Amid much fanfare last week, the last supposed “combat” troops left Iraq as the administration touted the beginning of the end of the Iraq War and a change in the role of the United States in that country. Considering the continued public frustration with the war effort, and with the growing laundry list of broken promises, this was merely another one of the administration’s operations in political maneuvering and semantics in order to convince an increasingly war-weary public that the Iraq War is at last ending. However, military officials confirm that we are committed to intervention in that country for years to come, and our operations have in fact, changed minimally, if really at all.
After eight long draining years, I have to wonder if our government even understands what it is to end a war anymore. The end of a war, to most people, means all the troops come home, out of harm’s way. It means we stop killing people and getting killed. It means we stop sending troops and armed personnel over and draining our treasury for military operations in that foreign land. But much like the infamous “mission accomplished” moment of the last administration, this “end” of the war also means none of those things.
50,000 US troops remain in Iraq, and they are still receiving combat pay. One soldier was killed in Basra just last Sunday, after the supposed end of combat operations, and the same day 5,000 men and women of the 3rd Armored Cavalry Regiment at Fort Hood were deployed to Iraq. Their mission will be anything but desk duty. Among other things they will accompany the Iraqi military on dangerous patrols, continue to be involved in the hunt for terrorists, and provide air support for the Iraqi military. They should be receiving combat pay, because they will be serving a combat role!
Of course the number of private contractors - who perform many of the same roles as troops, but for a lot more money - is expected to double. So this is a funny way of ending combat operations in Iraq. We are still meddling in their affairs and we are still putting our men and women in danger, and we are still spending money we don’t have. This looks more like an escalation than a draw-down to me!
The ongoing war in Iraq takes place against a backdrop of economic crisis at home, as fresh numbers indicate that our economic situation is as bad as ever, and getting worse! Our foreign policy is based on an illusion: that we are actually paying for it. What we are doing is borrowing and printing the money to maintain our presence overseas. Americans are seeing the cost of this irresponsible approach as our economic decline continues. Unemployed Americans have been questioning a policy that ships hundreds of billions of dollars overseas while their own communities crumble and their frustration is growing. An end to this type of foreign policy is way overdue.
A return to the traditional American foreign policy of active private engagement and non-interventionism is the only alternative that can restore our moral and fiscal health.
Monday
LET THE HOUSING MARKET NORMALIZE!
Recently there have been some encouraging signs that Congress is finally willing to admit what should have been evident two years ago. Even after a $150 billion bailout, Fannie Mae and Freddie Mac are still bankrupt and should be abolished. Indeed Rep. Barney Frank, a longtime champion of Fannie and Freddie has made a few statements alluding to this and I have signed on to a letter asking him to clarify his remarks and hold hearings on this topic. There seems to be a growing consensus in favor of abolishing Fannie and Freddie. This is the good news.
The bad news is that instead of simply returning to the free market, Fannie and Freddie will probably be replaced with something equally damaging, and at this point we can only guess what that will be. One possibility is that instead of these two giant Government Sponsored Enterprises (GSEs) the government will deputize thousands of smaller banks to do the same thing – that is to securitize mortgages with taxpayer guarantees to encourage lending that otherwise would not happen. In other words, there will be a myriad of smaller Fannies and Freddies, and government involvement will reach even deeper into the financial sector.
Fannie and Freddie, and thus the taxpayer, has an alarming $5 trillion exposure to the mortgage market. To some, spreading out this risk might seem tempting, and a smart thing to do. But the fact remains that if a bank expects to lose money on a loan, so will the taxpayers. Playing around with structures and definitions will still not deal with the root problem – government meddling in the housing market, playing fast and loose with our tax dollars, and central planning by the Federal Reserve.
Banks have complex risk assessment strategies in place that help them forecast if a particular loan will make them any money or not. If they expect to make money, they will approve the loan. If they have doubts, sometimes they will ask for a co-signer to improve their odds. You might do this willingly for a friend or a relative if you didn’t mind losing some money on their behalf, but current government policies essentially force taxpayers to become cosigners for risky borrowers that are complete strangers, who the banks have already determined to be bad risks. Taxpayers have no choice in the matter because politicians decided a few decades ago that dangling homeownership in front of more people seemed like a good way to garner votes.
