Euro Tract Infection

Americans are angry at their unemployment issues, home value collapse and have a rather bleak view of the future. The February 11^th Washington Post tells us that while two-thirds of Americans know very little about the “Tea Party” movement, “Two-thirds of Americans are [also] ‘dissatisfied’ or downright ‘angry’ about the way the federal government is working, according to a new Washington Post-ABC News poll. On average, the public estimates that 53 cents of every tax dollar they send to Washington is ‘wasted.’” Mr. Obama is not having a good time with this apparent massive disconnect with his constituency. But if you think he’s got problems, take a closer look at the unraveling of Europe’s weaker European Union nations, Greece, Spain, Italy, Portugal, etc., and its impact on the relationship between the voters in the stronger economies, which are being asked to use their power to bail out the weaker nations, and the leaders of those stronger countries – primarily Germany’s Chancellor Angela Merkel.

Greece is teetering on the brink of total economic collapse, while other countries in the EU are looking to follow. If any one country falls, the entire EU economic unity threatens to fall completely apart, taking down one of the most powerful economic structures on earth. To Teutonic Germans, who pay their taxes, invest relatively wisely and have built their country into one of the most powerful exporting nations on earth (yes, it isn’t just China), supporting nations where people scoff at the tax collector and are willing to let their entire country fall off a cliff before they even begin to consider paying their allocated tax burden… is … well… outrageous. But that’s exactly what their Chancellor is in the process of doing… guess how popular she is with the German voters?

Greek government workers have called strike, shutting down essential services, in the wake of massive cut-back that the government has been forced to impose. If the past is any predictor, we can expect these protests to turn violent very soon. Rather than allow this thread that threatens to unravel their EU to unwind, “[I]n a conference call with the finance ministers from the 16 countries that use the euro and the president of the European Central Bank, Jean-Claude Trichet, officials said that some action had to be taken to calm markets and take pressure off Greece. It appeared clear that Germany, with an assist from France, would have to take the lead. ‘The Germans are the only ones with deep pockets,’ said Daniel Gros, director of the Center for European Policy Studies in Brussels. If it was just Greece, they could consider letting them go down the drain, but it threatens the entire euro zone.’” New York Times, February 11^th.

If we were worried about the collapse of the dollar, this horror in Europe will reverse that pressure, although the U.S., U.K. and the euro-based Western nations all clearly have downward pressures on each of their currencies. But the collapse of Europe is not good news for the United States, since this economic turmoil could easily trigger a global “recession, part deux,” which would soon embrace us as well. Our banking systems and economic balance are heavily intertwined with Europe, no matter how separate most Americans believe them to be.

To Germans who sacrificed their Deutsche Mark in favor of a blended European currency, this potential for economic collapse is a huge “I told you so” moment. There has been a long-simmering resentment from many Germans (and more than a few French) that their prosperity is been leveraged by the less economically advantaged nations of Europe to escalate their standards of living – now that they were full economic members of the EU – by doing what took even the U.S. economy down hard: borrowing their way into their lifestyle. With one unitary economic system at the core, and the strong German and French economies as collateral, people who long looked at “richer” Europe with envy began to emulate what they yearned for with debt from pan-European banks, regulated and supported by the wealth of those on top. Germans deeply resent sacrificing their hard-earned money to shore up profligate nations, wallowing in unjustified debt with citizens turning their backs on the tax collector; the feeling is very understandable.

The world is looking to countries like France and Germany to issue guarantees for the Greek economic system, and some form of banking support from these stronger European nations is expected. While there are negative reactions in France, the backlash is particularly strident in Germany, which faces its own litany of economic and geopolitical changes: “The apprehension in Germany runs much deeper than a single crisis. It comes in the same week that Germany gave up its most cherished title, world export champion, to China, heightening fears of a declining stature and importance globally.

“Germany also faces a demographic challenge, managing a population that is not only graying but shrinking. Last month the government announced that the population dropped below 82 million last year for the first time since 1995. That means fewer people trying to pay off a growing national debt, with a projected budget deficit of $118 billion this year.

“After Mrs. Merkel’s re-election in September and triumphant turn on the world stage in November for the 20th anniversary of the fall of the Berlin Wall, her approval ratings have fallen to their lowest levels in more than three years. Criticism of her government over infighting in the governing coalition — mostly over tax cuts and the budget — has risen steadily. She has been noticeably reticent about the crisis in Greece, speaking out far more forcefully on populist issues like tracking down tax dodgers hiding money in Switzerland.” The Times.

The net result is a major setback for economic recovery. The February 12^th New York Times: “The economic recovery in the euro area almost ground to a halt in the last quarter of 2009… adding to worries about the ability of some countries in the region to use growth to improve their budgetary positions… Much of the weakness appeared to stem from Germany, where the economy unexpectedly stalled during the last quarter; the expansion in France strengthened.”

We are watching a major power shift from the West to the East. Most of Asia (particularly China and India) has lived within an exceptionally modest standard of living, where workers contribute vastly more value to their economies than they take out. The significant improvements in the quality of life for many Asians still doesn’t begin to compete with the social and economic benefits enjoyed by their Western counterparts, so that aggregate of value building in Asia is tilting the global power base towards those able to continue to produce value without sapping the system that supports them. We know in time this will change, that they will slowly mimic the consumption patterns of the richer Western nations… but right now, it’s all Asia and almost no West. Every time a Western power begins to lift its head above water, there seems to be a force that simply wants to drag it down. Change happens. It’s not always pretty.

I’m Peter Dekom, and I approve this message

Black Hawk Down

When Google elected not to participate in the censorship of Chinese-based searches, it (and similar sites) soon found itself the subject of targeted hackers’ attempts to breach its security walls. As a part of a statement issued by Google to the press on January 12, 2010, it noted: “[W]e have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective… [I]ndependent of the attack on Google, we have discovered that the accounts of dozens of US-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users' computers.” Secretary of State Hillary Clinton soon announced that the U.S. would provide financial assistance to groups fighting censorship within China. The Peoples Republic was outraged, calling the U.S. an “information imperialist.” Since then, Iran seems to be shutting down Google and gmail access as well. Censoring, hacking, spying.

