Afghanistan Déjà vu? Lessons from the Soviet Experience
National Security Archive Electronic Briefing Book No. 292
Edited by Svetlana Savranskaya
Posted - October 30, 2009
For more information contact:
Svetlana Savranskaya: 202/994-7190
Washington, D.C., October 30, 2009 - The debate over U.S. policy in the Afghanistan war features striking and troubling parallels with the choices faced by Soviet general secretary Mikhail Gorbachev in the 1980s, according to Soviet documents posted today on the Web by the National Security Archive. The documents have sparked a series of recent articles by Rodric Braithwaite (“New Afghan Myths Bode Ill for Western Aims,” October 15, 2008) in the Financial Times, Peter Beaumont (“Same Old Mistakes in Afghanistan,” October 18, 2009) in the Observer, Mark Thomson (“Soviets in Afghanistan … Obama’s Déjà vu?”, October 19, 2009 in Time, and Victor Sebestyen (“Transcripts of Defeat,” October 28, 2009) in the New York Times.
The documents obtained by the National Security Archive from the Russian archives show that even if history does not repeat, it almost certainly rhymes—more than 20 years later, U.S. policy makers are encountering very similar choices and analyses as they discuss the options for prosecuting or ending the war.
In terms that parallel those offered to President Obama by Gen. Stanley McChrystal, the Soviet military told their leaders in the mid-1980s that the war was not winnable by purely political means and that the initial analysis on the basis of which the troops were introduced did not take into account the historical and religious context of the country. Most strikingly, the Soviets complained that the top leader they helped to install lacked political legitimacy and probably would need to be replaced.
The Soviet military bemoaned the fact that even though every single piece of land was at some point controlled by the Soviet military, the moment the Soviet troops moved on, the territory was immediately re-taken by the armed resistance. Even after Babrak Karmal was replaced by Najubullah and the policy of national reconciliation was introduced, the internal resistance kept intensifying. In January 1987, for example, Defense Minister Marshal Sokolov reports that “the military situation has deteriorated sharply. The number of shelling of our garrisons has doubled. […] This war cannot be won militarily.” The growing numbers of Soviet casualties are cited in every report and discussion.
The choice between putting in more troops and delaying the withdrawal or withdrawing decisively and on schedule eventually put a rift between Gorbachev and his Foreign Minister Eduard Shevardnadze, who argued for a delayed withdrawal and providing more military support for Najibullah. In the end, the Soviets withdrew on February 15, 1989, fully anticipating the fall of Najibulah government. A major factor mentioned repeatedly in the internal Soviet exchanges was the need for comprehensive international mediation with Pakistan and the United States at the center of any such process – a condition that did not exist at the time of the Soviet pullout and would not come to pass.
Read the Documents
Politburo Session, November 13, 1986
(Full text also available from the Cold War International History Project Bulletin, Issues 8-9, Winter 1996/1997, pp. 1787-181)
The first detailed Politburo discussion of the process and difficulties of the withdrawal of the Soviet troops from Afghanistan, which included the testimony of Marshal Sergei Akhromeev.
Politburo Session, January 21, 1987
The Politburo discusses the results of Foreign Minister Eduard Shevardnadze and Head of the Central Committee International Department Anatoly Dobrynin’s trip to Afghanistan. Shevardnadze’s report is very blunt and pessimistic about the war and the internal situation. The main concern of the Politburo is how to end the war but save face and ensure a friendly and neutral Afghanistan.
Colonel Tsagolov Letter to USSR Minister of Defense Dmitry Yazov on the Situation in Afghanistan, August 13, 1987
Criticism of the Soviet policy of national reconciliation in Afghanistan and analysis of general failures of the Soviet military mission there are presented in Colonel Tsagolov’s letter to USSR Defense Minister Dmitry Yazov of August 13, 1987. This letter represents the first open criticism of the Afghan war from within the military establishment. Colonel Tsagolov paid for his attempt to make his criticism public in his interview with Soviet influential progressive magazine “Ogonek” by his career—he was expelled from the Army in 1988.
Life takes us in many strange directions and wonderful discoveries. It never turns out the way we thought it would.
Saturday, October 31, 2009
Friday, October 30, 2009
Passports Associated with 9-11 Attackers Found In Pakistan
SHERWANGAI, Pakistan — Pakistani soldiers battling their way into a Taliban stronghold along the Afghan border have seized passports that may be linked to 9/11 suspects, as they confront an enemy skilled in operating in a mountainous terrain with endless ways to wage a guerrilla war.
The military on Thursday took foreign and local journalists for a first look inside the largely lawless territory since it launched a ground offensive here in mid-October. The U.S.-backed operation is focused on a section of the tribal region where the Pakistani Taliban are based and are believed to shelter al-Qaida.
Soldiers displayed passports seized in the operation, among them a German document belonging to a man named Said Bahaji. That matches the name of a man thought to have been a member of the Hamburg cell that conceived the 9/11 attacks. Bahaji is believed to have fled Germany shortly before the attacks in New York and Washington.
The passport included a tourist visa for Pakistan and a stamp indicating he'd arrived in the southern city of Karachi on Sept. 4, 2001.
Another passport, from Spain, bears the name of Raquel Burgos Garcia. Spanish media have reported that a woman with the same name is married to Amer Azizi, an alleged al-Qaida member from Morocco suspected in both the 9/11 attacks and the Madrid train bombings in 2004.
Her family in Madrid has had no news of her since 2001, according to Spanish media. Her passport included visas to India and Iran, and the army displayed a Moroccan document with Burgos Garcia's photo and other information.
It was impossible to determine whether the passports are genuine, and German and Spanish officials did not immediately respond to requests for comment.
Maj. Gen. Athar Abbas, the army's chief spokesman, said he had not realized the passports matched any prominent names, and declined further comment other than to say European
Read more at: http://www.huffingtonpost.com/2009/10/29/passports-linked-to-911-f_n_339379.html
The military on Thursday took foreign and local journalists for a first look inside the largely lawless territory since it launched a ground offensive here in mid-October. The U.S.-backed operation is focused on a section of the tribal region where the Pakistani Taliban are based and are believed to shelter al-Qaida.
Soldiers displayed passports seized in the operation, among them a German document belonging to a man named Said Bahaji. That matches the name of a man thought to have been a member of the Hamburg cell that conceived the 9/11 attacks. Bahaji is believed to have fled Germany shortly before the attacks in New York and Washington.
The passport included a tourist visa for Pakistan and a stamp indicating he'd arrived in the southern city of Karachi on Sept. 4, 2001.
Another passport, from Spain, bears the name of Raquel Burgos Garcia. Spanish media have reported that a woman with the same name is married to Amer Azizi, an alleged al-Qaida member from Morocco suspected in both the 9/11 attacks and the Madrid train bombings in 2004.
Her family in Madrid has had no news of her since 2001, according to Spanish media. Her passport included visas to India and Iran, and the army displayed a Moroccan document with Burgos Garcia's photo and other information.
It was impossible to determine whether the passports are genuine, and German and Spanish officials did not immediately respond to requests for comment.
Maj. Gen. Athar Abbas, the army's chief spokesman, said he had not realized the passports matched any prominent names, and declined further comment other than to say European
Read more at: http://www.huffingtonpost.com/2009/10/29/passports-linked-to-911-f_n_339379.html
Pakistan's Intelligence Agencies Are "Playing Both Sides" To Get Massive US Government Aid
Here is a view of the various intelligence agencies in the Pakistani bureaucracy. I will bet that one or more of them know where Bin Laden and his management team are. They also know how to find all of the Taliban leadership. Why don't they act on this information? One part of the answer is they have some sympathy for these radical Muslims. The other part of the answer is they know they would lose billions of dollars in US aid they now receive and billions more they are going to receive. The losses of life inside Pakistan are considered collateral damage or necessary sacrifices for the perceived greater good.
Overview Of Intelligence Services:
Pakistan has three main intelligence services, Intelligence Bureau (IB), Military Intelligence (MI) & Inter-Services Intelligence (ISI). The common goal of these agencies is to look after interests and preserve national security of Pakistan on both external and internal fronts.
Intelligence Bureau (IB)
Primary job of Intelligence Bureau(IB) is tomonitor politicians, political activists, suspected terrorists, and suspected foreign intelligence agents.The IB keeps tabs on political operatives from countries it considers hostile to Pakistan's interests.Intelligence Bureau(IB) is headed byDirector General Intelligence Bureauand is part ofthe Interior Ministry of Pakistan.IBreports directly to the Prime Minister's office .
Military Intelligence (MI)
Military intelligence is tasked with counterinsurgency operations, identifying and eliminating sleeper cells, foreign agents and other anti Pakistani elements within Pakistan. Additional functions involve monitoring high level military and political leaders and safe guarding critical facilities such as military and non-military installations. MI also has limited external role as well.
Inter-Services Intelligence (ISI)
ISI is one of the best and very well organized intelligence agency in the world. It was founded in 1948. In 1950 it was officially given the task to safe guard Pakistani interests and national security inside and outside the country.
The ISI is tasked with collection of of foreign and domestic intelligence; co-ordination of intelligence functions of the three military services; surveillance over its cadre, foreigners, the media, politically active segments of Pakistani society, diplomats of other countries accredited to Pakistan and Pakistani diplomats serving outside the country; the interception and monitoring of communications; and the conduct of covert offensiveand wartimeoperations.
ISI is headquartered in Islamabad and works under a Director General, a serving Lieutenant General of the Pakistan Army. There are three Deputy Director Generals-designated DDG (Political), DDG (External) and DDG (General). The ISI is staffed mainly by personnel deputed from the police,para-military forces and some specialized units of the Army. There areover 25,000 active men on its staff.This figure does not include informants and assets. It is organized into six to eight divisions, which are listed below,
Joint Intelligence X:JIX,serves as the secretariat which co-ordinates and provides administrative support to the other ISI wings and field organizations. It also prepares intelligence estimates and threat assessments.
Joint Intelligence Bureau:JIB, responsible for political intelligence, was the most powerful component of the organization during the late 1980s. The JIB consists of three subsections, with one subsection devoted to operationsinvolvingIndia, other operations involve,anti-terrorismandVIP security. This is the largest part of ISI.
Joint Counter Intelligence Bureau:JCIB,is responsible for field surveillance of Pakistani diplomats stationed abroad,if need be monitoring foreign diplomats,as well as for conducting intelligence operations in the Middle East, South Asia, China, Afghanistan and the Muslim republics of the former Soviet Union.
Joint Intelligence / North: JIN,is responsible for Jammu and Kashmir operations, including monitoring Indian forces deployed within disputed Kashmir.
Joint Intelligence Miscellaneous: JIM, offensive intelligence operationsand war time espionage.
Joint Signal Intelligence Bureau: JSIB, which includes Deputy Directors for Wireless, Monitoring and Photos, operates a chain of signals intelligence collection stations,and provide communication support to its operatives.It aslocollects Intelligence through monitoring of communications channels of neighboring countries. A sizeable number of the staff is from the Army Signal Corps.It is believed that it has its units in Karachi, Lahore and Peshawar.
Joint Intelligence Technical:JIT, not much is know about this section however it is believedthat JITinclude a separate explosives section and a chemical warfare section.
Overview Of Intelligence Services:
Pakistan has three main intelligence services, Intelligence Bureau (IB), Military Intelligence (MI) & Inter-Services Intelligence (ISI). The common goal of these agencies is to look after interests and preserve national security of Pakistan on both external and internal fronts.
Intelligence Bureau (IB)
Primary job of Intelligence Bureau(IB) is tomonitor politicians, political activists, suspected terrorists, and suspected foreign intelligence agents.The IB keeps tabs on political operatives from countries it considers hostile to Pakistan's interests.Intelligence Bureau(IB) is headed byDirector General Intelligence Bureauand is part ofthe Interior Ministry of Pakistan.IBreports directly to the Prime Minister's office .
Military Intelligence (MI)
Military intelligence is tasked with counterinsurgency operations, identifying and eliminating sleeper cells, foreign agents and other anti Pakistani elements within Pakistan. Additional functions involve monitoring high level military and political leaders and safe guarding critical facilities such as military and non-military installations. MI also has limited external role as well.
Inter-Services Intelligence (ISI)
ISI is one of the best and very well organized intelligence agency in the world. It was founded in 1948. In 1950 it was officially given the task to safe guard Pakistani interests and national security inside and outside the country.
The ISI is tasked with collection of of foreign and domestic intelligence; co-ordination of intelligence functions of the three military services; surveillance over its cadre, foreigners, the media, politically active segments of Pakistani society, diplomats of other countries accredited to Pakistan and Pakistani diplomats serving outside the country; the interception and monitoring of communications; and the conduct of covert offensiveand wartimeoperations.
ISI is headquartered in Islamabad and works under a Director General, a serving Lieutenant General of the Pakistan Army. There are three Deputy Director Generals-designated DDG (Political), DDG (External) and DDG (General). The ISI is staffed mainly by personnel deputed from the police,para-military forces and some specialized units of the Army. There areover 25,000 active men on its staff.This figure does not include informants and assets. It is organized into six to eight divisions, which are listed below,
Joint Intelligence X:JIX,serves as the secretariat which co-ordinates and provides administrative support to the other ISI wings and field organizations. It also prepares intelligence estimates and threat assessments.
Joint Intelligence Bureau:JIB, responsible for political intelligence, was the most powerful component of the organization during the late 1980s. The JIB consists of three subsections, with one subsection devoted to operationsinvolvingIndia, other operations involve,anti-terrorismandVIP security. This is the largest part of ISI.
Joint Counter Intelligence Bureau:JCIB,is responsible for field surveillance of Pakistani diplomats stationed abroad,if need be monitoring foreign diplomats,as well as for conducting intelligence operations in the Middle East, South Asia, China, Afghanistan and the Muslim republics of the former Soviet Union.
