Tuesday, July 22, 2008

T. Boone Picken: America is Running Out of Time

Like the Texan Ross Periot, T. Boone Picken is sounding the alarm about the dangers that face America today. He is a true patriot, unlike the other Texan, George W. Bush.

BLITZER: But you're worried about the United States going bankrupt; is that right?

PICKENS: Well, I'm not saying we're going to go bankrupt. I'm saying we can't pay for a lot of things we want to pay for. What I am saying is, from a security standpoint, we could -- we could really be in terrible shape, if, you know -- importing 70 percent of your oil, and only having 3 percent of the reserves in the world, I mean, we're in -- we're in terrible shape on energy.

[...]PICKENS: Well, if you go back and look, Wolf, 10 years ago, I was saying that we will be at 60 percent imports by the end of the century. That was true. It happened. People said, Boone's crazy. That isn't going to happen.

It did happen. I have been pretty good on speaking up and predicting things. But now what's happened is that you're -- you're at a very critical point, but we're also at a critical point in this presidential election, too. And I don't think this issue has been elevated into the debate to the level I want to see it elevated.

It's number one. If you don't solve this problem, you -- you don't have to worry about health care and education, because you're not going to have the money to take care of it anyway.

BLITZER: And correct me if I'm wrong. You were a lifelong Republican. You supported President Bush back in 2000. "The New York Times" says you were among those that bankrolled the Swift Boat Veterans For Truth against John Kerry.

But, right now, where do you see these two candidates, neither one of whom, I believe you say is not doing the job?

PICKENS: I didn't say they weren't doing the job. And I'm not sure that they totally understand the urgency of what I see. And maybe they just don't think it's as -- as critical as I do.

But, here, you -- you don't talk about things that are going to happen 10, 20, 30 years from now. You talk about things you can fix as quickly as you -- as possible. And I think you can have a lot done in less than five years, if we move in the direction that I'm talking about going.

BLITZER: How much time do we really have? Because we have seen your commercials. The numbers are alarming, the transfer of wealth from the United States going around the world. How much time, realistically, do you think the United States has?

PICKENS: I think you're neck deep in it right now. I don't think you have any time. I think you have got to -- you have got to make your energy plan move forward.

[...]BLITZER: And you're ready to put some of your own money behind all of this as well. How much are we talking about? We know you're a billionaire.

PICKENS: I have -- in the 4,000 megawatts that I'm building at Pampa, Texas, that that's going to cost $10 billion. So, I'm putting my money where my mouth is.

The Rich Keep Getting Richer

Is anyone really surprised? Is it any wonder we face the economic crisis currently plaguing us? For decades big business has been gorging--at the expense of the rest of the world. And it is ending the same way it did in 1929. They've made their mammoth profits through speculation. As with all speculative bubbles: they burst. That means the rest of us who getting crumbs for so long, are now getting stuck with the bill. Because when the super rich get in trouble the government comes to their aide. The victims of big business' excesses get nothing but insults, as happened with all those innocent people who took out deceptive subprime loans. Much of the world's economic injustice can be attributed to the gap between the super rich and the great majority of the non-rich. And it is inequality that led the French Revolution, the Communist Revolution, and our own revolution. And it will happen once again in this country. Meanwhile, there will be great hardship:

In a new sign of increasing inequality in the U.S., the richest 1% of Americans in 2006 garnered the highest share of the nation's adjusted gross income for two decades, and possibly the highest since 1929, according to Internal Revenue Service data.

Meanwhile, the average tax rate of the wealthiest 1% fell to its lowest level in at least 18 years. The group's share of the tax burden has risen, though not as quickly as its share of income.

[...]The figures about the relative income and tax rates of the wealthiest Americans come as the presumptive presidential candidates are in a debate about taxes. Congress and the next president will have to decide whether to extend several Bush-era tax cuts, including the 2003 reduction in tax rates on capital gains and dividends. Experts said those tax cuts in particular are playing a major role in falling tax rates for the very wealthy.

[...]According to the figures, the richest 1% reported 22% of the nation's total adjusted gross income in 2006. That is up from 21.2% a year earlier, and is the highest in the 19 years that the IRS has kept strictly comparable figures. The 1988 level was 15.2%. Earlier IRS data show the last year the share of income belonging to the top 1% was at such a high level as it was in 2006 was in 1929, but changes in measuring income make a precise comparison difficult.

Mideast Sees More of the Same if Obama Is Elected

Obama has proven that he is in the back pocket of the Israeli lobby. This means nothing will be done to solve the number 1 issue confronting the Middle East: the Palestinian, Israel conflict. No politician can be elected to the presidency and advocate and even hand foreign policy in the region.

For what feels like forever, Israelis and their Arab neighbors have been hopelessly deadlocked on how to resolve the Palestinian crisis. But there is one point they may now agree on: If elected president, Senator Barack Obama will not fundamentally recalibrate America’s relationship with Israel, or the Arab world.

From the religious center of Jerusalem to the rolling hills of Amman to the crowded streets of Cairo, dozens of interviews revealed a similar sentiment: the United States will ultimately support Israel over the Palestinians, no matter who the president is. That presumption promoted a degree of relief in Israel and resignation here in Jordan and in Israel’s other Arab neighbors.

“What we know is American presidents all support Israel,” said Muhammad Ibrahim, 23, a university student who works part time selling watermelons on the street in the southern part of this city. “It is hopeless. This one is like the other one. They are all the same. Nothing will change. Don’t expect change.”

