Everybody knows the ship is sinking

Everybody knows our economic ship is sinking. Everybody knows who to blame. Everybody knows financial regulations will be necessary and everybody knows who is going to stand in the way.

The Securities and Exchange Commission has leveled charges against America’s most prestigious financial institution, pension funds have been ravaged, personal fortunes lost, millions of homes are in foreclosure, jobs are scarce, unemployment benefits are running out, the president seeks financial reform, the Democrats have drafted legislation and the Republicans are holding fast to their new party platform, “just say no.”

The scheme

Goldman Sachs, according to the SEC, is guilty of fraud, and that fraud cost investors in excess of $1 billion while Goldman Sachs made a profit of about $15 billion for brokering the alleged fraudulent transactions.

Selling mortgage securities is not a violation of the law, but what is a violation of the law is misleading the buyers of those securities by failing to disclose information. What the financial firm failed to disclose, according the SEC, was the fact that the hedge fund they were selling was hand-picked to decline in value. If you were on the inside and knew the mortgages you were bundling to sell would likely fail, you stood to make a hefty profit by betting against them.

The scheme involved knowing who the losers would be. Let’s say you knew the favored horse in a race had come up lame, but you sold stakes in the horse just the same. Meanwhile, when no one is paying attention, you ran to the betting window and placed a bet against the favored horse that you told everyone else would win. In essence, this is what Goldman Sachs did.

According to an ABC news story, “99 percent of the mortgages in the portfolio had been downgraded – an almost perfect failure rate.” Goldman Sachs knew they were selling a lame horse.

Reform Legislation

The Voice of America reports that under the bill drafted by the Democrats, “the U.S. central bank, known as the Federal Reserve, would be empowered to craft and enforce consumer protection rules for large financial institutions. Banks would be restricted in the types of investments they can make, and large financial institutions would be required to contribute to a bail-out fund that would be held in reserve in case of a future meltdown.”

Republicans claim the bill is flawed, which is the same claim they made against health care reform legislation, “it’s flawed.” They claim the establishment of a bail-out reserve fund would serve to perpetuate high-risk financial dealings by large institutions. In other words, forcing big banks to contribute to a bail-out fund, a sort of insurance policy for the American taxpayers, it would force them to make hastier decisions with investor’s money.

This argument doesn’t hold water and leaks like the boat they are riding in. What is wrong with banks providing security to taxpayers? We have to provide security to drive a car through automobile insurance. Does paying for auto insurance cause us to drive carelessly and make hasty decisions?

Republican Senator Scott Brown of Massachusetts suggested that a “pared-down version” of the bill could attract bipartisan support. Isn’t that what they said about health care legislation, and after all the concessions were made didn’t they still vote against it?

According to Dean Baker, from the Center for Economic and Policy Research, the Republicans, “are carrying water for the financial industry,” and he asks why many in the news media are pretending otherwise. The facts about this matter are staring us right in the face; the boat is sinking and everybody knows it.

Banks are not casinos and investors should not be left to spin roulette wheels with their money. All indications point to the mortgage crises as being the iceberg that left the gaping hole in the ship. Financial firms like Goldman Sachs have played a huge part in the sinking of our economy simply by claiming something was worth more than it was and betting against it.

The false economics of fiscal responsibility

A bill to restore Medicaid payments to doctors and extend unemployment benefits for a short period of time passed both houses of Congress. While President Obama would like unemployment benefits extended through the end of the year, Republicans have been successful in blocking a vote.

Republicans claim their concern over unemployment benefits involves fiscal responsibility; they want to be able to pay for it before they agree vote for it. Yet they are more than willing to spend money on others budget items that are far more costly.

“They seem to have discovered fiscal responsibility when it comes time to extend benefits, but not when it comes to paying for tax cuts for the rich and … war,” Rep. Sander Levin, D-Mich. said.

Representative Jerry Moran, R-Kan, said he is concerned with the deficit. According to his account, extending jobless benefits to the end of the year would increase the deficit by $18 million, “a cost to be paid for by future generations,” he said.
The rallying cry against spending is about not leaving a debt for our grandchildren, but is that an accurate assessment? Does it take generations to pay down a debt?

Statistics show that since 1910 the US has fought with budget deficits, but never has it taken a generation to turn a deficit into a surplus. In fact, deficits and surpluses throughout the past half century have been up and down like gasoline prices.

