Archive for February, 2009

Buffett Says Economy Will Be ‘In Shambles’ for 2009 (Update1)

February 28, 2009

Bloomberg.com: Worldwide

By Rick Levinson

Feb. 28 (Bloomberg) — Billionaire Warren Buffett said the economy will be “in shambles” for the rest of this year as financial firms take losses tied to reckless loans made during the housing boom.

The Standard & Poor’s 500 Index will probably gain in three-quarters of the next 44 years, just as it did in the period since Buffett took over Berkshire Hathaway Inc. in 1965, he said today in his annual letter to the company’s shareholders.

While Buffett and business partner Charlie Munger can’t predict how stocks will perform in 2009, they’re certain “that the economy will be in shambles throughout 2009 – and, for that matter, probably well beyond,” he wrote.

Gross domestic product shrank at a 6.2 percent annual pace from October through December, the most since 1982, the Commerce Department said yesterday in Washington. Buffett said the consequences of the U.S. housing bubble are now “reverberating through every corner of our economy.”

Home purchases should involve an “honest-to-God down payment of at least 10 percent,” Buffett said. “Putting people into homes, though a desirable goal, shouldn’t be our country’s primary objective.”

Buffett endorsed efforts by the U.S. government to prevent the failure of financial firms including Bear Stearns Cos., which was sold to JPMorgan Chase & Co.

‘Immediate Action’

“Whatever the downsides may be, strong and immediate action by government was essential last year if the financial system was to avoid a total breakdown,” Buffett said. “Had that occurred, the consequences for every area of our economy would have been cataclysmic. Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat.”…

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1L50vuf_HiM&refer=home

Twenty-four years of neocon “economics” brings us to what looks like a world economic disaster. But the neocons have the solution – tax cuts.

Tax cuts can fix what ails the economy. Spending America’s GDP on wars and rumors of wars? Not to worry. Tax cuts will fix it. Fixed-rate mortgages gave way to Adjustable Rate Mortgages(ARMS). Trying to budget an adjustable rate anything ought to be a scary thought. But not to worry – because,  again tax-cuts will manage the economy.

And the cherished belief that the tax-cut is the proper tool to  control the economy still reins supreme. It kinda reminds one of the villagers of old, looking that first steam locomotive in the eye and declaring it was driven by horses. Even in the face of evidence to the contrary, cherished beliefs can be difficult to dislodge.

And America is now experiencing the second instance of a failed economy on the Republican’s watch. And the Republicans, by and large, still don’t seem to get it. They are still harping tax cuts.

States eye income tax rises as rich pay less

February 28, 2009

REUTERS

By Joan Gralla – Analysis

Feb 26, 2009

NEW YORK (Reuters) – U.S. states, already battered by the financial crisis, risk suffering a further hit to their coffers when individuals file their income tax returns in April.

Falling income tax receipts from wealthy individuals could further gouge their already battered budgets, according to state officials and financial analysts.

Raising income taxes, as California did just last week, may fail to raise more tax dollars as the incomes of some wealthy people are falling too precipitously.

Yet most U.S. states by law must balance their budgets. The risk that their credit ratings will be cut if they borrow or sell assets, from hospitals to water systems, to close deficits may force states into difficult spending cuts. …

http://www.reuters.com/article/reutersEdge/idUSTRE51O74H20090226

The tax-cutting phase of the “trickle down effect” seems to have been working for twenty-four years. President Ronald Reagan led off the tax-cutting era with WORLD CLASS tax cuts. But the trickle down phase does not seem to be working effectively.

The hard part seems to be persuading the rich to spend money in a “depressed” economy. The rich seems to be just as unsure about spending during a “GREAT RECESSION” as the rest of America. Some of those earning $200,000 a year were reported as being in no big hurry to spendspendspend, even as America’s economy “tanked”.

Off-loading the recovery of America’s economy onto the backs of the rich may not be a good idea even as the neocons like their idea of a lassie faire government.