Joint Intelligence / North: JIN,is responsible for Jammu and Kashmir operations, including monitoring Indian forces deployed within disputed Kashmir.
Joint Intelligence Miscellaneous: JIM, offensive intelligence operationsand war time espionage.
Joint Signal Intelligence Bureau: JSIB, which includes Deputy Directors for Wireless, Monitoring and Photos, operates a chain of signals intelligence collection stations,and provide communication support to its operatives.It aslocollects Intelligence through monitoring of communications channels of neighboring countries. A sizeable number of the staff is from the Army Signal Corps.It is believed that it has its units in Karachi, Lahore and Peshawar.
Joint Intelligence Technical:JIT, not much is know about this section however it is believedthat JITinclude a separate explosives section and a chemical warfare section.
Thursday, October 29, 2009
A Secretary's Simple Mistake Costs Pesi Cola $1.26 Billion Dollars; Do You Think She Still Has Her job?
Price to PepsiCo for Not Being in Court: $1.26 Billion
* Lynne Marek, The National Law Journal
* On 3:01 am EDT, Wednesday October 28, 2009
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What's the cost of not showing up to court? For PepsiCo Inc., it's a $1.26 billion default judgment. A Wisconsin state court socked the company with the monster award in a case alleging that PepsiCo stole the idea to bottle and sell purified water from two Wisconsin men.
Now the company is scrambling to salvage the situation. The damages award was handed down on Sept. 30. PepsiCo filed motions to vacate the order and dismiss the claims on Oct. 13, saying it wasn't even aware of the lawsuit until Oct. 6.
The litigation began in April when Charles Joyce and James Voigt sued the soft drink maker and two of its distributors, alleging they had misappropriated trade secrets from confidential discussions the plaintiffs had with the distributors in 1981 about selling purified water. The information was illicitly passed to PepsiCo, which used it to develop and sell Aquafina bottled water, the plaintiffs allege in the case filed in the Circuit Court of Jefferson County before Judge Jacqueline Erwin.
In court documents, PepsiCo argues it was improperly served with the Wisconsin lawsuit in North Carolina, but also asks the court to excuse the corporate bureaucracy that buried a legal document for weeks. While plaintiffs say they served the lawsuit in June on PepsiCo's registered agent in North Carolina, where the company is incorporated, PepsiCo says its law department at the company's Purchase, N.Y.-based headquarters was not notified until September.
"The bottom line is there was a defect in the process for us, but also for" the plaintiffs, said PepsiCo spokesman Joe Jacuzzi, who called the case "highly dubious."
Robert Roth, a lawyer for PepsiCo at Menomonee, Wis.-based Niebler, Pyzyk, Roth & Carrig, couldn't be reached for comment. Another lawyer for PepsiCo, Dean Panos, a partner at Chicago-based Jenner & Block, declined to comment.
In court papers, PepsiCo claims it first received a legal document related to the case from the North Carolina agent on Sept. 15 when a copy of a co-defendant's letter was forwarded to Deputy General Counsel Tom Tamoney in PepsiCo's law department. Tamoney's secretary, Kathy Henry, put the letter aside and didn't tell anyone about it because she was "so busy preparing for a board meeting," PepsiCo said in its Oct. 13 motion to vacate.
When Henry received a forwarded copy of the plaintiff's motion for default judgment on Oct. 5, she sent that to Yvonne Mazza, a legal assistant for Aquafina matters. Remembering that she still had the other document, Henry passed it to Mazza too. The next day Mazza sent the documents to David Wexler, a department attorney, and he "immediately" called the agent to get a copy of the complaint.
Lawyers for PepsiCo distributors Wis-Pak Inc. and Carolina Canners Inc. made court appearances in June and July. PepsiCo was at a loss to explain why it hadn't heard about the case from them. "It's just another unfortunate thing that didn't come together," Jacuzzi said.
In seeking to dismiss the case, PepsiCo argues that the statute of limitations should preclude the lawsuit, brought 15 years after the company started selling Aquafina and more than two decades after the alleged confidential talks. Moreover, "the $1.26 billion judgment that has been entered is unprecedented in size and justice requires that PepsiCo have a chance to defend itself," the company said.
The lead plaintiffs lawyer, David Van Dyke of Chicago-based Cassiday Schade, said Wisconsin courts have been "pretty clear that they don't like" vacating default judgments. "There is a possibly that a judge may say we're going to litigate the damages aspect of it," Van Dyke said.
A hearing is scheduled for Nov. 6.
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* Lynne Marek, The National Law Journal
* On 3:01 am EDT, Wednesday October 28, 2009
o
Buzz up! 3184
o Print
What's the cost of not showing up to court? For PepsiCo Inc., it's a $1.26 billion default judgment. A Wisconsin state court socked the company with the monster award in a case alleging that PepsiCo stole the idea to bottle and sell purified water from two Wisconsin men.
Now the company is scrambling to salvage the situation. The damages award was handed down on Sept. 30. PepsiCo filed motions to vacate the order and dismiss the claims on Oct. 13, saying it wasn't even aware of the lawsuit until Oct. 6.
The litigation began in April when Charles Joyce and James Voigt sued the soft drink maker and two of its distributors, alleging they had misappropriated trade secrets from confidential discussions the plaintiffs had with the distributors in 1981 about selling purified water. The information was illicitly passed to PepsiCo, which used it to develop and sell Aquafina bottled water, the plaintiffs allege in the case filed in the Circuit Court of Jefferson County before Judge Jacqueline Erwin.
In court documents, PepsiCo argues it was improperly served with the Wisconsin lawsuit in North Carolina, but also asks the court to excuse the corporate bureaucracy that buried a legal document for weeks. While plaintiffs say they served the lawsuit in June on PepsiCo's registered agent in North Carolina, where the company is incorporated, PepsiCo says its law department at the company's Purchase, N.Y.-based headquarters was not notified until September.
"The bottom line is there was a defect in the process for us, but also for" the plaintiffs, said PepsiCo spokesman Joe Jacuzzi, who called the case "highly dubious."
Robert Roth, a lawyer for PepsiCo at Menomonee, Wis.-based Niebler, Pyzyk, Roth & Carrig, couldn't be reached for comment. Another lawyer for PepsiCo, Dean Panos, a partner at Chicago-based Jenner & Block, declined to comment.
In court papers, PepsiCo claims it first received a legal document related to the case from the North Carolina agent on Sept. 15 when a copy of a co-defendant's letter was forwarded to Deputy General Counsel Tom Tamoney in PepsiCo's law department. Tamoney's secretary, Kathy Henry, put the letter aside and didn't tell anyone about it because she was "so busy preparing for a board meeting," PepsiCo said in its Oct. 13 motion to vacate.
When Henry received a forwarded copy of the plaintiff's motion for default judgment on Oct. 5, she sent that to Yvonne Mazza, a legal assistant for Aquafina matters. Remembering that she still had the other document, Henry passed it to Mazza too. The next day Mazza sent the documents to David Wexler, a department attorney, and he "immediately" called the agent to get a copy of the complaint.
Lawyers for PepsiCo distributors Wis-Pak Inc. and Carolina Canners Inc. made court appearances in June and July. PepsiCo was at a loss to explain why it hadn't heard about the case from them. "It's just another unfortunate thing that didn't come together," Jacuzzi said.
In seeking to dismiss the case, PepsiCo argues that the statute of limitations should preclude the lawsuit, brought 15 years after the company started selling Aquafina and more than two decades after the alleged confidential talks. Moreover, "the $1.26 billion judgment that has been entered is unprecedented in size and justice requires that PepsiCo have a chance to defend itself," the company said.
The lead plaintiffs lawyer, David Van Dyke of Chicago-based Cassiday Schade, said Wisconsin courts have been "pretty clear that they don't like" vacating default judgments. "There is a possibly that a judge may say we're going to litigate the damages aspect of it," Van Dyke said.
A hearing is scheduled for Nov. 6.
Go to Law.com for legal information and services on the web.
Sign up today for a free subscription to the Law.com daily legal newswire.
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* Economy grows in 3Q, signals end of recession - AP
* Stock futures higher after GDP report - AP
* P&G reports profits off 1 percent in 1Q - AP
* Motorola posts 3Q profit, names permanent CFO - AP
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Some Comments From A Canadian On The Gifted Young Song Writer Killed By Coyotes In A Canadian National Park
Interestingly enough Taylor was a graduate from Etobicoke School of the Arts the high school that Matthew goes to. She was of course a couple of years or so older. Matthew knew of her but didn’t know her. ESA will be sad today with a graduate gone.
But at the end of the day we have always said – don’t hike alone. It was though very unusual for coyotes to attack. But any large animal will attack if they believe you are prey. Always, always, always when confronted with a larger wild animal be aggressive – don’t run, don’t show fear (even if you are afraid) and don’t shit your pants. If you do you change from a challenger to prey in the eyes of the wild animal. Wild animals are not stupid and don’t attack randomly. You have to effectively stand up to them. If you do and I don’t mean attack them (that is just stupid as well) but demonstrate that you are not afraid that are prepared to fight but all the time yelling, waving arms even throwing rocks, but don’t look at them in the eye and always back off facing them. The idea is to demonstrate that you are prepared to fight if challenged but would rather not. They usually decide that it is not worth the effort as well and they too will move on (normally). Naturally of course we don’t know how Taylor responded to the coyotes. Coyotes are really a larger dog and not that big (wolves are a lot bigger but wolves are very rational thinking animals). The animal I have the least comfort with is a moose. Moose are unpredictable especially if it is rutting season. You can’t deal with effectively a dumb ½ tonne plus beast.
We were in Nova Scotia ourselves in 08. We were in Cape Breton (stunningly beautiful) and we were hiking. We encountered no large wildlife but saw numerous moose signs and saw some bear scat. We hiked in the Yukon, the Rockies, and of course here in Ontario. We have encountered numerous signs of wildlife (moose, bear, wolves, coyotes). But over the years only met a moose and a bear face to face. Both moved on. But we were travelling minimum in a pair and we are usually 4. Never hike alone. Very dangerous.
But then there is one small consideration with bears. Grizzly bears. LOL.
Allegedly on a sign in BC. (paraphrased).
When hiking in the Rockies always be aware of bears. Carry bear bells and pepper spray. Watch for bear signs such as scat. Black bear scat has berries and squirrel fur. Grizzly bear scat has bear bells and smells of pepper.
State Of California Fines City of Pacifica $2.3 Million For Sewage Spills
State Fines Pacifica $2.3 Million: Sewage Spills
CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY
California Regional Water Quality Control Board, San Francisco Bay Region
FOR IMMEDIATE RELEASE
Contact: Dyan C. Whyte, October 27, 2009, Assistant Executive Officer 
(510) 622-2441
San Francisco Bay Regional Water Board Staff Requests $2,300,000 Fine against the City of Pacifica for Sewage Discharges into Pacific Ocean
Oakland—The City of Pacifica faces a $2.3 million dollar fine for illegal sewage discharges during heavy rains in January 2008. San Francisco Regional Water Quality Control Board (Regional Water Board) staff issued the complaint for unauthorized sewage discharges into the Pacific Ocean. The City discharged 6.9 million gallons of partially treated wastewater diluted with storm water on January 25 and 26, 2008, into Calera Creek. The discharge flowed through Calera Creek Wetlands and into the Pacific Ocean. The discharge occurred when high inflow and infiltration of storm water into the collection system generated more wastewater than the City¹s collection system and wastewater treatment plant capacities. That required wastewater to bypass certain treatment processes and only receive partial treatment. The City also discharged more than 100,000 gallons of raw sewage diluted with storm water from various points in its sanitary sewer collection system on January 25, 2008. All spills caused beach closures. For years, the City has failed to adequately identify and address collection system problems including failure to detect and eliminate storm water infiltration into the collection system. Had the City initiated timely corrective actions, it could have avoided: (1) the collection system overloading (exceeding capacity) and the resultant spills; and (2) the wastewater treatment plant bypass. In addition to these spills, the complaint also addresses numerous smaller collection system spills reported by the City, one larger spill in 2004 from a pump station, and effluent limit and receiving water limit violations. For additional information, please visit WATER BOARD. The San Francisco Bay Regional Water Quality Control Board¹s mission is to preserve, enhance and restore the quality of California's water resources, and ensure their proper allocation and efficient use for the benefit of present and future generations.
Wednesday, October 28, 2009
Governor Rick Perry Of Texas Knew The Arson Finding Was Flawed Before He Authorized Todd Willingham's Execution
From arson to politics
Oct 22nd 2009 AUSTINFrom The Economist print edition
Why has Texas’s governor derailed a death-penalty investigation?
THE sad case of Cameron Todd Willingham began two days before Christmas in 1991. He was alone with his three daughters—one toddler and two baby twins—when their house in Corsicana, a small town south of Dallas, began to burn. Mr Willingham later said the house was so thick with smoke he could not find any of the girls before escaping. But at his trial, investigators testified that based on the burn patterns in the house, the fire had been arson. Mr Willingham was quickly convicted and sentenced to death. Years of court challenges came to nothing and in 2004 Mr Willingham was executed. “The only statement I want to make is that I am an innocent man—convicted of a crime I did not commit,” he said from the gurney.
Innocence is a recurrent claim in last statements. In Mr Willingham’s case, it may well have been true. Shortly before he was executed, an arson expert from Austin faxed a report to the governor, Rick Perry, arguing that the 1991 investigation was based on bad science and that there was no proof of arson. Half a dozen additional experts have come to the same conclusion. In August another report came from Craig Beyler, who had been hired by the Texas Forensic Science Commission (TFSC), an oversight board. Mr Beyler’s report gave a blistering assessment of the original investigation, saying its conclusions were “nothing more than a collection of personal beliefs that have nothing to do with science-based fire investigation.”
