Thursday, October 18, 2012

Wall Street vs. Sesame Street

High Flying Presidential Candidate Mitt Romney Threatens Big Bird with Extinction.

Ex-vulture Capitalist Ruffles Feathers by Hatching Secret Plan Targeting Big Bird.

Deputy EPA director Burt McMuppet issued an emergency executive order protecting all fowl wildlife 8ft tall or taller, a ruling seemingly crafted to protect the PBS’s Big Bird, but which legal experts claim may be extended several NBA players with large wingspans as well.  The surprise ruling immediately attracted the ire of conservative lawmakers and pundits who have declared an open season on the outsized symbol of Sesame Street.  Jim Cramer, host of Mad Money and rumored to be the front runner for the job as Treasury Secretary in a Romney administration, sums up the conservative mindset well when he insists that characters like Big Bird, Bert, Ernie, and Oscar the Grouch are not wealth creators like those on Wall Street.  “Big Bird is entitled to feather his nest like everyone else,” Cramer squawked, “but he’s not a job or wealth creator like the vulture capitalists at Bain,” a reference to the hedge fund Romney ran before entering politics.   “You can’t expect the wealth creators on Wall Street to pay higher taxes just to subsidize the characters on Sesame Street.  After all, bailing out irresponsible deadbeat Muppets can only lead to moral hazard.”

The liberal economist and Nobel Laureate Paul Krugman disagrees:   “PBS is paying Big Bird chickenfeed.  Oscar is living in a garbage can for Pete’s sake!  No wonder he’s grouchy.  You can’t have a thriving Sesame Street without asking those who pull the financial strings on Wall Street to pay a little more.  If income inequality continues to grow, the Muppets will occupy Sesame Street.”

President Obama belatedly came to Big Bird’s defense today.  Speaking at a campaign rally in Dayton, Ohio, the Commander-in-Chief insisted: “I grew up with Big Bird.  Big Bird is a friend of mine.  I call on Governor Romney to keep his Mitts off Big Bird.”  However, Governor Romney, basking in the glow of his debate performance against the President, reiterated his commitment to go after Big Bird.  “I’m a job creator,” Romney insisted, “and I’m not going to borrow money from China to subsidize Sesame Street.  If Big Bird wants to build his retirement nest egg, then he should go out and get a job in the private sector.  I mean teaching kids math and their ABC’s is strictly for the birds.  Our society needs to disproportionally reward the risk-takers and speculators who create the fundamentals of a sustainable economy.”

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Sunday, September 02, 2012

Eastwood vs. Obama

Historians like Toynbee and Vico have argued long argued that civilizations have life-cycles that are similar to the arc of the human lifespan.  That is, societies pass through golden ages of youthful vitality, periods of stability and maturity, and eras of inertia and decline.

The actor Clint Eastwood unscripted and somewhat incoherent endorsement of Mitt Romney at the Republican national convention is only a small blemish on an otherwise distinguished career, but his rambling and unbecoming diatribe against President Obama only reinforces the notion that the Republican party is dangerously out of touch with reality and even a tad senescent. 

Eastwood’s performance undoubtedly left Republican image makers wincing.  However, the 82-year old actor’s views – and his crude attempts to caricature President Obama – are hardly an anomaly in the Republican Party.  Chastising Obama for failing to fulfill his campaign pledge to close Guantanamo, when in fact Republicans have obstructed all attempts to shutter the facility, is as disingenuous and reality-defying as Paul Ryan’s attempt to blame candidate Obama for the closure of a Detroit auto plant that shut its doors in the waning days of the Bush administration.

Eastwood’s and Ryan’s jabs at President Obama were reminiscent of Ronald Reagan’s false but sincerely held belief that acid rain was caused by trees.  But what happens to a political party, or a country, when so many demonstrably false beliefs are widely held by the population?

Conservatives deny the possibility that global warming could be a real or manmade phenomenon.  They also hew to a demonstrably false ideology, which insists that free markets never fail, tax cuts pay for themselves, and government regulations are unnecessary to prevent economic crises.

