October 30, 2009
October 29, 2009
October 28, 2009
The Obama administration and the head of an important House committee unveiled legislation on Tuesday to give the government broad new powers to shift the cost of rescues of big, troubled financial institutions from taxpayers to other large companies.
The new legislation was drafted jointly by Treasury officials and Representative Barney Frank, the head of the House Financial Services Committee.
The legislation, drafted jointly by Treasury officials and Representative Barney Frank, the head of the House Financial Services Committee, would create a special fund, paid by assessments on financial companies with more than $10 billion in assets, to bear the costs of big firms that fail.
A statement by the committee said that the legislation followed a “polluter-pays model where the financial industry has to pay for its mistakes — not taxpayers.”
Assessments on those companies would be made only after the collapse of a large institution, and the legislation gives the government authority to levy such payments over an extended period.
The Superfund program was launched in 1980 in the wake of a national tragedy that unfolded at Love Canal, N.Y. Lois Gibbs, a housewife-turned-activist who would come to be known as the “Mother of Superfund,” discovered that her family’s and neighbors’ sickness could be traced to toxic waste buried underneath her hometown decades earlier by Occidental Petroleum Co.
Initially, the program was funded by a tax on polluters, which fed the actual “Superfund,” a pool of money used to pay for the cleanup of sites whose polluters were unknown or unable to do the work.
But the tax law expired in 1995, under a Republican-controlled Congress, and the $3.8 billion that had accumulated in the fund at its peak ran dry in 2003.
The program is now funded with taxpayer dollars and money that the EPA manages to recover from polluters for work the agency has done at their sites.
But Superfund’s budget has not kept up with inflation. In 1995, the program received $1.43 billion in appropriations; 12 years later, it received $1.25 billion. In inflation-adjusted dollars, funding has declined by 35 percent.
October 27, 2009
So Karzai had to agree to at least go through the motions of participating in a real election.
And when he did, Obama hailed a man who stands accused of orchestrating a massive effort to thwart democracy as someone whose “constructive actions established an important precedent for Afghanistan’s new democracy.”
Obama’s precise statement went like this: “While this election could have remained unresolved to the detriment of the country, President Karzai’s constructive actions established an important precedent for Afghanistan’s new democracy. The Afghan constitution and laws are strengthened by President Karzai’s decision, which is in the best interests of the Afghan people.”
The “yuck factor” was high.
But it got higher when Obama praised Karzai for helping to foster “such a vibrant campaign.”
It is, of course, true that Obama is not the first American president to have to pretend that a local bad guy who got caught red handed was some kind of statesman.
Still, having to speak well of Karzai is a lot — arguably too much — to ask.
And if Obama has any sense of the region — or of the trouble his Afghanistan initiative is in — he had to be hoping that Karzai and his henchmen would refrain from obvious lawbreaking in the second round.
The international community must make it clear to the incumbent Karzai government that it will be held accountable for the integrity of the runoff voting process. This can be enforced by post-election audits of the sort that disclosed the blatant fraud in the unstable eastern and southern provinces. If the Karzai government tries manipulation again, it will sacrifice the confidence of the international community and suffer the consequences.
But I keep asking myself: How do we succeed with such a tainted government as our partner?
I know that Jefferson was not on the ballot. But there is a huge difference between “good enough” and dysfunctional and corrupt. Whatever we may think, there are way too many Afghans who think our partner, Karzai and his team, are downright awful.
That is why it is not enough for us to simply dispatch more troops. If we are going to make a renewed commitment in Afghanistan, we have to visibly display to the Afghan people that we expect a different kind of governance from Karzai, or whoever rules, and refuse to proceed without it. It doesn’t have to be Switzerland, but it does have to be good enough — that is, a government Afghans are willing to live under. Without that, more troops will only delay a defeat.
I am not sure Washington fully understands just how much the Taliban-led insurgency is increasingly an insurrection against the behavior of the Karzai government — not against the religion or civilization of its international partners. And too many Afghan people now blame us for installing and maintaining this government…..
We have to be very careful that we are not seen as the enforcers for this system….
This is crazy… I would not add a single soldier there before this guy, if he does win the presidency, takes visible steps to clean up his government in ways that would be respected by the Afghan people.
If Karzai says no, then there is only one answer: “You’re on your own, pal. Have a nice life with the Taliban. We can’t and will not put more American blood and treasure behind a government that behaves like a Mafia family. If you don’t think we will leave — watch this.” (Cue the helicopters.)
So, please, spare me the lectures about how important Afghanistan and Pakistan are today. I get the stakes. But we can’t want a more decent Afghanistan than the country’s own president. If we do, we have no real local partner who will be able to hold the allegiance of the people, and we will not succeed — whether with more troops, more drones or more money.
Success in counterinsurgency operations requires establishing a legitimate government supported by the people and able to address the fundamental causes that insurgents use to gain support. Achieving these goals requires the host nation to defeat insurgents or render them irrelevant, uphold the rule of law, and provide a basic level of essential services and security for the populace. Key to all these tasks is developing an effective host-nation security force.
Then we are going to have to avoid looking like we are part of the illegitimacy.
