So What Else Is Too Big To Fail?

I would guess that, prior to the recent World Economic Meltdown (WEM), most of us never gave much thought to which industries were “too big to fail”.  Who knew we couldn’t live without AIG or Bank of America?  Insurance companies and banks come and go, right?  It turns out that this rule only applies to the smaller banks and insurance companies.  It seems that the big banks and insurance companies, taken collectively – even individually as with AIG – are indispensable and critical to the very existence of the United States. Therefore, the U.S. government had to step in and rescue these companies – for the good of the country.

So, I’ve been thinking that it might be nice to know in advance which other companies or industries are also too big to fail, just so I can be prepared. Apparently the U.S. automobile industry is also too big to fail – at least the Ford and GM parts of the industry – maybe not Chrysler. It seems that the economic impact of losing GM (Ford is doing OK) would be detrimental to the U.S. so we just aren’t going to let them fail (a structured bankruptcy is not really failing).  My question then is this: is there some way I can identify other sectors or companies that are also too big to fail?  What other companies can expect a guaranteed government lifeline if they also get into financial trouble?

I took a look at the 2008 Fortune 500 list of America’s biggest companies, which, incidentally,  is called the Fortune 1000, to see if I could see some sort of pattern or trend that would help me identify the other “too big to fail” candidates.  I found that, of the top 25 revenue earning companies in the U.S., they could all be placed into one of the following six groups:

1. Oil/Energy

2. Finance/Insurance

3. Retail

4. Communications/Technology

5. Automobile

6. Health/Medical

The sectors above are listed in order of total revenues for 2008. The number one spot goes to the oil industry with total revenues of about $1.2 trillion. The financial sector came in second with revenues of about $810 billion.  I have to assume that the reason we have to save the banking/insurance industry is because they play such an important role in our economy. However, our government decided that the auto industry is also to big to fail and they came in at only fifth place with revenues of about $360 billion.  Given the recent measures taken by our government to save both the financial and auto sectors of our economy, I think it is only reasonable to expect that the other members of the top five would be saved if they imploded too.

My conclusion is this: if the time comes when disaster strikes any of these other sectors of our economy, namely oil/energy, retail, or communications/technology we can expect our government to immediately step in and declare that these are “too big to fail” also.  This must be especially true for Big Oil because they are the largest sector of our economy.  It’s probably comforting for Big Oil to know that if they ever do get in trouble, we, the American taxpayer, will be there to bail them out.

As far as the health/medical sector goes – I don’t know.  You guys didn’t make it into the top five, you know.  And what about the aviation sector: the airlines, airplane manufacturers, and so forth?  Sorry, you didn’t even make the top ten – you’re actually not even on my chart! I guess we can do without the U.S. aviation industry, right? Maybe we could outsource and insource all our aviation needs from other countries!  After all this is a global economy, right?

Come to think of it, we could probably outsource and insource our medical needs too, couldn’t we?  I mean if it really comes down to it, couldn’t we just buy all of our pharmaceuticals from China or India? Couldn’t we just use our electronic technology to outsource diagnostic testing to Canadian or British or even Chinese doctors?  Maybe so… Sorry, health/medical, but you’re only number 6.  You’re out too.  Sorry.

So that’s it then.  There’s my top five list of U.S. industries too big to die.  We are saving two of them right now, and with only three more to go.  I wonder who’ll be next?

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Is American Capitalism a Failure?

Failure is very much in the eye of the beholder, because whenever there are winners there are also losers.  Winners always think that things are just great, but the losers often have a different opinion.  If there are lots more winners than losers we can usually say that something is a success, and when things don’t turn out so good and there are lots more losers than winners we can judge something to be a failure.  It seems that an awful lot of people in Europe think that American Capitalism is a failure these days, and they intend to express their opinions to President Obama when he visits London on Tuesday.

There is little doubt that the present worldwide economic catastrophe has brought grief to millions, if not billions of people, and there is little doubt that the blame for the meltdown of the world’s economy can be laid at the doorstep of no-rules, Capitalist America.  However, the question we should be asking is whether this current situation is a one-time thing or is it sort of like a chronic disease you have that remains silent for years and then, every once in a while, goes berserk and the your body is covered by oozing sores.  It’s a good question because, if we care to glance back in time for a moment we can see that we have had similar economic catastrophes in the past  – and all have been linked to no-rules capitalism.