The Republican ideology failed spectacularly last time it was tried.  Bush’s tax cuts busted the budget and deregulation allowed the financial sector to run amok.  As a result, America’s financial system nearly collapsed.  Astonishingly, Republicans refuses to acknowledge the bankruptcy of its ideological agenda.  Instead, they’ve taken to blaming the Obama administration for the ills the Republican agenda inflicted on the United States.

This sorry state of affairs was symbolized by Clint Eastwood’s rather lame mock interview with an empty chair, which supposedly represented President Obama. Eastwood’s shtick may have come across as entertaining to a certain segment of angry white male voters, but his crude characterizations of Obama will probably come across as the vulgar stereotypical distortions they are to the demographic groups that will decide the election (namely, Hispanics, women, and independents).  No wonder, Romney’s political operatives were reportedly cringing during Eastwood’s performance.

Eastwood is not senile, but a certain segment of the Republican Party – the birthers, those who think Obama is closet Muslim or a covert socialist, or those who think Obama bears primary responsibility for the jobs crisis in America – is dangerously untethered to reality.  Ironically, the politician most responsible for America’s current misfortune – George W. Bush – was absent once again from the Republican convention.  The American icon Clint Eastwood’s showdown with an empty chair may have fell flat.  But what is more telling is the Republican Party’s failure to engage in an honest dialogue about the legacy of George W. Bush, a man who can’t show up at his own party’s convention because he is so deservedly reviled.

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Wednesday, April 11, 2012

Mitt Romney's Secrets to Success

Mitt Romney hoards money the way eccentric old ladies stockpile porcelain dolls, knickknacks, and other assorted trinkets of inestimable value. The former governor of Massachusetts is reportedly worth $250 million dollars, which makes him the wealthiest presidential candidate in U.S. history. Thankfully, Romney isn’t trying to hide his stash of cash under his mattress or in one of estate safes. Instead, Mitt has his loot spread out in a variety of high-interest bearing account in the Cayman Islands and Switzerland.

It would be class warfare to disparage Mitt Romney from being rich and successful. I may not be part of the fortunate 1%, but I harbor no resentment towards a man who would spend millions of his own money for the privilege of sharing the stage with the likes of Herman Cain and Newt Gingrich.

I do resent the fact, however, that Mitt’s money makes more than I do. In 2011, Mitt’s money made more than $ 4 million. That is, Mitt collected more than $4 million in interest income, which means that Mitt’s money was making more than a $109,000 a day! Assuming Mitt’s money was working 24/7 with no holidays, then Mitt’s money makes more than $4,500 an hour.

Needless to say, my money doesn’t work that hard, nor do I. Otherwise, I might try running for president myself instead of writing about the morons we end up electing. However, it is clear that Mitt’s money works harder than mine does. After all, my bank is only offering me 0.05% percent on my cash, whereas according to my calculation Mitt’s money is getting closer to 10%.

Of course, Mitt’s money may be taking greater risks than my money. I may be liberal politically and ethically, but I’m fiscally conservative, which means I enjoy having money, but not spending it. The idea of going in to debt gives me hives and makes me apoplectic.

Mitt has a healthier relationship to debt. He understands what poor old Aristotle did not: namely, that money can indeed be the mother of money. After all, debt is the engine of wealth creation for Bain Capital, the financial services firm that Romney once led.

Bain Capital has served its clients handsomely. In prosperous years, Bain has managed to generate annualized returns of 80% for some of its clients. Bain gets its money to work hard. How does Bain manage to generate such fantastic returns year after year? They must have recipe for success the rest of us in the 99% could follow.

The Bain formula isn’t rocket science, but it certainly rivals alchemy in its ingeniousness. Essentially, Bain borrows money from investors such as rich folks, pension funds, or endowments. It then uses the money it has borrowed to get banks to lend it even more money. This is called leverage. Sometimes, venture firms like Bain borrow thirty or forty dollars for every dollar they put up; the higher the leverage the higher the return on equity.

