When I traveled around the world, one of the most notable differences was the character and content of television news. The primary distinction seems to be a matter of depth...meaning the news in other regions isn't just presented in short sound bites. Granted, we have programs in the U.S. that provide detailed reports on topics of interest, however, they are in short supply when compared to many other countries and they aren't typically included as part and parcel of the traditional news cycle.
The following segment, from al Jazeera, on the growing global food crisis is an example of the kind of reporting we see less of in the United States. The report is a lengthy discussion intended to provide some understanding of the factors that are contributing to the food crisis as well as to explore the changes or solutions that might help alleviate it.
It is also notable in the format in which it is presented. When watching U.S. news...primarily on cable networks...the format usually includes participants with two diametrically opposing views offering the talking points of their political constituents and attempting to talk over each other...in segments that might last at most ten minutes...and frequently far shorter.
To understand the distinction, I would offer that the U.S. equivalent wouldn't be found in television broadcasting - rather it is in fact National Public Radio (NPR). If you've listened to NPR, they frequently explore topics that are receiving sparse coverage on the television networks. One can also find more in-depth stories on Public Broadcasting Service (PBS) though many of these programs follow the network format that includes a point - counterpoint approach.
Granted, my observations are more anecdotal than scientific but I suspect there is merit none the less. It appears that we Americans have become content with receiving our news in abbreviated form...delivered by partisans sharing talking points that have first been vetted by focus groups. I think it would make more sense if the American voter functioned like the focus group...taking the time to explore the ins and outs of a topic before making any conclusions while skipping the partisan spoon feeding we've come to accept. Don't hold your breath on that happening any time soon.
If you'll take the time to watch the following report, I suspect you may concur with my speculation. Regardless, you will certainly learn that the food crisis is far more complex than can be explained in thirty seconds. It might also demonstrate that our efforts to reduce every issue to a two sided topic fully ignores that our world needs to be understood as a complicate multi-dimensional construct whereby every action has the potential for unintended consequences. Finally, it might begin to explain why much of the rest of the world has begun to suspect that Americans are increasingly tone deaf.
Understanding The Food Crisis - Part One
Understanding The Food Crisis - Part Two
Tagged as: al Jazeera, Cable News, China, Corn, Ethanol, Food Crisis, Food Prices, Food Shortage, Globalization, India, Inflation, Media, Middle Class, Multi-National Corporations, Poverty, Rice, Trade Agreements
Daniel DiRito | May 16, 2008 | 8:55 AM |
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Focus on the Family, the empire of demagogue James Dobson, has launched a new video feature that gives outsiders an insight into the values they embrace...and they undoubtedly place a lot of value on the acquisition of cash...especially if it can be used to further their fundamentalist agenda.
The Colorado Springs based organization now produces two video segments - one is called Stoplight and the other Turn Signal...catchy metaphors for their desire to put a "stop" to anything they deem in conflict with their Bible based bloviations and to direct people to "turn" away from secular sensibility and accept the dogma they deem to have been sent to them from the divine director.
In the following segment of Stoplight, Stuart Shepard muses on the government's economic stimulus checks and how the money, unjustly taken from voters to fund a flawed government, could be put to better purposes. Of course those purposes include items like banning same-sex marriage and appointing more right leaning judges as well as eliminating a woman's right to choose.
And don't forget the most important purpose...donating more money to Focus on the Family so that Dobson and his disciples can lead lavish lives that support the contention that God rewards good people...with material wealth (prosperity theology). Yes, God thinks the best way to nurture the soul is to stuff a load of cash into the checking account.
You see, the folks at Focus on the Family are strong proponents of marriage...especially the one that unites them with money and the intoxicating power it brings. Apparently they have an updated understanding of the expression, "Charity begins at home". Yes, Jesus was a nice guy...but he could have been far more effective if he had been a well-heeled snappy dresser with a stable of lawyers and lobbyists. After all, apostles and the downtrodden are so passe.
Tagged as: Abortion, Bible, Economic Stimulus Checks, Evangelicals, Focus On The Family, God, Government, James Dobson, Jesus, LGBT, Marriage, Religion, Religious Right, Same-Sex Marriage, Stuart Shepard, Taxes
Daniel DiRito | May 14, 2008 | 11:50 AM |
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In this episode of The Onion News, the network takes a look at the Gap's new clothing line...the one that is made by kids for kids. Nothing like American children being able to wear the right tags...even if those tags are sewn on by children in sweat shops.
After all, isn't that why we Americans are the envy of the world...what with giving our children generous allowances to buy the products they need instead of having to sell them into virtual slavery to make those products.
Yes, without capitalism, what would parents in third world countries do with their children? Thank goodness we provide the demand that allows them to be productive individuals. Otherwise, they might spend their time playing video games, participating in club sports, and trying to one up the neighbor's children by wearing the latest fashions.
Now if we can only get these same foreign children trained in providing first rate customer support for American companies that have been "forced" to hire adults in third world countries. Thank goodness these folks are willing to do the jobs that Americans won't do.
It certainly makes one feel good to know that we're continuing our efforts to prove our unyielding commitment to assisting the underprivileged people of the world...at a significant profit to U.S. corporations, of course!
Tagged as: Baby Gap, Child Labor, Child Rearing, Corporate Profits, Fashion, Gap, Globalization, Humor, Outsourcing, Sarcasm, Satire, Sweat Shops, The Onion
Daniel DiRito | May 12, 2008 | 11:09 AM |
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In the following video clip from The Daily Show, Lewis Black shares his skepticism regarding the recently authorized stimulus checks that are intended to jump start our stalled economy. Needless to say, Black has some choice words for a program that he views as a waste of taxpayer money that he can endorse...as opposed to the endless war in Iraq.