It wasn’t for nothing that the richest men of the 19th century, like John D. Rockefeller, Cornelius Vanderbilt, Jay Gould and many others were called “Robber Barons”.  All of these people built up huge fortunes because there were no regulations that could control their activities.  The robber barons built monopolies and squeezed out their competition and then charged whatever price they liked for their goods or services.  The country utterly depended on them – they were “too big to fail”, because the loss of any of these companies would spell ruin for America.  Sound familiar?

It might be helpful to step back for a minute and consider the words “American Capitalism”. The reason they need to be considered is because there are a lot of wealthy people out there, like John McCain, who use these two words as if they are interchangeable.  If you ask John McCain, or Rush Limbaugh for that matter, I would guess they would tell you that to be an American is to be a Capitalist.  Capitalism is the American way – it’s who we are.  Actually that isn’t exactly true.

If we look at the very first English settlers who came to America, the Pilgrims in Massachusetts and the colonists in Virginia they were far from being Capitalists.  These states, and others were called “commonwealths”, i.e. the governments existed to promote the common good. In New England the early towns all had areas of land called the town common where anyone could graze their animals – the land was owned in common. Not very Capitalistic is it?  The first battle of the American Revolution was fought on such a “Common”, Lexington Common, also called Lexington Green.  So, I have to ask John McCain and his buddies: were the Pilgrims actually un-American?  Weren’t they more like Socialists, and doesn’t that sort of make them equal to Communist Pinko Russians or something?

When did “no-rules Capitalism” take on the equivalence of the word “American”?  It’s certainly not part of the philosophy of the founders of our country.  It is only in the 19th Century, with the rise of the robber barons and the lack of governmental controls that no-rules Capitalism began to appear in America.  It seems that it rose not by design but by default – no one realized at the time that rules and regulations might be required for some industries because they could easily become monopolies.  No-rules Capitalism reared its head again shortly before the Great Depression when people were able to buy huge amounts of stock on margin without having the assets to cover a loss.  This no-rules environment led directly to the stock market crash and the following Great Depression.

When Ronald Reagan became president he set about dismantling the government in the belief that “government is the problem”. As I noted in an earlier blog, he completely deregulated the airline industry with the result that today our airlines are barely surviving, our commercial airplane industry is barely hanging on, and while the wealthy enjoy the luxury of their corporate jets, the average person detests flying because of the lack of legroom, food, blankets and any other creature comforts that in the past made transcontinental travel enjoyable.

Now we are embroiled in a monumental economic disaster of such magnitude that only the printing presses of the United States Treasury can save us or the world.  Of course the bill will come due for all this money – and guess who will pay? Not the 21st century robber barrons; no, it will be the taxpayers – the common people.  The common people of the commonwealths of America have been indoctrinated to believe that no-rules Capitalism is the definition of “American” and anyone who questions this ludicrous fallacy is un-American.  The truth is that no-rules Capitalism only serves the ultra-wealthy, the people who can manage to seize control of a valuable resource and build monolithic industries that exterminate their competition.  In the end, no-rules Capitalism morphs into a giant game of Monopoly – and that is not capitalism anymore – nor is it American.  It is a tyranny, a tyranny of oligarchs, by and for oligarchs, masquerading as freedom.

The message the people of Europe will soon be shouting to President Obama is this: the restoration of power to the ruling oligarchy is a mistake. No-rules capitalism has again and again been shown to be a dangerous and unsuccessful economic system.  If there is one guiding principle that defines the true American philosophy of the founders of this country it is not total Freedom, it is Liberty.

John McCain, Rush Limbaugh, and their wealthy Republican buddies, not to mention the oligarchs, should learn the difference.

