The Post-American Dream

Memories from Vietnam

admin — Wed, 07 Apr 2010 15:29:54 +0000

As we proceed into the tenth year in Afghanistan, it continues to look more and more like Vietnam. President Karzi’s administration looks more like Duong Van Minh’s, the last President of South Vietnam. Corruption to the extreme, and US feet on the ground daily risking their lives for someone who is so far from our friend that he threatens to join the Taliban? I suggest a visit to the Virtual Vietnam Wall. You can tour the wall as it exists (chronologically), look up individual names, and even check out your own home town losses. I suggest looking at the losses from the town where you grew up and ask your self this – is it worth another 211,454 casualties, which included 58,209 deaths? The total U.S. casualties for WWI were only 320,518, and for Korea, 128,650. In the Second Iraq war, U.S. Casualties have reached 36,153, with 4,391 KIA. In Afghanistan, casualties are up to 6,416, with 1,023 KIA.

During and since the Cold War, we maintain this mass delusion that we can bring democracy to other countries. We ignore history, which is pretty clear that every attempt we have made to democratize a society has failed. Democracies arise when the citizens themselves say enough is enough, and revolution follows, just as it did here. We can and should provide all the help and assistance we can to fledgling democracies, just as France did for us. We should not put U.S. soldiers in harms way in an effort doomed to fail.

It is time to bring our troops home from Iraq and Afghanistan. Bring them home from Korea, Japan, and all of Europe. Let the world bear the price of defending freedom, not our treasury and our youth.

Just to be clear, I am a Vietnam vet, I was wounded in action and have the Purple Heart to prove it. I have nothing but love and affection for my brothers and sisters serving in the armed forces. And nothing but disgust for the politicians that keep letting this perversion continue.

The military budget for 2010 is $685.1 billion. We are facing a multi-trillion budget deficit over the next 10 years. Of that $685.1 billion, $577.6 billion is for Operations and Maintenance, Personnel, and Procurement. If we pull all of our troops out of combat and off-shore defensive positions (again, out of Korea, Europe, the Middle East, and more), is there any doubt we could make a major dent in that $577.6 billion? Even if we left the Navy in place around the world as a deterrent, a cut of 30-50% seems likely. If we were able to cut that budget by $250 billion, that equals $2.5 trillion in savings after 10 years, closer to $3 billion when you compound the savings.

Why is that not part of our national debate today? What is wrong with the leadership of this country?

What do you think?

Discharge of Student Loans in Bankruptcy

admin — Sun, 28 Mar 2010 17:06:57 +0000

Since a law change 1998, discharging student loans has been very difficult in bankruptcy proceedings. Two reasons:

The grounds for discharge for a student loan are very narrow — debtor must establish that failure to discharge would impose an “undue hardship” on debtor or his/her dependents; and
The bankruptcy court must make the finding of undue hardship in an adversary proceeding;

On March 23, 2010, the Supreme Court of the United States affirmed United Student Aid Funds v Espinosa, upholding the discharge of the debtor’s student loans without the adversary proceeding. As reported by Adam Liptak in the New York Times, Mr. Espinosa took out four loans totaling $13,250 from a trade school in Arizona in 1998 and 1999. Although employed as an airline ramp agent, Mr. Espinosa filed for bankruptcy four years later. In the bankruptcy proceeding, Espinosa proposed paying the principal of his loans and discharging the interest upon successful repayment of the principal.

Adversarial notice was not served on the creditor, United Student Aid Funds (USA Funds), but the creditor did receive notice from the bankruptcy court of the proceedings and of Espinosa’s plan. The bankruptcy court approved the plan without neither a finding of undue hardship nor the required adversarial proceeding. Once Espinosa repaid the principal, the court discharged the interest obligation. A few years later, the Department of Education (DOE) tried to collect the discharged interest, Espinosa asked the bankruptcy court to enforce the confirmation of discharge against USA Funds and DOE. USA Funds replied with a cross-motion seeking to set aside the confirmation because the plan was inconsistent with the undue hardship and adversarial proceedings requirements discussed above, and because the plan violated USA Funds rights of due process because it was never served with the required notice of adversarial proceeding. The bankruptcy court granted Espinosa’s motion in relevant part and denied USA Funds cross-motion. The District Court reversed on the basis that USA Funds was entitled to its due process, but the Ninth Circuit reversed the district court, holding that

the bankruptcy court had at most committed legal error which USA funds could have appealed but did not; and
USA Funds due process rights were protected since they received actual notice of the proceedings and the plan, even if they did not receive the required notice of adversarial proceeding.

