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Volume 8 Issue 1…Dedicated to the
Dialogue on Race…January 7, 2004
The Balloon
By Bubba Lee
The balloon, you see,
is but a bubble hung in effigy.
Its squeaky ephithelium
pumped full of nasty helium.
No scintillating sparkle.
When it pops it leaves a dark hole.
No pleasant little "pip"
it's gone in one big rip.
Just won't go without a shout,
always drags that string about.
An imitation bubble
that's simply rubber trouble.
While the bubble, very kind,
leaves a little kiss behind
a plump and gentle rainbow
it's never just a plain glow.
Sparkling bubble wafting by,
crystal mirror of sea and sky
as it floats across the earth
tingles noses, causes mirth.
The aluminum balloon,
just as vicious as can be,
tries to leave you in the dark,
without electricity.
It would really take a dope
to reject a dab of soap
for a nasty piece of tin
or some blistered plastic skin.
To avoid the nasty shell
Of a bubble born in hell
Simply love the soapy bubble -
and be saved from rubber rubble.
About Me: For more Bubba Lee poetry, lyrics,
rhymes, favorite quotations and links that are all about bubbles, log on to .
Overinflated Ethics?
Prior
to becoming the majority in the U.S. Congress, Republicans, under the
leadership of that shining example of morals and ethics, former Speaker of the
House Newt Gingrich, backed efforts to strengthen the rules governing ethical
behavior. Ethics was all the rave and
following the rule of law a GOP mantra.
Now that the GOP enjoys a majority, ethical behavior and rules to
enforce it are no longer serious considerations.
Even before the recent GOP-backed ethics rule change, a gentlemen’s agreement between Republicans and Democrats kept complaints to a minimum. The changes completely deflate those lofty rules, making it harder to bring any complaints against errant members.
After
claiming Election 2004, which increased GOP majorities in both chambers of
Congress, was all about values and an implied mandate to govern their way, the
GOP leadership sought to change the rules to protect that rascal Rep. Tom DeLay
(R-TX), who could be indicted for violating campaign finance laws. The rule the GOP wanted to abolish, but
failed to do so after a firestorm of criticism, would allow DeLay, even if
indicted, to retain his position as Majority Leader.
Like
the overblown emphasis on values to explain a fraudulent election, Congress has
shown that, despite the chatter, it has no ethics. Blah on the hypocrites!
Argentina: From Hyperinflation to Default
Argentina,
the third largest country in Latin America, suffered from huge deficits and
political corruption throughout the 1980s.
Rather than reduce spending and/or raise taxes, the Argentine government
printed pesos, the country’s paper currency.
This resulted in periods of hyperinflation, which economists define as high
inflation or price increases accompanied by little or no increase in
production. By July 1990, Argentine
prices rose nearly 200% per month.
Elected
in 1989, President Carlos Menem created a currency board (1991) to curb
hyperinflation; it pegged the Argentine peso to the US dollar on a one-to-one
ratio. Under this exchange regime,
every peso the central bank printed had to be backed by a dollar.
President
Menem launched a series of reforms, which included opening up the country to
foreign trade, privatizing state-owned industries, cutting the federal budget
and raising taxes. Menem’s policies
succeeded in bringing inflation under control.
Foreign companies invested heavily in Argentina’s oil,
telecommunications and banking industries, and Argentina's economy grew an
average 6% between 1992-94.
With
its currency pegged to an appreciating dollar and rising interest rates,
Argentina’s exports fell and its debt and unemployment rate steadily rose. Rather than practice fiscal restraint, the
government showered benefits on favored constituents, spending more than it
took in. By the end of 1994, it could
barely service its debt. Unemployment exceeded 18% during the 1995 economic
downturn.
By
2000, Argentina was instituting International Monetary Fund (IMF) austerity
measures to acquire loans and restore confidence. Unpopular with the people, the spending cuts and tax increases
worsened the economic recession. Unemployment soared to more than 20 percent,
and political unrest increased; people poured into the streets to protest. In December 2001, Argentina defaulted on its
foreign debt of approximately $141 billion. On February 3, 2002, the government
declared the peso would float free and all dollar debts would be converted into
pesos on a one-to-one basis. This
devaluation wiped out middle class savings and angered investors. Massive protests rocked the country as the
government restricted bank withdrawals.
After
a series of interim presidents, Néstor Kirchner took office in May 2003. Incredibly, the Argentine economy has
improved. Its foreign debt, roughly
$167 billion, remains outstanding.