Black laments that the government has skimped on the allowance for children...stating that he can get easily get more than $300 dollars for them on the black market. He's also of the opinion that consumers will spend their windfall on the same junk that has led us into this mess. Black closes by telling us he's spending his $600 dollars on lottery tickets.
Tagged as: Economic Stimulus Package, George W. Bush, Lewis Black, Miley Cyrus, Recession, The Daily Show
Daniel DiRito | May 9, 2008 | 10:00 PM |
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I don't generally watch Glenn Beck nor do I usually find his observations to be palatable. The following video is a notable exception. In this clip, Beck discusses the impact of $200 a barrel oil with Byron King, an oil industry analyst. Should oil reach this price...and there are some who believe it will happen by the end of this year...we can expect major changes that we can't even fathom at this moment.
It amazes me that our president continues to tell us the economy is just experiencing a rough patch while the escalating oil prices suggest the clouds of calamity may be on the horizon. In a worst case scenario, the word recession would likely be inadequate to describe the financial crisis we would experience should we fail to address this looming energy nightmare.
What scares me the most about this situation is my recollections of the handling of other emergencies by this administration. I keep thinking about Katrina and the clear indications that the storm would likely devastate New Orleans...and yet the president was nowhere to be found for four days and we were totally unprepared for the storm's aftermath.
Now that Bush is nearing the end of his presidency, just how interested is he in averting an energy meltdown? I'm afraid our best hope is that this energy crisis abates on its own. Having to rely on the critical thinking skills of George W. Bush hasn't proven to be in our best interest.
Tagged as: Byron King, Economy, Food Prices, Fuel Efficiency, Gas Prices, George Bush, Glenn Beck, Katrina, New Orleans, Oil Prices, Recession
Daniel DiRito | May 8, 2008 | 9:43 PM |
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Understanding the dynamics of the November election isn't all that complex if one simply takes the time to draw some necessary comparisons. In many ways, the policies of the Bush administration have provided the essential contrast. With that as the backdrop, we ought to be able to make prudent political decisions as an electorate. Further, it should guide the actions of our elected officials. Unfortunately, that may not always be the case.
Today, the defeat of legislation that would have enabled employees to pursue redress should it be determined that they have been unfairly discriminated against with regards to equitable pay highlights the division between those who foster favors for the wealthy (the GOP) and those who believe the fair treatment of the individual is an imperative (the Democrats).
WASHINGTON (Reuters) - U.S. Senate Republicans on Wednesday blocked legislation to reverse a Supreme Court ruling that makes it tougher for workers to sue for pay discrimination.
Democratic presidential rivals Barack Obama and Hillary Clinton interrupted their campaigns to return to the Senate to vote for the bill. The measure would lift tight time restraints to file claims that could expire before workers realize they were treated unfairly.
On a 56-42 vote, mostly Democratic supporters of the bill fell short of the needed 60 in the 100-member Senate to clear a Republican procedural hurdle and move toward passage of the bill approved earlier by the House of Representatives.
The blocked Lilly Ledbetter Fair Pay Act, named for an Alabama woman who lost her case in the Supreme Court last year, is backed by women's and civil rights groups that argue it would give workers a fair chance for justice.
On average in the United States, women are paid about 23 percent less than men, while minorities receive even less -- despite laws that mandate equal pay for equal work.
The White House said it opposed discrimination in the workplace. But it threatened to veto the bill if Congress passed it, saying in a statement the measure would "impede justice and undermine the important goal of having allegations of discrimination expeditiously resolved."
Backers of the bill complained that the Supreme Court, in its 5-4 ruling last May, reversed decades of legal precedent by declaring discrimination claims must be filed within 180 days of the first alleged offense.
Sen. John McCain of Arizona, the Republican presidential candidate, did not return to Washington to vote on the bill.
I suspect the McCain absence was intentional and in keeping with his efforts to straddle the political divide. Unfortunately, his actions betray his even-handed, straight talking proclamations. John McCain supports cutting corporate taxes from 35 percent to 25 percent. He has also reversed his position with regard to the Bush tax cuts for the wealthy. Once opposed to these cuts, he now argues they are an important element of his economic platform.
When push comes to shove, voters need look no further than examples of this nature to discern where the candidates...and the party's stand...and where their bread is buttered. Back in 1992, "It's the economy stupid" became the mantra attached to the presidential election. Following eight years of George W. Bush's ransacking of the economy while rewarding the wealthy with more wealth, may I suggest we simply remember the following, "It's the haves versus the have-nots, stupid".
Tagged as: 2008 Election, Democrats, Discrimination, Fair Pay, George W. Bush, GOP, John McCain, Lilly Ledbetter Fair Pay Act, Republicans, Supreme Court, Tax Cuts, U.S. Senate
Daniel DiRito | April 23, 2008 | 7:28 PM |
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Last year, President Bush shut down legislation designed to provide health insurance to more low income families and rewrote the rules to limit the coverage states could provide. At the time, his minions were busy eviscerating a family that spoke in favor of the measure. According to the Government Accountability Office, it turns out that the President didn't have the authority he thought and and actually violated the law. Nothing new there, eh?
WASHINGTON -- The Bush administration violated federal law last year when it restricted states' ability to provide health insurance to children of middle-income families, and its new policy is therefore unenforceable, lawyers from the Government Accountability Office said Friday.
The ruling strengthens the hand of at least 22 states, including New York and New Jersey, that already provide such coverage or want to do so. And it significantly reduces the chance that the new policy can be put into effect before President Bush leaves office in nine months.
At issue is the future of the State Children's Health Insurance Program, financed jointly by the federal government and the states. Congress last year twice passed bills to expand the popular program, and Mr. Bush vetoed both.
