The Wrongologist

What’s Wrong Today

We could talk about a host of things that are wrong, starting with Senators McCain & Graham Thanking America Last with their continuing wrongheadedness about Libya, (how is it possible for two Senators to be on every side of this issue, and always be wrong? 

But for today, let’s talk about something that is right: The New York Times reported today on the opening of the Martin Luther King Memorial on the Mall in DC. The Memorial opened on Monday after 20+ years of planning, but still about $5 million short of the funds required for its construction. It will be formally dedicated on Sunday, the 48^th anniversary of MLK’s 1963 “I Have a Dream” speech.

President Obama will lead the dedication ceremony, providing neat symbolism for a nation that often can’t get its symbolism right.

(Phillip Scott Andrews/The New York Times)

The Sculpture draws its inspiration from a line in the Dream Speech:  “With this faith we will be able to hew out of the mountain of despair a stone of hope”

Ask a person under 25 about MLK and they will say things like: “He made the ‘I have a dream’ speech? I heard it in school’; or, “He made things better in the US”; or, “He fought for black rights”.

Well, he did all of those things kids, and so much more. I lived through the 1950’s and 1960’s and MLK transformed America. In the ‘50’s the US was a place where no one questioned why we did things the way we did, we just followed whatever our parents did. By the end of the ‘60’s we had questioned everything, changed a few things and many of us were living under a very different set of social mores than those of our parents.

For me, the end of the 1950’s came with the civil rights movement. MLK, others in our churches and some courageous few politicians created a real “moral majority” (not the phony idea espoused by Jerry Falwell 25 years later), of people of all races, educational and economic strata who came together to support the Big Idea that Separate was not Equal. MLK went big, giving a voice to the Big Idea. His presence, power and persuasiveness drove our political process to a place and to an outcome in the Civil Rights Act of 1964 that was completely unthinkable in 1954 when Brown vs. Board of Education was decided by the Supreme Court. LBJ helped, too.

I participated in the Civil Rights movement from 1958 to 1962. My participation changed me, shaping my viewpoint on race, religion and politics. I left active participation in the movement believing good ideas and a morally sound position would, if properly promulgated, create change through our political process.

I was an officer in the US Army running a nuclear missile unit in Germany when MLK was killed in 1968. We had several tense days, despite the fact that the Army was ahead of the country at that point, integrated and in some ways, a meritocracy blind to race.

MLK remains the hero of a generation of Americans for whom activism was a building block of their personal journey to adulthood. In most ways, our nation has not recovered that sense of can-do, or that all things are possible for your Big Idea, because sadly, today we have no one who can rally us to drive Big Ideas to reality.

Still, 48 years later, we have not yet completely erased our race-related issues, except on TV, where every day,  commercials show people of all races having fun together while shopping for their next fast food meal.

Let’s hope that it becomes a reality outside of TV before too many more MLK days come and go by.

What’s Wrong Today:

Everyone is concerned about the economy and how to add new jobs. If you follow the current state of play between the parties, you know that:

• President Obama is casting about for a plan that a) will pass both houses of Congress and b) can add some jobs.
• An article of faith for most business executives and most Republicans is that the only solution is tax breaks for businesses and their executives (the “job creators”).
• The Keynesians argue for substantial and immediate stimulus (“government spending”) to create jobs as a bridge until our economy’s momentum takes over and drives us out of the doldrums. 

Should it be the government or the private sector that drives? We all want the answer to be the private sector, since down deep, we are all capitalists. We like the job creator image. We hear that America’s corporations are sitting on piles of cash that they are dying to unleash to create new jobs if only the government would get out of the way, and maybe provide a few tax breaks, too.

The statistics are compelling: The Wall Street Journal said recently that the S&P 500 corporations “collectively have $963 billion in cash, a sum equal to twice the annual output of the state of Ohio”. The New York Times reported that “519 American multinational corporations had $1.375 trillion outside of the United States”. The idea was that it would be repatriated if the Obama administration changed our tax policy to lower the tax rate on foreign dividends.

