T.E.A. Parties

Taxes Enough Already!! We don’t like taxes! Let’s do demonstrations to tell the government our views. There is of course a few small details that the organizers of T.E.A. Parties have overlooked. Lower taxes means we won’t have the where with all to provide all the services we want. A few that come to mind are:

Money to pay for the wars in Iraq and Afghanistan
Money to pay for the FAA, FCC, FDA, and the many other important functions provided by the government
Unemployment insurance payments to all of those who have been laid off
Public schools
Highway maintenance and construction
Police and fire protection

The list is too long to recite here but there is a myriad of services provided by our government. Some are provided by local agencies and others are provided by the state or federal government.

At the beginning of April the federal government actually lowered withholding on our paychecks and lowered the actual income tax rates.

The complaint about our government ought to be about waste and inefficiency. There are too many bureaucrats that do nothing to but add to the morass of functions that do not provide any worthwhile services. Here in Los Angeles the city says it will have a $500million shortfall in its next fiscal year. The solution will be in the elimination of unnecessary commissions and departments that provide very little to the welfare of most citizens.

President Obama has discussed improving the purchasing functions of the federal government. Defense Secretary Gates has proposed eliminating unnecessary projects. But wait, these actions will result in the loss of jobs.

Everyone complains about the cost of government and “pork barrel” projects until the project is in their community. Suddenly it’s not pork. Oh yes, one other thing. The Boston Tea Party was about taxation without representation. If we don’t like our representatives we can vote them out office.

The Road to Peace in the Middle East – Part Two

President Barack Obama may be facing a political fire storm. He could be called anti-semitic. This is a common tactic used by Jews to confront opposition to Israeli government position on any issue.

The President could be put in this situation because the new prime minister of Israel, Benjamin Netanyahu, and his foreign minister, Avigdor Lieberman, are both opposed to a Palestinian state. Netanyahu has discussed the idea of a self governing Palestinian region that would control its internal affairs but has not acknowledged the idea of that region becoming fully independent. Lieberman is part of a conservative religious group that believes that Old Testament definitions of Israel boundaries apply to the 21^st century.

The rejection of a two state solution to the Israeli Palestinian conflict has been reported in the Los Angeles Times, by BBC News and other reliable sources. The new “right wing” conservative Israeli government seems to be unanimous in their position as all leading ministers have stated almost the same views on peace with Palestinians.

There are American Jewish groups that do believe that a two state solution is the right thing to do. Commnetarymagazine.com has reported on four groups. J Street, Americans for Peace Now, Brit Tzedek v’Shalom, and even the well-funded Israel Policy Forum, have all previously jousted with the pro-Israel establishment.

A Jewish homeland ensures there is at least one place in this world where many Jews can feel safe. I feel safe in the United States but so did the Jews of Germany. The existence of Israel does not negate the existence of a Palestinian state as long as it lives in peace with its Jewish neighbors.

The Road to Peace in the Middle East

The road to peace between the United States and Muslim countries is through Jerusalem. The United States has been Israel’s staunchest ally. Israel needs American support to survive. Without that support Israel would have been destroyed by its neighbors decades ago. It is time for Israel to help the United States win the war against terrorism. That goal can be achieved by an Israeli Palestinian peace accord. Once that accord has become reality the Arab terrorists will lack a major battle cry that is now used to recruit terrorists. That peace accord will enable Israel to focus its energies on other things besides the defense of its borders. That accord will afford the opportunity for the United States to show Muslim nations that America does care about their values and beliefs.

Benjamin Netanyahu, leader of the Likud party in Israel, is now the man likely to become Israel’s next prime minister. He has the reputation of a “conservative” leader and is known to oppose a treaty with Palestinians that creates a two nation solution. It has also been written that he wants to draw out (or drag out) any negotiations as a delaying tactic to signing any kind of peace accord with the Palestinians. I can understand why he has taken this position. There are doubts among Jews everywhere about the reliability of any treaty.

