Iraqis Are Optimistic

According to polls Iraqis are upbeat about their future:

The survey of 1,967 Iraqis was conducted Feb. 27-March 5, after Iraq held its first free elections in half a century in January. According to the poll, 62% say the country is headed in the right direction and 23% say it is headed in the wrong direction. That is the widest spread recorded in seven polls by the group, says Stuart Krusell, IRI director of operations for Iraq. In September, 45% of Iraqis thought the country was headed in the wrong direction and 42% thought it was headed in the right direction. The IRI is a non-partisan, U.S. taxpayer-funded group that promotes democracy abroad.

No doubt the Left is as downcast about this poll as the Iraqis are enthusiastic. Will Bush get any credit from his critics for this turnaround or will their response to news like this be more like: "Bush slips in a hog pen and comes up smelling like rose water" We'll see.

What is a Soul?

A former student who is studying theology wrote not long ago to ask my opinion on the nature of the soul. I'm not a theologian, and I freely acknowledge that my guess is no better than anyone else's, but rushing in where wise mean fear to tread, this was my reply:

Some people think of the soul as a sort of "ghost in the machine", as Gilbert Ryle dismissively described the dualistic view of mind. Some people identify the soul with the mind. Some say the soul is our personality plus our body. In other words, for them the soul is the entire self.

It certainly could be that any of these is indeed what our soul is, although I think that if we include the body in the concept we run into a difficulty since bodies age and deteriorate. We might wonder whether our soul is what we are at ten years of age, or seventy, or at death. Despite the difficulty, however, I'm not discounting the idea.

My own view, though, is that our soul is really the totality of information which describes us: our personality, our life history (whether remembered or not), our values, knowledge, character, aspirations, etc. This information is not "in" us in any way, but rather it resides in the mind of God, like a file in a vast database, and is thus eternal. When our bodies die, this information, or at least some of it, is instantiated in another format (a body or body-like entity) in another world so that we are capable of experiencing another existence. We can think of it as a kind of download of information which creates the phenomena of "body" much like the software we load onto our computers creates the images we see on our screens.

This view is compatible with both materialism and substance dualism since regardless of which, if either, is true it has no bearing on the existential status of the soul. If it should turn out that mind is just the word we use to describe the functioning of the brain then the existence of the soul is no more jeopardized by that discovery than if it turns out, as I think it would, that the mind is something related to, but other than, the brain.

Even many materialists would acknowledge that a complete description of every person exists, although they could certainly add that the description is inaccessible and useless. They would doubtless point out that such a soul only exists in the same sense that numbers or logical relations exist even if there were no minds to apprehend them. They would exist but be utterly useless. The set of propositions which gives an exhaustive description of someone still exists after a person's body dies but would only be useful if it could be somehow conjoined with consciousness and another "body" of some sort. The possibility of this happening most (though perhaps not all) materialists would deny.

On the other hand, if there really is an omniscient God, then when my body dies, all is not lost. I, the set of propositions which describes the essential me, the information that comprises my identity, continue to exist in the mind of God. I may have no conscious awareness of my existence, it may be like being placed into a deep coma, but I exist nonetheless. I am not gone. If and when God decides to download the information (or the greater part of it) to some "body", the file marked with my name and containing a complete description of my self, infused with a spark of consciousness (mind?), becomes a revivified person. At that point I will have been resurrected, returned to life.

This has been the grand hope of Christianity and other theistic religions down through the ages, and it is this hope, this opportunity, that God held out to the world in prototype on the first Easter when He raised Christ from the dead.

On Tipping Points

I've read several articles lately that mention the possibility of March 16 being a "tipping point". This is a term given to an event or events that mark a significant point in time where, in hindsight, it becomes apparent that things will no longer be what they were.

Here's one of them from Morgan Stanley's Stephen Roach.

Tipping points are a great concept, but virtually impossible to identify ahead of time -- let alone when they are occurring. It is only with the great luxury of hindsight that we can look back and know that the proverbial bell has rung. In my view, March 16, 2005 could end up in the running as a possible tipping point for America. Suddenly, the US has taken on a very different aura in an increasingly unbalanced world: The confluence of a record current account deficit, a disaster from General Motors, and yet another new high for oil prices all speak of an increasingly precarious role for the global hegemon. World financial markets have barely begun to sniff that out.

