Aohell

Fiscal Policy

The Devil We Know...

WaMu was wiped out with an electronic bank run. There is panic in the world of banking, and although the whole idea of spending as much money as was spent on five years of war in Iraq at a stroke to rescue the credit markets makes reason stare and stomachs turn, it must be done.

If that panic isn't halted, WaMu's failure will pale in the face of business closures due to an inability on their part to secure financing for day-to-day operations. Banks have suspended lending to each other and they need a sign from Washington that there is something substantial propping up the system.

Yes, these are guys that serve Mammon, not God. We want to see them burn for their sins. But if we don't move to prop up the market now, they'll take us all down to hell with us.

I would say this episode shows the bankruptcy of unregulated free-market capitalism. It's as pollyanna as notions of socialist workers' paradises. We live in a world with evil men afoot, and no pure system is going to succeed once they latch on to it for fun and profit. Better to have the annual growth rates slashed a percent or two and have a smoother climb up than risk an unregulated crash into the ground.

JP Morgan and the US Government

Why is it a bank that had connections to the WorldCom fraud and the Enron scandal allowed to take up deals to pick up assets from Bear Stearns and Washington Mutual? JP Morgan Chase has just picked up its second cherry in the US banking/finance collapse, thanks to the federal government.

But wait - there's more! Henry Paulson, the US Treasury Secretary, is a former CEO of Goldman Sachs, and his proposed bailout plan would not wipe out the share values of that company's stock. It'll boost it, in fact.

The chaos in the Russian government and economy in the early 90's led to kleptocracy there. Are we witnessing a similar situation here?

EDIT: On the debates, McCain just said, "Iran has a terrible government, so they have a terrible economy." Oh McCain! Judge another nation not, lest thy nation be judged by the same measure...

Draft Deferments

My Name is Neither Bear Stearns nor JP Morgan...

The Federal reserve just helped JP Morgan take over Bear Stearns, due to the fact that Bear Stearns was set to have a massive default and needed some help, fast, to prevent the banking system of the US from collapsing. It was "too big to let fail", so in spite of the stupidity or criminality of its actions in getting where it is now, it's going to be forgiven and unpunished.

Personally, I am doing everything I can to rack up over $1 billion in personal debt, knowing full well that the US government will bail me out, as I'll be someone "too big to let fail" at that point. The problem is in getting enough credit cards to max out. You'd think with all the junk mail those credit card companies send out, I'd have over $1 billion in my back pocket by now, but I don't. With a credit limit of even $1 million per card, I'd need a thousand of the things to hit my target debt. Most only start with $25,000-$100,000, depending on what fake information I've used to get free subscriptions to magazines that target corporate executives, and that means I'll need about 10,000-40,000 credit cards for my project.

I guess I should just face it. I'm too poor to matter to the Fed. Oh well... a dollar collapse will at least make illegal immigration a moot issue, leave the US unable to pay for its wars overseas, and will give me the opportunity to discover a new career catering to the wants and needs of foreign tourists here in the states... perhaps I could supplement my income as a taxi driver at nights and earn some precious Euros, Pounds, Canadian Dollars, and Pesos in my tips... that would be something!

MANUEL NORIEGA

SADDAM HUSSEIN

AZERBAIJAN

LITVINENKO

Subprime...

Foreign Policy...

I Know Where the Missing Iraqi Weapons Are

190,000 missing weapons in Iraq, go the headlines, not to mention 135,000 missing body armor pieces and 115,000 missing helmets. And I know where they are.

No, I can't go get them, but that's just the way it goes. Anyway, the weapons are in the hands of people who should not have gotten them in the first place: insurgents, terrorists, and criminals. OK, so you're saying, "no duh!" Fair enough. But how they got there is the real story. They could have gotten there from two different flows.

One flow would be from infiltrators in the Iraqi forces. An insurgent, terrorist, or criminal shows up to work one day and grabs a stack of guns when nobody's looking. That's the easiest way to do it. If anyone asks questions, quit and go back to your insurgent, terrorist, or criminal job and let someone else infiltrate.

