Thursday, July 31, 2008
Kidding ourselves about high price of debt
by Gene Lyons
Credit cards, as most people theoretically understand, can turn into the 21 st century equivalent of sharecropping. First, you borrow from The Man to get your cotton planted (or maybe to buy that new flat-screen HDTV ). Comes picking time (or the warranty runs out ) and you're likely to discover, in the words of an old country song, that you "owe your soul to the company store." Not to mention late fees and a big jump in the interest rate. Meanwhile, you're getting letters daily offering you a new card at temptingly low rates for the first six months. Why not double down ? Hey, your 15-year-old's being offered a platinum card with the logo of his high school's mascot. Shoot, I've got a Charolais calf named Layla who's probably eligible for EZ-Credit today. Basically, anybody who can walk and chew cud at the same time can end up owing a half-dozen company stores. But why worry ? Money ? They're practically giving it away. And if the payments get too steep, what with $ 4-a-gallon gasoline and $ 5 milk, all you've needed to do over the past dozen years or so, in the immortal words of George W. Bush, is borrow more to "make the pie higher." Refinance with an adjustable rate mortgage, pull some cash equity out of your house, pay off a couple of credit cards and then repay the home loan with tax-deductible cash. Sweet. See, you're going to trade the dump in on a fancier house to borrow against before the interest rate resets anyway, pushing your monthly payment into the stratosphere. Because as everybody used to know, real estate can't go anywhere but up.
Until recently, spending money you didn't have was your patriotic duty. Wasn't it the same George W. Bush who advised Americans to respond to the 9 / 11 terrorist massacres by heading to the mall ? When the going gets tough, everybody laughed, the tough go shopping.
Never mind that it was also Bush who inherited a $ 128 billion budget surplus and turned it into a $ 482 billion deficit—an estimate, incidentally, that leaves out the costs of the wars in Iraq and Afghanistan. They're off the books, a bit like Enron's money-losing "partnerships." In retrospect, the Enron collapse clearly predicted the fiscal consequences of Bushism.
Facing questions, Edwards evades reporters
On Wednesday, however, the former U.S. senator and 2004 vice presidential nominee was eager to duck the press when the questions took a tabloid turn.
About a dozen reporters and photojournalists attended a speech Edwards gave to an AARP Foundation symposium on poverty and aging in Washington. Afterward, he avoided most of the waiting reporters, at least some of whom wanted to question him about recent reports in the National Enquirer that alleged an inappropriate relationship with a former campaign videographer.
Citing unnamed sources, the Enquirer published a story in October claiming that Edwards was having an affair with a woman who filmed a series of campaign videos. The story resurfaced last week in the online version of the Enquirer, which claimed that Edwards had visited the woman and their "love child" July 21 at the Beverly Hilton in Beverly Hills, Calif.
In October, the woman posted an online statement denying the first story. In December, an Edwards campaign worker claimed to be the father of the woman's then-unborn child.
On Wednesday, Edwards apparently ducked out a side area used by the kitchen staff in the fourth-floor ballroom of Washington's historic Hotel Monaco. Edwards emerged from a lower-level handicap ramp near the rear of the hotel with two men. When approached by a Charlotte Observer reporter, Edwards said, "Can't do it now, I'm sorry" and quickly walked past.
Asked what he was doing at the Beverly Hilton last week, Edwards said "sorry" and got into a waiting car with the other men.
No photographs or video of the alleged California hotel incident have been released by the Enquirer, which described in its online story its reporters' attempts to chase down Edwards. The tabloid reported he hid in a restroom to elude them.
Turning Weapons into Things of Beauty in Gaza
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by Philip Rizk
On March 19, Israeli forces rounded up Assad Salach and his sons, Fahmi and Salach, and Assad's brother Sa'id and his son Ghassan -- along with more than 300 men age 16 and above -- along its northern border with the Gaza Strip. It is not the first time Israel has arrested the male members of the Salach family.
These days when militants launch homemade Qassam rockets into Israel from the Gaza Strip, they are usually launched from within the cities, not these border areas. Thus, it makes little sense for these men to be arrested solely for security purposes. Rather, it seems to be a method of pushing the families inhabiting the border areas into the cities and deserting their only source of income, their land. Israel is successfully destroying the potential of the fruit basket of the densely populated Strip. The once-luscious green land is now reduced to an arid no-man's-land, easily overseeable by Israel's security towers and drones overlooking it all. The economic crisis caused by this ongoing, intentional de-development of Gaza's economy is destroying the society's makeup.