Palestinians are divided on a course of action towards Israel. There is no single unifying group or committee that speaks for most of them. The three leading groups that would like to lead all Palestinians are Hamas, Hezbollah, and Fatah. Under current conditions George Mitchell, the American diplomat looking for a solution, will be hard put to bring real negotiations to a table before all Palestinian groups agree on their objectives.

Mr. Netanyahu couldn’t be happier with the current in-fighting among Palestinians. If his plan is to delay negotiations, the Palestinians have aided him in that objective.

Both Jews and Arabs are very sensitive to the treatment they receive by the American government. That appears to be the major stumbling block that has deterred every U.S. administration from taking the needed actions that will bring peace to the area. At this time the Obama administration does not appear to be any more willing to force its vision on the parties than any previous administration. Sending George Mitchell to the Middle East as an American representative only showed that President Obama and Secretary of State Clinton understand that the situation is both complex and delicate.

The United States needs to look out for its interests first. To accomplish the U.S. objectives the American government should insist that all parties involved participate in negotiations that will lead to permanent peace and stability. That objective can be accomplished by using a “carrot and stick” approach. Time lines need to be established to end this open ended confrontation. The carrot is help to those to those nations and groups who participate. The stick is isolation and containment for those refusing to participate. Egypt apparently agrees with this approach as that country blocked entry and movement into Gaza during the recent Israeli attacks. Similarly there was a noticeable lack of support for Hamas in Gaza during those Israeli attacks. Unfortunately Israel killed and harmed too many innocent civilians. The isolation needs to be sustained indefinitely if Hamas refuses to participate in peace negotiations. Israel should be treated equally if it refuses to negotiate.

American Jews and Arabs may be unhappy with the Obama administration but the time has come to end the stalemate.

Jews Have Very Little Influence

Charles Freeman, a veteran diplomat slated to become the top U.S. intelligence analyst, withdrew from consideration on Tuesday, March 10. He released a statement denouncing the “Israel Lobby” for “character assassination.” He appeared on Fareed Zakaria’s GPS on March 15 and issued the same charges. Mr. Freeman charged “they have a hammer lock on public policy.” He blamed right wing Jews in America and Israel for his withdrawl from the nomination.

Hugh Hewitt, a conservative radio talk show host, had a group of guests on his program to discuss the Charles Freeman withdrawl. There were both defenders and opposers to Freeman on the show. Apparently Mr. Freeman is a strong supporter of Arabs and Saudi Arabia. He also was a strong supporter of China’s crackdown in Tiananmen Square (although he denies the accusation).

From Commentary Magazine:

Congressman Frank Wolf is afforded space in the opinion pages of the Washington Post — where one needs to go for reported facts — to explain why he was instrumental in provoking the withdrawal of Chas Freeman. It wasn’t the Jewish blogosphere or AIPAC, as the Post’s Walter Pincus seemed to believe, (without ever actually investigating). And it wasn’t the “Israel-centric fanatics” the category in which Glenn Greenwald places Chief of Staff in Rahm Emanuel.

Wolf explains:

For almost four years, Freeman served on the advisory board of the China National Offshore Oil Corp. (CNOOC), receiving $10,000 a year for his service. The communist government of China, along with other state-owned companies, are majority stakeholders in CNOOC. Yet Freeman claims that he never received money from a foreign government. The connection may not be direct, but it is certainly there. The same can be said of the paycheck he received from the Middle East Policy Council, which received ample funding from the kingdom of Saudi Arabia — whose regime is responsible for funding madrassas around the globe that have given rise to Islamic fundamentalists such as Mohammad Omar, leader of the Taliban.

Fareed Zakaria asked his viewers their opinion at the end of the broadcast. I waited for the results of that question to learn what most responding viewers thought. I am disappointed to learn that a majority do think that there is a pro-Israel lobby in Washington that does have the super power to influence U.S. policy related to the Middle East.

