Posted inUncategorized

To bail or not to bail?

Let’s set aside the demands of the extremists on the right, calling for more deregulation and tax cuts to address the financial crisis. It’s like trying to discuss the finer points of Plato with a small, yapping dog. Otherwise, I can understand the desire on the left and right to "punish Wall Street" by defeating the bailout plan. Unfortunately, the markets are so intertwined and inherently fragile, the first casualties are going to be on "Main Street" (a bittersweet anachronism for a nation that has mostly abandoned its main streets).

Wall Street — and increasingly overseas investors — owns Main Street.

The plan voted down yesterday was flawed but better than the original Czar Paulson contraption, which would have given the former head of Goldman Sachs unlimited access to use American treasure trying to extinguish the wildfire he and his greedy buddies started. Well, not quite — and here we get back to the unworkability of "punish Wall Street" argument. Deregulation, a casino-like attitude on Wall Street and a bubble-blowing Fed were the biggest culprits in the mess. But, so, too were the American people.

We voted in the deregulators and stood cow-like as it happened, the jobs disappearing, wages stagnating. Worse, too many of us thought we could get rich quick off real estate, like day trading before it. We bought overside houses and ran up credit-card debt we couldn’t afford. We bought SUVs to drive ever-longer distances as oil was peaking. We wanted tax cuts that gutted our schools and infrastructure. We wanted all that stuff at Wal-Mart. The casino became our ruling totem. It’s quite a remove from the generation of the Boomers’ parents that saved and waited to make purchases until it could afford them. It’s their passed-along wealth that is helping cloak the "banana republic with nukes" that we’re becoming.

So here we are. Were it not for the legacy of Franklin Roosevelt, we would already be seeing bread lines. And how many better ways could we use $700 billion…

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Posted inPolitics: National

A fear blankets the land

For the past two years, I’ve heard people say something new. Something new and troubling and chilling. They say in conversations, "For the first time in my life, I’m afraid for our country."

For the most part these aren’t partisans or even particularly political people. They are intelligent, engaged, worldly, successful in their own fields and, usually, of a certain age. Old enough to remember the nation that America once was, not so long ago. They read. They’re not talking about government terror alerts or that taxes might go up on the richest 1 percent of Americans. The statement comes up without prompting or coaching, and the words are almost always the same: "For the first time in my life, I’m afraid for our country."

In Republican John Sidney McCain III’s "home town" of Phoenix last week, I talked to people who are so upset about this election, they can hardly do their work. So upset that enough Americans will be misled by the Fox News echo chamber, passively being fed propaganda — won’t vote, under any circumstances, for a black man. Again, I hear this not from Obama campaign ops, but just intelligent people who have been paying attention.

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Posted inPhoenix

‘Arizona Dreams’ — the rest of the story

At my signing last week at The Poisoned Pen Bookstore in Scottsdale, my editor Barbara Peters told the story about how she had stripped the last paragraph out of my 2006 book, Arizona Dreams. It was too much, she argued, and I went along. She knows much more about mysteries, having edited some 600. Such is the give-and-take in book publishing. But some readers have asked to see the "real" ending. If you haven’t read Arizona Dreams, stop reading the post now.

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Posted inUncategorized

Weekend reading

I call your attention to the "In-depth reports" headline to the left, and particularly the link on Republican John Sidney McCain III. This is a continuously updated news page with…
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Posted inUncategorized

Economics 101: Watch me fail to explain the crisis to the duhs and ignos

Commentators keep trying to explain the financial meltdown and subsequent bailout debate by using analogies that "average Americans" can understand. We hear such things as "imagine Wall Street was your kid that ate a big bag of candy and got sick, then wanted more candy," etc.

The problem is that the calamity is so bad partly because it is not simple. The venality behind it is something everyone should understand (and many "average Americans," with their get-rich-through-liar-loan-financed-rent-houses schemes participated in). But the essential mechanics and details of how we got here, and how the situation might be improved, are highly complex. This is a stark reminder of a danger facing us: America is saddled with one of the least informed electorates of an advanced nation, and one hardly as intelligent or engaged as their forebears who actually built the wealth in money, institutions and ideas that we are now rapidly throwing away. It shows the risk of the continued governance by "conservatism," which by its very nature can’t handle complexity.

Here’s an analogy for the bailout: triage, longer-term care and rehab. The paramedics and ER personnel need to identify those that can’t be saved and set them aside, while focusing on the most life-threatening cases where the patient can still be saved, leaving the less injured for later. But I can dumb it down no further. I can only add complicating factors. As in, the paramedics have tools that will have unpredictable effects not only on the patients but also on everyone in the world. The patients’ bodies are wired into everyone else in the world. And the medics are working on injuries they never trained for.

Simple enough? Of course not.

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Posted inPhoenix Politics: National

Travels: Ohio and Arizona

A vague sadness hangs over the Ohio countryside, even though the trees hang on to their last vestiges of summer green. I flew into Cleveland’s airport last week. This was once one of America’s largest cities, and even though the airport remains a hub for Continental Airlines, the place has the feel of a small, regional terminal. The nice part is that people are nicer in a less crazed and crowded setting, but I keep asking myself, "this is Cleveland?"

