November 22, 2014 § 1 Comment
The House of Debt
I just finished reading a book recommended by my friend, Milton Lower. The book is The House of Debt by Atif Mian, professor of economics and public policy at Princeton, and Amir Sufi, professor of finance at the University of Chicago.
This is a short, well written book about the the housing collapse that precipitated the Great Recession of 2008. The writers identify the causes and recommend some policy changes that would prevent such calamities.
Their approach is similar to Thomas Piketty’s: They base their conclusions on carefully compiled and analyzed data. They patiently consider and discredit causation theories other than theirs and cite data-based reasons for rejecting them.
What Caused the Housing Market to Crater?
The authors present and reject three views about the causes of recessions. The first, and most popular, is the “fundamentals” view: That some disaster, radical political upheaval or other unexpected catastrophe caused it. But no such event occurred in 2007 to trigger the recession. The second is that “animal spirits” cause it. That is, buyers were guilty of “irrational exuberance”. They foolishly believed prices would endlessly rise. When they realized their folly, they panicked and the recession followed. Finally, some have argued that banks were to blame. They stopped loaning money thus thwarting economic expansion and the recession followed.
The authors offer convincing evidence that the latter two ideas don’t fit the facts. They cite ample statistical evidence that residential housing prices in some areas of the country sharply increased between 2000 and 2007. That price inflation followed a dramatic relaxation of requirements for mortgage loans, which fueled the price inflation of houses. That is, far from withholding loans, the banks eagerly offered money to borrowers, including many who, until the requirements were lowered, could not qualify for mortgage loans.
So, it was not “animal spirits” that caused the recession. It was lending money to people who lacked income to pay it back. Then, when defaults occurred, foreclosures followed, foreclosed homes depressed housing prices in surrounding neighborhoods and the downward spiral led to a general collapse of housing prices, diminished consumer demand and, hence, the Great Recession.
How Did The Housing Collapse Cause the Recession?
When residential housing prices fell, some owners continued making mortgage payments on homes that were worth less than the debt balances secured by them. Others walked away and tendered their homes for foreclosure. In either case, the principal assets of a giant class of homeowners, equity in their homes, were devalued and, in many cases, wiped out.
There were two classes of people involved in these transactions: The homeowner borrowers and the investor lenders who deposited their money in banks, who made the loans secured by the mortgages. The impact of the housing downturn was not equally distributed. For most of the homeowners, their only assets, the equity in their homes, were destroyed. For the investor lenders, their losses were only a fraction of their total wealth, which typically included stocks, bonds, investment real estate as well as their homes. Their losses did little or nothing to affect their propensity to spend and to maintain their lifestyles. The homeowners, by contrast, sustained close to total asset losses and they significantly cut back their spending.
The less wealthy homeowners’ propensity to spend was greater than that of the wealthier investors. That is, they spent a greater percentage of their income than the more wealthy investors. So, when the far more numerous homeowners lowered their rate of spending, the impact on the total demand for goods and services in the economy was significantly affected. In other words, the downturn in the housing market sparked a general downturn in demand throughout the economy and the Great Recession resulted.
What Was The Reason for the Relaxation of Credit Requirements?
This is the most interesting part of the book.
In 1990, the financial markets in Thailand, in the words of Mian andSufi, “went berserk”. There was a frenzy of inflation and speculation. The price of real estate escalated wildly. Foreign investors flooded Thailand with Dollars and Thailand banks grabbed them like ravenous wolves. In due course, the bubble burst. The foreign investors began withdrawing their money from the Thai banks.
Because the foreign investments were made in Dollars, they demanded withdrawals in Dollars. The Thai banks did not have enough Dollars to meet th0se demands. To avoid a complete collapse, the central bank in Asia tried to respond by making Dollars available to the desperate Thai banks, but they lacked sufficient stores of Dollars. So, they had to appeal to the IMF [International Monetary Fund] for help.
