Today

 

 

 

 

 

 

 

Strategic Interests

How did our oil get under their sand? We are strategic dunderheads. The best defense we can have is to become energy independent (and to quit importing crap from China). Our oil policy has cost this country trillions of dollars, massive debt, thousands upon thousands of lives...perhaps millions over the years. Many of them our own citizens/troops. To become fuel self sufficient doesn't mean burning fossil fuels, fracking or making ethanol from food products...it means R&D into fusion (should be on line by now), photovoltaics on every roof with solar exposure (we, personally, are energy self sufficient with PV since 1984), decentralization of our energy production, wind, wave...things we haven't heard of yet. We are America...let's think of the future, or we will surely perish either by fouling our nest beyond habitability or by blowing the world to smithereens. We would also be able to have 100% employment, as well.

Think people. Invest in the future...our grandchildren's grandchildren's grandchildren.

Design our communities with community in mind, not the automobile...people need connections. Cooperation, civility, celebration.

On Winter

It's a time for looking inward, losing our leaves and protecting our roots...let our bodies set to the rhythms of nature. More rest, recuperation, resolution, re-imagining. Regard, relish and respect.

Merry Everything

Occupy Thanksgiving - Merry Everything!
It's early morning, 2011 Nov 23rd. I'm at my desk as usual drinking some decent coffee while the rest of this part of the world begins to wake up. This is my favorite time of day, before it actually starts. My family is flocking to the area - My brother is here. I haven't had him stay with us in a while. My kids are all around as well as my niece and her two kids. Yes, it's that time of year again and I'm loving it. I'm thinking about all the young people I've seen over the past month or so out in the streets around this country occupying their cities and towns - trying to change the world. I'll be joining them again where and when I can. And I'm hoping that they find food and shelter from those who can provide it. For my part there will be a Thanksgiving Dinner at the Guthrie Center (The old Trinity Church where I wrote and later filmed Alice's Restaurant). It'll be packed this year. I will spend my Thanksgiving with friends and neighbors unable to do so on their own.
I am not at all discouraged or angry with the politicians and authorities who have shown contempt and disrespect for our young people out there. I feel sorry for them. They are self-made slaves to the great whore of our times - the idea that government is best when it serves those with the most. It should come as no surprise that those bowing and groveling at the feet of privatization - social security, medicare, roads, schools and everything else, should desire that government be privatized. The idea that congressmen and women, judges and elected officials on federal, state and local levels work best when bought and paid for by those who can afford to do so is at the heart of the matter. All the other issues before us, as a nation and a world, arise from this disgusting and anti-American core value.
I urge everyone, here and abroad to show respect and gratitude to these nameless young people. Talk about them in the coffee shops and luncheonettes with friends and neighbors. They are the heroes of a new generation. They will be vilified and slandered by those who have the most to lose. But, their courage and conviction is exactly right and appropriate. They need all the support they can get as they push us forward as a civilization toward a more perfect union. And they will succeed. Slowly and inevitably they will push us into the light of a better world. The signs are all around us. There is a great hope and a wonderful dream shared by countless generations of good people inching forward through history. It will burst like a dam upon those who try to hold it back. Resistance is indeed, futile.
The coffee is cold, the frozen rain keeps falling. But, inside there is a flame which seems to get brighter. It flickers at the edge of my thoughts though I sit alone. And I send my prayers and salutations to others around the world on this day… The day before we here in the USA celebrate the things for which we are most thankful. This year, I am not only thankful but hopeful and excited. Happy Thanksgiving - Merry Everything! adg

(Arlo Guthrie)

Paradigm Shifts

Extraction and exploitation aren't the only options. We need a paradigm shift away from mono cropping, fossil fuels, polluting waters, abusing people, animals and all of nature. Toward a more positive, sustainable future.
‎"Either you obstruct, in the only form left to us, which is civil disobedience, the plundering by the criminal class on Wall Street and accelerated destruction of the ecosystem that sustains the human species, or become the passive enabler of a monstrous system. Either you taste, feel and smell the intoxication of freedom and revolt or sink into the miasma of despair and apathy. Either you are a rebel or a slave." - Chris Hedges
End our global militarism. That's number one on my agenda. Economically we need to become more self sufficient. Most of our imports are of oil...and plastic crap from China.