...

But the message from overseas is that this game is just about over. One by one, Asian central banks -- America's financiers at the margin -- have dropped the not-so-subtle hint that they are saturated with dollar-denominated assets. From Korea and Japan to China and India -- not to dismiss Malaysia, Hong Kong, and Singapore -- there is a growing protest to massive dollar overweights in official reserve portfolios. The standard American response borders on arrogance: "What choice do they have?" The presumption is that the US has externally driven Asian economies over a barrel -- unwilling to accept a deterioration in export competitiveness that currency appreciation might bring. This misses a key cost-benefit tradeoff -- weighing the hit to exports against the fiscal cost of a portfolio loss on holdings of dollar-denominated assets. The bigger the build-up of dollar reserves, the more this tradeoff is likely to tip toward dollar diversification -- spelling the end of America's cut-rate foreign financing.

Trusting Without Proof

The service which provides us with a quotation each day from various philosophical sources sent this one from Thoreau's Walden the other day:

No way of thinking or doing, however ancient, can be trusted without proof.

We were just wondering what proof Thoreau had that no way of thinking can be trusted without proof.

Oh...This Can't Be Good

Following up on the troubles at General Motors, check this link where you will see that GM has $300 billion in debt. More importantly, you can also see that GM has a debt to equity ratio of over 10.

The significance of a debt to equity ratio as high as 10 can be found at this link to www.investopedia.com where we learn that:

A high ratio of 2 or more would expose the company to risk such as interest rate increases and creditor nervousness.

Foreign nations are plenty nervous and have been announcing that they will be selling U.S. bonds to diversify the holdings of their central banks: Russia, India, China, South Korea, and Japan.

Fed Chairman Alan Greenspan and the US are truly in a no-win situation. Greenspan must raise interest rates to stem inflation and make Treasury bonds more attractive to foreign countries. If he doesn't raise rates, the US will continue to lose the financing from foreign countries that has been fueling our economy. Yet if he raises rates, GM and others will go belly up. Note that for every one point that interest rates rise, refinancing GM's debt will cost an additional $3 billion in annual interest payments.

If GM fails, it would mean default on their debt of $300 billion dollars. That would make the Enron, World Com, and LTCM debacles look like a tea party in comparison.

Given the above, my initial reaction was to expect two possible outcomes, that GM would eventually file bankruptcy or they would become a takeover candidate by the likes of China. But after further consideration, I couldn't see a reason why any thinking investor would be interested in buying GM at any price with the excess baggage of $300 billion in debt. Upon further reflection it becomes apparent that it would be much more expedient to simply stand by and let GM enter into bankruptcy proceedings and then buy them at a discount. After bankruptcy, the stock holders lose everything and the bond (debt) holders might be lucky to get pennies on the dollar.

In any event, GM will be well worth watching as the end-game is sure to unfold over the next twelve months.

Room For Growth

According to a new CNN/USA Today/Gallup poll, relatively few Americans are generally familiar with the phenomenon of blogging, in which individuals, ranging from famous to anonymous, post running narratives of their thoughts and observations on whatever interests them:

[F]ewer than one in six Americans (15%) read blogs regularly (at least a few times a month). Just 12% of Americans read blogs dealing specifically with politics this often. Among Internet users, the numbers are similarly low: 19% and 15%, respectively.

According to a December 2004 Gallup Poll, the percentage of Americans getting their news on a daily basis from the mainstream media is 51% for local television news, 44% for local newspapers, 39% for cable news networks, 36% for the nightly broadcast network news, and 21% for radio talk shows. By contrast, only 3% of Americans say they read Internet blogs every day, and just 2% read politics-focused blogs daily.

Blog readers are younger than the population at large. Although 17% of the public is aged 18 to 29, a quarter of all blog readers (those who read even occasionally) are in this age bracket. At the older extreme, 17% of Americans are 65 and older, but only 6% of blog readers are this old.