In a formal legal opinion Friday, the accountability office said the new policy "amounts to a marked departure" from a longstanding, settled interpretation of federal law. It is therefore a rule and, under a 1996 law, must be submitted to Congress for review before it can take effect, the opinion said.
But Jeff Nelligan, a spokesman for the federal Centers for Medicare and Medicaid Services, said, "G.A.O.'s opinion does not change our conclusion that the Aug. 17 letter is still in effect."
What happens next is not clear. New York, New Jersey and several other states have filed lawsuits challenging the Bush administration policy. In addition, Congress may consider legislation to suspend the directive.
Under the Aug. 17 directive, states cannot expand the Children's Health Insurance Program to cover youngsters with family incomes over 250 percent of the federal poverty level ($53,000 for a family of four) unless they can prove that they already cover 95 percent of eligible children below twice the poverty level ($42,400).
Moreover, in such states, children who lose or drop private coverage must be uninsured for 12 months before they can enroll in the Children's Health Insurance Program, and co-payments in the public program must be similar to those in private plans.
The administration told states they must comply with the directive by August of this year or else they face "corrective action." Compliance could mean cutting back programs.
It amazes me that a President who sold himself to the electorate as a compassionate conservative is willing to restrict health care to the needy while insisting on spending billions of dollars year after year on his failed war in Iraq. It makes one wonder just who the President is protecting with his war on terror. I suspect those who risk losing coverage under Bush's arbitrary guidelines feel terrorized by their own government.
Then again, we shouldn't be surprised that a man of privilege (who acted out like a rebellious teenager until reaching the age of forty) lacks any tangible empathy for those in need. No, he would rather wax endlessly about the need to make permanent his tax cuts for the wealthy and finish the job his daddy didn't have the wherewithal to pursue.
When it's all said and done, I can't help but conclude that America has been the playground for an insecure and ego-challenged charlatan with little regard for anything that didn't serve to stroke his obtuse persona. Yes, his legacy will be legendary...though I'd wager it won't be of the nature he had hoped. In the end, I doubt many Americans will shed any tears when this 'little big man' rides off into the sunset.
Tagged as: Compassionate Conservatism, George W. Bush, Health Care, Iraq, Little Big Man, Poverty, SCHIP, State Children's Health Insurance Program, Tax Cuts
Daniel DiRito | April 19, 2008 | 4:11 PM |
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During election years, it's easy to get lost in the pettiness of the political battles that we think are important. Unfortunately, that partisan focus often leads us to lose sight of the issues that really matter. While we are asked to evaluate who is best prepared to answer the phone at 3:00 AM, millions of our fellow citizens are pondering how to feed their children breakfast in the morning.
When I watch programs like the following, I can't help but think about the huge amounts of money we are spending on the war in Iraq. Time and again, our president tells us the war is necessary to protect America. Somehow, I don't imagine the folks who are struggling to make ends meet are all that worried about a terrorist attack.
In fact, I suspect that many of the people referenced in this video live with the terror of being unable to find their next meal or surviving until the next handout is available. Our politicians talk about the need for health insurance while millions aren't even eating the food they need to insure their health.
Frankly, I can't imagine what the next president will have to do to right the ship. It's easy for voters to lock onto an issue, believing that it's a non-negotiable necessity. Some of us won't vote for a candidate that supports abortion...some of us won't vote for a candidate that won't support an amendment to ban same-sex marriage...some of us won't vote for a candidate because she is a woman or a black man.
In the midst of our absolutism, we ignore the neighbor who simply needs a decent meal or the elderly woman with high blood pressure who can't afford the medication she needs. For all the talk of this being a Christian nation, I am astounded at the lack of Christian compassion.
I simply can't imagine why we need to spend millions of dollars on initiatives to ban gay marriage in the midst of such great need. Why on earth would anyone care about what happens in the bedrooms of their neighbors when they don't give a damn about the neighbor's empty refrigerator? No, we've become a hateful nation filled with animosity and resentment for all things different. Those who rail against gay marriage argue they're simply protecting the family. I'm still trying to decide which families they're trying to protect. It sure as hell isn't the family next door.
Bill Moyers Journal - Hunger In America
Tagged as: Abortion, Bill Moyer, Compassionate Conservatism, Food, Food Banks, Food Pantries, Gay Marriage, Hunger, Inflation, LGBT, PBS, Poverty, Religion, Same-Sex Marriage
Daniel DiRito | April 15, 2008 | 9:25 AM |
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By all accounts, George W. Bush was determined to win reelection and thus avoid a repeat of his father's embarrassing defeat. Unfortunately, they say the sins of the father shall be visited upon the son. If true, the declining economy at the close of this Bush administration may well be a revisiting of his father's misfortune. While George W. Bush may have charted a different course than his father, he appears to be arriving at the same destination.
While the promise of the senior Bush to enact no new taxes is thought to have been a key component of his downfall; the cutting of taxes by his son was touted as the ultimate economic elixir. Given the economic status at the end of both Bush administrations, it seems to have been a difference without a distinction.
It's likely that the slow slog towards recession has now become a snowball racing rapidly down a slippery slope; headed for an unknown destination. Despite the repeated assurances from the Bush administration that a sound economy underlies the current downturn, the ride to the bottom may be a long one and it may end with a thunderous thud. When it's all said and done, the consequences of this Bush administration may mirror the misfortunes that befell the GOP in the wake of the prior Bush administration.
WASHINGTON (Reuters) -- Employers cut payrolls for a third month in a row in March and the unemployment rate jumped to a 2-1/2 year high, more evidence that a housing downturn and credit crisis may have pushed the economy into a recession.
