30 September 2008

Update no.354

Update from the Heartland
No.354
22.9.08 – 28.9.08
Blog version: http://heartlandupdate.blogspot.com/
To all,
This was the week we fulfilled my Mother’s last wish. With the help of Jeanne, my sister and brother, we organized a family gathering in Monterey, California, to celebrate Mom’s life and return her ashes to the Pacific Ocean. Taylor, Sherri, Jeanne and I arrived midday Thursday, to check the lay of the land, to find the spots we needed to be, and to finalize preparations. We enjoyed lunch at Bubba Gump’s Shrimp Company on Cannery Row in Pacific Grove – ‘the’ Cannery Row made famous by John Steinbeck. We visited the various sites for our planned events to validate directions, identify parking options, and note other relevant variables not previously anticipated. After accomplishment of the day’s assigned tasks, we checked into the hotel, got settled, refreshed, and then took a leisurely journey along the famous 17-Mile Drive to enjoy the magnificent scenery and see how the rich folk live . . . well, only the façade of the dwellings and grounds of their not-so-humble abodes. We putt-putt’ed along ‘the’ Pebble Beach with its multitude of stacked rock columns and caught glimpses of the famous golf course by the same name. Taylor and Sherri felt the urge to dip their toes in the Pacific Ocean on the beach at Carmel-by-the-Sea as we witnessed the Sun set behind the ever-present, offshore fog bank that enveloped the coast every evening. We savored a delightful evening meal at Clint Eastwood’s former establishment, the Hog’s Breath in Carmel. Friday, we met with Captain Dan Musker – the boat owner who would take us the legally required 500 yards offshore for the purpose of our trip – to confirm our meeting place, timing, boarding procedures, and other related formalities. We also toured Veterans Memorial Park, adjacent to the U.S. Army’s Presidio at Monterey, where our planned picnic celebration of my Mom’s life would be held. Those members of the family who arrived Friday, met at Fandango’s Ristorante in Pacific Grove for a sumptuous meal and renewal with family. The appointed day for fulfillment of my Mom’s wishes was Saturday. My sister, brother and I, along with my oldest and youngest boys plus Melissa’s daughter boarded Captain Dan’s sailboat and headed out of Monterey Harbor to Lover’s Point – the northern corner of the Monterey Peninsula. We made our peace, rendered the words significant to each of us, and I scattered her ashes in the Pacific Ocean. We added brightly colored, assorted flowers to the spot. Upon our return to shore, we gathered at the park with a couple of dozen other members of our family including Mom’s sister, cousin, and brothers-in-law along with grandchildren, nephews, nieces . . . all in all, four generations. A family picnic seemed the most appropriate venue to celebration my Mother’s life – thank you Melissa for reminding me. Melissa Louise and Melissa Sue provided the exquisite sustenance. My mission accomplished, we scattered again. Jeanne and I remained in California to visit her sister and husband, and take a few extra days just for ourselves, which is one reason this Update is late to the wire.

The follow-up news items:
-- Grand Dear Leader Umpa-Lumpa may or may not be ailing, but his cronies apparently are frustrated with the lack of attention they have been shown since they blew up the cooling tower at the DPRK’s nuclear reactor at Yongbyon [293]. North Koreans expelled the IAEA inspectors, and indications suggest they have begun reactivating the reactor.

The first McCain-Obama debate that was, then wasn’t, then was, happened Friday night as originally scheduled. Unfortunately, I had a family event at the same time as noted above, and I was not able to watch the debate. I have seen snippets as the Press decided to edit the event, and I have listened to the talking-heads pronounce one or the other as the winner. I have insufficient information to render judgment or an opinion. Next, we look to the Biden-Palin debate, which should be quite entertaining.

More history in the bad-debt, credit-crunch crisis this week:
-- The two remaining Wall Street investment banks – Morgan Stanley and Goldman Sachs – were reclassified as bank holding companies, bringing them under stricter oversight and tighter financial constraints.
-- Goldman Sachs reached an agreement to sell US$5B in perpetual preferred stock with a 10% dividend to Warren Buffet’s Berkshire Hathaway, and to sell US$2.5B in common stock to the public.
-- We learned on Tuesday about the FBI’s criminal fraud investigations into a string of companies in the headlines [352, 353] – Fannie Mae, Freddie Mac, Countrywide, Lehman Brothers, AIG . . . 26 companies in total, so far. I suspect there will be a bunch more folks going to prison and deservedly so.
-- Carving up the carcass of the once venerable Lehman Brothers continued this week. Nomura Group of Japan bought Lehman’s Asia-Pacific unit and agreed to acquire Lehman’s European and Middle Eastern operations.
-- Thursday, Washington Mutual (WaMu) took the dubious place in U.S. history as the largest bank failure . . . so far! The USG seized control of the bank and sold its assets to J.P. Morgan Chase.
-- Congress passed an unusual, six-month, US$630B, omnibus, budget extension to keep the Federal government in operation until spring.
-- Secretary of the Treasury Henry Merritt ‘Hank’ Paulson, Jr., and Chairman of the Board of Governors of the United States Federal Reserve Ben Shalom Bernanke, testified before the House and Senate banking committees, forecasting dire consequences if swift action to blunt the credit crisis is not taken.
-- Congress wrangled with the details of the so-called Paulson Plan, and various reports suggested a deal has been struck.

A couple points of amplification or clarification from my comments regarding last week’s historic events . . . depending upon one’s perspective:
1. Congress grappled with a number of mechanical issues regarding the administration’s extraordinary bad-debt absorption scheme. One of those elements was a provision to prevent golden parachutes and exorbitant executive compensation for those companies that are to be saved. I’m good with as severe a penalty as can be mustered. If there are insufficient grounds for criminal prosecution and punishment, then I strongly recommend they be shown the door with no severance or other compensation. If we need them to work, then minimum wage with 99.999% ‘at risk’ compensation for finite performance objectives seems appropriate. Why should they get more than the janitor? At least the latter did his job and did not injure the company, stockholders, customers and other disassociated citizens.
2. Business and capitalism is about risk. We need businessmen to take risks – an essential ingredient for advancement and success. Risk can be reckless. Risk also entails a constant, perpetual assessment of consequences and collateral effects. It is one thing to risk my own life riding a motorcycle or jumping out of airplanes; but, it is an entirely different risk to do the same things with a family who loves you and depends upon you. So it is in business. I do not claim comprehensive knowledge of the factors involved in this current banking crisis, but from what I do know, we had far too many bankers, from small to gigantic, who should have know better than to take such foolish risks with sub-prime mortgages to so many people who did not have the ability to sustain their debt in even a slight market downturn. The flip side of the risk balance might be best represented by bad boy Joe Stalin who banished under performing managers to the Siberian Gulag or shot them – not exactly conducive to risk taking. In our anger over what so many foolish people did to themselves, and greedy bankers aided and abetted with their blind lending, we must resist the temptation to overreact and constrain risk-taking in business; yet, we must institute some degree of safeguards to protect the innocents among us from the extraordinary damage wrought by such foolish, rampant, risk-taking.
3. The marketplace is NOT the wild, Wild West, where anything goes, survival-of-the-fittest conduct can be tolerated, like shootouts on Main Street. While the Old West tolerated such conduct for many reasons, the consequences of stray bullets in crowded cities are far too great. So, in principle, a truly free marketplace is self-regulating, just as communism is a utopian ideal where everyone is truly equal. Neither is realistic or pragmatic. A truly free market engenders the ruthlessness of the Wild West, and the potential for collateral damage is far too great. There must be rules to govern marketplace behavior just as there must be laws for Main Street conduct. Perhaps the law was commensurate with and reflective of the ‘irrational exuberance’ that marked the late 1990’s, but I respectfully submit the law did not serve We, the People, very well. The free marketplace is a pipe-dream just as much as communism is wishful thinking. We need laws to protect the innocent from injury.
4. Should We, the People, save a citizen from himself? Does a citizen who witnessed wild, irrational, escalation in home prices in California, decided he wanted some of that action, took out a 125%, adjustable-rate mortgage on a value five times the cost of replacement, and expected to flip the property in 2-3 years for double his purchase price deserve our compassion and salvation; or, a couple in Florida who bought five condominiums for business or speculation, only to find no customers? Please, let us remember where this credit crisis began – not on Wall Street, not with investment banks, not with mortgage companies – with that individual citizen sitting at a table with legal papers in front of him and an ink pen in his hand. The sad reality remains that we had millions of our fellow citizens who believed they had a foolproof get-rich scheme, who believed they could get something for nothing, who wanted a home they could not afford, who truly believed the downside could not happen to them. The banks blindly accumulated these faux-mortgages, and now the bill has come due.
5. Lots of talking-head pundit-isms regarding the USG bad-debt absorption plan were bandied about this week with words and phrases like ‘blank check,’ ‘rubber-stamp,’ ‘bailout,’ ‘blind faith,’ et cetera. We can wail about the administration’s US$700B+ rescue plan as much as we like, but that does not alter reality. We have trusted the USG with billions of Treasury dollars before, many times, and we are going to have to trust them again, to do the correct things to limit the damage and destruction looming over us in this financial crisis. Time is of the essence; action is far better than inaction considering the risks involved. We can seek retribution and deal with recriminations after the bleeding has stopped and the patient is recovering. Now is not the time to hesitate in thoughtful rumination.