It would create a change in the average American's way of life...but it couldn't be anything other than positive, in my estimation. Local, sustainable sources. When Steve Jobs said he had to do business in China (according to one of the 'debaters' last evening) because there weren't enough technicians and engineers in this country it tells me two things.

1. Our education system sucks. If that's a problem, fix it.

2. What he really meant was he needed low wage employees and less environmental constraints to manufacture apple products. The same is true of too much crap we use here. Why can't we have a bit less, and make the products here...in an environmentally conscious manner, with living wages? Why do we need to be in a race to the bottom, which we will lose...since the bottom is already there and so-called "developing nations" are racing to the top.

My least favourite catch phrase is "under developed" countries. Should they all become consumptive, wasteful and broken like this country? Built around the automobile, rather than people? Around consumption and competition rather than compassion and cooperation?
We need a paradigm shift away from toxic tech...and slave labor.

It's getting close to where a paradigm shift won't only be desirable, but it will become necessary. Either we prepare for it and make a smooth transition, or it tumbles down around us...and like Humpty-Dumpty, will never be put back together again...it will be painful, more like Kunstler's "World Made by Hand", than a well thought out, redesigned world.
We are butterflies in the chrysalis stage...we need to struggle to free ourselves, stretch and dry our wings...to fly off in beauty. It's the struggle that makes strong wings.

On Thanksgiving Day celebrations

We usually have our harvest festivals a bit earlier in the season, here in the north country. Gatherings where folks bring offerings in the form of pot luck dishes, music, laughter...stories of summer's successes and failures. Dreams of what will be different in the garden or with animals for the coming year. Much of the meat is from the wild. Common in most cultures, harvest festivals have been celebrated for millenia. Next, the festival of lights, the solstice...the time when the sun ends it's inexorable journey toward the horizon and begins it's return. Another true time of celebration. Cooperation, community, consideration, conservation.

On sexual intimacy

Start foreplay with morning coffee, sitting together enjoying the sunrise...prepare breakfast together. Not just bacon and eggs, but 'whip' up something fanciful and special...spend the day laughing and discussing dreams and exploring the beauty of the all, from the macrocosm to the microcosm...touch each other's faces lightly, playfully as you stare into each others' eyes...pull away and venture forth some more. For lunch, if it's hot...make a mojito or two...if it's cold, a hot toddy. Or, if you're not a drinker...have a toke. Or, barring that...a cup of tea, hot or iced. Continue with the foreplay, teasing your bodies and taking it ever higher, while walking, talking and reminiscing of the past and of the future. Be timeless, barefoot if it's warm...skinny dip together at a private pond/stream...even if only stepping across wet stones.

Continue letting the sadhana build throughout the day, let it culminate with a very special meal made together. Get all 4 of your hands into the dough of a great bread, smell it baking. As the sun dips below the horizon, watch for the moon and stars on the crisp of the night. Have a toast to each other and to life with a good glass of wine. Hold each other. Caress each other. Drift off together into a suddenly compact universe of skin and breath and hair. Get lost in each other, nothing else matters for those long moments.

Paul Chappell, a Modern Day Sun Tzu on The Art of Peace

Paul Chappell, a modern day Sun Tzu on the Art of Peace. Know those who wish to destroy you.

Great advice from the perspective of a warrior.

***

HOW TO DESTROY THE OCCUPY MOVEMENT AND HOW TO PREVENT IT FROM FAILING
by Paul K. Chappell
October 31, 2011


I graduated from West Point in 2002, served in the army for seven years, and was deployed to Baghdad in 2006. I left active duty in 2009 as a captain, and I am currently serving as the Peace Leadership Director for the Nuclear Age Peace Foundation, where I work to empower people with the skills and ideals that allow us to effectively wage peace.

If we compare how much the average twenty-two-year-old army officer knows about waging war and how much the average twenty-two-year-old activist knows about waging peace, there is a big difference. Although I admire their deep commitment to waging peace, many activists have not had enough training in the nonviolent methods that lead to positive change. Many activists have not thoroughly studied the brilliant techniques of Mahatma Gandhi, Martin Luther King Jr., Susan B. Anthony, and other peace warriors.

