Archive for March, 2009

A hour ago Bernard Madoff pled guilty to what has been described as the largest Ponzi scheme in history.  Is seems that Mr. Madoff bilked quite a few people out of billions of dollars by telling them that he had a secret way of beating the market.  He always paid dividends that were much higher than the return other investors were making on their investments. He was a miracle worker, or so it seemed.  In actuality he was simply using new investor’s money to pay old investors: a classic Ponzi scheme.  It worked well for a long time – all he had to do was to keep finding new investment dollars. The collapse of global economy sort of put an end to new investments in Bernie’s scheme and that, ultimately, proved to be very inconvenient for him and somewhat more inconvenient for his investors who had gotten used to making remarkable earnings on their investments.  Bernie will be sentenced, probably to life in prison, in a few months or so.  His investors? Probably out of luck – their money is just gone.

As massive as the Madoff Ponzi scheme was, it pales in comparison to the Worldwide Real Estate Ponzi scheme that is responsible for the global loss of somewhere between $30 and $50 trillion of wealth (yes, trillion).  Just thinking about that number for a moment puts Obama’s $800 billion stimulus into perspective, doesn’t it?  One thing to note is that there is not enough money in the U.S. Treasury and probably not even enough money printing capability in the U.S. to provide refunds to everyone who lost part or all of their wealth.  It’s just gone.

The question now is: what should happen to the people who perpetrated this truly massive Ponzi scheme on the world? What should be done with all those whose complicity in this insane scheme directly led to the loss of millions of people’s 401k and 529 fund values?  What should be done to those who created Liar Loans?  What should be done to those who misrepresented the value of property in order to get a mortgage approved?  What should be done to those who rated toxic mortgages as AAA-rated?  What should be done to the bankers who sliced and diced the toxic mortgages and flipped them as fast as they could to the entire world?  What should be done to those who sold mortgage insurance on these toxic mortgages, called credit default swaps, knowing full well that their company couldn’t begin to cover the losses if these mortgages weren’t paid?  What should be done to the Wall Street bankers who took TARP bailout money, taxpayer funds meant to keep their banks from dissolving into a slimy, black pool of toxic sludge, and handed out multimillion dollar bonuses to the very people who created this gigantic Ponzi scheme?

Pretty good questions, huh?  Well, it turns out I’m not the only one who’s asking.  David Segal reports in today’s New York Times that federal investigators are starting to ask, more or less, the same questions.  It’s about time.  Isn’t it sort of surprising that Bernie Madoff rips off a fairly small number of very wealthy investors and before you can say “Free Market Capitalism” he’s hauled off to court and pleads guilty to an historic crime.  Meanwhile, as literally billions of people suffer from the greedy antics of our completely-out-of-control financial industry, we are just getting around to sort of starting to begin to think about maybe checking to see if anyone can be found who might possibly be responsible for the Worldwide Real Estate Ripoff.

So what do we do? What if it turns out that all the leaders of our financial industry are culpable?  What if every last one of our big time bankers is a crook?  Do we throw them all in jail? No, of course not. We need them – remember? Our banks are too big to fail.  Our bankers must also be too big to replace, right?  That’s why we can’t nationalize the banks: all the knowledge of the financial industry resides with these people. Who would run our financial industry if all the crooks were all in jail? The sad reality is this: we can’t throw them all in jail. The solution: find some scapegoats. Find a few of the top dogs, maybe 0.00 1% of the financial industry who probably can’t duck or hide from some massive financial fraud charges and haul them off to court and throw them in jail. Maybe they can get a cell next to Bernie.

Then we declare ourselves to be cleansed of the toxic infection and we take a few moments to mourn over the billions of people who lost their fortunes.  Everyone will feel a lot better and then we will turn our attention to rebuilding our economy.  Then we turn over the task of creating a new financial industry, with built in safeguards against any more Worldwide Real Estate Ponzi schemes, of course, to the same people who got us into this mess.

And then we start all over again.