That help came with draconian requirements for painful austerity that plagued for decades those Asiatic central banks and the economy which they supported
Having learned a bitter lesson about the importance of ample caches of Dollars, the banks in Asia began to flood American banks with purchases of U.S. treasuries. Instead of responding to this influx of money by lowering the interest rate on treasuries, the U.S. central bank chose to use that flood of cash to funnel money into the home mortgage market. To accomplish this goal, it allowed and encouraged banks and other lending agencies to create mortgage backed assets and to market them as derivative securities.
This proved to be so profitable for Wall Street dealers in these securities that they sought more and more mortgages from banks. To satisfy the demand for mortgages, the banks lowered the requirements for obtaining mortgages. This opened up a large market consisting of people whose incomes had theretofore been too low to qualify for home ownership. This increased demand for homes, which resulted in increased home prices. The Wall Street bankers designed a wide assortment of complex combinations of mortgages and constantly pressured the banks to make more and more home loans to meet the demand for mortgages as fodder for the MBA’s.
The riskier mortgages made to low income borrowers were cleverly matched with safer groups of mortgages so that rating agencies could stamp the resulting cluster with AAA ratings. [I have described this widespread finagling in an earlier post entitled "The Bankenstein Fiends"] So, a mix of different risky and, in some ways, fraudulent schemes, combined to blow up the bubble that, when it popped, threatened the entire financial system of the Western industrial world. Crazy financial speculation 7,000 miles east of the United States thus triggered a series of events that ended in the Great Recession.
Wall Street banks made gigantic profits from the creation and marketing of the MBA’s. They not only made money selling them, they made money using market devices that enabled them to profit handsomely when the MBA’s were finally exposed as having been flagrantly misrepresented and mistakenly rated. They made money by selling the MBA’s and, when the value of the MBA’s lost value, they made more money.
There is a well known principle of equity, developed centuries before the birth of our country by judges sitting on the wool sack in English courts of Equity: No one may profit from his own wrong. This simple rule, so fundamental to any system of justice, was not only ignored, it was denounced as unwise and un-American by the ex-Wall Street bankers who advised both President Bush and President Obama when, amid a crisis, judgments had to be made about how to avoid a collapse of the financial system.
When the Wall Street banks were facing collapse the federal government had a choice: It could use taxpayer money to bail out the banks or it could take them over, wipe out the stockholders and enable the banks to continue performing their vital role in the domestic and the international financial system. This latter choice would have allowed the government, acting through the banks, to relieve the homeowners facing financial disaster by allowing them to postpone mortgage payments, reduce the principals of the loans secured by the mortgages, or both.
Presidents Bush and Obama chose to bail out the banks and leave the homeowners to their fate. Billions of dollars were handed over to the banks with no strings attached. The bankers suffered no losses. Instead of making changes in the mortgages to alleviate the homeowners’ financial problems, they used their blank check on the U.S. Treasury to fund record bonuses and watch their stock prices soar.
The net effect of these policy choices was a giant transfer of wealth from those at the low end of the wealth spectrum to those luxuriating at the very top.
Here is a brief summary of the remedy proposed by the authors of this book: They proposed a revision of the standard form of a residential mortgage. The new mortgage would be a Shared Responsibility Mortgage or SRM. It would provide downside protection for the mortgagor and corresponding benefit to the mortgagee.
If the value of the home decreased, the monthly payments would decrease proportionately. The extent of the decrease would be calculated by the average price of homes in the immediate neighborhood surrounding the home. The authors observe that extant agencies are already capable of monitoring those values in zip code areas. Regardless of the size of the monthly payments, the amortization table based on the original price of the home when the loan was made would remain the same. So, the effect would be the reduction of the amount being repaid.
The mortgagees would be protected by an entitlement to five percent of the sales price when the home is sold. The timing of the sale would be left to the homeowner but, if the lender had a diversified group of home mortgages in its portfolio, the five percent entitlement would result in a steady stream of return on its overall investment. The homeowner would sustain the five percent loss, but that would represent the value of the built-in insurance against loss of equity in case of a price drop.
The underlying thesis of the book is that housing bubbles cause general economic recessions because they result in losses of consumer demand that affects the entire economy.
For example, they point out that the tech bubble that popped in 2,000 caused many to lose money, but it did not cause a recession because the losers’ propensity to consume was not significantly affected. But the housing bubble of 2008 threatened a general collapse of the financial system.