The Labor Department on Friday reported that March non-farm payrolls fell 80,000, biggest decline in five years.It also said the March unemployment rate jumped to 5.1% from 4.8%, highest since a matching rate in September 2005.
Adding to the bleak picture, the department revised the first two months of the year's job losses to a total of 152,000 from a previous estimate of 85,000.
The March job report was more bleak than expected. Economists had forecast a decline of 60,000 in non-farm payrolls and a rise in the unemployment rate to 5%.
"There doesn't appear to be any silver lining. It shows that we're right in the middle of a recession that will probably take a while," said Carl Lantz, U.S. interest rate strategist at Credit Suisse in New York.
"Our expectation is that it will be a longer recession than the last two and we're just in the beginning," Lantz added.
It has taken George W. Bush two terms to reach an endpoint that will undoubtedly be seen as very similar to that of his father's presidency. Both men watched as the economy tanked...unaware of the plight of the working class. The first Bush didn't know the price of milk - the second seemed oblivious to the rising cost of gas. During their presidencies, both men invaded Iraq - the first Bush having the good sense to limit the scope of the incursion - the second determined to one-up daddy regardless of the cost.
In 1988, when Anne Richards spoke her oft quoted words about the senior Bush, "Poor George. He can't help it. He was born with a silver foot in his mouth"; little did we know how prescient her observation would be with regards to the second Bush. In recalling the expression, "The acorn doesn't fall far from the tree", one could also argue that the electorate bears responsibility for succumbing to another well known idiom...the one that posits, "Fool me once, shame on you; fool me twice, shame on me".
Sadly, a new poll provides a grim assessment of the degree to which voters may be experiencing buyers remorse. Unfortunately, what's done is done...and we're left to hope that the damage can be undone.
Americans are more dissatisfied with the country's direction than at any time since the New York Times/CBS News poll began asking about the subject in the early 1990s, according to the latest poll.
In the poll, 81 percent of respondents said they believed "things have pretty seriously gotten off on the wrong track," up from 69 percent a year ago and 35 percent in early 2002.
Although the public mood has been darkening since the early days of the war in Iraq, it has taken a new turn for the worse in the last few months, as the economy has seemed to slip into recession. There is now nearly a national consensus that the country faces significant problems.
A majority of nearly every demographic and political group -- Democrats and Republicans, men and women, residents of cities and rural areas, college graduates and those who finished only high school -- say the United States is headed in the wrong direction. Seventy-eight percent of respondents said the country was worse off than five years ago; just 4 percent said it was better off.
In the end, there is also an abundance of irony to be found in the two Bush presidencies. The former president Bush spoke of mobilizing 1,000 points of light...the latter nearly succeeded in turning off all of the lights. When the senior Bush called Americans to service, it was impossible to know that his son would enlist 1,000's of young Americans in the prosecution of an ill-advised war.
When the current president pledged to unite us, we should have realized that the ability to unite emanates from the capacity and the willingness to hear, understand, and appreciate the views of others. When he pledged compassionate conservatism, we missed the numerous indications that compassion would only flow to those who adopted his brand of conservatism. Hence, compassion modified by conservatism is more likely an ideology of intransigence than an expression of empathy.
As we await the passage of the second Bush administration, it should be abundantly clear to voters that we can ill-afford a third Bushwhacking. Hopefully voters won't be fooled by the cleverness of the GOP to choose another Bush as their candidate. Lest there be any confusion, I'm not talking about an eventual Jeb Bush candidacy...I'm talking about none other than John "W" McCain.
Tagged as: 2008 Election, Economy, George H.W. Bush, George W. Bush, Iraq, Jeb Bush, Jobs, John McCain, Recession, Unemployment
Daniel DiRito | April 4, 2008 | 10:07 AM |
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Most people understand the meaning of "the squeaky wheel gets the grease". The government's actions to bail out the big dogs in the subprime lending fiasco, in conjunction with the seeming disregard of the plight of the individual homeowner, are destined to rewrite the expression to read "the big wheel gets the grease".
In light of today's refusal by the Senate to modify bankruptcy laws to assist homeowners, it seems a further modification will be needed. I would suggest it be - "Once the big wheels get greased, the hosing of the homeowner can begin".
The Senate on Thursday rejected a Democratic proposal that would have rewritten bankruptcy law to help struggling mortgage borrowers, while moving ahead with debate on a housing market rescue bill that includes a $6 billion tax break for home builders.
In a 58-36 vote, the Senate defeated an amendment offered by Assistant Senate Democratic Sen. Richard Durbin to empower bankruptcy judges to ease mortgage payment terms for distressed borrowers under strictly limited circumstances.
The Durbin amendment -- which would have affected only mortgages already in place upon enactment -- was opposed by the influential banking industry and Republicans, who were joined by 11 Democrats in voting to kill it.
"Unfortunately, my amendment was strenuously opposed by the banking lobby and their powerful friends in the Bush Administration and in the Senate," he said.
Demands for action on behalf of average homeowners have grown since the Federal Reserve last month engineered a massive bailout of investment bank Bear Stearns.
The Senate bill, with lengthy debate still ahead of it, is estimated to cost $15 billion to $20 billion.
The bill's tax break for home builders and other businesses involves extending a rule that allows businesses to count net operating losses against tax returns from prior profitable years. The rule, in place for 2008 and 2009 only, would allow carry-backs of four years instead of the current two years.
"This is a taxpayer-funded give-away for corporations that caused the housing and mortgage crisis. It doesn't do enough to help struggling homeowners," said Jacob Hay, spokesman for the Laborers International Union of North America.
While the actions to kill this measure are appalling, the severity of the crisis may soon force politicians to reconsider. As foreclosures rise, and more Americans are impacted by the economic downturn, the public outrage with the ongoing efforts to bail out the lenders who willingly participated in promoting the suspect practices is bound to explode. That may preclude politicians from pouring cash into the coffers of their brazen benefactors.
