was certainly critical of McCain and by proxy Bush. He did then offer his solution: Change. Change to what? Well, higher taxes and creeping socialism. But no change in their stance on drilling for oil or their stance on pie in the sky reliance on "alternatives". Their idea of change is really a return to progressive ideas of the 60's that have been tried and found lacking.

McCain and Palin do represent change. Change to the Republican party. The party is a mess and is just as corrupt as the Dems. Gov. Palin actually has a lot to add to her credit on reform within the Alaskan republican machine which held the state in its grips the way the Dems hold Chicago under their thumb. Specifically she blew the whistle on corruption with the state government (in her own party). She took on the entrenched network of good 'ol boys and won.

Doing a little research on Gov. Palin actually leaves one more impressed than just hearing her deliver a rousing speech. She has done things that have been good for Alaska. She is tough and accomplished - and is quite popular in her home state.

Natives of Alaska have dreamed of a pipeline stretching for 1,715 miles from the Prudhoe Bay treatment plant to Alberta Canada for more than 30 years. Sarah Palin in less than two years got the bill passed and the framework is now laid for them to move forward with the project.

She signed Order 242 which puts together a co-op of the Department of Natural Resources and the Department of Revenue to work with organizations who wish to commercialize Alaska's North Slope natural gas.

"This solidifies our commitment to facilitating an LNG project that is a product of market interest,” Governor Palin said. “By committing both project capital and natural gas resources to a pipeline that would transport North Slope natural gas to tidewater, an LNG project can remain an integral element of the state’s effort to deliver Alaska’s gas to market"

Obviously energy production is the lifeblood of the Alaskan economy. This is energy that America needs. Since all Alaskans are by law owners of the mineral rights under Alaskan soil it only makes sense that the governor work toward securing and enhancing the states interest in energy developments. She was involved in renegociating with the oil companies that hold the leases on oil and natural gas resources to aquire a better deal for the stae and its residents. Some can call it a windfall profits tax - but that would be a stretch. All government entities negociate with private corporations for mineral rights, some just do it better than others. Everyone in Alaska benefits not just the government and the oil companies.

Under her leadership, Alaska invested $5 billion in state savings, overhauled education funding, and implemented the Senior Benefits Program that provides support for low-income older Alaskans. She created Alaska’s Petroleum Systems Integrity Office to provide oversight and maintenance of oil and gas equipment, facilities and infrastructure. During her first legislative session, Governor Palin’s administration passed two major pieces of legislation - an overhaul of the state’s ethics laws and a competitive process to construct a gas pipeline.

So, yes I am impressed.

Whether this McCain/Palin team wins in Nov. or not, Sarah Palin is someone to watch out for.


Monday, September 01, 2008

Capital vs Labor

The battle of capital vs labor has been raging since the beginning of time. Since the beginning of the industrial revolution the advantage has almost always been with capital. The struggle between the West and the communist revolution was a major front in this "war". The utopian concepts of Marx, Engels and Lenin were never going to exalt labor over capital because labor has no power without capital's gears to propel the movement forward. Before modern mechanization and transportation there was perhaps a fragile balance between the two. Time marches on and fragile doesn't hold up well over time.

In modern times - post WWII - labor began losing ground rapidly starting in the 70's and 80's. People can cite President Reagan's firing of the Air Traffic Controllers as the defining moment, but the mass exodus of labor intensive jobs began accelerating in the 70's.

Steel mills, mining operations, auto manufacturing and hundreds of other heavy industries began feeling the pressure of foreign competition in the 70's. Politically there was a deliberate shift in the Reagan years toward capital over labor with the concept of trickle-down and supply side economics. The adage "a rising tide lifts all boats" was the mantra for those on the side of capital.

Concurrently there was the rise of Japan and new management/labor relations techniques taking root in the U.S. that disfavored acrimonious union vs management attitudes. When Japanese manufacturers set up shop in America they almost always located in what were called right to work states where labor unions were not always welcome. As the manufacturing-based society gave way to the service/information-based society American workers saw less and less advantage in collective bargaining and union brotherhood.

This is the way it went for the next 20 years. In the 90's communism as a economic model died with a whimper and global capitalism was the clear victor. After any "battle" there is chaos on the ground - and so here we are...

Currently the number of American workers that are unionized is a tiny fraction of what it once was. Only government serving labor unions are growing. The question is one of balance. Where has the decline of labor union power led us? Does balance need to be restored?

There are those that argue that real wages and buying power for the average "worker" in the United States has stagnated or declined since the 80's. Personally I find it hard to make that case when one sees the wealth and material possessions of the average Joe in 2008. Real poverty rates have held steady in the U.S. since the 60's when President Johnson launched a massive wealth transfer scheme called the Great Society. Trillions spent on reducing poverty only succeeded in concentrating it in urban America. Who is to say it wouldn't have happened that way regardless, but the flight of wealth to the suburbs makes it hard to point to labor's decline a devastating factor.

If using poverty as a measuring stick for the impact of capital over labor is valid - and the United States is largely unchanged despite the massive upheaval of labor, then we need to turn to world poverty as a arbiter.

New estimates of the extent of the developing world's progress against poverty are interesting. Using the frugal $1 a day standard, we find that there were 1.1 billion poor in 2001 - almost 400 million fewer than 20 years earlier. Over the same time period, the number of poor declined by more than 400 million in China. The number of poor outside China rose slightly over the period primarily due to declining conditions in Sub-Saharan Africa. A marked bunching up of people between $1 and $2 a day has also emerged. If these trends continue, then the aggregate $1 a day poverty rate for 1990 will be halved by 2015, though only East and South Asia will reach this goal.

Surely it is almost impossible for us to imagine living on $365 a year, but the point is that global poverty is declining. As the modern world accelerates into the third world (provided Africa stabilizes politically) poverty could be in permanent decline. Would this be due to the decline of labor's power in the West? Good question. Capital is flooding into countries with large labor pools and these are the very countries seeing the greatest reductions in such devastating poverty.

The exploited masses in this "new" labor force will have to battle it's way to the same place American labor did. As the labor force attains a certain affluence higher wages and better conditions will be demanded just like they did in the West. When labor becomes too expensive capital will move, just like it did in the West - and poverty will continue to decline, right?