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Vampire Banks Come Back to Life

Paul Krugman, the Nobel prize winning economist, is fond of using the term “Zombie banks” to describe banks that are operating despite having liabilities that exceed their assets.  Most of our major banks have fallen into this category – the living dead.  However, it seems that the situation is changing with the Obama/Geithner rescue plan for our financial giants.  We, meaning the government – meaning us, will work a deal with private investors to buy up all the toxic waste inside the banks which we either pay for directly or guarantee to the private investors.  Wall street likes the idea and bank stocks have surged recently as blood begins to flow again into the pale white faces of the undead bankers.  The problem is: it’s our blood.

One thing that our government has conveniently overlooked – at least, and hopefully only for the moment – is that these nearly dead banks never had a soul.  These undead banks functioned more as vampires in our lives than as agents of community development.  Have we forgotten credit cards that sucked people in with promises of 0% interest only to escalate to 33% interest when a payment might be a microsecond late?  Have we forgotten how these vampires gleefully raised the rates on all of our credit cards simultaneously simply because we had somehow overlooked a single credit card payment for a day?  Have we forgotten what it is like to be in Credit Card Hell?

Then, of course, there are the mortgages – the ones given to unsuspecting homeowner wannabees that just wanted a house of their own but needed a break on mortgage payments.  So they got an adjustable rate mortgage that was easy to pay during the first year, but after that the payments were just impossible because the interest rate adjusted into the stratosphere.  Which, of course, is exactly what the banks wanted. Just like Credit Card Hell, the banks had also created Mortgage Hell.

Did you know that General Motors is a bank?  I thought they made cars. It turns out that they are actually a bank, so they got TARP bank bailout funds.  I thought General Electric made appliances.  It turns out that GE Capital Finance is the largest finance company in the world.  It seems that you can make a lot more money by loaning money to people than by building stuff and selling it to people.  When President Obama was on Jay Leno’s show he said that over the past 15 or 20 years about 40% of the U.S. economic growth was based upon the financial sector. That’s what happens when you lend money to people at extremely high interest rates.  So now, in order to rescue our economy, it has become necessary to remove the stake from the heart of the vampire banks and give them new blood.

Paul Krugman points out the problem in today’s New York Times. We can’t just give the vampires a transfusion and then think everything is going to be OK.  It won’t be long before they start stalking us again – offering 0% loans for six monthsb, then an interest rate tied to the value of the Russian Ruble divided by the ratio of the Euro to the dollar times the population of China at the end of the six month introductory period.  We need protection from the vampires. We need “stakeholders”, so to speak, who will stand up to these soulless, deathless entities and tell them “No more!”  Tim Geithner is hinting that he might be thinking that way, but is he a true vampire killer?  Is President Obama?

Many years ago our government (yes OUR government, meaning “us”) had laws that limited interest rates. Back in those days you couldn’t get a “Pay Day” loan.  (Check out My Cash Now.  Their annual interest rate is 485.45%!!!!!)  Then came a period of “deregulation”, i.e. leading the lambs to slaughter where the restrictions on interest rates were lifted and many of us got suckered into loans that drained us of everything we owned and the bloated banks still weren’t satisfied. Of course not; you can never satisfy a vampire.

Guess what?  I just checked the stock market.  They’re back.  What will President Obama do? I think he’s a smart guy. I think he wants to put the “us” back in “U.S.”, but so far he’s being cautious.  I think he doesn’t want to spook the vampires – same with Geithner.  I think both of them might be stealth vampire hunters, but it’s too early to tell. Meanwhile, I would be careful about taking out a new loan from any institution without calculating the total cost to repay it.  Try using an interest rate calculator like this one. For example, if you put in a loan of $10,000 at 18% interest for ten years you’ll find that you have to pay not only the $10,000 but also $7,989 in interest.  On the other hand if the bank jacks up the interest rate to 33% you have to pay $79,160 in interest!!  The vampires love that.

Until President Obama and Secretary Geithner rein in the bloodsuckers it’s best to be careful before taking out any new loans…. and whatever you do, don’t go into any bank after dark.

Ever.

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America’s Aviation Industry in Crisis

The collapse of the real estate markets, the banking industry, and the automobile industry over the past year has been the subject of news headlines almost every day. However, there is an other segment of the economy that has received scant attention, yet there is another industry that has also fallen to its knees: the airline industry.  Today, stocks for airlines like United and American are selling at 1/10 th of their value only a year ago. Yet, our government seems unconcerned.  In the world of aviation the unregulated, free market economics of Reagan and Bush still reign.  The result is that our airlines are barely able to survive and, for many passengers today, flying is merely something to be endured.