Good intentions are simply not enough. If they were enough, then war, injustice, and oppression would have ended many years ago. To solve our national and global problems, we need more than just good intentions. We must also be disciplined, strategic, and well trained. Civil Rights leader James Lawson, whom Martin Luther King Jr. called “the leading theorist and strategist of nonviolence in the world,” said, “The difficulty with nonviolent people and efforts is that they don’t recognize the necessity of fierce discipline and training, and strategizing, and planning, and recruiting.”

If we truly want to promote peace and justice, we must be as well trained in the art of waging peace as soldiers are in the art of war. In the next several pages I will discuss the Occupy Movement from a strategic perspective, and I will also explain some easy ways for the opponents of change to destroy it. Only then can we protect the Occupy Movement, which is a living monument to Martin Luther King Jr.'s legacy and vision.

If King had not been assassinated, he would have begun the Occupy Movement many decades ago. King had a vision called the Poor People’s Campaign, which was a plan to occupy Washington D.C. and pressure the U.S. government to create an Economic Bill of Rights. Samuel Kyles, a minister who worked closely with King and was with him during the last hour before his assassination, said: “With the Poor People’s Campaign, Martin is talking about taking these poor people to Washington, build tents, and live on the [Washington] mall until this country did something about poverty… Can you imagine what would happen if all these black and white and brown people go to Washington and build tents and live in tents in Washington?”

King’s vision to increase fairness and justice in our economic system was not fulfilled, but his vision to end segregation gave me opportunities my father never had. When I was growing up, my father always told me: “The only place in America where black men are treated fairly is in the military. People will be nice to you, but when they find out you’re part black they’ll turn on you. The military is the only place that gives black men a chance. You’ll never be able to get a decent job unless you’re in the army.”

Half white and half black, my father was born in 1925 and grew up in Virginia during segregation and the Great Depression. The U.S. Army was desegregated in the early 1950s, many years before segregation ended in the South. This made a strong impression on my father. During the 1940s and 1950s, his belief that he only had opportunity in the military was largely true. A hard worker who began picking fruit when he was six years old to earn extra income for his family, he fought in the Korean and Vietnam wars and retired as the highest enlisted rank, a command sergeant major.

My mother is Korean, and growing up in Alabama I also experienced some racism. This reinforced the fears that my father instilled in me. When I told my mother two years ago that I was leaving active duty, she said: “Are you out of your mind? Nobody is going to hire you. It’s bad enough you look Asian, but you’re also part black. Nobody is going to give a job to a black man who looks Asian.” My parents did not tell me lies. On the contrary, they told me their truth. They were describing life as they had experienced it and trying to protect me from the suffering they endured. But as an adult I had begun to realize that my racial background was no longer the hindrance my parents believed it to be, and I owe my very existence to the power of social movements.

America’s Founding Fathers rebelled against Great Britain because they felt unfairly treated. They believed it was unjust to be taxed or controlled without the opportunity to participate in the political process. The motto “No taxation without representation” echoed their outrage and became a call to arms, leading to the American Revolution. But until the 1820s, fifty years later, less than 10 percent of the American population could vote. Women could not vote. African Americans could not vote. And most white people could not vote unless they owned land. During the early nineteenth century, “No taxation without representation” only seemed to apply to the rich.

How did so many Americans increase their liberties during the past two hundred years? Did non-landowners fight a war to obtain the right to vote? Did women fight a war to get the right to vote? Did African Americans fight a war to attain their civil rights? Did American workers fight a war to gain their rights? Was a war fought for child labor laws? These victories for liberty and justice were achieved because people waged peace, but this is a part of our history that many people do not remember.

One of the most undemocratic things I have ever heard – which I hear often – is that the American president is the leader of the free world. If we understand what the ideal of democracy truly means, we realize that the people are supposed to lead, and the president is supposed to be the administrator of the people’s will. Although we live in a representative democracy instead of a direct democracy, we still have methods to pressure our politicians to do what we want. The evidence from American history shows that nothing will change for the better unless Americans tell the president what to do. American history also shows that ordinary citizens, not presidents, are the brightest visionaries and the true engine of progress.