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I still remember the second book I ever borrowed from a public library. I was probably eight years old and I had discovered Edgar Rice Burroughs, known primarily for his Tarzan books.  The book I borrowed was entitled Synthetic Men of Mars – not one of his best books. Even though I was only eight I knew it wasn’t that great, but there was an image I formed in my mind from that book that I have never forgotten.  The book tells of these sort of bubbling, brewing vats on Mars where body parts and Martian people are created.  The men of Mars thus created were, predictably, not nice people.

Yesterday, President Obama signed an executive order rescinding the Bush prohibition on stem cell research and, I guess this is how my mind works: I was reminded of Burroughs’ now seemingly prescient book.  I suppose a lot of people will be thinking that this is our first slippery step down that slippery slope that will ultimately lead to a scientific endeavor that will create something like those bubbling vats on Mars, except that our vats will be producing baby parts.  Yet, the objection from the “conservative” right to stem cell research is not the creation of baby body parts, it is the destruction of human embryos.

Human fertility clinics have a plethora of fertilized eggs or human embryos.  That is just the normal result of the whole process of trying to provide children to couples who have not been able to conceive the natural way, for one reason or another.  Fertilizing an egg is a iffy process; it doesn’t always work, so fertility clinics harvest lots of eggs from the potential mother and fertilize all of them with the donor sperm, in the hope that at least one of them will be viable.  It often happens that many are viable and the potential mother is left with the classical “Octomom’s Dilemma”: do you use all the remaining eggs or do you destroy them? The Octomom chose to have all of them implanted in the belief that these were all her children.  On the other hand, the vast majority of parents opt for destruction of their unused fertilized eggs.  It is these unwanted, fertilized eggs that are a good source of stem cells, cells that can be encouraged to grow and become virtually anything the body needs: a liver, an eye, nerve tissue, whatever you need.

The right wingers, like George Bush, apparently recoil at the taking of stem cells from the embryos because that process, of course, destroys the embryos. On the other hand, I haven’t heard much talk about the hard right wing objection to the outright destruction of the embryos when they are not wanted.  I suppose that if they are opposed to this too then they must agree with the Octomom and desire that all of these embryos be implanted in the mother and the babies all be born.  Apparently, these people would like to see millions of Octomoms in the U.S.  Or are they just against the whole fertility thing in general?  I don’t really know.  What would George Bush say?

The sanctity of human life is a thorny issue.  Who can choose whether another person should live or die? Who can choose whether an embryo should be destroyed or harvested?  What about transplanting organs from donors, i.e. people who have died?  Is that moral? Isn’t that sort of Frankensteinish?  How many thousands of Americans are living today with someone else’s heart or lungs or eyes or skin?  How many people’s lives have been saved by receiving another person’s blood?  If you receive someone else’s stem cells and they grow into a new heart or spinal cord or liver are you still the same person you used to be or are you now a hybrid of some sort? The DNA in your donor cells is not yours. It never will be. Ask any donor heart recipient. They’ll tell you that they never forget it is someone else’s heart that is beating in their chest and the people who receive stem cell transplants will probably feel the same.

Should we let an embryo die and thus condemn a sick patient also to death?  Is this the will of God?  Is it the will of God when someone is critically injured in an accident? And if it is, then should we help them or maybe let them die because it is God’s will?  Does the extreme right wing know the mind of God? Does George Bush?  Does President Obama? Does the Pope, or the Archbishop of Canterbury, or Joel and Victoria Osteen?

The simple fact is this: there is no consensus.  Well meaning people can be on opposite sides of this issue, but regardless of which side they take they must be logically consistent.  You can’t condemn the Octomom and at the same time approve of fertility clinics.  You can’t say you have regard for the sanctity of life and then create a business that deliberately creates embryos only for the purpose of harvesting stem cells.  You can’t tell others to accept the will of God and then go get a heart transplant for yourself.

President Obama’s action to rescind the Bush prohibition on stem cell research marks the beginning of a new national debate.  Where do we draw a line between the ethical and the unethical, the beautiful and the obscene, the right to live and the right to die?  Can we ever have consensus and, if so, does the consensus have the right to overrule the individual conscience?  Synthetic babies from New Jersey is probably not such a good idea, but what about using stem cells to repair a spinal injury so that a nine year old paraplegic can walk again?  It’s time for a rational, national debate.  The question I have is this: is that possible?

