Tip of the iceberg slowly thaws...

Finally, signs that something might be happening in the secretive, tony world of executive compensation...

American International Group Inc. agreed Wednesday to freeze some $19 million in payments to its former chief executive, Martin Sullivan, while New York Attorney General Andrew Cuomo reviews executive compensation and other expenditures aid out as the company neared collapse earlier this year.

About time... Of course, one can't be too sure if Cuomo is trying another Spitzer...

Culture watch

This month’s Harpers carried instructions issued by a Muslim cleric on methods men may use to to discipline their wives. The instructions were aired on a television program last year in Saudi Arabia and Kuwait. Full text here.

A husband should not beat his wife like he would a child, slapping it right and left. Unfortunately, many husbands beat their wives only when they get angry, and when they start the beating, they use both hands and sometimes their feet, as if they are punching a wall. Remember, brother, this is forbidden; your wife is a human being.

Tooting horn

I was happy to hear about India's successful moon rocket launch attempt. I must say that I consider myself lucky to have designed minor portions of that rocket when I worked as an engineer for the Indian Space Research Organization ten years ago and it sure was heartening to hear this news today. The mission seems to have a couple of stated objectives - firstly, to create a three dimensional surface topology map of the moon and secondly to find and map uranium/thorium deposits under the lunar surface... The former makes perfect sense, the latter none.

Even if Gen. Colin Powell lied to us about Iraq, his sense of American identity and what it represents is strong as ever... Here, he is talking about the smearing tactic of painting Sen. Obama as belonging to the Muslim faith...

Well, the correct answer is, he is not a Muslim. He’s a Christian. He’s always been a Christian. But the really right answer is, what if he is? Is there something wrong with being a Muslim in this country? The answer’s no. That’s not America. Is something wrong with some 7-year-old Muslim-American kid believing that he or she could be president?”

Binge buying

Politico details the gory details of how Gov. Sarah Palin managed to spend $150,000 on fashion accessories and clothes since her nomination six weeks back... I am not sure how one can say 'small town values', spend that much on fashion and still maintain a straight face.

Voices on the election

The New York Review of Books asked some of their contributors for their views on the upcoming Presidential election. Bit of a long read, but very important. Some excerpts below...

Mark Danner

It is no accident that the largest single polling disparity between McCain and Obama voters, apart from race itself, is age. Obama's candidacy is in large part a rebellion of the young, for whom race has much less saliency, and one of the great indeterminacies of the election is how many young people will turn out to vote. Another is whether the increase in those who will vote for Obama in part because of his race—most notably, African-Americans, who are registering in large numbers—will offset or exceed those who will vote against him in part for the same reason. This immensely complex question, which goes far beyond the debate over the so-called "Bradley Effect"

Andrew Delbanco

My daughter, who teaches in a charter school in Harlem, had a similar but more significant experience. Last spring, she felt a surge of excitement among her mostly African-American first-graders, whose young lives are terribly short on hope and shadowed by fear. Suddenly, their sense of the future was enlarged by an eloquent black man whom they saw on TV and whom they heard adults talking about all the time. The grandmother of one six-year-old said to her grandchild, "this time the White House will be the Black House." She didn't mean it as a threat of usurpation. She meant that now the American promise might be extended through a black president to black children who could look up to him with pride and a new sense of possibility.

Timothy Garton Ash

That someone from Obama's modest migrant background can make it this far also revives a potent, positive image of the United States as a land of opportunity—an American self-image which much of the world has internalized, however little it corresponds with the statistically recorded facts of limited social mobility.

Joseph Lelyveld

He was patronized as inexperienced and naive when more than a year ago he started calling for cross-border raids into Pakistan on al-Qaeda targets if there was "actionable intelligence" and our supposed ally declined to act. The idea may yet backfire but it recently became Bush administration policy. Ditto for his calls for a shift of forces from Iraq to Afghanistan. John McCain pays him the highest compliment by stealing his campaign themes. McCain is now the candidate of "change" who wants to reform the financial system and its legions of K Street lobbyists, which is where the supposedly inexperienced Obama began. I'm not contending that Obama is a seer, only that he seems to have read our time and the country's mood more intelligently than any of his rivals. We'll now see how well the country has read him.

On the slow death of Libertarian financial principles

Finally, I ran into an essay today that seemed to confirm my suspicions about libertarianism. Libertarianism is dying a slow death and the current financial meltdown further cements this movement’s distorted world view. Many think it is fairly fashionable to state that they are libertarian - little realizing that the current economic meltdown was clearly facilitated by libertarian philosophies dressed up in a conservative costume.