All that said . . .
Is the administration’s proposed bad-debt absorption plan the right thing to do? No! Yet, in 1935, was allowing the Nazis march toward war the right thing to do? The longer we wait, the higher the price tag will be. There are two elements:
A. Credit, the life-blood of modern business and finance, has nearly been choked off, partly because of the mountain of bad-debt. The physical action of removing that bad-debt from the marketplace is essential to the necessary money-flow for vital business. And, here we have two choices: the easy way or the hard way. The only question is how much pain do We, the People, wish to endure for decisions we did not make?
B. The administration plan, by itself, will not solve the problem. I believe it will address the tangible mechanical aspect, i.e., take the bad debt off the books of banks and mortgage companies, thus infusing massive amounts of money into the system. Yet, the other critical element can only be addressed indirectly – confidence. No matter how much money is available, banks will (or should) only lend money when they have confidence they can recover their investment and make a reasonable profit in the process. Without confidence in the economy and the process, money will not be available for business or private use.
Of the two elements, the USG plan attempts to deal with Part A, with hope that Part B will come along naturally. The longer it takes to address Part A, we shall suffer an amplified time for Part B. Without both Parts A and B, we will face recession or depression. The bottom line is action must be taken – any action is better than inaction. Let’s get on with it.

A contributor provided a timely and relevant link to this article:
“What Happened to Market Discipline?”
by John Stossel
RealClearPolitics.com
Published: September 24, 2008
http://www.realclearpolitics.com/articles/2008/09/what_happened_to_market_discip.html
My opinion:
I do not agree with Stossel's presentation. Sure, the interference of government in the free market has been around for 70+ years. I do not agree that an unregulated, truly free market is self-regulating, no more than I would agree that government without checks & balances will be inherently good. There will always be greedy selfish egocentric bastards in the marketplace, just as there are megalomaniacs in politics & government. The system must be sufficiently regulated to protect citizens from the abuses of the few without constraining the reasonable risk-taking that is the life blood of business.
“That's just my opinion, but I could be wrong.”
. . . to which came this reply:
“It is a tough call. While I have strong libertarian tendencies in many things, it is difficult to well up the courage to sit idle, do nothing, and let the market solve it. Perhaps if we did, the market would solve it in time, but that is not going to happen. Something is going to be done. Unfortunately, regulations grow like weeds and where it stops nobody knows. How do you tell private enterprise how much to pay someone and not become less of a free market? Does it stop with large financial corporations? Or does it extend to small business as well? Where do we draw the line? It appears we are going to take a giant step toward the European government-market model to get out of this mess. I hope it is the right move. We all have much at stake for freedom.
“Unfortunately, this mess has taken our eye off the biggest threat we face - terrorism. But, if we do more than put a band aid on the problem and actually solve it (if we can find someone smart and wise enough to know what to do), then perhaps we can get back to fighting the war on terror to preserve not only our way of life, but life itself as we know it on this planet.”
. . . et ma réponse:
We share libertarian views. Yet, libertarianism taken to its extreme could easily rationalize no police, no armed forces, no diplomatic service, ad infinitum – every man for himself. The criterion for me remains public injury. When the actions of anyone injure another citizen, then government has a proper interest and task to perform.
You posed some interesting related questions:
1. How do you tell private enterprise how much to pay someone and not become less of a free market?
The simple answer . . . we don’t and shouldn’t. The marketplace should define compensation. Yet, history tells us businessmen of the day were quite content and happy to enslave workers, pay them a pittance for their hard labor, and literally consume human beings as an expendable commodity. Unscrupulous businessmen were/are no different from dictators, rabid clergy, or any of the myriad of megalomaniacs among us.
2. Does it stop with large financial corporations? No.
3. Or does it extend to small business as well? Yes, if appropriate.
4. Where do we draw the line?
The answer depends upon many factors, e.g., criminality, expanse, severity, et cetera. The salient element in the current crisis and proposed remedy is the potential consequences of further credit constriction and loss of confidence. We are at the edge of the abyss, just as we were in 1929. The difference today is the aggressive action of the government to stem the tide. History shall judge our performance. I, for one, have a stable mortgage, I pay my bills, and I try to treat people with respect and let others live as they wish to live. When so many others got greedy, signed foolish mortgage papers, and took on more than they should have, they were on the verge of affecting my family, my job, my welfare, my ability to pay my bills. The potential for the injury to my family by the actions of others is real. The line was crossed four or more years ago, but at least the government is attempting to limit the destruction and injury.
The bottom line for me is the damage was done 10-20 years ago, and the longer we wait to do something to reenergize the credit market, the worse and more damaging the consequence will be. Inaction will simply take us closer toward bona fide economic depression. The choice is ours.

No comments from Update no.353:

My very best wishes to all. Take care of yourselves and each other.
Cheers,
Cap :-)

22 September 2008

Update no.353

Update from the Heartland
No.353
15.9.08 – 21.9.08
Blog version: http://heartlandupdate.blogspot.com/
To all,
Before we get into this week’s extraordinary and historic events, let us remember the incredible moment in history 68 years ago. The 15th of September was Battle of Britain Day – the day when a comparatively miniscule number of British and Allied fighter pilots turned the tide of the Nazi juggernaut. We need their courage, commitment and fortitude, today.

The follow-up news items:
-- Monday, Pope Benedict XVI gave a speech in Lourdes, France, stating that people must accept death at “the hour chosen by God.” For citizens who wish to believe that Joseph Alois Ratzinger has been anointed as God’s spokesman on Earth, his words may provide comfort and solace. To me, Joe is just a man like all the rest of us; yes, he has an interesting and rather unique job. Joe can also dictate what he wishes to those who choose to accept his dictum. I am not a citizen who trusts Joe anymore than I trust Barack, John, Bob or Ralph. I defend Joe’s right to say and believe whatever he wants. I categorically, absolutely, and manifestly reject and condemn any transformation of Joe’s wants into intrusive dicta upon my freedom of choice regarding my “Life, Liberty and pursuit of Happiness.” [349A]
-- As you may recall in this forum from last winter, we noted the arrest of former Marine Sergeant Ryan Weemer [329], after he disclosed his involvement in a possible wrongful death situation during the Second Battle of Fallujah, during a polygraph examination for entry into the Secret Service. Several of Weemer’s Marine buddies were caught up as a consequence of his disclosure. Weemer and fellow Marine Sergeant Jermaine Nelson still await general court martial at Camp Pendleton, California. The news this week is the acquittal of former Marine Sergeant Jose Luis Nazario Jr., who was tried under the Military Extraterritorial Jurisdiction Act of 2000 (MEJA) [PL 106–523] [351] – a terrible application of the law. A civilian jury had to judge Nazario’s conduct in combat operations in Iraq four years earlier. We are not talking about war crimes or crimes against humanity; we are debating an unfortunate event during intense combat operations. At least Nazario obtained a reasonable outcome, if we ignore the trauma to his life by standing before the bar. The oddity in the Nazario case sprouts from the fact that MEJA was intended to plug the gap identified in Reid v. Covert [354 U.S. 1 (1957); no. 701] [351] and address the exceptions associated with contractor violence like Blackwater [305-310, 329]. But, the truly sad reality of all this, if we applied the same criteria to past wars, we would be missing many presidents, judges, congressmen, corporate executives, doctors, lawyers, and many other leaders in our communities and society. We appear to be hell-bent on applying political correctness to warfighting – a fatal endeavor. Even if we never allow our military to fight again, war will come to us, and it will be just as ugly as it always has been. We have an unprecedented ability to peer inside combat operations, virtually on a moment-by-moment basis. The fact that we do not like what we see, does not mean we should interfere and punish those who stand guard at the gates.