Two days before the commission was due to hold a hearing on the Beyler report, on September 30th, Mr Perry announced he was replacing three of his appointees to the TFSC, including its head, Sam Bassett. Several days later he said he would replace the fourth. Their terms had expired, the governor explained. That is true, but not especially convincing. “It certainly is bad timing for the continuity of these investigations,” says Mr Bassett, a criminal defence attorney in Austin. Had the commission concluded that the evidence did not point to arson, Mr Perry would have been faced with the grave possibility that Texas had executed an innocent person.
Even Republicans are concerned. The governor is up for re-election in 2010. Kay Bailey Hutchison, his chief opponent for the Republican nomination, announced that the business with the commission was just “giving liberals an argument to discredit the death penalty”.
Oct 22nd 2009 AUSTINFrom The Economist print edition
Why has Texas’s governor derailed a death-penalty investigation?
THE sad case of Cameron Todd Willingham began two days before Christmas in 1991. He was alone with his three daughters—one toddler and two baby twins—when their house in Corsicana, a small town south of Dallas, began to burn. Mr Willingham later said the house was so thick with smoke he could not find any of the girls before escaping. But at his trial, investigators testified that based on the burn patterns in the house, the fire had been arson. Mr Willingham was quickly convicted and sentenced to death. Years of court challenges came to nothing and in 2004 Mr Willingham was executed. “The only statement I want to make is that I am an innocent man—convicted of a crime I did not commit,” he said from the gurney.
Innocence is a recurrent claim in last statements. In Mr Willingham’s case, it may well have been true. Shortly before he was executed, an arson expert from Austin faxed a report to the governor, Rick Perry, arguing that the 1991 investigation was based on bad science and that there was no proof of arson. Half a dozen additional experts have come to the same conclusion. In August another report came from Craig Beyler, who had been hired by the Texas Forensic Science Commission (TFSC), an oversight board. Mr Beyler’s report gave a blistering assessment of the original investigation, saying its conclusions were “nothing more than a collection of personal beliefs that have nothing to do with science-based fire investigation.”
Two days before the commission was due to hold a hearing on the Beyler report, on September 30th, Mr Perry announced he was replacing three of his appointees to the TFSC, including its head, Sam Bassett. Several days later he said he would replace the fourth. Their terms had expired, the governor explained. That is true, but not especially convincing. “It certainly is bad timing for the continuity of these investigations,” says Mr Bassett, a criminal defence attorney in Austin. Had the commission concluded that the evidence did not point to arson, Mr Perry would have been faced with the grave possibility that Texas had executed an innocent person.
Even Republicans are concerned. The governor is up for re-election in 2010. Kay Bailey Hutchison, his chief opponent for the Republican nomination, announced that the business with the commission was just “giving liberals an argument to discredit the death penalty”.
He's 5'2" Tall But Has A Giant Intellect; He Thinks It's Time To Break Up America's Five Biggest Banks
Robert Reich's Blog
Robert Reich was the nation's 22nd Secretary of Labor and is a professor at the University of California at Berkeley. His latest book is "Supercapitalism." This is his personal journal.
About Me
NAME: ROBERT REICH
Latest book, "Supercapitalism," is now out in paperback. For copies of articles, books, and public radio commentaries, go to www.robertreich.org. This blog is available as an RSS feed. Public radio commentaries are now available as a podcast.
View my complete profile
Too Big to Fail: Why The Big Banks Should Be Broke...
Why Wall Street Reform is Stuck in Reverse
Why Obama Has to do What Letterman Did: Refuse to ...
More Desperation from the Right
Why the Dow Broke 10,000, and Why You Should Still...
The Audacity of Greed: How Private Health Insurers...
Empty Hands on the Climate, and What Obama Needs t...
Why Obama Should Not Have Received the Peace Prize...
So Much Happening in Washington and So Little To S...
Specifically, What Should Be Done For Jobs?
SUNDAY, OCTOBER 25, 2009
Too Big to Fail: Why The Big Banks Should Be Broken Up, But Why The White House and Congress Don't Want To
And now there are five -- five Wall Street behemoths, bigger than they were before the Great Meltdown, paying fatter salaries and bonuses to retain their so-called"talent," and raking in huge profits. The biggest difference between now and last October is these biggies didn't know then that they were too big to fail and the government would bail them out if they got into trouble. Now they do. And like a giant, gawking adolescent who's just discovered he can crash the Lexus convertible his rich dad gave him and the next morning have a new one waiting in his driveway courtesy of a dad who can't say no, the biggies will drive even faster now, taking even bigger risks. What to do? Two ideas are floating around Washington, but only one is supported by the Treasury and the White House. Unfortunately, it's the wrong one. The right idea is to break up the giant banks. I don't often agree with Alan Greenspan but he was right when he said last week that "[i]f they're too big to fail, they're too big." Greenspan noted that the government broke up Standard Oil in 1911, and what happened? "The individual parts became more valuable than the whole. Maybe that's what we need to do." (Historic footnote: Had Greenspan not supported in 1999 Congress's repeal of the Glass Stagall Act, which separated investment from commercial banking, we wouldn't be in the soup we're in to begin with.)Former Fed Chair Paul Volcker, whose only problem is he's much too tall, last week told the New York Times he'd like to see the restoration of the Glass-Steagall Act provisions that would separate the financial giants' deposit-taking activities from their investment and trading businesses. If this separation went into effect, JPMorgan Chase would have to give up the trading operations acquired from Bear Stearns. Bank of America and Merrill Lynch would go back to being separate companies. And Goldman Sachs could no longer be a bank holding company. But the Obama Administration doesn't agree with either Greenspan or Volcker. While it says it doesn't want another bank bailout, its solution to the "too big to fail" problem doesn't go nearly far enough. In fact, it doesn't really go anywhere. The Administration would wait until a giant bank was in danger of failing and then put it into a process akin to bankruptcy. The bank's assets would be sold off to pay its creditors, and its shareholders would likely walk off with nothing. The Treasury would determine when such a "resolution" process was needed, and appoint a receiver, such as the FDIC, to wind down the bank's operations. There should be an orderly process for putting big failing banks out of business. But this isn't nearly enough. By the time a truly big bank gets into trouble -- one that poses a "systemic risk" to the entire economy -- it's too late. Other banks, competing like mad for the same talent and profits, will already have adopted many of the excessively-risky banks techniques. And the pending failure will already have rocked the entire financial sector. Worse yet, the Administration's plan gives the big failing bank an escape hatch: The receiver might decide that the bank doesn't need to go out of business after all -- that all it needs is some government money to tide it over until the crisis passes. So the Treasury would also have the authority to provide the bank with financial assistance in the form of loans or guarantees. In other words, back to bailout. (Historical footnote: Summers and Geithner, along with Bob Rubin, while at Treasury in 1999, joined Greenspan in urging Congress to repeal Glass-Steagall. The four of them -- Greenspan, Summers, Rubin and Geithner also refused to regulate derivatives, and pushed Congress to stop the Commodity Futures Trading Corporation from doing so.) Congress is cooking up a variation on the "resolution" idea that would give the Federal Deposit Insurance Corporation authority to trigger and handle the winding-down of big banks in trouble, without Treasury involvement, and without an escape hatch. Needless to say, Wall Street favors the Administration's approach -- which is why the Administration chose it to begin with. If I were less charitable I'd say Geithner and Summers continue to bend over bankwards to make Wall Street happy, and in doing so continue to risk the credibility of the President, as well as the long-term financial stability of the system.Wall Street could live with the slightly less delectable variation that Congress is coming up with. But Congress won't go as far as to unleash the antitrust laws on the big banks or resurrect the Glass-Steagall Act. After all, the Street is a major benefactor of Congress and the Street's lobbyists and lackeys are all over Capitol Hill.The Street obviously detests the notion that its behemoths should be broken up. That's why the idea isn't even on the table. But it should be. No important public interest is served by allowing giant banks to grow too big to fail. Winding them down after they get into trouble is no answer. By then the damage will already have been done. Whether it's using the antitrust laws or enacting a new Glass-Steagall Act, the Wall Street giants should be split up -- and soon.
Robert Reich was the nation's 22nd Secretary of Labor and is a professor at the University of California at Berkeley. His latest book is "Supercapitalism." This is his personal journal.
About Me
NAME: ROBERT REICH
Latest book, "Supercapitalism," is now out in paperback. For copies of articles, books, and public radio commentaries, go to www.robertreich.org. This blog is available as an RSS feed. Public radio commentaries are now available as a podcast.
View my complete profile
Too Big to Fail: Why The Big Banks Should Be Broke...
Why Wall Street Reform is Stuck in Reverse
Why Obama Has to do What Letterman Did: Refuse to ...
More Desperation from the Right
Why the Dow Broke 10,000, and Why You Should Still...
The Audacity of Greed: How Private Health Insurers...
Empty Hands on the Climate, and What Obama Needs t...
Why Obama Should Not Have Received the Peace Prize...
So Much Happening in Washington and So Little To S...
Specifically, What Should Be Done For Jobs?
SUNDAY, OCTOBER 25, 2009
Too Big to Fail: Why The Big Banks Should Be Broken Up, But Why The White House and Congress Don't Want To
And now there are five -- five Wall Street behemoths, bigger than they were before the Great Meltdown, paying fatter salaries and bonuses to retain their so-called"talent," and raking in huge profits. The biggest difference between now and last October is these biggies didn't know then that they were too big to fail and the government would bail them out if they got into trouble. Now they do. And like a giant, gawking adolescent who's just discovered he can crash the Lexus convertible his rich dad gave him and the next morning have a new one waiting in his driveway courtesy of a dad who can't say no, the biggies will drive even faster now, taking even bigger risks. What to do? Two ideas are floating around Washington, but only one is supported by the Treasury and the White House. Unfortunately, it's the wrong one. The right idea is to break up the giant banks. I don't often agree with Alan Greenspan but he was right when he said last week that "[i]f they're too big to fail, they're too big." Greenspan noted that the government broke up Standard Oil in 1911, and what happened? "The individual parts became more valuable than the whole. Maybe that's what we need to do." (Historic footnote: Had Greenspan not supported in 1999 Congress's repeal of the Glass Stagall Act, which separated investment from commercial banking, we wouldn't be in the soup we're in to begin with.)Former Fed Chair Paul Volcker, whose only problem is he's much too tall, last week told the New York Times he'd like to see the restoration of the Glass-Steagall Act provisions that would separate the financial giants' deposit-taking activities from their investment and trading businesses. If this separation went into effect, JPMorgan Chase would have to give up the trading operations acquired from Bear Stearns. Bank of America and Merrill Lynch would go back to being separate companies. And Goldman Sachs could no longer be a bank holding company. But the Obama Administration doesn't agree with either Greenspan or Volcker. While it says it doesn't want another bank bailout, its solution to the "too big to fail" problem doesn't go nearly far enough. In fact, it doesn't really go anywhere. The Administration would wait until a giant bank was in danger of failing and then put it into a process akin to bankruptcy. The bank's assets would be sold off to pay its creditors, and its shareholders would likely walk off with nothing. The Treasury would determine when such a "resolution" process was needed, and appoint a receiver, such as the FDIC, to wind down the bank's operations. There should be an orderly process for putting big failing banks out of business. But this isn't nearly enough. By the time a truly big bank gets into trouble -- one that poses a "systemic risk" to the entire economy -- it's too late. Other banks, competing like mad for the same talent and profits, will already have adopted many of the excessively-risky banks techniques. And the pending failure will already have rocked the entire financial sector. Worse yet, the Administration's plan gives the big failing bank an escape hatch: The receiver might decide that the bank doesn't need to go out of business after all -- that all it needs is some government money to tide it over until the crisis passes. So the Treasury would also have the authority to provide the bank with financial assistance in the form of loans or guarantees. In other words, back to bailout. (Historical footnote: Summers and Geithner, along with Bob Rubin, while at Treasury in 1999, joined Greenspan in urging Congress to repeal Glass-Steagall. The four of them -- Greenspan, Summers, Rubin and Geithner also refused to regulate derivatives, and pushed Congress to stop the Commodity Futures Trading Corporation from doing so.) Congress is cooking up a variation on the "resolution" idea that would give the Federal Deposit Insurance Corporation authority to trigger and handle the winding-down of big banks in trouble, without Treasury involvement, and without an escape hatch. Needless to say, Wall Street favors the Administration's approach -- which is why the Administration chose it to begin with. If I were less charitable I'd say Geithner and Summers continue to bend over bankwards to make Wall Street happy, and in doing so continue to risk the credibility of the President, as well as the long-term financial stability of the system.Wall Street could live with the slightly less delectable variation that Congress is coming up with. But Congress won't go as far as to unleash the antitrust laws on the big banks or resurrect the Glass-Steagall Act. After all, the Street is a major benefactor of Congress and the Street's lobbyists and lackeys are all over Capitol Hill.The Street obviously detests the notion that its behemoths should be broken up. That's why the idea isn't even on the table. But it should be. No important public interest is served by allowing giant banks to grow too big to fail. Winding them down after they get into trouble is no answer. By then the damage will already have been done. Whether it's using the antitrust laws or enacting a new Glass-Steagall Act, the Wall Street giants should be split up -- and soon.
Disaster For 260,000 Commuters As The Bay Bridge Linking San Francisco And Oakland Closes Indefinitely
Bay Bridge Closed Indefinitely For Repairs
Real-Time Traffic Conditions Web Cam NetworkSAN FRANCISCO (CBS 5 / AP / BCN) ―
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1 of 3
Caltrans crews on the Bay Bridge after it was closed Tuesday night.