There are 5 million Jews in the United States. That number equals 1.66% of the whole population. Jews only have influence because they are mostly well educated and do contribute to political parties. To believe that Jews can impact American policy is not reasonable given their small population. After all who cares what they want? They are too small a group to influence the outcome of anything. I will attest they are mostly smart. Some are brilliant. Still, they are just too small a group to influence the U.S. policy. Right wing Jews in America would be a minority within a minority. American Jews are notoriously supporters of liberal causes.

AIG – Arrogance Incompetence Greed

In reference to lawmakers’ request for a list of AIG‘s counterparties, U.S. Rep. Carolyn Maloney, D-New York, told CNNMoney it was critical to determine whether AIG‘s collapse would have resulted in a market catastrophe. A wonderful idea that has yet to see any investigation. AIG has received $182 billion in federal bailout money. The bonuses totaled $165 million. That means bonuses totaled .09% of the bail out money.

Where is the anger over the total bail out? Why hasn’t Rep. Carolyn Maloney’s commentary seen follow up with a real investigation? Perhaps the real question should be “when will the members of Congress do something to protect our taxes and our nation?”

Based upon the reports I have read there seems to be a long list of senators, representatives, Treasury department officials, and others from both parties that have been involved in the bail out of AIG , banks and Wall Street investment businesses. My thoughts about socialism-for-the-rich-free-markets-for-the-poor are more on point now than they were when I wrote them on July 29, 2008.

This AP report says it all:

WASHINGTON – Under intense pressure from the Obama administration and Congress, the head of bailed-out insurance giant AIG declared Wednesday that some of the firm’s executives have begun returning all or part of bonuses totaling $165 million.

Edward Liddy offered no details, and lawmakers were in no mood to wait. He was still fielding their questions when House Democratic leaders announced plans for a vote Thursday on legislation to tax away 90 percent of the extra pay for executives at AIG and many other bailed-out firms.

Liddy, brought in last year to oversee a company that has received $182 billion in federal bailout money, said he, too, was angry about the bonuses. But he did not respond directly when advised in pungent terms to pay to the Treasury all the money handed out last weekend in “retention payments.”

“Eat it now. Take it out of your profits down the road. It’s a lot sweeter now than it’s gonna be later,” said Rep. Gary Ackerman, D-N.Y.

Liddy slid into the witness chair at a congressional hearing as President Barack Obama sought anew to quell a furor that has bedeviled his administration since word of the bonuses surfaced over the weekend.

Obama, who took office just under two months ago, told reporters his administration was not responsible for a lack of federal supervision of AIG that preceded the company’s demise, nor for the decision made last year to pay what he called “outrageous bonuses.”

Still, he said, “The buck stops with me.” He said that “my goal is to make sure that we never put ourselves in this kind of position again,” and he disclosed the administration was consulting with Congress on the possibility of creating a new agency to govern the meltdown of large financial institutions such as AIG.

He also gave a strong vote of confidence to Treasury Secretary Tim Geithner, who has been the target of growing Republican criticism.

Later, at a town hall meeting in Costa Mesa, Calif., Obama said that while his administration was addressing the AIG bonuses specifically, he said he wanted to “make sure we don?t find ourselves in this situation again, where taxpayers are on the hook for losses in bad times and all the wealth generated in good times goes to those at the very top.”

Obama spoke as congressional Democrats worked on legislation designed to recoup most or all of the $165 million by exposing it to new taxes.

Rep. Charles Rangel, D-N.Y., chairman of the tax-writing House Ways and Means Committee, said the new 90 percent tax would apply to bonus money paid to employees earning more than $250,000 at firms that have received more than $5 billion in federal bailout funds. Mortgage giants Fannie Mae and Freddie Mac are covered under the proposal.