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It is fashionable in economic and government circles to condemn the tactics of tricksters like Charles Ponzi, a man who made a fortune by using new investors’ money to pay old investors their expected returns on their investments.  The most recent person to become famous in this way is Bernie Madoff, who is thought to have cost his investors somewhere around $50 billion. These newly destitute investors are rather unhappy these days. It seems they have quickly forgotten all those fabulous investment returns they made over the years, while the rest of us  struggled just to keep up with inflation. It sure liked Bernie was a genius in the old days, and a lot of people liked him too.  They just didn’t realize that the amazing earnings he was paying out depended upon more and more people investing more and more money with him, because, after all, he wasn’t really making any money in the market.

While we all can sit back and condemn poor Bernie, we might want to consider that Ponzi schemes seems to be more the rule than the exception these days.  For example, consider our 401k plans.  I already wrote about that in a previous blog a few days ago.  If you look at the history of the Dow Jones Average you will see that the Dow really took off after the whole 401k thing was created.  Without our 401k money piling into the economy it is likely that we never would have had the growth that we did have over the past thirty years.  Sure the 401k thing is sort a Ponzi deal – the more money we put in the more market went up, and so we put in even more money!  We all benefited right? Well, except for recent history anyway – if you want to count that.

But look at the real estate bubble.  Wasn’t that a grand Ponzi scheme too?  Everybody buying and selling houses to each other and every time houses were bought and fixed up and sold everyone making money.  It was great. You couldn’t lose – even the banks knew that.  And the government.  Thank God for the government and how they changed the tax laws so that you could flip a house every two years and not pay tax on the profit.  If that wouldn’t create a beautiful Ponzi scheme what would?  And didn’t we all benefit from that? Didn’t America, and a lot of the rest of the world too, just sprout up with gorgeous McMansions?  They’re everywhere now – not all of them inhabited, mind you – but beautiful nonetheless.  And all thanks to the brilliance of Charles Ponzi.

But wait.  There’s more.  Remember the Tech bubble?  Remember how the stock market just skyrocketed when Tech was born and there was a new IPO every day and everyone could make a fortune just by buying IPO stock one day and selling it the next? I know some people who made fortunes doing that.  Those were the days, I’ll tell you.  The Nasdaq going up and up and Greenspan saying we were guilty of irrational exuberance.  I wish I had sold my stock then.

Just think back: the 401k bubble, the tech bubble, the housing bubble…wait there’s another bubble I forgot to mention. The Social Security Ponzi scheme bubble.  That’s the one where you take money out of your paycheck for your entire life and the government uses that money to pay other people who are older than you their retirement income.  It works great as long as the population keeps on increasing, but when you have a population bubble, like the Baby Boomers, well, someone is probably going to wind up holding the short end of the stick.  But you have to admit it has worked really well for a long time and lots of people have had very nice retirements from this government sponsored Ponzi scheme.  We’ll just have to tell the boomers that you can’t win them all – I’m sure they’ll understand.

So, if you look back, it’s pretty clear that we’ve been running our economy on bubbles and Ponzi economics for a long time now – and we’ve had a good time doing it!  Do we really want to change horses in mid-stream and try to find some sort of drab, responsible sort of economic plan that is based upon creating real products and people actually working and making stuff?  What kind of growth rate could we possibly get from that? 2%? 3%? Doesn’t our government realize that, like all of Bernie Madoff’s clients, we have become used to 10% or more growth?  We can’t get that from just having an economy that makes stuff that people buy because they want the stuff!

No, we need an economy that works because people buy stuff because they think they can flip it to someone else and a make a ton of money in the process. We are a Ponzi people who really like Ponzi economics: make your money fast, get out, and stick it to the last guy in line.  Isn’t that how our businesses work?  Isn’t that how Wall Street works? Isn’t that the system our government created with 401k, and 529 plans, and Social Security too? Sure it is.  And that’s what we need now to get us out of this economic mess we’re in.  We just need a new Ponzi Plan – preferably one endorsed by the government, of course.