There's lots of interesting data at the link, but the article promotes a misconception. Many of the most popular blogs are not really news disseminators. They're not in the same category as newspapers and the evening news. They are more like the op-ed page of the paper or the commentary at the end of the news report. As such, the comparison of blogs to news outlets is a little like comparing hammers to screw drivers.

Power Line notes, too, that the low percentage of blog readers is actually a promising statistic since it indicates that there is still a vast untapped market out there for bloggers to tap into.

Memos From Our Troops

Instapundit posts a series of e-mails from readers connected in some way with servicemen serving in Iraq. They're worth reading. The whole link is good, the e-mails start several paragraphs from the top.

America's Has-Been Economy

Articles like the one below make me feel like I'm not "a voice crying in the wilderness". Or if I am, at least I'm not alone.

America's Has-Been Economy

By PAUL CRAIG ROBERTS

A country cannot be a superpower without a high tech economy, and America's high tech economy is eroding as I write. The erosion began when US corporations outsourced manufacturing. Today many US companies are little more than a brand name selling goods made in Asia.

Corporate outsourcers and their apologists presented the loss of manufacturing capability as a positive development. Manufacturing, they said, was the "old economy," whose loss to Asia ensured Americans lower consumer prices and greater shareholder returns. The American future was in the "new economy" of high tech knowledge jobs.

This assertion became an article of faith. Few considered how a country could maintain a technological lead when it did not manufacture.

So far in the 21st century there is scant sign of the American "new economy." The promised knowledge-based jobs have not appeared. To the contrary, the Bureau of Labor Statistics reports a net loss of 221,000 jobs in six major engineering job classifications.

Today many computer, electrical and electronics engineers, who were well paid at the end of the 20th century, are unemployed and cannot find work. A country that doesn't manufacture doesn't need as many engineers, and much of the work that remains is being outsourced or filled with cheaper foreigners brought into the country on H-lb and L-1 work visas.

Confronted with inconvenient facts, outsourcing's apologists moved to the next level of fantasy. Many technical and engineering jobs, they said, have become "commodity jobs," routine work that can be performed cheaper offshore. America will stay in the lead, they promised, because it will keep the research and development work and be responsible for design and innovation. Alas, now it is design and innovation that are being outsourced. Business Week reports ("Outsourcing Innovation," March 21) that the pledge of First World corporations to keep research and development in-house "is now pass�."

Corporations such as Dell, Motorola, and Philips, which are regarded as manufacturers based in proprietary design and core intellectual property originating in R&D departments, now put their brand names on complete products that are designed, engineered, and manufactured in Asia by "original-design manufacturers" (ODM).

Business Week reports that practically overnight large percentages of cell phones, notebook PCs, digital cameras, MP3 players, and personal digital assistants are produced by original-design manufacturers. Business Week quotes an executive of a Taiwanese ODM: "Customers used to participate in design two or three years back. But starting last year, many just take our product."

Another offshore ODM executive says: "What has changed is that more customers need us to design the whole product. It's now difficult to get good ideas from our customers. We have to innovate ourselves." Another says: "We know this kind of product category a lot better than our customers do. We have the capability to integrate all the latest technologies." The customers are America's premier high tech names.

The design and engineering teams of Asian ODMs are expanding rapidly, while those of major US corporations are shrinking. Business Week reports that R&D budgets at such technology companies as Hewlett Packard, Cisco, Motorola, Lucent Technologies, Ericsson, and Nokia are being scaled back.

Outsourcing is rapidly converting US corporations into a brand name with a sales force selling foreign designed, engineered, and manufactured goods. Whether or not they realize it, US corporations have written off the US consumer market. People who do not participate in the innovation, design, engineering and manufacture of the products that they consume lack the incomes to support the sales infrastructure of the job diverse "old economy." "Free market" economists and US politicians are blind to the rapid transformation of America into a third world economy, but college bound American students and heads of engineering schools are acutely aware of declining career opportunities and enrollments. While "free trade" economists and corporate publicists prattle on about America's glorious future, heads of prestigious engineering schools ponder the future of engineering education in America.