Consider these awesome numbers:

• Apple has $41 billion offshore
• Microsoft has $42 billion
• Cisco has $39 billion of which 90% is offshore
• Google has $40 billion in cash of which 43% is offshore

It’s child’s play right? Lighten up on the taxes these guys pay, and the jobs will roll on home too. Deregulate ‘em, and here come the jobs. 

So What’s Wrong?

Don’t count on significant domestic job creation from multinationals. The latest data show that multinationals cut 2.9 million jobs in the United States and added 2.4 million overseas between 2000 and 2009. Remember,  we currently have 13.9 million unemployed. Despite that, President Obama, lawmakers and business lobbyists have all touted the country’s biggest companies as critical to creating jobs.

But we don’t know which of these guys can create domestic employment, since most do not voluntarily break down their offshore vs. onshore jobs. Without details on which companies are contributing to job growth and which are not, Congress is flying blind as they try to pick a plan to jump-start the hiring of American workers.

You know we should be speaking to firms that actually do create jobs in the US and not to those who are simply lobbying for a better deal.

Firms that do not put their number of U.S. workers in their annual reports include:

• IBM
• P & G
• Hewlett Packard
• Apple
• Pfizer

The latter two are part of a coalition of companies pushing for Congress to give them a tax break on money they have parked overseas, saying that any money brought back to this country would spur hiring.

No law requires companies to reveal publicly where their employees are based. Some companies choose to include the breakdown of jobs here and abroad in their SEC filings for the benefit of shareholders. But they are required by law to report the numbers to the Commerce Department which compiles a yearly report on total employment by U.S. multinationals.

Politicians have always been willing allies of the Multinationals. The companies have long realized political donations and financial support brings loyalty. Politicians are not fighting over which policy will bring jobs to your home town, but over how best to keep their own jobs in Washington. We as citizens must pay close attention to what our elected representative are doing; where their money is coming from; and what effect it has upon their voting.

To do anything else is simply Wrong.

What’s Wrong Today:

OK, the wild ride in stock markets around the world is beginning to get to us. Fear is creeping into our thinking. The news about the European economic situation is bad and we hear that Merkel and Sarkozy have differing views of both what steps will fix the problem, and when they should be implemented. How almost – well, Red and Blue of them! While here in the colonies, President Obama and the Republicans won’t work on any real solutions, preferring to kick the ball ahead, trying to buy just a little more time to see if they can sell their political bases on some variant of the entrenched position.

So, our confidence in our political leadership erodes, as does our belief that our banks and large corporations have our back. Our thought that we are part of a growing economy begins to die; our understanding of what is really happening clouds over; our anger rises.

And our savings, 401ks and pension plans get free tickets to a scary ride on the equity roller coaster.

So, What’s Wrong?

We have run out of time. The competing dialectics have hardened into trench warfare. We can’t even agree on the definition of the problem:

• Too much debt?
• Too little economic growth?
• Too much social safety net/defense?
• Too much/little stimulus?
• Too little certainty that the way forward will be agreed by our political ignorati?

The average family may be ahead of the politicians. They know that the answer is cut what you can and earn more. Take another job if you have to. That’s what people who don’t live on dividends and capital gains instinctively do when faced with this problem. And they know that the trickle down approach will not work, since there is no time to try it again and because, net-net, it hasn’t given them a blessed thing in the past.

Look, we survived 1987 and we probably will come out of this (eventually) with the Dow and the S&P back to where they were in Q2 2011, when we thought we were on the way back to prosperity.

Time Gentlemen, no more trench warfare, we need a direction and a plan. It will take moral courage. We need to suppress our debating gene for a year or two and speak to our businesses and our global partners with one voice.

Can it be done? Geez, I hope so.

What’s Wrong Today:  

We are WAAY off track!

