Thursday, April 23, 2009

Democrats Take Us To The Gulag

Over the past several weeks Democrats in Congress have threatened to conduct hearings into interrogation techniques used on terror suspects during the Bush Administration. Congressional hearings are nothing knew and often produce useful information. On this subject, however, Congress already knows all there is to know. Congressional leadership on relevant committees was briefed well in advance of implementation of the policies.

More troubling is the threat of criminal prosecutions against those who signed off on the policy and who prepared action memos authorizing the practices.

Memos authorizing implementation of policy are not mere opinions. They are the means by which policy is implemented. They carry with them a detailed account of the legal authority that permits the proposed action. In this case, the memos were prepared by attorneys and approved by the appropriate Justice Department officials.

The practice of law is an art, not a science. Ask three attorneys a legal opinion and you’re likely to get three different answers. Responses often differ depending on an attorney’s area of practice. When the attorneys in question are political appointees, the matter takes on a new twist.

Private attorneys look for precedent to answer legal questions and advise their clients. They have no real ability to shape the law except the long and expensive judicial process. Attorneys who serve at the pleasure of the President in the White House and at top positions in the government are in a different position. They operate within the bounds of the law but their ability to shape the law and policy is much more expansive. When they shape the law, they do so from a particular political point of view. That is their job. Republicans did this under Bush. Democrats are doing it under Obama.

Now, after sitting on the sidelines for eight years, Democrats want to prosecute Republican political appointees for the Republican shape those attorneys gave the law while Bush was in office. This goes beyond political payback.

Using criminal prosecutions to imprison political appointees solely because their political opinion differed from the officials in power is nothing short of Soviet era use of the Gulag. The Democrats can carft their own policy. They can rail against Bush era practices. They can impose their opinions on current terror suspect treatment, which they have. But imprisoning someone for crafting policy from a political perspective that differs from your own is contrary to everything this country and our legal system was established to preserve.

Castro Needs Us As The Enemy

In spite of rhetoric to the contrary, neither of the Castro brothers want to normalize relations with the U.S.

Normalizing Cuba’s relationship with the United States would open the streets of Havana to thousands of tourists. Their seaside marinas would be jammed with sport fishermen. Bars and clubs would be packed with Cuba-Libre-drinking vacationers. Cigar lovers would flock to buy hand-rolled Cuban cigars. With billions in foreign investment, Cuba’s economy would flourish. And that is the problem.

By freeing the Cuban economy to participate fully in an exchange of commerce with the U.S., the world would see first-hand the failures of Castro’s policies. They would see the failed health care system and the ruinous effect of his collective economic policies. With tourists and businessmen on the island, Cubans would learn of the life beyond. Knowing how others live, they would be empowered to speak out against their conditions. At the same time, Castro would have to come clean about the fate of the many political prisoners who have disappeared.

So, no matter how many handshakes you see between Cuban and U.S. officials. Regardless of the press releases and the joint communiqu├ęs, Castro will not agree to normalize relations with the U.S. Imposition of the embargo gave him an enemy on whom to blame all the ills he foisted on the Cuban people. Without us, he would be forced to admit responsibility for the condition of his people. He wants us as the enemy. He needs us as the enemy. Without us, he has no country to rule.

Wednesday, April 15, 2009

Pass The Tea

Today is Tax Day – the day by which we must pay Uncle Sam for the privilege of living in our own country. And it is the day of the great Tea Party Protest.

At the original Boston Tea Party, Sam Adams led a group of men aboard a British ship. In protest over a recently imposed British tax on tea, Adams and his cohorts seized the ship’s cargo of tea and threw it into the Boston harbor. The crux of the protest wasn’t to throw tea in the harbor. The point was to prevent the tea from being unloaded, to render it worthless, and to deprive the Crown of the despised tax. Their protest subjected Adams and his friends to the possibility of criminal prosecution.

Today, angry citizens are gathering at sites across the nation to once again protest the imposition of ever-increasing taxes. However, unlike the historic tea party protest, today’s protest consists of driving to the grocery store, purchasing tea, taking it to the designated gathering point, and throwing it in the harbor, bay, river, creek, swimming pool.

My, how far we have come.