The authors make a point that is obvious, but one I had never fully appreciated: The problem with debt, whether it’s mortgage debt or student college debt, is that, as presently designed, it is inflexible. When the economy experiences turbulence, the borrowers have no way to survive because their debts are like anchors that sink them.
The authors contend that recessions can be avoided if our most common debts are redesigned so that borrowers can continue to consume without sustaining crippling losses of their assets. When consumer demand is maintained, businesses will not be forced to lay off employees. In other words, redesigned debt documents will serve as an efficient method of distributing economic stimulus. Instead of waiting until the economy is in recession and millions of workers have lost their jobs, the authors propose measures to avoid the job losses by maintaining consumer demand.
The authors also propose rewriting the documentation for student debt to make its repayment dependent on the job market at the time of graduation and thereafter. They offer persuasive arguments that all pervasive debt should be designed to adjust in response to prevailing economic conditions. They call it “equity financing”.
I have not done justice to this book. I can only offer a taste and a suggestion that you read it. It is packed with interesting statistics and historical examples. It also is an example of some very sharp and disciplined analysis presented in an easily readable form. These guys are probably wonderful teachers. They are masters at making dense economic data interesting and understandable. If I were Thomas Piketty, I would incorporate their proposals into my remedy for wealth inequality.
November 22, 2014 § 1 Comment
In response to the murderous attack on Jews worshiping at a Jerusalem synagogue, Netanyahu ordered the demolition of the family homes of the two murderers. He also ordered the demolition of the family homes of two others who recently committed violent attacks in Jerusalem.
All of the attackers are dead. The razing of their homes does not punish them. It punishes their families. The United States has declared this reaction by Israel “counterproductive”. Germany, France, Italy, Spain and Great Britain have denounced it.
This kind of collective punishment is a continuation of the policy that produced the war on Gaza that destroyed thousands of homes and killed over two thousand Palestinian civilians in response to mostly ineffective missiles launched from Gaza into Israel.
Here is a link to a Haaretz article that describes the issue: Demolitions
I believe this persistent policy raises an ethical policy well known to lawyers:
A client is entitled to be zealously defended by his lawyer, regardless of how immoral or illegal his conduct has been. But a lawyer may not, in any way, facilitate a client’s engagement in illegal or immoral conduct. If he does, the lawyer becomes complicit in the illegal or immoral activity.
I believe Israel has placed the United States squarely in the middle of this dilemma. We continue to furnish arms, supplies and money to Israel while Israel continues to engage in conduct that offends basic rules of fairness and justice. Collective punishment imposed on innocent people in response to violent acts by individuals violates international law.
This latter principle is sometimes subject to nuanced exceptions. For example, when a drone bombs a house to kill an enemy, innocent people are often killed. Such tragedies are excused as “collateral damage”. In my opinion this excuse is a lame one in some instances but, regardless of that argument, the Israeli policy of home demolition is different. The home demolitions ordered this week are specifically aimed at innocent victims.
We impose “sanctions” on Iran and Russia when they pursue policies that violate our values. I think we should consider whether sanctions should be imposed when Israel does the same thing.
It also seems chutzpah for Netanyahu to accuse Hamas and Mahmoud Abbas of “inciting” the violent episode at the Jerusalem synagogue. The “incitement” is plainly related to the brutal occupation of Palestine by Israel, the expansion of illegal settlements on the West Bank, the network of checkpoints that serve as daily interference with normal travel by Palestinians and conflicts between Jews and Muslims at Jerusalem’s holy sites. The demolition of homes of families who had nothing to do with the crimes committed by two now dead family members will certainly incite more violence.
One final thought: Suppose, after two brothers bombed the Boston Marathon, Barack Obama had ordered the demolition of their families’ homes. Do you have any doubt that a federal court would have granted a Temporary Restraining Order, prevented the demolition and probably ordered an immediate psychiatric examination of Obama to see if he was deranged?