In 200 years of running our government, we accumulated about $1 trillion of federal debt. Now, almost 25 years later, the debt is at nearly $15 trillion, mostly accumulated during 20 years of Republican Administrations: Reagan, Bush 1 and Bush 2. During the Bush 2 period, which started with a surplus, Mr. Greenspan advised Congress that budget surpluses and paying down the debt too quickly could be bad. Inflation, you know.

So Congress passed the Bush tax cuts, 9/11 happened, followed by the Afghan and Iraq wars. The surplus was quickly replaced by deficits and the hope of eliminating the federal debt went down the drain.

So, what did we get for that additional $13 trillion of deficit spending?

• Best education system in the world?   No!
• Best infrastructure in the world?    No!
• Best health care system in the world?    No!

We got 10 years of war. We got transfers of vast wealth to a few. We got a bubble that collapsed and led to this great depression recession, along with erosion of American prestige and influence throughout the world.

So What’s Wrong?  Now we hear that there will be no money for our cops, our firefighters, our nurses, our teachers. Next we will hear that our Social Security checks are smaller and Medicare will cover less than it does today. And today, you saw your 401k fall on the floor again.

Our politicians consider themselves blameless, they say that it’s the other side that is wrong and at fault. It is a time of fixed ideologies, one in which few are willing to move outside their little bubble and act in a thoughtful way about a collective future.

Democracies cannot run this way. But, we are not alone in this. Consider what is going on in Britain: Violence by the young poor. But they are not poor in their knowledge of technology:

“Youths used text messages, instant messaging on BlackBerry phones and social media platforms such as Twitter to coordinate attacks and stay ahead of the police.”

This is frightening. No matter where we live or how secure we may feel, we’re all just a few tweets away from a socially networked wave of violence and destruction–and if the looters or Wall Street don’t destroy your livelihood, then the crumbling economy will.

As Dean Vernon Wormer said to Flounder in “Animal House”:  “Fat, drunk and stupid is no way to go through life, son.”

Yet, we are doing just that, and its just so wrong.

What’s Wrong Today

We are quickly approaching the point of no return on increasing the debt limit. And it is doubtful that we will see a positive outcome from the “negotiations” between the two parties.

Some of the Washington ignorati believe that an actual negotiation is underway. Most of them think that a battle between mutually exclusive ideologies is taking place, and that the substantive difference is between those who feel that we should raise revenues in addition to lowering expenditures, and those who think we should simply lower expenses.

 Wrong!

There is no negotiation. And this is not what the battle is about. 

The Tea party faction of the Republicans believes that the US government is too big and that the best way to make it smaller is to limit its ability to borrow. The easiest way to limit the Government’s ability to borrow is by forcing it to miss some payments. 

Who would lend to a deadbeat?

Since Speaker Boehner doesn’t actually control House Republicans, he will be 50-75 Republican votes short of passing a bill that increases the debt ceiling that isn’t based on a compromise with Democrats. Obviously, he would get some Democrats voting with him, but not enough to pass a bill. If he does compromise with Dems, he will be more than 75 votes short of what he needs to pass a bill. Our divided government is really in the House of Representatives and more directly, within the Republican Party in the House.

So who benefits from financial chaos?    Two groups:

1. Republicans! I previously reported on Eric Cantor’s shorting of US Treasuries, so we know that he benefits personally. Politically, the idea is to create a fiscal crisis that Obama and Democrats can’t solve without Republican help. The gamble is that the electorate will blame the ongoing economic crisis (made substantially worse by a default) on Obama in 2012 and that the presidency and the Senate will then swing to Republican control. Then they can proceed with their agenda to dismantle the New Deal social safety net while making the world safe for the wealthiest 1% of Americans.
2. Too Big to Fail Money Market firms. The firms that dominate the financial markets take as an article of faith, that inflation will happen and thus borrowing costs will rise. This drives their profits up every time. Moreover, they like tumultuous markets. Since (i) rates haven’t actually risen and (ii) commodity prices have retreated since the Spring of this year, their trading departments have seen short term profits decline, so they also benefit from rising rates, a falling dollar and a weakened President.