For example, Lyndon Johnson was not a strong advocate for civil rights when he became president, but he later supported racial equality because Martin Luther King Jr. and other members of the civil rights movement pressured him to do so. Franklin Roosevelt was not a strong advocate for worker’s rights, which included child labor laws and a five-day workweek, when he became president, but the worker’s rights movement changed his viewpoint. Woodrow Wilson opposed women’s equality when he became president, but he later supported the constitutional amendment that gave women the right to vote because Alice Paul and other members of the women’s rights movement pressured him to do so. Abraham Lincoln was not a visionary who believed slavery was wrong when he began his political career, but his views changed due to the influence of Frederick Douglass and other members of the abolitionist movement.

As a child I was taught that voting was the be-all and end-all of citizenship, and if I showed up to the polls to vote I was fulfilling my civic duty. But the women’s and civil rights movements created dramatic change, even though many of its participants had little to no voting rights. Voting is just one tool in the democratic toolbox, and we can’t build a house with just a hammer. Susan B. Anthony and Martin Luther King Jr. used many democratic methods such as protests, petitions, boycotts, pressuring the legal system, and changing people’s attitudes for the better. Historian Howard Zinn said: “Democracy doesn’t come from the top. It comes from the bottom. Democracy is not what governments do. It’s what people do.”

My ancestors were slaves, my grandfather in Virginia was a racially mixed African American barber, and his wife was a racially mixed African American maid. Neither of my parents graduated from college, but now I am living in a position of extreme privilege. I am not referring to money, because I have a modest income and live in a one-bedroom apartment. To me, extreme privilege refers primarily to four things.

First, I am literate. It was illegal to teach slaves to read, and for most of human history the majority of people simply could not read. Second, I am living in a remarkable era where I have greater access to information than anyone living before me. Philosopher Francis Bacon said “Knowledge is power,” and Socrates showed that in order to improve our society we must transform people’s beliefs and ways of thinking. In my apartment I have Internet access and many books and documentaries, and in the battle to change minds this is a vast source of power. Third, I can express my viewpoints without being suppressed. Freedom of expression did not exist for much of human history, and it still does not exist in some parts of the world today. Fourth, as an American citizen I have the ability to make a difference, and I intend to make the most of my citizenship.

Although my income is modest and I live in a one-bedroom apartment, from a historical and global perspective I am extremely privileged, and taking action allows me to ensure that I do not take my freedom for granted. We certainly have a long way to go before peace and justice are truly a reality around the world, but we have also come a long way. My existence is proof that progress is possible, and if we have come so far, why can’t we keep moving in a positive direction?

If politicians today said, “We should bring back slavery and segregation, and women should not be allowed to vote or own property,” people would look at them like they were insane. But two hundred years ago the majority of Americans supported those viewpoints. How did we get here, and how can we change attitudes toward the other problems that threaten humanity?

Waging peace was the weapon used by Susan B. Anthony and Martin Luther King Jr., and we must arm ourselves with this weapon today. King said: “Nonviolence is a powerful and just weapon. It is a unique weapon in history, which cuts without wounding and ennobles the man who wields it. It is a sword that heals.” If people in the past had not used the power of waging peace, I and countless others would have little to no rights today. The American Civil War kept the country together, but it took a peaceful movement during the 1950s and 1960s before African Americans truly got their human rights. And not a single European country had a war to free the slaves. The first strategic nonviolent movements in history were the abolitionist movements in Europe during the eighteenth and nineteenth centuries.

By understanding how my bloodline went from slavery to extreme privilege, we will better understand how to strengthen the social movements occurring today and how the opponents of change will seek to destroy them.

In The Art of War, written during the sixth-century BC, Sun Tzu said: “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

Knowing our enemy and knowing ourselves is a timeless strategic principle. It means being able to see the world from our enemy’s point of view, and knowing not only our strengths, but also our weaknesses. When waging peace is concerned, our enemies are ignorance, hatred, misunderstanding, and greed. King never demonized the white racists who wanted to kill him. Instead, he called them his “sick white brothers.” King believed that their minds had been imprisoned by ignorance and hatred, and he sought to use the power of truth and love to break their chains.

Not everyone who perpetuates injustice will be won over to the cause of justice, but nonviolent tactician Gene Sharp teaches that in any oppressive system there are always people in that system who will empathize with the oppressed. Nelson Mandela was able to win hearts and minds among some of his prison guards, and Wikileaks exists because people in the American government and military are leaking documents they believe the American public needs to know about. Waging peace requires us to not demonize the other side, and to do more than just preach to the choir. If we use effective techniques for persuading those who disagree with us, then we can recruit more people in oppressive systems to directly or indirectly support the change our world needs.