October 26, 2009
October 23, 2009
October 22, 2009
October 21, 2009
There can be little doubt that the excessive risk-taking by bankers who aggressively hawked subprime mortgages and credit cards to earn high fees imposed enormous hardships on the American public. The worst offenders — Citigroup, Washington Mutual and Wachovia — irresponsibly over-leveraged their balance sheets and forced the United States government to step in to avoid complete collapse of the system. These banks and investment bank counterparts like Merrill Lynch, Lehman Brothers and Bear Stearns paid their price.
Unfortunately, the sins of the wrongdoers created a public relations problem for the remaining banks — at precisely the wrong time.
Leading bankers like Jamie Dimon of JPMorgan Chase and Lloyd C. Blankfein of Goldman Sachs (where I serve on the board) are calling for an industry self-assessment. Mr. Blankfein’s well-received speech to the Council of Institutional Investors in March was a humble and honest appraisal of the industry’s shortcomings:
“We held ourselves up as the experts, and the loss of public confidence from failing to live up to the expectations that we created will take years to rebuild. Worse, compensation decisions at banks that destroyed shareholder value look self-serving and greedy.”
Many pundits are advocating an increased role for government in regulating banking behavior and managing compensation. Past attempts along these lines have proven counterproductive and have produced unintended consequences. Yet in response to the public anger, such proposals are inevitable.
The danger is that we will punish healthy banks for the sins of failed banks. Most bankers have behaved responsibly throughout the crisis. This is the wrong time to tie their hands. Instead, we need these banks to get back to their chartered roles: to provide financial resources to consumers and businesses — large and small, new and old.
Commercial and investment banks are the backbone of American commerce. They provide the capital for business expansion and new company formation. In the past 20 years, 70 percent of all jobs have been created by start-up companies and small businesses. But the lack of available financing in the past year has severely crimped the ability of small businesses to grow their business and to add jobs. New company start-ups are finding it extremely difficult to get any financing.
Continuing to vilify all bankers will create a vicious cycle: It will fan the flames leading to excessive regulations. This will cause banks to pull back and lend less, thereby crimping expansion by small business and shutting down start-ups. This will intensify the jobs crisis and throw the United States into a double-dip recession.
But the banks can’t just retreat or lobby to stave off all regulation. Instead, they need to go on the offensive by advocating responsible regulations that reward sound practices and constrain and punish the egregious ones. They need to recognize the desperate needs of small businesses and start-ups and provide the funds they require. And they need to show marked restraint in cash compensation, rewarding only long-term performance with long-term rewards.
Let’s stop vilifying the bankers. The current public sentiment towards banks misses the forest for the trees. Anger is rarely cathartic. In this recession, it has become counterproductive.
The economic crisis was set off by an unbalanced approach to risk management, but the “antibank” rhetoric is an unbalanced reaction to the vital role banks must play in rebuilding trust and fueling economic growth. A blanket indictment of the entire system defeats the essential role that well-functioning banks must play in rebuilding the vitality of the American economy.
A blanket indictment of the entire system defeats the essential role that well-functioning banks must play in rebuilding the vitality of the American economy
October 19, 2009
October 16, 2009
Now the only way to avoid this shipwreck, and to provide for our posterity, is to follow the counsel of Micah, to do justly, to love mercy, to walk humbly with our God.
For this end, we must be knit together, in this work, as one man. We must entertain each other in brotherly affection. We must be willing to abridge ourselves of our superfluities, for the supply of others’ necessities.
We must uphold a familiar commerce together in all meekness, gentleness, patience and liberality. We must delight in each other; make others’ conditions our own; rejoice together, mourn together, labor and suffer together, always having before our eyes our commission and community in the work, as members of the same body. So shall we keep the unity of the spirit in the bond of peace.
The Lord will be our God, and delight to dwell among us, as His own people, and will command a blessing upon us in all our ways, so that we shall see much more of His wisdom, power, goodness and truth, than formerly we have been acquainted with. We shall find that the God of Israel is among us, when ten of us shall be able to resist a thousand of our enemies; when He shall make us a praise and glory that men shall say of succeeding plantations, “may the Lord make it like that of New England.”
For we must consider that we shall be as a city upon a hill. The eyes of all people are upon us. So that if we shall deal falsely with our God in this work we have undertaken, and so cause Him to withdraw His present help from us, we shall be made a story and a by-word through the world. We shall open the mouths of enemies to speak evil of the ways of God, and all professors for God’s sake. We shall shame the faces of many of God’s worthy servants, and cause their prayers to be turned into curses upon us till we be consumed out of the good land whither we are going.
And to shut this discourse with that exhortation of Moses, that faithful servant of the Lord, in his last farewell to Israel, Deut. 30. “Beloved, there is now set before us life and death, good and evil,” in that we are commanded this day to love the Lord our God, and to love one another, to walk in his ways and to keep his Commandments and his ordinance and his laws, and the articles of our Covenant with Him, that we may live and be multiplied, and that the Lord our God may bless us in the land whither we go to possess it. But if our hearts shall turn away, so that we will not obey, but shall be seduced, and worship other Gods, our pleasure and profits, and serve them; it is propounded unto us this day, we shall surely perish out of the good land whither we pass over this vast sea to possess it. Therefore let us choose life,that we and our seed may live, by obeying His voice and cleaving to Him, for He is our life and our prosperity.