A Lesson from the Fort Hood Massacre

As the U.S. Army, the soldiers at Fort Hood, and the American population in general come to grips with the catastrophe that occurred at Fort Hood with the murder of thirteen people and the wounding of twenty-nine others, it is only natural to try to see if we can draw some sort of lesson from this tragic incident. Is there something that can be done to try to insure that this sort of assault won’t happen again or must the army live with the knowledge that this sort of thing might just reoccur again and again? And beyond the army, is there a lesson here for the American public too?

The facts, as we know them today, seem to indicate that the perpetrator of the massacre, Major Nidal Malik Hasan, was indeed an Islamic radical and that his sympathies lay with the enemies of America. For whatever reasons, the army failed to take notice of the abundant evidence that indicated that the loyalties of this man were very questionable.  Instead he was treated as a trusted American citizen-soldier, and it was assumed that his complete and utter loyalty was to the United States and its people – his fellow citizens. However, the army was completely wrong in their assumption. Why?

Why, indeed.  Today’s army is certainly a lot different from the army of World War II when Japanese citizens were not even allowed to join the army.   Most Japanese Americans were confined to internment camps because, as a group, they were simply not trusted. It didn’t matter whether they were citizens or not. Eventually, Japanese men, mostly from Hawaii, were allowed into a couple of mostly Japanese units , like the 442nd Regimental Combat Team.  The 442nd performed heroically, earning 21 Medals of Honor. This was a unit that had something to prove – their loyalty to America – and they proved it indeed.

The issue, of course, during World War II was whether Japanese Americans could be trusted.  In today’s much more politically correct world we do not dare to wonder whether Muslim-Americans can be trusted.  We like to think we have moved beyond the simple racial prejudices of the 20th Century. We like to think that we can follow the ideal of  “all men are created equal” and therefore we don’t want to discriminate based upon race, religion, and so forth.  The interesting thing is that the government does discriminate all the time when it comes to protecting classified information. Try to get a very high level security clearance if you have an uncle who is a leader of the Taliban in Afghanistan. I guarantee it won’t happen.  Let’s suppose your father is a citizen and still lives in North Korea, do you think the government will allow you access to our most secret nuclear technology? Not in a million years.  Is this discrimination or is it just common sense?

We’ve been dealing with this issue since 9/11. The issue is profiling.  Is it right to be suspicious of someone just because they have similar beliefs, appearance, citizenship, and language as the people who perpetrated the 9/11 attacks? Or must we follow our ideal of “all men are created equal and everyone is innocent until proven guilty”?  Is that what the army does in Afghanistan when they see someone who appears to be a member of the Taliban? Or is the army a bit more cautious in these circumstances? What does common sense say to do?

The evidence so far indicates that red flags were flying in the face of the army, but the army stubbornly ignored them. More investigation is, of course, still needed, but the facts are the facts: Major Hasan shouted Allahu akbar!  Then he opened fire and mercilessly killed and wounded a lot of U.S. soldiers.  If there was ever an obvious lesson to be learned it is this: army security is insufficient. The question is what should be done to fix it.  It would seem that more thorough background investigations of Muslim members of the Army is needed.  I know that this is distasteful to some, but consider this: suppose we were at war with Australia, wouldn’t we want to take a closer look at Australian members of our army? I know we are not at war with Islam – although Osama bin Laden would love it if we were – but even so, common sense dictates that Muslims in the army be given more careful scrutiny – just in case. Doesn’t that make sense?  Would the Muslim community be outraged over that, and if so why?  Everyone who gets into a very trusted position in the U.S. government has to prove their loyalty by undergoing a very through background investigation.  People who work in these very sensitive positions simply accept that. They aren’t insulted. They know that you can never be too careful.