I keep referencing the Savings and Loan scandal of the late 80's in order to explain the scope of the situation. While it provides a useful example, it fails to illustrate the fact that the current fiasco will not only cost the taxpayer in terms of the governments funds needed to underwrite the lending industry's losses; it will result in an across the board decline in consumer wealth as a result of declining home values. At the same time, consumers will be forced to overcome the other obstacles that accompany periods of economic malaise.
In the end, this crisis will be far more injurious to the individual and far more insidious in revealing the complicity of our elected officials. Those who have built their political careers upon opposing the expansion of the nanny state are about to undertake one of the most egregious examples of corporate welfare we've ever witnessed.
If this alliance is allowed to exist, voters can expect the big wheel to become a steamroller aimed at flattening all that stands in the way of further capitulation to the almighty corporation. As of this moment, there are at least 58 senators who are willing to allow the crushing of their constituents.
It's not only time to silence the squeaky wheels, it's time to deny them access to the grease. More importantly, it's time to send a much needed message to their hypocritical enablers. Unlike many Americans, I'm certain these pandering politicians will have homes to return to once they've been thrown out of the drivers seat.
Tagged as: Banking, Bankruptcy Laws, Corporate Bail Out, Corporate Welfare, Dick Durbin, Economy, Foreclosures, Homeownership, Housing Crisis, Interest Rates, Lobbyists, Savings & Loan Scandal, Subprime Lending
Daniel DiRito | April 3, 2008 | 6:50 PM |
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With the Bush presidency coming to an end...with talk of a lame duck administration...and despite the negative reviews on George Bush's ambitious yet seemingly endless epic, The Iraq War...GWB Studios, in conjunction with GOP Tax Cut Productions, is moving forward with plans to release an astounding sequel that is destined to put an exclamation mark upon the 'Mission Accomplished' era.
From the director who brought us The Doubling Of Debt...get ready to witness the most startling event since the release of The Great Depression. Not since Alfred Hitchcock's The Birds, has America faced such an unfettered onslaught of "peckery". When the curtain falls on this startling production, you'll not only be missing the shirt off your back, your pocketbook will have been plucked cleaner than a spiral ham bone.
History is about to unfold...America is about to unravel...and George Bush is certain to have a legacy unlike any of his predecessors. My fellow Americans...prepare yourself for the premiere of R-E-C-E-S-S-I-O-N: The Ownership Society - You've Been Pwned.
R-E-C-E-S-S-I-O-N
Tagged as: Alfred Hitchcock, Depression, Economics, George W. Bush, Humor, National Debt, Ownership Society, Recession, Tax Cuts, The Birds
Daniel DiRito | April 2, 2008 | 4:25 PM |
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Former Federal Reserve chairman Paul Volker appeared on the Charlie Rose show last evening to discuss the recent actions to bailout Bear Stearns. Volker points out that the actions were unprecedented and he cautions that doing so may be an argument for greater regulation of investment houses like Stearns.
Volker's remarks were focused on his concern that we are witnessing a transformation in the financial market. As such, he argues that it is time to review the mechanisms we have in place to insure that the economy is being protected from the bad decisions of these newly emerging financial players.
Volker doesn't believe that the Federal Reserve should play a larger part in the regulatory process; rather he contends that they were forced to step into the void with regards to Bear Stearns. Volker suggests that the regulatory process should originate with our elected representatives.
The problem with that equation (even though I agree with Volker) is that the influence of the players in the financial market is daunting...and nothing provides better evidence of this influence than the recent rewriting of bankruptcy laws making it far more difficult for individuals to walk away from debt. Unfortunately, it appears that our government is on the precipice of bailing out the same financial institutions that sought to limit the options for relief by financially strapped citizens.
Yes, the GOP likes to be seen as opposing handouts and welfare...except when it is directed to those corporations that ante up each election cycle. The welfare reform enacted under the Clinton administration was one of the first steps in this shift towards escalating corporate welfare. If this trend continues, be prepared for further financial calamities of greater proportion...with astronomically more acute consequences.
Charlie Rose Interviews Paul Volker
Tagged as: Bailouts, Bankruptcy, Bear Stearns, Charlie Rose, Corporate Welfare, Fannie Mae, Federal Reserve, Freddie Mac, Influence Peddling, Liquidity, Lobbying, Paul Volker, Recession, Solvency
Daniel DiRito | March 19, 2008 | 11:36 AM |
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Today's speech on race by Senator Barack Obama was noteworthy. The media is abuzz with glowing proclamations. Some have said that the Obama speech was the most important speech on race in the forty years since the death of Martin Luther King.
While pondering the many positive observations, what struck me most was the fact that forty years have passed...but not the racial divide...regardless of the words Dr. King spoke then and despite the words Senator Obama uttered today. That left me wondering what was to be gained by stating the obvious to those who have never been intended to appreciate it or to those who aren't interested in changing it.
Let me attempt an explanation by first asking a question. What is the concept of race? Is it really anything more than a human construct that allows us to identify and isolate others in a classic "we versus they" dynamic? The answer to my question is no. In so noting, the issue of race is a human invention used to either elevate one group or to denigrate another group. It is the means by which many of us can avoid our unique human ability...and the responsibility it brings...to employ informed observations and reasoned judgments.
Our capacity to discern color or country of origin has often been the justification for the wholesale condemnations that frequently precede the waging of wars. It serves as the mechanism by which we dehumanize our enemies and excuse our transgressions. Race has become the means by which we have circumvented our obligation to judge others by what lies within. Instead, it allows us to slay others for that which sits upon the surface.