Governments control people by dividing them, and if I wanted to destroy the Occupy Movement the first thing I would do is encourage people in the movement to have an “us versus them” mentality. The government is notorious for planting undercover agents in social movements who intend to destroy the movement from within, and anyone who wants to destroy the Occupy Movement should use agents to increase the “us versus them” rhetoric.

This can be done with signs and slogans that portray all wealthy people, corporate employees, and police officers as evil. Occupy Movement protests in many cities have had signs with the words, “Eat the rich” (which is a message that endorses violence), and during the Occupy Oakland protest a picture was taken of an activist holding a sign, “All my heroes kill cops.” If a government agent wasn’t behind that sign, then a protestor was doing the government’s work for free.

The truth is that police officers are part of the 99 percent, and in many areas they are losing their jobs due to government cutbacks. Aqeela Sherrills, who grew up in gangs and later negotiated a peace treaty between the rival gangs the Bloods and the Crips, dealt with many bad police officers. But he said, “When the police would come and jump out of the car and everybody would run, we would just stand there. We knew our rights. We questioned and would argue the police down about violating our civil rights and run down the codes to them and everything. People thought we were crazy in the neighborhood. But there are always good cops. There were the good cops who recognized what we were doing was a benefit to the neighborhood, and who would basically tell us how to deal with those racist and renegade cops in the neighborhood by filing complaints and filing reports.”

Activist Blase Bonpane says, “If anyone in your movement advocates violence, always assume they are an undercover government agent.” If you are part of a social movement, the government wants you to use violence. Why? A basic principle of military strategy is to never confront your opponent where they are strongest, and always confront them where they are weakest. Where is the U.S. government strongest? Its greatest strength is the use of violence. The U.S. government has the most powerful military in human history and controls the army, navy, air force, marines, special forces, national guard, FBI, CIA, and police. If you fight the U.S. government with violence on its own soil – where it has home field advantage – it will crush you.

All governments work hard to maintain a monopoly on the use of violence, and the U.S. government has spent the past ten years building a massive anti-terrorism industry. The easiest way to destroy the Occupy Movement would be for people within the movement to commit violence. The U.S. government could then label the movement as a terrorist organization and crush it with force it in the name of self-defense and national security.

For years I have studied jiu-jitsu, which taught me that a skilled boxer is like a lion. Just as a lion is called the “king of the jungle,” a skilled boxer usually reigns supreme in a fistfight. But when a jiu-jitsu practitioner takes a boxer to the ground and applies a submission hold, it is like pulling a lion into a shark tank. A boxer on the ground, like a lion in the water, is out of his element.

When we wage peace, we are taking an oppressive system out of its element and dragging it into deep water, because when we are violent it is best prepared to smash us. King taught us to confront an oppressive system not violently where it is strongest, but in the realm of moral authority where it is weakest. When we wage peace and those in power use violence against us, it can actually make us stronger. When peaceful civil rights protestors were blasted with fire hoses and attacked with police dogs, public support for the civil rights movement increased. When the U.S. government attacked the Bonus Marchers – World War I veterans protesting for the wages they had been promised while serving overseas – it increased the moral authority of their movement and public opinion shifted in their favor.

Star Wars expresses this metaphorically. Right before Darth Vader kills him, Obi-Wan Kenobi says, “You can’t win Darth. If you strike me down I shall become more powerful than you can possibly imagine.” This metaphor applies to real life, because when the Athenians killed Socrates he became more powerful. After his execution the Athenians later regretted this injustice; they created a statue to honor him and he became a symbol that has inspired countless people around the world. When the Romans killed Jesus he also became more powerful, and when Gandhi and King were assassinated they became symbols that will never go away.

This is one reason why the apartheid government in South Africa kept Nelson Mandela in prison instead of killing him, and the dictatorship in Burma has held democratic leader Aung San Suu Kyi on house arrest rather than executing her. However, unjust imprisonment can still create public outrage and shift national and global consensus. This is why when dealing with nonviolent activists, it is better to imprison than to kill, but it is far better to slander someone’s reputation than be perceived as holding an innocent person in jail.