Liddy said that on Tuesday, he had “asked those who have received retention payments in excess of $100,000 or more to return at least half of those payments.” Some have “already stepped forward and returned 100 percent,” he added.

Majority Leader Steny Hoyer, D-Md., said the House bill would be voted on under rules requiring a two-thirds majority for passage. Democrats are in comfortable control of the House but do not control two-thirds of the seats, meaning the outcome of the vote would probably be determined by tax-averse Republicans.

Republicans raised pointed questions about the extent of Geithner’s advance knowledge of the bonuses, and stressed they had been locked out of discussions earlier this year when Democrats decided to jettison a provision from legislation that could have revoked the payments.

“The fact is that the bill the president signed, which protected the AIG bonuses and others, was written behind closed doors by Democratic leaders of the House and Senate. There was no transparency,” said Sen. Charles Grassley, R-Iowa, the senior Republican on the Senate Finance Committee.

On Wednesday, Sen. Christopher Dodd, D-Conn., the chairman of the Senate Banking Committee, acknowledged that his staff agreed to dilute an executive compensation provision that would have applied retroactively to recipients of federal aid. Dodd told CNN the request came from officials at the Treasury Department whom he did not identify.

While the House and Senate reconciled their stimulus bills last month, the Treasury Department expressed concern with a Senate restriction on bonuses, noting that if it applied to existing compensation contracts it could face a legal challenge.

“The alternative was losing, in my view, the entire section on executive excessive compensation,” Dodd told CNN. “Given a choice – this is not an uncommon occurrence here – I agreed to a modification in the legislation, reluctantly.”

The legislation does include a provision that allows the Treasury Department to examine past compensation payments to determine whether they were “contrary to the public interest.” Geithner on Tuesday said he was using that provision to review AIG‘s bonuses.

Liddy’s presence in a congressional hearing room was evidence of a bipartisan opposition to the bonuses, although his status as a $1-a-year CEO called out of retirement last year to try and untangle AIG‘s financial mess made him a less-than-easy target for expressions of outrage.

“No one knows better than I that AIG has been the recipient of generous amounts of government financial aid,” he said. “We have been the beneficiary of the American people’s forbearance and patience,” he added, acknowledging the patience was wearing thin.

Asked by Rep. Barney Frank, D-Mass., whether he would turn over the names of individuals who received the bonuses, as well as the amounts, Liddy said he would do so only if assured the information not be made public.

When Frank said he might seek a subpoena, Liddy said he was concerned about the safety of the employees and their families, and read aloud from a death threat received by one of them.

Frank said he would be guided in part by security considerations, but Ackerman later noted that Andrew Cuomo, the New York attorney general, was already seeking the names with a subpoena.

Liddy said he had not yet complied, sidestepped several times when asked whether he would, and finally said “it would be our intent” to do so.

Cuomo swiftly issued a statement saying Liddy’s pledge was “simply too little, too late. … Rather than take half-measures, AIG should immediately turn over the list, which we have subpoenaed, of who got what and when.”

Separately, a New York state judge ordered Bank of America Corp. to disclose information about bonuses given to employees at Merrill Lynch & Co. just before the bank bought the brokerage company. Cuomo, who has been sparring with the bank over release of the information, said the decision “will now lift the shroud of secrecy surrounding the $3.6 billion in premature bonuses Merrill Lynch rushed out in early December.”

“AIG should take heed and immediately turn over the list of bonus recipients we have subpoenaed,” he said. “The deadline for responding to our subpoena is tomorrow. “

AIG spokesman Mark Herr said he could not say how many executives had turned back the money. “Bear in mind, these bonuses were only just paid,” he said.

In Wilton, Conn., headquarters of AIG Financial Products Corp., police chief Edward Kulhawik said his department had not received any reports from the company of threats to employees but was in contact with the company and keeping “a special eye on that whole office complex.”