Today, many of the pundits have argued that we avoid discussions of race because it is a difficult topic. I reject much of that argument. I contend we don't address racism because its elimination requires us to grant our fellow humans a degree of fairness we aren't willing to afford. In this world of limited resources, the concept of equality is apt to be perceived as the brake being applied to the unencumbered pursuit of more than one's share of the spoils.
When pundits speak of forty years of seeming silence, they are simply exposing the swamp wherein still lurks a willingness to inflict more of the same on those who can be easily identified as different. What the passage of time has brought is the goal to do so through subtler methods and without speaking words that could subsequently serve as the evidence that we may still reject equal opportunity and equitable justice. All too often, it is far easier to assert that one's child didn't get into the school of his or her choice as a result of affirmative action than it is to admit our lengthy history of denying equal opportunities to the underprivileged. Perhaps we also seek to avoid an admission that the goal remains the same?
What most Americans don't realize is that the powers that be have little interest in establishing an equitable order. This includes measures like the Bush tax cuts; but there is a better example that also allows me to focus on race. Simply look at the refusal of our government to enforce our existing immigration laws for the last two decades and you will begin to understand how the efforts to amass wealth have been transformed in the aftermath of the abolition of slavery. The current clamor to close our border isn't a sudden admission of exploitation; it is a recognition that the unchecked increase in the number of Mexicans has the potential to skew the political power such that those who have more may not be able to maintain their unchallenged hold on the power that assures more.
Look, the greed of those who govern hasn't suddenly subsided. They have simply recognized that in their rush to expand their enrichment, they may have forgotten to police the portal. Hence we now have the calls for a temporary guest worker program...the modern means by which the underclass can be employed without enslavement...and prevented from circumventing the all-important political status quo.
At the same time, the powers that be prefer that this easily identifiable underclass be pitted against those Americans who are known as the "have-nots". The approach isn't unfamiliar. When the slaves were freed, they were quickly portrayed and perceived as an economic threat to southerners struggling to make ends meet. The same strategy has been embraced with Mexican immigrants.
Both efforts have been relatively successful because the battle for fewer dollars was intensified by an increase in those competing to obtain them. Thus the animosities of austere Americans have been artfully aimed at those who are different (black or brown)...and not at those who look the same but hoard the lion's share of the wealth.
In the end, race is the rail upon which the wizards of wealth have sought to separate one segment of society from another. When they succeed, they incite the insolence they intend.
Barack Obama deserves recognition for revisiting our racial rancor. However, unless and until each individual looks beyond the veil of vitriol that has been designed to divide us, we will forever overlook the power of the present to unite us. We're engaged in the kind of race that can only be won when everyone refuses to participate. Our humanity needn't be a hologram on the horizon. Healing must be achieved in the here and now.
Tagged as: 2008 Election, Affirmative Action, African Americans, Barack Obama, Class Warfare, Have-Nots, Immigration, Martin Luther King, Mexicans, Race, Racism, Slavery, Wealth Distribution
Daniel DiRito | March 18, 2008 | 5:00 PM |
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I try to avoid making unequivocal assertions...but if my instincts are correct, I'm not taking much of a risk in predicting that the calamity that will define this Bush presidency will not be the Iraq war. As with his father's presidency, it will be the economy. Yes, the Iraq war will be factored into the equation that facilitated one of the worst recessions in modern times, but numerous other missteps will receive far more attention.
With the Savings and Loan scandal of the late 80's as my point of comparison, I expect the magnitude of this recession to be much deeper and far more complex. Frankly, the fact that we survived events like the S & L scandal and the tech bubble have only contributed to the lackadaisical policies that have fostered an air of invincibility. This false confidence has resulted in a deadly conflation of economic poisons that will place a strain on our financial fortitude that hasn't been witnessed since the Great Depression.
For months, the Bush administration has sought to convince the American public that the economy is sound. Unfortunately, the hollowness of those assurances expands exponentially with each new report. Today's news is awash with further warnings of economic uncertainty. The President's remarks, in response to the growing storm clouds, simply highlight the mindset that has typified his inclination to ignore information that doesn't comport with his rose colored rhetoric.
Unfortunately, I fear this president suffers the misconception that he can tackle this systemic economic malaise in the same manner he addressed the many miscalculations that have plagued the prosecution of the Iraq war. Sadly, brute force has little relevance when it comes to the economy. As with the troop surge, the attempts by the Federal Reserve to pump more money into the economy in order to prop up flailing financial institutions fails to address the dire dynamics that underly the debacle.
Let's pause to review the observations of others.
It is a very logical progression. Peloton, Carlyle, Focus -- hedge funds and other non-deposit-taking financial institutions (NDFIs) are now being hit by the credit crunch, which had so far been mainly confined to mortgage lenders and the banks.
The Federal Reserve has reacted. Its Term Securities Lending Facility aims to encourage investment banks and prime brokers to lend to NDFIs and so relieve those parts of the credit market it cannot reach with its rate cuts and loans to banks.
So far its liquidity injections have got no further than the banks. Now it hopes to reach higher. Unfortunately, it won't work.
The Fed is like King Canute with a difference -- it is trying to halt an ebbing tide rather than a rising one. Its liquidity injection seems huge at $200 billion (with perhaps more to follow), but it is still only equivalent to one-third of the expected losses in the NDFI sector.
Moreover, the Fed's readiness to accept almost any asset at just below face value as collateral will prevent price discovery. That means the U.S. financial system will remain burdened with uncleansed balance sheets that penalize future lending and economic growth.
Creating a lot of liquidity does not resolve an issue of solvency, which is now the driver of credit contraction. All the Fed will achieve is a dollar that will be further debased and inflation that will be higher. It cannot stop the process of deleveraging and asset price decline.