Thursday, I watched and listened to an amazing story on CNN – an iReport from the East Texas coast about the destruction of Hurricane Ike. The simple image they used for the report is the best place to start.
Adams House, Gilchrist, Texas, post Ike
[Adams house after Ike.jpg]
First, before anyone jumps too fast, this is truly NOT a PhotoShop’d image; it is real.
Now, to the story . . .
On 24.September.2005, Hurricane Rita made landfall between Sabine Pass, Texas and Johnsons Bayou, Louisiana, as a Cat-3 storm. The home of Pat & Warren Adams, on a spit of land known as the Bolivar Peninsula, in the village of Gilchrist, Texas, was destroyed. They decided to rebuild, which they did in February 2006, but this time they designed and built the house to withstand a Category 5 hurricane. On the 13th of September, Hurricane Ike made U.S. landfall near dead-on Galveston, Texas, as a Cat-2 hurricane, placing Gilchrist smack-dab in the danger quadrant, barely 12 miles from the center. The image above is the Adams’ home after Hurricane Ike – everything else is gone, but the Adams’ House withstood the storm’s fury.
. . . and, my observations . . .
To begin, when we first moved to Wichita, we bought a nice house near Four-Mile Creek, south of Andover. Long story short, our home flooded twice; we sold the house; and, the creek overflowed again and flooded the house. FEMA condemned the property, along with a dozen plus other homes along the creek – flooding would not improve, even though it was outside the 100-year flood plain. The same rules need to be applied to Galveston (Gilchrist), New Orleans, and all other areas prone to broad, general storms like hurricanes or floods. The Adams, their beach house, and especially the image above show us what can be done with proper construction. If you build a conventional, stud & drywall house on the beach in Gilchrist, Texas, or anywhere else, a moderate hurricane will make easy work it, leaving nothing but a slab. If a citizen accepts that risk, that is their choice, and all well & good; but, where the choices of others, to live and build in such areas, rubs me really raw comes when they expect the government – any government from village to Federal – to provide any resources whatsoever for re-construction. This is the basis of my major objection to what many believed was an obligation to rebuild New Orleans. No! They chose to live near the coast, below sea level, and I respect the choices of anyone who wishes to do so. Just do not expect the public treasury to help you rebuild. I must note that despite the construction of the house, the Adams evacuated as directed by the government. The home did sustain damage, but it is a remarkable image. In any region exposed to general broad damage, buildings must be built to withstand the risk, e.g., houses in flood zones on stilts, or Adams’ House construction in hurricane prone areas. I have no problem whatsoever if folks spend their money to live on the beach in hurricane prone areas as long as they do not expect me to pay for their pleasure. Lastly, the image says a lot about construction standards in disaster prone regions, doesn’t it?

Now, please forgive me, the urge for a rant can no longer be resisted . . . .
I am really tired of all these politicians of any and all colors chattering on about tax cuts, like little squirrels collecting nuts for the winter. Reducing Federal revenue is NOT the answer in the bright light and reality of the massive Federal debt created by Congress and the President, and the far bigger, looming, entitlement mountain ahead of us. Drastic reductions and re-allocation of Federal spending is, has been and always will be the real issue. All the yammering about tax cuts is quite simply subterfuge, slight of hand, pabulum for the masses, and smoke screen to keep us focused on the wrong thing, i.e., what is in this for me? This tax cut trash reminds me of the abortion issue – the symptom, NOT the root issue. I want to argue about where to spend limited resources, to argue about priorities as I must do virtually every day at work and at home. There never will be enough resources, and the same reality applies to the Federal government as it does to every company and every citizen. Yet, we are fooled and distracted by this foolishness of tax cuts. We are spending billions upon billions on things the U.S. Government (USG) should never have undertaken, let alone continuing the perpetual spending like a never-ending bleed. We must demand zero earmarks, zero spending not presented in a bill, debated in Congress, subjected to public scrutiny, and validated by the President as vitally necessary spending; and, even in those cases, I want to see the USG do what every state government and every household in this Grand Republic must do everyday . . . what must we give up to pay for this new things. There are exceptions as we bear witness today (see below). Further, we must eliminate all those Federal spending projects that intrude upon the lives of common citizens – wasted treasure doing what the government should NOT be doing. If you are not willing to work, you will starve and die. If you have children, we will take them and give them to someone who will care for them properly. Am I angry? Yes! Absolutely! All this garbage coming from McCain and Obama is nonsense. Redistribution of income, under any name and any process, is communism in some other guise, which has been repeatedly proven to be a failed ideology – idealistic, not realistic or pragmatic. Let us condemn such foolishness, no matter what they call it.

Since I am all fired up, one more thought. All this gibberish from both major parties about the other guy lying . . . give me a break. They all shade the truth as it suits their perceived advantage. They clip a snippet out of a sentence or paragraph, and then place that snipped in an entirely different context to make the point they wish. They spit on the voting record of the other like everything the other does is wrong – based on political party ideology or partisanship, rather that what is best for the American People. They both accuse the other of lying, and the reality is, as with all propaganda, there are elements of truth. But, please, do not shine me on that either are righteous and pure. None of them are either righteous or pure; they are all dirty. So, let’s call a pig a pig, rather than pretending our side is right and the other side is wrong. It’s crap, I tell you. And, what’s more, the War on Islamic Fascism did not begin on 11.September.2001, but at least 22 years earlier; and the current banking crisis did not begin with the Financial Services Modernization Act of 1999 [PL 106-102; AKA Gramm-Leach-Bliley Act]. So, let’s quit pretending all our woes began with W; he is not Satan incarnate.

This has been an immensely extraordinary and historic week – one for the books. In many respects, events of the last few weeks are unprecedented, far more serious than the Savings & Loan crisis of the late 1980’s, or the banking meltdown that began in 1929 and led to the Great Depression.
-- First, the huge, venerable, 158-year-old, investment bank, Lehman Brothers [net worth: US$7B; total assets: US$691B] filed for Chapter 11 bankruptcy on Monday, after feverish negotiations with several potential buyers, including the USG. They have begun selling off assets to Barclays, PLC, and others.
-- Bank of America agreed to acquire Merrill Lynch for US$50B in stock. The acquisition joins Bank of America’s earlier acquisition [1.7.08 (11.1.08)] of the troubled mortgage giant Countrywide Financial Corp. for US$4.1B in stock.
-- After backing away from helping Lehman Brothers, the USG put up US$85B as a loan at 11.3% interest for an 80% stake in American International Group, Inc. (AIG) – one of the largest insurance companies in the world and the 18th-largest company in the world.
-- The Federal Reserve Board of Governors decided to leave interest rates ‘as is,’ citing their continuing concern about inflation and the stress of the money market liquidity crisis.
-- The central banks in Europe, Japan and the United States agreed to work jointly to stabilize the international credit markets by injecting US$180B into the banking system. Even Russia injected Rub500B (US$20B) into their marketplace.
-- New York Attorney General Andrew Mark Cuomo began a comprehensive investigation into potential criminal activity by short sellers, alleging they planted false rumors about the stability of Morgan Stanley and Goldman Sachs – the two remaining independent investment banking companies – to make money on the resultant falling stock price. Then, at the end of the week, the USG reclassified both investment banks as holding companies to allow direct deposits and other financial actions not otherwise available.
-- Wednesday, The top executives of the big three U.S. automakers met with House Speaker Pelosi and Democratic congressional leaders in an effort to obtain US$25B in USG loans authorized by the Energy Independence and Security Act of 2007 [PL 110-140] but not yet appropriated – probably necessary but odd timing.
-- Thursday evening, a comparably extraordinary, joint, public announcement by Treasury Secretary Paulson, Fed Chairman Bernacke, SEC Chairman Cox, House Speaker Pelosi, Senate Majority Leader Reid, and assorted congressional committee chairmen, proclaimed Federal action for relief of the money market liquidity crisis.
-- Friday, SEC issued a ban on short trading of 799 companies to curb the speculative volatility that has contributed so much to the wild fluctuation in the market place from oil prices to the value of companies and associated credit ratings (the ability to raise funds).
-- As we close the week, the USG is working aggressively to form a process by which the Government absorbs all the banking system bad debt to allow more liquidity and hopefully raise confidence in the stability of the financial system. The administration has requested that Congress allocate US$700B for the debt acquisition scheme.
-- All in this week alone --
We had warning signs . . . just like we had warnings before the Germans invaded Poland, before the DPRK invaded the RoK, and before al-Qaeda attacked the U.S. Homeland. We chose to ignore the warnings and pretend everything would get better on its own. Well . . . surprise, surprise! Two financial cases, among so many in the last 20 years, come to mind. On Tuesday, 26.February.1995, Barings, PLC – a 233-year-old, family, merchant bank and the oldest commercial bank in London – failed due to the actions of one employee –Nicholas ‘Nick’ Leeson, who traded and lost a massive derivatives position totaling £827M (US$1.4B), more than the bank could cover. Even Queen Elizabeth II suffered loss in the collapse. The other case was that of French short trader Jérôme Kerviel, who caused the loss of €4.9B for his employer, Société Générale, SA, on Monday, 21.January.2008. We called them rogue traders – anomalies – but, we know now they were the canaries in the mine. They represent the failure of a financial system to protect stack holders, customers, and uninvolved citizens from the consequences of rabid greed. [Just a quick side note: please compare the size of the numbers involved in my examples with those in the upper part of this section.] At difficult times like these, we must take the long view . . . keep our eye on the horizon, as pilot’s say. We see dramatic, unbelievable events on Wall Street. The vast majority of this Grand Republic churns on. The USG’s tasks . . . contain the damage, prevent spreading, and destroy the cancer that caused this nightmare. The Enron debacle pales to insignificance in comparison to what happened this week. So much of the national and international economy depends upon confidence. When doubt spreads, people withdraw from the market, money dries up, growth stops, and virtually all aspects of the economic fabric contract or collapse. We have seen what speculators can do to the base price of a barrel of oil; what should be roughly US$60/barrel, they inflate to US$150/barrel is short order on what is condoned economic gambling. What these speculators, short-sellers, derivative traders, and other ne’er-do-wells did is no different from what Usama bin Ladin and his al-Qaeda cronies have done for the last 20 years – they have injured or killed innocent people by their selfish, egocentric, monetary megalomania. We should treat speculators as we treat any enemy of the State. While we are at or near the cusp of a monumental change and I am rarely in favor of government intrusion into the market place anymore than into private homes & families, yet this unprecedented Federal action has become a necessary evil. If the economic engine slows, our warfighting capacity decreases, and regardless of what happens at home, we remain in a serious War on Islamic Fascism. This week was the 9/11 of an equally serious and threatening economic war against speculators. Capitalism is inherently good, but like any other human activity with no moral or legal constraints, it can readily take on a destructive character.
P.S.: Next week is likely to be historic as well.