Hmmm…now what sort of plan could that be? Let’s see we’ve done Ponzi housing, Ponzi tech, Ponzi retirement stuff…what else is there?  How about Ponzi banks?  What if we give the banks a lot of money so we become part owners? OK… So how about then the banks loan the money to whoever wants it? That’d be good!  Then…then we use the money we borrow from the banks to buy more stock in the banks! I bet that would drive up the stock price! Then we just keep doing that over and over again! We can’t lose!

Oh, wait…I have another idea. How about we buy the U.S. automobile companies! And then we all get stock in them and then we buy our cars from them and then….

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As the budget makes its way through Congress we now hear the annual outcry from certain politicians about the great evil of Congressional earmarks.  Senator John McCain could probably be called the champion of the crusade to eliminate earmarks.  Hey John, I have an idea.  Why don’t we just eliminate the Senate? Or even better, maybe just eliminate the Senate seats from Arizona? Would that work for you?

The earmark is an old tradition in our governmental process and it serves a good purpose: it represents the voice of the people via their elected representatives in Congress.  Each year our government needs to create a budget for the following year.  Guess who has that responsibility? The President  – not the Congress. But the President doesn’t actually draw up the budget, neither do his White House staff.  They don’t have the time or resources for that.  The initial cut at a budget is delegated to the army of civil servants that work in our many governmental agencies. Basically a request goes out from the President for inputs into the next year’s budget. The request goes to the Department of Defense then to the Departments of the Army, Navy, and Air Force.  The request goes to the Department of Agriculture, the Department of Commerce, and on and on.  Every department gets to send in their wish list to the President for both continuing and new funding.  This is all done by the employees of these departments who are all civil servants, i.e. government employees.  If you ask any one of these government employees who they work for they will immediately say they work for the President – and they do.  Some will tell you that they are the government.  No, really, some of them actually think like that.  Some of these people don’t know the difference between being a government employee and being the government itself.  Does all this sound a little inbred?  You bet it does.

Here’s where Congress comes in.  They get to approve and modify the budget. John McCain, a staunch supporter of the military “chain of command” school of thinking, believes that the only appropriate action for Congress to take is to approve or disapprove the President’s budget. He doesn’t go for that modification thing at all.  After all, John McCain, old soldier that he is, knows full well that the President is the Commander in Chief – so why should anyone else have a say in the budget?  Because we are not a dictatorship, John; that’s why.  Our elected Representatives and Senators are sent to Congress to listen to our local needs and to represent those local needs in Congress – if they don’t do that then who needs them?  That is how our government works and any senator worth his salary should know that.

One way our representatives represent us is by adding items to the budget that the President’s civil servants neglected to include.  These additions that correct the errors and omissions of the President’s budget are called earmarks.  Senataor McCain wants them all banned forever and ever.

For example, Senator McCain recently ridiculed an earmark for North Carolina for “beaver management”. McCain sent out a tweet to his followers (McCain actually knows how to send a tweet? He knows about computers and text messages?) saying, “How does one manage a beaver?”  I can just hear him chuckling now.  Pretty funny – like herding cats, I guess.  Right, Johnny. In actuality, if you bothered to check, Johnny, you would find that you manage them by trapping them and by blowing up their dams.  Why? Because if you don’t you get severe flooding of rivers and streams that causes lots of property damage and the loss of millions and millions of dollars, because the beaver population tends to get too large.  That’s why.  And that’s why earmarks are a necessary part of the process.  The civil servants of this country do not represent us or our interests.  They don’t even know about our needs or interests, and neither, it seems, does John McCain.

The real problem with the earmark process, if John McCain would like to know, is when lobbyists get involved in the process.  Then money starts to change hands and unnecessary earmarks make their way into the budget and a few select companies make a lot of money doing senseless things.  However, this is really a problem with lobbying, not earmarks.  The real problem is that lobbying also affects the President’s budget too.  You know all those civil servants who write up the budget inputs? Lobbyists talk to them.  They also talk to the generals and the admirals. They talk to anyone who has the power to control spending. The result is that the President’s budget is as equally likely to be contaminated with foolish projects as are the Congressional earmarks.  The real problem is not earmarks.  The real problem, which no one seems to complain about, is the lobbyists.  Funny thing though, you never hear McCain complain about lobbyists, do you?  Hmmm, I wonder why?

