Dana Blankenhorn

My Burma Sorrow

I am sorry about the Burma hurricane. I am sad that its leaders are so paranoid as to refuse aid from the world. I am saddened that so little aid is getting into the affected region and that people are dieing needlessly.

But still...

When I read complaints from our government about the failure to allow aid it's like someone rubbing a balloon before popping it and laughing in my face.

Is it that way to you?

This morning on TV Cindy McCain was complaining bitterly of the Burmese peoples' plight. I have no doubt she felt sincere. But I kept switching back to that picture of her husband, the day Katrina hit New Orleans, standing with our leader, and a birthday cake.

Crocodile tears.

When I see Secretary of State Rice demanding that Burma allow aid in, all I can think of is what she was doing when Katrina hit New Orleans. Shopping for shoes.

When I read about U.S. diplomats bemoaning the destruction of Burmese rice fields, I think about how all they cared about after Katrina was getting the casinos back into operation, and how we're now benefiting from higher rice prices.

The Wright Reality

No matter how we feel about "phony" controversies they usually have an important point behind them.

They define the limits of acceptable speech.

Take the Jeremiah Wright mess, which Bill Moyers is still agonizing over. Why is Wright condemned for statements like "God Damn America" while preachers like John Hagee, who (along with Falwell and Robertson) said the exact same things (only with different reasons) go merrily on. Isn't that a double standard?

Well, yes and no.

It's a double standard in that one man's speech is seen as out of bounds and another man's speech is seen as within bounds. True. But the whole purpose of the exercise was to define the bounds of acceptable political speech. It was to make Wright, and everything he says, out of bounds while enabling extremists on the other side free rein. (Actually, free reign.)

In this, as in other phony controversies over the years, the Right has been masterful. Through this process of phony controversy the acceptable discourse within our society has been pushed ever-more to the right, so it's becoming impossible to even publicly utter obvious truths. I'd say that's an important result.

For instance, the following sentence is, politically, completely out of bounds within the American political discourse:

Not Good Enough

The apology of Pope Benedict XVI for the Church's sex abuse scandal is not good enough.

Not by a long shot.

His words remind me of what a child says when he or she is caught taking the toy of another child. The personal shame and repentance may be real. But is anything really changing?

In this case it's clear nothing is changing. This is certain because we haven't heard of the Church doing anything in the other countries where it works. The Church is acting like this is some sort of American aberration, when the only aberrant thing about it is priests here were caught, and the Church as a whole was held to account.

"It wasn't just sexual abuse, it was spiritual abuse," one victim told CNN, but he wasn't the only one spiritually abused. His whole family was, and his whole congregation was.

There are few crimes in this world whose impact can compare with that of child sexual abuse. It happens every day -- in every denomination and creed -- and it destroys everyone it touches.

This isn't a gay crime. It's a crime of power.

When done against a child by a person who claims authority from God, it's even worse. The chance of the victim opening up to anyone, and seeking a cure for the hurt and anger inside them, drops to near zero. And the resulting scars last a lifetime.

A World Without a Moral Center

As I may have mentioned here before I'm scheduled to visit Chengdu, China next month. Blogging will be sporadic.

Given the recent headlines over the torch run I'm certain you're wondering what I might tell my hosts.

The answer is -- not much.

For one thing I expect few there to know English. But even without the language barrier I'd mainly want to listen. Listen to my son try to puzzle out the language barrier after three years of Mandarin. Listen to people greet me, and try to explain things by speaking Szechuan ve-ry slow-ly (as though that would help).

But there's another, more important reason. I no longer have cause to condemn anyone.

Neither, frankly, do you.

Don't Get Killed in the Semi-Finals

I was told this a lot in 1968, by conservatives I considered knowledgeable friends.

It summed up their attitude toward Vietnam at the time, and their feeling the Vietcong would be reluctant to risk death. (They were wrong, of course.) The real fight wasn't with us, but between them, they assumed. So don't get killed in the semi-finals.

The good news from Iraq is we seem to be past the semi-finals. The current Battle of Basra is really the Bush Administration's last stand.

If Nouri al-Maliki should win, we will have chosen Iraq's new Saddam. He'll be a Shiite Saddam, he'll be a Saddam allied with Iran, but we'll have put him there. The point is this may be "victory" enough for our troops to get the heckoutofthere.

Unfortunately, right now he doesn't look like a winner. He's already had to call on Uncle Sam to hold Baghdad and we're hearing the same-old same-old about bad planning further south.