In 1943 our country had a deficit of $54.6 billion, but by 1948 we had a surplus of $11.8 billion. In 1968 our deficit was $25.2 billion, but the following year we had a surplus of $3.2 billion. More recently, in 1992 our county’s deficit was $290.4 billion; six years later we enjoyed a budget surplus of $69.2 billion.

It is easy to see that it has not taken generations to right our economy in the past, so I find it difficult to believe this will happen now. Besides, debt is not measured by how much we owe, but by the percentage of debt compared to the gross national or gross domestic product.

The highest national debt in terms of our gross domestic product came in 1943 when that debt ratio stood at 30 percent, according to factcheck.org. Statistics also point to the fact that Republicans give rise to the nation’s debt more often than Democrats.

From 1948 until 1990 our nation’s debt steadily declined, and declined sharply. In 1991 our debt began to climb again. This increase began during the Reagan years and continued through the first Bush presidency. During the Clinton presidency the debt leveled off and when George W Bush took the oath of office the nation enjoyed a surplus, but that surplus quickly became a deficit again and the debt has continued to rise to the present day.

Republicans like to call themselves fiscal conservatives, but history does not make a good case for them. Denying jobless benefits does not help the deficit, but in fact, slows recovery. A direct correlation exists between the gross domestic product and joblessness; when unemployment increases the gross domestic product decreases, which in turn, puts a strain on the economy. Good economic times only occur in America when Americans are working.

While investing in job creation may increase the national debt slightly in the short term, not investing in jobs has a negative long term effect on the economy. When America isn’t working, homes sales are down, cars set on dealership lots, mortgages go into foreclosure and our nation’s infrastructure suffers.

Those who stand against the jobless in this country do not stand for fiscal responsibility, quite the opposite, they are adding to the economic downturn. Turning off the benefit spigot for the unemployed ads to their misery and affords them less opportunity to find jobs, this is not rocket science, its common sense.

War, yesterday, today and tomorrow

The Great Pretenders

Crying and lying are profitable, but don’t take my word for it, ask Rush Limbaugh and Glenn Beck. In fact, Sarah Palin has learned very quickly she since resigned as governor that a right-wing conservative pretender can make a lot of money.

These conservative pretenders bring in a lot of cash for themselves and serve as the glue that helps to hold together a cross-cultural base of conservatives across the country. They have taken up the sword in an effort to hold the Republican Party base together, but that sword is ripping through the fabric of America, and as they apparently believe themselves, he who lives by the sword also dies by the sword.

Glenn Beck for example, is keenly aware the vomit coming out of his mouth poses a dangerous situation. Beck is accompanied on a regular basis by two body guards. It has been said that Rush Limbaugh would be swinging from a tree if not for his bodyguards. Sarah Palin is well guarded, and rumor has it she can shoot pepper spray directly from her nose. (Efforts to confirm this rumor, however, have been unsuccessful).

Despite the damage these pretenders may be responsible for the money makes the effort worth it. Glenn Beck earms at least $32 million a year from his recent book about common sense, his radio show, a string of websites, speaking engagements and from television. Beck doesn’t think of himself as a “television guy,” however, but as a “brand.” Expect to see Beck breakfast cereal and cologne in big box stores near you. Glenn claims he was a pot-smoking alcoholic until his conversion to Mormonism, which according to his own account is responsible for his success.

Beck has become widely known for his on-air antics: angry outbursts when disagreed with, crying, lying and his bigoted words. For Beck and his audience tears are not a sign of weakness but a sign of sincerity. Anger is not a sign of weakness either, but of righteous indignation. Glenn Beck, like Rush Limbaugh, bends the spectrum of light to validate his values and claims. “I’d better start wearing a bullet-proof vest to guard against White House attacks,” he said in a recent interview. I doubt, however, the White House is planning to have the CIA assassinate him as he suggests, but he probably should be concerned about the man on the street.

Beck’s statement about the White House, not only suggests he is a weeping paranoid schizophrenic, but it lends credence to the idea that people who are intent on stirring up the emotions of others for their own wellbeing are making targets of themselves.

The rhetoric the pretenders create to make themselves rich also creates an atmosphere where violence can grow. Sarah Palin, of death panel fame, recently stated on Facebook “don’t retreat … reload.” This double-edged sword carries two messages: don’t give up and keep fighting for what you believe in, and to the dimwitted in our society, don’t back off, load you ...