And on President George W. Bush’s watch, America’s and the world’s economies became so bad that there were questions on the usefulness of the CAPITALISM concept.

Vatican rejects bishop’s apology

February 28, 2009

The Vatican has rejected an apology by a British bishop who denied the full extent of the Holocaust.

It said the bishop needed to “unequivocally and publicly” withdraw his comments.

Earlier, Jewish leaders said the bishop had failed to address the issue of whether he believed that the Holocaust was a lie.

Richard Williamson said if he had known the full harm his comments would cause, he would not have made them.

‘Ambiguous’ apology

The bishop said that his opinions had been formed “20 years ago on the basis of evidence then available”.

But Vatican spokesman Rev Federico Lombardi said the bishop “does not seem to respect the conditions” it set after he had made the comments.

Meanwhile Renzo Gattegna, the president of Italy’s Jewish Communities, described the apology as “absolutely ambiguous”.

http://news.bbc.co.uk/2/hi/europe/7915022.stm

Perhaps if the Catholic Church had been this vigorous during the period of African slavery,  history might have been different. But then again, the current Jewish/Catholic argument is mainly over a definition – made to look like what it wasn’t.

The plight of Hamas ought to be worthy of such a display of CONCERN.

But then again, learning to quietly co-exist with the GOOD, the BAD and the UGLY is a worthy self-preservation cause – RIGHT?

Obama Iraq Plan Might End the War, But Will It Complete the Mission?

February 28, 2009

President Obama announced Friday his plan to end combat operations in Iraq by August 2010 — but if the war is over, then the job is still far from done.

In 18 months, President Obama plans to give America what it hoped it had six years ago — its “Mission Accomplished” moment in Iraq. …

http://www.foxnews.com/politics/first100days/2009/02/27/obama-iraq-plan-end-war-complete-mission/

Mission Statement(a definition):

A mission statement is a brief statement of the purpose of a company, organization.

http://en.wikipedia.org/wiki/Mission_statement

Searching 2003 for an Iraq war “Mission Statement” (i.e. why the Iraq war?):

Those sixteen(16) Words:

The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.

http://www.cnn.com/2003/ALLPOLITICS/01/28/sotu.transcript/

Who knows what Mr. Bush’s mission was in Iraq?

It seemed to many that the 2003 “mission” was to “get Saddam Hussein’s government”. And sure enough after that happened, Mr. Bush made his next most famous “mission” statement: “Mission Accomplished”.

The mission of the Iraq war was a mystery in 2003 and it remains a mystery today. Certainly, the Iraq war was an event. And most would agree that an event must have a cause. What caused the Iraq war? What was the Bush team’s mission in starting the Iraq war? Before a mission can be accomplished, one must have a mission. Who was privy to the mission of the Iraq war? What mission did the Bush team “plan” to accomplish in 2003? Did the mission change as obstacles appeared?

If the Bush team’s mission was to free the Iraqi people, they apparently did not “catch on”. General Douglas MacArthur  said to the people of the Philippines: ” I shall return“. How would the Iraqi people feel if Mr. Bush issued his own ” I shall return” statement?

Obama brings back era of big government

February 26, 2009

REUTERS UK

By Steve Holland – Analysis

WASHINGTON (Reuters) – Bill Clinton declared more than a decade ago “the era of big government is over.” With his new budget, President Barack Obama has brought it back.

Obama’s $3.55 trillion budget proposal represents a gamble that Americans are ready for the sort of change they embraced by electing him in November, including a tax increase on Americans making more than $250,000 a year. …

http://uk.reuters.com/article/usPoliticsNews/idUKTRE51P73W20090226

Steve Holland’s ANALYSIS compares the America that Bill Clinton inherited to the America that Barack Obama inherited. That is about as lopsided a comparison as could be made – especially if one expects the responses to two hugely contrasting conditions to be similar.

A better comparison would be between the America that Franklin Delano Roosevelt inherited and the America that Barack Obama inherited. Even Mr. Bush’s Treasury Department, before he left office, was recommending economy fixing tools that were similar to the Great Depression’s economy fixing tools.

