Tuesday, August 25, 2009

Is the US political system capable of bringing about change that does not perpetuate the interests of the elite?


he stood with his predecessor – serial bubble-blowing Alan Greenspan – who argued that monetary authorities are best positioned to clean up the mess after the bursting of asset bubbles rather than to pre-empt the damage. "

Editorial Comment

The biggest criticism of US Policy is that they their planners are not adjusting to the new realities represented by globalisation, the failures of US Foreign policy, the loss of faith in the dollar and the apparent lack of any ethics in the general economic environment. I believe it is less a case of the planners not being aware of the need to make fundamental changes as the fact that these changes will hurt some major players and their interests and therefore will not be allowed to happen.
A consumer economy based on the good credit standing of the US will have to undergo change when the US is no longer AAA but this is a tough sell to the powerful retail Industry. A foreign policy that hurts the interests of AIPAC and the defense Industry is a non starter.
Is the US political system capable of bringing about change that does not perpetuate the interests of the elite? This is the biggest hurdle when the answer is " unlikely". While the non elite forces are greater in number, they still lack the organisation to have an impact. There is a growing sense of frustration that the Democratic Party is too much in the grip of the elite. It is only less elitist to the extent that the Republican party is far more racist and for the time being the Democratic President is black.
The forlorn hope that a grass roots movement will revolt and bring about change rises perpetually in the American heart. What will this grass roots movement be based on? Anti race, resistance to war or a concern for the environment. I believe neither of these. People will revolt, when they do, because of economic injustice. The lack of jobs, housing,reasonable heath care and adequate educational opportunities will bring out people on the streets faster. Not until people come out on to the streets to express their point of view will any one sit up and take notice. I believe that we need to build up the platform for Economic Justice within Wespac and build awareness not just for a better life but specially for meeting the basics of life. Until such time that we can show the way of achieving this both through mobilising and education, we cannot give the hope to the distressed that is needed. Hope will come with success and success will come through more vigorous and effective action. The message is quite clear, we cannot wait for Obama to deliver. It should be enough that he is there, we need for ourselves to mobilise and deliver.


The case against Bernanke
By Stephen Roach
Published: August 25 2009 16:02 | Last updated: August 25 2009 16:02
Barack Obama has rendered one of his most important post-crisis verdicts: Ben Bernanke will be nominated for a second term as chairman of the Federal Reserve. This is a very shortsighted decision. While America’s head central banker deserves credit for being creative and courageous in orchestrating an unusually aggressive monetary easing programme, it is important to remember that his pre-crisis actions played an equally critical role in setting the stage for the most wrenching recession since the 1930s. It is as if a doctor guilty of malpractice is being given credit for inventing a miracle cure. Maybe the patient needs a new doctor.
Mr Bernanke made three critical mistakes in his pre-Lehman incarnation: First, and foremost, he was deeply wedded to the philosophical conviction that central banks should be agnostic when it comes to asset bubbles. On this count, he stood with his predecessor – serial bubble-blowing Alan Greenspan – who argued that monetary authorities are best positioned to clean up the mess after the bursting of asset bubbles rather than to pre-empt the damage. As a corollary to this approach, both Mr Bernanke and Mr Greenspan drew the wrong conclusions from post-bubble strategies earlier in this decade put in place after the bursting of the equity bubble in 2000. In retrospect, the Fed’s injection of excess liquidity in 2001-2003, which Mr Bernanke endorsed with fervour, played a key role in setting the stage for the lethal mix of property and credit bubbles.

Second, Mr Bernanke was the intellectual champion of the “global saving glut” defence that exonerated the US from its bubble-prone tendencies and pinned the blame on surplus savers in Asia. While there is no denying the demand for dollar assets by foreign creditors, it is absurd to blame overseas lenders for reckless behaviour by Americans that a US central bank should have contained. Asia’s surplus savers had nothing to do with America’s irresponsible penchant for leveraging a housing bubble and using the proceeds to fund consumption. Mr Bernanke’s saving glut argument was at the core of a deep-seated US denial that failed to look in the mirror and pinned blame on others.