To see why this is so, imagine I’m a hedge fund manager with $10,000 in my pocket. I make my living convincing people I’m smarter and more knowledgeable that them, so it’s quite probable I could induce a few friends and relatives to pony up their life savings so that we can pool our resources, invest in a hotshot business opportunity, and all become filthy rich. Let’s say I manage to raise $990,000, which added to my original $10,000 comes out to a cool million. Based on the money I’ve raised and my idea I then manage to convince some major banks to lend me even more money. Thanks to the magic of leverage I now have $30 million dollars I can use to invest in equities, acquire a business, or make bets in the high stakes derivatives market.

For the sake of argument, let’s say I buy a company for $20 million. I might fire a couple of workers or move operations to a third world country where labor costs are a pittance. I’ve made the company more valuable so I can sell it to some other hedge fund manager for more than I bought it somewhere down the road. In the meantime, I still have a third of my equity available to pay for administrative perks, my base salary, and to hire an army of industrious tax lawyers to help me reduce my tax liability.
Let’s say I sell the company after a year for $25 million. You might say my return on the equity I raised was an impressive 17%. But remember all that leverage. I only put in $10,000 originally, but now I’m a multimillionaire with a track record of creating wealth for my clients. Investors and banks will clamor to lend me money and I can repeat the whole process again.

Thanks to the magic of leverage, I’m virtually guaranteed to generate impressive return on the equity I start with. Sure, I have to find buyers for the companies I “invest” in. Like a used car dealer, I make some cosmetic improvements to the companies I’m peddling. I may even find genuine ways of adding value to the companies I acquire. However, my primary aim will be to buy companies low and sell them high. Jobs may be destroyed and created thanks to this freewheeling form of capitalism. But my primary fiduciary responsibility is to create wealth for myself and my clients.

Now, some financial experts might insist that what I’m doing is amoral and parasitic. After all, it’s not clear that my activity is really contributing to the economy or the larger social good. Do I really deserve to make 400 times what a teacher makes? I look at this way, wealth like mine wouldn’t exist unless there were people as ingenuous and ballsy as myself who could hatch and execute such brilliant money-making schemes. The wealth people like me generate out of thin air can be used to hire chauffeurs, secretaries, accountants, tax lawyers, strippers, bartenders, gardeners, and public servants who share my passion for free markets and less government oversight.

Of course, my hedge fund activities may contribute to inequality, but it is entirely legal. Indeed, it may even be ethical. Sure there are winners and loser – and booms and busts – but when the financial system collapses the government will step into to bail everyone out. After all, banks will get virtually zero interest loans from the Fed so they can lend money to hedge fund managers like me again.

Only financial wizards like me can get the engine of prosperity started again, which is why bonuses need to part of any bailout program. You might think that future taxpayers may be hit with the bill for any bailouts, but it is far more likely that the U.S. will simply devalue its currency or default altogether. In fact, present day taxpayers will actually get a tax cut because an economic meltdown is not the time to raise taxes. Everyone wins!

The discerning reader may have noticed that my hedge fund scheme privatizes the gains, but socializes the risks. Indeed, some might argue that the system I’ve outlined amounts to a form of socialism for the rich. Such critics, I assure you, are engaging in class warfare and guilty of attacking capitalism itself. Poor people are not poor because of capitalism; they are poor because they fritter their money away on frivolous things, like taxes.

Well, I hope I’ve shed light on why Mitt Romney is rich and successful and why the rest of us are not. Mitt has been focused on money the way squirrels are focused on acorns. This may sound like a nutty analogy, but it may explain why Romney is now considered by many to be presidential timber.

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Wednesday, December 30, 2009

Cheney’s Chutzpa

Dick Cheney's credibility has more holes in it than a Russian submarine. The former vice-president was a central figure in what is widely acknowledged as the most incompetent administration in modern American history. Yet, the man who once shot his hunting partner in the face has the temerity to launch a fusillade against the Obama administration for supposedly ducking the "war on terror" metaphor.

Cheney's latest broadside follows on the heels of an unsuccessful al-Qaeda plot to blow up an airliner on Christmas, which follows on the heels of the Fort Hood Massacre where a disturbed U.S. Army psychiatrist (who happened to be Muslim) opened fire on his fellow soldiers.

Both incidents, in fact, were carried out by devout Muslims who could best be characterized as unmarried social misfits deeply opposed to America's wars in Iraq and Afghanistan.