America is not in a business as usual mode – even though some would like to make-believe it is. While the stock market and businesses “crater”, Americans can still go to their banks and deposit or withdraw money. FDR saw the wisdom in protecting America’s bank deposits in the 30′s. There is no panic trying to get money out of banks that are CLOSED indefinitely. Don’t thank the Republicans. Thank the Democrats.

But some can use the relative calm of this time period to “pretend” that all is well. To do otherwise is to perhaps draw attention to those who got America into this mess. The Republicans and their “TELL AMERICA” press do know how to be opportunists – taking advantage of conditions established by FDR to “feather” the Republican’s nest.

After twenty-four years of the neocons’ “trickle-down” economics, America’s economy and and indeed the economy of the world is in a mess.

And if Ronald Reagan’s tax cuts were not “class warfare” then how do you define economic “class warfare”? America has barely endured twenty four years of neocon tax cuts on the rich – while spending all it could on wars. Today’s economy is nothing like the economy that Bill Clinton inherited and it is peculiar that someone would make such a comparison.

A people abandoned

February 26, 2009

Le Monde diplomatique

02/01/2009

by Serge Halimi

By 14 January Israeli troops had killed more than a thousand Palestinians confined to a narrow strip of land and subjected to land, sea and air bombardment by one of the most formidable armies in the world. A Palestinian school converted into a United Nations refuge had been bombed (1), a resolution – issued by the only organisation that really represents the “international community” people are so fond of talking about – had called in vain for a halt to the military operations in Gaza. So, on 14 January, the European Union showed just how firmly it was prepared to react to this mixed display of violence and arrogance. It decided to suspend the process of rapprochement with Israel! But to lessen the impact of what might, even so, have been seen as gentle reproach to Tel Aviv, it explained that this was a “technical”measure, not a “political”one. And that the decision was taken by “both parties”.

Israel is free to do as it likes. Its army had already destroyed most of the Palestinian infrastructure funded by the EU and there had been little or no reaction, no legal action, no call for reparations (2). It then imposed a blockade on people already living in poverty, with no water, food or medical supplies. Still no response, only endless admonitions and a general refusal to become involved in the argument, on the pretext that violence of the strong is not always accompanied by submission of the weak. So why should Israel suppose that it cannot continue to act with impunity?…

http://mondediplo.com/2009/02/01abandoned

Amnesty calls on US to suspend arms sales to Israel

February 23, 2009

Hellfire missiles and white phosphorus artillery shells among weapons used in ‘indiscriminate’ attacks on civilians, says human rights group

guardian.co.uk

Rory McCarthy in Jerusalem

February 23, 2009

Detailed evidence has emerged of Israel’s extensive use of US-made weaponry during its war in Gaza last month, including white phosphorus artillery shells, 500lb bombs and Hellfire missiles.

In a report released today, Amnesty International listed the weapons used and called for an immediate arms embargo on Israel and all Palestinian armed groups. It called on the US president, Barack Obama, to suspend military aid to Israel.

The human rights group said those arming both sides in the conflict “will have been well aware of a pattern of repeated misuse of weapons by both parties and must therefore take responsibility for the violations perpetrated”.

The US has long been the largest arms supplier to Israel; under a 10-year agreement negotiated by the Bush administration the US will provide $30bn (£21bn) in military aid to Israel.

“As the major supplier of weapons to Israel, the USA has a particular obligation to stop any supply that contributes to gross violations of the laws of war and of human rights,” said Malcolm Smart, Amnesty’s Middle East and North Africa programme director. “To a large extent, Israel’s military offensive in Gaza was carried out with weapons, munitions and military equipment supplied by the USA and paid for with US taxpayers’ money.”

For their part, Palestinian militants in Gaza were arming themselves with “unsophisticated weapons” including rockets made in Russia, Iran and China and bought from “clandestine sources”, it said. About 1,300 Palestinians were killed and more than 4,000 injured during the three-week conflict. On the Israeli side 13 were killed, including three civilians. Amnesty said Israel’s armed forces carried out “direct attacks on civilians and civilian objects in Gaza, and attacks which were disproportionate or indiscriminate”.