During the recent Israeli war on Gaza, Netanyahu often said, “How would you Americans react if Mexico was lobbing missiles into your country?” It was an effective argument because our history is replete with disproportionate responses to minor events. The explosion on the Maine and subsequent war against Spain; the naval bombardment of Vera Cruz on 1914, in response to the arrest of 6 sailors in Tampico; and the assault on Ft. Sumter triggering the Civil War come to mind. But I’ll bet he doesn’t make a similar argument about the home demolitions, because we have a legal system that wouldn’t permit it and a set of values that wouldn’t condone it. We don’t punish the families of wrongdoers.
November 16, 2014 § Leave a comment
I have updated yesterday’s post concerning the Keystone Pipeline. The post had a link to Lou Dubose’s article in the Washington Spectator but, for some reason, the link did have the usual appearance . So, you probably did not realize it was a link. I have updated the post to include a link to the article and have designated it as a link. Lou’s article is not lengthy but it includes some information I did not include in my post.
Also, the Curmudgeon in Wisconsin, a friend and follower of this blog, commented on my post and included a link to a story in the Minnesota Star Tribune describing the current status of the Public Utilities Commission proceeding concerning Enbridge’s application for a permit to lay its new pipeline across the State. Here is a link to that story:
Also, in the penultimate paragraph of my “Playpen Politics” post, I quoted a panelist on a TV show who said that the Keystone Pipeline would create “about 30,000″ construction jobs. I commented they would be temporary jobs. After further research, I discovered that the 30,000 figure is probably inflated. I found an article in Forbes magazine entitled, “Pipe Dreams: How Many Jobs Will Be Created by the XL Pipeline?”. The article cites various theories proposed by different analysts. They vary widely but, considered as a whole, they conclude that the number of construction jobs may be as few as 13,000. Here is a link to the Forbes article: Forbes.
A Brief Comment
I have some concern about the news that Harry Reid has “rewarded” Senator Elizabeth Warren with a position on a leadership committee charged with crafting policy ideas for Democratic Party members of the Senate.
I hope, of course, that his decision represents a recognition that Senate Democrats need to focus attention away from pleasing their corporate campaign campaign contributors and toward the economic inequality that is beggaring the American working class. If that is the objective, Senator Warren is an obvious choice because she has been like a laser pointing at that injustice.
My fear is that, on the contrary, Reid’s decision is more like a way of managing Senator Warren so that she does not unduly disturb the cozy relationship between Senate Democrats and their financial supporters.
This latter motivation was once memorably expressed by President Lyndon Johnson, in an example of his genteel Texas style. He was talking about his reluctance to fire J. Edgar Hoover, the Director of the FBI. He wanted to fire him but decided not to. He explained his reluctance, ”Well, it’s probably better to have him inside the tent pissing out, than outside pissing in.” [Quoted by Davide Halberstam in a long article entitled “The Vantage Point” reviewing books about LBJ] [NY Times. October 31, 1971]
November 15, 2014 § Leave a comment
The past few days have exposed Republicans in Congress as misbehaving children.
Fresh from their electoral victory, as the echos were still reverberating from their pledges to work reasonably with Obama, they rushed to TV cameras to proclaim their intention to impeach him or worse. What provoked these tantrums? Did Obama insult them? Did he suddenly lash out at them? What reduced these middle-aged and older men and women to such mouth frothy rage?
Obama merely repeated what he has been promising for about a year: If Congress doesn’t enact some reasonable overhaul of our immigration system, he will do the following: He will stop the deportation of parents of children born here. He will stop deporting people who were brought here when they were children. This easing of deportation policies will occur only if those affected have committed no crime and have lived here peacefully for a reasonable period of time.
This could not have come as a surprise to the the Republicans. If the President did otherwise, he would betray promises made publicly to the Latino population of our country. Yet John Boehner and Mitch McConnell reacted as if he had slapped them across the face with a glove.
Boehner declared that the President was risking immolation. Mitch The Turtle said, while displaying his trademark unctuous smile, that the President was waving a red “flag” at a bull. This made me wonder if Mitch had ever attended a bullfight. If he had, he would know where that metaphor came from. And he would also know what, in almost all cases, happens to the bull who becomes enraged and charges the one with the red cape.