The lesson of the Fort Hood massacre is this: we don’t need to go back to World War II style internment camps, but the military does need to do more thorough background checks on some people. Perhaps being Muslim is reason enough to trigger a closer background investigation, perhaps not. It needs to be looked into. Our government has always used profiling when handing out top-level security clearances – that is only common sense.  The army also needs to take a common sense approach – not an idealistic approach – reality is seldom ideal.  This isn’t the world of Pollyanna.  The U.S. military used to know that, I wonder when they forgot?

Can A New Housing Bubble Rescue Our Economy?

It was Albert Einstein who said that the definition of insanity is, “doing the same thing over and over again and expecting different results”. Congress has now passed legislation that will extend the first time home buyer tax credit deal – that’s the one that encourages people to buy a house now so they can pocket an $8,000 tax credit. Now, even better, Congress has also included in the legislation a $6500 tax credit for people who have owned their homes for five years.  The deal is you have to flip the house you are in and buy another house.  Then you have to stay in that house for three years.  This income tax credit is, of course, in addition to the exclusion from income taxes of up to half a million dollars profit you make on the sale of your existing house.

So, let me see if I understand this. The economy of the entire world has been brought to its knees by a housing bubble and the fix for the global economic meltdown is to create another housing bubble?  Is that it? You mean it’s like giving heroin addicts a little more heroin because they are having withdrawal symptoms? So when the symptoms go away everything is OK?  So what about those of us who bought a house four years ago? Why can’t we play too? Or what about those of us who are saving up for a down payment for our first home but we know we’ll never have enough until the summer? What about us?

So – this is going to help the economy, right? OK. Whose economy does it help? The people who buy the new houses? Probably not much, after all they are about to be saddled with a new mortgage.  How about the people who build the houses? I suppose so. It will probably keep them employed for another six months or so while they build the new houses for the new bubble. How about the banks? Well then, I think now we’ve struck pay dirt.  The banks will be giving out their usual, or unusual, 30 year mortgages, thus assuring themselves of at least tripling their investment over time.  Sure, this tax credit sort of stimulus will give a multi-million dollar boost to the home construction industry. However, over the period of 30 years, it will create a multi-billion dollar boost for the banks.

So where does that leave us? Congress is making rules that primarily benefit the big banks and a little bit of the money trickles down to the ordinary people, who will naturally wind up paying for this benefit to the banks via their shiny new mortgage payments – or via their future taxes which will be used to pay for the tax credits they just received.  In the end the net big time winner is the banks – which is probably the intent of our Congress which has grown fat and bloated, feasting upon the “contributions” from the half a zillion lobbyists who troll the streets and alleyways of our nation’s Capital.

Here’s a question: how many professional economists has our Congress consulted for guidance about this? Has Congress ever talked to Nouriel Roubini, the economist who accurately predicted the worldwide economic meltdown? Has President Obama ever talked to him? How about Paul Krugman, the Nobel prize-winning economist? Is he in the loop?  Somehow, I don’t think so. We all know who is in the loop in Washington. It’s the bankers and their lobbyists.  It’s the insurance companies and their lobbyists. As they say – we have the best government money can buy.

Here’s another question: what is the grand vision? Where do we go from here – economically, I mean. And how do we get there? Could someone in DC just stand up, preferably the President, and just lay it out for all of us? Or do they just think it is all too complicated for us children?  Is that why they are throwing us these scraps of cake to feed on – little stimuli to keep us sated while they figure out how to get the banks on top again?

OK, one more question: if our Congress cared so much about us instead of caring about the wealthy bankers, why don’t they put a limit – a hard and low limit – on credit card interest. Something like 12%.  Why don’t they put a hard limit on mortgage interest rates – like maybe 8%?  Why doesn’t the Congress protect us citizens from the raptors at the banks instead of allowing them to feed off the flesh of the American people? We know why.  The banks own Congress.  That’s why we now embarking on Housing Bubble Part 2.

Better find a seat in a lifeboat now.

The European Union – A Model for America?

