Monday, December 14, 2009
And Now for Something Completely Predictable: A Retro-Post for a Retro-Celebrity Part Two
By Michael Giometti-
(In the first part of this post we started to take John Cleese to task for his characterization of America, or at least that part of it that doesn’t swoon over Barack Obama, as “backwoods, racist, and redneck.” We set out to prove that there was very little in the way of “hope and change” that we could expect from an Obama administration (and so far we have not been disappointed). We numbered the ways that George Bush, far from being a” heartless, small-government conservative” when it came to social welfare policies, was actually a suitable heir in that respect to FDR and LBJ. Here we’ll continue the tirade by listing the ways that Barack Obama resembles George Bush and his ilk on national security issues.)
Left or Right?
On national security issues, the Bush administration was rightly characterized as fond of unconstitutional foreign military operations and domestic security measures. This behavior is considered typically right-wing, but a cursory look at modern Democrat administrations, from Wilson to Clinton, and their friendly Congresses puts the lie to this. Detailing the ways these “peace-loving” Democrats slashed and burned their way through the geopolitical landscape of the twentieth century will take another overly long post, so we’ll stick with Barack Obama for now.
Despite the constant shouts of “Hope and Change” that rained down like hammer blows from the Obama campaign, Democrats, and those in the media friendly to him (known as The Media), Barack Obama is no great agent of change. Consider his stands on various national security issues as Senator and candidate—and later as President:
· Senator Obama was always an outspoken critic of our involvement in Iraq and has moved to end that involvement as president. His commitment, like most Democrats in Congress, can be called into question, however, in light of his nearly complete reluctance to vote to defund the effort, as well as the leisurely nature of his exit plan as president, which will keep us there until at least 2012.
· Iraq aside, from listening to some of his campaign speeches one could be forgiven for seeing Senator and candidate Obama as an interventionist on the order of Bill Clinton or George Bush. While condemning our operation in Iraq, he nonetheless justified hypothetical large-scale operations in Sudan, Zimbabwe, Iran, and Pakistan.
Just days after the inauguration, President Obama launched missile strikes against Taliban and Al-Qaeda targets in Pakistan, continuing a recent Bush Administration policy of small-scale missile strikes there. In the ensuing months, Obama has softened his public comments on any intensification of American military activity in Pakistan in hopes of prodding Pakistan itself to take more active measures against Al-Qaeda and the Taliban. Toward this end he has secured a dramatic increase in aid to the country. Nevertheless, he has left open the possibility of more active military measures there.
· Like most Democrats, Obama has been an enthusiastic supporter of our involvement in Afghanistan. Indeed a common refrain among Democrats, including Obama, has been that the Republicans’ “obsession” over Iraq had caused the important struggle in Afghanistan to be “under-resourced.” As president, Obama sent 17.5 thousand additional troops shortly after taking office and has just announced a plan to send about twice as many more.
· Obama has a mixed record on civil liberties for American citizens. As a senator, though he did call for a liberalizing reform of the PATRIOT Act in 2005, he nevertheless voted for amendments to the Foreign Intelligence Surveillance Act in 2008 that extended government wiretapping authority. Furthermore, as president, he is now calling for a renewal of those provisions of PATRIOT Act set to expire.
What hasn’t been brought up so far are the similar efforts under Bush and Obama to prop up/stimulate our ailing economy. This mare’s nest deserves its own post, but it suffices to say that Bush played Herbert Hoover to Obama’s FDR in laying the foundation (and the first few stories) of a vast government edifice of disastrous economic planning.
So again, Mr. Cleese, why all the breathless talk about some great choice to be made in this country?
(In the next, and last, part of this post interminable, let’s take a look at John Cleese’s political views—or at least what we can best determine them to be. For, you see, it’s hard to find anything explicit on that subject for about a decade. Watching him spew condescension from his seaside porch to an obsequious, nondescript interviewer or slap thighs with an equally unchallenging Keith Olbermann takes us pretty far, but we’ll nevertheless take a closer look. We’ll also show what these views have meant for Great Britain. More generally, we’ll consider why it is that the ideologies of Right and Left seem to converge, and why their respective members remain stubbornly oblivious to this fact and unjustifiably vituperative to their philosophical cousins. Finally, I’ll qualify my criticism of Europeans, but not Monty Python.)
Thursday, December 10, 2009
What Recovery? America's Problems "Getting Worse, Not Better," Says Jim Rogers
(Yahoo Finance)
"It's getting worse, not better."
That's how Jim Rogers responds to the recent talk of improvement from President Obama, Treasury Secretary Geithner and Fed Chairman Bernanke, among others.
"Papering over the problem is not going to solve America's problem," Rogers says. "The idea you can solve a problem of too much debt and too much consumption with more consumption and more debt defies belief. I cannot believe that grownups would stand there and say that."