Umar Farouk Abdulmutallab and Major Hasan both illustrate the unconventional nature of the jihadist threat. Neither man was following orders as a part of a formal hierarchical organization. Rather, each was inspired by al-Qaeda's ideology to initiate attacks of their own choosing. Hasan and Abduulmutallab may have received "spiritual guidance" which reinforced their impulses to unleash terrorist violence against "infidels." However, the clerics that recruit, counsel, and radicalize lost souls like these probably do not dirty their hands by planning or coordinating specific acts of terrorism.

Al-Qaeda is arguably the ultimate "virtual community," a collection of loosely affiliated groups and cells comprised of career criminals, paramilitaries, religious zealots, and loner terrorist wannabes.

Osama bin Laden is a charismatic figurehead who is the spiritual locus of al-Qaeda, but he largely irrelevant from an operational or managerial point of view. The Bush administration claimed that bin Laden had been neutralized because he could not plan or conduct operations. This view is self-serving and erroneous. Simply put, nothing would deflate al-Qaeda more than the death or capture of their charismatic spiritual leader, who has supposedly evaded U.S. forces thanks to Allah's protection.

The failure to kill or capture bin Laden at Tora Bora (U.S. resources were being diverted to Iraq at the time) must rank very high on the list of the Bush administration's missed opportunities. Killing bin Laden would not have ended terrorism as a technique, but it could have delivered a knockout blow to al-Qaeda.

The Bush administration instigated one of the greatest strategic blunders in military history when it invaded Iraq. Toppling Saddam Hussein was supposed to be the first step in a wave of democratization that would sweep and transform the Middle East. Instead, the misguided and mismanaged Iraq War became a recruitment tool that radicalized an entire generation of Muslims.

The Islamic extremists that are plotting to blow up airliners and attack Western targets are convinced that the U.S. is waging a war against Islam. Bellicose rhetoric from the Bush administration regarding the "war on terror" proved to be self-defeating because it reinforced al-Qaeda's deluded ideology, which paints the Muslim world as the victim of America's imperial aggression. The Obama administration is right in downplaying such rhetoric because the struggle against Islamic extremism is an ideological struggle to convince ordinary Muslims that America is on the side of human dignity and social justice.

America won the Cold War against the Soviet Union because it contained Communism and won the ideological battle for hearts and minds of mankind. At the height of the Cold War, however, there were those on the extreme right who insisted that the only way to defeat Communism was to launch a pre-emptive nuclear war against the "Evil Empire." Recently, right-wing extremists like Dick Cheney took America down a path that included pre-emptive war, torture, and other Constitutional abuses. As a result, America's reputation sank and the country nearly drowned in a financial crisis caused in no small measure by the failed economic policies of the Bush/Cheney administration. Dick Cheney's credibility on national security matters is unsalvageable.

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Tuesday, December 29, 2009

Barack Obama’s Half a Loaf

Barack Obama is drawing the ire of both the far right and the reflexive left. This is probably a sign the president is governing well.

The historian Arnold Toynbee believed civilizations had life cycles. In Toynbee's view, societies pass through the phases of youthful vitality, vigorous middle age, and senescent rigidity. The intellectual bankruptcy, paranoia, and inflexible crankiness that characterize today's conservative movement would seem to exemplify the social dementia Toynbee believed afflicted societies entering their terminal phases.

Thankfully, the conservative movement has been largely marginalized following the disastrous reign of the epically incompetent Bush administration. Solving America's formidable domestic and foreign policy challenges will require flexibility, creativity, and pragmatism, qualities that are in short supply among conservatives.

The far left, however, can be every bit as obtuse as the far right. For example, President Obama has taken heat from the left for his supposed failure to end America's involvement in Afghanistan and for supposedly getting rolled into supporting a flawed healthcare bill. In fact, Obama made a sound decision on Afghanistan. And the Democratic health reform bill represents a real social achievement in that it establishes the principle that all Americans are entitled to decent healthcare.