Paul Krugman said, “There are no atheist in foxholes, and no libertarians in a financial crisis.” We have heard the first portion before. The second portion seems appropriate and applicable.

Comments and contributions from Update no.352:
“Hi, haven't had much time to correspond of late, the [Royal British] Legion absorbs most of my mental and physical energies! I retire from that in January except for my local work, I then must get on with my writing which has suffered badly for three years. That little piece I sent you was just bit of fun. Such people exist though I'm sure.
“We've lost three men in the Middle East this week. Will the work of veteran's organisations ever be done?
“Read the item re your Mom, it's a subject that rises above the parapet quite regularly over here, especially when those dying are carted off to a Swiss clinic where it appears to be legal. My own father died an inhuman death to cancer. We never discussed the subject but if he had been my dog.....”
“PS, please get on with your blasted election, we're feed up hearing about it over here.”
My reply:
We colonialists are equally as tired of our ‘blasted election.’ Unfortunately, painfully, this is the American way. Even more regrettably, this particular election will go down as the longest in history.
Tending to veterans’ affairs is never easy, and I especially understand what they have been through. Keep the faith, my friend.
It seems many of us share the same opinion regarding Death with Dignity. You noted the salient point; we are not allowed to show our closest family members the dignity we give so freely to our ‘other family members.’

Another contribution:
“Let us hope that law enforcement nationwide learned a good lesson from the St. Paul police and undercover operatives. The nutjobs failed in their attempts to ruin the Republican convention. We will see.
“The bailing out of the mortgage firms is different from Chrysler in that they are more government than private firms as you note in your label of pseudo gov’t agencies. Let us hope the bailout succeeds for all of us. But, I remain troubled about bailing out private firms for profit. The behavior of private firms is regulated by the marketplace. If you can fail without the consequence of closing your doors, the free market loses in the end. On the other hand, the size of the failures is mind boggling in some cases as noted today, Monday, Sep 15. We will see how and when common sense emerges.
“The only way to win the war on terror is to eliminate the terrorists. The only evidence needed to note we are in danger is to pay attention to terrorists being set free to terrorize again. Fear has found its way to court. These are dangerous times.”
My response:
We are a long way from perfect, but we have learned from our enemies. The coordination between Federal, state, and city agencies is far better than it was just a few years ago.
Oh, I do share your apprehension, indeed. As sad as it is to see venerable companies like Lehman Brothers cease to exist, it is a natural course of business – you live by the sword, you die by the sword. Their greed got ‘em.
Ditto on the way to wage war successfully. I continue to search for the balance between war & justice, between warfighting & law enforcement.
. . . a follow-up:
“As far as I'm concerned, the balance between war and justice is when war is won and justice is served.”
. . . and my follow-up reply:
Amen. Unfortunately, the American Judiciary and the not-so-loyal opposition do not see it the same way, and therein lays the rub.
. . . lastly:
“The not-so-loyal opposition's inability to grasp the obvious is what gets good people killed...enough said.”

A different contribution:
“Regarding the arrests in St Paul at the RNC- while they might have tightened up on the would-be anarchists, the St. Paul police also arrested a large number of peaceful demonstrators and press members. There has been strong criticism of the police - particularly in blocking off streets for demonstrators and then demanding that they disperse-- they had no way of doing that and were hemmed in and arrested. I have read where former and active police from other cities strongly criticized the over-reaction—especially compared to what happened in Denver at the DNC. (Where at least two would-be assassins were arrested.) There is now a review being undertaken in the Twin Cities over the reaction.”
My response:
True. Yet, peaceful demonstrators and journalists among the rowdies deserve to be caught up; they chose to associate with the unlawful ones. They were also sorted out rather quickly, as I recall. I am not seeing the over-reaction. We do have a constitutional right of assembly, but there is no amplifier protecting assembly anywhere, anytime and under any conditions they wish. Public safety draws the line. I would hope to shout St. Paul as well as Denver are examining their actions, to learn and document what worked and what did not. When anyone, from Fred Phelps to the RNC Welcoming Committee (RNCWC) or the Aryan Nation, decides to disrupt another group’s lawful assembly, then the State has an interest in constraining disruptive assembly or activity. Overreaction perhaps, but I’m not convinced.

My very best wishes to all. Take care of yourselves and each other.
Cheers,
Cap :-)

15 September 2008

Update no.352

Update from the Heartland
No.352
8.9.08 – 14.9.08
Blog version: http://heartlandupdate.blogspot.com/
To all,
We remember our Day of Infamy seven years ago, as the War on Islamic Fascism continues. The presidential candidates put politics aside for a joint remembrance in New York City. Lest we ever forget . . .

The follow-up news items:
-- Two years ago, history recorded the arrest of a score plus of British citizens, accused of planning a massive bombing campaign against trans-Atlantic airliners, using liquid explosives [244]. This week, three of the eight conspirators, tried for terrorism crimes, were convicted of lesser crimes; four were found not guilty, and one had the charges dropped. A series of contrasting newspaper reports acknowledged this week’s event.
1. – “Three of Eight Men Found Guilty in ’06 Bomb Plot”
by Reuters
Published: September 8, 2008; Filed at 11:48 a.m. ET
http://www.nytimes.com/reuters/world/international-britain-plot.html?_r=1&hp&oref=slogin
2. – “Police in crisis after jury rejects £10m terror case”
by Sean O’Neill, Security Editor
The Times [of London]
Published: September 9, 2008
http://business.timesonline.co.uk/tol/business/law/public_law/article4710879.ece?&EMC-Bltn=PMVHI9
3. – “No One Convicted of Terror Plot to Bomb Planes”
by John F. Burns and Elaine Sciolino
New York Times
Published: September 8, 2008
http://www.nytimes.com/2008/09/09/world/europe/09london.html?_r=1&th&emc=th&oref=slogin
4. – “Airliner bomb trial: Three British Muslims guilty of conspiracy to murder – Three British Muslims who were accused of plotting the world's biggest terrorist atrocity have been found guilty of conspiracy to murder.”
by Duncan Gardham and Gordon Rayner
The Telegraph [of London]
Last Updated: 12:53AM BST 09 Sep 2008
http://www.telegraph.co.uk/news/uknews/2706494/Airliner-bomb-trial-Three-British-Muslims-guilty-of-conspiracy-to-murder.html?DCMP=EMC-new_09092008
One sentence in report no.2 above represents a far more ominous reflection of our collective ability to execute the War on Islamic Fascism. O’Neill wrote, “The jury’s indecision in the face of a detailed Crown case raises questions about the public perception of the terror threat that could undermine government attempts to introduce further security legislation.” We have discussed that perception many times in this forum. From my humble perspective, a jury in England returned enemy warriors to the battlefield to look for other opportunities to kill innocent people. Sadly, the reality will suck down precious law enforcement and intelligence resources to keep track of them. Lastly, I ask you to take note of the titles of each article about the same event. Perspective!
-- Anarchistic activity outside the Republican National Convention (RNC) [350] drew some Press attention, but never reached the levels of the 1968 Democratic National Convention. I urge you to read the following essay for several reasons: 1.) to see the potential of what might have happened, and 2.) to learn of a success in combating domestic terrorism.
“The Lessons of St. Paul”
by Fred Burton and Scott Stewart
Strategic Forecasting, Inc.
Published: September 10, 2008 1946 GMT
http://www.stratfor.com/weekly/lessons_st_paul