History shows the only way to solve a financial crisis is "when people go bankrupt, you let them go bankrupt," Rogers say. "Then, competent people come in, take over the assets, reorganize and you start over."
But rather than "take the pain and reorganize and start over," as Sweden, South Korea and others have done, Rogers says America is "doing the Japanese model."
Keeping zombie banks alive and bailing out their creditors will only prolong the pain, the famed financier predicts. "What has been happening is the government has been printing and spending a lot of money," he says. "The problem is not solved - they're making the problem worse."
Adding insult to injury, Rogers fears the "unintended consequences" of new regulations that inevitably come from politicians seeking someone to blame for the crisis.
"The problems in last two years came from industries that are heavily regulated: banking, insurance, mortgage," he notes. "Now what? You're going to make the regulations tougher? It's not the regulations, it's the regulators."
"It's getting worse, not better."
That's how Jim Rogers responds to the recent talk of improvement from President Obama, Treasury Secretary Geithner and Fed Chairman Bernanke, among others.
"Papering over the problem is not going to solve America's problem," Rogers says. "The idea you can solve a problem of too much debt and too much consumption with more consumption and more debt defies belief. I cannot believe that grownups would stand there and say that."
History shows the only way to solve a financial crisis is "when people go bankrupt, you let them go bankrupt," Rogers say. "Then, competent people come in, take over the assets, reorganize and you start over."
But rather than "take the pain and reorganize and start over," as Sweden, South Korea and others have done, Rogers says America is "doing the Japanese model."
Keeping zombie banks alive and bailing out their creditors will only prolong the pain, the famed financier predicts. "What has been happening is the government has been printing and spending a lot of money," he says. "The problem is not solved - they're making the problem worse."
Adding insult to injury, Rogers fears the "unintended consequences" of new regulations that inevitably come from politicians seeking someone to blame for the crisis.
"The problems in last two years came from industries that are heavily regulated: banking, insurance, mortgage," he notes. "Now what? You're going to make the regulations tougher? It's not the regulations, it's the regulators."
Sovereign Debt Is the Next Big Worry
By MICHAEL CASEY (WSJ)
NEW YORK -- If you're looking for one global risk to really worry about, look no further than the mountain of debt accumulated by governments in their efforts to support domestic economies.
Moody's Investors Service says there's $49.5 trillion of sovereign debt outstanding -- and this week, ratings firms, and some jumpy bond traders, have shone a glaring light on it.
The raters are worried that governments' massive deficit-spending campaigns to pull their economies out of last year's crisis won't produce enough economic growth to pay for itself.
But none of this is new. A month ago, the International Monetary Fund projected that the average debt-to-gross domestic product ratio of the 10 advanced country members of the Group of 20 developing and developed nations would mushroom to 118% by 2014. Such numbers have led some pundits to warn of a debt crisis, especially regarding the U.S.'s dependence on foreign creditors.
What's key now is that the recent market jitters could be self-fulfilling. Falling bond prices mean higher yields, which makes it harder for governments to refinance future obligations. That will hurt the currencies of those nations and will challenge fixed exchange rate regimes -- especially in the euro zone and for currencies pegged to the dollar.
Spain became the latest flashpoint Wednesday when Standard Poor's changed the outlook on its AA+ rating to negative. As it did when it downgraded Portugal's outlook Monday, S&P emphasized a weak growth outlook.
And with their bonds hammered for different reasons, Greece and Dubai's and Abu Dhabi's government-controlled entities have similarly seen ratings or outlook downgrades this week.
Also on Tuesday, Moody's acknowledged two elephants in the room. Although it referred to worst-case scenarios, the agency said the U.S. and the U.K.-- whose public debt runs to $12.1 trillion and $1.3 trillion, respectively--could potentially lose their triple-A ratings.
Meanwhile, analysts are worried about Japan, where deflation makes it ever-more expensive for the government to repay a debt that's projected to hit 220% of GDP in 2014.
Sovereign borrowers aren't supposed to default, at least not on local-currency debt, because their central banks can always print money. But Russia's ruble default in 1998 blew that theory away. And in any case, printing money to pay down the debt means robbing Peter to pay Paul: too often, we pay for it with inflation.
In theory, if a global capacity glut were to continue generating deflationary pressures, it might not be a problem to repay the debt with yet more "quantitative easing." But with so much liquidity already making inflation hawks nervous and fueling potential asset bubbles, pressures are rising for monetary tightening, not loosening.
And that's why sovereign strugglers are most at risk. When the European Central Bank hikes rates it's going to make Greece's interest obligations only more burdensome.
That raises questions about the entire euro zone. The ECB must pursue a policy that fits the price stability outlook for the 16-member euro zone as a whole.