I remember reading Fountainhead when I was in engineering school and naively thought that this philosophy might be just the answer to problems and inequalities that I saw growing up in India. On graduating and finding real jobs in the real world, I slowly came to realize that libertarian principles espoused by its cheerleader Ayn Rand (she seems to call it Objectivism - sounds polished, but similar principles), was nothing short of a collection of washed up, puerile ideas that sound great in an utopian world of ones imagination but has little basis in a real world peopled with actual human beings who bring with them feelings, emotions, pleasure and pain. It is now clear that the economic meltdown was precipitated by libertarian principles like 'self regulating financial markets', 'let the markets decide what is best for the public', 'the markets can't be wrong' and 'government is the problem, not the solution' (among the many such slogans that one hears). It is time to clear the decks and ensure that this flawed movement dies a speedy, much-needed death.

The best thing you can say about libertarians is that because their views derive from abstract theory, they tend to be highly principled and rigorous in their logic. Those outside of government at places like the Cato Institute and Reason magazine are just as consistent in their opposition to government bailouts as to the kind of regulation that might have prevented one from being necessary. "Let failed banks fail" is the purist line. This approach would deliver a wonderful lesson in personal responsibility, creating thousands of new jobs in the soup-kitchen and food-pantry industries.

The worst thing you can say about libertarians is that they are intellectually immature, frozen in the worldview many of them absorbed from reading Ayn Rand novels in high school. Like other ideologues, libertarians react to the world's failing to conform to their model by asking where the world went wrong. Their heroic view of capitalism makes it difficult for them to accept that markets can be irrational, misunderstand risk, and misallocate resources or that financial systems without vigorous government oversight and the capacity for pragmatic intervention constitute a recipe for disaster. They are bankrupt, and this time, there will be no bailout.

A great review of Henry Hitchings book, The Secret Life of Words and a brief historical walk through the development of the English language...

English is a mallard because the common duck's indiscriminate interbreeding threatens indigenous duck breeds all over the world. In the same way, modern English infiltrates diverse languages everywhere. Today, English is spoken by billions of people all over the globe. Mandarin may have more native speakers, and Spanish and Hindi-Urdu have about the same number, but English claims a special distinction: It is so popular among language learners that there are more speakers of English as a second language than there are native speakers. English is now the language of urbanization and globalization.

Compensation alert - yet again

Peter Kraus, the head of strategy at Merrill Lynch is leaving the company and in the process will net $25 million in compensation. This resulted due to the takeover of Merrill by Bank of America.

Here is the stunner:
Peter Kraus joined Merrill in September. A month back!

And the McCain camp has issues with redistributing wealth.

Investment Banker in an organic compound

After sharks in formaldehyde, it is indeed fitting that 'artist' Damien Hirst has decided to put an investment banker in this embalming fluid... It sold for an investment bank type sum too (nearly $4 billion). For some reason I don't believe that, but that is what the internets say...
Among the other creatures that fall into the same league that he could throw into formaldehyde and make his zillions include hyenas and vultures.
The banker happens to be from Merrill - not too sure why this company was the 'chosen' one. After closely studying the price for which this was sold for, I think Sec. Paulson might consider recruiting Mr Hirst into the investment bank bailout team. He seems to have the ability to easily muster ungodly amounts of cash by artfully distorting ninth grade science experiments/exhibits... We need the money - you know...

UPDATE: The Hirst investment banker thing looks like a spoof - like I said above, I did not believe the price, though formaldehyde might be a good medium to put most of the bankers in...

On Powell for Obama

Today the media is drunk on the fact that Gen. Colin Powell has endorsed Sen. Barack Obama's candidacy for the presidency of the U.S. I am not sure if this is that much of a big deal.

Here was one man who could single handedly have prevented the Iraq fiasco. Here was one man who could have asked tougher questions to his boss and his direct reports before he lied to the United Nations (full transcript here) about the State of Iraq amassing WMDs. I remember watching that speech and actually believing him. I had a funny feeling that a highly decorated military man would not stand up in front of the United Nations and spew lies. At the end of that speech, I was thinking that it might be the right move after all - Iraq and Saddam Hussein must indeed be stopped in their tracks.