Once US firms complete their loss of proprietary architecture, how much intrinsic value resides in a brand name? What is to keep the all-powerful ODMs from undercutting the American brand names? The outsourcing of manufacturing, design and innovation has dire consequences for US higher education. The advantages of a college degree are erased when the only source of employment is domestic nontradable services.

According to the Los Angeles Times (March 11), the percentage of college graduates among the long-term chronically unemployed has risen sharply in the 21st century. The US Department of Labor reported in March that 373,000 discouraged college graduates dropped out of the labor force in February--a far higher number than the number of new jobs created.

The disappearing US economy can also be seen in the exploding trade deficit. As more employment is shifted offshore, goods and services formerly produced domestically become imports. Nothink economists and Bush administration officials claim that America's increasing dependence on imported goods and services is evidence of the strength of the US economy and its role as engine of global growth. This claim ignores that the US is paying for its outsourced goods and services by transferring its wealth and future income streams to foreigners. Foreigners have acquired $3.6 trillion of US assets since 1990 as a result of US trade deficits.

Foreigners have a surfeit of dollar assets. For the past three years their increasing unwillingness to acquire more dollars has resulted in a marked decline in the dollar's value in relation to gold and tradable currencies. Recently the Japanese, Chinese, and Koreans have expressed their concerns. According to Bloomberg (March 10), Japan's unrealized losses on its dollar reserve holdings have reached $109.6 billion.

The Asia Times reported (March 12) that Asian central banks have been reducing their dollar holdings in favor of regional currencies for the past three years. A study by the Bank of International Settlements concluded that the ratio of dollar reserves held in Asia declined from 81% in the third quarter of 2001 to 67% in September 2004. India reduced its dollar holdings from 68% of total reserves to 43%. China reduced its dollar holdings from 83% to 68%. The US dollar will not be able to maintain its role as world reserve currency when it is being abandoned by that area of the world that is rapidly becoming the manufacturing, engineering and innovation powerhouse. Misled by propagandistic "free trade" claims, Americans will be at a loss to understand the increasing career frustrations of the college educated. Falling pay and rising prices of foreign made goods will squeeze US living standards as the declining dollar heralds America's descent into a has-been economy. Meanwhile the Grand Old Party has passed a bankruptcy "reform" that is certain to turn unemployed Americans living on debt and beset with unpayable medical bills into the indentured servants of credit card companies. The steely-faced Bush administration is making certain that Americans will experience to the full their counry's fall.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: pcroberts@postmark.net

Brave New World

Judge George Greer has ruled that the feeding tube nourishing Terri Schiavo must be removed and she must be allowed to starve to death. Imagine for one moment that authorities ruled that food must be withheld from someone on death row, or from a suspected al Qaida detainee, until the prisoner starved to death. The left would be incandescent with rage. They would be screaming about the cruelty and inhumanity of the ruling. They would be shouting at the tops of their formidable lungs about egregious violations of human rights and the Geneva accords. Calls would go out from every organ of liberalism demanding the ouster or impeachment of every and any official who could be tied to this reprehensible decision.

But in the case of a completely innocent woman who is neither a criminal nor a terrorist, the Left is almost preternaturally silent. They seem perfectly content to let Terri Schiavo be killed through a long slow process of starvation and dehydration. Even worse, some democrats are allegedly attempting to exploit the tragedy of this woman and her family by turning it to partisan political advantage.

Rush Limbaugh said today that an editorial in a national newspaper (I missed the name of the paper) asserted that we are not actually killing Ms Schiavo by removing her feeding tube, we're simply allowing nature to take its course by not forcing her to live. This statement, if I heard it correctly, is uncommonly dumb even by liberal standards. If a mother refuses to feed her infant would that editorialist argue that the mother wasn't really killing the child, but was rather simply letting nature take its course? Anyone who doesn't wish to care for either the very young or the elderly need only withhold food from them and let them die and they bear no guilt. Welcome to our Brave New World.

The next time you hear someone from the Left say that capital punishment is cruel and unusual punishment and should be abolished, or that torturing a suspected terrorist violates his human rights and demeans us as a nation, ask this person where he or she was when an American judge unilaterally sentenced Terri Schiavo to starve to death while her parents stood by legally helpless. Anyone who is indifferent to Ms Schiavo's plight and that of her family has no moral credibility on any other human rights issue.