But can debt-laden Greece handle that? Or Spain? Or Italy? What if a U.S. recovery pushes the Federal Reserve closer to an exit from its extraordinarily accommodative policy stance? That would hurt big sovereign debtors whose currencies are pegged to the dollar -- ike Dubai and Abu Dhabi.
Alternatively, what if the biggest shoe were to drop? Although it's near impossible to imagine the U.S. Treasury formally defaulting, many worry that its mammoth debt burden could lead to a dollar collapse. Then all bets are off.
None of these scenarios must play out. Nonetheless, they show why sovereign debt is the problem to watch.
NEW YORK -- If you're looking for one global risk to really worry about, look no further than the mountain of debt accumulated by governments in their efforts to support domestic economies.
Moody's Investors Service says there's $49.5 trillion of sovereign debt outstanding -- and this week, ratings firms, and some jumpy bond traders, have shone a glaring light on it.
The raters are worried that governments' massive deficit-spending campaigns to pull their economies out of last year's crisis won't produce enough economic growth to pay for itself.
But none of this is new. A month ago, the International Monetary Fund projected that the average debt-to-gross domestic product ratio of the 10 advanced country members of the Group of 20 developing and developed nations would mushroom to 118% by 2014. Such numbers have led some pundits to warn of a debt crisis, especially regarding the U.S.'s dependence on foreign creditors.
What's key now is that the recent market jitters could be self-fulfilling. Falling bond prices mean higher yields, which makes it harder for governments to refinance future obligations. That will hurt the currencies of those nations and will challenge fixed exchange rate regimes -- especially in the euro zone and for currencies pegged to the dollar.
Spain became the latest flashpoint Wednesday when Standard Poor's changed the outlook on its AA+ rating to negative. As it did when it downgraded Portugal's outlook Monday, S&P emphasized a weak growth outlook.
And with their bonds hammered for different reasons, Greece and Dubai's and Abu Dhabi's government-controlled entities have similarly seen ratings or outlook downgrades this week.
Also on Tuesday, Moody's acknowledged two elephants in the room. Although it referred to worst-case scenarios, the agency said the U.S. and the U.K.-- whose public debt runs to $12.1 trillion and $1.3 trillion, respectively--could potentially lose their triple-A ratings.
Meanwhile, analysts are worried about Japan, where deflation makes it ever-more expensive for the government to repay a debt that's projected to hit 220% of GDP in 2014.
Sovereign borrowers aren't supposed to default, at least not on local-currency debt, because their central banks can always print money. But Russia's ruble default in 1998 blew that theory away. And in any case, printing money to pay down the debt means robbing Peter to pay Paul: too often, we pay for it with inflation.
In theory, if a global capacity glut were to continue generating deflationary pressures, it might not be a problem to repay the debt with yet more "quantitative easing." But with so much liquidity already making inflation hawks nervous and fueling potential asset bubbles, pressures are rising for monetary tightening, not loosening.
And that's why sovereign strugglers are most at risk. When the European Central Bank hikes rates it's going to make Greece's interest obligations only more burdensome.
That raises questions about the entire euro zone. The ECB must pursue a policy that fits the price stability outlook for the 16-member euro zone as a whole.
But can debt-laden Greece handle that? Or Spain? Or Italy? What if a U.S. recovery pushes the Federal Reserve closer to an exit from its extraordinarily accommodative policy stance? That would hurt big sovereign debtors whose currencies are pegged to the dollar -- ike Dubai and Abu Dhabi.
Alternatively, what if the biggest shoe were to drop? Although it's near impossible to imagine the U.S. Treasury formally defaulting, many worry that its mammoth debt burden could lead to a dollar collapse. Then all bets are off.
None of these scenarios must play out. Nonetheless, they show why sovereign debt is the problem to watch.
Friday, December 4, 2009
White House Calls for Summit on Summits New “Summit Czar” Named*
By Michael Giometti –
On Thursday, the White House called for a major overhaul of the way it conducts summits. Part of the initiative is a proposed meeting of stakeholders who will be entrusted with the task of constructing a plan to improve the operation of these meetings—a “summit” on summits, as it were.
“For far too long in this town,” the President said, “both Republicans and Democrats have conducted these meetings in an environment of partisanship and pleading of special interests. Those days are over. From now on it’s no longer “summits as usual.”
The director of the newly created White House Office of Consensus Development, or” Summit Czar”, Frances Tugwell, when asked about the new initiative, affirmed the President’s commitment to openness and inclusivity. “We are eschewing the politics of exclusion and special interest. The participants of this summit represent the breathtaking diversity of this wonderful country, from the AFL-CIO to the Sierra Club to Public Citizen.”
When asked about the improvement in the environmental impact of future summits, if any, White House Press Secretary Robert Gibbs said, “Well, uh, I don’t know exactly what the carbon footprints of these meetings will be, or, uh, what exactly a carbon footprint is, but I’ll, uh, get back to you on that, uh.”
*keen political satire
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