CBS
Related Slideshows
Bay Bridge Labor Day Construction Project
Related Links
Increased Transit Options Due To Bridge Closure
511.org: Bay Bridge AlternativesAuthorities on Tuesday indefinitely closed the Bay Bridge after a rod and a metal brace erected last month during an emergency repair job fell onto the bridge's westbound lanes, startling a pair of drivers who collided with the debris and leaving hundreds of others stranded in their cars during the evening commute.The bridge will remain closed "until further notice" while engineers evaluate the damage and figure out how to fix it, the California Department of Transportation said in a statement. No injuries were reported.The rod, part of the emergency repair performed on Labor Day, was holding in place a saddle-like cap that was installed over a cracked link. On Tuesday, it apparently snapped, bringing down with it a steel patch roughly 3 feet long around 5:30 p.m., said California Highway Patrol Officer Peter Van Eckhardt.Caltrans is working with Bay Area transit agencies Tuesday night to prepare for the Wednesday morning commute.The bridge was closed in both directions around 8 p.m. Tuesday night, Caltrans spokesman Bart Ney said.All traffic is being diverted to other bridges, and the CHP around 9:30 p.m. was continuing to escort motorists who were on the bridge when the closure was implemented.Caltrans said more than 40 portable, changeable messages are being used around the Bay Area, as well as overhead changeable message signs on freeways, to alert motorists of the closure.California Highway Patrol Sgt. Trent Cross said the CHP received a report of a cable that had broken loose and struck three vehicles. An occupant of a Ryder Truck sustained a minor injury due to shattered glass. No other injuries were reported.Before the closure, traffic was already backed up into Oakland.The incident occured near the same section of bridge where a big rig crashed earlier this month.Crews Tuesday night were continuing to assess the situation and work on a final repair plan.The closure of the bridge was expected to cause a traffic nightmare during the morning commute. The California Highway Patrol was alerting Bay Area transit operators about the closure so they could try to prepare for a crush of additional passengers Wednesday.BART spokesman Linton Johnson said the agency will run longer trains Tuesday night to accommodate an increase in riders. In the event the bridge remains closed Wednesday morning, BART will run all available trains, Johnson said.The Golden Gate Bridge, Highway and Transportation District announced Tuesday night that all southbound lanes of the Golden Gate Bridge in the toll plaza will be open by 4 a.m. to accommodate heavy traffic.Additionally, the Golden Gate Ferry will be prepared to add a high-capacity vessel to operate after 7 a.m. from Larkspur to San Francisco, according to the district.The 73-year-old bridge, which carries about 260,000 vehicles a day between San Francisco and heavily populated cities to its east, was closed over the Labor Day weekend so a football-field-sized, 3,300-ton section of the eastern span could be cut out and replaced with a new double-deck section.The work was part of a seismic upgrade and had to be completed 150 feet above the ground.When crews weren't able to fix the crack that was discovered in the span September 5th in time for the bridge's scheduled reopening at 5 a.m. September 8th, traffic was jammed as commuters tried to take alternate routes.Caltrans officials had nothing to say Tuesday about what might have caused the repair job to fail. The department issued a brief statement saying only that "structural engineers and inspectors are onsite to assess the damage and will make a determination as to how long repairs will take."At this time, the bridge is closed until further notice," the statement said.Abolhassan Astaneh-Asl, a civil engineering professor at the University of California, Berkeley who has spent 20 years studying the Bay Bridge, called the initial crack a "warning sign" of potentially bigger safety issues with the bridge."The repair they were doing was really a Band-Aid," said Astaneh-Asl, who criticized Caltrans at the time for rushing to reopen the bridge. "The Band-Aid broke, in essence."Astaneh-Asl said the failure of the repair job demonstrates the need for a longer-term solution. The span's age and design make it susceptible to collapse, especially if commercial tractor-trailers are allowed to continue using it, he said."I think Caltrans is putting public relations ahead of public safety," he said.
(© CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press and Bay City News contributed to this report.)
Real-Time Traffic Conditions Web Cam NetworkSAN FRANCISCO (CBS 5 / AP / BCN) ―
Click to enlarge
1 of 3
Caltrans crews on the Bay Bridge after it was closed Tuesday night.
CBS
Related Slideshows
Bay Bridge Labor Day Construction Project
Related Links
Increased Transit Options Due To Bridge Closure
511.org: Bay Bridge AlternativesAuthorities on Tuesday indefinitely closed the Bay Bridge after a rod and a metal brace erected last month during an emergency repair job fell onto the bridge's westbound lanes, startling a pair of drivers who collided with the debris and leaving hundreds of others stranded in their cars during the evening commute.The bridge will remain closed "until further notice" while engineers evaluate the damage and figure out how to fix it, the California Department of Transportation said in a statement. No injuries were reported.The rod, part of the emergency repair performed on Labor Day, was holding in place a saddle-like cap that was installed over a cracked link. On Tuesday, it apparently snapped, bringing down with it a steel patch roughly 3 feet long around 5:30 p.m., said California Highway Patrol Officer Peter Van Eckhardt.Caltrans is working with Bay Area transit agencies Tuesday night to prepare for the Wednesday morning commute.The bridge was closed in both directions around 8 p.m. Tuesday night, Caltrans spokesman Bart Ney said.All traffic is being diverted to other bridges, and the CHP around 9:30 p.m. was continuing to escort motorists who were on the bridge when the closure was implemented.Caltrans said more than 40 portable, changeable messages are being used around the Bay Area, as well as overhead changeable message signs on freeways, to alert motorists of the closure.California Highway Patrol Sgt. Trent Cross said the CHP received a report of a cable that had broken loose and struck three vehicles. An occupant of a Ryder Truck sustained a minor injury due to shattered glass. No other injuries were reported.Before the closure, traffic was already backed up into Oakland.The incident occured near the same section of bridge where a big rig crashed earlier this month.Crews Tuesday night were continuing to assess the situation and work on a final repair plan.The closure of the bridge was expected to cause a traffic nightmare during the morning commute. The California Highway Patrol was alerting Bay Area transit operators about the closure so they could try to prepare for a crush of additional passengers Wednesday.BART spokesman Linton Johnson said the agency will run longer trains Tuesday night to accommodate an increase in riders. In the event the bridge remains closed Wednesday morning, BART will run all available trains, Johnson said.The Golden Gate Bridge, Highway and Transportation District announced Tuesday night that all southbound lanes of the Golden Gate Bridge in the toll plaza will be open by 4 a.m. to accommodate heavy traffic.Additionally, the Golden Gate Ferry will be prepared to add a high-capacity vessel to operate after 7 a.m. from Larkspur to San Francisco, according to the district.The 73-year-old bridge, which carries about 260,000 vehicles a day between San Francisco and heavily populated cities to its east, was closed over the Labor Day weekend so a football-field-sized, 3,300-ton section of the eastern span could be cut out and replaced with a new double-deck section.The work was part of a seismic upgrade and had to be completed 150 feet above the ground.When crews weren't able to fix the crack that was discovered in the span September 5th in time for the bridge's scheduled reopening at 5 a.m. September 8th, traffic was jammed as commuters tried to take alternate routes.Caltrans officials had nothing to say Tuesday about what might have caused the repair job to fail. The department issued a brief statement saying only that "structural engineers and inspectors are onsite to assess the damage and will make a determination as to how long repairs will take."At this time, the bridge is closed until further notice," the statement said.Abolhassan Astaneh-Asl, a civil engineering professor at the University of California, Berkeley who has spent 20 years studying the Bay Bridge, called the initial crack a "warning sign" of potentially bigger safety issues with the bridge."The repair they were doing was really a Band-Aid," said Astaneh-Asl, who criticized Caltrans at the time for rushing to reopen the bridge. "The Band-Aid broke, in essence."Astaneh-Asl said the failure of the repair job demonstrates the need for a longer-term solution. The span's age and design make it susceptible to collapse, especially if commercial tractor-trailers are allowed to continue using it, he said."I think Caltrans is putting public relations ahead of public safety," he said.
(© CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press and Bay City News contributed to this report.)
Tuesday, October 27, 2009
American Billionaire Sets Up $50 Million US Fund To Fight Right-Wing Zealots
Michael Hirsh
Converting the Preachers
George Soros launches a $50 million effort to purge economics of its free-market zeal.
Oct 27, 2009
"Large swaths of economics are going to have to be rethought on the basis of what's happened." So said Larry Summers, President Obama's chief economic adviser, in an interview in the weeks after the markets crashed a year ago. Yet to a remarkable degree, economic thinking hasn't changed very much at all. (Click here to follow Michael Hirsh).Now financier George Soros is announcing a $50 million effort to speed things along. This week Soros is gathering some of the leading practitioners of the market-skeptic school, who were marginalized during the era of "free-market fundamentalism," among them Nobelists Joseph Stiglitz, George Akerlof, Michael Spence, and Sir James Mirrlees. He's also creating an "Institute for New Economic Thinking" to make research grants, convene symposiums, and establish a journal, all in an effort to take back the economics profession from the champions of free-market zealotry who have dominated it for decades, and to correct the failures of decades of market deregulation. Soros hopes matching funds will bring the total endowment up to $200 million. "Economics has failed not only to predict and explain what happened but has also failed to protect society," says Robert Johnson, a former managing director at Soros Fund Management, who will direct the new institute. "That's what the crisis revealed. The paradigm has failed. There is no guidance."
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It might be tempting to dismiss all this as a war of words among brainiacs. It's not. The critical issues being discussed in Washington about the future regulation and control of the financial industry—the very nature of Wall Street and the health of the economy—depend on this battle of ideas. What led to wholesale deregulation in the '90s and '00s wasn't just Wall Street lobbying money. It was also that key legislators and policymakers, among them Larry Summers, persuaded themselves that deregulation was sound economics and good policy, and that markets and Wall Street institutions could take care of themselves. Many of those views have been discredited by the crisis. But in the absence of a new paradigm of economics, confusion still reigns in Washington. With no new concept of the proper role of government and regulation in the economy, of the proper balance between the markets and their minders, the old school still dominates.
PHOTOS
What About Us?
Wall Street's problems have captured the attention of Congress, the White House and the media. But on the country's Main Streets, worried workers, struggling small business owners and cash-strapped families are wondering if anyone is paying attention to them. A look at how Americans are coping with the economic crisis.
What They Got Away With
And almost by default, the profession and many of its leading journals remain controlled by free-market thinking out of the University of Chicago, Stanford, MIT, and other institutions, Soros, Johnson, and others argue. Free-market thinking also dominates the debate on everything from the "too big to fail" problem to health care. And some of the economists whose work was most prescient, and most ignored, remain marginalized.
Exhibit No. 1: the late Hyman Minsky, a bushy-haired dissident at the University of California, Berkeley, and Washington University who saw into the heart of financial-market mania perhaps more deeply than anyone else. Minsky's "Financial Instability Hypothesis," which he developed in the '60s, held that success in financial markets always breeds its own instability. The longer a boom lasts, the less market players consider failure a possibility; as a result, careful borrowing, lending, and investment inevitably give way to recklessness and speculative euphoria. Margins and capital cushions come to be seen as unnecessary. At a certain watershed point—sometimes called a "Minsky moment"—the foreordained collapse begins. The most speculative bets crash, loans are called in, asset values plunge, and the downward spiral feeds on itself. That's what happened over the last two years.
Minsky was in effect filling in many of the intellectual blanks left by John Maynard Keynes on the critical question of how financial markets affect the "real" economy. Nonetheless, an assessment of Minsky in 1997, a year after he died, concluded that his "work has not had a major influence in the macroeconomic discussions of the last thirty years." Since the current crash, Minsky has been rediscovered by economic pundits, and now a few economists are struggling to turn his insights into a model of how the economy really works.
But it's all happening very slowly. And with no rules of the road, we have entered a Mad Max world of economics in which even the most eminent of our top regulators and central bankers can't seem to agree on the fundamental nature of financial markets. One clash of titans is occurring between Paul Volcker and Ben Bernanke. Volcker, the former Fed chief, wants commercial banks barred from heavy proprietary trading. "I don't want them to be Goldman Sachs, running a zillion proprietary operations," he told me recently. Bernanke, the current Fed chairman, doesn't want to tamper nearly as much with the structure of the Street; instead, he wants to restrain the big banks through changed incentives, such as by tying compensation to long-term performance, and through increased capital requirements. Across the Atlantic, Mervyn King, the governor of the Bank of England, is engaged in a fierce debate with Britain's chancellor of the Exchequer, Alistair Darling, over breaking up big banks. King says breaking them up is the only way to prevent another catastrophe;Darling says King doesn’t know what he’s talking about.
Even Alan Greenspan appears to be engaged in a fierce argument ... with his own younger self. "U.S. regulators should consider breaking up large financial institutions considered 'too big to fail,' " he said earlier this month. But for most of his life, Greenspan was an Ayn Rand libertarian who abhorred the idea that government should break up anything; he once wrote that "the entire structure of antitrust statutes in this country is a jumble of economic irrationality and ignorance." Bigger was better, he said, and that way of thinking largely governed his stewardship of the Fed from 1987 to 2005. "The control by Standard Oil, at the turn of the century, of more than eighty percent of refining capacity made economic sense and accelerated the growth of the American economy," Greenspan wrote in Capitalism: the Unknown Ideal in 1961. But Greenspan now has this to say about banks: "If they're too big to fail, they're too big. In 1911, we broke up Standard Oil—so what happened? The individual parts became more valuable than the whole. Maybe that's what we need to do."