The Supreme Court found error at all three prior levels. The student loan discharge rules are “self-executing,” meaning that the bankruptcy court must make the finding of undue hardship only after an adversarial proceeding, whether or not requested by the creditor. But the Court also held that failure to follow the procedure was legal error, but the confirmation order was binding because USA Funds had adequate notice and failed to object or appeal within the required time limits. Thus the District Court erred in reversing the bankruptcy court on due process grounds and the Ninth Circuit also erred in its holding that a bankruptcy court must confirm a plan proposing discharge of a student loan debt without the finding of undue hardship in an adversarial proceeding unless the creditor makes a timely objection. Remember, the undue hardship and adversarial proceedings are “self-executing,” and the bankruptcy court should have followed the procedure with or without object of the creditor.

So although Espinosa prevailed and had his loans discharged without the finding of undue hardship after an adversarial proceeding, the effect of this ruling is extremely limited. The bankruptcy court should have required the adversarial proceeding, but USA Funds did not object or appeal this legal error within the time limits allowed. There was no due process violation because USA Funds had actual notice of both the proceeding and the plan for discharge.

It is highly unlikely that this decision will serve as a basis for discharge of additional debtors student loans without the finding of undue hardship after an adversarial proceeding.

US Bankrupt?

admin — Sun, 07 Mar 2010 14:32:42 +0000

Both parties are bragging these days about their cost-cutting moves. Unless something serious gets done, we could easily ring up a $12 Trillion deficit in the coming years. Read Robert J. Samuelson (one of the few economists I bother to read) take on the status quo at http://tinyurl.com/yjcvwu6.

Is a $12 Trillion deficit enough to bring down our economic system. No one really knows, but it might be. Stock up on beans and bullets.

Goldman Sachs is at it again

admin — Mon, 15 Feb 2010 14:00:48 +0000

Today’s copy of the UK Independent has an article implicating Goldman in complex financial transactions designed to allow Greece to avoid its debt ceiling.

“The euro membership rules place strict caps on the size of government deficits relative to a national economy, but Goldman Sachs and other banks helped Greece raise cash earlier in the decade in ways that did not appear in the official statistics. With the current recession causing even official budget deficits to balloon all across the continent, fears of further hidden liabilities have been contributing to the crisis of confidence in Greek debt and pulling down the value of the euro.”

Using “cross-currency swaps”, Goldman enabled Greece to push current obligations into the future, creating yet another bubble. For more on Goldman’s bubble machine capability, see The Great Bubble Machine in Rolling Stone and the follow up article Inside the Great Bubble Machine.

How long are we going to allow investment banks to destroy economies, wipe out the savings of millions and put millions of people out of work? If anyone thinks Obama is hostile to Wall Street, think again. Hostile would mean appointing a special prosecutor to go after any financial institution found to be intentional creating bubbles that result in out-size profits for the bank and devastation for the people caught in the bubble. My personal recommendation would be Eliot Spitzer. He did a great job going after Wall Street as Attorney General for Connecticut, and this would be an opportunity for him to gain back some o the credibility his sexcapades cost him.

What do you think?

Obama Planning a “Surge” Speech from West Point Tomorrow

admin — Mon, 30 Nov 2009 12:37:40 +0000

The on-site commander has requested 40,000 additional troops. According to the Wall Street Journal, Obama will announce an increase of about 30,000 tomorrow at West Point. Notably, he seems ready to reject a second high priority of Gen. McChrystal: a doubling of the Afghan police and army over the next few years. The New York Times also reports that Obama will discuss a timetable for withdrawal, but not with any where near the specificity of the Iraq plan to be completely out by 2010.

What does it all mean?

The war in Afghanistan is soon to enter its ninth year. That makes it third longest war in our history:

Vietnam: 116 months
American Revolution: 100 months
Afganistan: 97 months
Iraq: 80 months

To put this in context, WWI only required 19 months, WWII took 45 months and Korea lasted 37 months.

The Definition of War

The real rub is that most wars are fought against another country — that sets up a very clear end condition, when you have taken the surrender of that country. Iraq and Afghanistan are both part of the “War on Terror”, and we need to seriously rethink whether we want to classify our conflict with terrorists as “War.” After all, when does the War on Terror end? There are hundreds of terrorist groups around the world and if we have learned one thing about terrorists, is we are successful in stamping out one group, another rises to take its place.