Final Warning

After the shiny, happy people feeling you got from reading my last post, now I'm going to bring you down.

Over at Juan Cole's shop, former University of Chicago professor William Polk reads the tea leaves and pronounces the War With Iran to be at go time.

To last week's US News warning he adds the personal recollection that Dick Cheney also made a trip to Saudi Arabia in March 2002 -- ostensibly diplomatic but (we now know) his warning, and assurance, that Saddam Hussein was a dead man.

The article contains the tantalizing possibility that Israel's recent attack on Syria was just a test of its radar and anti-missile defenses, but Polk then adds news that there has been an unprecedented build-up of U.S. Navy assets in the Persian Gulf:

Of course, deploying forces along Iran’s frontier does not necessarily mean using them. At least that is what the Administration says. However, as a historian and former participant in government, I believe that having troops and weapons on the spot makes their use more likely than not.

Instead such forces create a "climate of war" like the one which set off The Guns of August and World War I, a climate which both Bush the Wiser and Bush the Dumber have given in to before. He adds that the rationale for war is contained in the 2005 National Defense Strategy, which asserted America's right to engage in first-strike warfare anytime, and anywhere, it chose.

What can halt the march to war? Just one thing.

It's Not That They're Clueless

Think of this as Volume 11, Number 11 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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My blog friend Oliver Willis calls those in charge of our financial house clueless.

That's an easy mistake to make.

In fact, it's in the nature of our economic system that you go right up to the line of legality in order to maximize profit. Anyone who doesn't do that is an economic loser, either in the short run or the long run.

You want to go right up to the line, peer down over the edge, and maybe move your toes back a bit. That's what your lawyers are there for, to move your toes back a bit.

This is fine so long as the law is reasonable. If the law is reasonable and cops are on the beat, walking right up to the line of legality and staring down into the canyon is both legitimate and good business. It's what makes markets efficient.

The problem in this case is the law was made unreasonable, and the cops chose to look the other way.

All the problems Bear Stearns caused were through the creation of new, "unregulated" markets. An unregulated market is a market that's looking for scandal. Because there is no reasonable line you can walk right up to, it's easy as heck to become Wile  E. Coyote in such a market -- everything is fine so long as you don't look down.

The defaults on sub-prime mortgages last year were when we started to look down.

The Manchurian Presidency

The Manchurian Candidate is about a Communist plot to install a dupe, played by James Gregory (left in the photo at right), as President. He claims to be fiercely anti-communist, but he's really controlled by the communists through his wife, played by Angela Lansbury. (Sorry if I spoiled it. Watch it for Frank Sinatra next time -- one of his best roles.)

Ever since the movie returned to vogue politicians have been warning that their opponents are secretly working for the other side. The claim is made this cycle about Barack Obama. That is, Barack Hussein Obama.

Of course, this deliberately misses the plot. The James Gregory candidate is a perfect conservative, a neo-McCarthyite. In 2008 parlance, he's McCain.

But what if the Manchurian Candidate has already been elected? What if, in fact, he's been in office for over 7 years?

The End of Impunity

One thing which has marked the last two decades, and it's as true for ordinary people as for our leaders, has been a sense of impunity.

Democrats complain often of how the Bush Administration displays impunity. The rules don't apply to them. They make up their own reality. The President cannot break the law.

We talk a lot less about our personal impunity. We can buy what we want. We can walk away from our debts. We don't have to make hard choices.

Democrats most fear talking about the impunity inherent in their own positions. We'll get out of Iraq on our own schedule, and stay in Afghanistan "to win," they say. We'll give ordinary people tax cuts and raise spending on health care and education.

The end of all this impunity is a big theme in our current crisis and all of us -- Democrats, Republicans, consumers, businesses -- remain in the denial stage of the process.

Last week's biggest story may have been Joseph Stiglitz' (above) estimate of the Iraq war's cost -- $3-5 trillion. (It's all here in his book.) The figure seems unimaginable so let me put it into perspective.

It's going to cost the U.S. its autonomy. It's going to cost our currency. It's going to cost you your life savings, and me mine. It's going to end the era of American impunity.

Does Politics Trump Everything?

I didn't intend on getting into this, but I had the Congressional hearing on, with Roger Clemens, and there's an important point which needs to be made. (Picture from 108 Red Stitches.)