That was sold to voters as a compassionate gesture to the poor and beneficial to society as a whole. After all, how could giving more Americans an ownership stake in society be bad? The combined policies of loose credit and government backing increased the demand for housing and drove prices sky high. When the housing market heated up to the breaking point everything came crashing down. Those suddenly facing foreclosure saw the reality of government compassion. Truly, when government offers you a gift, you should eye it with great suspicion.
Another tragedy is that many job seekers are now tethered to their locations because of upside down loan obligations. It takes a lot of effort with their bank and damage to their credit scores to figure out how to get out and move to a place where there are jobs. Will the government now be seeking ways to subsidize renters in some way because of this lack of mobility? Some think so.
My hope is that for the long term stability and health of the economy, the government will extricate itself from the market altogether and let it normalize. My fear is that in its usual misguided efforts at solving one crisis, it will create a thousand others.
The bad news is that instead of simply returning to the free market, Fannie and Freddie will probably be replaced with something equally damaging, and at this point we can only guess what that will be. One possibility is that instead of these two giant Government Sponsored Enterprises (GSEs) the government will deputize thousands of smaller banks to do the same thing – that is to securitize mortgages with taxpayer guarantees to encourage lending that otherwise would not happen. In other words, there will be a myriad of smaller Fannies and Freddies, and government involvement will reach even deeper into the financial sector.
Fannie and Freddie, and thus the taxpayer, has an alarming $5 trillion exposure to the mortgage market. To some, spreading out this risk might seem tempting, and a smart thing to do. But the fact remains that if a bank expects to lose money on a loan, so will the taxpayers. Playing around with structures and definitions will still not deal with the root problem – government meddling in the housing market, playing fast and loose with our tax dollars, and central planning by the Federal Reserve.
Banks have complex risk assessment strategies in place that help them forecast if a particular loan will make them any money or not. If they expect to make money, they will approve the loan. If they have doubts, sometimes they will ask for a co-signer to improve their odds. You might do this willingly for a friend or a relative if you didn’t mind losing some money on their behalf, but current government policies essentially force taxpayers to become cosigners for risky borrowers that are complete strangers, who the banks have already determined to be bad risks. Taxpayers have no choice in the matter because politicians decided a few decades ago that dangling homeownership in front of more people seemed like a good way to garner votes.
That was sold to voters as a compassionate gesture to the poor and beneficial to society as a whole. After all, how could giving more Americans an ownership stake in society be bad? The combined policies of loose credit and government backing increased the demand for housing and drove prices sky high. When the housing market heated up to the breaking point everything came crashing down. Those suddenly facing foreclosure saw the reality of government compassion. Truly, when government offers you a gift, you should eye it with great suspicion.
Another tragedy is that many job seekers are now tethered to their locations because of upside down loan obligations. It takes a lot of effort with their bank and damage to their credit scores to figure out how to get out and move to a place where there are jobs. Will the government now be seeking ways to subsidize renters in some way because of this lack of mobility? Some think so.
My hope is that for the long term stability and health of the economy, the government will extricate itself from the market altogether and let it normalize. My fear is that in its usual misguided efforts at solving one crisis, it will create a thousand others.
Tuesday
WASHINGTON'S IDEA OF FISCAL RESTRAINT
It has been months now since the new healthcare reform bill was passed into law. As is so typical, this massive piece of legislation was passed with a sense of urgency so acute that leadership declared America could not afford to wait until legislators, their staff and the general public had time to thoroughly read the bill.
The truth comes out eventually, however. Much like the recently discovered exemption from Freedom of Information Act requirements for the SEC that was slipped into the equally massive and “urgent” financial reform bill, we are finally seeing what other insidiousness has been hiding in the fine print of the healthcare reform bill. It seems that all provisions in this poorly written and poorly conceived monstrosity need to be repealed as soon as possible.
One such disaster-waiting-to-happen is one of the revenue generating provisions used to claim that the healthcare reform bill was “paid for”. $17 billion in additional tax revenues is supposed to come from an onerous new IRS reporting requirement that any taxpayer with business income who spends over $600 in one year with one business will have to report those expenditures to the IRS. Mind you, this is a cumulative total of $600 in transactions in one year. This will involve so much extra accounting and paperwork that the IRS claims it will be unable to deal with it effectively, and even the American Institute of Certified Public Accountants (to whom it should be a boon) has come out against it! Apparently they realize they will actually lose customers, especially small businesses, to bankruptcy because of this!