The trial of the airline bombers (noted above) shocked the British government and certainly stirred the hornet’s nest. The five-month prosecution did not achieve the expected and what some believed inevitable result. Some are calling the case, Great Britain’s O.J. Simpson trial – the 1995 criminal version (since there are so many) – because of the jury’s conclusion in the face of monumental, definitive, factual evidence. We do not have access to the evidence presented or the body of intelligence collected against this network, except as reported in the Press. The Crown Prosecution Service has begun (what we Marines call) an After-Action assessment, and a fair amount of attention is being directed at the judge – The Honorable Mr. Justice Sir David Calvert-Smith, QC. As the British government analyzes the investigation and prosecution of these jihadistanis, we all need to pay attention for many reasons, not least of which is guidance necessary for future prosecutions. Like similar cases in the United States, this episode lays at the fringe of a misty boundary between justice and warfighting. The case also illuminated tension between the British and American governments. The catalytic event centered upon Rashid Rauf – a 25-year-old male with dual British-Pakistani citizenship and an alleged al-Qaeda operative – who was arrested on 9.August.2006, in Bhawalpur, Pakistan. The following day, fearing exposure of their investigation, British security services rounded up a couple of dozen individuals in the United Kingdom, on terrorism charges. Some public information suggests that Rauf’s arrest by Pakistani security services had been ‘encouraged,’ perhaps even forced, by American intelligence operatives and against the objection of British intelligence. Obviously, much of this aspect of events remains on the dark side beyond public scrutiny, but the conflict is certainly understandable and predictable. Let us assume the limited, foggy, Press rendition is precisely true and accurate. The Americans presumably wanted to neutralize a senior al-Qaeda operative and to interrogate Rauf for more intelligence to aid the warfighting task. The British had numerous citizens under surveillance in England who were plotting grievous attacks and wanted to ensure ironclad prosecution that would remove the homegrown jihadistanis permanently from public threat. If the assumption and hypothesis are correct, the case may well be the best example to date of the clash between war and justice. The outcome of the British jihadistani trial is certainly disappointing for a host of reasons; yet, the case will hopefully serve as a marker or progression toward dealing with future Islamic fascist terrorists caught in the law enforcement net, as opposed to being captured on the warfighting battlefield. As a side note rather than a postscript, Rauf escaped from his Pakistani guards and remains at large.

I do not usually become engrossed in judicial procedure – conclusions, yes, but not process. However, a judge’s ruling in San Diego caught my attention for several reasons. United States District Judge Roger T. Benitez, Southern District of California, wrote a 23-page decision denying the defendants’ motion to dismiss in Johnson v. Poway Unified School District [USDC CASD case no. 07cv783 BEN (LSP) (2008)]. Within the school district in San Diego County, Westview High School mathematics teacher Bradley Johnson filed suit claiming his constitutional rights had been violated. For 25 years, Johnson displayed a set of personal banners in his classroom:
In God We Trust,”
One Nation Under God,”
God Bless America,”
God Shed His Grace On Thee,” and
All Men Are Created Equal, They Are Endowed By Their Creator.”
On 23.January.2007, Westview Principal Dawn Kastner told Johnson that his classroom signs had to be removed since “his banners were impermissible because they conveyed a ‘Judeo-Christian’ viewpoint.” Judge Benitez noted, “The banners do not quote from the Holy Bible, or books of other particular religions such as the Jewish Torah, the Islamic Koran, the Mormon Book of Mormon, the Buddhist Diamond Sutra, or the Hindu Bhagavad-Gita.” Judge Benitez also observed that Principal Kastner allowed Buddhist, Islamic, and Tibetan religious viewpoints to be espoused and displayed. First, based on the Judge’s opinion regarding the motion to dismiss, I hope the superintendent of schools is smart enough read the handwriting, and he settles the case with an sincere apology to Bradley Johnson and an admonishment to Principal Kastner. Second, this foolish case serves as a brilliant display of the thin intellectual façade covering the silliness of political correctness. As much as I harp on the necessity for the separation between church and state, we can see in this case why many Christians look passed the long-held principle of American government to an attack on religion and specifically their religion, as illuminated in the Johnson case. Judge Benitez struck resonance with his observation. Bradley Johnson’s classroom banners did not come from the Bible or any other religious text; they came from American history. If this case does not proceed in court, I hope our friends in San Diego will let us know the final outcome.

The governmental economic action last week to rescue the mortgage giants from bankruptcy produced this exchange from a regular contributor to this forum, yet from a different network.
“Yes, the e_CON_omists have advised our president that the good thing to do is bailout the Mae & Mac.
“Let me get this right: Millions of unqualified (risky) debtors financed homes they used little or phony docs on. The homebuyers did not bother to forecast or factor that their mortgage payment would double in five years. Hundreds of thousands of realtors, homebuilders, mortgage brokers and lenders allowed greed to drive their values, principles, mission and P&Ls. So because of collective gross stupidity and misconduct, we who did not make the mess now are assigned the task of shoveling the mess.
“Some prognosticators are stating this will cost USA taxpayers at least $200 billion. Divide that among taxpayers, it is well above $1,000 per person.
“Our country's economy has been based on free-market dynamics. When the government is bailing out and nationalizing the two largest mortgage providers (already backed by GOV), it makes you wonder whether we are going old Soviet style right here at home.
“United Airlines had a big scare today. Someone (or a group?), leaked falsely, that United had declared bankruptcy (that would have been the 2nd time). It hit the 'net, and trading was shut down. I have a friend who is a captain for United. He has had to endure years of gross mismanagement from brown nosing appeasers to their own pockets and institutional stockholders, selling out future success for short-term performance (a set of metrics that don't measure employee morale or customer satisfaction). So my question to Mr. Bush is since so many employees jobs are on the line at United, can he arrange for a bailout of United too? Why not bailout the thousands of business owners who fail every year, some because of Wal-Mart and cozy deals made between politicians, transnational corporate chieftains, and the Chinese?
“While we are trying to install democracies in Afghanistan and Iraq, while our Great Republic is transforming select businesses into nationalized entities, why don't we reboot and get it right at home?
“It was most entertaining to watch CNBC business outlet this morning. They had many so-called analysts talking positive (I bet these guys/gals are like expert witnesses, they get paid to sing pretty songs) about the bailout of Fannie Mae & Freddie Mac. They were saying we have hit bottom, it is all getting better from here. They were telling folks to get back in the markets. They said this is good for America. They did not mention that you and I will have to fund the $200+ billion bailout, and that you and I had no vote in the matter.
“Speaking of mortgages, on real estate, CNN profiled a house in Stockton, California, it sold for $295,000 just 3 years ago. The owners lost it through foreclosure. It is now being offered for $29,000! The catch: thieves tore apart many of the walls, stole all the copper out of the home. The foreclosure rate in Stockton is up 500% from just last year. I'm sorry, the good times are here, let's party hard and chant for our sports team, because when in Rome, do what the Romans do.
“The presidential candidate that would get my attention would be the one with the slogan and campaign promise of: SINK or SWIM. If the government cannot regulate the lenders to the degree that billions were lent to those that should not have received loans, then let all of them fall, and let the dominos follow. That would be truly too laissez-faire and too capitalistic to allow to happen in America, land of irrational exuberance. Covering up incompetence via selective bailouts, is going to sink the country.”
. . . to which was followed:
A link to this article:
“The Greatest Bailout of All Time”
by Martin D. Weiss, Ph.D.
moneyandmarkets.com
Posted: 25.August.2008
http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=2125
and . . .
“If you want to see the graphics, you'll need to link over to the source URL I've provided. It would be most interesting (if it has not already been done), for media to ask Obama, McCain, Biden, and Palin, what their position is on the bailout.”
Being who I am, I had to add . . .
A few thoughts from my humble, lay perspective . . .
The collapse of Fannie Mae or Freddie Mac (like Bear Stearns) would be the early dominoes in a cascade. At an earlier time, I reluctantly supported the first corporate bailout (to my knowledge) – the Chrysler Corporation Loan Guarantee Act of 1979 [PL 96-185] – signed into law in the waning days of the Carter administration. I argued both ways during that time. We could debate, with today’s hindsight, whether that Federal action was a positive move. The latest, and I suspect not the last, bailout saves two, quasi-governmental, mortgage companies from insolvency. The reality in each case, including the earlier Bear Stearns deal, remains Federal intervention to avoid a crisis of confidence in the money markets and preserve necessary liquidity. I will argue that the current banking crisis originated in the early 90’s, after the Savings & Loan debacle, the collapse of the Soviet Union, and our selective ignorance of the explosion of Islamic fascism, led to what Alan Greenspan called ‘irrational exuberance,’ in the dot.com boom and concomitant housing bloom. People became convinced there was no limit. They could get not just something but gobs of money for nothing; they just had to jump into the rushing torrent . . . sign up to home loans for 110 to 125% of a fictitious, inflated, home values, or for ‘investment’ properties they could not support. Revenue minus expenses is a simple equation that has remained the same since our ancestors created money for trade. Fannie Mae, Freddie Mac, Bear Stearns, IndyMac, et al, are symptoms, not the disease. The root cause rests squarely with the individual citizens who signed those loan papers, thought they could get something for nothing, and truly believed they were immune to market forces. Allowing the mortgage giants to collapse would adversely affect several orders of magnitude more citizens, including those of us who did not allow our greed to color our rational decision-making. So, we can rail against the massive Federal bailout, or we can quietly thank our lucky stars the government did what had to be done. If we wish to cast blame, let us place it where it rightly belongs – at the root.
As always, “That’s just my opinion, but I could be wrong.”