But let’s face it, spying and hacking are part of every major intelligence agency’s basic mandate in a modern world. The U.S. is probably the biggest hacker in the world, but it’s not exactly something we are going to brag about. But because the U.S. is so completely “wired,” where the entire financial sector, corporate communications, the power grid to the complex interweaving of intra and inter-governmental agency connectivity are based on one form of the Internet or “another,” we are also ultimately more vulnerable to attack than any other nation on earth…. The Pentagon has been charged to create a centralized defense operation (the Cyber Command) to defend the United States – its military and critical civilian institutions – from cyber-attacks intended to disable America’s economic and military computer systems and Internet linkage, but everyone knows that we are still very, very vulnerable. OK, we’ve not actually been at war, but what can happen in combat has already been “projected” by recent history.

It does get worse when the intent is a precursor to a military invasion, an event that suggests the future military aggression. Within the first month of China’s Defense Ministry setting up shop (on August 20, 2009), 2.3 million attempts to hack into the system were recorded! Just days before Russian forces invaded the nation of Georgia in early August, 2008, Georgian-government file servers (their digital storage systems) and Websites were taken out by an explosion of messages, many directed from the United States. The August 13, 2008 New York Times reported: “Researchers at Shadowserver, a volunteer group that tracks malicious network activity, reported that the Web site of the Georgian president, Mikheil Saakashvili, had been rendered inoperable for 24 hours by multiple D.D.O.S. attacks.” This is the first recorded use of such a cyber attack in a military conflict. The principal message of this cyber attack: “win+love+in+Russia.”

Shortly thereafter, on Thanksgiving (November 27, 2008), a “malware” computer attack of the U.S. Central Command (which oversees combat operations in Iraq and Afghanistan) also appeared to originate from “somewhere inside Russia,” and wreaked havoc with vital defense systems in the region. The virus appears to be of a new variety that is designed specifically to disable or cripple military networks. We can expect this form of attack to become a routine aspect of warfare, probably expanding to target the Web connectivity of entire nations, slamming both military and civilian targets – ranging from compromising defense security to shutting down all financial transactions and locking down power grids.

It’s no surprise that China employs censorship or that it is very interested in the workings of “liberal” or “anti-government” movements within and without its borders. The war of words between China and the U.S. escalated of late, not just over Internet or “freedom of speech” issues, but over support for Iran, currency valuation and our own massive path of governmental deficits. It is interesting to see what “token steps” China has take of late to make little “gives” to U.S. demands, a reflection of a possible thawing in Sino-American relations.

China just announced the closed down the nation’s biggest “hacking school,” arresting the three principals of the Black Hawk Safety Net, an entity in central China that, according to the February 8^th FastCompany.com, operated as follows: “It seems that their main crime isn't so much hacking themselves, but running a subscription site which provided sophisticated tools like Trojans [computer viruses that lie in wait for a future attack] and account-hijacking code. They also ran training sessions in which they'd show other coders how to write malicious code. Over the years of operation, Black Hawk attracted some 17,000 VIP members, 140,000 free-access members and had made a haul of the equivalent of just over a million dollars in membership fees. And that's actually pretty amazing--it implies that there's an active hacker base numbering in the hundreds of thousands just from this one site, and though the media is labeling Black Hawk as what's ‘believed to be’ the biggest site, there must be others, and they may be of a similar scale.”

Of course, you really have to ask some basic questions at the very existence of such a “school.” It obviously had to exist for years under the noses of Chinese authorities, and it is equally clear that no one in China takes risks like that without some form of government sanction, no matter how informal that might be. Further, if there is one such “school,” there have to be others, and training people with those basic hacking skills has to be valuable for any government looking to recruit the “best and the brightest.” I have no doubt but that our C.I.A. keeps its eyes on those with similar skills here in the U.S.

Whatever the motivation or the result, the new notion of “cold war” seems to be played on many levels; we face surrogate wars, where countries that hate us finance terrorist groups that operate far away from them in other nations… or… worse, without reference to any particular nation. Cyber attacks, often deployed with plausible deniability and not traceable to the originating nation, are the new secret weapons, often causing more damage than a well-place bomb.

I’m Peter Dekom, and the way humans carve away at each other never ceases to amaze me.

The Double Standard

If you want the most fundamental issue that Americans have with whoever may be the incumbent party in charge, it’s the fact that squeaky wheels with media access, well-funded special interests and wealthy constituents (individual and corporate) get one set of rules and privileges, and the rest of us remain fundamentally underrepresented by our elected representatives. A piece of legislation may start with the best of intentions, but by the time it is processed in our nation’s capital or our many state capitals, the people consistently lose, and the special interests consistently win. Just look at the past few months of abortive legislation under the Obama administration, as fractious Democrats and doctrinaire “purity” Republicans dealt with major issues facing this country:

Banking: We stimulated and reduced Federal Reserve interest rates to get America rolling again, to get the credit markets restarted and to slow if not stop an economic collapse. Result: credit markets further contracted for small and middle-level businesses, corporations were incented to lay people off thus increasing the unemployment rate under pressure from Wall Street to cut, and most of that Fed money the financial institutions borrowed was used to fund their trading activities… making them rich while the rest of the country suffered. Home prices continued to tumble as buyers could not get financing and as laid-off workers defaulted on their mortgages. And rewriting the regulatory schema of this country to prevent a repeat of the Wall Street-induced economic calamity? Fo’getaboutit! Whatever watered-down version of any new regulations we get are hardly going to restrain a loop-hole-infested-I’ll-pay-mega-bonuses-no-matter-what financial sector that seems to have Washington bought and paid for and tied up with be big red ribbon. And as Democrats escalate the rhetoric against unbridled financial power, Wall Street is making sure that the politicians know where their campaign contributions are going next: “Republicans are rushing to capitalize on what they call Wall Street’s ‘buyer’s remorse’ with the Democrats. And industry executives and lobbyists are warning Democrats that if Mr. Obama keeps attacking Wall Street ‘fat cats,’ they may fight back by withholding their cash… ‘If the president wanted to turn every Democrat on Wall Street into a Republican,’ one industry lobbyist said, ‘he is doing everything right.’” Feb. 8^th NY Times.