Throwing my own tea into the bay reduces the brave act of Adams to mere symbolism. It deprives no one but myself of anything (the tea I purchased with my own money). Yet, somehow this symbolic act is supposed to send a message. It sends a message, but not the one the protesters intend.

The message of today’s Tea Party Protest isn’t one of angry defiance. Instead, today’s message says, “We am not willing to take any step that threatens our own comfort.” We have nothing but gestures and hollow words. We are all about rhetoric and not about substance. What about throwing our tax returns in the bay? What about a massive refusal to file a return? What about filing but not paying? That would cost us something, but it would send our elected officials a message they would understand. We don’t need symbolism, we need substance.

Monday, April 13, 2009

Economy Set To Rebound

Since October 2008, news outlets have inundated the country with reports detailing how poorly our economy is performing, forecasting dismal economic results in coming quarters, and calling for desperate measures to address our dire circumstances. The federal government has responded, pumping trillions of borrowed dollars into the economy. Yet, reports continue to focus on bad news.

Fear not, genuine help is on the way.

Election Day, 2010 is less than 19 months away. Already, political strategists and fundraisers are hard at work planning mid-term election campaigns. The entire House of Representatives will be up for re-election. A third of the Senate, too. And therein we shall find the relief we desperately need.

No, we won’t throw our elected officials out of office, though that might be an interesting remedy. Instead, the economic stimulus we need most will come in the form of a change in the story.

For the past 8 months, politicians have used bad news to bolster their claims for more spending and to defend the accretion of greater power to the federal government. Under the cover of pending financial doom, politicians have borrowed more, spent more, and claimed more power than at any other time in our nation’s history. That strategy has a short life. Its effectiveness lasts only as long as the momentum from the previous election. As the new election cycle gears up, the story will change.

With mid-term elections approaching, candidates for re-election will begin to tout the effectiveness of their efforts. The White House will lead a chorus of praise for the recent stimulus initiatives. Every shred of positive news, every hint of profitability, every glimmer of good news will be highlighted, polished and made to glow with the fires of hope and prosperity. Sectors of the economy that have remained sound but ignored will be trotted out as evidence of the effectiveness of government stimulative efforts and a harbinger of coming economic prosperity. All of which will be attributed to the work and wisdom of our elected officials. When you hear the rhetorical shift, don't despair. That new and positive message will be our salvation.

America’s economy is a confidence game. Trust is the key. We have no fixed standard for determining economic value. No fixed benchmarks for determining the value of our currency. The true wealth of our economy rests not on gold or silver but on our mutual trust for each other.

You give paper currency to the pizza store in exchange for something to eat. The paper isn’t worth the cost of one pepperoni slice, yet the store takes it in exchange for enough food to feed a family of four. The store takes that piece of paper only because the owner knows the pizza dough supplier will accept that same piece of paper as payment for the store’s supply account. Over the past twelve months our confidence in each other has taken a big hit. A constant mantra of bad news has settled doubt and gloom on us like a heavy, thick cloud. But take heart. The fog is about to lift.

As the politicians switch from a message of fear and failure to one of better-days-ahead, newscasters will follow suit. With a prosperity chant ringing in our ears, the fog of despair will lift. Our confidence will return. Not confidence in the politicians, but confidence in each other. And the economy will rebound.

Saturday, April 11, 2009

One Person Can Make A Difference

In 1913, Booker T. Washington was president of Tuskegee Institute. Though an African-American, and a former slave, Washington was well-educated. At the time, most blacks in Alabama were not so fortunate. Schools in Alabama and across the South offered little or no opportunities for African-Americans.

To address that situation, Washington asked Julius Rosenwald to invest in a modest effort to construct simple, one-room school houses in predominantly black communities. Rosenwald was intrigued by the idea and in 1913 began funding the construction of one and two-room school houses across the state. By the time he was finished, he had expanded the program to 15 states and constructed more than 5300 schools.

The buildings made possible by Rosenwald’s generosity became houses of learning and hope to generations of young minds. Hundreds of thousands of students found in those simple buildings a doorway to a future that only a few years earlier seemed impossible.

Washington was just one man who saw a seemingly insurmountable problem and decided to do something about it. When Rosenwald saw the problem, he decided to help. The next time you see a need in your community and think the situation is hopeless, remember Julius Rosenwald and Booker T. Washington and remind yourself that one person with an idea really can make a difference.

