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Death of the Middle Class – Part I August 22, 2007

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Take 2 trillion dollars in interest-only (subprime) loans made with absolutely no collateral or proof of income. Bundle them into hedge funds with minimum initial investments ranging from $100,000 to $5,000,000. Add a healthy dose of greedy investors – mostly investment bankers – leveraged to the hilt with the help of consistently low interest rates and a complicit Federal Reserve.  Stir well and let simmer for a couple of years. The problem is that this concoction didn’t just simmer, it boiled over and took the stock market with it. For months now we’ve been hearing about the record number of mortgage foreclosures on subprime loans. It was only a matter of time before the check came due. In the span of a week between Aug. 2nd and Aug. 10th, the Dow Jones Industrial Average dropped 1100 points. Worries about “overextended” credit came home to roost, not just in this country, but in markets around the world. In order to calm investors and stop the hemorrhaging, the Federal Reserve has pumped $101.25 billion into the market since Aug. 9th – Gulf Daily News. This influx of cash was designed to help investment banks suffering from the credit crunch to actually cover the debts that they so wisely let ballon out of control.  Hey, when money’s cheap and you’ve got such high yield investments, why worry about debt?  To further curb credit worries, on Aug. 17th the Fed cut its discount interest rates 0.5%. The discount rate is used when the Fed loans money to banks and other qualified institutions – CNNMoney. These moves, coupled with the infusion of over $500 billion dollars into worldwide markets have slowed the deluge of stock prices for now, but more is expected by banks and high-end investors. So, crisis averted, right? The top 10% of the richest 1% decided to gamble a little and came out on the short end. After all, hedge funds are just like hedge bets. What’s the big deal?

The big deal goes like this:  Just like every other major economic blunder in American history, the middle class pays for it: The Great Depression, the savings and loan scandal, and now this fiasco.  Let’s talk about taxes.  When a federal agency dumps over $100 billion into an unstable market, where does that money come from?  It doesn’t come from the huge surplus of dollars laying around in the federal treasury, because that hasn’t existed since the end of the Clinton years.  According to CBS NEWS, the federal deficit should “drop” to $205 billion this year.  Even if the $100 billion existed in the Fed’s budget at the beginning of the fiscal year, it’s still effectively debt.  More importantly, that’s OUR tax dollars.  What’s happening is, the Fed is bailing out investors who will pay no more than 15% (capital gains tax) with money coming from people who pay anywhere from 20% to 40% in income tax.  You see, very wealthy people do not get compensated the same way us middle class slobs do.  They don’t go to a job and pay income tax on what they earn.  They push vast amounts of money – or useless slips of unsecure stock, as the case may be – around and only pay on the profits.  Oh sure, they may pay taxes on their CEO salary at Sprint or Wal-Mart, but the majority of their compensation comes from stock options and investments.  It’s no wonder every tax break the current administration has handed out benefits the rich to a much higher degree than the middle class.  Dick Cheney has stated publicly that he’d like to see the capital gains tax sharply cut – another boon to the top 1% of the investor class that currently holds over 90% of all stock value, according to the Economic Policy Institute (Aug. 2006).

But hey, not only is it the average tax payer who has to help clean up this mess, it’s the average investor.  Major investors were racing to sell off stock to pay back the debt on their bad hedge fund bets.  Where did this sell off come from?  The same place the middle class invests.  Mutual funds lost billions of dollars as the Dow continued to tumble.  The average investor did the right thing.  They sat tight, weathered the storm, and lost money.  In the end, the richest investors got what they needed; an infusion of cash, a lower discount interest rate, the promise of another drop in the short-term rate from the Fed – CNNMoney, and a chance to do it all over again by borrowing cheap money to shove right back into high yield, get-richer-quick-scheme investments. 

So what about the poor families who lost their homes when they had to default on those subprime loans?  They were taking a big risk.  Why didn’t they understand the potential consequences of their actions?  According to George Bush, there will be no federal help for these people,  other than a potential attempt by the FHA to help them refinance a home they’ve already lost.  I guess they just should’ve known better. 

Next up: Death of the Middle Class – Part II; The wage crunch, the trade deficit, and the lack of consumer choice lead to empires led by little yellow smiley faces.      