If you want to learn more about McCain’s relationship with lobbyists, click here.

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Economies are based upon a simple principle: supply and demand. This can be restated as: “You have something I want, so I’ll give you something of value in exchange for it”.  In the past, economies have been built upon things that are produced and desired, things like food, cars, homes, clothing, and so forth. The list can go on and on, but the distinguishing thing about most of these items is that the items that are being bought and sold are necessities. Or maybe they are things that are greatly desired and affordable: things like music, jewelry, gold, Hummers, and so forth.  Whenever there is a strong demand for a product, and the ability to pay for it, you can create a viable economy.

The problem with Green Technology is that while it does some very good things, like making the environment cleaner, it’s hard to find a lot of people who are willing to shell out extra money for that.  We all know its a good thing and we all know that if we don’t take care of our environment we will all suffer, but how many people really want to pay extra for it?  For the answer, just recall how many Americans bought SUVs two years ago compared to those who bought Hybrid cars.  The only reason Hybrids are becoming popular now is that they can save on gasoline costs, not because they emit less carbon dioxide.

So, I have to wonder, if we transition to a green technology economy will that actually stimulate economic growth and create ten times more jobs than we have now? Or will we just replace existing jobs with new, green jobs? One for one job replacement is not economic growth.  Will the average American rush out to buy a new Green Car because it pollutes less?  I don’t think so.  Will we all go out and buy a ton of Green insulation for our houses so we won’t have to burn so much carbon-based fuel? No, we could have already done that, and we haven’t.  Green is an admirable goal.  Green might even save the planet, but I doubt that it will save the economy, because while we might create a huge supply of Green products, I don’t believe we can create an equally huge demand for them just because they are Green.

If we want to stimulate our economy we need to create the new, next  generation of products that people actually really, really want. We need to create products that people want so badly that they will work extra hard to get them.  That’s what makes economies tick.  Here’s an example: I am tired of driving long distances on interstate highways at 70 miles per hour.  It can take all day or longer to get anywhere that is 1,000 miles away.  I suppose flying might be am option, but what if there are no major airports near where I live and where I want to go? Suppose the interstate highways are really my only option?  Is there a solution for this? A technological solution? Sure there is.

Suppose we took a giant leap forward an created cars that could go 200 mph. 300 mph, or more! I know, I know, we would all kill ourselves.  But wait.  Suppose we also equipped the high speed lanes of our interstates and our new, next generation ultra high speed cars with a pseudo GPS system where we would have an “autopilot” in the car?  Suppose all I had to do to drive from New York to Atlanta would be to select my destination and then get into the Pseudo-GPS-enabled high speed lane.  (This pseudo-GPS would use surveyed ground stations, not satellites.)  I could zip along to Atlanta at two or three times my current speed – maybe more.  It would be like high speed rail, only it would be more flexible.

So, would there be a demand for that technology?  Would Americans buy cars that would go coast to coast in 12 hours or less?  Of course.  We are an impatient people, we want to go everywhere fast.  This sort of thing would create a ton of new jobs in pseudo-GPS technology; high-speed, computer-controlled cars; high speed road technology, and much more.  If it also used Green technology, so much the better.

Green is good, but reducing the amount of CO2 we spew into the environment isn’t going to create a rush to the malls. It is only exciting  innovation and new products that dramatically improve the quality of our lives that will spur the next major growth spurt in our economy.  Green can’t do it alone.

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The 401(k) section of the Internal Revenue Service code was approved by the U.S. Government in 1978 and became effective on January 1, 1980. This plan supposedly allows employees to invest in the stock market in order to create funding for a comfortable retirement.  Ever since the 401(k) provision was created Congress has passed more and more 401(k) related legislation to encourage more workers to invest more of their retirement money in the stock market.  Employers loved the idea because it removed their obligation to provide defined benefitension plans for their employees, i.e. plans that provided a specific, guaranteed income.  Instead, employees were sold the story that these 401 (k) “defined contribution” plans could provide them fabulous amounts of money because the stock market always goes up.