With the ratification of the Lisbon Treaty, the handwriting on the wall is now becoming legible.  The structure of the world’s national governments will be changing in the near future. This change is inevitable and simply follows the lead of businesses in becoming multinational organizations.  Many American businesses are now multinational and they use their new multinational identity to make handsome profits at the expense of the American citizen. Multinationals export the jobs of U.S. citizens to countries where the labor is much cheaper than American labor and then import their products, often with the same brand name they used when they were American made, and sell these to U.S. citizens. Meanwhile, U.S. citizens are unable to follow their former jobs overseas and these people often have to settle for a lower paying job than the one they had before.  It works great for business, but not so good for the average person – even though they think they are getting a great deal at Wal-Mart, people don’t realize that stores that primarily sell products that are made in other countries endanger purely American companies.

The European Union is a very powerful force in the world’s economy.  It’s currency, the Euro, is rapidly becoming the world’s dominant currency, while the dollar continually weakens in value.  In many ways, the EU is the United States of Europe, although many Europeans would hasten to deny that. The simple fact is that it is an alliance of twenty-seven countries that functions as a superstate.  Citizens of the EU can travel from one country to another as easily as Americans can travel from Texas to Connecticut. EU citizens can move, go to school, get a job, get medical care, and so forth in any EU country of their choosing. They just have to get up and go.

The result is that if there is job growth in Germany people go to Germany from Poland and work there.  If German jobs are exported to Ireland, then Germans are free to go to Ireland and apply for their old jobs.  How many Americans can go to China and get their job back? How many Americans can go to Canada and get free medical care?

The people of Europe have learned that small, individual countries don’t have much leverage in the modern world. To counter this they have created, and now significantly strengthened, the European superstate. Other countries, like Turkey, are clamoring to join.  It doesn’t take a genius to see where this is all heading. The leaders of twelve Asian countries recently met to discuss the possibility of creating an East Asian Union, modeled on the European Union. The idea has strong support from Japan.  The age of independent countries acting as separate economies is over.  It is very apparent that the economic success of the European Union is the model of the future, but is it the model for America?

Perhaps not. Not soon anyway. There will be resistance in America to create a North American Union or an American Union, encompassing North and South America, because American businesses are doing too well exploiting the cheap labor in remote countries, by exporting American jobs to those countries, and by selling their products to Americans. Of course these businesses don’t care that Americans have been using their credit cards to pay for all this and then they have been paying their credit card bills by buying and flipping houses in the great real estate Ponzi scheme.

Inevitably, in fact it is happening now, the U.S. economy has to suffer. Americans have to lose their jobs. We cannot compete with mega-countries like the EU and the East Asian Union.  The only course of action for the U.S. is to unite (you would think we would embrace that idea since that is the principle idea of the United States).  But this idea meets with a lot of resistance in the U.S. Most likely this is from the businessmen who are profiting from the current multinational thing and don’t see any profit for them in this new structure.  Nevertheless, it is inevitable.  It is the way the world is going. We can either become part of the movement or be swept away by it.

This natural process of combining small countries into larger mega-countries is part of a process that will inevitably lead to a single world community with a single, federal government and lots of local governments.  This is where world economic pressures are driving us.  This is the way political pressures are driving us. The U.S. has been slow to recognize the dominance of the EU as a financial and political power.  It appears that the U.S. is unaware of the desire for an East Asian Union.  Perhaps it is time for the sleeping giant to wake up from its slumber, before we find out that the rest of the world has grown far larger than us, and we have become nothing more than a sleeping midget.

Is the U.S. Stock Market Being Manipulated?

There have been many articles and books written about the cause of the Stock Market Crash of 1929.  As in many manmade disasters it can be difficult to determine THE CAUSE because there are in fact multiple causes which combine to generate the eventual catastrophe. Many so-called experts like to point to one cause or another for an event, when in actuality, the whole thing was due to a complex interrelationship of factors, none of which is the sole cause or the sine qua non.  There is, however, one thing that is certain about the events that led up to the 1929 disaster – the stock market was being manipulated. At the time there was no law against manipulating the market and small groups of very wealthy people did just that.