There is talk that Argentine may sever its ties with the IMF. Moreover, the Kirchner administration has
made repaying its outstanding debt contingent on Argentina's continued good
economic health. (Sources: Encyclopedia
Britannica, http://www.cia.gov/cia/publications/factbook/geos/ar.html,
www.nytimes.com, and www.washingtonpost.com)
Bankruptcies: Debt Reckoning
Bankruptcy
petitions filed in the New York area set a new record in 2004. The 5,562 petitions filed in U.S. Bankruptcy
Court in Rochester represent a 6.8 percent increase over the record 2003
filings of 5,207. Given similar trends
in other states, 2004 was a banner year for bankruptcies nationwide.
The
chief culprits blamed for this wave of bankruptcies are consumer debt, job
losses and greater access to credit.
Workers laid off from U.S. companies, such as Eastman Kodak Co., Xerox
Corp. and Bausch & Lomb Inc., figure prominently among those filing
bankruptcy petitions in New York. While
many petitioners experienced some catastrophe, such as a job loss, health
problem or divorce, a growing number of bankruptcy petitioners just amassed a
mountain of debt.
Judge
John C. Ninfo II, chief bankruptcy judge for the Western District of New York,
has developed some useful tips for avoiding financial problems. Published at www.democratandchronicle.com,
his commonsense advice includes: (1) Always have a budget and live within it;
(2) Don't have more than one credit card; (3) Shop around for the best deal on
a credit card. Read the agreement carefully to understand the interest rate on
charges vs. cash advances, the default interest rate, any annual or late
payment fees, and when payments are considered received; (4) If you can eat,
drink or smoke it, don't charge it; (5) Use a debit card, check or cash when
possible and you'll spend less; (6) If you are not paying the entire balance on
your credit card or store charges, analyze why; (7) Add up the outstanding
balance on your credit cards and store charges at the end of the month to see
how much you actually owe; and (8) Always have a plan to repay your debt. Don't
use credit to get through hard times without first cutting. If the advice comes too late and you need relief,
know your options and consult an attorney.
By John Burl Smith
Economists
are like seismologists that warned of the tsunami in the Indian Ocean that
killed more than one hundred fifty thousand on Boxing Day (12-26-04). Like 9-11, the rationale for no warning of
the impending disaster is no one could have known those signals meant a
tsunami, and a warning would only have generated panic. It seems greed motivates such a dismissive
response to possible impending doom for millions.
Comparing
and contrasting that event with the current economic crisis facing the world
may seem inappropriate to some, but to others its implications are seismic. Tanking against currencies to which it once
stood as the monetary standard, the falling value of the US dollar is sending
tremors through world economic centers.
For some the dollar’s slide is a mysterious phenomenon; only more US
consumer spending will appease the angry money god.
Understanding
the dollar crisis, like a tsunami, one must look beneath surface affects to
find its cause. US corporate greed and
malfeasance, mammoth trade deficits and a ballooning national debt to finance
tax cuts and war are tectonic plates along the fault line at the bottom of this
US ocean of red ink. George W. Bush
entered office jawboning down the US economy and calling for tax cuts to spur
economic growth when there was no recession.
Ever accommodative with the printing press, Federal Reserve Chairman
Alan Greenspan dropped interest rates, creating monetary ripples like a rock in
a pond.
Bush
policies collided with conventional wisdom causing the US economy to experience
tremors and shocks. With cheap dollars,
higher oil prices, overvalued stocks and reduced consumer confidence and
spending, the country is paying for wars in Afghanistan and Iraq without an
increase in taxes. Greenspan’s real
estate and consumer credit bubbles have kept the US economy afloat, but rising
surface pressure bursts bubbles.
Warning bubbles precede tsunamis, so the dollar crisis can be compared
to the rumbling felt by animals before the Sumatra disaster struck.
Contrasting
what is known about quakes and tsunamis, with economic signals being ignored
mimic reactions before Sumatra.
Seismological warnings were dismissed fearing Indian Ocean tourism would
be adversely affected. Economists raising alarms regarding the dangers posed by
the shaky US economic fault line are washed away with rosy forecasts.
Awash
in red ink, corporate greed runs the US.
Unless there is a protective bubble around the US economy, like Diego
Garcia, US consumers will be swamped by a wave of red ink, similar to the
tsunami that washed away portions of Sumatra.
Rather than preparing for the economic reckoning, greedy US corporations
kept pumping red ink during the Christmas season by increasing credit card
debt. Awash in an ocean of debt, red
ink will flow out of the US, drowning neighbors North and South before it
floods ashore in Europe and Africa. Batten down the hatches in 2005.
Housing Bubble
Shortly
before the dot-com bubble burst, Federal Reserve Chairman Alan Greenspan used
the phrase “irrational exuberance” to illustrate the absence of anything
logical to explain the high price of tech stocks relative to the value of their
output and earnings. Some economists,
including Ian Morris, chief U.S. economist at Hongkong and Shanghai Banking
Corporation (HSBC), see a similar overvaluation or bubble in the US housing
market. While the Federal Reserve,
particularly its chairman, has been reluctant to acknowledge a disconnect
between the run-up in house prices and long term real estate values, economists
are predicting house prices will decline and with them the U.S. economy.