Healthcare: Every significant cost-savings element of the proposed Senate plan (now dead in the water, where it should be but for the wrong reason) was eviscerated as business lobbies created false explanations in the media of what the plan really represented (“death panels,” “taking away our free choice,” “destroying American competition,” etc.), and Congressmen and women, who run for office all the time and need special interest funding to get elected, were battered with well funded lobbies from their biggest contributors to kill off “cost-savings,” because they would no longer be able to gouge the American public. What really happened? We lost the public option, which would have created competitive pressure on the lower-end of the insurance market, and we lost importing prescription drugs from vastly-less-expensive Europe or Canada (for the same drugs) under the incredibly stupid premise that we couldn’t police drug standards on imports. The Senate bill was among the worst pieces of legislation ever created… even exempting an entire state – Nebraska – from Medicaid contributions in exchange for a vote. Instead of cost-controlling an out-of-control medical industry – what the average American would like to see – the proposals would have created a massive new federal expenditures without addressing personal needs of those folks in the middle.

Education: With public and private primary and secondary schools laying off teachers, and with the cost of a college or vocational education sliding past the affordability index for most Americans – financial aid is becoming a distant memory – the simplest attempts to help average Americans afford to give their children a decent education (and America a future) are met with special interest stone walls. The February 4^th New York Times: “Four months ago, it appeared all but certain that the White House and Democrats in Congress would succeed in overhauling the student loan business and ending government subsidies to private lenders… President Obama called the idea a ‘no-brainer’ last fall, predicting it would take billions of dollars from the profits of private lenders and give it directly to students, and many colleges were already moving to get loans directly from the federal government in anticipation of the next move by Congress….But an aggressive lobbying campaign by the nation’s biggest student lenders has now put one of the White House’s signature plans in peril, with lenders using sit-downs with lawmakers, town-hall-style meetings and petition drives to plead their case and stay in business...The fierce attacks from the lending industry… have … damaged the chances for the student loan measure, said the aides, who spoke on the condition of anonymity because they were not authorized to discuss the matter publicly.” These are our children people… and the only possible way for us to pay back our massive deficits with a powerful, value-added work force… and that value comes from education! Education Secretary Arne Duncan on February 9^th: “Working Americans pay while bankers get rich… Sallie Mae executives have paid themselves hundreds of millions of dollars in the last decade while teachers, nurses, and scientists -- the backbone of the new economy -- face crushing debt because of runaway college tuition costs.”

As the dollar sinks slowly (not so slowly, actually) in the West, as the Supreme Court has empowered the mega-wealthy special interests to buy mass media without restriction to favor their candidates, and special interests require lockstep “purity” tests (eliminating the fact that our elected representatives are supposed to exercise their individual best judgment on issues), it seems that this double standard is being reinforced with concrete and steel. For anyone who has spent time reading about the history of civilizations and what ultimately brings down even the most powerful that ever existed on this earth… it’s time to take a good look at ourselves, a society poised for a period of precipitous decline. Ruling almost exclusively for a particular elite is fatal to a nation’s survival. It’s time to be afraid, very afraid.

I’m Peter Dekom, and we still can fight back!

Nice Tomatoes!

De-vine intervention? Pick-its everywhere? Will all this nastiness catsup to us sooner or later? Or is this just down and dirty bribery and corruption? Tomatoes? Come on?! Think I’m just cherry-picking my subjects? But there it is in red and white: “Amid concerns about corrupt practices in the food industry, nine people have pleaded guilty to charges including racketeering, money laundering and bid-rigging in a federal probe of SK Foods.” February 8^th Los Angeles Times. The charges appear to be that tomato salesmen routinely peeled of hundred dollar bills to convince produce buyers at various companies to buy their tomatoes at their prices, substituting lower quality products for the more expensive higher grades, inevitably kicking up the price that consumers pay for all sorts of tomato products. I am sure you blanched when you read this, but there it is, and the U.S. Department of Justice is taking action. Think this was an F.B.I. plant? Global worming?

Hey, youse guys, wanna buy a hot tomato? Bent-nose mobsters or travelling salesmen? It sounds like business on half the planet… they way emerging nations well… emerge. We’re looking at the tip of the iceberg… lettuce that is. SK Foods of Monterrey, CA is at the heart of this investigation: “In a series of court filings starting in 2008, federal prosecutors in Sacramento allege that [one salesman, Randall Lee Rahal], nine others and SK Foods of Monterey, Calif., used more than $330,000 in bribes from 1998 to 2008 to subvert competition and nail down deals to sell the company's tomato paste, peppers and other products to Kraft Foods Inc., Safeway Inc., Frito-Lay North America and B&G Foods, among others… All but one of the individuals have pleaded guilty to offenses typically associated with organized crime: racketeering, collusion, bribery, money laundering and bid-rigging. Five of the people worked for SK Foods; four were employed by its customers. SK Foods' sales plummeted as the case unfolded and it was sold out of Bankruptcy Court last year to a Singapore firm…Rahal -- who pleaded guilty to racketeering, money laundering and conspiring to eliminate competition -- faces up to 20 years in prison at his scheduled sentencing in May. Neither Rahal, who was a sales broker and a director of the company, nor his attorney could be reached for comment.” The Times.

Some of the payments were purportedly actually by check, others involved alleged payments for medical insurance for a buyer’s kid (and you thought this wasn’t a blog about the rising cost of healthcare!). What a terrible way for these salesmen to spend their salad days (hey, Shakespeare buffs!), maybe they just need a good dressing down! Who knows what a jury might find… could just be a toss-up! What’s next? Asparagus? Some F.B.I. agent acting on a tip? Oy, sorry about this, and actually, it is bad news, but the really amazing thing about this is that while these “crooks” might get 20 years for their market manipulation, just think how they would be punished on Wall Street for a much greater market manipulation and infliction of extreme financial damage. Heck, they could be pummeled by a pomodoro of excess bonus payments! They could be force to upgrade to first class travel or… wait for it… wait for it, their own private jet… and be required – strictly for business image purposes – to add a house in the Hamptons this year. Oh, the pain… but they can read about tomato salesmen during hard time in a medium security federal penitentiary. Feel the jealousy, eh? Guess we know who has the juice in Washington; the Department of Justice would rather be a crop buster!