Italy's Staying

Contrary to recent reports, the Italians are not abandoning Iraq, or us, after all. The Left must be disconsolate:

Italian Prime Minister Silvio Berlusconi has sought to clarify his announcement on the withdrawal of Italian troops from Iraq. Mr Berlusconi says the timing of the troop withdrawal will depend upon Iraq's security situation.

Yesterday Mr Berlusconi announced Italy would begin a gradual pullout in September in line with public opinion and as agreed with British Prime Minister Tony Blair. Mr Berlusconi told US President Bush in a telephone call that he wants to begin removing his country's 3,300 troops in September if possible, his office said.

Mr Berlusconi "reiterated to President Bush his wish to begin a gradual and progressive withdrawal of the Italian contingent in Iraq as quickly as possible, and if possible from September," his office said in a statement. Mr Berlusconi said he would not act unilaterally.

"If it's not possible, it's not possible, everything has to be agreed with the allies," he said. "We will do everything in a concerted manner."

When Mr Blair was asked about the Italian withdrawal in the House of Commons overnight, he said Mr Berlusconi's comments had been misinterpreted. Both leaders now agree their countries troops will remain in Iraq until Iraqi forces are ready to take their place.

Italian soldiers are based in the relatively peaceful area of Nasiriyah in southern Iraq, which is under British command. Italy has been one of US President Bush's closest allies in Iraq, where it is the fourth biggest troop contributor.

Quite clearly, Italy isn't Spain.

China Syndrome

Bill Roggio at The Fourth Rail has a very interesting analysis of the future of Chinese/ American relations. He considers the prospects of a Chinese assault on Taiwan and finds them improbable. He also considers Chinese prospects in a conventional military conflict with the U.S. and finds them dismal. His arguments are compelling. Check them out.

Environmentalists Miss an Opportunity

The senate has voted 51-49 to open the Alaskan National Wildlife Refuge (ANWR) to oil drilling. It's not, however, a done deal:

Sen. Ted Stevens, R-Alaska, who has fought for 24 years to open the Arctic National Wildlife Refuge to oil companies, acknowledged it still could be "a long process" before a final drilling measure clears Congress. Lawmakers must agree on the final budget, something they failed to do last year, or Wednesday's vote would have been for naught.

Nevertheless, environmentalists have lost a superb opportunity to capitalize on what was, or is, inevitable: that drilling would take place in ANWR. Our preference would have been to leave ANWR alone, but given that the thirst for oil would not be quenched and no other practical solution to our energy problems is currently available or economically painless, environmentalists should have seen this coming.

What they should have done, instead of fighting extraction of ANWR's reserves with all their energies and resources, was cut a compromise years ago. They should have agreed to no longer stand in the way of drilling in ANWR if the Interior Department would guarantee that another (or several) large wildlife refuge would be created somewhere else in the United States and if guarantees could be put in place that the oil companies would leave ANWR as much like they found it as is technologically and economically feasible.

Because of the environmentalist's insistence on total victory on this issue those who care about conserving wild lands and natural beauty wind up with nothing when they might have preserved another new refuge from the depredations of developers. With foresight like this, it's no wonder the environmental movement is dying.

This isn't the only tactical mistake the environmentalists have made in this contest. For years they've fought oil drilling in ANWR, contending it would lead to "a spider web of drilling platforms, pipelines and roads that would adversely impact the calving grounds of caribou, polar bears and millions of migratory birds that use the refuge's coastal plain." No one knows if this is true, of course, but the experience we have in other places is that wildlife adjusts and in some ways even prospers. By staking their credibility on dubious arguments and indemonstrable assertions the environmentalists succeed merely in squandering their credibility.

Sen. Maria Cantwell, D-Wash. claimed that it is "foolish to say oil development and a wildlife refuge can coexist." But it is certainly as foolish to say that they can't. One of the jewels in the National Wildlife Refuge system is John Heinz refuge in Philadelphia which is bounded by Philadelphia International Airport, oil storage depots, a busy interstate highway and other scars upon the land. We ardently wish this weren't so, but as long as the refuge has been allowed to maintain something of a land buffer against encroachment the impact of these stressors seems to have been minimal.

