Brief Shorts


So on February the 6th last week, the country celebrated Ronald Reagan’s 100th day-o-birth. Reagan, as our 40th president brings and brought out a lot of novice traits that we all like to feel a part of. We felt he was honest, stern but fair, boosted America’s morale domestically and internationally, lowered taxes and propelled the U.S.s economic engine into high gear firing out on all cylinders. Unfortunately for the uninformed, the real Reagan story gives a different ending. Most of what we hear about Reagan today originates from myths built up around him and misinformation that shroud him, simply because he is portrayed as a savior.

Reagan’s administration treated the poor poorly, ill-treated the sick, attempted to disable the disabled from collecting Social Security payments, swelled the underclass by improving conditions favorable only for the wealthiest upper-class, misdiagnosed stagflation, mismanaged our monetary policy and ignored reforming energy policies. Six out of the eight years of Reagan’s term, he actually raised taxes, his job growth was primarily from federal subsidies, he was the first president to double the deficit, which made him the first president to hurl our country into the throngs as a debtor nation and was the first president to increase spending by 80% during his tenure.

Republicans today, cannot claim to be the governing champion of small government, of less spending and a balanced budget, for, as explained in detail in posts past, they are the total opposite. So, Republicans without a good brand to peddle, try to package it by wrapping themselves around the Reagan myths. The fact is, if one swims through all the fabrication about Reagan, their dip in research will show Reagan’s administration as one of the most corrupt.

Despite the fact Republicans accused the Clinton administration as being the most corrupt, all their attempted claims of corruption failed in the courts, which of course now, led by Darrel Issa, they’re claiming the Obama administration as “the most corrupt” with only unfounded politically motivated reasons to go by. It’s their brand of politics as usual. On the other hand, the liberal leaning hasn’t pointed out the Reagan record and attempt to politically gain from actual facts by constantly pointing out his misdeeds.

For the last hundred years, the most corrupt presidential administrations have been Republican, due to the administrations of Harding, Nixon and Reagan. Once history finally reveals itself, I’m sure the W. Bush administration will eclipse them all, but at present Reagan holds the lead. By the end of his final term, 138 Reagan officials had been convicted, indicted or were under official investigation for criminal misconduct from illegal lobbying to the Iran/Contra affair; from Richard Beggs to Ollie North. In terms of the sheer number of Reagan officials involved, it is currently the worst administration ever for corruption.

Yet, Republicans have an ironic dire need to be the exemplary model of political conduct that they actually cloak themselves as the ones of virtue and truth through deceit of the myriad Reagan fictional tales. Reagan was aimlessly and errantly convinced that government problems were due to excessive taxation, government regulation, poverty handouts and that capitalism had to be brutal in its approach to succeed…so too, is the current Republican mandates.

A prime example of this Reagan cloaking is Sarah Palin’s speech in Santa Barbara, California last week where she direly stated Washington’s misguided policies need to get back in step to Reagan values. She said in her usual public relations mode with no substance, “This is dangerous, this is insane. This is not the road to greatness; this is the road to ruin.” She was referring to Obama’s administration straying from Reagan ways. I will add that Ronald Reagan’s son, Ron, later in an interview with AP stated, “Sarah Palin is a soap opera basically,” and that he didn’t see anything in common with his dad and Palin.

As of recent, the fat of the news has been on Egypt. Shortly after Tunisian citizen protests and mass demonstrations’ success in changing government, Egyptians followed. There had been many instances before where Egyptian citizens had gathered in Cairo’s main square, Midan Tahrir, to demonstrate against the abuses of their government, but were quickly quashed, dispersed, arrested, detained, jailed and tortured. This time…it didn’t quite happen that way. Perhaps it was due to the timing, the mass and the efficient electronic communications in logistics that stymied the hated police forces to better counter the demonstrators. Whatever the reasons, the protesters were there to stay, halting Egypt’s economy and business as usual.

Hosni Mubarak gained power in 1980 when serving as Anwar Sadat’s vice-president. Sadat was assassinated by the Society of Muslim Brothers otherwise known here in the U.S. as the Muslim Brotherhood, which then, Mubarak took the helm. I was in the Sudan at the time and the assassination put into effect a state of emergency sending shock waves throughout the Middle East. Since that time, Mubarak, as a close American ally has been in power as an almost dictatorial regime. His government does not allow for the peaceful assembly of government protest, has installed a virtual state of emergency, outlaws governmental rivals, conducts mock elections, controls the press and tortures political detainees. On the other hand, he has been indispensible for American interests in the Arab world, stood by us during the Cold War era and has provided the safest Middle East haven for American and European tourists in visiting the country’s rich heritage and historical landmarks.