I’m Peter Dekom, a lawyer, and I am just wondering exactly what justice really is these days?

Apocalypse Now

Climatologists predict a heavier-than-usual hurricane season this year. A massive killer earthquake was not enough for Haiti; nature may have another devastation in store for this tiny island nation. As time runs out for Haitians who may have been buried alive in the rubble, as anarchy reigns supreme and folks struggle to find potable water, food, clothing and shelter – often without luck – it seems that the people are clamoring for what they see as their only hope – takeover by a richer and more powerful United States. For all practical purposes, the major political force on the Haitian side of Hispaniola is the U.S. military. But is an economically impaired America even remotely in a mood to take over an entire impoverished nation? Imagine the claims of U.S. imperialism if we did.

Reports of shootings, looting and wanton criminal activity are accelerating as hopeless appears to be the continuing national pastime. Theft, armed robbery and rape are commonplace, and gangs have taken over entire sections of the capital city, Port-au-Prince, filling the political vacuum of a collapsed government.

PoliticsDaily.com (February 1^st): “Things are beginning to fray in post-apocalypse Haiti as grim reality sets in. The magnificent international relief effort, while heart-warming, can't reach everyone, and those who can be reached are fed or sheltered only temporarily. The day-by-day struggle for life's basics seems to stretch out indefinitely into the future, for a people traumatized by having lost nearly everything in the sudden violence of the earthquake and its aftermath…. Too grim a picture? Perhaps, but take a cue from the paratroopers of the 2^nd Battalion Combat Team, 82^nd Airborne. Among its 3,000 soldiers are many veterans of grueling combat tours in Iraq and Afghanistan. They are a hard-bitten and normally boisterous lot. Riding back from a mission, they sit in stunned silence. ‘A lot of my guys are going to need help when we get home,' a young officer [said sadly].”

All totaled, Americans have donated half a billion dollars to various campaigns dedicated to helping Haitians survive and rebuild. But roads are often impassable, water mains and sewer lines remain totally out of service, sewage and garbage create challenges to those trying to stem the obvious disease that spreads under such conditions, buildings continue to collapse and people need to resupply almost immediately after each load of donated materiel is distributed; it’s a bottomless pit of desperation. There is no accurate total on those who have lost their lives, but the estimates are staggering and threatening to grow as disease and starvation take new lives.

Pre-earthquake unemployment was absurdly high, but the number of people with no work and no way to earn even the smallest sum in the quake’s aftermath is an almost insurmountable barrier. Commodities, basics, are almost all imported… even water. Given that the relief effort will eventually diminish, how will those who survive… well… survive? Americans are a generous lot, willing to lend a helping hand to those people in need, but in this perilous economy, will the pain of Haiti slip out of our consciousness as the routine of decimated Haitian lives slips out of the daily headlines?

The reality seems to be that the relief effort is not nearly enough. The February 8^th Washington Post: “Nearly one month after a powerful earthquake brought this country to a halt, Haiti is tumbling headlong through a crisis that has not begun to abate, with evidence everywhere that current relief efforts are falling short… Despite the good intentions of the United States and the world community, weary relief workers say the coming weeks will severely test the resolve of those foreign contributors and the resourcefulness of a Haitian government that remains all but invisible.

“Pressure will grow on a fledgling food distribution network backed by U.S. soldiers that so far has largely managed to deliver only rice. From surgery to shelter to sanitation to schooling, the needs are vast and the international commitment unproven… ‘The need is so overwhelming. You can't have an initial push, and then it stops. That just won't be enough,’ Lane Hartill, an Africa-based Catholic Relief Services staff member, said as he walked toward a sweltering encampment of 30,000 people who have spent every hour outdoors since the Jan. 12 earthquake…The sadness is sometimes suffocating, yet the agony of last month's earthquake is being overtaken by the urgency of now. Every day, tens of thousands of Haitians face a grueling quest to find food, any food. A nutritious diet is out of the question.”

Even those crappy Somali pirates are getting into the act, playing Robin Hood and offering to “redistribute” some of their pirated booty to those suffering in Haiti… we most certainly can’t be outdone by generous bandits! Time for “Relief Effort, Part 2,” followed by parts 3, 4, 5, 6, etc.

I’m Peter Dekom, and I certainly hope we don’t give up.

No News from Too Much News

On January 27^th, I was watching the CNN analysts tear apart the President’s State of the Union speech, looking at everything, tiny bit by tiny bit…. from the total number of words, to how many words were spoken before he presented his half-hearted, reprioritized healthcare message. Panels of “average American” Democrats, Republicans and Independents were interviewed. Meters measured their responses during the speech and were reviewed afterwards. Experts, biased and unbiased, from every segment were brought forth. Facts were checked from almost every perspective. And hours and hours of analysis and mindless interviews were imported. Fox News did the same with a critical eye, presenting hours and hours of opinions. Bottom line: the only real news was the speech, and the President dumbed it down enough so I could actually understanding without the gaggle of pompous experts and laymen produced to explain the obvious to me.

What a colossal waste. We don’t get news on television anymore. We get pictures, footage and piles of inane comments, left right or center, to explain what was obvious in the first place. Americans who watch television news seem to search out networks that reaffirm their perception of the world and will not watch a telecast without that necessary bias. Since everything is presented from the same perspective, there really isn’t any news at all… just preselected propaganda, right or left, with truth long lost between the cracks. I remember when Walter Cronkite was actually a source of authoritative news. That was a long time ago. Now, I can go online and look at the same story from the BBC, the Canadian Broadcasting or even those loving folks at the English-language Al Jazeera site.

It’s about revenues and viewership… truth is a sideshow that interferes with the business side of television news. Fox News, a bastion of conservatism, is said to generate $700 million of profits for parent News Corp. a year, more than the NBC, CBS and ABS, CNN and MSNB news combined. So they must be right! But is this really good for America? Is Fox News, as fake-news-comedian, clearly left of center, Jon Stewart (The Daily Show – on Comedy Central) described that network in an interview on Bill O’Reilly’s own Fox News program (split into two segments airing on February 3^rd and 4^th), a “cyclonic perpetual emotion machine” that has “taken reasonable concerns about this president and this economy and turned it into a full-fledged panic about the next coming of Chairman Mao”? Is it any worse than Keith Olberman’s rants on MSNBC – except for the falling ratings?