Our dream is to see as much land as is possible permanently preserved from development, but sometimes one must take a step back in order to move forward. Yielding a relatively small tract of land in the midst of an inaccessible wilderness in order to acquire more critical habitat elsewhere would have been a fantastic trade-off, benefiting both wildlife and humans. Environmentalists had a chance to do this before the 2004 elections when the oil advocates were politically weaker, and they refused to do it. Now those who care about land preservation must take a step back at ANWR with no good prospect of any step forward anywhere else.

This was not the environmental movement's finest hour, but as Ted Stevens suggests above, perhaps they still have a chance to salvage a victory for preservation when lawmakers hammer out a final budget. Our suggestion is that the oil companies who will profit from ANWR oil be required to purchase and donate land in the lower 48 to the Department of the Interior for use as a refuge, or that their leasing fees be put to this purpose so that valuable wild lands can be incorporated into the National Wildlife Refuge system and preserved their for generations to come.

The Judicial Usurpation of Democracy

Viewpoint has been arguing ever since our first post last May that legalizing gay marriage will have the ultimate consequence of destroying the institution of marriage altogether. The rationale given for the recent decision by judge Richard A. Kramer of San Francisco County Superior Court overturning California's marriage laws provides all the confirmation of the validity of this concern that one could ask for.

According to the New York Times Judge Kramer stated that "the denial of marriage to same-sex couples appears impermissibly arbitrary," thus violating the equal protection clause of the state's Constitution. In other words, defining marriage as a bond between one man and one woman is unsupported by anything more than cultural habit and preference.

The fact is, of course, that any secular definition of marriage is going to be arbitrary. No matter how a legislature chooses to define marriage, if religion and tradition are ruled to be inadequate grounds for the definition, it can be based on nothing more than sociological fashion. Thus if marriage cannot be limited to one man and one woman because that would be an arbitrary restriction, on what grounds will we be able to limit marriage to just two people?

If the gender of the spouses is a matter of cultural caprice why is not the number of spouses? If two thousand years of tradition isn't enough to eliminate what is seen as the discretionary nature of heterosexual marriage, how will courts be able to uphold laws establishing marriage as a union of just two persons?

The answer is, of course, that they won't. If Judge Kramer's reasoning is accepted by the appeals courts the door will have swung wide open for redefining marriage any way some judge finds agreeable. There will certainly be no difficulty in finding courts sufficiently sympathetic to those who wish to push the social envelope by demanding the right to participate in group marriage. But when marriage means whatever anybody wants it to mean then it will really mean nothing at all and will cease to exist, at least in the form we recognize today.

The addled and myopic reasoning which afflicts Judge Kramer's opinion is not untypical of contemporary liberal jurisprudence, which is why it is imperative that conservative judges be appointed to the federal bench and Supreme Court. The Left knows its ideas, such as they are, would not prevail in state or national legislatures so it circumvents these by enacting its agenda through judicial fiat.

If Democrats are allowed to continue to obstruct and block President Bush's nominees, who are the only hope we have of turning back this "judicial usurpation of democracy", we will continue to get more sophomoric judicial opinions such as the vacuous judgment handed down by Justice Kennedy in the recent Simmons case and the witless nullity delivered by Judge Kramer in this one.

The Wasteland

Why is it that the MSM and especially the cable news shows have given us every sordid detail of the cases of Scott Peterson, Michael Jackson, Martha Stewart, and Robert Blake, but seem singularly uninterested in Terri Schiavo? Is it because Terri Schiavo just isn't glamorous?

A woman is about to be deliberately starved to death over the horrified objections of her parents, simply because her legal husband, who has long ago abandoned her for another woman with whom he's had a couple of children, wants her dead, as does the judge in the case. The legal and cultural implications of Ms Schiavo's plight are immeasurably more significant than those of the stories receiving all the media notoriety and scrutiny, but she is neither rich, famous, nor attractive and so the media can't be bothered to do any real reporting on her awful circumstances.