Regarding Afghanistan, the president's critics fail to understand that ending America's involvement prematurely would pose intolerable risks. To begin with, quitting Afghanistan with an ascendant Taliban would almost certainly consign the country to civil war, which would destabilize Pakistan (a country with nuclear weapons). Further, Islamic extremists would interpret America's withdrawal as a victory over a weakened superpower, a narrative that would embolden jihadists worldwide.

Exiting Afghanistan on America's terms is imperative. Sending additional U.S. troops is not an ideal option, but it is the least bad of truly terrible options. Likewise, the Democratic healthcare bill is terribly flawed, but it may be the best reform that a broken political system is capable of generating at the moment. Critics on the left (like Howard Dean) who insisted that it would be better to vote against the bill and start over, are oblivious to consequences of their idealistic folly. If Republicans had succeeded in stymieing health reform again it would have been a mortal blow to Obama and the Democratic Party. In all likelihood, the failure of health reform would pave the way for Republican victories in 2010 and 2012. Consequently, it would be years if not decades before anyone attempted to reform the healthcare system again.

Barack Obama is a pragmatist who'd rather come away with half a loaf than no loaf at all. Right-wing activists who contend that Obama is socialist who wants to redistribute wealth are certifiably delusional. In fact, the crony capitalism championed by Bush and Cheney amounted socialism for the wealthy as military contractors like Halliburton, the financial industry, and political contributors fed at the public trough until the entire economic system nearly collapsed.

In reality, President Obama is a centrist and an incrementalist. Indeed, he seems to be employing conservative means towards moderately liberal ends. He may be taking flak from both the rabid-right and the utopian-left, but it is probably a good sign that he's steering a course that displeases the insensate fringes of our political system.

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Monday, December 21, 2009

Pantheism versus Theism

The poet William Blake saw Heaven in a wildflower and he found eternity in an hour. Poets are quite mad, of course. But as Plato recognized, the madness of the gods is to be preferred over the sanity of men.
Poets tend to be heretics too. After all, shattering dogmas so that fresh truths can be perceived is part of a poet’s reason for being.

The poet Czeslaw Miloz once wrote, “You ask me how to pray to someone who is not. All I know is that prayer constructs a velvet bridge. And walking it we are aloft, as on a springboard.”

Miloz, I believe, captured a great truth about prayer and religion. The traditional conception of God as a personal deity who created the world and intervenes in human affairs is no longer intellectually, theologically, or philosophically persuasive. Nikos Kazantzakis, put it well when said, praying to God is like knocking on the door of a deaf man.

The paradox in Miloz’s poem, On Prayer, is that although our prayers almost certainly fall on deaf ears they are nevertheless spiritually empowering. Faced with the dark night of the soul, a time when we are acutely aware of our limitations, we instinctively turn to a power greater than ourselves. This is when we are at our most authentic, even divine-like. The power of prayer lies not in catching the attention of some supreme being, who then intervenes on our behalf, but in the way a truthful and heartfelt inner dialogue, fortifies us to meet life’s most formidable challenges.

The root meaning of the word religion is to link back. Both pantheists and deists share the belief that man has sprung from a transcendental source. For pantheists, this source is Nature, which is a reflection of a slumbering but cosmic intelligence. We humans are a reflection of this unconscious and impersonal intelligence. Nature has emerged into consciousness through us and we are quite literally the eyes and ears of the world. Nature, of course, can be terrifying and awe-inspiring. However, discerning the broad brushstrokes of beauty and harmony against the backdrop of individual suffering can be an aesthetic experience that offers a poetic respite from the harshness of the natural order.

Schopenhauer believed that aesthetic arrest represents a moment when a human being temporarily transcends the limitations of their suffering ego and recognizes (however dimly or faintly) their ultimate identity with the noumenal ground of being.

Seeing Nature as a work of art is no easy task. Great poets demonstrate that an immersion in nature need not be some sort of escapist regression, as The New York Times columnist Ross Douthat implies in his Op-Ed, Heaven and Nature. Put simply, the kernels of insight and enlightenment that poets like Blake convey have the power to recreate in us the same “Ah ah” experience that stirred the soul of poets in the first place.