Gold dealers are especially alarmed by this provision, as most of their transactions easily top $600. This represents a significant outlay of time and paperwork and no additional revenue for businesses with which to hire people. Not to mention this makes every business a de facto IRS agent, as if they didn’t have enough to worry about already!
Of course, there is a tremendous outcry against this. Several other legislators also see how unreasonable this is and are trying to repeal it. However, this would simply mean that $17 billion in healthcare funding will have to come from somewhere else, and there are no good options. Taxes from some other equally bad collection scheme? Borrowing and more debt? Creating more money from thin air and adding to inflationary pressures?
The best answer, of course, would be to repeal the entire health care law, along with all other unconstitutional spending. But Congress is more likely to continue the shell game to cover the fact that we are broke and can afford none of this.
This whole idea of “paying for” new programs is a political euphemism that suggests that raising taxes is just as good as cutting spending since neither one increases the national debt. Raising taxes and overwhelming small businesses with paperwork and regulations still increases governmental burden on our fragile economy. But this is our government’s idea of “fiscal restraint” in action. Washington needs to stop creating new programs and spending so much money. That would be true fiscal restraint.
The truth comes out eventually, however. Much like the recently discovered exemption from Freedom of Information Act requirements for the SEC that was slipped into the equally massive and “urgent” financial reform bill, we are finally seeing what other insidiousness has been hiding in the fine print of the healthcare reform bill. It seems that all provisions in this poorly written and poorly conceived monstrosity need to be repealed as soon as possible.
One such disaster-waiting-to-happen is one of the revenue generating provisions used to claim that the healthcare reform bill was “paid for”. $17 billion in additional tax revenues is supposed to come from an onerous new IRS reporting requirement that any taxpayer with business income who spends over $600 in one year with one business will have to report those expenditures to the IRS. Mind you, this is a cumulative total of $600 in transactions in one year. This will involve so much extra accounting and paperwork that the IRS claims it will be unable to deal with it effectively, and even the American Institute of Certified Public Accountants (to whom it should be a boon) has come out against it! Apparently they realize they will actually lose customers, especially small businesses, to bankruptcy because of this!
Gold dealers are especially alarmed by this provision, as most of their transactions easily top $600. This represents a significant outlay of time and paperwork and no additional revenue for businesses with which to hire people. Not to mention this makes every business a de facto IRS agent, as if they didn’t have enough to worry about already!
Of course, there is a tremendous outcry against this. Several other legislators also see how unreasonable this is and are trying to repeal it. However, this would simply mean that $17 billion in healthcare funding will have to come from somewhere else, and there are no good options. Taxes from some other equally bad collection scheme? Borrowing and more debt? Creating more money from thin air and adding to inflationary pressures?
The best answer, of course, would be to repeal the entire health care law, along with all other unconstitutional spending. But Congress is more likely to continue the shell game to cover the fact that we are broke and can afford none of this.
This whole idea of “paying for” new programs is a political euphemism that suggests that raising taxes is just as good as cutting spending since neither one increases the national debt. Raising taxes and overwhelming small businesses with paperwork and regulations still increases governmental burden on our fragile economy. But this is our government’s idea of “fiscal restraint” in action. Washington needs to stop creating new programs and spending so much money. That would be true fiscal restraint.
Monday
THE CYCLE OF VIOLENCE IN AFGHANISTAN
Last week the National Bureau of Economic Research published a report on the effect of civilian casualties in Afghanistan and Iraq that confirmed what critics of our foreign policy have been saying for years: the killing of civilians, although unintentional, angers other civilians and prompts them to seek revenge. This should be self-evident.
The Central Intelligence Agency has long acknowledged and analyzed the concept of blowback in our foreign policy. It still amazes me that so many think that attacks against our soldiers occupying hostile foreign lands are motivated by hatred toward our system of government at home or by the religion of the attackers. In fact, most of the anger towards us is rooted in reactions towards seeing their mothers, fathers, sisters, brothers and other loved ones being killed by a foreign army. No matter our intentions, the violence of our militarism in foreign lands causes those residents to seek revenge if innocents are killed. One does not have to be Muslim to react this way, just human.