Fleecing the Customer, version 4.0 August 17, 2007

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Let’s talk about role playing games; specifically Dungeons and Dragons – okay, perhaps the title of this post isn’t completely fair. I’ll leave that up to you to decide. So, Wizards of the Coast, owner of the popular Dungeons and Dragons franchise, has recently announced the release of Dungeons and Dragons, version 4.0. This marks the third version of D&D since 2000, if you include version 3.5 (which I will here because of the full range of rule books required for that version). To put that into perspective, there had only been two versions of D&D released in the 25 years previous. As a long time D&D player, I’ve also seen the transition from a few core rulebooks for Advanced Dungeons and Dragons circa 1978 (version 1) to the absolute deluge of supplementary guides, class handbooks, setting books, battle maps, plastic figurines, and seemingly endless errata to said texts that have accompanied versions 3.0 and 3.5. Friends of mine estimate they’ve spent $1000 or more just to collect most of the 3.0 and 3.5 products. Now, Wizards of the Coast (WotC) has seen fit to produce a fourth edition. WotC claims that there will be fewer supplementary products and a system setup for online play. That might be a great service to me, as I no longer live near the other geeks with whom I used to game. Unfortunately, that online play comes with a monthly fee. It appears they’ve found a passive revenue stream so that they can take a break from constantly pushing out new products. I suppose some of the writers at WotC will be happy about that.

So here are a couple of questions. At what point is a beloved game simply fleecing its loyal patrons, preying on the fears of game geeks everywhere, telling them they won’t have the newest skills, feats, rules, powers, and setting updates for their games unless they shell out $35 a pop for each new rulebook? Is this simply good capitalism, providing a product to those who demand it, or are we being strung along by an army of writers and marketeers just trying to push out product after product to raise their bottom line? More importantly, at what point do these products become so watered down that it would be better if we just all wrote our own material and traded it around to other gamers under the open gaming license? I realize other companies such as Sword & Sorcery games have taken advantage of the open gaming license and produced several products including the Eberron game setting. So I don’t want to demonize WotC – though it probably sounds like I’m doing exactly that – but would it be so wrong for long-time gamers to get a couple of months off from new D&D products so that we might settle into the ones we already have? Is WotC afraid of shrinking revenues or short attention spans that might quickly bore of products that are more than a few months old? Perhaps, WotC could continue growing into sci-fi and/or horror games, you know, work a different niche for awhile. Trust me, I have no problem at all making a buck. I’d like to be a real writer, myself, someday. I’m just tired. Honestly, I was tired after 3.5 and the endless “splat” books (class/supplementary handbooks) were released. In fact, I haven’t purchased a D&D product since late 2003. I can’t really afford it. I just mooch off my good friends who I can rely on to support WotC’s bottom line. Here’s to you, guys! You know you’ll always have my thanks.

Of course the simple answer is that if we stop buying, they’ll stop producing. But then what will happen to our beloved game. Maybe we could go underground, and the gamers could write all their own material and share it like some sick socialist system? My former gaming group already shares books and materials already. My god, man, what’s next? Universal health care?

So, what do you think?

An “intelligent” estimate? How about another look? July 18, 2007

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On Tuesday the Homeland Security Adviser, Frances Townsend, met with the press to release the recent NIE, or National Intelligence Estimate. Ms. Townsend highlighted several points in the report including Al Qaida’s willingness to strike the “homeland”, its attempts to leverage its contacts and relationships with Al Qaida in Iraq (AQI), and the fact that top Al Qaida leadership is currently enjoying safe harbor along the Afghan/Pakistani border. These are facts that have become relatively apparent to anyone paying attention over the past year. Nothing new. The problem is, the report points out other facts that don’t seem congruent with the historical facts of the last 5 or 6 years. It’s at these points where Homeland Security, an agency created by the Bush administration and led by Bush administration appointees, seems to lose its credibility.

Ms. Townsend begins the session by pointing out the classified report that was leaked last week which reads “Al Qaida Better Positioned to Strike the West.” However, she goes on to say “Our greatly increased worldwide counter terrorism efforts since September the 11th have constrained the ability of Al Qaida to attack the U.S. again and have led terrorist groups to view the homeland as a harder target to strike than it was on 9/11.” Are we to believe that “the West” noted in the classified report does not include the United States? Much like President Bush did immediately after the report was leaked, Ms. Townsend sounds as if she’s doing damage control. In Mr. Bush’s case, we’re to believe that Al Qaida is not as strong as it was BEFORE 9/11, just as strong as it was ON 9/11. It appears Ms. Townsend is simply saying, although there’s a classified document stating the contrary, we really have slowed down Al Qaida; at least, that’s the story we’re feeding the public.

As I noted above, Ms. Townsend also talks about Al Qaida in Iraq. “Of most concern is that Al Qaida will try to exploit the conflict in Iraq and leverage the contacts and capabilities of Al Qaida in Iraq, its most visible and capable affiliate and the only one known to have expressed a desire to attack the homeland.” This quote is disquieting for a couple of reasons. First, it implies that “Al Qaida in Iraq” is an organization that existed before the war in Iraq began, a assertion we know to be false. Al Qaida in Iraq, led by the now deceased Abu Musab Al-Zarqawi, was formed and pledged its allegiance to Osama Bin Laden in late 2004 – almost two years after the war started. As with the rest of the administration, Ms. Townsend continues to characterize sectarian violence between Shias and Sunnis, growing daily into a full-fledged civil war, as purely Al Qaida terrorists de-stabilizing the democratic process. These fallacies allow the Bush Administration to continue the ridiculous “chicken and egg” argument of why we are in Iraq in the first place.