Liddy said the Federal Reserve knew long in advance of the bonus payments and acquiesced in them, noting that officials from the independent agency attend key company meetings. But he said the same was not true of Geithner, adding, “We do our work with the Federal Reserve.”

Liddy gave skeptical committee members what amounted to a tutorial in the practice of paying retention bonuses – he did not call them that – to executives.

He said the money was offered to executives in AIG‘s financial products section, where risky investments finally became the entire company’s undoing. He said each executive was offered money to dispose of his “business book,” meaning the transactions he had been in charge of handling, and thus far, the company’s financial derivatives had been reduced from $2.7 trillion to $1.6 trillion.

He had decided it was worth paying the money to retain the services of executives who knew the business best, he said. And he had received legal advice that there were valid contracts requiring the payments.

“I know 165 million is a very large number. It’s a very large number. In the context of 1.6 trillion … we thought it was a good trade,” he said.

Liddy added there was still a risk of financial catastrophe if the remaining $1.6 trillion in financial instruments were not disposed of properly.

But Rep. Stephen Lynch, D-Mass., angrily told the witness the contract read like “the captain and the crew of the ship reserving the lifeboats.”

Liddy replied that he was not at the firm when the contracts were negotiated, and said, as he has before, that he would not have approved them.

Lynch said the terms had been put in place in December, after Liddy arrived at AIG.

But Liddy disputed that. “I take offense, Sir,” he said.

“Well you take it rightly. Offense was intended,” shot back Lynch.

It’s Class Warfare

After reading the president’s book, “The Audacity of Hope”, listening to his speeches and presentations I have come to the following conclusions.

President Barack Obama really understands the meaning of class warfare. His father deserted his mother. She was left to struggle with the challenges of survival for Barack and herself in the challenging world of Hawaii. It was his grandparents that helped with the financial challenges that he and his mother faced. Given the large group of wealthy people living and visiting Hawaii, Barack Obama learned the meaning of working class family vs. wealthy. Is it any wonder that he sees the need to increase the opportunities for those of us not born into a wealthy family? Many of us can relate to his view that our society has given an unfair advantage to the rich at the expense of the rest of us.

His view of how our nation functions now and how it ought to function is obviously the driving force behind his push for a stimulus package, an enlarged national budget, a new health care system, and the many other programs he has proposed. He is trying to remake much of the system that makes our society function. This is a tall order. He may not be successful. He apparently believes that reaching his goals is more important than a second term in office.

Obviously many people will oppose his objectives. It will not only be Republicans. Many Democrats will aslo see his ideas as un-American and foreign to our history. Many people reading this column will see his ideas of remaking America as socialist, communist, or some other form of government that they find offensive. They are wrong. His ideas are to make Amercan society more just for everyone. That is the reason I call President Obama’s ideas class warfare.

The warfare is evident in the today’s outrage over the multi million dollar bonuses given to AIG managers. Merrill Lynch managers were given bonuses just prior to Bank of America’s acquisition of that firm. It is obvious that will hear about other bonus packages given to other banking and Wall Street companies. Those people receiving the bonuses and their friends see nothing wrong with the wealth and power they have. They are in a financial class that most of us will never know. That is the reason we are going to see more class warfare. Will the wealthy and powerful win or will it be the rest of us? Stay tuned.

Incompetent Sunday Morning Talking Heads

Perhaps it’s the producers of the Sunday morning talk shows that are to blame for their uninformative guests and commentators. May be I have watched too many of these shows. No, neither of these explanations is correct. A scowling Brent Scowcroft (the United States National Security Advisor under Presidents Gerald Ford and George H. W. Bush) would regularly appear on Face the Nation and Meet the Press and avoid answering almost every moderator’s question. That was the failure of both the moderators and the producers.