Take a look at the history of the Dow Jones average since 1900 until now.  First of all notice that the chart is logarithmic.  Stock analysts like to use log charts, they seem so much more well-behaved than linear charts.  However if you look at a few dates and take the numbers from the vertical scale you can see that, in the linear world, they are not so well-behaved – and, by the way, the world we live in, and the money we own, is linear, not logarithmic.  For example, lets take the extreme case.  Suppose you had invested all your money in the Dow components in the 1920’s. By 1929 the Dow had reached a peak value of about 380.  By 1932 it had dropped to about 43.  This is a drop of about 89% in value.  And remember, this is the Dow – a 30 stock index of the biggest companies in America.

On the other hand, suppose you had a 401k plan in 1929 but a lot of it was not invested in the Dow but in some of the smaller companies.  It is likely you would have lost even more because a lot of the small companies simply evaporated as the country entered the Great Depression.  Fortunately, 401k plans didn’t exist then. Unfortunately, a lot of people who thought they might be able to make it in retirement from company pensions or other funding were rudely awakened when their company pensions vaporized as well as their life savings because a lot of the banks failed.  Many retirement-aged people in the Great Depression were destitute and it was for this reason that FDR created the Social Security system. (Imagine where we would be today if George Bush had gotten his way and converted Social Security into a plan where each individual invested their Social Security contributions in the stock market – just like the their current 401k plans).

The Dow Jones chart shows that time and again the stock market drops as drastically as it rises. Over all it can be expected that the value of the Dow will drop dramatically between 20% and 50% every four or five years, with a few exceptions where it may not drop quite so much and others where it drops a lot more. Overall, it doesn’t seem to be the sort of thing you would want to bet your retirement on, does it? And that’s just the Dow, the biggest companies in America. That is not taking into account all the little companies that just vaporize when things get tough. Even more disconcerting to note is that of the original companies that made up the Dow, there is only one left! The others are gone or morphed into something else or downsized into insignificance.  The one original company that is left is GE.  GE’s stock traded at $6.66 today, only about a tenth of its value in 2000. So much for safety in the Dow.

Look again at the historical chart of the Dow Jones average.  Notice that from about 1960 until 1980 it just oscillated with no upward momentum. But in 1982 it took off! Of course it took off.  Everyone began plowing all their retirement money into the stock market – just what American business and our Republican Party dominated government wanted. The market skyrocketed from about 800 in 1982 to almost 14,000 in 2007, a gain of almost 1650%!!! Compare that with the period 1960 to 1980. The Dow went from about 700 to about 800 in twenty years, a gain of only 14%.  Could it be that our economy magically took off in 1982 and never looked back because our business community suddenly figured out some new business plan?  Hardly.  It was because of all the money that people innocently put into their 401k plans.  The American working man was the victim of a monumental Ponzi scheme cooked up by a business/government coalition that didn’t give a hoot about the welfare of the American citizen. The 401k scheme was just a clever idea to get the ordinary American citizen to plow his earnings right back into the business world so the wealthy could get even wealthier.  And it worked.

Now, as the world of banks, finance, and insurance has been shown to be a community of cheats and liars who gleefully defrauded each other as well as their investors and the American public, the typical American is looking at the smoldering ruin of his 401k plan and wondering how he can ever retire – or worse – if he is already retired, what will he do now?  Will he be able to afford a house or food?

There is only one good solution for retirement money: Social Security.  FDR had it right.  If people are going to contribute to a retirement account it should be a Social Security account, backed by the full faith and credit of the United States government.  401k plans should be eliminated.  Investing in the stock market is for people who can afford the risk.  The average American can’t. The American people have been robbed by the largest Ponzi scheme imaginable, and as the stock market continues to tank we are headed for a crisis of truly vast proportions.  Many, many millions of American’s have lost their only hope for a viable retirement because of the 401k Ponzi scheme.

I can only wonder, when will our government take serious note of this human disaster, and what in the world will happen to all these people now?