I wonder what the voters, who thought they were electing adults, thought when they saw this yammering performance. Did they really want their government to function? Were they disgusted because they were “tired of the partisan bickering in Washington” as the TV talking heads kept saying? If that is what they thought they were seeking, they were surely disappointed.
Unfortunately, I don’t think that’s true. I think the FOX news watchers are getting exactly what they want: The continued hamstringing of their own government. Until they awaken to the fact that the Koch Brothers are not likely to help them pay their bills or get decent jobs, we are in for more fake histrionics and childish tantrums.
Oh, by the way. In my post earlier this afternoon about the Keystone Pipeline, I neglected to mention the most absurd lie being endlessly repeated by its enthusiastic admirers: That “46,000 jobs are being prevented because the delayed construction of the Keystone Pipeline.” The truth, provided by an analyst on the Steve Kornaki show this morning: About 30,000 jobs will be created to contruct the pipeline. When it is completed, 35 people will have jobs maintaining it.
So, the current propaganda is like a newscaster reporting: “The circus is coming to Midville. One hundred jobs will be created. They will last for one week, until the circus moves on.”
November 15, 2014 § 2 Comments
Lou Dubose manages a bi-weekly newsletter called The Washington Spectator. I became aware of it when I met him at the Texas Observer anniversary party in Austin a few weeks ago. I have become a subscriber.
In his November 11th issue he posted a story about a Canadian company, Enbridge, Inc. . That company, like TransCanada, is in the tar sands oil business in Calgary Canada. TransCanada is the owner of the Keystone XL pipeline, the subject of the currently brewing political battle over a 1700 mile right-of-way across the United States to deliver oil to the Gulf Coast for transhipment to other countries.
Here is a link to Dubose’s story: Spectator.
Dubose’s story is not about TransCanada. He writes about Enbridge’s clever strategy to evade and avoid opposition from federal authorities. So far, those maneuvers have been successful. Here is how Dubose describes the route across the United States: “The Alberta Clipper [Enbridge's name for their pipeline] begins in Alberta, crosses the Canadian border, and continues for 327 miles, ending at a tank battery in Superior, Wisconsin. From there, the oil would flow to Cushing, Oklahoma, then to the Gulf Coast for refining and export.”
The State Department has authority to decide whether this kind of transborder pipeline is “in the public interest of the United States”. Enbridge has cleverly used a permit granted in 1967 to authorize its plan for the Alberta Clipper. In 1967, tar sands had not become a major source of oil. Much of the research concerning climate change had not been done.
Alberta Clipper’s path crosses Minnesota. In 2010, an Enbridge pipeline ruptured and spilled an historic amount of gasoline into a major river in Minnesota. The resulting damage is still being cleaned up at a cost of more than a billion dollars. The Minnesota Public Utility Commission is understandably concerned about a new. larger Enbridge pipeline crossing the State. That agency is trying to force Enbridge to agree to some route changes and safety measures. Meanwhile, plans for the Alberta Clipper are on hold.
The federal government, however, is offering no opposition to Enbridge’s plans. Dubose quotes a “State Department spokesperson” as follows: “. . . “In the case of Line 3, the department determined that Enbridge’s proposed replacement of the border segment was consistent with the authorization in the existing presidential permit.” “Line 3″ is a reference to the Alberta Clipper’s crossing route from Canada to the U.S. .
All of which makes me wonder: Is this like a magician’s trick? Waving a red scarf to distract the audience’s attention while palming an object to create the illusion of a magical disappearance? Lou Dubose doesn’t spell it out. Like a good reporter, Dragnet style, he offers, “just the facts”. We have been watching an exciting investigation of the Keystone XL pipeline, still in progress, while the new GOP majority in Congress prepares to force its approval as a show of strong opposition to President Obama. But what difference does it make if, regardless of the ultimate outcome, only a state agency in Minnesota stands between Enbridge and accomplishing the same objective as TransCanada? Is the real argument going on in Minnesota?