The Salach's main family home was destroyed in 2001. Eight Israeli bulldozers crossed the nearby border and flattened the fields. Shortly thereafter, they came back and flattened the home with some family members still inside. That day Abu Assad, the Salach family grandfather, had a stroke, and he and his wife, Om Assad, were taken to the hospital. By the end of the day, Om Assad had lost her husband, her home, and the trees that had adorned the family's fields. She moved half a kilometer down the road to her other son's home. Today, Israel has taken him as well.
Despite a cease-fire, five of the Salach family members remain imprisoned without even a court case. Their fields still lie in ruin as the Israeli army fires at them when they try and approach it. Their old home remains demolished while the memories of the past continue to haunt them daily.
Assad and Sa'id used to collect the tank shells, things of ugliness, which Israel fired on them as they tended to their goats and fields. They would paint them, fill them with flowers, and turn them into vases -- things of beauty. "The day they started doing that the Israelis almost completely stopped firing at us," Assad's wife told me. As soon as the media spread pictures of their act -- turning death into life, ugliness into beauty -- the shells stopped falling. When the men were detained, so were the vases.
http://blog.beliefnet.com/godspolitics/2008/07/turning-weapons-into-things-of.html
China's economic 'bargaining chip'
Four years ago, when the foreign-exchange reserves of China totaled about $450 billion and the value of China's holdings of U.S. securities was about $300 billion, former Treasury Secretary Lawrence Summers warned about the emergence of a global "balance of financial terror."
Mr. Summers and others worry that U.S. consumption and investment levels are becoming dependent on "the discretionary acts" of other governments. Foreign governments and investors are accumulating huge pools of dollars by virtue of the massive trade deficits the United States has been running. What these governments decide to do with their rapidly growing dollar reserves could have a huge effect on the U.S. economy.
"There is surely something odd about the world's greatest power being the world's greatest debtor," Mr. Summers told the audience gathered at the Peterson Institute for International Economics in Washington.
"It surely cannot be prudent for us as a country to rely on a kind of balance of financial terror" that exists today, he said.
Since Mr. Summers' March 2004 speech, the United States has racked up an additional $1.2 trillion in budget deficits and about $3 trillion in trade deficits, including more than $900 billion in merchandise trade deficits with China alone.
China's currency reserves have kept growing since 2004, in tandem with its ever-expanding trade surpluses and foreign direct investment, which has built many of China's export-generating factories. So-called "hot money" has also been pouring into China seeking to reap the gains from its slowly appreciating currency.
Not surprisingly, China's foreign-exchange reserves have soared, quadrupling from $450 billion in early 2004 to more than $1.8 trillion today. The International Monetary Fund expects China's currency reserves will exceed $2.4 trillion by next year.
http://www.washingtontimes.com/news/2008/jul/27/chinas-economic-bargaining-chip/print/
7-square-mile ice sheet breaks loose in Canada
EDMONTON, Alberta - A chunk of ice spreading across seven square miles has broken off a Canadian ice shelf in the Arctic, scientists said Tuesday.
Derek Mueller, a research at Trent University, was careful not to blame global warming, but said it the event was consistent with the theory that the current Arctic climate isn't rebuilding ice sheets.
"We're in a different climate now," he said. "It's not conducive to regrowing them. It's a one-way process."
Mueller said the sheet broke away last week from the Ward Hunt Ice Shelf off the north coast of Ellesmere Island in Canada's far north. He said a crack in the shelf was first spotted in 2002 and a survey this spring found a network of fissures.
The sheet is the biggest piece shed by one of Canada's six ice shelves since the Ayles shelf broke loose in 2005 from the coast of Ellesmere, about 500 miles from the North Pole.
Formed by accumulating snow and freezing meltwater, ice shelves are large platforms of thick, ancient sea ice that float on the ocean's surface. Ellesmere Island was once entirely ringed by a single enormous ice shelf that broke up in the early 1900s.
http://news.yahoo.com/s/ap/20080730/ap_on_sc/canada_arctic_ice_shelf
Caught on tape: Army recruiters threaten high school students
It's a problem that was supposed to be fixed, but is it?