This has been the dilemma posed to Obama…which side to choose; a tough challenge to call. Should our president push for democracy and human liberties by backing the protesters, or should he back an old American friend…one that is few and far in between in the Arab world? Mubarak carried and gave us the water we needed in these parched desert lands. As Henry Kissinger once said, “In this world, it is often dangerous to be an enemy of the United States, but to be a friend is fatal.”

This, I suppose is what has prolonged Obama’s speaking out, it is a quandary, the massive protest caught everyone off guard, even the Muslim Brotherhood. But once he came out on the side of the demonstrators, conservatives waiting in the aisles for Obama’s decision immediately took to the opposite road in defending Mubarak.

I don’t truly know, perhaps the demonstrators should believe Mubarak this time in stating he will step down this September, but he has long lost their trust in stating this times before during his thirty year reign. There have been concessions to the demonstrators’ demands, a meeting with the opposition has been held and protection of the essentially leaderless protesters has been so far inaugurated with the military. With Mubarak’s claim to step down in a few months, it would appear to be a proper approach, for some time is needed to allow other fronts’ ideas to take seed and blossom. Once the flame is truly lit though, it appears the yearning to citizen rights and freedoms cannot wait till the morrow.

Egyptians as a whole are looking for democracy, but it is beginning to appear the main focus of concern is the huge discrepancies between the rich and poor; an item all countries should be evaluating, in particular the U.S. where the gulf between wealth and poverty is ever widening with civil liberties and social programs for the common folk floundering in being ignored or attacked.

To Ban or Not to Ban:
Yesterday on Tuesday, February 08, 2011, Republicans in both Houses of Congress commenced legislation that would prohibit the federal government from honoring any failed or underfunding state pensions of economically burdened States that cannot. Representatives Darrell Issa, Paul Ryan and Senators John Thune and Richard Burr got the ball rolling on their respective floors by introducing legislation for a bill to ax all federal commitments to cover state and local public sector employee pensions in states that are unable to fund them.

Aw, I don’t know, I guess this would save the federal government somewhere between $700 billion to $1.3 trillion over the long haul with the exact amount not truly known due to the calculating of future disparities in long term investment fluctuations...and that is if every State had to forfeit payment to the federal government. This ban on the federal government in honoring its promise to back States’ funding of their employee retirement pensions appears to be a good place to save a federal buck, but what’s next…defunding the FDIC where they can no longer cover individual failed bank accounts of $100, 000.00 or less? It’s saving federal deficits from rising, but all the while it would obliterate what’s left in burdened states’ budgets.

The thing is, why are the States in this position? In truth, due to the eight years of Republican’s and George W. Bush’s cutting back on federal funding to States creating state budget shortfalls…municipalities, communities and school districts approached, consulted with and bought ABS securities from brokers in hopes of relieving their stagnant finances. Many a pension fund and investment across America were wiped out during the financial meltdown, leaving communities in dire straits. They responded through acts of lay-offs, school classes and activity cuts, park and library closures and deletion of services in general. After digging a deep financial hole, community leaders now have no rope to generate income, for residents who have lost jobs, or on fixed incomes, cannot afford a rise in local taxes.

To add into the financial mix, shadow-banking systems kicked in under the Bush years that added its own unique demise to a healthy financial environment. This so-called ‘insurance against default’ opened the floodgates by allowing investors, such as with pension funds, to legally invest in artificially and highly rated but risky ABS securities. Before the Bush administration, pension fund management and other retirement fund institutions had a fiduciary obligation to only entertain high quality securities. The way it evolved is if one trader needs to sell, others also sell and buy back the original asset. This in turn led to price overshooting and a reduced liquidation value for the targeted distressed trader. Hence, the market becomes illiquid at the precise time liquidity is needed most. Further, predator trader profits from triggering another trader’s crisis, created a cascade spilling over onto other traders that eventually infiltrated the whole market. Hedging and speculating took form in predatory derivative underlying that of course, eventually led to the financial meltdown. All of this was due to Republicans refusing to regulate the market while allowing it to operate under a dome of silence.

So now, the Republican Party, who created the financial mess for the States in America in the first place, are now clamoring to fix the problem by adding more financial stress to the States…a double whammy. Makes sense doesn’t it? Also, Republicans claim sole rights as the true adherent followers to the Constitution, but this introduced legislation goes against the grain of the Constitution. The only alternative Republicans are offering to the States that will be affected is that they should file bankruptcy. But the Constitution guarantees that all States will remain sovereign…in other words…a State cannot be bankrupt. Perhaps Republicans might want to mull this over a bit more...a direct contradiction in the making.

Intrepid Reporting

As Always,

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