Yes. I can see the changes as we drive out of town, on the way to my conference at Kent State University. Buildings that held large businesses a decade ago sit empty. The big Ford plant sits looking vulnerable. While I was there, Eaton, the city’s largest Fortune 500 headquarters, announced it was leaving downtown for the suburbs. This is a downtown that has revived itself well and is a transit hub. Yet the Eaton bigs seem oblivious to the future of higher gas prices, as well as shameful as stewards of their hometown. Everybody talks about how bad the economy is, with high unemployment and job insecurity. The change in the vibe of this state from a decade ago is so real and raw you can’t miss it. No wonder Ohioans threw out the Republicans — the party that wrecked America — in 2006. And yet, McCain has an edge if the polls are to be believed, and one wonders.

Still, Ohio is a state synonymous with white flight and de facto segregation. Apart from some successful downtowns and a few still-lovely upper-class neighborhoods, the big cities are heavily black, while their numerous suburbs are white. It’s a class thing, but it’s also a race thing. And it may well be that Ohioans won’t vote for a black man. How they think Republican John Sidney McCain III, continuing the policies of 25 years of "conservatism," will help them is beyond me. But these are emptional responses beyond the reach of rational persuasion.

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Posted inPhoenix Politics: National

Weekend reading

Joe Nocera in the New York Times looks at the worst market crisis since 1929. But will Bernanke and Paulson's "hail Mary" pass connect? The Economist examines ways the torn…
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Posted inPolitics: National

Barely avoiding economic judgment day, maybe

I’ve been traveling this week as the American financial markets came as close to collapse as at anytime since 1929. And make no mistake: this disaster is real, it will unfold in unexpected ways, and it won’t be an event that is over quickly such as in 1987 — or even the S&L scandal. Some early takes:

–It would be ironic if Republican John Sidney McCain III were elected and George W. Bush left one positive legacy by stabilizing the meltdown — the "let the markets rule" so-called conservatives, who saved the day thanks to mechanisms put in place by Woodrow Wilson, FDR and successive liberals. If we didn’t have tools such as the Fed, FDIC, SEC, etc. — this could have been a calamity on the order of the "panics" of the 19th century, with worldwide contagion.

–This event should totally discredit the deregulation, market-religion ideas pursued over the past 25 years — it is the direct result of these policies. But maybe not. The administration may use unprecedented intervention to save capitalism, and then go back to their Milton Friedman sock-puppet talking points. And the duhs and ignos won’t care — Obama’s black, remember?

–Gee, remember when W intended to "spend his political capital" privatizing Social  Security into the toxic investment bank dumps that are now failing? Republican John Sidney McCain III still wants to do this.

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Posted inPolitics: National

Palin’s ‘small-town’ scam

Sarah Palin is trying to play the small-town card. Her handlers even had her quoting the infamous hater and anti-semite columnist Westbrook Pegler: "We grow good people in our small towns, with honesty and sincerity and dignity." The point, of course, is that she was a "small-town mayor," an "average folks" product of a "small town." Just like you folks hurting in Ohio and other battleground states.

Trouble is, Wasilla, Alaska, is not really a small town in the Disneyland Main Street USA way she’s trying to conjure. This railroad camp turned into an exurb of Anchorage with all the attendant flotsam: big boxes, no downtown, car dependent, sprawling. It’s also in a state that is America’s welfare queen of federal handouts. So we’re not talking Harry Truman’s Independence here.

She’s trying to conjure the town that has been largely destroyed by sprawl, Interstate highways, economic and cultural shifts, and the predatory, monopolistic practices of Wal-Mart. As Thomas Frank pointed out in his new Wall Street Journal column, policies that kill small towns have been an intregal part of the Republican Party of John Sidney McCain III.

Yet the exurb vs. small town issue doesn’t stop there.

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Posted inPolitics: National

Let’s look at the fundamentals of the American economy

Republican John Sidney McCain III is trying desperately to back away from his "fundamentals of the economy are strong" line, even going so far as to say he meant American workers. But not so fast. In fact, it is the fundamentals of the American economy that are in dangerous trouble. Let us count the ways. I’m going to have to give you some straight talk, my friends:

1. Debt. The nation is deeply in hock to creditors worldwide. We used this line of credit to finance the housing bubble, wars in Iraq and Afghanistan, tax cuts to the richest Americans, rebate checks that went into the ether and the privatization of hundreds of billions of dollars in government services. It’s paying for the bailout of Bear, Sterns and it stands to take a devastating shock from Freddie and Fannie. From government to business to consumers, Americans are debtors, and most of the debt has been pissed away on war, sprawl, speculation and corruption, as opposed to building something for the future.

As the economist Nouriel Roubini has pointed out, the current account deficit in the ’90s came back as investment in private innovation, but for the past eight years it has been used to finance deficit spending and debt. Moreover, now much of this debt is held by nations that do not necessarily wish us well, including China and the petro-states such as Saudi Arabia.

This situation dangerously limits our options in foreign policy. It makes it a near certainty that living standards will take a big hit as we have to pay it back. Remember, when the Soviet Union collapsed, the first people in the door were the bankers, wanting to be repaid for the debt the Bolsheviks defaulted on after the 1917 revolution.

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