With multiple American television channels dedicated to a mind-numbing over-saturation of 24/7 of “news” flow, the need to create identifying characteristics to facilitate ads sales trumps accuracy. Biased news, left and right, catered to those seeking filters to make sure nothing but their preordained points of view would ever reach their eyes and ears. Basically, with too much news, a lot of people were finding out how to eliminate most of it. With “all news, all the time,” the news channels needed cheap talking heads to fill the time vacuum; editorials, biased analysis and opinions followed almost every political and economic story. Hard news and editorial slant blurred into a unified morass of “information.” It has become very difficult for people to tell the difference. How much of this filtration helped support the mythology that allowed our financial markets to spin out of control?

One is reminded of the little boy or girl covering their ears and making a noise so that they will not hear their parent’s admonitions. Fractured connectivity has allowed people to select out of purveyors of facts they do not want to see or hear and travel into media worlds where they can be sure that everything they see and hear will be consistent with their view, often inaccurate, of the universe and the way things should be. The impact of this trend, particularly where a voting electorate must select leaders to deal with a very real and fact-filled world, is disturbing. The ability to “spin” media coverage, the truckloads of cash needed to permeate the media world with information that is processed through the system, the number of “special interests” and lobbyists with the financial wherewithal to spread supporting mythology to the relevant constituency, often determine the political winners and losers… not truth. Funny that our Congress… our electorate itself… seem to look like folks who only can embrace one point of view… Funny without the “ha ha.”

I’m Peter Dekom, and I feel really strange about all this.

Folk Slinging

The American taxpayers are still gasping, choking actually, on the bonus structures being doled out to Wall Street bankers under the guise of “this-is-simply-the-way-we-pay-people-and-how-we-keep-our-best-and-brightest-so-we-can-compete” payroll policy. AIG’s up for another round - $100 million! It’s certainly galling to have bailed out many of these mega-hogs, provided them with virtually free loans so that they could free up the credit market (instead, they invested on their own account) and guaranteed their insurance company which was covering some of their biggest lending losses… but if you think we’re angry, there are a lot of taxpayers boiling over in not-so-jolly-olde England – a country whose economic problems dwarf even our own.

You see, the Royal Bank of Scotland would’ve been “kilt” (I’m sorry) if U.K. taxpayers had not bailed out this teetering token of terrible trading with a $74 billion infusion of capital, making the British government the 84% owner of this “too big to fail” failure. So effectively, British taxpayers own and control RBS. You see, this 300-year-olde bank is about to pay out a staggering $2.4 billion in bonuses, even as the average Brit is pinned down by horrid economic times. While the U.S. government may effectively control carmakers like GM and Chrysler, these once-proud manufacturing behemoths have never embraced a system of mega-bonuses as how they compensate the senior managers. So the U.S. government simply does not have a comparable ownership/control situation like that of the U.K. and RBS.

It seems that a gaggle of generally groaning gentlefolk – U.K. taxpayers to be sure – are not letting this phenomenon pass without protest. A prominent local folk singer, 53-year-old Billy Bragg (known for his musical collaborations with the likes of Natalie Merchant, R.E.M and Wilco), has launched a Facebook page (NoBonus4RBS) and a Webpage (www.NoBonus4RBS.co.uk) that present a form letter that can be sent to the Chancellor of the Exchequer (the British IRS) saying that the sender/U.K.-taxpayer is withholding paying taxes until the British government “exercise[s] our shareholders veto and limit all bonuses that RBS pays to employees to no more than £25,000 [$41,000].” The Facebook page has already signed up over 20,000.

The January 25^th DailyFinance.com reports: “Bragg has certainly hit a nerve with the public. With many Brits struggling to make ends meet, unemployment at 7.9% and a record banker bonus season just around the corner, every reference to RBS payouts feels like a slap in the face. Bragg has provided links to videos like the televised address by RBS Chief Executive Stephen Hester to Treasury Select Committee, during which he admitted, ‘If you asked my mother and father about my pay they would say it's too high.’” Oh, by the way, Hester himself is scheduled to receive a bonus package worth £9.7 million.

The U.K. and France have recently imposed a 50% tax on such bonus packages to the extent they exceed £25,000 ($41,000), but Braggs, active in controversial issues for decades, wants that number to be a cap. Interesting thought, a taxpayer revolt, but the notion of applying what Bragg openly calls “Anarchy in the UK” to the American system... the picture of the IRS’ prosecuting thousands of tax “evaders,” crowding the courts, maybe even costing taxpayers more to cover the cost of incarceration just to ensure that fat cats stay fat... is a very amusing visual. Seeing the steam coming out of U.K. and U.S. taxpayers’ ears alike isn’t, however, so pretty.

I’m Peter Dekom, and I thought you’d like to see how others are reacting to excess.

Revolting Future

In the next decade, the Peoples Republic of China will add nine times more new energy-producing capacity than will the U.S. The incredible demand gives China a powerful edge in becoming the world’s leader in the design and manufacture of alternative energy-generating technology. While most of both US and PRC new power will come from coal – which really isn’t clean (most “clean” coal plants just shove the “dirt” deep beneath the earth) – China benefits from massive direct investment from the government, exceptionally low-interest loans (2% is pretty typical) for new installations, and the fact they don’t have as many older legacy systems that have so much investment sunk into them that it is not economic to replace them. Energy is such a priority in China that the new super-cabinet ministry (National Energy Commission comprised of several existing cabinet ministers) is led by none other than Premiere Wen Jiabao himself.

So which country is the biggest manufacturer of wind turbine electrical generators? China. Of solar panels? China. Obama’s January 27^th State of the Union message chided us for falling behind in the energy technology race, where many countries (like Spain, Germany and Denmark) have beaten us at our own game: “I do not accept a future where the jobs and industries of tomorrow take root beyond our borders — and I know you don’t either,” he told the joint session of Congress. But even if the US could return to second place, we’d be doing well. Foreign companies are investing in manufacturing plants for new energy technologies in China, not the US. They know where the demand will be greatest and where labor costs are exceptionally moderate.