Israeli officials criticised the report, saying the military only used weapons that were legal under international law and did not intentionally target civilians. Israel’s foreign ministry said it was “inappropriate” to compare the supply of weapons to Israel and to Hamas. …

http://www.guardian.co.uk/world/2009/feb/23/israel-arms-embargo-gaza

The neocons ruled America for twenty-four(24) years. During the last four of those twenty-four(24) years, George W. Bush’s administration engaged in wars and rumors of wars. In addition to that, the Bush administration appeared to be a catalyst for the wars of its Middle East sidekick.

Going to the Middle East on the occasion of Israel’s 60th birthday(Palestine’s 60th death-day), Mr. Bush was looking to bring  “lasting peace” to the Middle East. Adolph Hitler was looking to bring “lasting peace” to Europe. Attila the Hun was also in search of  the elusive “lasting peace”.

Lasting peace is what you get when your enemy is vanquished via war. The Tasmanians of old, no longer pose a threat to “lasting peace”. The Tasmanians were the victims of what some called the most complete case of genocide on record.

But the Palestinians have not reached the level(zero) of the Tasmanians at this time. But the Palestinians(Hamas) must forget that they ever “owned” Israel. It appears that the brothers of Hamas have already forgotten.

You can’t own what you can’t protect. The United States knows that. Russia knows that. France knows that. England knows that. The nuclear club knows that. But Iran had better forget that. It could possibly develop that another “wayfaring” group, through no fault of its own, may someday need land to settle upon. Europe is out of the question but the Middle East may still supply attractive land – open to “development”.

Solving problems with problems has worked in the past – but only because of a “humongous” imbalance in the war making capability of the solutions’ combatants. The United Nations was supposed to make it so that EVERY country did not need to develop  a war making arsenal to protect itself. And the U.N. motto seems to imply that there is a class called human beings. The Geneva Conventions seems to define human beings in terms of a war setting.

But then came the Bush team.

America’s old “War Department” seemingly was reborn via its State Department. The State Department used to showcase diplomacy, but under the Bush team – diplomacy took a back-seat to wars, rumors of wars and saber-rattling. When the Bush team truly needed the powers of persuasion during the economic meltdown, nobody was listening. Wars could not solve the economic meltdown problem.

The Middle East legacy of the Bush team lives on. That legacy could be described in one word – WAR. But the Hamas “war” with Israel was more of a “turkey shoot” than a real WAR. It pitched Israel’s STANDING ARMY using high-tech American made fighter planes against “terrorists”. The terrorist are the Palestinians whose land was stolen in 1948 by the United Nations.

Jewish terrorists, involved in the theft of the 1948 land, went on to become political leaders. Palestinian terrorists, 60 years later, were not granted the privilege of serving their people even after winning an election. There is no mistaking the “color” of the Bush team’s hats nor the REALITY of the Bush team’s RHETORIC. Mr. Bush’s Secretary of State said Americans would eventually “THANK”  Mr. Bush for what he has done.

Who Revealed the CIA Job Status of Valerie Plame?

February 21, 2009

As the Bush team years recede from memory, they may take along with them answers to questions of historical relevance. Would members of America’s government be a party to revelations of the job status of a CIA operative?

Someone outed Valerie Plame. Who?

It used to be believable that if an American found a “little black book” of CIA operatives on the streets of a big American city, a first order of duty would be to return that book – unread to the CIA.

It used to be believable that, by and large, the only threats to America’s CIA operatives would come from foreign sources. It used to be that way.

But then came the Bush team.

And things seemed to change. Valerie Plame’s job status of CIA operative was revealed by someone and “nobody don’t know who”. But, in search of whodunit  the focus was not on foreign agents. The focus was on America. And not “street-level” America – but high ranking America.