Maybe it is, or maybe it isn't. Does anybody know anything any more? Again, many of these debates go back to basic questions of economic wisdom. Even Adam Smith, the founder of free-market thinking, noted that banking should be treated differently than other businesses. Financial markets, constantly haunted by panics and manias, are more prone to failure and are more critical to the economy's health. That wisdom was lost or marginalized in recent decades as the "efficient-market hypothesis" ruled the era. But that doesn't mean the pendulum should necessarily swing all the way in the other direction. Should finance be regulated almost like a public utility, as Keynes and Minsky thought? Some, like Bernanke and Summers, say that too much of that kind of thinking will inhibit healthy innovation. "The Keynesians were romantic about the possibilities of governments. The free-marketers were romantic about the possibilities of markets," says Johnson. "But the policies in neither camp have much validity at this point." While this intellectual interregnum drags on, Wall Street-affiliated lobbies are moving into the vacuum and enjoying some success in watering down regulatory proposals, such as those concerning derivatives trading.
One thing seems certain: unless the economists get their act together, at least more than they have, the lobbyists may get to decide what the future looks like.
Converting the Preachers
George Soros launches a $50 million effort to purge economics of its free-market zeal.
Oct 27, 2009
"Large swaths of economics are going to have to be rethought on the basis of what's happened." So said Larry Summers, President Obama's chief economic adviser, in an interview in the weeks after the markets crashed a year ago. Yet to a remarkable degree, economic thinking hasn't changed very much at all. (Click here to follow Michael Hirsh).Now financier George Soros is announcing a $50 million effort to speed things along. This week Soros is gathering some of the leading practitioners of the market-skeptic school, who were marginalized during the era of "free-market fundamentalism," among them Nobelists Joseph Stiglitz, George Akerlof, Michael Spence, and Sir James Mirrlees. He's also creating an "Institute for New Economic Thinking" to make research grants, convene symposiums, and establish a journal, all in an effort to take back the economics profession from the champions of free-market zealotry who have dominated it for decades, and to correct the failures of decades of market deregulation. Soros hopes matching funds will bring the total endowment up to $200 million. "Economics has failed not only to predict and explain what happened but has also failed to protect society," says Robert Johnson, a former managing director at Soros Fund Management, who will direct the new institute. "That's what the crisis revealed. The paradigm has failed. There is no guidance."
Follow your favorite NEWSWEEK columnists
Customize the Newsweek homepage to feature the latest word from your favorite columnists.
It might be tempting to dismiss all this as a war of words among brainiacs. It's not. The critical issues being discussed in Washington about the future regulation and control of the financial industry—the very nature of Wall Street and the health of the economy—depend on this battle of ideas. What led to wholesale deregulation in the '90s and '00s wasn't just Wall Street lobbying money. It was also that key legislators and policymakers, among them Larry Summers, persuaded themselves that deregulation was sound economics and good policy, and that markets and Wall Street institutions could take care of themselves. Many of those views have been discredited by the crisis. But in the absence of a new paradigm of economics, confusion still reigns in Washington. With no new concept of the proper role of government and regulation in the economy, of the proper balance between the markets and their minders, the old school still dominates.
PHOTOS
What About Us?
Wall Street's problems have captured the attention of Congress, the White House and the media. But on the country's Main Streets, worried workers, struggling small business owners and cash-strapped families are wondering if anyone is paying attention to them. A look at how Americans are coping with the economic crisis.
What They Got Away With
And almost by default, the profession and many of its leading journals remain controlled by free-market thinking out of the University of Chicago, Stanford, MIT, and other institutions, Soros, Johnson, and others argue. Free-market thinking also dominates the debate on everything from the "too big to fail" problem to health care. And some of the economists whose work was most prescient, and most ignored, remain marginalized.
Exhibit No. 1: the late Hyman Minsky, a bushy-haired dissident at the University of California, Berkeley, and Washington University who saw into the heart of financial-market mania perhaps more deeply than anyone else. Minsky's "Financial Instability Hypothesis," which he developed in the '60s, held that success in financial markets always breeds its own instability. The longer a boom lasts, the less market players consider failure a possibility; as a result, careful borrowing, lending, and investment inevitably give way to recklessness and speculative euphoria. Margins and capital cushions come to be seen as unnecessary. At a certain watershed point—sometimes called a "Minsky moment"—the foreordained collapse begins. The most speculative bets crash, loans are called in, asset values plunge, and the downward spiral feeds on itself. That's what happened over the last two years.
Minsky was in effect filling in many of the intellectual blanks left by John Maynard Keynes on the critical question of how financial markets affect the "real" economy. Nonetheless, an assessment of Minsky in 1997, a year after he died, concluded that his "work has not had a major influence in the macroeconomic discussions of the last thirty years." Since the current crash, Minsky has been rediscovered by economic pundits, and now a few economists are struggling to turn his insights into a model of how the economy really works.
But it's all happening very slowly. And with no rules of the road, we have entered a Mad Max world of economics in which even the most eminent of our top regulators and central bankers can't seem to agree on the fundamental nature of financial markets. One clash of titans is occurring between Paul Volcker and Ben Bernanke. Volcker, the former Fed chief, wants commercial banks barred from heavy proprietary trading. "I don't want them to be Goldman Sachs, running a zillion proprietary operations," he told me recently. Bernanke, the current Fed chairman, doesn't want to tamper nearly as much with the structure of the Street; instead, he wants to restrain the big banks through changed incentives, such as by tying compensation to long-term performance, and through increased capital requirements. Across the Atlantic, Mervyn King, the governor of the Bank of England, is engaged in a fierce debate with Britain's chancellor of the Exchequer, Alistair Darling, over breaking up big banks. King says breaking them up is the only way to prevent another catastrophe;Darling says King doesn’t know what he’s talking about.
Even Alan Greenspan appears to be engaged in a fierce argument ... with his own younger self. "U.S. regulators should consider breaking up large financial institutions considered 'too big to fail,' " he said earlier this month. But for most of his life, Greenspan was an Ayn Rand libertarian who abhorred the idea that government should break up anything; he once wrote that "the entire structure of antitrust statutes in this country is a jumble of economic irrationality and ignorance." Bigger was better, he said, and that way of thinking largely governed his stewardship of the Fed from 1987 to 2005. "The control by Standard Oil, at the turn of the century, of more than eighty percent of refining capacity made economic sense and accelerated the growth of the American economy," Greenspan wrote in Capitalism: the Unknown Ideal in 1961. But Greenspan now has this to say about banks: "If they're too big to fail, they're too big. In 1911, we broke up Standard Oil—so what happened? The individual parts became more valuable than the whole. Maybe that's what we need to do."
Maybe it is, or maybe it isn't. Does anybody know anything any more? Again, many of these debates go back to basic questions of economic wisdom. Even Adam Smith, the founder of free-market thinking, noted that banking should be treated differently than other businesses. Financial markets, constantly haunted by panics and manias, are more prone to failure and are more critical to the economy's health. That wisdom was lost or marginalized in recent decades as the "efficient-market hypothesis" ruled the era. But that doesn't mean the pendulum should necessarily swing all the way in the other direction. Should finance be regulated almost like a public utility, as Keynes and Minsky thought? Some, like Bernanke and Summers, say that too much of that kind of thinking will inhibit healthy innovation. "The Keynesians were romantic about the possibilities of governments. The free-marketers were romantic about the possibilities of markets," says Johnson. "But the policies in neither camp have much validity at this point." While this intellectual interregnum drags on, Wall Street-affiliated lobbies are moving into the vacuum and enjoying some success in watering down regulatory proposals, such as those concerning derivatives trading.
One thing seems certain: unless the economists get their act together, at least more than they have, the lobbyists may get to decide what the future looks like.
All of The Things You Love At Breakfast Facing Huge Price Rises
Commodities breakfast club sees price rises
By Javier Blas
Published: October 26 2009 17:25 Last updated: October 26 2009 17:25
The food crisis has moved from lunch and dinner to breakfast.
Tea, cocoa, sugar and coffee prices have hit multi-decade highs over the last few weeks, while the cost of orange juice has also risen sharply. Among “breakfast” commodities, only milk prices remain low.
Tea is at an all-time high; cocoa has reached a 30-year high; sugar, a 28½-year high, and coffee is near a 11-year high. Orange juice has risen to its highest levels in 15 months. The sharp increases in the prices of these soft commodities contrasts with relatively depressed prices for agricultural commodities including wheat, rice, soyabean and corn.
“The price divergence is a good indicator that fundamentals are at play, rather than just speculative investments lifting the cost of all food commodities,” says Emmanuel Jayet, head of agricultural commodities research at Société Générale in Paris. Supply disruptions, rather than stronger demand for food, are driving the rally in soft commodities, analysts and traders say.
EDITOR’S CHOICE
Overview: Equities falter amid proposed financial rules - Oct-26
Chinese comments further erode dollar - Oct-26
Lloyds feels effect of ING rights issue - Oct-26
Financial stocks drag Wall Street down - Oct-26
ING €7.5bn rights issue rattles investors - Oct-26
Oil retreats to $78 a barrel as demand eases - Oct-26
“Soft commodities are united by the fact that their production is concentrated in developing countries,” says Nicholas Snowdon, a soft commodities analyst at Barclays Capital in London, adding that developing countries – mostly in the tropical areas of the world – are more prone to output troubles due to weather, conflicts, credit shortages or the inability of farmers to respond to rising prices.
Further, production of soft commodities is concentrated in a small group of countries, making it more likely that supply disruptions have had a larger impact on prices. Cocoa is a prime example, with the Ivory Coast and Ghana accounting for 60 per cent of the world’s output.
By contrast, Mr Snowdon adds: “Agricultural commodities’ production is concentrated in developed countries, and widely spread among the US, Canada, the European Union or Australia.” In those regions, farmers respond quickly to rising prices, expanding their acreage and using more inputs to boost yields.
Kona Haque, a commodities strategist at Macquarie in London, cites consumption as a unifying factor. “Demand for soft commodities has not been affected by the economic crisis as much as other commodities,” she says.
However, not everyone agrees that the rally has a common background. Tobin Gorey, an agricultural commodities strategist at JP Morgan in London, says the simultaneous rally is a coincidence, pointing out that tea, cocoa, sugar, coffee and orange juice have performed “differently over different times”.
Whatever the drivers behind the surge in prices, investors have been attracted by the synchronised rally, bringing speculative investors to what is usually a relatively small corner of the commodities market, traditionally handled by trading houses, brokers and merchants.
“We are seeing buying from the investor community,” says Mr Gorey.
In tea, the bull market has its root in crop damage in the main exporting countries from simultaneous droughts. Production in Kenya, Sri Lanka and India has dropped on average by 10-20 per cent this year, sending tea prices to an all-time high.
The benchmark best-quality broken pekoe, or BP1, surged to $5.02 a kilogram in mid-October, a record and up 70 per cent from January. Unlike other soft commodities, tea does not trade in a futures exchange and the business is based on physical deals, meaning that most financial investors are not profiting from the rally. The surge in cocoa prices has a main cause: the Ivory Coast, which delivers 40 per cent of the world’s cocoa, had a poor harvest this season and, in spite of favourable weather, traders fear that the country’s ageing trees will deliver an even smaller crop in the 2009-10 crop year that started this month.
Cocoa consumption has outpaced supply for the past three seasons and another bad crop in the Ivory Coast could prolong the deficit for a fourth consecutive year, the longest period of supply shortfalls since the shortages of between 1965 and 1969.
Last week, New York’s cocoa prices hit $3,412 a tonne, up 28 per cent this year, and their highest level since February 1980.
The sugar rally is the result of a large supply deficit due to disappointing crops in Brazil and India, the world’s top producers. In India, the world’s largest consumer of sugar, the driest monsoon since 1972 due to the El Niño weather phenomenon has damaged the cane crop. Meanwhile, El Niño has brought rains to what is normally the dry season in Brazil, which accounts for 60 per cent of the world’s sugar exports.
Raw sugar prices in New York rose to a 28½-year high above 25 cents per pound last month and since then the cost of the sweetener has hovered around 23-25 cents.
While tea, cocoa and sugar have strong fundamentals driving price rises, the supply and demand equilibrium on coffee and orange juice is somewhat more balanced. Even so, prices are on the rise.
In the case of coffee, production losses in Colombia and fears of a low crop in Brazil have supported the market. New York’s arabica coffee hit 145.40 cents a pound last week, up 30 per cent so far this year.
Orange juice had been supported by output losses in Brazil and Florida, the world’s top producers, due to cold weather and the spread of the so-called greening disease which forces farmers to uproot trees. “Once infected, there is no cure for a tree with citrus greening disease,” warns the US Department of Agriculture.
New York’s frozen concentrated orange juice futures hit a 15-month high of $1.1820 per pound last week, up 72.4 per cent since January.
By Javier Blas
Published: October 26 2009 17:25 Last updated: October 26 2009 17:25
The food crisis has moved from lunch and dinner to breakfast.
Tea, cocoa, sugar and coffee prices have hit multi-decade highs over the last few weeks, while the cost of orange juice has also risen sharply. Among “breakfast” commodities, only milk prices remain low.
Tea is at an all-time high; cocoa has reached a 30-year high; sugar, a 28½-year high, and coffee is near a 11-year high. Orange juice has risen to its highest levels in 15 months. The sharp increases in the prices of these soft commodities contrasts with relatively depressed prices for agricultural commodities including wheat, rice, soyabean and corn.
“The price divergence is a good indicator that fundamentals are at play, rather than just speculative investments lifting the cost of all food commodities,” says Emmanuel Jayet, head of agricultural commodities research at Société Générale in Paris. Supply disruptions, rather than stronger demand for food, are driving the rally in soft commodities, analysts and traders say.
EDITOR’S CHOICE
Overview: Equities falter amid proposed financial rules - Oct-26
Chinese comments further erode dollar - Oct-26
Lloyds feels effect of ING rights issue - Oct-26
Financial stocks drag Wall Street down - Oct-26
ING €7.5bn rights issue rattles investors - Oct-26
Oil retreats to $78 a barrel as demand eases - Oct-26
“Soft commodities are united by the fact that their production is concentrated in developing countries,” says Nicholas Snowdon, a soft commodities analyst at Barclays Capital in London, adding that developing countries – mostly in the tropical areas of the world – are more prone to output troubles due to weather, conflicts, credit shortages or the inability of farmers to respond to rising prices.