The Bush Administration, through Ms. Townsend, is touting its “successes” for a number of reasons including “protecting critical infrastructure and strengthening our border security.” Obviously, Ms Townsend defines “border security” as the influx of as many as 50,000 illegal immigrants into the U.S. per week, or the safety inspection of 1 out of every 100 cannisters that come into our ports on a daily basis. They must not have read the Reuters article last week reporting that undercover investigators were able to obtain a license to buy enough radioactive material to build a “dirty bomb”. The license was issued in 28 days from the Nuclear Regulatory Commission after what was described as a “cursory review”. In fact, the Government Accountability Office said “the NRC approved the license after a couple of faxes and phone calls and mailed to the phony company’s headquarters — a dropbox at a United Parcel Service.” This is not exactly what I’d call “protecting critical infrastructure and strengthening our border security.”

The most confusing aspect of the NIE report is echoed by National Intelligence Director, Mike McConnell. Ms. Townsend notes “our worldwide counterterrorism efforts over the past five years helped disrupt a number of plots against the U.S.” Director Mike McConnell referenced a “relatively large number of plots we have been able to thwart since 9/11.” According to reports, however, Mr. McConnell didn’t offer any details. What exactly are these two supposedly high level officials saying? What “relatively large number of plots” are they talking about. Perhaps they’re referring to the recent plot to blow up JFK international airport.  Four men, including a former member of Guyana’s parliament, planned to use explosives to blow up the pipeline underneath the airport.  Interestingly, one of the ringleaders of this plot was actually an FBI informant who pushed the idea of blowing up JFK in the first place.  The plot was foiled well before the planning stages were even complete.  Not to mention the fact that the apparent ineptness of the plan and incompetence of the would-be terrorists caused FBI officials to note that there was no real danger to the public.  FBI spokesman Richard Kolko in Washington said “There is no threat to air safety or the public related to this plot.”  Would-be terrorist attempts like this are no laughing matter, of course, but this is the only example the Bush administration as put forth in over 5 years.

Maybe Ms. Townsend and Mr. McConnell were speaking of the extended 9/11 plot to fly a plane into the U.S. Bank Tower in Los Angeles simultaneously with the attacks in New York and Washington D.C.  The plot fell through, according to Ms. Townsend’s report on February 9th, 2006, because Al Qaida could not find enough operatives.  Strange how when you need a suicide bomber there’s never any around, huh?  The reconstituted plot was to happen in early 2002 when the cell leader was captured.  Ms. Townsend also reported that the cell trained with Richard Reid, the shoe bomber, before he was arrested in December 2001.  In March 2003, Khalid Shaykh Muhammad – accepted as the mastermind behind the September 11th attacks – was captured effectively ending the immediate West Coast threat.

So, what have we learned?  In the last 5 years, the Bush administration has reported thwarting two terrorist plots.  How does this in, any way, constitute “a relatively large number”.  If there have been more attempts at attacking the US “homeland” as Ms. Townsend calls it, why haven’t we been informed.  If they could tell us about these two plots, why can’t they tell us at least some information about others.  In what can only be described, generously, as a completely biased report, administration officials appear to be guilty of “padding their stats”.

When we take the time to read between the lines of this doctored document, the gist of the National Intelligence Estimate is undeniable:  Al Qaida’s leadership has safe haven along the Afghanistan/Pakistan border, the war in Iraq has created prime conditions for the development of a new Al Qaida threat which is getting guidance from Al Qaida leaders in Pakistan, and we continue to fight on the wrong front because we still believe that democracy can be forced on a people who’ve known nothing but totalitarianism for the last 1000 years.  The Bush administration has done an excellent job infiltrating every level of our government from the Supreme Court to the EPA, appointing anti-government hit men (and women) to  masquerade as civil servants.  This report is a perfect example of why we can’t take anything the current powers that be tell us at face value.  Remember, they’ll stop lying when we finally stand up and say “ENOUGH”!

A Few Thoughts on “SICKO” and a broken health care system July 15, 2007

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This is not a movie/documentary review.  I don’t tend to do those, mainly because I’m not a very good film critic.  But as a citizen of the United States who has been subjected to the American health care system and a former community organizer who heard the health care stories of the poor and middle class, I walked out of the theater with tears in my eyes and rage in my heart.  This entry is for those who have seen, or are thinking about seeing, the film.  I hope every U.S. citizen gets a chance to see it.