We received no comments or contributions from Update no.351.

My very best wishes to all. Take care of yourselves and each other.
Cheers,
Cap :-)

08 September 2008

Update no.351

Update from the Heartland
No.351
1.9.08 – 7.9.08
Blog version: http://heartlandupdate.blogspot.com/
To all,
When we act in a partisan way, people respond to us in a partisan manner. Genuine leadership involves inspiring all people – of all backgrounds, experiences, and the vast array of social factor combinations – to support and perform to a common objective. We have been subjected to too many years of parochial partisan political tripe. Continuing down their chosen path of division rather than union will not heal the wounds or yield the strongest republic we can be. Jamming one ideology or another down the throat of every citizen is NOT what this Grand Republic has been about; and, history shows us a republic can only exist when there is broad compromise to achieve a stable, moderate state. Once militancy takes hold, division becomes perpetual. The political parties of any color are so calcified and caught up in their own dogma, they find it virtually impossible to embrace other opinions and seek compromise. The Founders did not envision a republic of polar extremes in constant combat for the hearts and minds of its citizens, but rather a forum of freedom and Liberty where contrasting ideas and concepts can be debated and mutual compromise attained. Our history documents the tragic devastation brought on by the conflict of hardened ideologies. My generation and those behind us have born witness to contemporary calcification. Perhaps it is time for a revolution, or at least a leader who can help us rise above slash-and-burn politics.

The follow-up news items:
-- No sooner had Sarah Palin been announced as the Republican vice-presidential nominee [350], the blogosphere speculation bloomed regarding her youngest son. What was a mother of five doing, running for vice president? What about her infant son? Why was their oldest daughter holding the baby? Was it hers? In an attempt to get ahead of the story, the Palin’s publicly disclosed the pregnancy of their 17-year-old, unmarried daughter. I shall not prolong this topic other than to acknowledge the reality. I condemn politicians, political operatives and the Press who dredge into private family affairs for parochial partisan gain (see opinion above). Choices their oldest daughter made are absolutely no business of ours or the silly season.
-- Hurricane Gustav [350] made landfall on the U.S. Gulf Coast in South-central Louisiana Monday morning. Those of us fortunate enough to live on the Great Plains in Kansas felt the outer bands of Gustav on Wednesday morning. The storm did not intensify as Katrina did or do the damage anticipated. The evacuation of the south coast of Louisiana and New Orleans was reported to be the largest such event in history, involving more than two million citizens. Then, we hear foolish people claiming they were disappointed by the lack of serious damage and will not evacuate the next time . . . that is the face of stupid.
-- It is now official for the other guys and the slate for the fall election is complete. Congratulations to Senator John Sidney McCain III of Arizona [90, 326, et al] and Governor Sarah Louise [Heath] Palin of Alaska [350], who are the Republican Party candidates to lead the Executive Branch of the United States of America.

Of all the sentences in all the speeches over the last two weeks, perhaps the one that may mark this election was actually a laugh-line. Palin said, “Do you know the difference between a hockey mom and a pit bull? (pause) Lipstick!” Her delivery was masterful. Now, we must get down to the hardball of a certainty – the next President of the United States of America will be elected on the first Tuesday of this coming November. The real test for both Barack Obama and Sarah Palin will come in the approaching live debates, where there are no written and rehearsed speeches or Teleprompters. They both deliver impressive speeches, but can they truly communicate for connection with citizens in the midst of spirited opposition? Biden and McCain are old hands at public debate, and will be formidable adversaries. Another memorable line from the RNC extravaganza this week came from former presidential candidate, Mayor Rudy Giuliani – “Change is not a destination, and hope is not a strategy.” Pretty good words, I’d say. However, the real challenge for us common citizens remains, who will deliver the change we need?

OK, so no nibbles on the Planned Parenthood vidclips from last week [350]. With your indulgence and you can always just stop reading, I shall launch off on my argument for better sex education of our children. The Sarah Palin kerfuffle offers up an appropriate opportunity. So, here we go. Contained within the Balanced Budget Act of 1997 [PL 105-33], the Abstinence-Only Education block grant program, which included the controversial Community-Based Abstinence Education (CBAE) program [308], emphasized abstinence-only sex education in pubic schools. Abstinence-only sex education has been one of many moral projection laws favored by social conservatives, the uber-Right, and fundamentalist Christians. In fact, as more than a few religious fundamentalists of several faiths endorse, I support their advocacy of sex only for church-sanctioned, married, monogamous-‘til-they-die, heterosexual relationships, and even then for procreation-only. Where I go cross-wise with anyone from strict, fundamentalist Christians to avid polygamist Muslims comes when they define for all the rest of us what is moral conduct, or proper private behavior, or what choices in Life are acceptable and which are not. And, I am jacked up to a new level of anger when these preachers who denounce anything but abstinence until married adulthood, concurrently if not directly, condemn our children to fumbling around in awkward exploration or make them vulnerable to being victims of humongous quantities of peer pressure to experience what they see as acceptance, only to find themselves pregnant or an impregnator. Sex is a natural, normal, important and healthy physiological life function. Parents must teach their children what they feel is proper and responsible, and respect the right of other parents. On the inverse, they must not project their bias, beliefs, preferences or wishes on other parents. I would like to think Bristol Palin and Levi Johnson made a conscious, considered decision to bring a new child into this world. However, I suspect [I do not know] that one or both of those young folks figured it would not happen to them, that they could defy biology. I would truly hate to think either one of them did not know how things work. At a personal level, I prefer to have all the facts – good, bad or ugly – and make the best informed decision I can. Our kids were raised with that approach. Now, in all candor and full disclosure, I am NOT saying we taught our children properly about sex, but we did try. I see this foolish, abstinence-only policy as a serious restriction upon the facts to which our children have access. Our task as parents, it seems to me, rests in helping our children understand those facts and to make the best, informed decisions for themselves. I could argue that the facts should be taught in school, and parents should teach their children about relationships and how to make proper decisions regarding the facts they have learned. The Planned Parenthood vidclips may be a bit silly for such a serious topic, but at least they are making an attempt to inform young folks.

A timely, related Op-Ed article for your perusal . . .
“Let’s Talk About Sex”
by Charles M. Blow
Op-Ed Columnist
New York Times
Published: September 6, 2008
http://www.nytimes.com/2008/09/06/opinion/06blow.html?th&emc=th
Please note the graphic included in Blow’s Op-Ed column – quite illuminating.

In my continuing effort to understand the law related to the War on Islamic Fascism, I read an oft-cited Supreme Court case – Reid v. Covert [354 U.S. 1 (1957); no. 701]. The ruling prohibited the trial of Americans outside the United States from being tried by military court-martial or tribunal. I asked a former Marine JAG officer and classmate of mine how the case related to current law, policy and procedures for Americans accused of crimes on U.S. military bases, aircraft or ships in foreign countries. I am not at liberty to convey his response, but I would like to share my reply.
My interest in the Covert case comes from the citation of that ruling in several of the detainee cases.
al-Marri v. Wright [4CCA no. 06-7427 (2007)] [288]
Boumediene v. Bush [552 U.S. ___ (2008); no. 06-1195] [340]
al-Marri v. Pucciarelli [4CCA no. 06-7427 (2008)] [346]
et cetera.
If a crime is committed on a military base, ship or aircraft, located in a foreign country, does not the U.S. retain civil judicial jurisdiction? I understand the local jurisdiction for crimes committed off-base, in-country . . . other than in combat operations. The issue in Covert was a capital crime committed on base by a dependent, American citizen.
The difficulty I continue to wrestle with is the prosecution of crimes committed outside the U.S., yet tried in Federal court, and the reflection upon cases like Mohammad Munaf, John Walker Lindh and their ilk. The established rules of evidence and criminal procedure become extraordinarily difficult to execute in cases occurring outside the U.S. and closer to or contained within combat operations. I understand and appreciate Covert’s finding that criminal trial of American civilians by military court-martial presents significant constitutional concerns. Yet, such judicial ambiguity cannot be a rationale for failure to prosecute. It seems to me as the global community becomes more intimately intertwined, this issue must be reconciled. Not least of which, my motivation . . . handling of American citizens in treasonous activities beyond the border.
My lay reading of the Military Extraterritorial Jurisdiction Act of 2000 (MEJA) [PL 106–523] would suggest that certain contractors – those employed by DoD, rather than DoS – are covered, and crimes committed in other countries, not prosecuted by the host nation, are subject to Federal prosecution in the U.S. If correct, why isn’t it happening? Also, is there a separate law covering DoS, CIA, or other agency contractors? Also, MEJA § 3267 (2) appears to close the gap created by Covert; is that correct? However, as we have discussed, we still have considerable ambiguity associated with words like ‘combat,’ ‘battlefield,’ ‘enemy,’ ‘combatant,’ ‘torture,’ and such. MEJA does not help with even the inverse of that issue. I am not aware of any pending legislation to rectify that ambiguity.
My query focus rests upon the fringe of modern combat involving Americans in extra-national organizations in combat or combat support roles against the United States and/or its Allies. Associated with that focus are the related issues of battlefield captives, detention, interrogation and such. The law appears to be in a reactionary mode because existing legislation has not kept up with the mutating battlefield in the War on Islamic Fascism. Abu Graib and Guantánamo may be catalysts for the judicial reaction, but this convulsive action is hardly efficient in support of current warfighting exigencies.