The credit crisis is unfolding as we expected, but more slowly than anticipated, because of the actions taken by central banks (mainly the Fed) and the U.S. government to allay its effects. The wholesale socialization of credit has meant that government and central bank measures account for 70% of new credit since last summer.
But these policy measures will not prevent asset-price deflation or credit contraction, which are functions of risk appetite and general readiness to maintain current levels of gearing throughout the economy. The non-bank sector has the potential to inflict more damage on the system than banks, because it has a much smaller capital cushion for a much more volatile and risky balance sheet.
Credit contraction translates through the financial system into a reduction in available credit for the non-financial corporate sector, and thus into reduced investment and growth in the real economy. The size of that contraction can be estimated from the leverage ratios of the financial sector and their impact on real GDP growth.
We estimate that nonfinancial corporate debt ultimately will have to shrink by 11%-12%. This will generate a decline of five percentage points of real U.S. GDP growth and push the U.S. into recession. Europe's real GDP growth will contract by two percentage points.
Essentially, the point being made by the author is that the Federal Reserve's efforts to lower interest rates is inadequate to address the fundamental problem - the value of the assets that underly much of the existing debt is in a period of contraction...largely as a result of the collapsing housing industry.
As such, the ability of lenders to lend is limited. They lack the capital needed to make loans; let alone the capital required to support declining equity positions and the increasing default risks that are associated with these loans. Hence, the Fed's efforts to infuse the economy with the capital needed to spur growth isn't going to be sufficient. Even worse, should this contraction lead to lender insolvency, the likelihood of the need for a huge government bail out advances. If this happens, I believe it will be far larger than the one witnessed during the S & L scandal.
The Fed's economic power rests on the fact that it's the only institution with the right to add to the "monetary base": pieces of green paper bearing portraits of dead presidents, plus deposits that private banks hold at the Fed and can convert into green paper at will.
When the Fed is worried about the state of the economy, it basically responds by printing more of that green paper, and using it to buy bonds from banks. The banks then use the green paper to make more loans, which causes businesses and households to spend more, and the economy expands.
This process can be almost magical in its effects: a committee in Washington gives some technical instructions to a trading desk in New York, and just like that, the economy creates millions of jobs.
But sometimes the magic doesn't work. And this is one of those times.
Instead of following its usual practice of buying only safe U.S. government debt, the Fed announced this week that it would put $400 billion -- almost half its available funds -- into other stuff, including bonds backed by, yes, home mortgages. The hope is that this will stabilize markets and end the panic.
Officially, the Fed won't be buying mortgage-backed securities outright: it's only accepting them as collateral in return for loans. But it's definitely taking on some mortgage risk. Is this, to some extent, a bailout for banks? Yes.
Still, that's not what has me worried. I'm more concerned that despite the extraordinary scale of Mr. Bernanke's action -- to my knowledge, no advanced-country's central bank has ever exposed itself to this much market risk -- the Fed still won't manage to get a grip on the economy. You see, $400 billion sounds like a lot, but it's still small compared with the problem.
Krugman offers a look into the risks being taken by the Federal Reserve to avert the looming collapse of financial institutions. The fact that the government is taking unprecedented risk signals the seriousness of the situation. The fact that the government has committed half of its available funds to this risk intensive effort suggests that the ultimate solution will require the government to appropriate additional funds...hence the bailout begins. The price tag of the S & L scandal would likely pale in comparison.
The impact to the overall economy could be mind-boggling since it would be apt to affect consumer spending. Falling home values would strip millions of Americans of the bulk of their accumulated wealth which would no doubt restrict their ability and willingness to spend money. The direct correlation of this intertwined cause and effect spiral could have disastrous consequences.
We haven't even factored in the disproportionate numbers of baby boomers moving towards retirement. A worst case scenario could place the financial stability of many of these individuals in jeopardy at a time when the safety net of Social Security is also approaching insolvency.
The United States has entered a recession that could be "substantially more severe" than recent ones, former National Bureau of Economic Research President Martin Feldstein said Friday.
"The situation is very bad, the situation is getting worse, and the risks are that it could get very bad," Feldstein said in a speech at the Futures Industry Association meeting in Boca Raton, Florida.
"There isn't much traction in monetary policy these days, I'm afraid, because of a lack of liquidity in the credit markets," he said.
The Fed's new credit facility, announced on Tuesday, "can help in a rather small way ... but the underlying risks will remain with the institutions that borrow from the Fed, and this does nothing to change their capital," Feldstein noted.
I simply don't see the mechanism by which this strained liquidity can be alleviated in the near term. Pumping more cash into the system could have short term benefits but the risk to the already tenuous value of the dollar would likely outweigh them. Relying upon the standard bearers...the consumer...to spend us out of this mess seems unlikely. Rarely have prior recessionary periods been accompanied by such significant declines in home values.
Were we to see the emergence of sustained inflation, the picture becomes even more disconcerting. Many of the measures designed to address the liquidity crunch have the potential to do just that. Toss in our trade imbalance, the amount of debt held by the Chinese, and an international shift away from the dollar as the preferred reserve currency and one begins to see the growing alignment of negatives.
The fact that the American image has been tarnished during the current administration makes it difficult to imagine the kind of international cooperation we might have otherwise received during such a slowdown. In fact, don't be surprised if a number of nations stand idly by as the perceived bully endures its comeuppance.
Returning to the Bush legacy, I recall the deteriorating situation faced by his father prior to the 1992 election. When the senior Bush expressed his amazement with the scanning technology found in grocery stores, his appeal and his connection with the average American is thought to have suffered. When the Clinton campaign added, "It's the economy, stupid", the stain became permanent.