Across the border, in Israel, Moshe Cohen could not have agreed more. “Jews there have influence,” Mr. Cohen said, as he sold lottery tickets along Jaffa Road in Jerusalem. “He’ll have to be good to Israel. If not, he won’t be re-elected to a second term.”

Mr. Obama, who will be here on Tuesday, has promised change. He has offered to begin dialogue where the current president has refused, in places like Syria and Iran. But when he stepped into the Middle East, he walked into a region where public expectations were long ago set. The Bush years have supercharged those sentiments, especially in the Arab world, where there is little faith that the United States can ever again serve as a fair broker between the sides.

In Israel, Mr. Bush was seen as the most supportive American president yet, and early opinion polls show a preference there for the presumptive Republican nominee, Senator John McCain.

But Mr. Obama gained ground — or lost it, depending on which side was reacting — when he spoke in June to a pro-Israel lobby, the American Israel Public Affairs Committee. He said that Jerusalem “will remain the capital of Israel, and it must remain undivided.”

He later qualified his comments, saying he meant that the two sides of Jerusalem should not be separated by walls or barbed wire. But the message had already been sent.

“The Arabs need America to be straight and unbiased, but anyway we feel, that American policy will not be changed too much,” said a Palestinian who identified himself by his nickname, Abu Fadi, a salesman in an electrical appliance store in downtown Arab East Jerusalem.

Behind this general agreement, there is a fundamental difference. In the Arab streets, there is a hope, perhaps limited, that this candidate might be different. He is black, his father was Muslim and his middle name is Hussein, so there is hope that he will be more sympathetic, though that hope is not joined to any expectation.

When the Lobby says jump the politicians ask, "how high?" That means he will not meet Hamas eventhough no peace can come without involvement of that group.
Democratic presidential candidate Barack Obama will visit the West Bank next week as part of a swing through the Middle East, a Palestinian official said Monday, giving an important diplomatic boost to the Palestinians at a sensitive time in peace talks.

The Palestinians expressed satisfaction over the planned meeting with the presumed Democratic nominee, which comes months after Obama's likely Republican opponent, John McCain, passed on meeting with the Palestinians during a brief visit to Israel.

Obama is scheduled to meet Palestinian President Mahmoud Abbas during his July 23 stop in Ramallah, said Palestinian negotiator Saeb Erekat, who was in Paris for a Mediterranean summit.

[...]In a recent speech to the American Israel Public Affairs Committee, he offered such ardent support for Israel that he had to backtrack just a few days later. Obama, working to woo Jewish voters, told the lobbying group that he supported Israel retaining control of an "undivided" Jerusalem. The comment so infuriated many Arab leaders that he was forced to issue a clarification that he didn't oppose Israeli-Palestinian negotiations over the future of the city.

Wachovia Has Record $8.9 Billion Loss

Erin Burnett called the situation with the banks "grim" this morning. I continue to argue that the banking situation will continue to worsen. Who knows how many banks are in trouble. Will the government bail them all out? Can it? Who's going to bail out the government? Will it be too late to do something when we do learn the answers?

Wachovia Corp., the U.S. bank that hired Treasury Undersecretary Robert Steel as chief executive officer two weeks ago, reported a record quarterly loss of $8.9 billion and slashed the dividend. The stock fell as much as 12 percent in early New York trading.

The second-quarter loss of $4.20 a share compared with net income of $2.3 billion, or $1.23, a year earlier, the Charlotte, North Carolina-based company said today in a statement. The loss included a $6.1 billion charge tied to declining asset values.

The writedown and second dividend reduction in three months reflect Steel's response to setbacks including the Golden West Financial Corp. acquisition in 2006, which cost former CEO Kennedy Thompson his job after eight years. Wachovia has dropped more than 75 percent in New York Stock Exchange composite trading since it spent $24 billion two years ago to buy Golden West just as house prices were peaking.

It's gotten so bad that even when banks report losses Wall St. takes that as a positive news:
Bank of America Corp. has become the latest in a string of big banks whose second-quarter earnings, while hurting from the impact of the credit crisis, still managed to beat Wall Street expectations.

The nation's second-largest bank by assets said yesterday that its profit fell 41 percent as losses in its struggling mortgage operations were offset by business in other parts of the company. But it easily beat Wall Street estimates, and its stock rose $1.07, or 3.9 percent, to $28.56 in afternoon trading.

Four of the nation's five biggest banks have now reported better-than-estimated results. JPMorgan Chase & Co. and Wells Fargo & Co. reported smaller-than-expected profit declines, and Citigroup Inc. had a milder-than-expected $2.5 billion loss.

Maybe we should listen to Henry Paulson. Let's put our trust in this administration. They will do the right thing. Haven't done a great job up till this point?
Treasury Secretary Henry Paulson said Sunday that the current economic difficulties will take months to pass but added that turmoil in the banking sector is under control.

"This is a tough time," Paulson said in an interview on CBS's Face the Nation. "We're going to be in a period of slow growth for a while."

But he added that recovery would involve a matter of months rather than years.
Paulson also voiced confidence on government's ability to deal with the recent string of bank failures.

"Our regulators are on top of it. This is a very manageable situation," he said.
He said 2008 has seen only five banks fail, compared with about 250 failures seen in a single year during the height of the savings-and-loan crisis of the late 1980s and early 1990s.

Speaking later on CNN's Late Edition, he added that "99% of the banks with 99% of the assets" were in good shape in terms of capitalization.
"Stability in the capital markets, that's our No. 1 thing," he said