Our battle in Afghanistan resembles the battle against the many-headed Hydra monster in Greek mythology. According to Former General Stanley McChrystal’s so-called insurgent math, for every insurgent killed, 10 more insurgents are created by the collateral damage to civilians. Every coalition attack leads to 6 retaliatory attacks against our troops within the following six weeks, according to the NBER report. These retaliatory attacks must then be acted on by our troops, leading to still more attacks, and so it goes. Violence begets more violence. Eventually more and more Afghanis will view American troops with hostility and seek revenge for the death of a loved one. Meanwhile, we are bleeding ourselves dry, militarily and economically.
Some say if we leave, the Taliban will be strengthened. However, those who make that claim ignore the numerous ways our interventionist foreign policy has strengthened groups like the Taliban over the years. I’ve already pointed out how we serve as excellent recruiters for them by killing civilians. Last week I pointed out how our foreign aid, to Pakistan specifically, makes it into Taliban coffers. And of course we provided the Taliban with aid and resources in the 1980s, when they were our strategic allies against the Soviet Union. For example – our CIA supplied them with Stinger missiles to use against the Soviets, which are strikingly similar to the ones now allegedly used against us on the same battlefield, according to those Wikileaks documents. As usual, our friends have a funny way of turning against us. Manuel Noriega and Saddam Hussein are also prime examples. Yet Congress never seems to acknowledge the blowback that results from our interventionism of the past.
Our war against the Taliban is going about as well as our war on drugs, or our war on poverty, or any of our government’s wars – they all tend to create more of the thing they purport to eradicate, thereby dodging any excuse to draw down and come to an end. It is hard to imagine ever “winning” anything this way.
We have done enough damage in Afghanistan, both to the Afghan people, and to ourselves. It’s time to re-evaluate the situation. It’s time to come home.
The Central Intelligence Agency has long acknowledged and analyzed the concept of blowback in our foreign policy. It still amazes me that so many think that attacks against our soldiers occupying hostile foreign lands are motivated by hatred toward our system of government at home or by the religion of the attackers. In fact, most of the anger towards us is rooted in reactions towards seeing their mothers, fathers, sisters, brothers and other loved ones being killed by a foreign army. No matter our intentions, the violence of our militarism in foreign lands causes those residents to seek revenge if innocents are killed. One does not have to be Muslim to react this way, just human.
Our battle in Afghanistan resembles the battle against the many-headed Hydra monster in Greek mythology. According to Former General Stanley McChrystal’s so-called insurgent math, for every insurgent killed, 10 more insurgents are created by the collateral damage to civilians. Every coalition attack leads to 6 retaliatory attacks against our troops within the following six weeks, according to the NBER report. These retaliatory attacks must then be acted on by our troops, leading to still more attacks, and so it goes. Violence begets more violence. Eventually more and more Afghanis will view American troops with hostility and seek revenge for the death of a loved one. Meanwhile, we are bleeding ourselves dry, militarily and economically.
Some say if we leave, the Taliban will be strengthened. However, those who make that claim ignore the numerous ways our interventionist foreign policy has strengthened groups like the Taliban over the years. I’ve already pointed out how we serve as excellent recruiters for them by killing civilians. Last week I pointed out how our foreign aid, to Pakistan specifically, makes it into Taliban coffers. And of course we provided the Taliban with aid and resources in the 1980s, when they were our strategic allies against the Soviet Union. For example – our CIA supplied them with Stinger missiles to use against the Soviets, which are strikingly similar to the ones now allegedly used against us on the same battlefield, according to those Wikileaks documents. As usual, our friends have a funny way of turning against us. Manuel Noriega and Saddam Hussein are also prime examples. Yet Congress never seems to acknowledge the blowback that results from our interventionism of the past.
Our war against the Taliban is going about as well as our war on drugs, or our war on poverty, or any of our government’s wars – they all tend to create more of the thing they purport to eradicate, thereby dodging any excuse to draw down and come to an end. It is hard to imagine ever “winning” anything this way.
We have done enough damage in Afghanistan, both to the Afghan people, and to ourselves. It’s time to re-evaluate the situation. It’s time to come home.