I also remember a feeling of betrayal that swept across the nation when it was conclusively proved that all the talk of finding stockpiles of yellow cake uranium, WMDs and chemical weapons turned out to be a complete fabrication. Remember vividly…
I am not so sure if this endorsement is such a big deal especially when Sen. Barack Obama actually voted against going to war in Iraq.

Detail from a painting by Winslow Homer (1836 - 1910), 'Sounding Reveille', oil on canvas, 13" X 19", 1865 (image from a Christie's book)

A cartoon from The Harpers magazine...

More of this artist's cartoons here...

Reposting: AFL-CIO's Richard Trumka on Racism and Obama

Poem/Photo

Rider by Mark Irwin

As I carried my mother from the hospital bed
across the room toward the chair by the window,
she played with my gold watch as if it were a toy,
flipping the strap up and down, then singing Giddyup,
Giddyup, but as I looked at her she did not smile
so I nodded my head, snorted, then put a pencil
in my mouth, as bit, and cantered about the room
till I was out of breath, puffing, and she patted me, saying,
Good boy, Good boy, so I pawed the carpet, slobbering a little
like her, as she waved and I nodded my mane
until this was how we said goodbye one spring
while the sun shrank to a white-hot bb among a thousand
others receding in the jeweled, black sky as the rivers
galloped away with her breath through the dark green land.

-- From the current issue of Georgia Review

Details of an orgy

Maureen Dowd on why heads must roll in the orgy of executive excesses that is being played out even as the mortage meltdown unfolds...

Just when we thought executives of A.I.G., the insurance giant bailed out by taxpayers for $123 billion, had been shamed into stopping their post-bailout Marie Antoinette spa treatments, luxury sports suites, Vegas and California posh resort retreats, we were dumbfounded to learn that some A.I.G. execs were cavorting at a lavish shooting party at a British country manor. London’s News of the World sent undercover reporters to hunt down the feckless financiers on their $86,000 partridge hunt as they tromped through the countryside in tweed knickers, and then later as they “slurped fine wine” and feasted on pigeon breast and halibut.
The paper reported that the A.I.G. revelers stayed at Plumber Manor — not the ancestral home of Joe the Plumber, a 17th-century country house in Dorset — and spent $17,500 for food and rooms. The private jet to get there cost another $17,500, and the limos added up to $8,000 more. In an astonishing let-them-eat-cake moment, the A.I.G. big shot Sebastian Preil held court at the bar and told an undercover reporter, “The recession will go on until about 2011, but the shooting was great today and we are relaxing fine.”

On robocalling and smearing your opponent

As Sen. McCain tries 'last ditch' efforts at smearing Sen. Obama through automated robocalls that aim to tie Obama to Ayers, it is instructive to look back to the year 2000 when McCain was running against sitting POTUS George Bush in the primaries and they used automated calls in a vicious campaign to smear each other.

An article from Feb 2000 in the Times here:

Supporters of Mr. McCain reported receiving automated telephone calls in which the recorded voice of the evangelist Pat Robertson urged them to ''protect unborn babies and restore religious freedom'' by opposing Mr. McCain. As he has on his cable television program, Mr. Robertson, a supporter of Mr. Bush, accuses Mr. McCain of having chosen as his national chairman ''a vicious bigot who wrote that conservative Christians in politics are anti-abortion zealots, homophobes and would-be censors.''

Adrienne Karns, who lives in the Detroit suburb of Birmingham, said she received a call at 5:30 this afternoon that issued a ''Catholic voters alert.'' Then, she said, the anonymous voice told her ''that George Bush had gone to Bob Jones University, and Bob Jones University was anti-Catholic, and George Bush was anti-Catholic.'' Then, she continued, ''It said John McCain was pro-Catholic and I should vote for John McCain.''

It is clear that McCain is using the same trashy tactics from 2000 which the Republican vote machine seems to have perfected then. Of course, this time around it does not look like it might work that well (according to this study). Thanks to Marc Ambinder for the link...

Sucker Punch

Andrew Lahde, a hedge fund manager found that his 1 year old fund returned 866% betting against subprime. He quit soon after and this was his goodbye letter. Worth a read.

I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.