Comments and contributions from Update no.350:
“On a continued note, I really enjoyed your open letter. I don’t know if the law will ever be changed living in Kansas but all we can do as civilians is speak our minds. I would be interested to know if you get any serious responses from anyone or will it be a canned response letter.
“What are you thought on the DNC speeches, especially Barack? What are your thoughts on McCain’s choice? We can all read between the lines with his choice but I will be curious to find out whether it works on the American public or not.”
My reply:
I doubt the law will change in Kansas, either; but, I had to try. I’ll let you know if anything turns up as a result. There is always hope.
Barack, et al . . . pretty good; great show. He is always good with the speeches – an important attribute for a President, and a refreshing change from the suffering of the last 8 years. As I wrote in last week’s Update, McCain’s selection of Palin is really ballsy, typical for him – an “all-in” gamble – a very political selection. He’s going after a chunk of Hillary’s followers. I’m not too partial to Palin’s social politics. I selected for the war last time, and my choice has pained me relentlessly. The key factor for me this time will most likely be Supreme Court nominations. I believe McCain is pandering to the social conservatives, the uber-Right and fundamentalist Christians to get elected; and, his selection of Palin contributes to that effort. I believe, but now I must hope, that he will moderate back toward the center once elected. My apprehension rests in trusting him to make that move . . . a ‘trust me’ position with which I have no assurances whatsoever; and, I cannot suffer another 4 years like that last eight. So, for me, anything is possible at this point . . . even Bob Barr, the Libertarian candidate.

Another contribution:
“Let's hope the Dems stick to that cease-fire promise. I'm still floored by the comments of Michael Moore and the Fowler guy, the former DNC head, saying there must be a God since Gustav is hitting the USA at the same time the GOP convention is taking place. Is their hatred of Republicans so all-consuming that the suffering of so many people doesn't bother them. They can say they were joking all they want, but I still find comments like that insensitive and disgusting.”
My response:
Hadn’t heard those comments directly, but actually not surprising. Some folks are so blindly and rabidly politically parochial; they see nothing other than their narrow electoral ambitions. As you well know, some folks in both parties have NO class whatsoever. I condemn such nonsensical yammering.

A different contribution:
“All I can say is that I am glad the conventions are over. Let’s get down to the debates. First off, Giuliani is a complete ass. What’s up with the snide remarks during his speech. It is so juvenile and it made him look like more of dick that he already is. But the Repubs there played right along and cheered him through. Palin did ok but she also had some snide remarks. But then McCain speaks last night and takes the opposite approach and actually praises Obama at one point. So is this good cop, bad cop. What the F. Oh yeah, and was McCain in the military? I almost forgot. Oh, he went to Vietnam. Holy shit, I haven’t heard that story before, why don’t you tell it to me....AGAIN! Obviously I am not criticizing him for serving our country but is that what they are going to cling to? And hear is an interesting thought I had last night. How many Vietnam Vets do you know who actually like to talk about their experience in Vietnam. Exactly! None. So it’s ok for him to do it?
“And here is my final thought. Unfortunately we have to look at the VP’s this time and being a very important figure because both Presidential Candidates could literally be one breath away from dying once they get into the White House. McCain because he is old (and I am not pulling that card but it is true) and Obama because he is black and some asshole might want to pull an MLK on him. Sad to say but it is true. So my question is, is Palin really ready to lead this nation? I will let you answer that.”
My reply:
Politicians sniping at each other . . . that’s what politicians do. They stretch the truth in their favor and diminish the truth for their opponents. It is one of many tragedies in our political system. Rarely is there a candidate who can rise above the Party rancor. If we look passed the dogmatic rhetoric, both sides are the same coin. Obama has moved left, pandering to the socialists and uber-Left. McCain has had to move right and take up more strident social positions to gain the nomination. What we saw last night was some of the same, but also an attempt to move back to the center and the world of compromise & negotiation. I would respectfully suggest that everything the Republicans did this week diminishing Obama-Biden, the Democrats did last week diminishing McCain-XXX. And, we shall be treated to two more months of this political bullshit. I freely admit my admiration for McCain, largely because he has defied the Party bosses and sought bipartisan deals:
McCain’s interrogation and denouncement of Rumsfeld [127]
McCain’s condemnation of the Federal Elections Commission [146]
McCain-Nelson Compromise on judicial appointments [181]
McCain-Feingold campaign reform [183, 290]
McCain’s anti-torture bill [205]
ad infinitum.
I am watching Sarah Palin, critically. I like her confidence and oratory skills – quite admirable, actually; she impressed me as Obama impressed me four years ago. I need to see her in a free-for-all Press conference with hostile journalists or in an open debate with a worthy adversary. I’m looking forward to the Biden-Palin debate more than I am the Obama-McCain debates. I have not made my judgment, as yet; none of the candidates have won my vote, yet. But, I am impressed with McCain’s “go for broke” gamble on Palin. So far, she has done nothing to disqualify herself. Conversely, I do not buy the ‘Obama is not qualified’ garbage the other side is spewing, either. He made it through the primaries against a formidable and worthy adversary; he is qualified. Where this election will hang for me is their selection criteria for Supreme Court justices. McCain has had to pander to the uber-Right and evangelical Christians to such an extent that he has gone too far right, and as much as I admire John Roberts, Sam Alito and my popular foil Antonin-the-Impaler, we cannot tolerate another federalist, who places the Federal government over the individual and sanctions even deeper intrusion into our private affairs; we have gone miles too far down that erroneous path, so far down that road we may not be able to return to a proper, stable relationship between the State and the free citizen, between public and private.
IMHO, FWIW, the best possible state or choice will be the candidate who tries to make sure all parties are equally pissed off. I liberally condemn all sides and anyone who cannot turn their back on the parochial political party dogma and seek solutions of compromise, and if not mutual support, at least comparable resistance. I want a candidate of the middle, who can go left or right depending on the issue, and refuses to be pushed too far to the Left or Right. I want a candidate who will defend a citizen’s fundamental right to privacy and really delivers small, less intrusive government. For the last bunch of decades, all we get is bigger and bigger government with faint tinges of blue or red depending on the wind.
Here’s a revelation . . . Bush 43’s far-Right, big government scares me far worse than the Democrat’s far-Left, big government. If I truly thought McCain was actually Bush III rather than the parochial political drivel from the Democrats, he would not get my vote. Taylor warned me about the PATRIOT Act, but at the time, I believed it was necessary; in fact, I still do, if used properly. However, such power in the hands of a sanctimonious, vengeful government has proven Taylor’s warning to be prophecy.
As we have discussed more than a few times before, idealism is great, like hope, but the realities of the world demand recognition and pragmatism.

My very best wishes to all. Take care of yourselves and each other.
Cheers,
Cap :-)

01 September 2008

Update no.350

Update from the Heartland
No.350
25.8.08 – 31.8.08
Blog version: http://heartlandupdate.blogspot.com/
To all,
The follow-up news items:
-- It is official. Congratulations to Senator Barack Hussein Obama of Illinois [339], and Senator Joseph Robinette Biden, Jr., of Delaware, who are the official Democratic Party candidates to lead the Executive Branch of the United States of America. I might also add a comparable atta-girl to Senator Hillary Rodham Clinton of New York, and her hubby, President William Jefferson Clinton, formerly of Arkansas; both the Clinton’s did a bang-up job at the convention.
-- The stage is nearly set. Senator John Sidney McCain III of Arizona [326] selected Governor Sarah Louise [Heath] Palin of Alaska as his running mate. No one can say McCain is not bold. This is called an “all-in” gamble. The Grand Old (Republican) Party holds its nominating convention next week. Then, the real silly season will begin in earnest.
-- Hurricane Gustav approaches on a similar track as Hurricane Katrina (195, et al). New Orleans Mayor Ray Nagin [196, et al] issued a mandatory emergency evacuation of the city. The Republicans trimmed down their convention out of respect for those in the throes of evacuation and who will endure the ravages of another major tropical storm. The Democrats vowed a ceasefire during the days of trauma. Now, we hope and pray.
-- “Scientists Reprogram Adult Cells' Function – Advance Stirs Up Debate on Embryos”
by Rob Stein
Washington Post
Published: Thursday, August 28, 2008; Page A01
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/27/AR2008082701829.html?wpisrc=newsletter
Scientists at the Harvard [University] Stem Cell Institute reported a significant advancement in the field of stem cell research with Induced Pluripotent Stem Cells (IPs) that are coaxed into other types of cell inside the body. It is the last prepositional phrase that carries the greatest significance. I do not have sufficient information regarding the process to understand how they trigger the in situ transformation; however, just the notion is quite intriguing and avoids the volatile debate surrounding embryonic stem cell research [146, et al]. The reported results involve mice, and they have a distance to go before human research and even farther for human application can be conducted. The news is encouraging.