An old Ponzi schemer in Boston that I used to know said all the time: “If you can’t raise the bridge, lower the river.” This meant to him, think outside the box when you have a problem that you can’t solve. The Republicans and the Banks are thinking outside the box alright, and it is so wrong.

What’s Wrong Today:

Don’t know about you, but I never thought that the “bi-partisan” Debt Ceiling negotiations were going to give us a solution prior to the final hours before a general default on the US’ debt obligations.

So when Eric Cantor announced today that he was pulling out of the negotiations, it was no surprise. He says that the group has reached an impasse over taxes that only President Barack Obama and Speaker John Boehner can resolve. Cantor, in an interview with the Wall Street Journal described the last negotiating session as bitterly contentious and said he would not be attending today’s scheduled meeting.

Mr. Cantor said he believed it was time for the negotiations to move up a level. Cantor said. “Given this impasse, I will not be participating in today’s meeting”.

So What’s Wrong?   

First, if you ever find yourself saying “Only John Boehner can solve this problem” your problem cannot be solved.

Second, given the House GOP landscape, there are two players who can cut a budget deal: Eric Cantor and John Boehner. If a deal is to happen, one of them has to do it. That means that one of them is likely to lose his job. The optimistic take is that what we’re seeing is a game of chicken over which one of them it’ll be. Pessimistically, if you had to write a plausible scenario for how America defaults on its debt, or at the least, seriously spooks the market, this is how it starts. By using the debt limit as leverage for a budget deal, the Republican leadership now finds they can’t actually strike a deficit-reduction deal, nor can they go back on their promise to vote against any increase in the debt limit that isn’t accompanied by a deficit-reduction deal. What will follow is a lot of jockeying and fingerpointing, a short-term increase or two, and eventually, a market panic.

Third, what you probably don’t know is that Eric Cantor will benefit financially from a panic:  WSJ’s Washington Wire reported:

 

“Putting his money where his mouth is?  Eric Cantor, the Republican Whip in the House of Representatives, bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF last December, according to his 2009 financial disclosure statement. The exchange-traded fund takes a short position in long-dated government bonds. In effect, it is a
bet against U.S. government bonds—and perhaps on inflation in the
future.”

This means that Cantor took a short position in long-dated government bonds.He made a bet against U.S. government bonds.. Since Mr. Cantor can seriously affect the value of U.S. government bonds, this investment places him in a direct conflict of interest. It doesn’t matter that the investment was a small amount. If a Democrat were found to be investing like Cantor has done, the Republicans would be calling that Democrat “unpatriotic.”

Cantor is operating in a very dangerous way.  And it is so Wrong.

Many people in the US find it very hard to believe that officialdom in Pakistan didn’t know that UBL was living in Pakistan. We have all heard the logic, “they must have known…if they didn’t know, they are incompetent.”  Some think that the incompetence explanation is preferred by the Pakistani government since it would be far more painful to admit the alternative: that Pakistan’s secret service, the Inter-Services Intelligence directorate (ISI), or the Pakistani military or certain elements within either or both, in fact harbored UBL. In fact, Pervez Musharraf, Pakistan’s former president said that it was incompetence this morning on NPR, while the current president, Asif Zardari, has avoided the subject.  

Despite the spin, Pakistani complicity is a logical explanation. Consider the following: Would UBL have risked hiding in plain sight in Abbotabad, where, according to the Economist,(Banyan) residents say that local police regularly swept the area around the UBL compound roughly once a week, checking residents’ IDs and sometimes looking inside homes?

It is hard to believe that UBL’s house could have escaped scrutiny for long. So, we are back to the questions:

• Did the police stop at UBL’s house? If not, why not?
  