The fact that the current president expressed surprise when a member of the press mentioned the prospects of $4.00 per gallon gas seems eerily similar to the last days of his father's presidency...and it may also assist in cementing the economy as his legacy's leading albatross.
George W. Bush's seeming shortage of empathy for the plight of the average American shone through in his mishandling of Katrina, his passage of tax cuts for the wealthiest, his inept energy policy, and his willingness to sink trillions of dollars into the execution of a virtual vendetta in Iraq. These events will forever be tethered to his tenure and his successors are apt to spend years trying to repair the damage done.
They say the writing of one's legacy is rarely finished since the past undoubtedly shapes the future. In the case of George Bush, I suspect he'd be best to hope that his influence on the future be less indelible than his unabashed attempts to color the present.
Gertrude Stein stated that a "rose is a rose is a rose". Ernest Hemmingway responded with "a rose is a rose is an onion". In thinking of the Bush legacy, I'm inclined to argue that a silver spoon may beget rose colored rhetoric...but a silver spoon full of rose petals rarely helps us swallow the thorns. When the bow breaks, the Bush legacy will fall.
Tagged as: Ben Bernanke, Economy, Federal Reserve, GDP, George Bush, Housing Bubble, Interest Rates, Iraq War, Katrina, Liquidity, Monetary Policy, Recession, Savings and Loan Scandal, Subprime Lending, Tax Cuts
Daniel DiRito | March 14, 2008 | 11:44 AM |
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It's difficult to find anything to smile about in the latest jobs report. Despite the assurances from the Bush administration that the economy remains strong, each new report brings evidence that we're in a recession. It looks like the administration is either in denial or simply employing the same "head in the sand" mindset that spent the last five years telling Americans that the situation in Iraq is improving. Despite the president's rosy rhetoric, I choose to believe that the data doesn't lie.
The current economic uncertainty reminds me of a metaphor shared by a friend many years ago. While discussing borderline personality disorder, a psychological condition prone to sociopathic behaviors, she described it as being akin to comparing an apple to an onion. The normal personality is like an apple, in that it has a core; whereas with the onion, you peel away layer after layer to find that no core exists.
It's not a perfect analogy, but it underscores my belief that this latest period of economic expansion has lacked the essential fundamentals to insure economic stability. When one strips away the facade of inflated home values...driven by artificially low interest rates...all that remains is a tenuous economy in the throes of adjusting to the instability and uncertainty of globalization.
The economy shed 63,000 jobs in February, the government said on Friday, the fastest falloff in five years and the strongest evidence yet that the nation is headed toward -- or may already be in -- a recession.
"I haven't seen a job report this recessionary since the last recession," said Jared Bernstein, an economist at the Economic Policy Institute in Washington. "This is a picture of a labor market becoming clearly infected by the contagion from the rest of the economy."
The loss in February was the second consecutive monthly decline in the labor market; economists had predicted a slight increase. The government also revised down its estimate for January to a loss of 22,000 jobs -- the first decline in four years -- and cut in half its estimate for job growth in December.
Wages stayed stagnant in February, further depressing the outlook for consumer spending over the next few months. Among rank-and-file workers -- more than 80 percent of the work force -- average pay grew just 0.3 percent to $17.20 an hour. Wages are effectively running flat when adjusted for inflation.
These job losses are only one segment of the current economic downturn. Truth be told, the housing crisis and its impact on financial markets looks to be an unprecedented debacle that has yet to fully unfold. The efforts of the Federal Reserve to reduce interest rates and make huge amounts of capital available to struggling financial institutions is a testament to the severity and complexity of this crisis.
I suspect the powers that be are hesitant to offer a candid assessment for fear it will trigger even more caution on the part of consumers. To a degree, that is prudent. Unfortunately, this snowball is already rolling and I see little reason to offer false assurances that it won't continue to expand. I look for the government to make added admissions in much the same manner found in a criminal investigation...as more evidence is unearthed, the administration will find itself unable to continue with the denials.
Look no further than a comparison to the Saving & Loan scandal of the late 80's to understand how the government will attempt to downplay the gravity of the situation. Sadly, I'm concerned this fiasco may be far more pervasive. While the S&L scandal was primarily isolated to commercial real estate, the current crisis involves residential real estate and millions of homeowners. That alone suggests a greater magnitude; one that will strike a blow to a core source of economic growth...consumer confidence and spending.
I don't want to be an alarmist, but I see a unique and troubling confluence of conditions that have the potential to challenge our existing economic constructs. The growth of multi-national corporations with GDP's that rival those of many nations serves to undermine the assumption that all Americans share similar economic objectives with consistent measures of success. It simply isn't true in this day and age of global investments and the outsourcing it facilitates in order to increase the bottom line. When the goals of a huge corporation no longer comport with the goals of their nation of origin, the established economic models have become outdated and virtually irrelevant.
I realize I'm painting a gloomy picture. At the same time, I'm convinced that the American public must demand an honest assessment and an open dialogue with regard to these dramatic developments. If we allow our politicians to plot the course...in conjunction with their corporate benefactors...we may find ourselves in a conflict with the United Empire of ExxonMobil...a conflict that we can neither overcome or endure.
On that dark note, I think the following video from The Onion captures much of the essence of this shifting economic construct. It made me laugh...but as with all comedy...it also underscores an undeniable truth that requires our consideration.
The Onion: Outsourcing Child Care Overseas
Tagged as: Comedy, Economics, ExxonMobil, Federal Reserve, Foreclosures, GDP, Housing Bubble, Humor, Interest Rates, Jobs, Multi-national Corporations, Recession, Savings & Loan Scandal, The Onion, Unemployment, Wages
Daniel DiRito | March 7, 2008 | 11:22 AM |
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Read about the Director and Cast