Donald E. Wildmon’s American Family Association got all fired up again this week over a Planned Parenthood initiative titled: “Take Care Down There,” offering a set of video clips intended for the safe sex education of teenagers. I could wander off into a raucous tirade about a few of my favorite topics – moral projection and the paucity of genuine sex education for our children. Instead, I shall hold my fire and provide the URL for the Planned Parenthood website: www.takecaredownthere.org. You be the judge. I would truly appreciate whatever opinions anyone desires to offer.

Comments and contributions from Update no.349:
None
Comments and contributions from Update no.349A (Death with Dignity letter):
“As usual you have articulated a look at life that many could (or would) not do. I am sorry you had to suffer so much with your Mother. [We are] going through slightly different, but in many ways similar, aspects of her [my wife’s] Mother's last years.
“You really should go back to school and become a lawyer, who knows where that may lead over the next decades for you.”
My reply:
I am sorry you must experience this aspect of life with [your mother-in-law]. It is never easy, and no matter how much you prepare, you are never prepared.
Jeanne has mentioned going back to school to become a lawyer. I’ve thought about taking a constitutional law course, just cuz it interests me. Ah yes, but alas, I am too old to head down that path.

Another related comment:
“Your letter is eloquent, moving, and relevant. Both my parents suffered a miserable bed-ridden death a decade ago and were denied Dignity in Death. I've been screaming about it for decades even before they were victims of cruel laws. I commend you for taking up this cause. Even though I don't live in Kansas, count me in this fight right beside you. Oregon serves as an example for the nation about what it means to be willing to give humans the same dignity we give our pets.”
My response:
I am sorry your parents had to endure what my Mother suffered. You now know I can relate. In my own way, I chose to make my words public and available to everyone. If you wish, I would encourage you to cut & paste, to use those portions of my letter that are appropriate for Texas, delete the Kansas stuff, and add your experience, your words. I would be honored to help, if you so choose. I hold no naiveté that the Kansas legislature will be so progressive, but we just never know unless we try. Sometimes a chorus opens with one voice. Oregon does indeed serve as a beacon in the darkness; and, they have conducted themselves with pride and honor. Several other states have made bona fide attempts, but the Christian, fundamentalist, uber-Right often stands in the way, and of course, they try to put the fear of God into the legislature. Kansas made a half-hearted attempt at a Death with Dignity law in the late 90’s, but the bill never made it out of committee. We shall see what happens.
. . . a follow-up comment:
“I'll give some thought for not only Texas, but my home state of Missouri as well. My folks passed away there. I think of them each day.”
. . . and my follow-up response:
No pressure, as you know. This is a very personal action. I’ll attach my MSWord file, which has a goodly chunk of my research in hidden text, if any of it might prove useful to you. If I may be of any assistance, please do not hesitate to ask.
[P.S.: If anyone would like my original MSWord document for their purposes, I would happy and honored to attach a copy to your request.]

“Very well done and your correspondence drives to the heart of the matter, I wish your mother’s wishes could have been fulfilled. Both of my parents passed away in much the same manner as your father but both had prepared all of the legal papers for their demise years before so I an only child would not have great problems with the great legal entity of the State of Oklahoma.
“They both had trepidations about a long bout with health issues and we discussed that and how to handle it but we were not faced with that long downhill slide, just the gradual deterioration with age and heart disease.”
My reply:
Perhaps, it is an odd blessing . . . . at least your parents did not endure the slow, lingering path. Like your parents, my Mom had all the legal documents prepared well in advance, yet, as I am sure you experienced, no matter how much you prepare, you are never prepared.
. . . a follow-up comment:
“No matter how much you prepare for the eventuality of your parents passing it is always a shock and it takes awhile to recover, that is if you ever do.”

A comment from another contributor:
“Bottom line, I agree with you 100%, and offer any support you would ask/require in this quest.
“I lost my father to cancer in the early 1990's, and my family went through many similar experiences which you have so eloquently described.
“Although I am no longer a resident of the state of Kansas, my Mother lives in Winfield, and (God forbid) if anything would happen, we would be dealing with the same issues under Kansas law.
“Please let me know how I may assist in this endeavor.”
My response:
These actions are very personal, so I try not to pressure anyone into any action they are not convinced to take on their own. However, if you would like a few suggestions . . . .
My letter was an open letter by design and intention. It would be appropriate to address a simple letter of endorsement and/or concurrence to the governor and your Mom’s representatives with a copy of my letter. You could also write a simple letter to the folks I sent mine to as an endorsement, or perhaps just the Wichita Eagle. More importantly, you might wish to consider writing to the Alabama governor and your legislators. I will attach my MSWord document that includes much of my research in hidden text for your use, as you may wish. You are most welcome to use any, all or none of my words & work, that is entirely up to you. I stand ready to assist you as you see fit.

Another comment:
“Great letter. In my father's case this year, it was a blessing that he passed away only a week after being diagnosed with terminal cancer. It was very quick and peaceful, and my brother and I are thankful for that.
“Your legal analysis is good- you may have missed your calling.
“And Brownback is a sanctimonious git.”
My reply:
Naw, I’ll leave all the lawyer’ing stuff to you professionals. As you’ve probably gathered, I do have a bit of a curious fascination with the logic of judges. I have thought about taking a constitutional law course after I retire and have time to devote to such thought. Perhaps I did miss my calling, but as you know, at our age, we are what we are . . . for better or worse.
What is a “git?” Or, do you mean twit? I am not a fan of dear ol’ Sam, and I am always embarrassed to acknowledge that he is from Kansas. ‘Sanctimonious’ fits him to a tee.
. . . an answer:
“Britspeak -- more severe than a ‘twit,’ but not a stronger word like ‘wanker’ or ‘arsehole.’ A despicable person.”

Another contributor distributed the Open Letter to his network:
“Cap Parlier has been consistently a very kind gentleman in his blog and e-mails. He and I got to know each other via e-mail when I read a very objective book in the 1990s he coauthored entitled TWA 800-ACCIDENT or INCIDENT? http://www.parlier.com/
“Cap is retired Lieutenant-Colonel in the Marines and was a test pilot. He currently does production test flying for a major business jet manufacturer.
“His mom died 30-[July] 2008. This is his story and his desire to ask people to contemplate. Many of us have very mixed feelings about this topic. I for a long time have generally been against euthanasia. My reasoning was Biblical interpretation and fear at a point in our future, an end-of-life mandate could be imposed by a state or corporate entity based on quality-of-life metrics and cost ratios outside the patient's sphere of control. However, I would not want to be at the end of my road, whether natural or by accident, without predictable quality nor recoverability, and have a medical care institution keeping me alive by technology, or family thinking I would want to live like Christopher Reeve (no offense to his strength through difficulty). And sadly, many folks are warehoused without the loving support from family like the Parlier's, and the taxpayers or an estate is billed to maintain life even for highly ill people.
“Another factor is the tragic impact a terminally ill person who commits suicide, has on loved ones. There is often shame and survivor's guilt. Those that have pain or illness that exceeds their ‘capacity to bare the cross’ (when all other avenues, assistance, treatment was unsuccessful), need not take the route of a violent and often more painful ending due their only perceived exit to a problem with no solution.
“I have no doubt nothing but incredible compassion and courage is coming from Cap Parlier, for his mom and others in the same position. His sensitivity to the emotional complexity and both poles of the debate, is commendable. I applaud him for his energy and time in this effort during his family's healing process. And I am sure he will be most thankful if you read his sound and reasoned basis, for your consideration.”
My response:
Thank you very much for your generous words and forwarding my open letter to your network. I hope it does encourage folks to think about this important topic and perhaps argue the issues in a proper, respectful, public debate.
We should all bear mixed feelings, at a minimum, and reservations regarding this serious and irrevocable action. I attempted to articulate in my humble proposal, such legal options would and should be available to a small, finite group of qualified citizens, and even then, the option would be available only within a comparatively narrow window of time, i.e., an individual of sound mind (able to clearly articulate his wishes to independent witnesses) and at a sufficiently diminished physical state to see the end. The time window would open when his disease, deterioration or injury is medically unrecoverable, and would close when the individual is no longer competent to express his wishes. If application is not within that window, then it would be invalid.
The State has an obligation and bona fide interest in protecting the “unalienable rights” to “Life, Liberty and the pursuit of Happiness” of every citizen, including those who are into their end-of-days. The State’s interests can be defended and protected by defined qualification criteria and independent medical and legal witnesses.
I just hope we can transcend the dogma and deal with reality in a logical, reasoned manner.

My very best wishes to all. Take care of yourselves and each other.
Cheers,
Cap :-)