Further, production of soft commodities is concentrated in a small group of countries, making it more likely that supply disruptions have had a larger impact on prices. Cocoa is a prime example, with the Ivory Coast and Ghana accounting for 60 per cent of the world’s output.
By contrast, Mr Snowdon adds: “Agricultural commodities’ production is concentrated in developed countries, and widely spread among the US, Canada, the European Union or Australia.” In those regions, farmers respond quickly to rising prices, expanding their acreage and using more inputs to boost yields.
Kona Haque, a commodities strategist at Macquarie in London, cites consumption as a unifying factor. “Demand for soft commodities has not been affected by the economic crisis as much as other commodities,” she says.
However, not everyone agrees that the rally has a common background. Tobin Gorey, an agricultural commodities strategist at JP Morgan in London, says the simultaneous rally is a coincidence, pointing out that tea, cocoa, sugar, coffee and orange juice have performed “differently over different times”.
Whatever the drivers behind the surge in prices, investors have been attracted by the synchronised rally, bringing speculative investors to what is usually a relatively small corner of the commodities market, traditionally handled by trading houses, brokers and merchants.
“We are seeing buying from the investor community,” says Mr Gorey.
In tea, the bull market has its root in crop damage in the main exporting countries from simultaneous droughts. Production in Kenya, Sri Lanka and India has dropped on average by 10-20 per cent this year, sending tea prices to an all-time high.
The benchmark best-quality broken pekoe, or BP1, surged to $5.02 a kilogram in mid-October, a record and up 70 per cent from January. Unlike other soft commodities, tea does not trade in a futures exchange and the business is based on physical deals, meaning that most financial investors are not profiting from the rally. The surge in cocoa prices has a main cause: the Ivory Coast, which delivers 40 per cent of the world’s cocoa, had a poor harvest this season and, in spite of favourable weather, traders fear that the country’s ageing trees will deliver an even smaller crop in the 2009-10 crop year that started this month.
Cocoa consumption has outpaced supply for the past three seasons and another bad crop in the Ivory Coast could prolong the deficit for a fourth consecutive year, the longest period of supply shortfalls since the shortages of between 1965 and 1969.
Last week, New York’s cocoa prices hit $3,412 a tonne, up 28 per cent this year, and their highest level since February 1980.
The sugar rally is the result of a large supply deficit due to disappointing crops in Brazil and India, the world’s top producers. In India, the world’s largest consumer of sugar, the driest monsoon since 1972 due to the El Niño weather phenomenon has damaged the cane crop. Meanwhile, El Niño has brought rains to what is normally the dry season in Brazil, which accounts for 60 per cent of the world’s sugar exports.
Raw sugar prices in New York rose to a 28½-year high above 25 cents per pound last month and since then the cost of the sweetener has hovered around 23-25 cents.
While tea, cocoa and sugar have strong fundamentals driving price rises, the supply and demand equilibrium on coffee and orange juice is somewhat more balanced. Even so, prices are on the rise.
In the case of coffee, production losses in Colombia and fears of a low crop in Brazil have supported the market. New York’s arabica coffee hit 145.40 cents a pound last week, up 30 per cent so far this year.
Orange juice had been supported by output losses in Brazil and Florida, the world’s top producers, due to cold weather and the spread of the so-called greening disease which forces farmers to uproot trees. “Once infected, there is no cure for a tree with citrus greening disease,” warns the US Department of Agriculture.
New York’s frozen concentrated orange juice futures hit a 15-month high of $1.1820 per pound last week, up 72.4 per cent since January.
Chile's Next President Will Emphasize Efficienct
Chile's 'Berlusconi' puts efficiency top of election agenda
By Oliver Balch in Buenos Aires
Published: October 27 2009 02:00 Last updated: October 27 2009 02:00
Buenos Aires rush hour traffic lets up for no man, not even billionaire Chileans with a date to see the Argentine president.
Sebastián Piñera covers his growing agitation at the stop-start traffic with practised calm. He is a man in a hurry. Not only is Cristina Fernández de Kirchner, Argentina's premier, waiting for him. So, too, is the presidential seat back home.
As head of Chile's right-wing coalition, Mr Piñera is enjoying a comfortable lead in the run-up to national elections in December. After 19 years of the left-wing Concertación alliance, Chileans are showing an appetite for change. But not too much, which is just what Mr Piñera is offering.
"Our objective is to maintain the network of social protection that has been constructed by the last governments . . . but to make it more efficient," he tells the Financial Times in the back of his official car.
"Efficiency" is the watchword for this entrepreneur turned politician. There will be no messing with the policies that investors have come to love about Chile: balanced budgets, open markets, stable institutions and respect for the rule of law.
One of the country's richest men - known to his critics as "Chile's Silvio Berlusconi"- Mr Piñera's pitch rests on bringing business-like proficiency to that package. "Efficiency isn't a word that only interests the world of private companies. Efficiency is a word that does - or ought to - interest the world of politics," he argues.
His message is "better, quicker" delivery across the public sector. He pledges to root out inefficiencies and slash bureaucracy in healthcare, public education and crime prevention. So far, so standard.
As for the role of the state in general, he concedes a place for government in bringing about "profound modernisations", but decries any excessive dallying in the private sector.
"We want a state that strengthens its muscles but doesn't accumulate fat," he says, giving a nod to those on both the left and right of Chile's political spectrum.
Yet Mr Piñera's effort to present himself as a moderate voice and transitional president has still to convince some voters.
For starters, questions have been raised about his business activities. His personal fortune derives from introducing credit cards into Chile in the late 1970s. Since then, his portfolio of assets has expanded to include the terrestrial television channel Chilevisión and a stake of about 27 per cent in former state airline LAN. "He's never really separated his politician side from his business side," says Patricio Navia, a Latin American specialist at New York University.
Although Mr Piñera recently placed his investments under the control of a blind trust, he continues to run his political campaign from the headquarters of his business operations. That makes people wary, says Mr Navia.
The nickname of "Chile's Berlusconi" drew strength when it emerged that Mr Piñera had undergone plastic surgery on his eyelids. He rejects the comparison with Italy's prime minister as neither "just nor adequate". As for the surgery, that was to help correct his peripheral vision, he said.
"Berlusconi is not a saint of my devotion. I have profound differences from him," he says.
Questions also surround Mr Piñera's views on the Pinochet dictatorship, in which his brother was a cabinet minister.
A former senator and self-proclaimed Christian Humanist, Mr Piñera insists he voted against the continuation of the Pinochet regime in a 1988 referendum. Yet a year later he backed the presidential campaign of Mr Pinochet's finance minister. "With Piñera comes a more modernised, more democratic right . . . but also part of the political right that is linked to the dictatorship," argues José Jara, director of the political research centre Flacso Chile.
Fortunately for Mr Piñera, the ruling Concertación alliance is in disarray. Despite record personal approval ratings of more 70 per cent for President Michele Bachelet, Chile's ruling coalition has lost steam after almost two decades in power.
Concertación's candidate, Eduardo Frei, holds second place in the opinion polls. Yet most surveys put him 10 per cent or more behind Mr Piñera, who enjoys ratings of about 37 per cent.
This is Mr Piñera's second attempt at the presidency. In 2005, he lost to Ms Bachelet in a run-off. Despite the ruling party's problems, Chile's presidential hopeful has so far held off from negative campaigning. "The government has good intentions, but it hasn't been successful in achieving these," he says.
By Oliver Balch in Buenos Aires
Published: October 27 2009 02:00 Last updated: October 27 2009 02:00
Buenos Aires rush hour traffic lets up for no man, not even billionaire Chileans with a date to see the Argentine president.
Sebastián Piñera covers his growing agitation at the stop-start traffic with practised calm. He is a man in a hurry. Not only is Cristina Fernández de Kirchner, Argentina's premier, waiting for him. So, too, is the presidential seat back home.
As head of Chile's right-wing coalition, Mr Piñera is enjoying a comfortable lead in the run-up to national elections in December. After 19 years of the left-wing Concertación alliance, Chileans are showing an appetite for change. But not too much, which is just what Mr Piñera is offering.
"Our objective is to maintain the network of social protection that has been constructed by the last governments . . . but to make it more efficient," he tells the Financial Times in the back of his official car.
"Efficiency" is the watchword for this entrepreneur turned politician. There will be no messing with the policies that investors have come to love about Chile: balanced budgets, open markets, stable institutions and respect for the rule of law.
One of the country's richest men - known to his critics as "Chile's Silvio Berlusconi"- Mr Piñera's pitch rests on bringing business-like proficiency to that package. "Efficiency isn't a word that only interests the world of private companies. Efficiency is a word that does - or ought to - interest the world of politics," he argues.
His message is "better, quicker" delivery across the public sector. He pledges to root out inefficiencies and slash bureaucracy in healthcare, public education and crime prevention. So far, so standard.
As for the role of the state in general, he concedes a place for government in bringing about "profound modernisations", but decries any excessive dallying in the private sector.
"We want a state that strengthens its muscles but doesn't accumulate fat," he says, giving a nod to those on both the left and right of Chile's political spectrum.
Yet Mr Piñera's effort to present himself as a moderate voice and transitional president has still to convince some voters.
For starters, questions have been raised about his business activities. His personal fortune derives from introducing credit cards into Chile in the late 1970s. Since then, his portfolio of assets has expanded to include the terrestrial television channel Chilevisión and a stake of about 27 per cent in former state airline LAN. "He's never really separated his politician side from his business side," says Patricio Navia, a Latin American specialist at New York University.
Although Mr Piñera recently placed his investments under the control of a blind trust, he continues to run his political campaign from the headquarters of his business operations. That makes people wary, says Mr Navia.
The nickname of "Chile's Berlusconi" drew strength when it emerged that Mr Piñera had undergone plastic surgery on his eyelids. He rejects the comparison with Italy's prime minister as neither "just nor adequate". As for the surgery, that was to help correct his peripheral vision, he said.
"Berlusconi is not a saint of my devotion. I have profound differences from him," he says.
Questions also surround Mr Piñera's views on the Pinochet dictatorship, in which his brother was a cabinet minister.
A former senator and self-proclaimed Christian Humanist, Mr Piñera insists he voted against the continuation of the Pinochet regime in a 1988 referendum. Yet a year later he backed the presidential campaign of Mr Pinochet's finance minister. "With Piñera comes a more modernised, more democratic right . . . but also part of the political right that is linked to the dictatorship," argues José Jara, director of the political research centre Flacso Chile.
Fortunately for Mr Piñera, the ruling Concertación alliance is in disarray. Despite record personal approval ratings of more 70 per cent for President Michele Bachelet, Chile's ruling coalition has lost steam after almost two decades in power.
Concertación's candidate, Eduardo Frei, holds second place in the opinion polls. Yet most surveys put him 10 per cent or more behind Mr Piñera, who enjoys ratings of about 37 per cent.
This is Mr Piñera's second attempt at the presidency. In 2005, he lost to Ms Bachelet in a run-off. Despite the ruling party's problems, Chile's presidential hopeful has so far held off from negative campaigning. "The government has good intentions, but it hasn't been successful in achieving these," he says.
Heven Help US All--Bush 2 Is Now A Motivational SPeaker
Bush's first stand on a new podium
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(Aman Batheja/fort Worth Star-telegram)
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By Mary JordanTuesday, October 27, 2009
FORT WORTH -- After nine months of being nearly invisible -- a big outing has been to a Dallas hardware store for flashlights -- George W. Bush made his debut Monday in his latest incarnation: motivational speaker.
Nearly 15,000 people heard the former president, known more for mangling the English language than for his eloquence, reminisce about his White House days. Bush, who is writing a book about the dozen toughest decisions he had to make, used much of his 28 minutes onstage to talk about lighter topics such as picking out a rug design for the Oval Office that reflected his "optimism."
Perhaps in a nod to his dismal 22 percent approval ratings when he left office, Bush noted that "popularity is fleeting. . . . It's not real."
He beamed at the standing ovations from the friendly hometown crowd -- he now lives in nearby Dallas.
Looking younger than his 63 years and relaxed, Bush did not appear to have an overarching theme, but strung anecdotes and jokes together and frequently mentioned his faith in God.
"I don't see how you can be president without relying on the Almighty. Now when I was 21, I wouldn't have told you that, but at age 63, I can tell you that one of the most amazing surprises of the presidency was the fact that people's prayers affected me. I can't prove it to you. But I can tell you some days were great, some days not so great. But every day was joyous." That, he attributed, to the prayers of others.
His speech came after the crowd at the "GET MOTIVATED!" seminar stood up and danced to the Beach Boys' song "Surfin' USA" and batted around beach balls tossed into the audience.
The well-publicized event appears to mark the beginning of a higher profile for Bush.
Just last week he gave three speeches in Canada, and he has joined the Washington Speakers Bureau. He is scheduled to give another motivational speech next month in San Antonio. Former presidential adviser Karen Hughes said he has "quite a few speeches planned" during the fall.
Along with his book, due out next year, Bush is planning his new presidential library and policy institute at Southern Methodist University -- the alma mater of Laura Bush. He also has been spotted riding his mountain bike on local trails.
Many people interviewed afterward said they liked Bush, perhaps even because he wasn't the best speaker of the day. He could have said a thesaurus was a big scaly creature that roamed the planet millions of years ago and they would have applauded.