Third, Mr Bernanke is cut from the same market libertarian cloth that got the Fed into this mess. Steeped in the Greenspan credo that markets know better than regulators, Mr Bernanke was aligned with the prevailing Fed mindset that abrogated its regulatory authority in the era of excess. The derivatives’ explosion, extreme leverage of regulated and shadow banks and excesses of mortgage lending were all flagrant abuses that both Mr Bernanke and Mr Greenspan could have said no to. But they did not. As a result, a complex and unstable system veered dangerously out of control.
Notwithstanding these mistakes, Mr Obama may be premature in giving Mr Bernanke credit for the great cure. No one knows for certain as to whether the Fed’s strategy will ultimately be successful. The worst of the US recession appears to have been arrested for now – a fairly typical, but temporary, outgrowth of the time-honored inventory cycle. But the sustainability of any post-bubble recovery is always dubious. Just ask Japan 20 years after the bursting of its bubbles.
While financial markets are giddy with hopes of economic revival – in part inspired by Mr Bernanke’s cheerleading at the Fed’s annual Jackson Hole gathering – there is still good reason to believe that the US recovery will be anaemic and fragile. US consumers are in the early stages of a multi-year retrenchment as they cut debt and rebuild retirement saving. The unusual breadth and synchronicity of the global recession will restrain US export demand from becoming a new growth engine.
It would be the height of folly to reward Mr Bernanke for the recovery that never stuck. Yet Mr Bernanke’s apparent reward is, unfortunately, typical of the snap judgments that guide Washington decision-making. In this same vein, it is hard to forget Mr Greenspan’s mission-accomplished speech in 2004 that claimed “our strategy of addressing the bubble’s consequences rather than the bubble itself has been successful”. Eager to declare the crisis over, the Obama verdict may be equally premature.
The Bernanke reappointment is a welcome chance for a broader debate over the conduct and role of US monetary policy. Mr Obama has made sweeping proposals that give the Fed broad new powers in managing systemic risks. I argued in the Financial Times 10 months ago that the Fed should not be granted these powers without greater accountability as required by a “financial stability mandate” – in effect, forcing the Fed to shape monetary policy with an aim towards avoiding asset bubbles and imbalances. Without a revamped policy mandate, it is conceivable that we could face another destabilising crisis.
Ultimately, these decisions boil down to the person – in this case, Mr Bernanke – who is being charged with the awesome responsibility as America’s chief economic policymaker. As a student of the Great Depression, he should have known better. Yes, he reacted strongly after the fact in taking actions to avoid the pitfalls highlighted by his own research. But he lacked the foresight and courage to resist the most reckless tendencies of the era of excess. The world needs central bankers who avoid problems, not those who specialise in post-crisis damage control. For that reason, alone, he should not be reappointed. Let the debate begin.

The writer is chairman of Morgan Stanley Asia and author of The Next Asia to be published next month

Saturday, August 1, 2009

Who rules America?


"Fighting the special interests doesn't pay and doesn't succeed."

Editorial Comment

Paul Craig Roberts has been railing against this system for a long time but as we are seeing in the case of Health care the corporations own Congress. I do not expect anything to change soon even under Obama. What may gain traction though is the second part of the article which questions why we are in Afghanistan. As the cost of conducting this war exceeds the cost of the Iraq war, sheer Economics will make people ask the obvious questions, what are we doing pouring valuable resources like men and money into the worlds biggest hell hole?

Obama has a very short window to make up his mind about how he will justify the Afghan war but if it is still there by the time of the next elections he will have run out of sell able ideas. His commitment to AfPak has stopped his party from pointing out the obvious connection between the Iraq/Afghanistan adventure and his failure to finance the Health Care plan. The Health Care plan incidentally is dying before our very eyes.

The other point in the article which gets no sympathy from any one because no one really cares about them ( never mind the car sticker s which say, I support the toops) is the psychological destruction of the men and women who serve in the US army. In spite of the various programs that the army puts them through on their return, a fairly large number become killers, rapists, wife/girl friend beaters, misfits and outcasts of society.

There is even less sympathy for what we have done to Iraq in destroying their country. No one questions how Iraq is now a much worse place for it's citizen then it was under Saddam. All we care about is to declare victory and to get out. If there are huge red flags relating to an ailing nation then we are not recognising them because we are not admitting that any thing serious ails us.

We are a nation in denial about our sickness and continue to harp on the great virtues of our Democracy and our Financial systems.