Although there are many ways to discredit and damage a social movement, in the modern world the greatest danger to any movement is from within. The more frustrated people in the Occupy Movement become, the more likely they will be to use violence. This is cause for concern, because some protestors in the movement may not realize what they are getting into. This is not going to be like Egypt, where a ruthless dictator was toppled in a few weeks. In many ways the struggle in Egypt is just beginning, because much of its oppressive infrastructure is still in place.

To better understand the challenges ahead, we should study and draw inspiration from the struggles for civil and women’s rights, and every other social movement in history. It may take some years before significant progress is made on the issues we are confronting today. Rosa Parks was a committed activist for twelve years prior to her famous arrest incident, and King believed that the dangerous forces we are up against now are going to make the supporters of segregation look like amateurs in comparison.

If protestors aren’t mentally prepared for the challenges ahead and are expecting immediate results, their frustration will swell and the cries for violence will become more potent. Someone in the movement will say, “We’ve been doing this nonviolence thing for eight months and no significant change has happened. I am starting to get impatient. If we want change, we must resort to violence.” There are certainly people in the Occupy Movement who have this mindset now, but as frustration and impatience increase within the movement their violent rhetoric will gain more traction.

Social movements are long-distance marathons, not sprints, and they all involve a series of victories and setbacks. The better we understand this, the less frustrated we will become, the less likely we will be to lose hope due to disappointment, and the less prone we will be to becoming violent and destroying the movement from within. To be effective in any struggle for peace and justice we must balance urgency with patience, and we must be disciplined, strategic, and well trained.

What I have discussed here is just the beginning of a much longer conversation. But before we can move forward, I first had to explain why the easiest way to destroy the Occupy Movement is by getting its members to advocate and commit violence, and the best way to prevent the movement from failing is by instilling a deep loyalty to nonviolence and providing effective training in the art of waging peace. If the majority of protestors do not encourage each other to learn skills and ideals that allow us to be effective, the opponents of change may not have to do much in order to destroy the movement. It will simply collapse from within.

But I have hope, because although protestors are being told they are part of the 99 percent, I realize they are really part of the 1 percent. I am not referring to the “wealthiest 1 percent,” but the “active 1 percent” who truly practice democracy and defend its principles. Henry David Thoreau said: “There are thousands who are in opinion opposed to slavery and war who yet do nothing to put an end to them. There are nine hundred and ninety-nine patrons of virtue to every virtuous man.”

According to Thoreau, for every thousand people who think something is a good idea, only one person actually does something about it. This is not just Thoreau’s viewpoint. It is also a fact of history. Less than 1 percent of Americans were actively involved in the women’s rights movement, or in the civil rights movement. When opinion polls tell us a large percentage of Americans oppose a war, we must keep in mind that only a small fraction are actively involved in solving the problem.

Today, everyone who wages peace is part of the “active 1 percent.” Their greatest wealth is conscience, compassion, courage, and commitment. Throughout history the “active 1 percent” has worked to give me and so many others the freedoms we enjoy today. Now we must use those freedoms to create the change our world so desperately needs.

***********

Paul K. Chappell graduated from West Point in 2002. He served in the army for seven years, was deployed to Baghdad in 2006, and left active duty in November 2009 as a Captain. He is the author of Will War Ever End?: A Soldier’s Vision of Peace for the 21st Century, The End of War: How Waging Peace Can Save Humanity, Our Planet, and Our Future, and Peaceful Revolution: How We Can Create the Future Needed for Humanity’s Survival (publication date: March 2012). He lives in Santa Barbara, California, where he is serving as the Peace Leadership Director for the Nuclear Age Peace Foundation. He is working on his fourth book, The Art of Waging Peace: A Strategic Approach to Improving Our Lives and the World, and he speaks throughout the country to colleges, high schools, veterans groups, churches, and activist organizations. His website is www.willwareverend.com.

Thanksgiving out my front door?

In reality, I'll make our traditional black bean/rice enchiladas for our meal of thanks.

Tell a lie often enough and it becomes a mantra

After watching the Republican 'debate' last evening I feel there is a LOT of misinformation being spread to place blame other than where it belongs for the housing crisis and the ripples it created. And now it is hammered by the candidates that we need LESS regulation? Really? Bring back Glass-Steagall.