Does politics really trump everything? Does the truth of something mean nothing? Or is everything just a function of which political party you belong to?

Let's be clear. Roger Clemens is a Republican, a staunch one, a charter member of the "jockocracy" who got rich off sports and thus identifies with the rich.

That fact should mean nothing regarding whether Roger Clemens used performance-enhancing drugs. The Congressional committee should be testing the evidence, and acting in an impartial manner as much as possible.

I don't know the truth, but I have suspicions. I know what Clemens looked like a decade ago. I know what he looks like now. His head is two sizes larger. That is one side-effect of steroid use. And his record over the last 10 years, his success in continuing to pitch well into his 40s, also has to be seen suspiciously. Especially in light of the specific allegations contained in the Mitchell Report, and the further evidence offered by former trainer Brian McNamee.

Every case of conspiracy is, as prosecutors say, a piece of shit. That is you depend on members of the conspiracy, criminals, to testify against others. You expect drug dealers to rat on their customers, customers on their dealers, and you don't judge guilt or innocence  based on party affiliations.

Do you?

Revenge, Reform and Justice

Think of this as Volume 11, Number 6 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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The countdown to the end of the Bush era has begun.

We think.

But as we gaze over the immense crimes of this time, and seek justice for the damage to our world, our people, and our finances, the demand for revenge and justice is getting in the way of reform.

I share the thirst for revenge.

If no one pays for all this, if no one is held legally responsible for Iraq and Katrina and torture and the massive thefts which may add up to trillions of dollars we don't even have, then the whole country becomes like the Reagan labor secretary Raymond Donovan (right), plaintively wailing (after being found innocent of corruption) "where do I go to get my good name back?"

Fact is, with countries, it's not so easy. The guilt for this era will never wash off our hands. Not entirely. No matter our politics, the crimes of George W. Bush, his henchmen, and his followers, done in our name, are our crimes as well.

The Rough Justice of a Crash

Both political parties are rushing to bail-out the losers in the present economic crisis.

• Bail out my friends who insured the Big Shitpile, begs Jim Cramer.
• Bail out the rich, says George W. Bush.
• Bail out the poor, say the Democrats.

Unfortunately there's a sort of rough justice which takes place during these market crashes. I have seen it during every single crash I've ever covered, from the oil crash of 1981 through the dot-bomb of 2001 through today.

We don't want idiots bailed-out. Those of us with cash, or those who stayed on the sidelines, want the chance to pick through the wreckage at our leisure. Analysts claim there are two emotions, fear and greed, which determine where prices will go. There's really only greed and greed.

During a boom everyone wants to be venture capitalists.

During a bust everyone wants to be vulture capitalists.

Go To Kenya

There's a simple way Barack Obama can take this campaign by the scruff of the neck and do something marvelous at the same time.

Go to Kenya. Or at least promise to go to Kenya. Send Bill Richardson to Kenya, as a personal emissary, and offer to meet the two disputants to sign a settlement of their dispute.

Barack Obama has the same interest in Kenya as Bill Clinton had in Ireland, when he offered help in that dispute.  Moreover, Obama's paternal grandmother still lives there. And the dispute is similar, with tribes substituting for religious groups. A civil war is raging, and it must be stopped.

There's another reason to get into the middle of this, which is to illustrate the damage the Bush Junta has done to America's cause. Since the Supreme Court selection of 2000's loser, we've seen repeated examples of contempt for democratic process, when that process might result in a change of regime.

Ignored in the Big Shitpile

There are three big problems, laid on top of one another, in the financial mess known as the Big Shitpile:

1. Bad loans were mixed with good ones and sold as securities, even options.
2. Millions of adjustable rate mortgages are re-setting to higher rates over the next three years.
3. Homes are priced at twice their value.

There are a lot of "solutions" being proposed by both parties for the first two problems. (Picture from Bayareahousingbubble.)

No one is even talking about the third, because its implications are too massive to contemplate.

But this is the stark reality. What we're reading now, even the pessimists' argument, is not yet even realistic.

When any bubble bursts, the actual value of things gets cut in half. Usually it over-shoots this mark, then it resettles at the halfway line and starts proceeding upward again, slowly.

• This is what happened to the NASDAQ after the tech bubble burst. It fell from 5,000 to under 2,000, but now trades at around 2,600.
• This is what happened to the Japanese stock market after it peaked in 1987 at around 37,000. It now trades at about half that value, and investors are happy to be there.