The second flow would be corruption among those who handle the weapons. They need something the insurgents, terrorists, or criminals got, probably drugs or prostitution, but most likely drugs. This sort of thing happened all the time in Vietnam and Afghanistan and it's not limited to the US forces.

Of course, these would be the unaccounted losses explained. I'd want to take a closer look at the losses that are properly accounted for. In World War 2, Ukrainian resistance fighters would join the Nazi SS division Galizien and then go into battle against the Russians. They'd report massive casualties. In reality, they were faking their death numbers to cover for guys who left that division after getting training and equipment from the Germans. Those "deaths" would free up more slots in the division for Ukrainian resistance fighters and it made that unit look like it had lots of heavy fighting. It did, but nowhere as fierce as reported. Similar things can happen in Iraq.

Then there's the grunt on the field. He wants something the insurgents, terrorists, or criminals have and is willing to trade his gun for that thing. He finds a way to have his gun properly "broken down" so he can get a replacement and the "defective" weapon never gets back for repairs. Maybe it's unaccounted or maybe the accounting is just crapulent at times in the chaos of the front line clerk's offices. But then, the guns wind up in the hands of the people he's fighting.

A veteran of the Afghan War, the Russian one, wrote that when the enemy is shooting at you with your own weapons, your side has lost. We can now confirm that the Iraqis are shooting at us with our own weapons.

A Simple Case for Impeaching Bush

If Clinton's behavior warranted impeachment - lying under oath in the Monica Lewinsky investigation - surely Bush's behavior - waging a war without Congressional approval - warrants impeachment.

360 Tons of Cash

Paul Bremer's trying to explain how he lost $9 billion in cash while running the show in Iraq. That's 360 tons of cash, as Congressman Henry Waxman put it. The cash was literally loaded on pallets and shipped into Iraq, a war zone.

"But as often in Iraq the ideal collided with the harsh realities on the ground," Bremer said. Get outta here. Iraq wasn't an ideal situation?

Note to the Bush administration: Next time you want to lose $9 billion, let me know. There are a lot better things to do with 360 tons of money than to fly it into the middle of a chaos studded with corrupt contractors and shady politicians. Or was that the intent in the first place?

Corruption? Try the Opposition Party

Most of the politicians on a list compiled by Nigeria's Economic and Financial Crimes Commission belonged to parties in opposition to the ruling party.

Amazing how neatly that worked out. Of course, everyone denies the charges of corruption and claims the real corruption is to be found among those whose names aren't on the report.

Knowing Nigerian politics, the EFCC could very well have printed a directory of all politicians, opposition and ruling, to be totally fair.

When Is It Ever Otherwise?

Hyundai's boss embezzled over $100 million from his company and got a suspended sentence. Sure, he looks sullen and beat down in his courtroom photo, but the fact is that he got off much easier than some random street mugger. It's always like that. He's paid off big politicians, so he's got close ties with government and he's head of Korea's largest automaker, so it's "bad for Korea" if he actually goes to jail.

It's like there's a script for super-wealthy people. Step one: get a lot of money through crime, fraud, or inheritance. Very, very few of the super-wealthy actually do ethical things to get money like that. Step two: subvert the government through massive bribes. Call them what you will, but the donations made to political campaigns are, in the end, bribes. Laws can be passed to make them legitimate in a courtroom, but it's obvious those laws were made by the bribers and the bribed to allow them and only them to carry one with their corrupt game. Step three: if caught, get off easily. Even super-wealthy murderers get off easily compared to other murderers. They're less likely to face the death penalty and more likely to get acquitted or a hung jury.

Korea, Nigeria, Mexico, US: It's all the same. Capitalism and democracy work. They're great systems and allow for the greatest possible expression of both personal and economic freedoms. The huge problems begin when the wealthiest people in society choose to subvert the economy and government to their advantage.

My suggestion? Quit giving people respect because of their wealth. If you wouldn't respect someone who cheated at Monopoly to win, don't kiss up to those who cheated at life to win.