Palin is not a rich woman yet, but she left her job as governor of Alaska, where she earned $125,000 a year, for a higher calling. She works as a pontificator Fox News, is a frequent guest on talk shows, has had a book written in her name and speaks at Tea Party rally’s for $100,000 a pop. She has seen the light. There is no money in not in public service, but there’s plenty to go around in the field of public torment.

Rush Limbaugh is the king of pontificating pretenders. An example of his rhetoric comes from comments he made about health care. In defending the US health care system as being the finest among industrialized nations, Limbaugh claimed statistics showing the US as having a poor infant mortality rates and lower life expectancy were skewed due to “the epidemic of low-birth weight babies born to teenage and drug-addicted mothers, along with drug related homicide rates.”

The fact of the matter is, The CDC estimates that removing homicides rates would only increase life expectancy by about three months on average and mortality rates have a direct correlation with lack of pre-natal care. The CDC estimates mothers who lack proper pre-natal care are ten times more likely to have unhealthy babies.

Limbaugh also claimed the H1N1 virus was created by the government to kill people. Rush likes to make things look dirty. Drugs and violence and government conspiracies are dirty, but so is the slobbery cigar clinging to his lips.

Nevertheless, Limbaugh’s false accusations and big-mouth ranting have made him a millionaire; he is estimated to be worth in excess of $650 million.

By the way, all of the above mentioned “celebrities” have something else in common, they speak in a knowing self-important way about issues they are not qualified to talk about, but unfortunately, people listen.

The gloves came off, as the news media likes to say, with the setting aside of the Fairness Doctrine in 1987. The Fairness Doctrine had been in place since 1949 and required some broadcast time be set aside for opposing viewpoints. Under the Fairness Doctrine Limbaugh, Beck and Company could not spew an hour’s worth of deception unless they gave 20 minutes of that hour to an opposing argument.

The broadcasting industry, taken over by a few wealthy individuals and corporations, claimed the Fairness Doctrine was too costly to them, but the social costs since its disappearance have been even greater. As the Fairness Doctrine died, birth was given to the pretenders.

Misdiagnosing an illness to sell a drug

This is a story about how a drug company set about to sell a new drug. It is a familiar story in our ailing health care system, but it's a story that we should not have to tell.

No matter how much the corporations may own Washington, and therefore, have a unique control over our lives, we always have one thing that stands in our defense if we seek it out; the truth. As long as the First Amendment exists, someone will do the research, ask the right questions and tell us the story.

A few months ago National Public Radio featured a story called "How a bone disease grew to fit the prescription." This story explains how far a pharmaceutical company will go to sell their drugs and make a profit.

The drug company Merck America created a new drug to treat osteoporosis, and pushed into the light of day a fairly new diagnosis called osteopenia. Osteoporosis is a debilitating bone disease and osteopenia is disease thought of as being pre-osteoporosis, or an indicator that one is prone to develop osteoporosis.

The problem Merck had with selling the new drug about a decade ago was the cost of the tests. A big bone density machine was needed to measure the bones in a woman's hip and spine in order to make a diagnosis. Before they could sell their new drug to a patient a diagnosis had to be made.

In order to get large numbers of women to take their new drug, Fosamax, Merck needed to make bone scanning less costly. The drug company set out to change the way our health care system tested for bone density.

Merck created a non-profit organization called the Bone Density Institute. The Institute had no office, was not housed in a building and did not have a payroll; it consisted of one man named Jeremy Allen, who was hired by the drug company to market Fosamax.

Allen figured out that small "peripheral" machines could be used to scan bone density in smaller bones, like the wrist or ankle. Nevertheless, these smaller machines were still too expensive for most doctors and clinics to have on hand, so Allen set out to help with the development of new, less costly machines; he began contacting manufacturers.

Some manufactures were opposed to the idea of scanning the smaller bones to diagnose the disease; they didn't believe it was the best way to reach a diagnosis. So Merck threatened to support the competitors of manufacturers who refused to cooperate, and eventually, bought one of them out so they could control the manufacturing of the machines.

Merck aimed to show those who would not cooperate how low the cost of one of these machines could go. They wanted to sell them cheap so they were affordable, and even offered help with financing for doctors who were interested. The drug maker’s actions got everyone's attention.