Our troops are being asked to do more than we even asked of the “Greatest Generation” in WWII. True, when we drafted troops for that war, it was for the duration: but that only amounted to 45 months if your were called up in the first wave and served all the way to the end. Our troops today are seeing three and four tours in Iraq and Afghanistan, and there is no end in site. Post Traumatic Stress Disease (“PTSD”) has become so prevalent, the Pentagon is considering making counseling mandatory for all returning troops. But that is a palliative at best — troops from Vietnam still experience flash-backs from PTSD. Hell, I only spent 22 days in combat 40 years ago, resulting in one hot mission and one gunshot wound to my left wrist. But if I hit a pot hole just right with my car, the sound and vibration is so close to the feeling of rounds going through our helicopter that, for just a split second, it takes me right back there.

What we re doing to our soldiers today is unconscionable. I have a truly radical proposal: let’s bring them home from all foreign assignments. Europe is surely able to handle its own defense now — bring our troops home from Germany. We still have 28,500 troops in Korea, and effectively, they serve as a trip wire to bring us into any conflict if North Korea decides to invade with the 700,000 troops it has within 90 miles of the DMZ. But do we need that trip wire? Wouldn’t our treaty with South Korea be just as effective?

Think out of the box with me here. We have over 200,000 troops stationed in 144 countries. By bringing all of our troops home:

We would help reduce our national deficit by an enormous amount and could help fund strategically critical programs for our own people in education and health care;
The rest of the world would be called upon to take up the slack in their own defense — they already make clear they don’t like us, so screw them and let them field their own damn troops;
To the extent we pulled out of Muslim countries, we would be undercutting the number one driver of Jihad — the presence of US Troops in Arab holy lands.
Most importantly, we could accomplish everything we do by spending billions to keep troops overseas by simply speaking the truth: Iraq, if you cut off our oil, we will be coming back. Russia, if you invade Europe (how and with what?), we will hit you with everything we have. North Korea, if you invade South Korea we will just as surely turn your country side to slag as we would have after you had slaughtered our 28,500 troops (no matter how good our troops may be, they face 700,000 North Koreans and would not last for more than a few hours at best).

In other words, speak softly but carry a big stick! But don’t leave that stick inserted in 140 countries around the world.

Dubai Crisis Continues

admin — Mon, 30 Nov 2009 11:58:33 +0000

News from around the world

From the Guardian.co.uk: The Abu Dhabi Securities Exchange has finished the trading day for Monday, and it was not pretty
- The Exchange was down 83%, losing 241.92 to close at 2668.23.
- Royal Bank of Scotland is already down 4% today on concerns about its loans to Dubai World
The Washington Post reports that there are concerns in Europe beyond Dubai: the Greek government is suffering from a fiscal crisis and several Eastern European governments appear to be struggling, including Hungary, Poland and the Baltic States. Vietnam also devalued its currency by 5 percent last Wednesday.
The Wall Street Journal noted the pledge by the United Arab Emirates to back banks in Dubai, but there is still concern that the crisis could lead to a flight to quality. “As in September 2008, when the failure of Lehman Brothers heightened worries about all financial institutions, they might pull back, regardless of the markets’ strength.” The WSJ also noted that the U.A.E. statement of support for banks did not include any support for Dubai itself.

What it means to us

First, this is in some ways just continuation of the world-wide real estate crisis. Real Estate prices in Dubai have fallen 50% over the past year, and may have further to go. Second, we need to be alert to additional bubbles or “mini-bubbles” as the international banking system is already stressed beyond safe limits. In some ways, Dubai is the bubble to end all bubbles – build out of reclaimed sea, including the worlds tallest building, and certainly on of the most expensive places on the planet. Third, any bank failures or pullback on lending is sure to impact our own attempt to jump start our economy.

John Stewart’s Interview with Lou Dobbs

admin — Sun, 29 Nov 2009 10:17:59 +0000

Now I am not nor ever have been a Lou Dobbs fan. And the first three segments of his interview with John Daily were kind of uninspiring. But this last segment was pretty good; a rational setting of bounds that we need to set and keep if want to keep our way of life alive.

See the interview at http://www.thedailyshow.com/watch/wed-november-18-2009/exclusive—lou-dobbs-extended-interview-pt—3. Parts 1 and 2 are there as well.

The U.K. has a New Worry Today

admin — Sat, 28 Nov 2009 16:54:51 +0000

The developing debt crisis in Dubai (yet another financial bubble about to break) has the UK Financial Services Authority “urgently seeking assurances that Britain’s major banks are protected…” reports the Guardian this morning. The Authority is demanding open disclosure of exposure while the Bank of England and the Treasury continue to monitor closely.