Women may have given up required acts of chivalry when they demanded the same work opportunities as males but Ex-President Eisenhower would still tip his hat to a lady AND it was said in an Internet essay that he might blush if he inadvertently said a “bad” word in front of a lady.

But then came the Bush team.

And it appeared that everything(even that [expletive deleted] piece of paper) took second billing to the goals of the Bush team’s neocons. The Bush team was searching for  a yellowcake reason to attack Iraq. The Bush team sent Valerie Plame’s husband, Joseph Wilson(Ex-Ambassador to Niger), to Niger to bring back evidence of a Niger-Iraq yellowcake connection. Perhaps Joseph Wilson felt he could come back with a “yes – I found a connection” or a “no – I did not find a connection”.

Joseph Wilson came back to the neocons with a “no – I did not find a Niger-Iraq yellowcake connection”. And the Republican’s “family values” theme may have kicked in.

Valerie Plame, the wife of Joseph Wilson, found her name and occupation making headlines. And it looked like the Wilson family values met the Republican’s family values.

Answers to the question of who outed Valerie Plame are not likely to be found as buried artifacts to be later dug up by archaeologists. It is doubtful that historians have the interrogation skills necessary to cause an information source to “COME CLEAN”.

It is quite possible that WHO OUTED VALERIE PLAME is an UNKNOWABLE – but it happened on the Bush team’s watch.

Viewpoint: A word of caution to Obama

February 19, 2009

BBC News

Desmond Tutu, the first black South African archbishop of the Anglican church and veteran campaigner against apartheid, gives a lecture in London on Thursday to mark the 75th anniversary of the British Council. Here, he explores some of the same themes in an article written for BBC News.

I make no apology for talking and writing, in the UK, about a foreign leader. But expectations of him are so high and attention worldwide is glued to his every step as he reaches the end of his first month in office. He is the story of the moment.

I am obviously referring to Barack Obama.

Three months ago as I watched the news that could define an era, I rubbed my eyes in disbelief and wonder. It could not be true that Barack Obama, the son of a Kenyan, was to be the next president of the United States.

During the previous administration’s term, I’d been asked to suggest one unilateral magnanimous gesture or action that the incoming US president might make to counteract anti-Americanism abroad. I said that while there were clearly pockets of anti-Americanism around the world, this was definitely not a global phenomenon nor was it directed towards the American people.

What I certainly could attest to was substantial resentment and indeed hostile opposition to the policies of a particular US administration.

I contended, as I do now, that the two are quite distinct and separate.

An elucidating example dates back to the years of the anti-apartheid struggle. The Reagan White House was firmly opposed to applying sanctions against the South African apartheid regime, preferring what it described as “constructive engagement”. Many of us were incensed by this policy and opposed it with every fibre of our being.

Black role models

I probably dismayed many people when on one occasion I was told of the latest Reagan rejection of our call for US sanctions against Pretoria. I retorted, out of deep exasperation, “The West can go to hell!” I was then Bishop of Johannesburg, and some thought it was decidedly un-episcopal language.

I was very angry toward the Reagan administration, but that did not make me anti-American. And that is the point, anger and resentment toward the policies of a particular administration do not necessarily translate into anti-American sentiment.

When I was nine or so, I picked up a tattered copy of Ebony magazine. I still don’t know where it could have come from in my ghetto township with its poverty and squalor. It described how Jackie Robinson, a black man like us, had broken into major league baseball and was playing scintillatingly for the Brooklyn Dodgers.

I did not know baseball from ping-pong. That was totally irrelevant. What mattered was that a black man had made it against huge odds, and I grew inches and was sold on America from then on.

Remember the extraordinary outpouring of sympathy and concern after 9/11? That surely could not have happened, certainly not on such a vast global scale if people hadn’t genuinely cared. Everywhere, virtually.

But what happened that all these positive warm feelings toward the United States were disrupted and turned into the negative ones of hostility and anger?

‘Lean years’

For those of us who have looked to America for inspiration as we struggled for democracy and human rights, these past seven years have been lean ones.

