Should 41 = 51?

Senator Evan Bayh of Indiana decided not to run for re-election this fall. In a Sunday Opinion in the New York Times last week, he cited the failure of the United States Senate to conduct business because of the filibuster rule.

"The Senate should reform a practice increasingly abused by both parties, the
filibuster. Historically, the filibuster was employed to ensure that momentous
issues receive a full and fair hearing. Instead, it has come to serve the
exact opposite purpose--to prevent the Senate from even conducting routine
business."

According to the historian of the Senate, the term filibuster has origins from the Dutch word meaning pirate. In the early days of the republic, both houses allowed unlimited debate. As House membership grew it was abandoned, but remained in the Senate. In 1917, senators adopted rule (Rule 22), at the urging of President Woodrow Wilson, that allowed the Senate to end debate with a two-thirds majority vote, a procedure called "cloture". The new Senate rule was first put to the test in 1919, when the Senate invoked cloture to end a filibuster against the treaty of Versailles. The late J. Strom Thurmond of South Carolina holds the record of 24 hours 18 minutes against the Civil rights Act of 1957.

Filibusters are becoming more frequent. Last fall they were used to stall the legislation to extend unemployment insurance. Now the simple threat of a filibuster from one senator can halt progress on any legislation. Today, we have ideological gridlock over health care financing legislation. The 60 vote "supermajority " of the Democrats has been lost with the election of Senator Brown of Massachusetts, so that the threat of filibuster by the Republican minority can stop a vote and eventual passage of bills already passed by both houses of Congress. So a majority does not rule! Forty-one(41)votes obstructs the more than a majority fifty-nine(59) votes.

But is the game over? The answer is fortunately "NO". Again rules can be made to trump rules. There is an arcane rule in the Senate call the "budget reconciliation" rule. The rule will, after differences in the house and Senate bills have removed differences by compromise, allow passage by a simple majority in the Senate and House. This rule was passed in the 1974 Congressional Budget Act. This rule applies in the Senate to all legislation affecting the budget, and the health legislation would certainly qualify. The same act also limited debate in both houses to 20 hours and in the Senate, NO FILIBUSTERS ARE ALLOWED. Somebody was thinking. It should be pointed out that, Congress has used the reconciliation rule to apply to non-budget issues as the Republicans did in 1996 to pass major welfare legislation. In fact it has been used 19 times to get President Clinton's budgetary policies through in 1994, and the tax package cuts of President George W. Bush.

So if 59 can really beat 41, who not do it and do it now? If the people have spoken in the last election and there is a clear majority, why not do what the people's representatives have decided? The argument seems to be that the passage would be bullying the minority and that the majority is not listening to the minority. The idea that the minority can upon occasion be right is being offered as argument. Critics are also harping on the sol-called "sweet" deals. Summing it up at the bipartisan session at Blair House today, using the reconciliation rule, according to Senator Lamar Alexander, would be "jamming through in a partisan way".

What is the prospect? As long as the minority decides to obstruct the majority from governing, as long as campaigning continues after an election, as long as there is no real debate, there will be not only no progress on health care finance legislation, but none on Wall Street reform, none on ending wars, and none on reversing our bankruptcy trajectory.

Please, talk to your legislators about talking to each other. If we are not willing to revoke the filibuster rule, then let us invoke the reconciliation rule and move on.

Why Not Adopt The Volcker Rule?

Quoting from President Obama's remarks on financial reform on January 22, 2010 "This economic crisis began as a financial crisis, when banks and financial institutions took huge, reckless risks in pursuit of huge profits and massive bonuses". There is not a single economistin the western world who would argue with the observation that excessive leverage was a root cause of the financial crisis. Take Bear Stearns as an example. They were leveraged 100 to one on the weekend that they failed. That meant simply that they were in a situation where they had borrowed to the max--that they had made a bet putting up all of their money so that a 1% maarket drop would result in loosing 100%. Not even the most reckless bookie in Vegas would ever do such a dumb thing. Venerable and supposedly brilliant Lehman Brothers was hardly any better or smater, failing with leverage over 80%.
What the president was saying was that the banks were playing in the same game, their trading desks in the risky game of subprime mortgages, derivatives, and credit default swaps plus gambling in the oil futures markets. They were funding hedge funds, and trading themselves like hedge funds. It is obvious that we need a limit on risk taking in the name of stability, reliability and future growth.
Now the House of Representatives has passed the necessary financial reform to curtail this risk taking under the leadership of Rep. Barney Frank and the Senate is now working to follow through under the chairmanship of Senator Dodd. It was before his Senate Banking Committee that former chaiar of the Federal Reserve, Paul Volcker testified yesterday.
Volcker appeared before the congress on February 2nd. His public testimony held that high risk trading such as hedge fund acvtivigties should not be part of standard commercial banking. Banking licenses should not be given to institutions that cause failures through extraordinary risk. Excessive leverage and inadequate capital to support liquidity should not be allowed. The idea is to have procedural safeguards that step in to cause bankruptcy rather than allowing such banks to become too big to fail.
The President's current proposal provides for an authority that would intervene and prevent excesses of proprietary trading[translate casino activities using depositors' money]. Conflicts of interest such as between bank brokerage activities and the brokerage "research" should not be allowed to provide leverage whch such an authority would limit or eliminate. Banks should not be trading for themselves and sustaining losses that undermine their stability and their central mission. Such inside funds should not be able to profit from knowledge of customer business. Attempted separation ("Chinese walls")eventually do not work. There is plenty for banks to do without going beyond commercial community needs. Commercial banking should be clearly defined and fundamentally conservative as they were meant to be. This in the end brings good competition and a stronger system.
All this was undermined by the majority leader of the committee, Senator Richard Shelby of Alabama, who appeared on CNBC Financial the same afternoon and held that we have all the regulation we need, and that the Volcker Rule was unnecessary and he would not support it. After the greatest financial disaster in more than a century, I would hope that the Senate does not follow his lead. I can only assume that Senator Shelby would allow banking firms to continue to run hedge funds and any leverage they please while running a bank backed by the US Taxpayer.
Let's adopt the Volcker Rule. Let us take the casino out of the commercial banks and never require such bailouts again.