A Golden Parachute With a Silver Lining
 | By Darryl Robert Schoon |
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AN ESCAPE ROUTE IN A TIME OF DISASTER
Only those who have gone too far know where the limits should have been
Money served throughout history as a medium of exchange and as a storehouse of value. But when gold and silver coins were replaced by paper currencies, money no longer was the same. Paper money, no longer having intrinsic value, now functions only as a medium of exchange, a function that degrades over time.
The value of paper money continually loses value because the constant printing of paper money constantly dilutes the value of previously printed money. The more paper money printed, the less paper money is worth; and today, money is being printed at a faster rate than at any time in history.
In fiat paper money systems, today's paper money will be worth less than tomorrow's and will be worth less the day after ad infinitum. This constant degradation of paper money is known as inflation. When the process rapidly speeds up, it is known as hyperinflation. Remember that word.
For the first time in history, all money, all currencies are now fiat which means money no longer has intrinsic value. This is not because intrinsic value was deemed unnecessary for a functioning currency. The real reason is far less reasonable.
All money is now fiat because between 1949 and 1970 the US overspent its entire 21,775 ton hoard of gold and could no longer convert its currency to gold as agreed under the Bretton Woods Agreements in 1944.
Note: What gold remains in US custody today remains only because in 1971 the US refused to transfer the remaining gold owed to others; as its obligations were far greater than its capacity to settle.
Because at the time the gold-backed US currency anchored all world currencies, when the US dollar became fiat, all currencies also became fiat. For the first time in history, no currency was backed by either gold or silver including the international reserve currency, the US dollar. The destructive consequences of that act have remained contained for 35 years. They are no longer.
Let's Speak the Truth About Afghanistan
By Eric Margolis
During his triumphant European tour, Senator Barack Obama again urged NATO's members to send more troops to Afghanistan and called the conflict there, "the central front in the war on terror." Europe's response ranged from polite evasion to downright frosty.
It is unfortunate that Obama has adopted President George Bush's misleading terminology, "war on terror," to describe the conflict between the United States and anti-American groups in the Muslim world. Like many Americans, he and his foreign policy advisors are sorely misinformed about the reality of Afghanistan.
One understands Obama's need to respond with martial élan to rival John McCain's chest-thumping about "I know how to win wars." Polls put McCain far ahead of Obama when it comes to being a war leader. But Obama's recent proposal to send at least 7,000 more U.S. troops to Afghanistan, and his threats to attack Pakistan's territory, and warnings about Islamabad's nuclear forces, show poor judgment and lack of knowledge.
The United States is no longer "fighting terrorism" in Afghanistan, as Bush, Obama and McCain insist. The 2001 U.S. invasion was a legitimate operation against al-Qaeda, a group that properly fit the role of a "terrorist organization." But, contrary to the White House's wildly inflated claims that Osama bin Laden's al-Qaeda was a worldwide conspiracy, it never numbered more than 300 hard core members. Bin Laden and his jihadis long ago scattered into all corners of Pakistan and elsewhere. Only a handful remain in Afghanistan.
Today, 80,000 U.S. and NATO troops are waging war against the Taliban. Having accompanied the mujahidin fighting the Soviet occupation of Afghanistan during the 1980's, witnessed the birth of Taliban, and penned a book about the Afghan struggle, "War at the Top of the World," I can attest that Taliban is not a terrorist organization as the U.S. and its allies wrongly claim.
The new consensus on Iraq
By BRIAN KATULIS
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This past week represented a watershed moment in the Iraq policy debate: A pragmatic consensus for a phased redeployment of U.S. troops within a specified timeframe emerged in the United States and Iraq. As Iraqis head toward the next round of elections in their country — provincial elections and national elections sometime in the next 18 months — it's not at all surprising that Iraq's leaders would increasingly assert their own sovereignty. The idea of an extended and extensive U.S. presence in Iraq remains deeply unpopular among the majority of Iraqis, and Iraqi leaders of all sectarian, ethnic, and political backgrounds have become vocally opposed to a U.S. troop presence without limits and with no end in sight. This past week, a range of leaders in the Iraqi government made clear that they support withdrawing U.S. combat troops by 2010. "We are hoping that in 2010 that combat troops will withdraw from Iraq," said Ali al-Dabagh, the spokesman for Iraq's prime minister, confirming Prime Minister Nouri al-Maliki's repeated statements on this subject. Tariq al-Hashemi, the Sunni vice president of Iraq, concurred by saying that Iraqi leaders shared a common interest in scheduling the withdrawal of U.S. troops. |
What has 18 wheels and two smokestacks?