The wealthy investors would, as a group, begin buying shares of a single stock and then, through their connections in the news media, the average person would be told that such and such stock was rapidly going up and it looked like a sure bet. Before long a lot of small investors would buy the stock and its price would shoot further upward, thus luring even more small investors to buy in. The big boys would sit on the sideline and watch, waiting for their moment.  Then, in one coordinated movement they would sell all their shares at a hefty profit. The stock price would then plummet and the small investor, who fell for the fake news stories about the stock would lose a lot of money, maybe 90% or more.

It was practices like this that caused the Crash and the resulting Great Depression. President Roosevelt created the SEC in order to put an end to these predatory practices.  Law were passed.  Restrictions put in place. These sorts of schemes must never happen again, everyone said.  It is now 80 years since the great stock market crash.  During the intervening years laws have been changed.  The SEC has fallen asleep at the wheel. Men like Bernie Madoff have prospered. One can only wonder, have some of the old schemes been revived?  Have new ones been created? Is the stock market a straight and honest place where stocks are bought and sold without manipulation of any sort?

Consider the past several months behavior of the DOW.  There is a curious behavior in the prices of this average. Notice how the DOW tends to increase rather gradually and then periodically drops precipitously.  It’s sort of a sawtooth effect. One would expect that if very large groups of investors were buying and selling throughout the day that periodic, abrupt changes in stock prices wouldn’t happen. It seems highly unlikely that everyone would decide to sell at the same time. If they did, wouldn’t they also decide to buy that way?

Today the stock market has taken a steep drop.  Yesterday it took a steep rise. The pundits at the various news media all claim to have an explanation as to why the rise and drop occur.  The Wall Street Journal quoted one doomsayer who claims that we are headed for a disaster in commercial real estate.  Yet, only a few days ago we were exuberantly buying stock and congratulating ourselves that we have finally broken the 10,000 mark. We just heard that the economy has returned to positive economic growth.  Despite this wonderful news, CNN posts an article questioning whether things are getting better. Better? Isn’t 10,000 better than 6,500?

While the media are currently broadcasting a message of fear – which can only drive people to sell off their stocks – Nouriel Roubini, the economist who correctly predicted the world economic meltdown doesn’t seem too afraid. He is no longer talking about a W-shaped recovery and seems to have accepted a V-shaped recovery.  Mr. Roubini, seems more concerned about the Carry Trade, trading in currency, and its effect on the dollar’s value than anything else. He says we are now in the Mother of All Carry Trades.  Even so, the Fed has control of this through interest rates. Dr. Doom is no longer forecasting imminent doom for the world.  However, as before the great meltdown, his views don’t get much publicity. He says that the government’s intervention in the economy has led to a recovery. Yet, for many people there is skittishness and resulting volatility in the market – a perfect environment for predators to take advantage of the little investors who will jump to buy at news that a certain stock will rise and who will equally bail out immediately with the slightest hint that a particular stock might drop.

Listen to the so-called analysts who profess to know the cause of the stock market either rising or falling.  How often are they actually correct? There are many times when their reasons contradict their story from just yesterday.  One can only wonder whether there is more to this than meets the eye. The behavior of stocks, the pattern of steady rise and precipitous drops, both during a single day and over multiple days, might well indicate manipulation by large investors. Of course, it might not.  After all, sometimes you can flip a coin and it actually will come up heads ten times in a row.

But you have to wonder.

Green Energy Is Not the Solution for the Economy

A few days ago, President Obama gave a speech at MIT during which he reiterated the need to switch to green energy in order to preserve the environment.  He also said that the use of fossil fuels, particularly foreign oil, places the country in a precarious situation. If a foreign country cuts off our oil supply it could cause great hardship in the U.S.  He also said that a massive effort to create a green energy industry will be a significant stimulus for our economy. Speaking about the worldwide competition to create new sources of green energy he said, “The nation that wins this competition will be the nation that leads the global economy.”  I’m not so sure of that.