"We have shifted from a culture of production to a culture of consumption. "

"The skillfully manufactured images and slogans that flood the airwaves and infect our political discourse mask reality. And we do not protest. "
=0 A

Consider the following written by Chris Hedges in his new Book:

I reported in my new book, Empire of Illusion: The End of Literacy and the Triumph of Spectacle from the ringside of professional wrestling bouts at Madison Square Garden, from Las Vegas where I wrote about the pornographic film industry, from academic conferences held by positive psychologists -- who claim to be able to engineer happiness – and from the campuses of universities to chronicle our terrifying flight as a culture into a state of illusion. I looked at the array of mechanisms used to divert us from confronting the economic, political and moral collapse around us. I examined the fantasy that if we draw on our inner resources and strengths, if we realize that we are truly exceptional, we can have everything we desire.
The childish idea that we can always prevail, that reality is never an impediment to what we want, is the central motif of illusion peddled on popular talk shows, by the Christian Right, by Hollywood, in corporate retreats, by the news industry and by self-help gurus. Reality can always be overcome. The future will always be glorious. And held out to keep us amused and entertained are spectacles and celebrities who have become idealized versions of ourselves and who, we are assured,20we can all one day become.
The cultural embrace of illusion, and the celebrity culture that has risen up around it, have accompanied the awful hollowing out of the state. We have shifted from a culture of production to a culture of consumption. We have been sold a system of casino capitalism, with its complicated and unregulated deals of turning debt into magical assets, to create fictional wealth for us and vast wealth for our elite. We have internalized the awful ethic of corporatism -- one built around the cult of the self and consumption as an inner compulsion -- to believe that living is about our own advancement and our own happiness at the expense of others. Corporations, behind the smoke screen, have ruthlessly dismantled and destroyed our manufacturing base and impoverished our working class. The free market became our god and government was taken hostage by corporations, the same corporations that entice us daily with illusions though the mass media, the entertainment industry and popular culture.
The more we sever ourselves from a literate, print-based world, a world of complexity and nuance, a world of ideas, for one informed by comforting, reassuring images, fantasies, slogans and a celebration of violence the more we implode. We ask, like the wrestling fans or those who confuse love with pornography, to be fed lies. We demand lies. The skillfully manufactured images and slogans that flood the airwaves and infect our political discourse mask reali ty. And we do not protest. The lonely Cassandras who speak the truth about our misguided imperial wars, the global economic meltdown and the imminent danger of multiple pollutions that are destroying the eco-system that sustains the human species, are drowned out by arenas full of fans chanting "Slut! Slut! Slut!" or television audiences chanting "Jer-ry! Jer-ry! Jer-ry!" The worse reality becomes, the less a beleaguered population wants to hear about it and the more it distracts itself with squalid pseudo-events of celebrity breakdowns, gossip and trivia.
A culture that cannot distinguish between reality and illusion dies. And we are dying now. We will wake from our state of induced childishness, one where trivia and gossip pass for news and information, one where our goal is not justice by an elusive and unattainable happiness, to confront the stark limitations before us or we will continue our headlong retreat into fantasy. Those who do not grow up in times of despair and turmoil inevitably turn to demagogues and charlatans to entertain and reassure them. And these demagogues, as they have throughout history, lead the crowd, blinded and amused, towards despotism.


Who Rules America?
By Paul Craig Roberts

What do you suppose it is like to be elected president of the United States only to find that your power is restricted to the service of powerful interest groups?

A president who does a good job for the ruling interest groups is paid off with remunerative corporate directorships, outrageous speaking fees, and a lucrative book contract. If he is young when he assumes office, like Bill Clinton and Obama, it means a long life of luxurious leisure.

Fighting the special interests doesn't pay and doesn't succeed. On April 30 the primacy of special over public interests was demonstrated yet again. The Democrats' bill to prevent 1.7 million mortgage foreclosures and, thus, preserve $300 billion in home equity by permitting homeowners to renegotiate their mortgages, was defeated in the Senate, despite the 60-vote majority of the Democrats. The banksters were able to defeat the bill 51 to 45.

These are the same financial gangsters whose unbridled greed and utter irresponsibility have=2 0wiped out half of Americans' retirement savings, sent the economy into a deep hole, and threatened the US dollar's reserve currency role. It is difficult to imagine an interest group with a more damaged reputation. Yet, a majority of "the people's representatives" voted as the discredited banksters instructed.

Hundreds of billions of public dollars have gone to bail out the banksters, but when some Democrats tried to get the Senate to do a mite for homeowners, the US Senate stuck with the banks.The Senate's motto is: "Hundreds of billions for the banksters, not a dime for homeowners."

If Obama was naive about well-intentioned change before the vote, he no longer has this political handicap.