It doesn’t have to be this way; it wasn’t always this way.  Before the era of the great Reagan economical errors the airline industry in the U.S. was heavily regulated. Airfares and air routes were controlled by the government.  The drawback of the old system was that the cost of an airline ticket was relatively high compared to today.  However, the advantage for passengers was that there was actually legroom and food on airplanes.  A transcontinental flight was a comfortable journey with the airline providing good meals, blankets, pillows, magazines, decks of playing cards, postcards to be filled out, complimentary ink pens, – anything you could possibly want during your flight was provided, even in economy class.  Furthermore, the airlines actually made money because they were not faced with cutthroat competition.

Some airlines, like Pan American, were only allowed to fly international passengers while others only flew domestic passengers.  During the pre-Reagan years we had three major commercial airplane manufacturers in America: Boeing, Douglas, and Lockheed; now there is only Boeing and Boeing has now fallen behind Europe’s government supported Airbus and the world’s premier passenger airplane maker.  In the pre-Reagan years an airline pilot was paid a salary commensurate with his abilities and his responsibilities, which were significant  – he literally held the lives and safety of his passengers in his hands.  Today, only a few pilots – the most senior at the largest airlines – still make six figure salaries. Young pilots,  the first officers who take turns with the captains flying each leg of a flight, find that their starting pay, even at the largest of the U.S. airlines, is comparable to the starting pay for a barista at Starbucks or a cashier at Wal-Mart.  Isn’t that just a little scary?

One need only to look at the record of the past thirty years to see that aviation in the U.S. is in a death spiral. The number of airlines that have vanished since deregulation is large. Gone are Pan Am, Eastern, Northeast, Braniff, Northwest Orient, America West, Mohawk, TWA, PSA, Air Florida, Air New England, Aloha Airlines, Mid Pacific Air, Mississippi Valley, National, New York Airways, North Central, Overseas National Airways, Ozark, Piedmont, Ransome, Reeve Aleutian, Republic, Southern, Transamerica, Western Airlines, and Wright Airlines.  There are actually a lot more. Too many to list here; for a more complete list check out wikipedia.

Clearly, operating an airline is  risky business undertaking.  It was risky even during the years of government regulation, but one has only to look at the financial condition of our major airlines to realize that the industry, as a whole, is facing a dire situation. Certainly, the plight of the airlines was severely compounded from the 9/11 attacks when a lot of people stopped flying.  A lot of rich executives went out and bought private corporate jets to avoid the possibility of a hijacking.  The price of fuel has skyrocketed.  Competing start-up airlines have forced the existing airlines to operate on a dime – to the benefit of no one.  It probably won’t be long before our airlines follow in the footsteps of Ireland’s Ryanair and start charging passengers to use the onboard toilets.

Enough.  The time has come to re-institute adult supervision for the airline industry. The alternative is the collapse of airline transportation in the U.S.  We are the only country in the world to all such no-holds-barred, free market capitalism for our airlines.  The result is that, by comparison, our airlines provide shoddy service in terms of passenger comfort, baggage handling, and on time performance.  Check out the 2009 World Airline Awards and compare any American airline with Singapore Airlines, Asiana Airlines, or British Airways. The only award given to any U.S. airline was given to Continental Airlines. Their award? Best airline in North America.  How far the U.S. airline industry has fallen!

A question we should all ask ourselves is this: are we also playing Russian roulette with airline safety in the U.S.?  Remember the fiasco about the cracks in Southwest Airlines’ planes? The U.S. government has gone too far down the path of no rules capitalism, a path that has led to the collapse of the real estate market, the U.S. banking industry, and the world economy. It also appears to be leading to the collapse of the U.S. airline industry in the near future. Now is the time for the government to reassert itself in U.S. aviation.  I know the government has its hands full at the Treasury but the FAA seems to be just sitting on their hands. My guess is they have plenty of free time; all they need is for President Obama to give them the word.  After all, we can’t all fly on Air Force One, can we?