The January 30^th New York Times: “China intends for wind, solar and biomass energy to represent 8 percent of its electricity generation capacity by 2020. That compares with less than 4 percent now in China and the United States. Coal will still represent two-thirds of China’s capacity in 2020, and nuclear and hydropower most of the rest…As China seeks to dominate energy-equipment exports, it has the advantage of being the world’s largest market for power equipment. The government spends heavily to upgrade the electricity grid, committing $45 billion in 2009 alone. State-owned banks provide generous financing…

“China’s commitment to renewable energy is expensive. Although costs are falling steeply through mass production, wind energy is still 20 to 40 percent more expensive than coal-fired power. Solar power is still at least twice as expensive as coal…The Chinese government charges a renewable energy fee to all electricity users. The fee increases residential electricity bills by 0.25 percent to 0.4 percent. For industrial users of electricity, the fee doubled in November to roughly 0.8 percent of the electricity bill… The fee revenue goes to companies that operate the electricity grid, to make up the cost difference between renewable energy and coal-fired power.”

And China appears to be committed to making sure that its products remain cheaper than American manufactures by making sure that, despite the clear downward pressures on the U.S. dollar generated from our massive deficits, that the Chinese and U.S. currencies maintain parity, even if this distorts normal economic balance. As the Obama administration presses for a real currency adjustment to make our exports cheaper and Chinese imports more expensive, it’s a battle from a weak and over-borrowed U.S. government, with a house divided back home. The February 4^th New York Times: “China, they say, is determined to reignite its export machine after a global recession that sapped demand for Chinese goods. A cheap currency is vital to that goal. And China’s leaders have grown impatient with lectures on economic policy from their chief debtor, the United States…‘It will be like water off a duck’s back,’ said Nicholas R. Lardy, a China expert at the Peterson Institute for International Economics. ‘They’re puzzled by the criticism. They think they should be praised for keeping their currency stable at a time of global turmoil.’…Criticizing China’s policy, however, is likely to worsen a relationship already frayed by irritants on both sides.”

It is only a question of time before relatively inexpensive Chinese-made equipment becomes the only truly economic way of creating green power in this country and most of the world. As we dither with political bickering and a failure of leadership among our Congressional leaders, China is simply accelerating its technology development at such a pace that in the immediate future, they simply will be too far ahead of us to catch. But then, just think of how much money we can save by cutting the teaching budgets of the nation’s engineering schools and how many educated aliens we can exclude to protect American jobs for which there are no qualified Americans to fill?! Yeah, we’re on the smart path!

I’m Peter Dekom, and if only you could see my face.

Another Day, Another Dollar

A recent Supreme Court ruling (Citizens United vs. Federal Election Commission) took the restrictions off of corporate and union campaign donations from their own coffers. The strongly negative reaction of the current administration, focused heavily on an exchange between conservative Justice Samuel Alito and the President, as the latter delivered his State of the Union speech on January 27^th. Obama blasted the 5-4 decision, which reversed an earlier Supreme Court ruling, saying that on January 21^st, “the Supreme Court reversed a century of law to open the floodgates for special interests — including foreign corporations — to spend without limit in our elections. Well I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities. They should be decided by the American people, and that’s why I’m urging Democrats and Republicans to pass a bill that helps to right this wrong.” Cameras caught stone-faced justices reacting to the blast, except for the apparent mouthing of the words, “not true,” by Justice Alito.

In a world of special interests – particularly Wall Street bankers – clearly triumphing over the average American, this decision, rendered under an interpretation of the application of the First Amendment, clearly favors the rich and powerful over the voiceless and often impotent masses. The justification? The January 21^st Atlantic.com summarized the decision as expressed by Associate Supreme Court Justice, Anthony Kennedy: “Justice Kennedy, in the majority opinion, reasoned that the government can't discriminate against speakers based on their corporate identities, and that ‘all speakers, including individuals and the media, use money amassed from the economic marketplace to fund their speech, and the First Amendment protects the resulting speech.’” Great theory of freedom, but the consequences for political domination by the super-well-funded are staggering.

There is one particular aspect of this ruling that may in fact be more bothersome than campaign financing for legislators and elected governmental executives: in many states, including my home state of California, judges are elected to every level from trial court, to appellate and even the state supreme court. How comfortable do you feel if the judge that is trying the case of a big corporation against you as an individual was elected only through the massive campaign contributions of big business… even if the specific corporation in question may not have been a contributor. Can American “big boys” buy justice?

Dorothy Samuels, editorializing for the January 30^th New York Times, noted that we have been duly warned: “That is not just because the ruling is another reminder of the court’s rightward shift since Justice [Sandra Day] O’Connor was replaced by the starkly conservative Justice Samuel Alito. Since retiring, Justice O’Connor has been warning about the threat to judicial independence from big-money state judicial campaigns and attack ads paid for by special interests hoping to influence future court decisions. The Citizens United ruling promises to make that problem worse, possibly much worse.”

Samuel’s editorial cuts deep with these facts: “Thirty-nine states hold judicial elections. Between 2000 and 2009, State Supreme Court candidates raised $205.8 million, according to the Justice at Stake Campaign, a watchdog group that monitors money in court races. That was more than double the $84.9 million raised the previous decade. One immediate result of the Citizens United ruling, as Justice John Paul Stevens noted in dissent, is that these states ‘may no longer have the ability to place modest limits on corporate electioneering even if they believe such limits to be critical to maintaining the integrity of their judicial systems.’… Another result is that all states are now effectively barred from adopting curbs on corporate and union spending on political campaigns, including judicial races. Business and other outside interest groups able to spend the cash could further dominate the airwaves and the debate in campaigns. Judicial candidates concerned about retaining control of their message will need to devote even more time to fund-raising.”

We all know that rich and powerful interests already have a leg up on the general public, no matter what restrictions are placed on these special interests. There’s just something particularly ugly when that advantage is reinforced to the extent that the average American is rendered virtually impotent in the political process. We truly need to reform this system and push some reality checks onto a nation governed increasingly for the benefit of special interests at the expense of everyone else.