Scanners Make Profiling Unnecessary?

On boarding an airplane, all a passenger wants to know is that there is no bomb on boaard, either in baggage or concealed on another passenger. Mental detectors and thorough luggage searching has made a gun in the aircraft cabin a practically zero probability. That had been the main concern until the fear of a bomb became an emerging reality. Bomb fear replaced hijacking fear. The placing or carrying on of a bomb became a form of terrorist activity of organized Islamic fundamentalists who declared war on Israel and the West.
The Lockerbie crash by a luggage bomb changed international policy for package and luggage security. The exposure of Al Qaeda actions to blow up multiple transatlantic flights together with the famous shoe bomber, Richard Reid, tightened airport security around the world by more thorough scrutiny of each passenger and a new limit on the amount of "liquids" allowed. The emergence of Islamic martyrs willing to die for the cause, heightens the extent to which security efforts need to be improved to attain an absolute level of security. The 23 year-old Nigerian Christmas bomber, Abdul Farouk Umar Abdulmutallab, represents the resourcefulness of the enemy in researching the chemistry of bomb technology, and the status of security in the air, particularly on international flights entering the United States.
Fortunately, countering the threat is the develoopment of whole body scanners. Whole-body scanners use different systems, but there are two main competing technologies: Backscatter x-ray and millimeter-wave. Both of these use radiation that penetrates clothing. Backscatter technology (Z Backscatter X-ray system) can detect objects that regular X-ray scanners and metal detectors can't pick up very well, like ceramic knives, drugs and liquid explosives. They produce a near life-like image, which is causing all the uproar over privacy, charging prurient intent on the part of the TSA and engaging the ACLU. The images can be blurred by computer altering techniques, but the more distortion, the less the value; for example detecting an explosive tapped to the body. The other concern has nothing to do with privacy, but with the amount of radiation absorbed by the backscatter technology. Without going into details, the fact is that it would take 5000 scans a year to reach the limit of safety.
The alternate system is the millimeter-wave or MMW system. This system, pioneered by the defense and security firm Qintiq, uses millimeter wave (MMW) technology that was first developed to enable helicpoter pilots to see through the smoke of a battlefield. The system uses a cylindrical holographic imaging technology to conduct a 360-degree whole-body scan in 1.5 seconds. It bounces low-powered, non-ionizing millimeter waves off a person, penetrating clothing and reflecting off the body. Reflected signals are collected by the arry/transceiver and sent to a high-speed image processing computer, which forms a high-resolution three-dimensional image of the body and any hidden objects. The system provides a safe, fast and effrective alternative to metal detectors, X-ray machines and pat-down searches at security checkpoints.
As a member of the traveling public, I say get whatever scanner as fast as possible into every airport in the world. I do not want to depend upon the "dot connectors" or the sixteen intelligence agencies in the federal government, however hard working and well intentioned they may be in sorting out their "no fly llist". I will not exempt Congress either as they have not yet implemented the necessary recommendations of the 911 Commissioin. Let's get to the next level of security as quickly and efficiently as possible.
But does this mean we should do away with profiling? The answer is no! The enemy will continue to try to subvert the system. We must use whatever means we can to attempt ot identify the enemhy, the unstable or otherwise suspicious security risk in the travelers' space. As for the traveler who does not wish to participaate in the new security option, take the boaat--or train--or drive to your destination with your ACLU lawyer.

When Are Banks Going To Make Cars?