It's much more important to the television news "journalists" that we see video every ten minutes of Jacko showing up in court in his pajamas and that we check out the ensemble Martha is sporting as she leaves her prison gig behind. What incredibly shallow people they must be who put together the stuff that America watches every night. Do they really take their work and themselves seriously?

Marshall McLuhan noted some forty years ago that television was a vast wasteland. He should see it today.

Racial Hectoring

Here's a twist. White students, offended by a lecture given by the secretary of state for New Jersey, an African American woman, walked out of school and refused to go to classes. Evidently, the speaker, Ms Regina Thomas, accused students in ungentle accents of being ignorant of black history and being racists. The students refused to take the insults meekly and walked out of school, essentially shutting the place down for the day.

Imagine that. White kids finally getting tired of abasing themselves whenever some minority spokesperson takes it upon herself to lecture them about what evil racists they are and how guilty they should feel about it.

If more audiences would just get up and walk out when race hustlers like Ms Thomas take the stage maybe there'd be a lot less racial hectoring and consequently a lot less white hostility and a lot more racial comity. No one likes being insulted because of their race, after all. Surely Ms Thomas should understand that.

See here for more.

The Party Continues

For 2004, the current account deficit surged to a new high of $665.9 billion from the 2003 gap of $530.7 billion, the Commerce Department said. Given my rants in the past about this issue, I doubt if any of our readers are actually surprised with this news but there is an interesting observation to make.

Historically, international trade accounts were settled with gold bullion. In other words, there was no "credit" in international trade. If you ran out of gold, you didn't do business. Since those days of good sense are gone, and in today's world of fiat currencies, it has been customary that when a country would run a trade deficit that spiraled out of control, their currency would devalue against the currency of other countries. This devaluation would raise the cost of imports making the debtor countries exports more competitively priced. This would create demand for the goods they manufactured causing their manufacturing sector to hire more people to meet the demand. This would stimulate the economy and the trade deficit would return to a more balanced state. Manufacturing was essential to the economic health of a country.

Since the year 2000, our currency has devalued against the currencies of other foreign countries by over 20% as a result of the mechanics mentioned above yet we see that our trade deficit continues to explode. Why? For two reasons, first, China and Japan won't allow our currency to devalue against theirs as they will purchase US dollars on the open market which strengthens the dollar in relation to their currencies and secondly, because we have no manufacturing sector of any significance anymore. As it was being dismantled over the last ten years we were told that it didn't matter because we were transitioning into a "service" economy.

Well, it does matter. There used to be an old expression, "As GM goes, so goes the country". Today General Motors abandoned projections of a break-even or even slightly profitable first quarter and slashed its full-year earnings outlook by more than half, citing poor North American business. Its share price tumbled to its lowest in more than a dozen years, from its old high of 94, General Motors closed just above 29 today -- a total loss of 70%. If it wasn't for their financing division - GMAC, they'd probably be out of business by now.

If one were to conspire to destroy this once great country, they could think of no better plan than to enact the fiscal and trade policies our politicians have promoted over the last decade. The terrorists don't have to do anything to destroy our country, we're managing quite nicely without their help.

Americans need to turn off the TV, stop believing what their told and start doing some critical thinking about what they see happening. These issues need to be core platform issues of candidates running for office and I'm not talking about Al Gore's lame "medicare lock box" drivel and then they need to be held accountable to ensure their implementation.

Slavery was never really abolished in this country, the criteria simply shifted from the color of one's skin to the amount of debt that they have. The master is now the banker and people in debt are enslaved to them. That reminds me, congress recently passed new legislation that prevents individuals from filing chapter 7 bankruptcy. That means your debt will be restructured in a way that you can pay it back but make no mistake, you will pay it back unless you'd rather be living in a cardboard box in an alley somewhere.

Trade deficits like we have today mean our children will inherit the responsibility to pay for them. Five percent interest on $665 billion dollars is $30 billion dollars a year. That's just the cost of the interest and that's just one obligation we're leaving to our children not to mention the cost of all of the other un-funded liabilities they will incur. We are a country with a "service" economy alright. We have become a country of people whose life's work will be to "service" the interest on a debt that can never be paid back. Personally, I'm truly ashamed to be part of a generation who's legacy was to enslave their children in poverty.