Banks mentioned with potentially large exposure include Royal Bank of Scotland and HSBC

To my Brothers and Sisters in Arms

admin — Fri, 27 Nov 2009 12:46:22 +0000

Happy Thanksgiving to all of you serving in the armed forces today, and to all of those who served in the past. I read the other day that there is only one living veteran of WWI in the U.S. – to him, as special thank you and best wishes for another year.

December is a tough month for me – I arrived in the Republic of Vietnam on December 1, and was shot while rescuing Vietnamese civilians on December 22. One good thing, I did get to meet Bob Hope and his troop who came through my ward (Neil Armstrong, the Gold Diggers, Connie Francis (from whom I got a memorable kiss) and more. Unfortunately, I was so whacked on morphine at the time that it is all like a dream sequence (I had to ask the guy in the bed next to me if that really was Connie Francis).

So to all of you heroes holding the Purple Heart, a special thanks and a very special holiday good wishes.

To all of you who did not serve, for what ever reason, you will never know the depth of brotherhood that exists between people who have shared combat. Please, take the time this weekend to thank each Vet you see. You do not have to interrupt them in the airport or where ever you see them — just place your left hand over your heart, look at them and nod, and take your hand down. Every single one of them will feel the love.

Early Take – A New International Financial Panic

admin — Fri, 27 Nov 2009 12:07:13 +0000

Dubai World

Dubai World, the government owned enterprise for developing Dubai, shocked international markets yesterday by asking to delay some debt payments. http://preview.tinyurl.com/ydutgdm. According to the Guardian’s ariticle,

The FTSE 100 tumbled by 70 points, or nearly 1.4%, to 5123 when trading began. But with share prices volatile, it clawed back most of the losses by 10am, hovering around 5171. The Nikkei 225 closed 3.2% lower, with Japan’s biggest banks leading the fallers. Hong Kong’s Hang Seng index fell by 5.3%.

Remember we asked the question last week – could a major nation default on its debt? With £48.8 billion of debt, Dubai may not be the largest debtor nation, but it has been maintaining a reputation as the most expensive, most luxurious, most everything for the past several years.

Another source, Breitbart, asserts that Dubai’s move was carefully planned:

“Dubai’s move to suspend payments on its Dubai World conglomerate’s debt was “carefully planned” and done in full knowledge of how the markets would react, the chairman of the Supreme Fiscal Committeesaid on Thursday.

“Our intervention in Dubai World was carefully planned and reflects its specific financial position,” Sheikh Ahmed bin Saeed al-Maktoum said in a statement.

“The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react. We understand the concerns of the market and the creditors in particular.”

Germany

In a separate article, the Guardian confirmed that Germany will bear the brunt of an anticipated job loss from GM of 9,000. http://preview.tinyurl.com/ye44fly.

The Washington Post weighed in on the Dubai debt crisis by forecasting heavy selling on today’s opening. http://tinyurl.com/yhep5s2

A Foreclosure Victim Saved

And some good news for a change: after being ripped off by an unscrupulous seller placing her in a $698,000 home on a no document loan (this single mom’s sole source of income was a small day care center), the family lost everything in a foreclosure. This past week, their County came through and after 167 days of living in a motel room, the family of 4 moved into a subsidized 1800 foot apartment this week. http://tinyurl.com/yebrxrc

New York – the Next California?

And on to the next depressing financial story: New York state is running out of money. According to the New York Times:

“Without a budget deal, New York will be left with just $36 million in the bank by the end of December, according to current projections. And the money will last that long, officials say, only if the state chooses to fully exhaust its emergency reserves by tapping several billion dollars’ worth of temporary loans from its rainy-day fund and short-term investments.” http://tinyurl.com/yhfqyhf

New York State has the second largest budget behind California, $130 Billion per year, with a deficit this year of $3.2 billion that the Governor and the Legislator have, so far, been unable to resolve. Now New York is no California, and their have so far been no payment in “script”, but its problems are real. The biggest bills in December, according to the times stories are “… $1.6 billion in aid the state … to pay school districts, $2.5 billion in property tax relief to individual homeowners, and $500 million in general aid meant to go to local governments.” The New York State legislature, like most State legislative bodies, has more than its fair share of, shall we say, “unusual personalities.” I’m predicting we will get some real entertainment out of them over the coming weeks.

So, are we looking at the beginning of another financial crisis? Another bubble bursting? Only time will tell.