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AIG:Too Big to Fail – Too Big to Exist

If you bought AIG stock about ten days ago, you could have quadrupled your money by today.  It doesn’t make much sense, does it?  Why are people buying AIG while the U.S. Congress sounds like they are about to eat AIG for lunch?  There is either some serious irrational exuberance going on among investors or maybe these investors all know something we don’t know.  Is it that they know that AIG is too big to fail, and that whatever happens the government is compelled to save them or else they and we will all disappear into some kind of financial black hole?  Maybe buying AIG stock really is a sure bet – then again, maybe not.

The current uproar over spending about 165 million in bonuses for AIG employees sort of distracts us from the real issue about AIG.  It is certainly puzzling why AIG management felt OK in giving out the bonuses; most companies in similar situations would have called their employees into a meeting and said, “Look, the company didn’t have a very good year, so we are asking you all to tighten your belts, and so forth…” It’s the kind of  standard speech you give employees before you tell them they don’t get a bonus this year. It’s happening all over the country.  So why did AIG go ahead and give out these massive bonuses?  Could it be because they are smug in the knowledge that they are too big to fail?  Is that what their counterparties believe too?

The AIG counterparties, the people who purchased credit default swaps (CDS’s) (basically insurance against people defaulting on their mortgage loans) and collateralized debt obligations (CDO’s) (basically sliced and diced toxic mortgages), expect to be paid off.  Some of these, like Deutche Bank, UBS, Goldman Sachs, Merrill Lynch, and others have already received over $108 billion. All from our TARP money.  But can we be sure that AIG has come clean? Are there other holders of CDS’s or CDO’s who are yet to paid off? Were there other types of CDS’s, for example, CDS’s for credit card defaults, or CDS’s for commercial real estate defaults?  I wonder how the future is looking for those? (Hint: not good.)

To make things even murkier, it seems that there were a lot of investors who bought credit default swaps who never bought the corresponding CDOs. Yes! They essentially placed a bet that people would default on their mortgages without even buying the mortgages themselves! Having won their bets, the AIG counterparties now want to be payed off. This is better than Las Vegas, isn’t it? One would think that when a company starts providing insurance to people on assets that they don’t even own then they have left the realm of insurance and have entered the world of outright big stakes gambling.  The AIG people have essentially become bookmakers, and AIG’s multimillion dollar bonus babies took the wrong bets.

The Bush administration allowed AIG and many major banks to play no-rules capitalism – and they lost really, really big.  The problem is that they then came crying to the government, meaning us, and pleaded for a bailout.  And we gave it to them.  That was our mistake. We should have realized that any company that is “too big to fail” is also too big to be allowed to exist.  We become vulnerable to the stupidity and greed of its executives and in the end, they win and we lose.  The solution is to do to AIG what we did many years ago to Ma Bell – break them up.  Slice and dice AIG into ten or twenty independent mini-AIGs, just like we did with the phone company.  Then if one fails we don’t care; the others can take up the slack.  If there is one lesson we should take away from this worldwide economic collapse it is that we need to always keep an eye out for companies that might be “too big to fail”, and when we do identify them we must step in immediately and break them up into smaller, independently viable companies.

It’s not to late to apply that lesson to AIG, and a couple of our big banks too, while we are at it.  Now is the time to begin the deconstruction of these dangerous behemoths. The worst thing we can do is to simply shovel money into institutions that are “too big to fail”, because, inevitably, they will fail again – and guess who is going to pay (again)? The only sure way to save ourselves and AIG is, paradoxically, to destroy AIG.  Too big to fail is too big to exist.

Too big to fail is too dangerous to even be allowed to exist.

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A Day to Be Irish

The annual Saint Patrick’s Day meeting of the Taoiseach of Ireland and the President of the United States took place this morning in the White House as Brian Cowen presented Barack Obama with bowl full of shamrocks – the traditional gift from the people of Ireland on this day. The water in the White House’s north and south lawn fountains was dyed green – under the direction of Michelle Obama, and America prepared once again to celebrate…to celebrate…to celebrate just exactly what?  It seems on Saint Patrick’s Day that almost everyone claims to have at least a bit of  Irish blood, and that in itself is cause to go out and have a pint.  The question that one must ask though, at some point, is why do we celebrate this day? Why celebrate the Irish, and why is it that it seems that almost everyone considers themselves to be at least a little bit Irish on this day?