• Did the police know who lived there?  If yes, did they care? If no, who did they think lived there?
• Wouldn’t’t a prolonged stay at a specially built, high-walled compound with many of his family require an external support network? 

The fact that UBL had only two guards in the compound suggests he trusted others for security. So shouldn’t’t we conclude UBL must have had help from someone in the government?

Indeed, some of Al Qaeda’s other high value targets were captured in urban cities in Pakistan: Khalid Sheikh Mohammad from Rawalpindi, Ramzi Binalshibh from Karachi and Laith al Libi from Mardan. Also captured from Abbotabad last month was the Indonesian Umar Patek, implicated in the Bali bombings.

Either way, Pakistan, the military and the ISI all look humiliated. The Government may be digging for a plausible explanation of its inability to track down Bin Laden in Abbotabad not just to provide to an already-suspicious Obama administration but also to its own citizens who want to know how the Americans managed to fly helicopters from Afghanistan undetected by Pakistani radars and then to carry out a raid when Pakistan’s stated policy is that no foreign forces would be allowed to carry out a land operation in-country. Again, the only logical explanation is that there was some knowledge of the operation at the top of the government.

For Pakistan, the near-term domestic implications are two-fold: a threat from Al Qaeda and the Taliban to avenge UBL’s death. This poses a formidable challenge to the government and the security and military apparatus. Another daunting task is to cope with a more assertive United States:  Pakistan lost the opportunity provided by the arrest of US spy Raymond Davis on murder charges. The deal for his freedom was that the US would reduce the CIA’s footprint by cutting down its Special Operations forces in-country.

It is doubtful that we will be cutting back the CIA station now.

Strategically, Pakistan has tried to walk two paths simultaneously.  They have funded militants in Afghanistan and Kashmir while allying with the US and our anti-terror nation building.  For that, they receive more than $3B in annual aid from the US.

That strategy will no longer work.  Pakistan can continue its clandestine funding of militant networks, leveraging discontent in Afghanistan and Kashmir only if Islamabad gives up its alliance with the US.

In that case, the US is likely to align more closely with India, leaving Pakistan to move to openly support the militants in Afghanistan and align more closely with China. 

Would that be Wrong for America?  Discuss….

Whats Wrong Today:

Millions of words have been written. Hyperbole is piled upon hot steaming piles of exaggeration, but nothing touches the Sacramento Bee headline of 5/2/2011:

“Bin Laden went out a coward, U.S. says”

When you read the story, he didn’t have a gun in his hand when he was killed, which is the opposite of what was originally reported. Words matter. The press calling UBL a coward panders to the coarsest side of our spirit. Headline writers and editors of The BEE, why do you need to cheapen the story and paint the mission as if it was a video game? No gun does not equal coward except maybe in Hollywood. This headline is not who we are as a people. It tells us we can minimize UBL because he wasn’t a warrior.

I’m glad he’s gone and it doesn’t matter to me how it went down. It does matter how we frame our thinking about our enemies. Calling our #1 enemy in the GWOT a coward may appeal to some of the Couch Patriots out there who have never worn the uniform and it may make some of us feel better about ourselves, but it reveals that the press (at least the Sacramento Bee) underestimates the enemy and reveals us as unsophisticated, arrogant and clueless about the mission undertaken by our SEAL team.

Imagine the impact if this headline was repeated broadly around the world: jihadists would be thinking, (“that won’t be the way I go out”).

Some read that UBL wasn’t armed and questioned if the SEAL team did the right thing. They think we should have captured him alive and held a show trial. We all know that UBL admitted to planning and executing the 9/11 attacks. He was videoed saying he did it while sitting on a rug at his hideout without requiring any enhanced interrogation techniques. These people imply that the world would be better off had he been captured alive. I disagree. The SEAL team acted correctly. UBL is now out of the terror equation. Our satisfaction at his death is not enhanced by thinking he was or wasn’t a coward in the eyes of the Sacramento Bee.

So What’s Wrong?