November 9, 2014 § 5 Comments
On October 20th I woke up and discovered that my eyesight had malfunctioned and, as a result, everything I looked at was a double image, one atop the other. When this problem persisted and my effort to ignore it proved to be too taxing, I finally went to a neighborhood hospital center. After a CTscan, an MRI, an EKG and a thorough series of blood tests, the message from this premier medical center was: ” Good news! You don’t have diabetes; you didn’t have a stroke; one of your cranial nerves has malfunctioned; we don’t know why, but it will probably correct itself and your eyes will return to default condition sometime in a few weeks. Put a patch on one eye and you’ll be fine. And, if that doesn’t happen, we’ll fit you with a pair of glasses with an embedded prism that will correct the problem.”
So, now I have a clue about how pirates feel, except I don’t have a peg-leg and a parrot.
This mishap has curtailed my reading and my attention to this blog. But, I do have one comment on last Tuesday’s “Republican Sweep” and the “Top to Bottom Assessment” that the Democratic Party has now launched.
I find myself agreeing with Bruce Bartlett, a conservative writer and former adviser to HW Bush and Ronnie Reagan. He recently wrote an article in American Conservative magazine entitled, “Obama Is A Republican”. He supported Obama in 2008, because he was furious at GW Bush because of GW’s fiscal policies. In his article, he cites chapter and verse to explain his contention that Obama forgot his Saul Alinsky roots and governed like a moderate Republican. Here is a link: Bartlett
I commend the article to you. Bartlett is a right-wing true believer in some economic policy fairy dust, but he has produced a thoughtful reminder of some of Obama’s policies.
I mention this article now because I think it offers a clue about why the Democratic Party voters did not vote last Tuesday. Maybe it was because they were no longer convinced that Barack Obama’s policies promised the kind of relief and change they needed. Their wage levels were dwindling. The jobs they lost were not being replaced with work that enabled them to support a family. They needed policies that targeted the excessive greed of the rentier class. They were looking for Elizabeth Warren and what they were offered was a now-fully-disclosed Barack Obama and the future prospect of Hillary Clinton. They didn’t perceive Obama as an enemy. What they perceived was indifference, not in his rhetoric, but in his actions.
I don’t think those voters were thrilled by speeches about women’s reproductive rights and gay marriage. There were three groups of potential supporters for Democratic Party candidates: Chicanos who want legalization and a path to citizenship; young people who want relief from oppressive debt and prospects for decent jobs; and working class wage earners who wante decently paid jobs. I didn’t see or hear many campaign speeches talking about those issues.
I hope the post election assessment convinces the Democrats to forget about “reaching across the aisle” and foreswearing “class warfare” and “populism”. We live in divided country. There are two sides. When the Republican side talks about “compromise” and “getting things done”, they mean “agree with us”. The voters are not sophisticated. They do not understand how the nuts and bolts of government work. But they do understand discussions of their fears and their desperation. If we want to preserve our democracy, we better begin to offer some solutions even if the solutions don’t please the tiny fraction of our population that furnishes most of the money that corrupts our politics.
I have zero confidence that my proposal will even be discussed at the high-level strategy sessions that are probably now occurring. The hallmark of political expertise in America is recognition that political policies that displease those who furnish the money in political campaigns are “tilting at windmills’ style notions and Sancho Panza is not a viable political mentor.
I have mentioned Dan Carlin before in posts on this blog. He has a channel called “Common Sense”, in which he discusses various current issues. In a recent one, he discussed what he perceives as a real threat to our democracy: Pent up rage and frustration in response to government’s indifference to the economic problems facing working class Americans. If you would like to hear his reasoning on this subject, here is a link: Common Sense
This link takes you to the home page of his blog. Scroll down and click on “The Specter of Dissent”.
October 18, 2014 § Leave a comment
Dan Carlin, Cent Ugar and TYT
For several years I have enjoyed a series of podcasts from a web site entitled “Dan Carlin’s Hard Core History”. Before my legs developed neuropathy that made it impossible, I was a runner (when I was much younger), then a jogger (for years after that), then a walker (in my 70′s). To amuse myself during the hour or so while engaged in those exercises, I listened to podcasts. My favorites were Carlin’s and Ira Glass’s “This American Life”.