His most memorable story, one after another said, was about Barney, his Scottie:
Mindful of his new neighbors, who have had to endure as many as 650 people a day gawking at his new house in a cul-de-sac, Bush said he took Barney for a neighborhood stroll with "plastic bag on his hand" to scoop poop. That was a moment, he said, when he realized "Man, my life has changed!"
"He is just a normal guy! He wasn't the best speaker. But I was happy to see him!" said Lubbock salesman Patrick Kruger, 50.
Anthony Champagne, a professor of politics at the University of Texas at Dallas, said many presidents go underground for a period after they leave the White House, but then "even Richard Nixon came back in the public eye."
He said approval ratings of presidents often rise the longer they are out of office.
Along with Bush, former secretary of state Colin Powell, former New York mayor Rudy Giuliani, retired football great Terry Bradshaw and a host of professional speakers spoke on a stage decorated with red-white-and-blue signs that said "Motivate!" and "Achieve!"
Sparklers, rock music and a perky master of ceremonies ever-complimentary of Fort Worth kept the crowd on its feet.
"Cut the word 'impossible' out of your vocabulary!" thundered the Rev. Robert Schuller, televangelist and author. After telling the sad story about his daughter getting her leg amputated after a motorcycle accident, he came back big with an account of her playing baseball, trying for home runs so she wouldn't have to run: "Never look at what you have lost. Look at what you have left."
Powell, speaking after a drawing for a door prize of a high-definition flat-screen TV, told the audience to celebrate America's freedom. "We must never be afraid of some clown hiding in a cave," Powell said. Then moving on from Osama bin Laden, he talked about the Chinese: "The only fight we have with them is they want more shelf space at Wal-Mart!"
All this face time -- on giant screens for those in the rafters -- cost $4.95 for most people. The VIP seats in the front rows went for $89.
Tamara Lowe, co-founder of the motivational speakers series, which did a brisk business selling workbooks and other materials, said she was contractually bound not to reveal how much Bush was paid. His spokesman also declined to comment on published reports that estimated his fee at $100,000.
In Britain, where Bush remains wildly unpopular, the media have been reporting his return to public speaking with incredulity. Some commentators recalled his famous flubs: "Rarely is the question asked: Is our children learning?" and "I know how hard it is for you to put food on your family."
A Telegraph news article noted that the Republican former president -- whose policies inspired millions of Americans to vote Democratic in the 2008 election -- was now managing to draw crowds and "may yet have the last laugh."
"I kept looking for a teleprompter, but I didn't see one," said Joanne Ryan, 35, a financial adviser in the audience who noted, "I know the media makes him out to be an idiot," but he seemed genuine and "down-home."
Ryan said Bush seemed more comfortable speaking now than he did as president.
In the crowd of real estate agents in suits, housewives in jeans, students and senior citizens, Chris Clarke, 25, a salesman from Dallas, stood at the back. Like many people, he said that other speakers were better -- Colin Powell was his favorite -- but he thought Bush was good. In fact, he said, it could turn out that Bush may be more suited to motivational speaking than being president. He said when Bush misspeaks, it sounds "incompetent if you are president. But here it can be inspiring. It makes him seem like a regular guy, no better than me."
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By Mary JordanTuesday, October 27, 2009
FORT WORTH -- After nine months of being nearly invisible -- a big outing has been to a Dallas hardware store for flashlights -- George W. Bush made his debut Monday in his latest incarnation: motivational speaker.
Nearly 15,000 people heard the former president, known more for mangling the English language than for his eloquence, reminisce about his White House days. Bush, who is writing a book about the dozen toughest decisions he had to make, used much of his 28 minutes onstage to talk about lighter topics such as picking out a rug design for the Oval Office that reflected his "optimism."
Perhaps in a nod to his dismal 22 percent approval ratings when he left office, Bush noted that "popularity is fleeting. . . . It's not real."
He beamed at the standing ovations from the friendly hometown crowd -- he now lives in nearby Dallas.
Looking younger than his 63 years and relaxed, Bush did not appear to have an overarching theme, but strung anecdotes and jokes together and frequently mentioned his faith in God.
"I don't see how you can be president without relying on the Almighty. Now when I was 21, I wouldn't have told you that, but at age 63, I can tell you that one of the most amazing surprises of the presidency was the fact that people's prayers affected me. I can't prove it to you. But I can tell you some days were great, some days not so great. But every day was joyous." That, he attributed, to the prayers of others.
His speech came after the crowd at the "GET MOTIVATED!" seminar stood up and danced to the Beach Boys' song "Surfin' USA" and batted around beach balls tossed into the audience.
The well-publicized event appears to mark the beginning of a higher profile for Bush.
Just last week he gave three speeches in Canada, and he has joined the Washington Speakers Bureau. He is scheduled to give another motivational speech next month in San Antonio. Former presidential adviser Karen Hughes said he has "quite a few speeches planned" during the fall.
Along with his book, due out next year, Bush is planning his new presidential library and policy institute at Southern Methodist University -- the alma mater of Laura Bush. He also has been spotted riding his mountain bike on local trails.
Many people interviewed afterward said they liked Bush, perhaps even because he wasn't the best speaker of the day. He could have said a thesaurus was a big scaly creature that roamed the planet millions of years ago and they would have applauded.
His most memorable story, one after another said, was about Barney, his Scottie:
Mindful of his new neighbors, who have had to endure as many as 650 people a day gawking at his new house in a cul-de-sac, Bush said he took Barney for a neighborhood stroll with "plastic bag on his hand" to scoop poop. That was a moment, he said, when he realized "Man, my life has changed!"
"He is just a normal guy! He wasn't the best speaker. But I was happy to see him!" said Lubbock salesman Patrick Kruger, 50.
Anthony Champagne, a professor of politics at the University of Texas at Dallas, said many presidents go underground for a period after they leave the White House, but then "even Richard Nixon came back in the public eye."
He said approval ratings of presidents often rise the longer they are out of office.
Along with Bush, former secretary of state Colin Powell, former New York mayor Rudy Giuliani, retired football great Terry Bradshaw and a host of professional speakers spoke on a stage decorated with red-white-and-blue signs that said "Motivate!" and "Achieve!"
Sparklers, rock music and a perky master of ceremonies ever-complimentary of Fort Worth kept the crowd on its feet.
"Cut the word 'impossible' out of your vocabulary!" thundered the Rev. Robert Schuller, televangelist and author. After telling the sad story about his daughter getting her leg amputated after a motorcycle accident, he came back big with an account of her playing baseball, trying for home runs so she wouldn't have to run: "Never look at what you have lost. Look at what you have left."
Powell, speaking after a drawing for a door prize of a high-definition flat-screen TV, told the audience to celebrate America's freedom. "We must never be afraid of some clown hiding in a cave," Powell said. Then moving on from Osama bin Laden, he talked about the Chinese: "The only fight we have with them is they want more shelf space at Wal-Mart!"
All this face time -- on giant screens for those in the rafters -- cost $4.95 for most people. The VIP seats in the front rows went for $89.
Tamara Lowe, co-founder of the motivational speakers series, which did a brisk business selling workbooks and other materials, said she was contractually bound not to reveal how much Bush was paid. His spokesman also declined to comment on published reports that estimated his fee at $100,000.
In Britain, where Bush remains wildly unpopular, the media have been reporting his return to public speaking with incredulity. Some commentators recalled his famous flubs: "Rarely is the question asked: Is our children learning?" and "I know how hard it is for you to put food on your family."
A Telegraph news article noted that the Republican former president -- whose policies inspired millions of Americans to vote Democratic in the 2008 election -- was now managing to draw crowds and "may yet have the last laugh."
"I kept looking for a teleprompter, but I didn't see one," said Joanne Ryan, 35, a financial adviser in the audience who noted, "I know the media makes him out to be an idiot," but he seemed genuine and "down-home."
Ryan said Bush seemed more comfortable speaking now than he did as president.
In the crowd of real estate agents in suits, housewives in jeans, students and senior citizens, Chris Clarke, 25, a salesman from Dallas, stood at the back. Like many people, he said that other speakers were better -- Colin Powell was his favorite -- but he thought Bush was good. In fact, he said, it could turn out that Bush may be more suited to motivational speaking than being president. He said when Bush misspeaks, it sounds "incompetent if you are president. But here it can be inspiring. It makes him seem like a regular guy, no better than me."
Heaven Help Us All--Bush II Is Now A Motivational Speaker
Bush's first stand on a new podium
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(Aman Batheja/fort Worth Star-telegram)
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By Mary JordanTuesday, October 27, 2009
FORT WORTH -- After nine months of being nearly invisible -- a big outing has been to a Dallas hardware store for flashlights -- George W. Bush made his debut Monday in his latest incarnation: motivational speaker.
Nearly 15,000 people heard the former president, known more for mangling the English language than for his eloquence, reminisce about his White House days. Bush, who is writing a book about the dozen toughest decisions he had to make, used much of his 28 minutes onstage to talk about lighter topics such as picking out a rug design for the Oval Office that reflected his "optimism."
Perhaps in a nod to his dismal 22 percent approval ratings when he left office, Bush noted that "popularity is fleeting. . . . It's not real."
He beamed at the standing ovations from the friendly hometown crowd -- he now lives in nearby Dallas.
Looking younger than his 63 years and relaxed, Bush did not appear to have an overarching theme, but strung anecdotes and jokes together and frequently mentioned his faith in God.
"I don't see how you can be president without relying on the Almighty. Now when I was 21, I wouldn't have told you that, but at age 63, I can tell you that one of the most amazing surprises of the presidency was the fact that people's prayers affected me. I can't prove it to you. But I can tell you some days were great, some days not so great. But every day was joyous." That, he attributed, to the prayers of others.
His speech came after the crowd at the "GET MOTIVATED!" seminar stood up and danced to the Beach Boys' song "Surfin' USA" and batted around beach balls tossed into the audience.
The well-publicized event appears to mark the beginning of a higher profile for Bush.
Just last week he gave three speeches in Canada, and he has joined the Washington Speakers Bureau. He is scheduled to give another motivational speech next month in San Antonio. Former presidential adviser Karen Hughes said he has "quite a few speeches planned" during the fall.
Along with his book, due out next year, Bush is planning his new presidential library and policy institute at Southern Methodist University -- the alma mater of Laura Bush. He also has been spotted riding his mountain bike on local trails.
Many people interviewed afterward said they liked Bush, perhaps even because he wasn't the best speaker of the day. He could have said a thesaurus was a big scaly creature that roamed the planet millions of years ago and they would have applauded.
His most memorable story, one after another said, was about Barney, his Scottie:
Mindful of his new neighbors, who have had to endure as many as 650 people a day gawking at his new house in a cul-de-sac, Bush said he took Barney for a neighborhood stroll with "plastic bag on his hand" to scoop poop. That was a moment, he said, when he realized "Man, my life has changed!"
"He is just a normal guy! He wasn't the best speaker. But I was happy to see him!" said Lubbock salesman Patrick Kruger, 50.
Anthony Champagne, a professor of politics at the University of Texas at Dallas, said many presidents go underground for a period after they leave the White House, but then "even Richard Nixon came back in the public eye."
He said approval ratings of presidents often rise the longer they are out of office.
Along with Bush, former secretary of state Colin Powell, former New York mayor Rudy Giuliani, retired football great Terry Bradshaw and a host of professional speakers spoke on a stage decorated with red-white-and-blue signs that said "Motivate!" and "Achieve!"
Sparklers, rock music and a perky master of ceremonies ever-complimentary of Fort Worth kept the crowd on its feet.
"Cut the word 'impossible' out of your vocabulary!" thundered the Rev. Robert Schuller, televangelist and author. After telling the sad story about his daughter getting her leg amputated after a motorcycle accident, he came back big with an account of her playing baseball, trying for home runs so she wouldn't have to run: "Never look at what you have lost. Look at what you have left."
Powell, speaking after a drawing for a door prize of a high-definition flat-screen TV, told the audience to celebrate America's freedom. "We must never be afraid of some clown hiding in a cave," Powell said. Then moving on from Osama bin Laden, he talked about the Chinese: "The only fight we have with them is they want more shelf space at Wal-Mart!"
All this face time -- on giant screens for those in the rafters -- cost $4.95 for most people. The VIP seats in the front rows went for $89.
Tamara Lowe, co-founder of the motivational speakers series, which did a brisk business selling workbooks and other materials, said she was contractually bound not to reveal how much Bush was paid. His spokesman also declined to comment on published reports that estimated his fee at $100,000.
In Britain, where Bush remains wildly unpopular, the media have been reporting his return to public speaking with incredulity. Some commentators recalled his famous flubs: "Rarely is the question asked: Is our children learning?" and "I know how hard it is for you to put food on your family."
A Telegraph news article noted that the Republican former president -- whose policies inspired millions of Americans to vote Democratic in the 2008 election -- was now managing to draw crowds and "may yet have the last laugh."
"I kept looking for a teleprompter, but I didn't see one," said Joanne Ryan, 35, a financial adviser in the audience who noted, "I know the media makes him out to be an idiot," but he seemed genuine and "down-home."
Ryan said Bush seemed more comfortable speaking now than he did as president.
In the crowd of real estate agents in suits, housewives in jeans, students and senior citizens, Chris Clarke, 25, a salesman from Dallas, stood at the back. Like many people, he said that other speakers were better -- Colin Powell was his favorite -- but he thought Bush was good. In fact, he said, it could turn out that Bush may be more suited to motivational speaking than being president. He said when Bush misspeaks, it sounds "incompetent if you are president. But here it can be inspiring. It makes him seem like a regular guy, no better than me."
PHOTOS
Previous Next
(Aman Batheja/fort Worth Star-telegram)
TOOLBOX
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107 Comments View All »
POST A COMMENTYou must be logged in to leave a comment.Log in Register
Why Do I Have to Log In Again?