It might surprise many American Irish to find that if they visit Ireland and ask the Irish people, they will find that most of them do not consider the American Irish to be Irish. They consider them to be Americans, because, these days, in Ireland the thinking is that you can only be Irish if you were born in Ireland.  Except, unless you immigrate from somewhere in the European Union, places like Poland or Slovakia, or if you are a refugee from Nigeria or Rwanda. Maybe, then you will be considered Irish. You will be called the “New Irish”.

Of course many Americans of Irish descent feel a bit left out by this line of thought, but it’s all quite rational.  In America, people consider themselves to be Irish because their DNA. In Ireland you are considered to be Irish by the legal rulings of the State. If the State declares you to be Irish then you are, and if the State says you are not, then you are not.

The problem with the State’s way of thinking is that it disregards history and genetics. It is also fickle.  Twenty or so years ago, you had a valid claim to be a citizen of Ireland if one of your great-grandparents had been born in Ireland. In this way many Americans, whose ancestors arrived in America as famine refugees, were eligible for Irish citizenship and Irish passports.  Then, for who knows what reason, the government of Ireland changed its mind. This was about the time that Ireland was beginning to really feel the boom in its economy known worldwide as the Celtic Tiger.  Ireland soon went from being the poorest country in Europe to being the second wealthiest country in the world.  Until recently, there were more millionaires, per capita, in Ireland than in either the U.S. or Saudi Arabia.

So the Irish government decided that the great-grandchildren of Ireland’s famine refugees were no longer Irish.  Zap!! They changed the law and said you could claim Irish citizenship if your grandparents had been born in Ireland, but not great-grandparents.  Sorry.  Thus, they disenfranchised millions of American Irish, Argentinian Irish, and others around the world who, sadly, had never been aware that they even had a claim to Irish citizenship.  A few years ago, the then Taioseach, Bertie Ahern, made a speech on the anniversary of the 1916 Easter Rising and he talked about the difficulty of defining what it means to be Irish. He said, “We must begin a great national conversation on what it means to be Irish, on the values that we hold and the hopes that we cherish”. Note that he said “national” and not “international”.

At the same time, another voice in Ireland, David McWilliams, a columnist for the Irish Independent newspaper had a different take on the concept of Irishness.  He thought that Ireland should use the example of Israel, where anyone who is Jewish can be a citizen of Israel, the Jewish people all over the world  know that despite war or dislocation they always have a place to go, a home when no one else will take them in: Israel. McWilliams called upon Ireland to emulate this policy with the Irish diaspora, noting that this could also provide a massive economic stimulus to that tiny island nation.  Unfortunately, the Celtic Tiger was still in full roar and his words were ignored by everyone in the government.

Today, the roar of Ireland’s Celtic Tiger is barely a meek meow.  Ireland is facing a dire economic future because of the worldwide recession.  Some say that’s Ireland’s plight is the worst of any country in the world. So, it is interesting that only a couple of days ago, Taoiseach Brian Cowen declared that it is time to rethink the definition of Irishness and that he plans to reinstate the provision for the great-grandchildren of people who were born in Ireland to also be allowed to claim Irish citizenship. That is welcome news indeed, I suppose, to many of the disenfranchised descendants of the famine Irish.  Yet, I can only wonder if Ireland’s economy were still the envy of the world, would Mr. Cowen still be so anxious to welcome the Irish diaspora “home”?

Mr. Cowen and President Obama joked today about the fact that they both have roots in County Offaly.  Unfortunately, they don’t seem to be related. Even so, the people of Ireland have eagerly claimed President Obama as one of their own. Perhaps there really is no one as Irish as Barack Obama. But then we have to face the question that Bertie Ahern posed: just what does it mean to be Irish?  Is someone Irish because some politician in Dublin says he is?  Is someone not Irish because another Dublin politician says he isn’t?  And what, if anything does DNA have to do with it?