Recently I discovered that Dan Carlin has a new podcast series, “Common Sense”, a weekly commentary on various issues and occasional interviews. Carlin is not an ideologue but, because he bases his opinions on facts and research, he usually, but not always, arrives at liberal conclusions. His disdain for both Fox News and CNN is constant, not because of their political biases but because he finds them intellectually barren.
I mention Carlin because, on one of his “Common Sense” episodes, he interviewed Cenk Ugar, the head of an online group of news and entertainment channels called “TYT”, an abbreviation for The Young Turks. Here is a link to that episode: Common Sense
This is an hour-long show. It requires some patience. The first 8 or 9 minutes consist of Dan Carlin’s monologue about himself and his approach to his job. It was interesting to me because, as stated, I have respect for him and I enjoy his ideas. If you don’t want to bother with that, just move the cursor over to about 9 and you will hear a conversation between him and Cenk Ugar. For me, this conversation was a treat. Two intelligent guys talked about several issues that interest me and did so in an intelligent way.
In case you are too busy to invest an hour, please Google TYT Network and sample some of the episodes you find there. Ugar and two or three others discuss politics every week day on a TYT channel called “The Young Turks”. You can click on recent shows from a column along the right side of the screen.
BTW, the TYT network has almost twice as many daily average viewers as CNN and significantly more than Fox. Two billion people have signed up as “members”. You guys are probably already aware of it and are regarding as quaint the fact that I have just awakened to discover it. I hope that is true but, if it isn’t, you should try it. I have found it more interesting than either CNN or MSNBC.
One more thing – and this is important, so listen up – Ugar and his crew are trying to use Article 5 of the Constitution to force a state legislature-compelled convention to add an amendment to the Constitution that will prohibit corporations from making political contributions and declaring that corporations are not people and, hence do not have enforceable First Amendment rights. The state legislatures of Vermont and California have already joined this effort. Recent polling reflects that 80% of Americans are in favor of this idea and opposed to the present money domination of our political system. Both Democrats and Republicans agree on this issue.
The effort is called Wolf-Pak. Please Google it and sign up.
Gary Webb, The Contras and Cocaine
There is a new movie out, Kill the Messenger. It is about Gary Webb, an Oakland California newspaper reporter who, in 1996, wrote a three-part series of articles entitled “Dark Alliance”. He described an alliance between the CIA, the Contras and Central America drug smugglers to finance the ouster of Nicaragua’s government. The Reagan Administration was opposed to that government because its president was Daniel Ortega, the leader of the Sandinistas, was resisting the influence of the neo-colonial policies of conservative political faction backing the Contras. This cocaine connection was an added piece to the Iran-Contra scandal that exposed the lawlessness of Ronald Reagan and led to the imprisonment of Ollie North, one of the wack-a-doos commissioned by Reagan and his neo-cons to trash the “rule of law”, a idea much admired in public but ignored in private when it hampers the current goals of government leaders.
There are two long stories that describe this tawdry episode in our history. One is this recent article in The Nation. Another is a long account of how John Kerry, when he was a freshman Senator, risked his political career by sponsoring an investigation into the Contra-Cocine-CIA connection. This story appeared in Salon.
Waiting for Turkey and Sanity About a Travel Ban
Finally, I am still waiting for some media attention to a couple of facts that are still bothering me.
First, I don’t know why, despite all the pursed lips and head shaking about why Turkey is being so obdurate about doing something about the impending fall of Kobani to the forces of ISIL, no one ever mentions that maybe it might have something to do with the oil deal between Turkey and ISIL Yeah, yeah I know about the PIK issue and Turkey’s complaint about reluctance to join the opposition to Bashar al-Assad. But shouldn’t the oil deal at least be mentioned?
Second, when the GOP ignorami bray about travel bans from Ebola infected West African nations, why doesn’t someone ask them how it would work, given the fact that there are no direct commercial flights from any of those countries to the U.S.. Do they really want a travel ban from Belgium or the UK or other European nations from which travelers from West Africa change planes on their way to New York.
These are the matters that evoke conversations between me and a TV set for a few seconds until I realize I am talking to a machine. So, who’s the crazy one?