Thursday, April 09, 2009

Can We Really Borrow Our Way Out of Debt

Current analysis of economic conditions in the United States centers on the need for businesses to obtain financing. Tight credit is supposedly the root of our current economic recession. America, so we are told, runs on credit. At the same time, we are told that consumer debt is a serious threat to our economic health and should be avoided. Credit card debt, so we hear, is a huge problem for most American households.

Can anyone see the conflict in this message?

It’s okay for General Motors or Chrysler or AIG or any other company to amass huge amounts of debt. After all, debt – dressed up as financing – is essential to the life of American business. It’s okay for a business to incur debt, but not okay for an individual? It’s okay for the federal government to borrow billions from China, yet not okay for the consumer to borrow thousands from MasterCard?

If American consumers can’t borrow their way out of debt, chances are, the federal government can’t either.

Friday, April 03, 2009

China's Monetary Role Portends Global Shift

In recent weeks, China has sent not-so-subtle messages to the U. S. and to the world. First they warned the United States against devaluing the dollar, a move that would devalue the hundreds of billions of dollars in U. S. debt currently held by China. Then, they suggested the world should adopt a reserve currency not based on the economy of any single country – calling for a shift away from the world’s dependence on the dollar as that reserve. China’s rumblings about the dollar might be seen as an attempt to stake out their role as a critical economic player prior to the G20 meetings. And they might have been an attempt to test the mettle of the United States’ new and young president. Whatever the immediate aim, the suggestion of a larger and more permanent role in world financial affairs goes far beyond China’s concerns over the current economic crisis.

For the past fifty years, China has been growing toward a market-oriented economy. Using low wages to its advantage, China has transformed itself into the world’s manufacturing center. From its huge export trade, China has amassed foreign exchange reserves in excess of $1.5 trillion. At the same time, it has carefully developed its own domestic economy, raising growth of domestic demand to 4-6% per year. As a result, China and the United States are reversing their historic fiscal and monetary roles. At the close of World War II, the U.S. loaned money to other nations to enable them to purchase American goods. Today, China loans money to the U.S. to enable the U.S. to purchase Chinese goods.

As this century unfolds, the symbiotic relationship between China and the United States will profoundly influence U.S. foreign policy. With loyalties re-forming along commercial lines, the United States will come to view its relationship to all other countries through a China/trade-and-commerce prism. As the U.S. orientation turns increasingly toward Asia, a power and influence vacuum will develop in other parts of the world. The U.S. will become increasingly reticent to participate in solving Middle Eastern and European problems. Countries in other regions will move to fill the gap left by the U.S. absence, realigning along trade and commercial interests.

What you hear now in China’s warnings about U. S. fiscal policy and its call for an independent international reserve currency are but the first rumblings of a coming global realignment of nations.

Wednesday, April 01, 2009

Time To Regulate Credit Card Interest Rates

The Obama Administration has used every means available to impose tighter and tighter regulations on companies receiving Stimulus Funding. In the financial industry, they have sought to limit executive pay and eliminate bonuses. In the automobile industry they have used federal assistance as leverage to restructure General Motors, even ousting officials elected by General Motors’ stockholders. Most recently, some in the administration have suggested the government should regulate salaries of all executives in all industries. But one thing they haven’t sought to regulate is credit card and consumer loan interest rates.

Over the past twenty years, the banking industry has lobbied for increasingly favorable rules controlling the interest rates they are allowed to charge for credit card debt. As a result, in some states interest rates are unlimited. In addition, banks and credit card issuers are permitted to tack on fees and late charges and they are permitted to increase interest rates for customers who, though current at the time, fail to meet certain criteria not directly tied to their account.

Not satisfied with that, in 2005 after years of intense lobbying, banking officials convinced Congress to tighten bankruptcy laws to prohibit consumers from liquidating credit card debt. Now that many in the financial industry have run the banking sector into the ground, imperiling the U. S. and the world, these same companies turn to Congress for assistance.

In the past 12 months, the federal government, through one agency or another, has pumped trillions of dollars into the banking industry. Banks have received generous injections of capital, either through the sale of preferred stock or loans from the Federal Reserve, at all but an interest-free rate. Every dime of that money is taxpayer money. If banks get all of this free of charge, why are consumers forced to pay usuriously high interest rates?