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By Mary JordanTuesday, October 27, 2009
FORT WORTH -- After nine months of being nearly invisible -- a big outing has been to a Dallas hardware store for flashlights -- George W. Bush made his debut Monday in his latest incarnation: motivational speaker.
Nearly 15,000 people heard the former president, known more for mangling the English language than for his eloquence, reminisce about his White House days. Bush, who is writing a book about the dozen toughest decisions he had to make, used much of his 28 minutes onstage to talk about lighter topics such as picking out a rug design for the Oval Office that reflected his "optimism."
Perhaps in a nod to his dismal 22 percent approval ratings when he left office, Bush noted that "popularity is fleeting. . . . It's not real."
He beamed at the standing ovations from the friendly hometown crowd -- he now lives in nearby Dallas.
Looking younger than his 63 years and relaxed, Bush did not appear to have an overarching theme, but strung anecdotes and jokes together and frequently mentioned his faith in God.
"I don't see how you can be president without relying on the Almighty. Now when I was 21, I wouldn't have told you that, but at age 63, I can tell you that one of the most amazing surprises of the presidency was the fact that people's prayers affected me. I can't prove it to you. But I can tell you some days were great, some days not so great. But every day was joyous." That, he attributed, to the prayers of others.
His speech came after the crowd at the "GET MOTIVATED!" seminar stood up and danced to the Beach Boys' song "Surfin' USA" and batted around beach balls tossed into the audience.
The well-publicized event appears to mark the beginning of a higher profile for Bush.
Just last week he gave three speeches in Canada, and he has joined the Washington Speakers Bureau. He is scheduled to give another motivational speech next month in San Antonio. Former presidential adviser Karen Hughes said he has "quite a few speeches planned" during the fall.
Along with his book, due out next year, Bush is planning his new presidential library and policy institute at Southern Methodist University -- the alma mater of Laura Bush. He also has been spotted riding his mountain bike on local trails.
Many people interviewed afterward said they liked Bush, perhaps even because he wasn't the best speaker of the day. He could have said a thesaurus was a big scaly creature that roamed the planet millions of years ago and they would have applauded.
His most memorable story, one after another said, was about Barney, his Scottie:
Mindful of his new neighbors, who have had to endure as many as 650 people a day gawking at his new house in a cul-de-sac, Bush said he took Barney for a neighborhood stroll with "plastic bag on his hand" to scoop poop. That was a moment, he said, when he realized "Man, my life has changed!"
"He is just a normal guy! He wasn't the best speaker. But I was happy to see him!" said Lubbock salesman Patrick Kruger, 50.
Anthony Champagne, a professor of politics at the University of Texas at Dallas, said many presidents go underground for a period after they leave the White House, but then "even Richard Nixon came back in the public eye."
He said approval ratings of presidents often rise the longer they are out of office.
Along with Bush, former secretary of state Colin Powell, former New York mayor Rudy Giuliani, retired football great Terry Bradshaw and a host of professional speakers spoke on a stage decorated with red-white-and-blue signs that said "Motivate!" and "Achieve!"
Sparklers, rock music and a perky master of ceremonies ever-complimentary of Fort Worth kept the crowd on its feet.
"Cut the word 'impossible' out of your vocabulary!" thundered the Rev. Robert Schuller, televangelist and author. After telling the sad story about his daughter getting her leg amputated after a motorcycle accident, he came back big with an account of her playing baseball, trying for home runs so she wouldn't have to run: "Never look at what you have lost. Look at what you have left."
Powell, speaking after a drawing for a door prize of a high-definition flat-screen TV, told the audience to celebrate America's freedom. "We must never be afraid of some clown hiding in a cave," Powell said. Then moving on from Osama bin Laden, he talked about the Chinese: "The only fight we have with them is they want more shelf space at Wal-Mart!"
All this face time -- on giant screens for those in the rafters -- cost $4.95 for most people. The VIP seats in the front rows went for $89.
Tamara Lowe, co-founder of the motivational speakers series, which did a brisk business selling workbooks and other materials, said she was contractually bound not to reveal how much Bush was paid. His spokesman also declined to comment on published reports that estimated his fee at $100,000.
In Britain, where Bush remains wildly unpopular, the media have been reporting his return to public speaking with incredulity. Some commentators recalled his famous flubs: "Rarely is the question asked: Is our children learning?" and "I know how hard it is for you to put food on your family."
A Telegraph news article noted that the Republican former president -- whose policies inspired millions of Americans to vote Democratic in the 2008 election -- was now managing to draw crowds and "may yet have the last laugh."
"I kept looking for a teleprompter, but I didn't see one," said Joanne Ryan, 35, a financial adviser in the audience who noted, "I know the media makes him out to be an idiot," but he seemed genuine and "down-home."
Ryan said Bush seemed more comfortable speaking now than he did as president.
In the crowd of real estate agents in suits, housewives in jeans, students and senior citizens, Chris Clarke, 25, a salesman from Dallas, stood at the back. Like many people, he said that other speakers were better -- Colin Powell was his favorite -- but he thought Bush was good. In fact, he said, it could turn out that Bush may be more suited to motivational speaking than being president. He said when Bush misspeaks, it sounds "incompetent if you are president. But here it can be inspiring. It makes him seem like a regular guy, no better than me."
Monday, October 26, 2009
How The US Treasury Blew The Chance To Make A $1 Trillion US Profit From The Bailouts
How the U.S. Blew Trillion-Dollar Trade of Century: Mark Fisher
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Commentary by Mark Fisher
Oct. 26 (Bloomberg) -- Hindsight is 20/20, especially when it comes to missed trading opportunities. But when the government has the trade of the century at its fingertips and fails to take advantage of it, someone has to play the Monday morning quarterback.
Flashback to 2008: When the government was forced to bail out the financial system, our friends in Washington also had the opportunity to make the trade of the century for the American taxpayer. While Uncle Sam succeeded in the former, he failed miserably in the latter.
Lehman Brothers Holdings Inc.’s shocking fall exposed the instability of the U.S. banks. In the aftermath, it quickly became clear that the collapse of the financial system was imminent without the intervention of the U.S. government.
In a recent interview in the Financial Times, John Thain, Merrill Lynch & Co.’s former chief executive officer, gave an insider account of those dark days: “Once it became clear that Lehman wasn’t going to be rescued and was going to go bankrupt, the group then shifted its discussion to OK, well, how do we prevent this domino effect?”
Within this environment of impending doom, the government had no choice but to play Atlas and save the financial world. Unfortunately, it failed to realize that along with this role came a tremendous opportunity: to capitalize on the situation. In this sense, the government failed to make the trade that would have catapulted the taxpayer -- rather than just the banks -- back to stability.
Mitigated Animosity
The government had an opportunity to structure the following innovative investment solution: Uncle Sam could have demanded 25 percent to 30 percent of the underlying equity in the banks before agreeing to negotiate a bailout package with the weakened institutions. Had the government brokered a deal that tied bank earnings to taxpayer payback over time, the animosity between Wall Street and Main Street that exists today would have been eliminated, or mitigated at the very least.
I’m certainly not advocating government control of the banks; rather, just the opposite -- the government would have taken a passive stake and then stepped aside to let business take care of business.
Unfortunately, our leaders in Washington lacked the shrewdness required to guarantee taxpayers a permanent ownership stake in the banks their money was being used to save. An innovative investment solution could have secured some of the necessary funds to fix our disaster of a health-care system or Social Security mishap.
Negligible Profits
Instead, the government went ahead and lent hundreds of billions in capital to Wall Street, insured all the money-market funds, bailed out companies such asAmerican International Group Inc. and allowed financial institutions to issue government- backed debt while exacting negligible profits in return.
And so I ask: What trader in his right mind decides to dump his money into a glorified black hole, taking on unlimited risk in the process, for minuscule returns? I’m no socialist, mind you. All I am saying is that the banks should have been made to drop off an envelope at the taxpayer’s doorstep every month. Obviously, no one in President Barack Obama’s administration has ever watched “The Godfather.”
Lay-Up Trade
Thus, when confronted with the opportunity to make an epic trade, the government managed to make the worst deal possible -- so bad that I’m completely comfortable comparing it to the mistake made by the Native Americans back when they sold Manhattan for $24. Just as the settlers weren’t to be blamed then the banks aren’t to be vilified today. When the U.S. government gives you a lay-up trade, you take it. Anyone in the banks’ position would have taken advantage of the terms they were offered and, frankly, would have been stupid not to.
Had Uncle Sam been a student in my class, he would have gotten an “F” in Sensible Trading and an “Incomplete” in Bailout 101. To put this all in perspective, just consider for a minute how in the world Warren Buffettmanaged to negotiate a better deal with Goldman Sachs Group Inc. than the government did for the taxpayer. The policy wonks on Capitol Hill should have stuck to what they know best and called in someone like Buffett or bond guruBill Gross when it came time to negotiate.
Obviously, Federal Reserve Chairman Ben Bernanke and his cronies have learned from the experience of the Great Depression how to repair what has been broken, but they have failed to understand how to capitalize on it.
The jury is still out on the verdict for the bailout, but I would bet good money that the worst is yet to come for the economy. While some are speculating that the financial crisis is over, I’d say we’re still in Act I, with a great deal of financial drama left to unfold.
There’s no question that the government officials who brokered the deal with major banks during the crisis will ultimately go on to become highly respected economists, academics, professors and the like. But I can guarantee that none of them will ever be hired on our trading floors.
(Mark Fisher, author of the 2002 book “The Logical Trader,” is the founder of MBF Asset Management LLC. The opinions expressed are his own.)
Click on “Send Comment” in the sidebar display to send a letter to the editor.
Share Email Print A A A
Commentary by Mark Fisher
Oct. 26 (Bloomberg) -- Hindsight is 20/20, especially when it comes to missed trading opportunities. But when the government has the trade of the century at its fingertips and fails to take advantage of it, someone has to play the Monday morning quarterback.
Flashback to 2008: When the government was forced to bail out the financial system, our friends in Washington also had the opportunity to make the trade of the century for the American taxpayer. While Uncle Sam succeeded in the former, he failed miserably in the latter.
Lehman Brothers Holdings Inc.’s shocking fall exposed the instability of the U.S. banks. In the aftermath, it quickly became clear that the collapse of the financial system was imminent without the intervention of the U.S. government.
In a recent interview in the Financial Times, John Thain, Merrill Lynch & Co.’s former chief executive officer, gave an insider account of those dark days: “Once it became clear that Lehman wasn’t going to be rescued and was going to go bankrupt, the group then shifted its discussion to OK, well, how do we prevent this domino effect?”
Within this environment of impending doom, the government had no choice but to play Atlas and save the financial world. Unfortunately, it failed to realize that along with this role came a tremendous opportunity: to capitalize on the situation. In this sense, the government failed to make the trade that would have catapulted the taxpayer -- rather than just the banks -- back to stability.
Mitigated Animosity
The government had an opportunity to structure the following innovative investment solution: Uncle Sam could have demanded 25 percent to 30 percent of the underlying equity in the banks before agreeing to negotiate a bailout package with the weakened institutions. Had the government brokered a deal that tied bank earnings to taxpayer payback over time, the animosity between Wall Street and Main Street that exists today would have been eliminated, or mitigated at the very least.
I’m certainly not advocating government control of the banks; rather, just the opposite -- the government would have taken a passive stake and then stepped aside to let business take care of business.
Unfortunately, our leaders in Washington lacked the shrewdness required to guarantee taxpayers a permanent ownership stake in the banks their money was being used to save. An innovative investment solution could have secured some of the necessary funds to fix our disaster of a health-care system or Social Security mishap.
Negligible Profits
Instead, the government went ahead and lent hundreds of billions in capital to Wall Street, insured all the money-market funds, bailed out companies such asAmerican International Group Inc. and allowed financial institutions to issue government- backed debt while exacting negligible profits in return.
And so I ask: What trader in his right mind decides to dump his money into a glorified black hole, taking on unlimited risk in the process, for minuscule returns? I’m no socialist, mind you. All I am saying is that the banks should have been made to drop off an envelope at the taxpayer’s doorstep every month. Obviously, no one in President Barack Obama’s administration has ever watched “The Godfather.”
Lay-Up Trade
Thus, when confronted with the opportunity to make an epic trade, the government managed to make the worst deal possible -- so bad that I’m completely comfortable comparing it to the mistake made by the Native Americans back when they sold Manhattan for $24. Just as the settlers weren’t to be blamed then the banks aren’t to be vilified today. When the U.S. government gives you a lay-up trade, you take it. Anyone in the banks’ position would have taken advantage of the terms they were offered and, frankly, would have been stupid not to.
Had Uncle Sam been a student in my class, he would have gotten an “F” in Sensible Trading and an “Incomplete” in Bailout 101. To put this all in perspective, just consider for a minute how in the world Warren Buffettmanaged to negotiate a better deal with Goldman Sachs Group Inc. than the government did for the taxpayer. The policy wonks on Capitol Hill should have stuck to what they know best and called in someone like Buffett or bond guruBill Gross when it came time to negotiate.
Obviously, Federal Reserve Chairman Ben Bernanke and his cronies have learned from the experience of the Great Depression how to repair what has been broken, but they have failed to understand how to capitalize on it.
The jury is still out on the verdict for the bailout, but I would bet good money that the worst is yet to come for the economy. While some are speculating that the financial crisis is over, I’d say we’re still in Act I, with a great deal of financial drama left to unfold.
There’s no question that the government officials who brokered the deal with major banks during the crisis will ultimately go on to become highly respected economists, academics, professors and the like. But I can guarantee that none of them will ever be hired on our trading floors.
(Mark Fisher, author of the 2002 book “The Logical Trader,” is the founder of MBF Asset Management LLC. The opinions expressed are his own.)
Click on “Send Comment” in the sidebar display to send a letter to the editor.
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