It is obvious that General Motors is not only a failed car maker, but also a failed bank. TARP money to the tune of $3.8B was released this week to "stabilize" GMAC Financial Services as it attempts to recover from heavy loses. [GMAC has already received $12.5B]. The original purpose of GMAC was to finance its customers who buy cars and trucks from General Motors Corporation. Recognize that the practice of funding car loans is in direct competition with banks, including your local community bank. To make matters worse, GMAC was in trouble, not just because of its financial practices, but because they compounded their greed by playing in the sub prime mortgage casino. Where were the regulators or were there any? As the poet Ogden Nash once observed in an applicable quip, "In the land of mules, there are no rules".
All this got me thinking. If car makers can create their own banks, why can't banks create their own cars? Why not pool their resources and produce cars to beat the gang of three in Detroit that still doesn't get the message and are returning to their "brand names", perpetuating our dependency on oil. A consortium of major and even regional banks could build a hydrogen car along with the system of refueling. They could even name the models after the sponsoring banks, like the Morgan or the Citi or the Wells Fargo--gosh they even have a stage coach logo in the mix--how prophetic.
So how is the transition from fossil fuel to renewable energy made? The gigantic oil lobby isn't going to sit about without a war on change. The answer is federal legislation that would add one penny of tax per gallon per month to the price of gasoline. People would make book in Vegas as to which would come first--the conversion from oil dependency or the payment of the national debt.
And don't forget the most important consequence of such a simple plan; no more oil money to fund the Islamic extremists currently backed by our frenemies in the Middle-East [frenemies are friends who sell us oil but are enemies who who fund Al Qaeda Islamic Fundamentalists]. If successful, the banks might then think of setting up shop to make GE light bulbs and expensive X-Ray scanners and so possibly even cut the cost of health care.
But wait just one Washington, DC minute! Weren't the banks into trying a new business when we got into this financial mess? They decided that the best business to try was the casino business using high leverage in the mortgage securitization and the multi-variant derivatives markets, and that is the very reason that they needed TARP money as well. It is high time to return the Glass-Steagall Act*, prevent banks from going into the casino business which should be left to Las Vegas and surviving high leverage players like Goldman Sachs.Recall please, that it was leverage that did in Lehman Brothers and Bear Stearns. So to prevent leverage in the car business, add a provision that prevent, corporations from owning their own banks.
Car makers that can't make money by making cars should not be in banking. Banks that can't survive by their core business of lending should not make cars or light bulbs and certainly not casinos.
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*Glass-Steagall Act [The Banking Act of 1933, repealed by the Republican Congress and signed by President Clinton in 1999].

Reasons to leave Afghanistan

The first reason is that we are at war with the Taliban and that involves us and the ISAF [International Security Assistance Force] in an intra-Islamic conflict which has been going on for centuries and has no discernable end. There has hardly been a single century since Islamic armies left Arabia to invade their neighbors that there has not risen a leader who claims that the failures of their endeavors was due to a failure to adhere to the original tenants of the prophet. The Taliban in Afghanistan and Pakistan are echoes of that history. What we perceive as radical, they see as fundamental to their roots. General McChrystal’s armies have no strategy to sort that out let alone claim they can “win”.

The second reason is that we cannot fight this war in Afghanistan when the enemy is dispersed outside that country in Pakistan’s peripheral mountainous territories. Mullah Omar and his Quetta Shura Taliban [QST] are headquartered in Quetta, a Pakistan city. They are well organized and have established a proxy government known as Islamic Emirate of Afghanistan and have agents throughout Afghanistan. The Haqqani network [HQN], according to the latest McChrystal report, operates from Pakistan with Gulf Arab financial backing and works with al Qaeda. The Hezb-e-Islami Gulbuddin forces have a base in Pakistan and are led by the indomitable old mujahideen chief Gulbuddin Hekmatyar. Our current “clear, hold and build” strategy has no meaning in this situation. What do we clear? A field, a city? How do we hold it? Establish a periphery day and night? And what do we build? Here is a poor country that does not have one foot of railroad. It is not a question of missing the 20th century—they missed out from the 12th century.

The third reason is that we have no way of knowing that whatever government gains the upper hand after our departure, that al Qaeda will be a significant force or one that could not be monitored. There is reason to believe that al Qaeda would not be welcome. The Afghans will sort it out. Critics will say we will leave chaos but I am reminded of Gandhi’s reply to Lord Mountbatten when he said India would be in chaos if the British left. Gandhi said, “Yes, but it will be our chaos”.

The fourth reason is that we cannot further afford these wars any more. This nation with current debt load, financial institutions trying to escape insolvency, our states unable to meet basic obligations and on-and-on is on a trajectory for bankruptcy. The idea that we could now be talked into throwing more billions at this conflict when we have just dumped three trillion dollars into an equally useless conflict in Iraq is an idea beyond the imagination.

The last reason is that we have accomplished our purpose in invading Afghanistan. We have denied the enemy safe haven. Let the region have a go at keeping it.