Archbishop Desmond Tutu speaks to the BBC’s Allan Little.

When war began, first in Afghanistan and not long after in Iraq, we read allegations of prisoner abuse at Bagram air base in Afghanistan and of rendition to countries notorious for practising torture. We saw the horrific images from Abu Ghraib and learned of gruesome acts performed in the name of gathering information. Sometimes the torture itself was couched in the US government’s euphemisms – calling waterboarding an “interrogation technique”.

To the past administration’s record on torture, we must add a string of other policies that have damaged the standing of the United States in the world: its hostility to the Kyoto Protocol on greenhouse gases; its refusal to assent to the Rome Statute of the International Criminal Court; its restrictions on the use of US funding to fight Aids; and the arrogant unilateralism it has employed in declaring to be enemies any countries it deemed “against us” because they were not “for us”.

‘Bully-boy attitude’

I never imagined in my worst dreams that I would live to see the day when the United States would abrogate the rule of law and habeas corpus as has happened in the case of those described as “enemy combatants” incarcerated in Guantanamo Bay. Or that I would hear an American government and its apologists use exactly the same justification for detention without trial, as had been used by the apartheid government of South Africa – a practice that the United States at the time condemned roundly, as was so utterly right to have done.

So, it was a devastating case of deja vu for some of us, thoroughly disillusioning.

The Bush administration managed to rile people everywhere. Its bully-boy attitude sadly polarised our world.

Against all that, the election of Barack Obama has turned America’s image on its head.

On US election night last November, I wanted to jump and dance and shout, as I did after voting for the first time in my native South Africa on 27 April 1994.

My wife cried with incredulity and joy as we watched a broadcast of the celebrations in Chicago, after the election results came through. A newspaper here ran a picture of Obama from an earlier trip to one of our townships, where he was mobbed by youngsters. It was tacitly saying that we are proud he once visited us.

Caution

Because the Bush years have been disastrous for other parts of the world in many ways, Obama’s victory dramatises the self-correcting mechanism that epitomises American democracy. Elsewhere, oppressors, tyrants and their lapdogs can say what they like and, for the most part, they stay put.

But ordinary citizens living in undemocratic societies are not fools; they may not always agree with US foreign policy, but they can see and register the difference between the United States – where people can kick an unpopular political party out – and their own countries. …

http://news.bbc.co.uk/2/hi/africa/7897206.stm

Condoleezza Rice, America’s previous Secretary of State, said that people would come to thank Mr. Bush for what he has done.

But before the people thank Mr. Bush for what he has done – let the World Court thank him first.

Let the World court  “Thank” Mr. Bush for what he has done: to Iraq –to Guantanamo’s detainees and to detainees secretly scattered throughout the world. Let the World Court thank or pass judgment on Mr. Bush and his neocon’s “interrogation techniques”. The Bush team and neocons seemed to have little or no respect for laws be they domestic or be they international.

Trying to re-establish respect for the rule of International law would be a fitting place to start “thanking Mr. George W. Bush”.

Tax cuts may heighten deflation risks – NY Fed study

February 18, 2009

REUTERS

Wed Feb 18, 2009 5:29pm EST

NEW YORK, Feb 18 (Reuters) – Cutting taxes to try to stimulate the economy could do more harm than good in a zero interest rate environment as it can heighten the risk of deflation, according to a recent New York Federal Reserve study.

Policies that are aimed at increasing the supply of goods can be counterproductive when the main problem is insufficient demand, New York Fed economist Gauti Eggertsson said in a research paper entitled “Can tax cuts deepen the recession?”

“The emphasis should be on policies that stimulate spending,” Eggertsson said, adding that his research found the impact of tax cuts is “fundamentally different” with interest rates near zero.

“At zero short-term nominal interest rates, tax cuts reduce output in a standard New Keynesian (economic) model. They do so because they increase deflationary pressure,” he wrote. Eggertsson’s study focused primarily on labor taxes and some sales taxes. …

http://www.reuters.com/article/newIssuesNews/idUSN1845479520090218


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