As usual, isolationist Americans tend to be unaware of advances made in the rest of the world.  Ever since we won World War II we have had a tendency to view ourselves as the world leader in anything technological. It might then come as a surprise to many Americans that the call to action for the creation of green energy has been heard a long time ago in Europe – while Americans were happy to drive their gas guzzling SUVs and Hummers and heat their homes with fossil fuels and generate electricity with coal.  While Americans were comfortably cocooned in their homes watching football on their widescreen TVs, Denmark was busy building gigantic windmills for the generation of electricity. Today, Denmark is the world leader in wind-produced electricity, a result of a National plan developed in 1976.  They make some mighty large and mighty efficient windmills in Denmark. It’s not clear to me that even MIT can overtake the Danes anytime soon in this type of technology.  Do we really think we will be producing next generation windmills anytime soon and be selling them to the world?  The world already has significant wind generation capability.

What about solar power?  Surely the world needs that. True, but the world has been working on that for quite a long time – while we were driving our SUVs around town trying to find houses we could flip.  Germany is the world leader in solar technology and has been for quite a while. The Germans are currently building a 40 megawatt solar power plant for their own power generation needs. I doubt that the Germans will be one of our customers for solar power technology. Germany is the world leader in producing solar power.

OK, so what else is there? Nuclear? Whoa, hold yer horses, fella. What do you mean “nucular”?  That’s dangerous. Don’t you know they make bombs out of that stuff?  We Americans don’t want that! (Just disregard our stockpile of thousands of nuclear bombs.) Meanwhile, the French – actually not “meanwhile”, ever since the Arab Oil Embargo in 1973  the French decided that they would never again be held hostage to foreign oil.  So they built a bunch of nuclear power plants all over France.  France is the world leader in nuclear power plant technology, not the U.S. I don’t think they’ll be lining up to place any orders from the U.S. even if we do decide to resume nuclear power research.  The leading institution in the world for the future of nuclear energy, i.e. nuclear fusion, is called ITER. It’s in France.  Under the Bush administration the U.S. had all but dropped out of this research effort. Our country stopped paying its dues and had almost zeroed out all funding. Meanwhile the other six members of ITER: China, European Union, India, Japan, Korea, and Russia have made great strides toward the production of power from controlled nuclear fusion – a process that produces very little radioactive waste. Recently the U.S. chipped in a little money that helped to make back payments that the Bush administration failed to make. Even so, we are hardly on the cutting edge of nuclear science compared to the rest of the civilized world.

The fact that President Obama wants to spend a lot of money on energy projects in America is good news. It’s about time. But let’s not kid ourselves. The rest of the world is way ahead of us.  The Obama plan will undoubtedly create more jobs in the U.S.  for people who will be engaged in energy research. It is something we need to do.  It is also something the rest of the world realized they needed a long time ago.  It is unlikely that we will find a large foreign market for our energy technology, whether it is solar, wind, nuclear, or anything else in the near future.  We have too much catching up to do. Because of that, it is unlikely that launching a massive energy research and development project can be the near term solution for our economy. We won’t be exporting windmills to the Danes, solar panels to the Germans, or coals to Newcastle. They have enough, thank you.

The fundamental problem with our economy is not that we don’t do energy reserach, it is the outsourcing of people’s jobs by multinational companies.  We simply cannot go on having our multinational companies make everything in China and then sell it to us in Wal-Mart stores while we get the money to pay for all this stuff by playing economic bubble games and getting home equity loans.  Green energy research is good. It’s good for the scientists and engineers who need jobs. It’s good for the environment. But let’s not kid ourselves, it’s not going to be the solution for the much deeper problems of our pathetic economy.  The solution will only come by tackling head on the iniquities of multinational economics and the exportation of American jobs and manufacturing capabilities to foreign countries.