I’m Peter Dekom, and guess how I feel about this issue!

A House Divided, A Loan Again, Naturally

It appears that the Americans have left Capitol Hill to groups incapable of working together towards a common goal. They call themselves “Democrats” and “Republicans,” but the labels are interesting predictors of how they will vote. Yes, the Democrats are divided, seemingly into two sub-parties: the Blue Dog fiscal conservatives and the traditional liberal factions. Republicans will predictably oppose most any major policy shift recommended by the President, because, it seems, they believe if they support such a program and it works, Obama and the Democrats will get the credit, and frankly they have the Democrats on the run and pinned against the wall.

“One day after the president upbraided Congress in his State of the Union address for excessive partisanship, Senate Republicans voted en masse against a plan to require that new spending not add to the deficit (it passed anyway as all 60 members of the Democratic caucus hung together). And some Republicans peremptorily dismissed Mr. Obama’s main job-creating proposal, expressing no interest in using $30 billion in bank bailout money for business tax credits [for new hires].” New York Times, January 29^th.

If corporate profits are at stake, unless conservative voters clearly say otherwise, Republicans seem to be uniformly in favor of letting companies act within a “market economy” that clearly failed the nation in the most horrific way in this recession. If there is a social program that can create a spending allocation that looks like it might solve a problem or please a union constituency, liberal Democrats will fall all over each other to find the votes. Blue Dogs appear to be wandering about with no clear direction at all. What’s missing here? Americans.

Yes, Mr. President, the Union is in a state. You want to prioritize economic, national security issues and education… and lower the expectations on healthcare. Your Democrats are deeply divided, and the Republicans want lower deficits, lower taxes and vastly fewer programs. Good luck. If you are on Wall Street, you can spend on political campaigns without restriction, the numbers are jolly and the recession is so over… we do not need those job stimulants you seek. Look at the way economists are looking at the numbers: “The U.S. economy grew at 5.7 percent annual rate in the fourth quarter, the highest rate of gross domestic product growth since 2003 and up from 2.2 percent in third quarter. The rise, which beats expectations, was driven by business inventories.” Washington Post, January 29^th. Forget about the unemployed and those who have lost or are losing their homes or the life savings that once was tied up in those homes.

Mr. President, you talked about crossing party lines to build new policies that will benefit the average Americans. But about half your legislators have already discovered that if they oppose such efforts, they become heroes to their constituents, so your efforts have fallen on deaf ears. It’s back to what’s best for “getting me reelected” even if that may be bad for America. Sorry, Democrats, you will have to live with the “horse-trade” that became the poster for all that’s wrong in Congress: Nebraska Democrat, Ben Nelson’s willingness to vote in favor of the Senate healthcare bill if his state could be treated differently from every other state in the union and avoid paying its fair share of Medicaid payment.

And an issue that has absolutely no business being partisan has become a political football… again. Education – with infrastructure – the only long-term investment that could even begin to hope to pay down the massive deficits we are incurring. And without dramatically improving our educational standards at every level, this country has nothing but a severe, dark downward spiral as its future. We will not be able to compete anymore. Young adults are being crushed by high tuition rates generating loans that they cannot possibly service. At every level, educational programs, both at public and private universities/colleges as well as primary and secondary schools, are being hacked to death, notwithstanding federal pledge of financial assistance.

As federal legislation aimed at making student loan repayments manageable stalls in the Senate, it seems pretty clear that Congress has given up on genuine long term goals that can only benefit the nation as a whole. The controversy is over whether the government should simply take over the student loans they have guaranteed, eliminating the banking sector as a middleman. Fiscal conservatives don’t want to take banks out of this profitable and low risk sector. They also say that making loans easier to pay back (by capping monthly repayment obligations to students) will take pressures off of universities and colleges to be cost-efficient… as if colleges and universities are spending in profligate ways in this current economic crisis. $80 billion is at stake, and eliminating a middleman definitely generates savings to the overall lending process.

And without infrastructure and education, exactly how do we generate enough future income to rise again? Think this is just hogwash? Look at the numbers. The Feb. 1^st New York Times analyzed the $3.8 trillion budget recommended by the administration… showing a deficit of 11% of the nation’s gross domestic product, a staggering number, but this is even worse: “By President Obama’s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years. In fact, in 2019 and 2020 — years after Mr. Obama has left the political scene, even if he serves two terms — they start rising again sharply, to more than 5 percent of gross domestic product. His budget draws a picture of a nation that like many American homeowners simply cannot get above water.

“For Mr. Obama and his successors, the effect of those projections is clear: Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors. Beyond that lies the possibility that the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded.” We need Republicans and Democrats to stop pushing their own selfish, ideologue-laden agendas without regard to what’s best for America; we’ve got some real problems that require a united and focused leadership.

In the end, if this bickering does not stop, how do we convince our Congressmen and women that they way they are acting seems to be hell-bent on destroying a democratic process necessary for the survival of this nation? This factionalism is one of the most significant hallmarks of a civilization in decline… a beginning of the end… accelerated by a deficit caused by an unregulated economy run wild… a bursting bubble that could take America with it. Frankly, I’m not ready to throw in that towel… it really cannot be “every man for himself” at the expense of the country. I think we need to take a very careful look at what it really means to be a patriotic American.

I’m Peter Dekom, and I love this country!

Taip-ei Personality

Until the 19^th century, China did not recognize the concept of “ambassadors” from other nations. To do so would have been an acknowledgement that other nations had equal nation-state status, and that simply wasn’t in the Chinese view of the world. Representatives from other countries were viewed as “tribute ambassadors,” able to represent their countries at a level where they were paying homage to the “Middle Kingdom” – China really had no equivalent of “China”… they were simply the center of everything. In the 15^th century, the famous Ming Emperor Zhu Di, whose eunuch Admiral Zheng He roamed the world in massive fleets with water-tight compartments extracting tribute from every port of call, was asked why he never sent forces to the Middle East and points east (Europe), was reputed to have said, “They are barbarians; they have nothing to offer.” It was modern Western weapons, particularly cannon-laden ships, that tipped the balance toward recognition of nations that could possibly be China’s equal.