In contrast, abstract conceptions of an all-good Almighty -- whose sole remaining function these days is to save His creatures from the evils of His own Creation – seems like an escapist fantasy at best and pernicious nonsense at worst. There is nothing more painful than false belief. And I fear that much of the anger that seems to be consuming the religious right in America at the moment stems from frustration that invariably develops when a person’s worldview is at complete variance with the world he or she inhabits.

Ross Douthat theistic apologia is rhetorically brilliant, but his logic is unpersuasive. His chief argument in favor of theism is that pantheism cannot deliver man from the evils and suffering of this world. But using Hollywood homages to pantheism as proverbial straw men allows Douthat to paint “nature worship” in superficial way.

Wittgenstein was famous for dissolving – not solving – philosophical conundrums. His insight, still not widely appreciated, is that the way we use (and misuse) language generates pseudo-problems. For instance, to say, “It is raining” does not mean there is some entity “It” that is raining. In a similar way, theism generates many false problems by positing literal entities – A savior God, Heaven, and Hell – which are not ontologically real. Pursuing mirages is bound to create angst. Ultimately, it may be that theism creates the malady it purports to cure.

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Wednesday, October 28, 2009

Politics, Professional Wrestling, & Fox News

Politics is like professional wrestling, only it's more entertaining but less edifying. Perhaps that explains why cable "news" personalities like Glen Beck deliberately blur the lines between entertainment and current events.

The social critic Neil Postman once entitled a book Amusing Ourselves to Death, which is a rather apt description of the carnivalesque antics the clownish Beck and his ilk have imported into the journalistic profession. War, recession, and national decline are a lot more bearable if our media jesters can somehow divert us from an increasingly unpleasant reality with their foolishness.

Lear called upon his Fool to cheer him up as his psyche and his kingdom crumbled. His fool was wise in a way our media fools are not. Lear's jester traded in the kind of wisdom and insight that surpassed men's understanding; our media fools pander to the lowest common denominator while peddling propaganda and sophistry as if they were the highest forms of sagacity.

What is so objectionable about the likes of Beck, Sean Hannity, and others at Fox News? Fox News is built on two principles: 1) promoting the reactionary agenda of Rupert Murdoch and 2) telling an audience what they want to hear.

Orwell warned that the function of propaganda is to sell the notion that war is peace, that slavery is freedom. Fox News, the "fair and balanced" network – is in the business of selling similar contradictions.

The anchors and hosts on Fox News are not in the business of objective journalism. Rather, they are master sophists. They aim not at truth, but persuasion. Socrates noted that the sophists in ancient Greece were so skilled in rhetoric that they could make the worse argument appear the better. Unlike Socrates' dialectical method, which examines presuppositions, sophists begin with preconceptions and end with them.

Fox News, like Narcissus, is smitten with itself. When you think about it, it's rather perverse for a news organization to spend so much time reporting on itself. Journalists are supposed to report the news, not make it. However, Fox's personality-driven programming is centered on a simple premise: convince credulous audiences that their anchors and hosts speak for them. Fox News calls attention to itself at every turn because it has set itself up as proxy for beleaguered Americans.

War is force that gives us meaning. An Axis-of- Spin – Glenn Beck, Sean Hannity, and Bill O'Reilly -- promote the notion that the Obama has declared war on the news agency because it plays into the narrative Fox is peddling, namely that Fox is the champion of the besieged masses.

Fox recognizes that a rumble with the Obama administration will attract viewers looking for an entertaining spectacle and an outlet through which they can vent their frustrations and aggressions. Like the World Wrestling Federation, Fox News has a stock of buffoonish characters who aim at stirring up their audiences with over-the-top antics. Similarly, with Fox News reality is beside the point, ratings are everything, and discourse is tailored towards third-graders.

When I think of Fox News I think of Sean Hannity fawning over President Bush; Bill O'Reilly excusing the abuses at Guantanamo; Glenn Beck ridiculing the scientific consensus on global warming; and Neil Cavuto tossing softball questions to a corporate honcho who would soon be convicted of a massive fraud. Are these anchors journalists or propagandists? You decide.

Fox News, like professional wrestling, traffics in entertainment not edification. Both Fox and the WWF create arenas where self-reference abounds and objectivity is obliterated. Climbing into the ring with Fox News is degrading, even for politicians.




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