Source: Barrons Online (Oct 2008)

THIS MEMO PROVIDES A BRIEF HISTORY OF the actions that helped create this crisis.

1997: Federal Reserve Chairman Alan Greenspan's famous "irrational exuberance" speech in 1996 was somehow ignored by, um, Fed Chairman Greenspan. The Fed missed the opportunity to change margin requirements. Had the Fed acted, the bubble would not have inflated as much, and the subsequent crash would not have been as severe.

1998: Long Term Capital Management was undercapitalized, used enormous amounts of leverage to purchase all manner of thinly traded, hard-to-value paper. It failed, and under the authority of the Federal Reserve a "private-sector" rescue plan was cobbled together. Had these bankers suffered big losses from LTCM, they might have thought twice before jumping into the exact same business model of undercapitalized, overleveraged, thinly traded, hard-to-value paper. Instead, they reaffirmed Benjamin Disraeli's famous aphorism: "What we learn from history is that we do not learn from history."

1999: The Financial Services Modernization Act repealed Glass-Steagall, a law that had separated the commercial-banking industry from Wall Street, and the two industries, plus insurance, came together again. Banks became bigger, clumsier, and hard to manage. Apparently, risk-management became all but impossible, even as banks had greater access to larger pools of capital.

2000: The Commodities Futures Modernization Act defined financial commodities such as "interest rates, currency prices, and stock indexes" as "excluded commodities." They could trade off the futures exchanges, with minimal oversight by the Commodity Futures Trading Commission. Neither the Securities and Exchange Commission, nor the Federal Reserve, nor any state insurance regulators had the ability to supervise or regulate the writing of credit-default swaps by hedge funds, investment banks or insurance companies.

2001-'03: Alan Greenspan's Fed dropped federal-fund rates to 1%. Lulled into a false belief that inflation was not a problem, the Fed then kept rates at 1% for more than a year. This set off an inflationary spiral in housing, and a desperate hunt for yield by fixed-income managers.

2003-'07: The Federal Reserve failed to use its supervisory and regulatory authority over banks, mortgage underwriters and other lenders, who abandoned such standards as employment history, income, down payments, credit rating, assets, property loan-to-value ratio and debt-servicing ability. The borrower's ability to repay these mortgages was replaced with the lender's ability to securitize and repackage them.

2004: The SEC waived its leverage rules. Previously, broker/dealer net-capital rules limited firms to a maximum debt-to-net-capital ratio of 12 to 1. This 2004 exemption allowed them to exceed this leverage rule. Only five firms -- Goldman Sachs, Merrill Lynch, Lehman Brothers, Bear Stearns and Morgan Stanley -- were granted this exemption; they promptly levered up 20, 30 and even 40 to 1.

2005-'07: Unscrupulous home appraisers found that they could attract more business by inflating appraisals. Intrinsic value was ignored, so referrals kept coming in. This helped borrowers obtain financing at prices that were increasingly unsupportable. When honest appraisers petitioned both Congress and the bureaucracy to intervene in the widespread fraud, neither branch of government acted.

Voodoo economics, as it was once called...or 'trickle down', 'supply side'...hasn't worked. Instead it has given us massive debt over the past 3 decades. Reagan more than tripled the national debt and raided the SS trust fund that he set up with the aid of Alan Greenspan. That doubled the taxes on the working class. It's time for all the inequity to stop. If necessary, return to the tax policies of Eisenhower, which paid off our debt from WWII, educated a returning veteran population, spurred a growing middle class. A time when one wage earner was enough, benefits were good, college was affordable, and family vacations were possible. My dad was a bus driver and we received all these benefits, plus he had a good pension when he retired. Time for millionaire's making their opinions known to end, as if they are the Oracles at Delphi...they've been wrong for thirty years and longer. It's happened before in the 1890s, the 1920s, etc. All of this worthless paper that is floating around the globe is killing many nation's economies. Derivatives, speculation, CMOs, sliced and diced bs. Some suggest that over a quadrillion dollars in derivatives are afloat. That is more than the world economy's GDP.

The Military Industrial/Big Pharma/Medicine/Insurance/Banking complex is overwhelming the citizens of this nation while they chortle all the way to the Cayman Islands or Dubai.