Chrenkoff's 23rd

The 23rd installment of Arthur Chrenkoff's Good News From Iraq is up. The installments keep getting longer and longer as the good news keeps building. Iraq is in every way undergoing an amazing transformation. The economy is growing, the infrastructure is improving, and the security situation is steadily improving. Even some of President Bush's critics are now admitting that maybe there is cause for optimism after all.

Going It Alone

We read that the Italians are planning to withdraw their troops from Iraq in September. We're also told in the same article that fourteen other nations have withdrawn their forces in the past year, and that twenty three nations besides the U.S. still remain there, contributing almost 23,000 troops.

Huh. And here we thought from listening to Chris Matthews that our "go-it-alone" president had us there all by ourselves.

Safer in Iraq

Some 75 Americans have been killed in hostilities so far this year in ..... Philadelphia. There have been five people murdered in the last six days in York, PA. It's safer to be an American soldier in Iraq right now than it is to be a resident in America's cities.

Greenspan on SS

Dr. Greenspan's latest testimony was thoroughly disturbing and I would like to respond to it more completely but for now I can only post the following in response to the link:

However, by almost any measure, the required amount of saving that would be necessary is sufficiently large to raise serious questions about whether we will be able to meet the retirement commitments already made. Much has been made of shortfalls in our private defined-benefit plans, but the gross underfunding currently at $450 billion, although significant as a percentage of the $1.8 trillion in assets of private defined-benefit plans, is modest compared with the underfunding of our publically administered pensions.

So what is Dr. Greenspan saying here? Relative to the rip off of the public by their employers, the government rip off isn't as bad?

At present, the Social Security trustees estimate the unfunded liability over the indefinite future to be $10.4 trillion. The shortfall in Medicare is calculated at several multiples of the one in Social Security. These numbers suggest that either very large tax increases will be required to meet the shortfalls or benefits will have to be pared back.

It looks like the link I've posted several times in the past interview (requires Real Player) with Mr. Lawrence Kotlikoff turns out to be quite acurate.

Because benefit cuts will almost surely be at least part of the resolution, it is incumbent on government to convey to future retirees that the real resources currently promised to be available on retirement will not be fully forthcoming. We owe future retirees as much time as possible to adjust their plans for work, saving, and retirement spending. They need to ensure that their personal resources, along with what they expect to receive from government, will be sufficient to meet their retirement goals.

What I read here is that Dr. Greenspan is suggesting that congress tell the people that the government isn't going to keep its promise of return on the investment workers have made all of their working lives and the sooner the better. Yet our government fully intends to continue taking our dollars out of every pay check to fund the promise that they now can no longer keep.

In other words, we the government made a promise to you, the poor working sap, that we will take your money and give it back to you when you need it. But now we see that there is no way we can keep our promise so we have a responsibility to tell you that you are screwed as soon as possible so you can adjust your expectations. But we're going to continue taking your money. Where's the outrage?

If Dr. Greenspan is so concerned about our "personal resources being sufficient to meet our retirement goals, then why does the government continue to take them from us? Why does the Fed maintain a policy of low interest rates that encourages further debt rather than savings? Why is there rampant inflation as a result of Fed policy that encourages people to spend today because tomorrow their dollars will be worth less? Why has the Fed created the biggest housing bubble in history so people can take out home equity loans that enables them to consume more stuff and at the same time, acquire further debt?

During the first Bush administration, Secretary of Treasury Paul O'Neil commissioned a study to determine the extent of the unfunded liabilities of the US and discovered it was $44 trillion dollars (today it's about $55 trillion). Upon making the administration aware of this crisis, he was dismissed. Paul O'Neil was a good man (ex CEO of Alcoa) but a lousy politician. You see, were his findings to become public knowledge, Bush may not have been reelected.

Now that Bush is in his second term, the timing is more appropriate to let the word out in a "kinder and gentler" way. According to Dr. Greenspan, the shortfall in Medicare is calculated at "several multiples of the one in Social Security". Good luck America.