Nationally,
housing prices have risen more than thirty percent in four years. In some red
hot markets, such as California, Florida and New York, prices have increased
more than fifty percent over this period.
More than simply increased demand for a fixed supply, fueling the house
price increase are record low mortgage interest rates, which have also created
a boom in refinancing.
Despite
Greenspan’s disclaimers to the contrary, all the antidotal evidence suggests a
housing bubble. Like the creative
accounting of corporations from Enron to mortgage giant Fannie Mae, a recent
report by October Research found appraisers, under pressure, are inflating
house prices. So, if there is a bubble
and it bursts as interest rates rise and house prices decline, homeowners with
adjustable rate mortgages (ARMs) may find it increasingly difficult to make
ballooning house payments. With fixed rates still relatively low, now may be a
good time to switch.
By John Burl Smith
Natural
phenomena have always been fascinating.
Learning about their processes and occurrence broadens one perspective,
making them less mysterious and even understandable. The 9.2 earthquake that caused the tsunami that devastated
Indonesia, Sri Lanka, the Maldives and even caused damage as far way as Somalia
raised questions about the lack of warning.
The US war on terror, which demands international cooperation, and
advances in seismic technology make no warning very suspicious.
A
National Geographic Special on a tsunamis in Hawaii years ago educated this
reporter. Compared to Indonesia, it lacked the power and destructive force, but
the total surprise and no warning were the same. The wave’s sudden appearance and the people’s shock as they saw
the wall of water rising mimicked the unpreparedness of the prior catastrophe.
The
NG special explained, while tidal waves result from surface activity like
unusually high winds, tsunamis result from earthquakes on the ocean floor. An earthquake creates the same affect as a
rock thrown into a pond. Circular
ripples begin at the epicenter and run until they hit shore or loose
momentum. The force and height of waves
are determined by the quake’s magnitude.
Land masses bordering water within quake force areas are affected. Areas near the epicenter are impacted
greatest.
The
US has a geologic station in the Chagos Archipelago on Diego Garcia, 1500 miles
from the recent quake’s epicenter. A
horseshoe atoll forty miles wide, with an average elevation of only four feet
above sea level, Diego Garcia was like a bubble, sitting alone in the middle of
the Indian Ocean. Yet, it was totally
unaffected by the tsunami. According to
the Guardian Unlimited, “Looking at a map you'd expect not much to be left of
the island; it's right in the path of the tsunami’s waves. But they had little more than high tides.”
How
is this possible, unless the rules governing tsunamis have changed or they do
not apply when US military facilities are in their path? Why did the wave part like the “Red Sea”
around Diego Garcia, while targeting Sri Lanka about 1800 miles from the
quake’s epicenter, the Maldives parallel to it and Somalia where people
died1800 miles the other side of Diego Garcia?
Why didn’t the US warn the millions of people in the path of this killer
wave?
Considering
the anti-Bush sentiment, religion and complexion of the people devastated, the
damage to this emerging economic region is tantamount to an atomic
explosion. Raising more suspicion and
concern, US neo-cons are urging the Bush administration to use the tsunami’s
devastation to “bring democracy to the region.” Such an opportunistic strategy would be like the war in
Iraq. The very notion has some
wondering if “God had help in bringing about this disaster.”
Disgruntled
wants to know: In the joint session of the 109th
Congress, members of the House of Representatives were joined by California
Senator Barbara Boxer in challenging Ohio’s Electoral College votes. This gutsy move denies George W. Bush the
required number of votes to proceed to an inauguration. Finally, there is a senator brave enough to
challenge the status quo. Questions so
many are asking are, why are women doing all the leading and men holding all
the leadership positions doing nothing?
Disgruntled feels: Irony!
The International Monetary Fund (IMF) is the most powerful financial
institution in the world. As its
largest shareholder, the United States exerts tremendous influence over its
policies and operations. Ironically,
the IMF has given developing nations a boatload of bad advice on managing their
economies. Tying its loans to the
adoption of austerity measures that no self-respecting developed nation would
implement during a recession, the IMF has presided over the economic decline
and impoverishment of developing nations across Africa, Asia and Latin America.
Disgruntled says: Warren Buffett, Chairman and CEO of
Berkshire Hathaway, a holding company, and Wall Street investment guru, is so
bearish that he is shorting the dollar.
For the past three years, Buffett has been lecturing investors about the
dire consequences of US fiscal and monetary policies that have saddled the
nation with ballooning deficits and a declining dollar. Betting there will be an economic tsunami
with which to reckon, he is buffeting the incoming tide by investing in foreign
currencies, such as the euro, pound and yen.
His advice has been sound in the past.
As OPEC, Japan and China dump dollars, it may well be again.
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