This is also what happened in the 1970s, the last time we had a housing crash. Homebuilding stopped in most markets -- at least those outside the oil patch. The price you could get for an existing home fell to much less than its replacement cost, and stayed there. Renting made sense.

That is where the U.S. housing market is headed. That's where it has to be headed in order to regain free market equilibrium. That's the way markets operate.

But you'd never know that from the nonsense being proposed right now:

• Easing the pinch on some "sub-prime" borrowers does not make more credit available for new mortgages. 
• Enabling refinancing of adjustable-rate debt doesn't make the value of the underlying home any greater.
• Giving developers incentives to price some homes below-market is useless.
• A moratorium on foreclosures sounds nice, but it's just delaying the inevitable.

Awakening the Netroots

Perhaps nothing illustrates the impact of Howard Dean's achievements than the caving of his party's Congressional wing this month.

It's the reaction to them that's important.

The FISA filibuster and the Bush Christmas Present Budget are angering the Netroots and, hopefully, re-energizing them.

It's a cold slap in the face, one that's overdue.

It's one thing to build a party, or a movement, as Kos has done. It's quite another to see that movement directed toward a goal, and directed toward actively confronting a party, really taking it over. That was the lesson Howard Dean himself tried to teach before becoming DNC chair, when he formed Democracy for America.

That's now taking place. The anger over at DailyKos, at Americablog, at Firedoglake, and elsewhere in the Netroots over what is happening now is palpable.  For much of 2007 netroots bloggers were, when outraged, mainly outraged at President Bush. They cut their own party's leaders considerable slack.

No more. I hope, and expect, that the result of this anger will be a growing sophistication on the part of Netroots activists and a growing number of Netroots-inspired primary challenges, such as those now going on in Illinois and Maryland.

We don't just need more Democrats. We need better Democrats.

It's 1938 Over Here

I often decry the call of "Munich" on foreign policy. It's not 1938. Our foreign enemies are not Hitler. They don't have his kind of power, and don't pose his kind of threat.

But domestically, it has been 1938 in this country for a long time, and most Democrats have been Neville Chamberlain before it.

They constantly assume goodwill toward democracy, and to the basic rights of a free society, which Bush, Cheney, and their whole crowd do not share. The Administration uses this assumption of goodwill against them in ways large and small, in their ruthless campaign for absolute power -- not just political power, but personal power, financial power, and judicial power.

It's only the DFHs of the Netroots, the ones called "extreme" by the mainstream press, who are playing Churchill here. They seem easy to dismiss. In the short run, they are. If these people had realized earlier this year they were, in fact, the majority, as they claimed they were, they wouldn't be in this mess.

But let me leave the financial scandals, the power grabs, the planetary destruction and the sick foreign policy for a moment. Let's talk about this in terms of something I know well, the Internet.

Avoiding Nixonism

One of my great fears for 2008 is that Democrats will simply recapitulate the events of the last political crisis, that of 1968. (Picture  of the House Democratic leadership from Firedoglake.)

This would mean the narrow election of Hillary Clinton, slight increases in Democratic majorities, followed by a host of actions supported by the political right.

That's a mirror-image of what happened after 1968. Nixon's win was narrow, the domestic agenda of his first term was liberal, and his battles against the liberal assumptions of his time made him paranoid, resulting in Watergate. The Watergate scandal delayed the changes movement conservatives desired by over a half-decade. The distance between the 57% vote share by Nixon and Wallace in 1968, and the beginnings of the "Republican Revolution," in 1980, was 12 years.

Democrats can't afford this. Americans can't afford this. The world can't afford this. We can't wait 12 years to begin the War Against Oil. We can't wait 12 years for major action against global warming. We can't wait 12 years for a return to social mobility. We can't wait 12 years for honest government.

The Democratic outrages of the present day, their repeated capitulation to Republican demands,  and their delight in power without responsibility,  are not new. The Money Party has dominated American politics almost without let-up throughout its history. What New York wants, New York generally gets.

But not always. When the crisis is deep enough, and when leaders are courageous enough, the Money Party can be beaten back for a time.

The Reckoning

We are past the time of the Good German.  We're even past asking who might be a Bad German.

The Reckoning has begun.

We forget how The Reckoning can begin before the war ends. In Germany The Reckoning began long before the Soviets entered Berlin. It was in full swing at the time of the 1944 plot against Hitler (a plot in which I recently learned a distant relative (right) participated).