Tuesday
THE TROUBLE WITH UNCONSTITUTIONAL WARS
Our foreign policy was in the spotlight last week, which is exactly where it should be. Almost two years ago many voters elected someone they thought would lead us to a more peaceful, rational co-existence with other countries. However, while attention has been focused on the administration’s disastrous economic policies, its equally disastrous foreign policies have exacerbated our problems overseas. Especially in times of economic crisis, we cannot afford to ignore costly foreign policy mistakes. That’s why it is important that U.S. foreign policy receive some much needed attention in the media, as it did last week with the leaked documents scandal.
Many are saying that the Wikileaks documents tell us nothing new. In some ways this is true. Most Americans knew that we have been fighting losing battles. These documents show just how bad it really is. The revelation that Pakistani intelligence is assisting the people we are bombing in Afghanistan shows the quality of friends we are making with our foreign policy. This kind of thing supports points that Rep. Dennis Kucinich and I tried to make on the House floor last week with a privileged resolution that would have directed the administration to remove troops from Pakistan pursuant to the War Powers Resolution.
We are not at war with Pakistan. Congress has made no declaration of war. (Actually, we made no declaration of war on Iraq or Afghanistan either, but that is another matter.) Yet we have troops in Pakistan engaging in hostile activities, conducting drone attacks and killing people. We sometimes manage to kill someone who has been identified as an enemy, yet we also kill about 10 civilians for every 1 of those.
Pakistani civilians are angered by this, yet their leadership is mollified by our billions in bribe money. We just passed an appropriations bill that will send another $7.5 billion to Pakistan. One wonders how much of this money will end up helping the Taliban. This whole operation is clearly counterproductive, inappropriate, immoral and every American who values the rule of law should be outraged. Yet these activities are being done so quietly that most Americans, as well as most members of the House, don’t even know about them.
We should follow constitutional protocol when going to war. It is there for a reason. If we are legitimately attacked, it is the job of Congress to declare war. We then fight the war, win it and come home. War should be efficient, decisive and rare. However, when Congress shirks its duty and just gives the administration whatever it wants with no real oversight or meaningful debate, wars are never-ending, wasteful, and political. Our so-called wars have become a perpetual drain on our economy and liberty.
The founders knew that heads of state are far too eager to engage in military conflicts. That is why they entrusted the power to go to war with the deliberative body closest to the people – the Congress.
Decisions to go to war need to be supported by the people. War should not be covert or casual. We absolutely should not be paying off leaders of a country while killing their civilians without expecting to create a lot of new problems. This is not what America is supposed to be about.
Many are saying that the Wikileaks documents tell us nothing new. In some ways this is true. Most Americans knew that we have been fighting losing battles. These documents show just how bad it really is. The revelation that Pakistani intelligence is assisting the people we are bombing in Afghanistan shows the quality of friends we are making with our foreign policy. This kind of thing supports points that Rep. Dennis Kucinich and I tried to make on the House floor last week with a privileged resolution that would have directed the administration to remove troops from Pakistan pursuant to the War Powers Resolution.
We are not at war with Pakistan. Congress has made no declaration of war. (Actually, we made no declaration of war on Iraq or Afghanistan either, but that is another matter.) Yet we have troops in Pakistan engaging in hostile activities, conducting drone attacks and killing people. We sometimes manage to kill someone who has been identified as an enemy, yet we also kill about 10 civilians for every 1 of those.
Pakistani civilians are angered by this, yet their leadership is mollified by our billions in bribe money. We just passed an appropriations bill that will send another $7.5 billion to Pakistan. One wonders how much of this money will end up helping the Taliban. This whole operation is clearly counterproductive, inappropriate, immoral and every American who values the rule of law should be outraged. Yet these activities are being done so quietly that most Americans, as well as most members of the House, don’t even know about them.
We should follow constitutional protocol when going to war. It is there for a reason. If we are legitimately attacked, it is the job of Congress to declare war. We then fight the war, win it and come home. War should be efficient, decisive and rare. However, when Congress shirks its duty and just gives the administration whatever it wants with no real oversight or meaningful debate, wars are never-ending, wasteful, and political. Our so-called wars have become a perpetual drain on our economy and liberty.
The founders knew that heads of state are far too eager to engage in military conflicts. That is why they entrusted the power to go to war with the deliberative body closest to the people – the Congress.
Decisions to go to war need to be supported by the people. War should not be covert or casual. We absolutely should not be paying off leaders of a country while killing their civilians without expecting to create a lot of new problems. This is not what America is supposed to be about.
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