Democratic Majority Whip Dick Durbin acknowledged the voters' defeat by the discredited banksters. The banks, Durbin said, "frankly own the place."

It is not difficult to understand why. Among those who defeated the homeowners bill are senators Jon Tester (Mont), Max Baucus (Mont), Blanche Lincoln (Ark), Ben Nelson (Neb), ManyLandrieu (La), Tim Johnson (SD), and Arlan Specter (Pa). According to reports, the banksters have poured a half million dollars into Tester's campaign funds. Baucus has received $3.5 million; Lincoln $1.3 million; Nelson $1.4 million; Landrieu $2 million; Johnson $2.5 million; Spec ter $4.5 million.

The same Congress that can't find a dime for homeowners or health care appropriates hundreds of billions of dollars for the military/security complex. The week after the Senate foreclosed on American homeowners, the Obama "change" administration asked Congress for an additional $61 billion dollars for the neoconservatives' war in Iraq and $65 billion more for the neoconservatives' war in Afghanistan. Congress greeted this request with a rousing "Yes we can!"

The additional $126 billion comes on top of the $533.7 billion "defense" budget for this year. The $660 billion--probably a low-ball number--is ten times the military spending of China, the second most powerful country in the world.

How is it possible that "the world's only superpower" is threatened by the likes of Iraq and Afghanistan? How can the US be a superpower if it is threatened by countries that have no military capability other than a guerilla capability to resist invaders?

These "wars" are a hoax designed to enrich the US armaments industry and to infuse the "security forces" with police powers over American citizenry.

Not a dime to prevent millions of Americans from losing their homes, but hundreds of billions of dollars to murder Muslim20women and children and to create millions of refugees, many of whom will either sign up with insurgents or end up as the next wave of immigrants into America.

This is the way the American government works. And it thinks it is a "city on the hill, a light unto the world."

Americans elected Obama because he said he would end the gratuitous criminal wars of the Bush brownshirts, wars that have destroyed America's reputation and financial solvency and serve no public interest. But once in office Obama found that he was ruled by the military/security complex. War is not being ended, merely transferred from the unpopular war in Iraq to the more popular war in Afghanistan. Meanwhile, Obama, in violation of Pakistan's sovereignty, continues to attack "targets" in Pakistan. In place of a war in Iraq, the military/security complex now has two wars going in much more difficult circumstances.

Viewing the promotion gravy train that results from decades of warfare, the US officer corps has responded to the "challenge to American security" from the Taliban. "We have to kill them over there before they come over here." No member of the US government or its numerous well-paid agents has ever explained how the Taliban, which is focused on Afghanistan, could ever get to America. Yet this hyped fear is sufficient for the public to support the continuing enrichment of the military/security complex, while American homes are foreclosed by the banksters who have destroyed the retirement prospects of the US population..

According to Pentagon budget documents, by next year the cost of the war against Afghanistan will exceed the cost of the war against Iraq. According to a Nobel prize-winning economist and a budget expert at Harvard University, the war against Iraq has cost the American taxpayers $3 trillion, that is, $3,000 billion in out-of-pocket and already incurred future costs, such as caring for veterans.

If the Pentagon is correct, then by next year the US government will have squandered $6 trillion dollars on two wars, the only purpose of which is to enrich the munitions manufacturers and the "security" bureaucracy.

The human and social costs are dramatic as well and not only for the Iraqi, Afghan, and Pakistani populations ravaged by American bombs. Dahr Jamail reports that US Army psychiatrists have concluded that by their third deployment, 30 percent of American troops are mental wrecks. Among the costs that reverberate across generations of Americans are elevated rates of suicide, unemployment, divorce, child and spousal abuse, drug and alcohol addiction, homelessness and incarceration. http://www.truthout .org/051209J? n

In the Afghan "desert of death" the Obama administration is constructing a giant military base. Why? What does the internal politics of Afghanistan have to do with the US?

What is this enormous waste of resources that America does not have accomplishing besides enriching the American munitions industry?

China and to some extent India are the rising powers in the world. Russia, the largest country on earth, is armed with a nuclear arsenal as terrifying as the American one. The US dollar's role as reserve currency, the most important source of American power, is undermined by the budget deficits that result from the munition corporations' wars and the bankster bailouts.

Why is the US making itself impotent fighting wars that have nothing whatsoever to do with its security, wars that are, in fact, threatening its security?

The answer is that the military/security lobby, the financial gangsters, and AIPAC rule. The American people be damned.