So it has begun here, with George W. Bush still in office. The great hope of the Administration, the fact that will keep W's butt out of jail, is to show Democrats' complicity.

Democrats were complicit. Democrats on the Intelligence Committees, and House Speaker Nancy Pelosi, were apparently briefed on torture and stood silent. The CIA's insistence it acted within the law, that it it was only following orders, Mein Herr, is more evidence that the search for conspirators is well under way.

Essentially our Congressional leaders are being blackmailed, in the full light of day, by the regime's leaders. Protect us and you won't be hurt, they say. And these leaders are knuckling under.

In 2006 the cry was for more Democrats. Today the cry must go out for better Democrats. Despite the risk which our major media (which is also fully complicit in torture, in war crimes, and in the theft of this nation's Constitution) will claim exists, Democrats need to wage war on their fellow Democrats, right now. Netroots Democrats must demand that those Democrats whowere complicit in these crimes be held to account, in order that those Republicans who engaged in criminal conduct be held to account.

What is at stake is our own complicity in these crimes. Your complicity. My complicity.

This Week's Clue: The New Mortgage Fraud is Political

Following is the essay you can designate as Volume 10, Number 49 of This Week's Clue, based on the e-mail newsletter I have produced since March, 1997. It would be the issue of December 10.

Enjoy.

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There's a new kind of mortgage fraud stalking the land, the quick political fix.

It's a game both parties can play, unfortunately. A moratorium on foreclosures bails out thieves who signed for loans they had no intention of repaying. The industry's "freezer-teaser" plan gives the impression of progress, but it's really just a way for lenders to pick through the rubble.

Jesse Jackson has proposed that the government take on the loans which are going bad, leaving you and I on the hook for bad loans. He misunderstands what the Depression-era RFC actually did, which was mainly micro-lending to good risks, at a profit.

Here are the plain facts:

1. Housing prices have to come down. That's the only way to make housing affordable.
2. Lending practices have to be tightened. No more teaser rates, no more interest-only except to investors, and simplified documents must become mandatory.
3. Incentives need to be adjusted, and responsibilities attached to everyone in the mortgage process.
4. The criminal law must be applied for fraud by both borrowers and lenders.

It's this last which is most essential. It's obvious a lot of fraud took place here on all sides.

1. Investment bankers created crap, mixing-and-matching bad loans with good.
2. Mortgage brokers pushed bad loans on poor people, and didn't tell them.
3. Many buyers grabbed cash with both hands.

Laws are going to have to be changed, and people with gazillions of dollars in the bank are going to have to face prosecution, not just here but in other countries as well.

Here are my own modest proposals:

Belief in Evil

The nightmare I've been dealing with concerning our son reaches another climax tomorrow with an appearance at juvenile court.

After three months of this I have a pretty clear idea what happened. We're hoping for the best.

But regardless, what seems very clear is that the teacher who claims my son assaulted her believes firmly in good and evil. Especially evil.

Evil can be a noun, a verb, or a modifier. As a verb it refers to action everyone knows is wrong. As a noun it refers to the person behind that action, and may also be used to damn their character, to consign them to the netherworld of death or prison. As a modifier it's a political football as in the term evil-doer.

How many more innocents have died in Iraq these last 5 years, at our hands, wittingly or unwittingly, compared to the number who died on 9-11? Yet our leaders refer to those who planned 9-11 as evil-doers, and to our own good men and women as liberators.

It's nonsense. War is evil, no matter who does it, no matter their cause. It is all hell. It is violence, it is destruction.  It's a central lesson told by everyone who has come back from any war. The only way to justify such evil is to see the other side as more evil, so that the war becomes self-defense.

I shouldn't criticize. That's our defense as well.

The Big Shitpile

I like Atrios' term for it, not because of Duncan Black's politics, but because it accurately describes what we're looking at. (Picture from The Fattys.)

The present financial crisis was caused by brokers combining so-called "sub-prime loans" (aka shit) with decent mortgages into securities and derivatives. This pile of capital was then traded like real securities, which worked fine until the shit started to stink, i.e. when the rates on those loans re-adjusted to what they should have been all along. The wave of defaults turned the whole pile of securities into something you couldn't price, because it would take enormous work to figure out which bad mortgages were in what jumbo instrument.

The idea was to make a pile on the shit, but the shit stunk up the whole pile. Thus, shitpile.

It gets worse. A lot of