The machines were created. Congress was lobbied (or paid off) to pass the Bone Mass Measurement Act in 1997. The new law, among other things, allowed the testing to be paid for through Medicare. (And some complain they are afraid of government involvement in our health care system - "socialized medicine").

The market was open and the diagnosis of osteopenia became very familiar. And Merck, well, they sold a lot of drugs thanks to their deep pockets and the greediness of Washington politicians.

One of the threatened manufacturers who would not go along with Merck and the idea of using smaller machines was the Lunar Corporation. A Lunar Corporation spokesperson, Richard Mazess, told NPR that Merck had plotted to “misdiagnose patients” and “expose them to the risks of taking a medication they did not need.” Allen, the one man institute, also spoke to NPR. He claimed he felt he was doing the right thing at the time.
So while some rant and rave about their fear of socialize medicine, the fact of the matter is, it is already alive and well and living in America.

America gone rogue

Call her what you want, a buffoon, a ditzy idiot, a patriot, an ice hockey mom, or whatever, one thing Sarah Palin has become very good at is politicking. She is a politician through and through, and like most politicians; she is a fund raising machine.

Palin, like most politicians today, is predictable. So, it comes as no surprise that her Tea Party Convention speech, riddled with ridicule for the Obama Administration and the Democrats, also sucker punched the Republicans. She probably didn’t make a lot of points with her own party when she encouraged Tea Party candidates to compete with GOP candidates in the primaries. But, hey, she is keeping her options open. Like any good politician she needs to find out who has the most butter to put on her bread before committing herself.

What Palin is doing right now is aimed at two things: publicity and money, and she will take both any way she can get it. Whether she is speaking on camera as a pundit for Fox News or speaking behind a podium in front of a thousand Tea Party Convention goers, her aim is the same, air time and money.

As expected, she called the Obama Administration “misguided” and pointed the finger of blame at the Democrats for “big spending.” But what she didn’t say, and what no politician says, is that politics and policy today is all about money. If you can raise money for me I will listen to you.

Maybe she is doing the Democrats a favor by splitting the conservative vote, but she is not doing the nation a favor, and it doesn’t matter anyway because both the Democrats and Republicans are corrupt, it’s just that the Republicans are a little more hypocritical about their corruption – their doing God’s work, or they are fighting to limit big government and hold the line on spending. Politicians are not interested in limiting government; they seek to expand government, both parties do, so they can maintain their control. If they thought for one minute that limiting government would help them maintain their position of power, they would do so without hesitation.

Speaking of money and fiscal responsibility, Palin likes to brag about the excess money the State of Alaska has after her administration. She touts the fact that she sold the state jet in Alaska and fired the governor’s chef. What she neglects to tells us is she also increased the state’s budget by 30 percent, but it didn’t matter because of the excessive amounts of money coming into state coffers from the oil industry. The price of oil has been up the last few years, and that is good news for Alaska’s budget because 90 percent of the state’s budget in funded by royalties and taxes from oil producers. Palin does not have a history of making government smaller and she does not have a history of saving money.

Palin has her eye on the prize, and the prize is power and money. As for her presidential aspirations, she keeps saying she is uncommitted, but every indication points to what her ambitions are. Unfortunately for her, most people do not see her as a viable candidate. Even the Republican leader of the Alaskan Senate Lyda Green said, “she (Palin) is not prepared to be governor. How can she be prepared to be vice president or president?”

Sarah Palin is running a fund raising machine, and like the debutant she once was, she is running it with a smile and pretty face that has no idea about policy, foreign or domestic. The only policy she is interested in is the policy of promotion.

The party she affiliates herself with, at least for now, the GOP, has become a party of darkness and anti-enlightenment. The foundation of the Republican Party is based upon theocratic fundamentalism that opposes science, health care reform, financial responsibility, ecological responsibility and diversity. Like her party, Palin suffers from tunnel vision. They call themselves conservatives but they are liberal liars. Palin, and others like her will kill the Tea Party movement. Like the dark plague they are, they wither away any opportunity a third party has to make a dent in our monogamous fund raising two- party system. And yes, I used the word “monogamous” and the words “two- party” together because they are one in the same. The Democrats and the Republicans are monogamous in their inability to make real policy or change what’s wrong with American politics – they are what’s wrong with American politics. The foundation of America has gone rogue.