In the 17^th century, England discovered the joys of Chinese tea, long before that crop was transferred to the fields of India. By 1654, it was the most popular drink in Britain. The addiction to tea drinking, amazingly, tipped the balance of payments in silver and gold so heavily in favor of China – the Chinese found nothing manufactured in England worthy of massive trade – the British threatened military action unless the Chinese created a two-way trading street. Claiming medicinal benefits, the British slowly addicted as many Chinese as they could to opium… even as the Chinese government protested that creating addicts was contrary to her laws. In the middle of the 19^th century, superior Western firepower (Britain and her allies, including the U.S. until her ships were withdrawn to fight the Civil War) forced ports to open, concessions in Shanghai, Macao and Hong Kong. China was only nominally the “Middle Kingdom.” – the Opium Wars have always been a sore spot with the Chinese. Until the economic resurgence that began in the 1980s and continued into the power that is modern China, China slipped into an unnatural role as a second rate power, a nation dwarfed by Western power and technology.

Why is any of this remotely relevant to the modern world? Because China has languished as a second-rate power for hundreds of years, but she never ever let go of the notion of being the center of the earth. Chinese suffered a profound inferiority complex, particularly as Mao’s communist mandate still made the Chinese quality of life pale in comparison to the West. His solution? Seal off contact with the rest of the world and focus on nuclear weapons to make the earth shudder at China’s power.

In 1949, conservative Chang Kai-Shek led a breakaway faction to the island of Formosa to form the Republic of China, just as Mao Zhedong established the Peoples Republic of China, claiming that the new island nation on Formosa (Taiwan) was nothing more than are rebel province that belonged to the PRC. Chang Kai-Shek, known for heavy-handed corruption for those who really knew, managed successfully to court the United States through his charming wife and powerful, American-connected in-laws. The friction between the United States and China continued over the military protection umbrella that the U.S. has consistently given to the Taipei government (Taipei is the capital city of the Republic of China) into the present day. China (PRC) preached a formal absorption of the rebel Republic as the only possible outcome (the so-called “One China” policy). The U.S. has constantly opposed this notion as long as Taipei wanted to remain separate. Machinations over seating in the United Nations gave the PRC “face” against Taipei, but the sore spot has never healed. This battle continues despite the extreme business connectivity between Taipei and Beijing, inexorably linking their economies, which seems to operate without reference to the higher-level political disputes.

Of late, tensions between the U.S. and China have escalated. We are challenging their limitation on the import of film and television programming in the World Trade Organization. We have been pressing China to join the pact of nations forcing Iran to disarm in connection with potential nuclear weapons, but China actively buys a huge slice of Iran’s oil output. Secretary of State Hillary Clinton announced financial support for groups fighting China’s internal censorship rules, particularly regarding Internet access.

The January 31^st AmericanChronicle.com focuses on some of the most difficult aspects of our trade disputes with the PRC: “The recent flare-up with Google, in which the search giant threatened to leave China over censorship, may be the tip of the iceberg… More challenging, say software companies and makers of clean-energy products, is a new policy encouraging ‘indigenous innovation.’ That policy requires the intellectual property behind a host of technology products sold in China to be developed and owned by Chinese companies…‘The U.S. should fully expect to be battling Chinese policy to get into these sectors,’ said U.S. Rep. Rick Larsen, D-Lake Stevens, co-chairman of the bipartisan U.S.-China Working Group, which works to educate Congress about relations with China. Beijing's new measure takes the growing ‘tit-for-tat’ trade disputes over steel and poultry to a new level… ‘When it comes to protectionism, we're minor-league players when you look at what China is doing,’ Larsen said.”

China has also lambasted America’s profligate deficit spending and the attempt to devalue the dollar (and hence make Chinese goods more expensive in the U.S.) against the Chinese currency. And China has trillions of dollars in currency reserve as she bought deficit debt to stabilize the U.S. currency… leaving her has our largest creditor nation. And now China is reacting to American support of Taiwan with a roar.

We have always supplied weapons to the Taipei government; China has always protested when we do. And even though China had serious advanced notice of the latest deal, the reaction to a recent arms trade to Taipei was clearly one of the most negative and strident in recent history: “Calling in U.S. Ambassador Jon Huntsman on Saturday, Chinese Vice Foreign Minister He Yafei said the United States would be responsible for ‘serious repercussions’ if it did not reverse the decision to sell Taiwan $6.4 billion worth of helicopters, Patriot Advanced Capability-3 missiles, minesweepers and communications gear. The reaction came even though China has known for months about the planned deal, U.S. officials said.” January 31^st Washington Post.

Chinese’s Olympic ceremonies were a loud statement to themselves and the world that the old Chinese mega-superpower was back. Anyone witnessing this magnificent presentation had to be impressed. This new strident tone appears to be a clear indication that China feels superior enough to the rest of the world – she was not remotely impacted by the overleveraging that decimated Western economies in the big recession – to stand up and make an old point in a new and powerful way… a sign that China expects that her economic and military power are enough the challenge U.S. supremacy on a world stage. The Post: “Analysts say a combination of hubris and insecurity appears to be driving China's mood. On one hand, Beijing thinks that the relative ease with which it skated over the global financial crisis underscores the superiority of its system and that China is not only rising but has arrived on the global stage -- much faster than anyone could have predicted. On the other, recent uprisings in the western regions of Tibet and Xinjiang have fed Chinese leaders' insecurity about their one-party state. As such, any perceived threat to their power is met with a backlash.”

While I believe that some of this balance is in this powerful reaction and that China will back off the rhetoric soon, I also believe that we, as Americans, need to pay close attention to China’s own renewed perception of herself as the true “Middle Kingdom” once again and realize that life is never going to be the same. China actually can push hard, and there is little that we are able to do about it, given our weak economy, heavy deficit and total internal fractionalization between Republican and Democrats. It’s time to stop fighting among ourselves, a habit that is weakening our power throughout the world. It’s time to get on the same page and become Americans again.

I’m Peter Dekom, and sometimes it’s worth looking at the lessons of history.