Let me start off by saying that Michael Moore is an accomplished propagandist.  I’ve seen parts, but not all, of his other films.  His first work “Roger and Me” was nothing if not groundbreaking.  As a very wealthy filmmaker he takes on the “everyman” role and plays it quite well.  He has been known to take facts and bend them to his own design, and was most notably criticized for the rampant conspiracy theories put forth in his 2004 release, “Fahrenheit 911.”  In “SICKO”, Moore masterfully strings together some of the worst case scenarios in health care he could find and creates a dark comedy that successfully points out the American people as the butt of the joke.  These stories were picked from what Moore claims is over 25,000 submissions to an email address, after he put the word out that he was looking for health care stories for his film.  In the film, Moore travels to Canada, Great Britain, France, and Cuba to test their health care systems.  It appears that, no matter where he goes, the health care in that country is better than what the average citizen of the United States receives here.  His point he echoes throughout the film is, “Why can’t we have this?”

There are many who will claim that the Canadian health care system is a mess, that the taxes paid in Great Britain and France to cover such outlandish health care costs would crush our economy, and that Moore’s smoke and mirrors showmanship deftly hides any problems that “socialized” medicine puts on a nation and its people.  Sadly, these naysayers – many from the for-profit health care system – are missing the point.  It doesn’t matter if 90% of what Michael Moore put into “SICKO” was a complete lie.  It doesn’t matter if he made up the statistics – most of which are legitimately taken from the World Health Organization – or if he simply has some vendetta against the health care industry.  None of that matters because if just ONE of those stories is true; if just ONE little girl DIED because she was denied care when she was taken to the wrong emergency room; if just ONE woman DIED of a brain tumor because the only viable treatment option was deemed too “experimental” by her insurance company; if just ONE working class citizen with a life threatening illness was denied treatment because it was considered a “pre-existing condition”, then Mr. Moore’s point has been made.

In Iraq, the Bush administration has pushed for health care to cover all Iraqis.  We demand this kind of humane treatment from other nations but continue to ignore the fault in our own country.  We constantly claim that higher taxes will hurt the citizenry, squelch innovation, and suppress investment in our economy.  Out of nothing more than fear, we ignore our social compacts; that society cannot exist without cooperation.  It makes more sense to us to turn our backs on each other rather than to give up another dollar.  We make sure people “take control of their own health care” all in the name of corporate profit.  And, consequently, the nation that gave the world its first democratic revolution falls short of Saudi Arabia in health care for its citizens.  That’s right, Saudi Arabia; a totalitarian nation that won’t let its women drive cars.

Dr. Martin Luther King Jr. once said, “Injustice anywhere is a threat to justice everywhere”.  So tell me, can there be any greater injustice than the death of a child to save a buck?  I doubt Dr. King would have thought so.  It’s about time we started redefining “profit”.

The Populist: An Introduction July 14, 2007

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Hello and welcome to The Populist.

For some time now I’ve debated and discussed various political topics with friends and family from across the United States.  I’ve had the pleasure of engaging in lively discussion with liberals, conservatives (both traditional and neo), libertarians, and progressives.  Not surprisingly, the old adage about opinions is true; everyone’s got one.  The problem is, many opinions today have little basis in fact.  We all have beliefs we carry along with us in life.  Some of these are based on faith, others on values we were taught as children.  Sadly, more than a few of us don’t allow these beliefs to grow and evolve, even in the face of new evidence.  We find it nearly impossible to look at the world differently because we keep clinging to the idea that this is how the world is supposed to be, or worse, that this is just “the way it is”.  I would like this blog to be a place where we might change that outlook.

To say we live in politically charged times is an insult to understatement.  Our courageous fighting men and women fight for freedoms abroad while we continue to lose freedoms at home.  Our hard-working families in the U.S. are losing their pensions, their health care, and struggling to keep up in a system that continues to squeeze the middle class.  The executive branch of our government has been gifted with unprecedented powers and created a personality cult bent on proving that, over time, absolute power will corrupt absolutely.   Now, more than ever, we cannot lose sight of our responsibilities as citizens of this nation and this world.  We’ve heard time and again over the past six years that “Freedom isn’t free”.  I believe this with all my mind and heart.  If we don’t get informed as individuals and stand up for what we know to be truth,  we could very easily lose that freedom and ensure tyranny for future generations.

The Populist blog was conceived with one idea in mind; to educate and inform individuals about current events and the political process.  It is designed to be a forum for discussion, debate, and learning.  Without the exchange of ideas and information we cannot grow as intelligent, thoughtful, self-examined beings.  To this end, I strongly encourage comments to anything and everything you read on this blog.  I will always put forth my opinion, but I’ll do my level best to support it with hard facts.  If you disagree, please let me know. I love to learn.  I would, however, encourage you – for your own education and enlightenment – to back up your opinions with facts as well.

Welcome, again, to The Populist.  Get Informed.