It’s a great day for the Irish.  It’s also a great day for the Americans and others of Irish descent to pause for a moment and reflect on the lives of their ancestors. It’s also a good day to reflect on their own values, and their hopes for the future, and, at least for a day, just what does it really mean to be Irish?

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Cheney the Torturer

Dick Cheney is at it again.  Like an undead vampire he has returned, being interviewed on CNN and once again espousing the virtues of torturing prisoners.  It is in a way surreal.  How can it be that a former U.S. Vice President can advocate a policy that completely disregards human rights?  Under Cheney’s direction the U.S. engaged in a systematic program of capture and torture of people who had suspected Al Qaeda connections.  He claims that through techniques, such as waterboarding (were there also other methods, even more diabolical that we don’t know about?) the U.S. obtained key information that allowed us to preempt terrorist attacks. Unfortunately, all the details of the information and the preemptive strikes are so secret the American people can’t be trusted to know the details of these episodes – even though they are episodes that happened in the past.  Cheney is convinced that it was only through these extraordinary measures that America has been kept safe.  So how come Cheney never used his wonderful torture techniques to find out where Osama bin Laden was hanging out?

It might be instructive to take a brief look at the career of another person who seems to have shared Cheney’s admiration for the use of torture. This person is known today as Vlad the Impaler. Vlad became ruler of a part of Romania, called Wallachia, upon the death of his father. He was confronted by a host of enemies and within a short span of time he had lost and regained his crown three times.  During his main reign, from 1456 to 1462, Vlad attained his reputation for torturing his prisoners. Torture was used for various purposes, but one of the primary purposes was to instill fear in his enemies. Vlad would impale his prisoners on posts and set them outside Wallachia as a warning to attacking armies.  When Sultan Mehmed II attacked Wallachia in 1462 he was faced with the sight of 20,000 impaled Turkish prisoners between him and Vlad’s town.  Mehmed was undeterred and simply drove his army forward and quickly conquered Wallachia.  It seems that Vlad’s practice of extreme torture was ineffective as a deterrent.  It is also likely that any information he obtained by torture was equally useless because it is well known that people under torture will say anything just to make the torture stop.  Confessions given under torture are never admissible as evidence in a court of law.  Today, not many people are familiar with the career of Vlad the Impaler. Most people have never heard his name.  However, almost everyone in the world knows him today by his other name: Vlad Dracula or simply Dracula.  Even for Dracula, torture just never worked as well as he hoped it would.

Getting back to Cheney, our former Vice President is now making the rounds of the news media, asserting that President Obama is making us less safe because he is stopping the torture and extraordinary rendition programs that Cheney the Torturer so loved.  What he fails to mention is that it was during his watch, as Vice President, that this country was attacked.  What he fails to mention is that his beloved torture program failed to lead to the capture of Osama bin Laden.  What he fails to mention is that his torturing of prisoners from Abu Ghraib to Guantanamo to the dark and secret recesses of former Soviet prisons somewhere in Eastern Europe has failed to prevent terrorist attacks in Spain or England.  More importantly, his torturing of prisoners has not stopped thousands and thousands of undocumented people flooding across our border with Mexico throughout his term as Vice President. I wonder if an Al Qaeda terrorist could do that too? So how does Cheney’s program of torture prevent that?

Cheney claims that the U.S. is vulnerable to attack, and he should know.  He methods of torture have been ineffective, his Department of Homeland Security is incompetent, and his war in Iraq irrelevant.  The Pashtun tribes who occupy the border regions between Afganistan and Pakistan are rumored to be helping Osama bin Laden and his buddies, but who can be sure? If we were sure we would capture them, wouldn’t we? The simple fact is that Dick Cheney has looked for Al Qaeda everywhere except where we think Al Qaeda really is. We have sent our armed forces into Iraq and Afghanistan, but no where near the Al Qaeda hideouts.  Cheney and Bush tortured people for seven years and their torture produced no effective result.

These days, Cheney the Torturer is still advocating and justifing torture. So did Vlad the Impaler throughout his life.  The puzzling thing is this: it really didn’t work very well for Vlad, and it clearly didn’t work very well for Cheney either.

Maybe they both liked torture for some other reason.

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