Help Clean Up California's Dirty Diesel Trucks
While sitting in traffic, have you ever wondered about the pollution billowing out of big-rig trucks? California's heavy duty trucks are the state's largest source of toxic diesel pollution—burdening Californians with serious health impacts and billions in healthcare costs. These trucks also belch more than seven percent of all of California's global warming pollution. This October, the California Air Resources Board (CARB) will vote on a pair of proposals to clean up California's dirty diesel trucks, but many in the trucking industry are fighting the state's proposed cleaner standards.
Please sign our petition to CARB supporting the proposals to protect truckers and families from toxic diesel pollution and curb global warming pollution from big-rig trucks.
Diesel trucks and buses on the road represent the largest source of toxic diesel emissions in California. These toxic diesel emissions are responsible for causing approximately 2,300 premature deaths and more than 38,000 asthma attacks annually in the state. Truck drivers, children, the elderly and those with compromised immune systems are especially vulnerable to the health risks of diesel pollution. The loss of life, health care costs, and lost work and school days cost an estimated $18 billion each year, far more than the cost to clean up the trucks.
The California Air Resources Board (CARB) must develop an effective, health protective In-Use Truck and Bus rule in order for California to meet its federal commitments to reduce ozone and particulate pollution, benefit truckers' health, lessen the health impacts of toxic diesel pollution, and save lives.
Additionally, CARB must adopt a strong Heavy-Duty Vehicle Greenhouse Gas Emission Reduction Measure to reduce the truck pollution that causes global warming and meet our commitments under the landmark Global Warming Solutions Act of 2006 (AB 32).
What's At Stake:
The California Air Resources Board (CARB) is proposing to adopt new regulations to clean up pollution from diesel trucks in October 2008. The rules would require reductions of particulate matter (soot), nitrogen oxide emissions that contribute to smog, and global warming pollution.
Over the last decade, CARB has taken significant steps to clean up diesel pollution from sources such as buses, garbage trucks, harbor craft, and construction equipment, but trucks remain the largest source of unregulated diesel emissions in the state. CARB's proposed rules would require trucks to clean up through retrofits or upgrade to newer trucks. Incentive funding is also available to help truck owners retrofit or replace their trucks. This regulation is critical for public health and improving air quality in California, and to help us address global warming.
Thar She Blows: The Last Hurrah for the Banking System
The Bush administration will be mailing out another batch of "stimulus" checks in the very near future. There's no way around it. The Fed is in a pickle and can't lower interest rates for fear that food and energy prices will shoot to stratosphere. At the same time, the economy is shrinking faster than anyone thought possible with no sign of a rebound. That leaves stimulus checks as the only way to "prime the pump" and keep consumer spending chugging along. Otherwise business activity will slow to a crawl and the economy will tank. There's no other choice.
The daily barrage of bad news is really starting to get on people's nerves. Most of the TV chatterboxes have already cut-out the cheery stock market predictions and no one is praising the "impressive powers of the free market" anymore. They know things are bad, real bad. A pervasive sense of gloom has crept into the television studios just like it has into the stock exchanges and the luxury penthouses on Manhattan's West End. That same sense of foreboding is creeping like a noxious cloud to every town and city across the country. Everyone is cutting back on non-essentials and trimming the fat from the family budget. The days of extravagant impulse-spending at the mall are over. So are the "big ticket" purchases and the "go-for-broke" trips to Europe. Consumer confidence is at historic lows, disposal income is a thing of the past, and all the credit cards are at their limit. The country is drowning in red ink.
Something has gone terribly wrong with the economy, but no one knows what it is? In the last three months bank credit has shrunk faster than any time since 1948. The banks aren't lending and people aren't borrowing; that's a lethal combo. When credit-creation slows, the economy falters, unemployment rises and the misery index soars. That's why Bush will have to mail out more stimulus checks whether he wants to or not; his back is against the wall. He'll try to make it look like the economy is still breathing on its own and just needs a spell on the respirator before resuming its normal activities. But Bush is wrong; we've reached Peak credit and the blood-transfusions won't work anymore. The vital signs have shut down and rigamortis is already setting in. Our goose is cooked.
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