We should care that the media reported that UBL had a gun and then that he didn’t have a gun. We should care that they reported that he hid behind his wife and then that he hadn’t. There was precisely one source for the facts in this instance, our military, as told to us by our government. Was the difference Fog of War, or manipulation of the facts? We’ll probably never get the real scoop on everything that went down and everyone who was responsible.

We know only two facts: UBL is dead and was buried at sea. And that may be enough.

 We also know that the Sacramento Bee did not add to the facts, just to the hyperbole. No one in the government called UBL a coward. Didn’t see that reported anywhere else, either. So we can conclude that the Bee it is run by adolescent minds that need to grow up and get a world view. Pandering headlines like theirs coarsen our spirit and weaken our nation.

What’s Wrong Today:

If the NRA , its lobbyists, the Members of Congress and citizens who believe as they do have their way, everyone will carry a loaded gun. They might be concealed weapons; they could be automatic weapons.

Then:

• The Police would be outgunned
• The National Guard would be outgunned
• The Armed Services would be outgunned

Do you think that this makes us safer?   (Discuss)….

Wrong! This makes us Mexico, Iraq, or Afghanistan

Whose interest is served by this outcome? It isn’t yours and mine.

What’s Wrong Today

The Wrongologist woke up this am to hear that the Obama administration is sending $25 million of “non-lethal” goods to the Libyan rebels. And France, England and Italy are sending military advisors to help the rebels with logistics, organization. We apparently have also had CIA advisors on the ground in-country for a few weeks. Does this sound familiar to anyone other than The Wrongologist?  

In March, I said we should back the President’s play unless and until we saw mission creep that fundamentally changed the original intent to protect innocent civilians from death at the hand of its own government. The original intent was flawed. The Obama administration indicated from the start that it wanted Gaddafi out of power and thus created confusion about the purpose and end state of the mission from day one as well.

Today we can say that the rebels will not win a civil war simply with NATO air cover. They need modern arms, ammo, training and infrastructure support. Many of us were concerned about arming the rebels with modern weapons because we didn’t know who or what groups we would be supporting. (Didn’t we learn THAT in Afghanistan?) Now, the ground war is at best a stalemate, devolving to a war of attrition which is likely to be won by Gaddafi.

The strategic response Western Europe is now embracing is Regime Change by Proxy. Not Humanitarian support, not “No Fly Zone”, not assist the rebels with advisors, it is regime change with no boots on the ground or Regime Change by Proxy. The Obama administration has attempted to distinguish between helping the rebels and Regime Change by Proxy, but it is a distinction without a difference.

And the mission morphs at the expense of the moral high ground President Obama articulated a month ago.

So What’s Wrong?

We won’t get to an End State called Regime Change without civil war. We are likely to see as many die in civil war as would die at Gaddafi’s hands without our help. So, now an end state the American peoplee didn’t support may destroy the goal we did support. That’s simply wrong.

The Wrongologist said in March that the Obama doctrine is:  What Would the French Do? Bernard Henri Levi, a French philosopher admired by the Wrongologist for his writings on US affairs and culture, has been the key intellectual force behind France’s commitment to Libya. It has been reported that before the UN Resolution got any traction, Levy phoned President Sarkozy from Benghazi to tell him that French flags were flying everywhere. Levy told Sarkozy that if he allowed a bloodbath in Libya, the blood would stain the French flag. That really affected Sarkozy and moved him to unilaterally grant diplomatic recognition to the Libyan rebels and formally receive their representatives at the Elysée (a meeting also attended by Bernard-Henri Levy).

Levy has now said that Regime Change is the only answer to the current stalemate. This idea is gaining support in other European capitals (but not in Bonn). In the past, President Obama has said that the US should be against Regime Change as an instrument of US policy. He was right in saying that.

What about actively supporting Regime Change in Libya is in our National Interest? It would be simply wrong for the US to embrace Regime Change by Proxy in Libya now.