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In the aftermath of the 9/11 attacks, the Bush administration determined that if we only had a federal agency charged exclusively with protecting our homeland we could have prevented the terror attacks. As a result they promptly eliminated the rent-a-cops that used to provide security at our airports and replaced them with a uniformed corps of Americans who would be taught to search our luggage far more thoroughly than your average rent-a-cop could ever be trained to do.  However, the new Department of Homeland Security had a mandate to go far beyond simply searching our luggage; they were to be the giant eyes and ears of the government, an all pervading presence that would detect a terrorist the moment his toe crossed our border, and then, a moment later, swoop down sweep the hapless terrorist away to a remote detention facility for “questioning”.

Before 9/11, I had always thought that this role of protecting our homeland had already been sort of given to the Air Force, Army, Navy, Marines, Coast Guard, National Guard, FBI, NSA, CIA, State Police, local police, U.S. Border Patrol, Secret Service, U.S. Marshals, rent-a-cops, and no doubt others that I can’t think of at the moment. However, I was wrong.  Apparently none of the foregoing organizations have the duty of protecting our homeland.  OK.  I understand.  I had it wrong. So, anyway, we created Homeland Security to keep us safe from being infiltrated by enemy terrorists (I won’t mention the other roles they were assigned, like disaster response, for which I am sure they must be equally effective.)

Just to keep us on our toes about the terrorist threat, our recent ex-Vice President, Dick Cheney declared that we face a “high probability” of a nuclear attack or a biological attack in the near future. Whoa!!!  Dick….Dick, wait a minute.  What about Homeland Security? Aren’t they going to prevent that?  I know they can’t stop nuclear-tipped missiles, but those aren’t launched by terrorists. We’re talking about terrorists smuggling in a nuclear device or a biological weapon here, right?  And we don’t really have to be concerned because Homeland Security has that covered, don’t they?  I mean, that’s what they do, isn’t it?

That’s what I thought, but something has started to bother me. It was a recent story about the arrest of a Mexican drug ring in the U.S.  About a week ago 775 people were arrested throughout the U.S. for smuggling cocaine from Mexico.  They were all part of the Sinaloa gang. It seems that this was the culmination of a 21 month surveillance effort by the Mexican authorities, as well as the U.S. and Canada.  Twenty-one months.  I wonder if they caught all the smugglers?  I wonder what else they were smuggling besides drugs?  I wonder if Homeland Security knew about this and if so, why didn’t they just catch and search the smugglers for nuclear weapons and biological weapons as soon as they set foot across the border?  Did they figure they were just ordinary cocaine smugglers and therefore it didn’t concern them? Did Homeland Security even know this was going on?

I wonder how many smugglers cross the U.S. border and are never caught?  I wonder if Cheney is right. Maybe the terrorists have already smuggled a weapon into the country. Or maybe Dick is thinking that the terrorists will sneak something through under the noses of Homeland Security in the next few weeks or months, or maybe next year.  What did Dick really mean, anyway? Is he saying that Homeland Security is not up to the job? It sounds like it, doesn’t it? If you look at all these Mexican drug traffickers importing tons of cocaine into the U.S. without being intercepted by Homeland Security, I think maybe Dick is telling us something here.  Sort of a hidden message, maybe. I think he’s saying that we would be just as well off with the old rent-a-cops.  They were a lot cheaper and they couldn’t find smugglers either.

It seems to me that the ease with which smugglers can enter the U.S. proves that Homeland Security is  a failure (I won’t mention Katrina here).  When you step back and consider our fleet of aircraft carriers, nuclear submarines, B-2 stealth bombers, spy satellites, warrentless phone monitoring, soldiers, sailors, airmen, spies, policemen…the list could go on and on. And now the Department of Homeland Security. You would think that someone could get the job done. Right? But according to Dick Cheney, and according to the clear evidence of all those drug arrests, after almost two years of investigation, the job isn’t getting done – by any organization acting either singularly or as part of a group! Smuggling stuff into the U.S. seems to be pretty easy.

This is an abject failure of Homeland Security, and it should make us wonder if we need this organization at all.

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