Today’s This Week was an excellent example of a truly poor performance. Larry Summers (top economic adviser to President Obama) gave vague answers to every question put to him by George Stephanopoulos. Given Mr. Summers’ understanding of economics and the workings of government he should have been able to provide an understandable explanation to every question asked. Instead he fumbled through the entire 15 minute interview. Dithering Senate Minority Leader Mitch McConnell was totally unprepared to answer any questions. The outstanding question being where is the Republican budget plan was answered with the idea that they did not have a plan but that the GOP will offer numerous amendments to the administration’s budget plan. The followup round table discussion provided little in the way of insights or ideas on where the government should go on any of the topics discussed.

The Sunday morning shows need people like Tim Russert as moderators. “Tim Russert, … was a gifted and cunning Sunday-morning interrogator who, while never quite disturbing his genuine persona or television’s conventions, used his outsized position on “Meet the Press” to rattle many more politicians than any of his on-air rivals did.” As David Remnick wrote in The New Yorker. I like David Gregory but he just does not have the authority needed to conduct this program.

The End of American Auto Manufacturing is Near

I predicted the American Auto Manufacturing Is Coming To An End! in August 2007. Trends seem to be confirming that prediction. It is not what I wanted but the handwriting has been on the wall for about 30 years. Each year imports have sold a greater percentage of the total United States sales. The American companies chose to ignore the fact that an ever shrinking number of buyers liked their products. The management of the American companies is to blame for the current situation. That this situation has grown critical when the entire economy is doing very badly only adds to a problem facing our government. Barack Obama must decide if the government should prop up the car manufacturers until the economy is strong enough to withstand the loss of thousands of auto manufacturing jobs.

My guess is that the U.S. government will support the car manufacturers for at least two years. The continuing support after an overall economic recovery is doubtful. Looking at European manufacturers that have government subsides will be enough motivation to discontinue subsidies at the earliest possible date.

I received Consumer Reports annual car edition just this week. Their conclusions about U.S. auto makers is devastating. Among the top 10 in their rating the only American car was the Chevrolet Corvette. Among the worst 10 cars, eight are American made. The three lowest rated cars are American made. Even worse in the overall rating of 15 manufacturers, the American companies took 12^th, 14^th, and 15^th place. Consumer Reports takes no advertising in order to prevent their ratings being influenced so I trust their evaluations. The have no axe to grind. Just a few years ago they rated all Hyundai cars very low but this year the Genesis 3.8 model landed on that list of top 10.

Today’s report on ABC World News that an Auditor Report Warns GM Survival ‘Doubtful’ only reinforces my opinion about the survivability of the American car companies.

Backwards No, Forwards Yes!

America is not the bastion of capitalism and free markets that Republicans want you to believe. If that were the case then there would be no protection for banks, auto manufacturers, and other large companies. There would also be no protection for the money you deposit in your bank. The market place would be totally free. There would be no controls.

The U. S. federal government has come to the aid of society numerous times during our history. The Pacific Railway Act of 1862 during the American Civil War and supported by U.S. government bonds and extensive land grants is an outstanding example of government aid to private industry. The state of New York built the Erie Canal. Construction occurred between 1817 and 1825 was a benefit to commerce. U. S. price supports for agricultural commodities date back to 1933. Many other programs started during the Great Depression are still impacting our society including Social Security, rural electrification, and the FDIC.

Are Republicans really opposed to upgrading our society to the 21^st century? Their argument today is that we cannot afford the cost now. The question is when could we afford the cost? They have continually opposed all improvements. They oppose those “extravagent” expenditures on infrasructure but willingly support more money spent for defense spending. Why do they not understand that money spent on education, railroads, highways, energy, and health care makes the United States a better nation?

The problem for Republicans is that they have been high jacked by radio talk show hosts. Most of those hosts are conservatives. They are primarily entertainers that earn more money when their audience is bigger. Rush Limbaugh and Sean Hannity couldn’t be happier. They are the leaders of a group that want to keep America in a category by itself. That category is looking backwards.

America is not about helping the rich at the expense of everyone else. America is about equality and opportunity for all!