Mulling the Kohut/Bradley lacunae

Here, I found a poll telling us that Obama has a 14 point lead over McCain. Yesterday I was driving around our predominantly blue collar town and came across no less than 15 McCain/Palin signs conspicuously stuck in the front lawns. I managed to count exactly 0 Obama/Biden signs. All this in the state of New Jersey which is supposed to be a solidly democratic state. This is a phenomenon that I noticed not just in our town, but towns all over this state. Often times, in the course of this election, we see the overwhelming lead in all the polls mentioned but little enthusiasm in the suburbs and homesteads… I guess it could be that a lot of people actually (inherently) support Barack Obama, but are actually not too happy with wearing it out on their front lawns. They are not too sure what their white neighbors over on the other side might think about them and hence plan to play it by ear. They are just content with going up to the polling booth and expressing their desires in secret.

Or maybe we are all wrong about this thing – the whole lead in the polls… Are these polls actually right? Are people telling us the truth? In this regard, we need to understand two factors that have been poorly quantified into the statistical engines that drive final tallies coming out of these polls: The Bradley effect and the Kohut Lacuna…

The Bradley Effect:

Bradley Effect, named for the black mayor of Los Angeles, Tom Bradley, who lost the California governorship in 1982 despite polls that had showed him in the lead, apparently because a small percentage of respondents would rather lie to a pollster than admit to opposing a candidate on the ground of his race.

The Kohut Lacuna:

Andrew Kohut, of the Pew Research Center, published an Op-Ed in the Times about the failure of polls to predict the outcome of a primary in New Hampshire between Clinton and Obama. He had a theory: undetected racism among working-class whites. Clinton, he noted, beat Obama among whites with family incomes under fifty thousand dollars and also among those who hadn’t attended college. “Poorer, less well-educated white people refuse surveys more often than affluent, better-educated whites,” Kohut wrote. “Polls generally adjust their samples for this tendency. But here’s the problem: these whites who do not respond to surveys tend to have more unfavorable views of blacks than respondents who do the interviews.”

On top of the effects of respondents lying to pollsters, it also looks like poorer, less well-educated voters are less likely to agree to answer the questions posed.

Looking at these polls and hearing the chest thumping from various democratic leaning blogs, I fervently hope that people are not lying to the pollster and poorer, less educated people know that they need to vote with their interests of self preservation at heart.

Look, I know that Obama is a politician and there is only so much we could actually expect from politicians. Remember the adage, politics makes for strange bedfellows… But the effort and the sincerity behind Obama’s ideas for propping up the middle class and the fact that he actually mentions that health care is a right to be enjoyed by all citizens should make the poorer, less educated whites think again and disprove the Kohuts and Bradley’s.

The pictures above depict the watercolor paintings of dead birds by artist Noel Grunwaldt. She is currently on with her first solo show at the Stellan Holm Gallery in Chelsea. The show runs from Sept 12 - Oct 25. She has an MA in Studio Arts from SUNY Albany and lives and works in upstate NY.

A Kafkaesque plumbing problem

After all the brouhaha about Joe the plumber, we find out that he is not a plumber, is behind on his taxes, is not an undecided voter, is not properly registered to vote and to cap it off, is not even named Joe! If this does not illustrate the thin ice the McCain presidential campaign is skating on, nothing more will.

Shameless self promotion

I am very excited to tell you that some of my most recent paintings made it through a peer review process over at UGallery and are on sale at their site here.

You have to click on the paintings to get to the details. So, all of you with the greenbacks to buy some good art, this is your chance to contribute generously... Go on and buy. Don't be shy. ;-)

Plumbing the depths using Joe the Plumber

Yesterday, Sen. McCain mentioned ‘Joe the Plumber’ 21 times at the debates. Apparently, Joe is some rich plumber in Ohio who happened to tell Obama that his plumbing business is set to make more than $250,000 a year and Obama’s tax policies might hit the business hard.

Big deal! Maybe Joe Plumber needs to get a couple of facts straight.

Only 2% of all households in these United States make more than $250,000 a year. That leaves 98% of all households below the $250,000 limit. The median income of all households in the United States is about $50,000. The tax policy proposed by Obama will only hit people making more than five times the median income = 2% of the population!

So, yesterday it was clear that Sen. McCain was speaking to the richest 2% of the people in the United States.

My response is this: If Joe the Plumber was asked to pay a little more taxes, suck it up and pay. You owe it to the people. The BS about trickle down or free market or laissez faire have not worked. A quick look at executive compensation and income disparities in the United States will tell you that. We need sensible policies that will give the 98% a chance.

Well, the machinations of the Jonah McPalin campaign have produced a motley cast of characters. Last week Gov. Palin gave us Joe Six-pack, this week Sen. McCain introduced us to Joe Plumber. Who know, next week we might need to get ready for Joe the Lyncher.


This ad from the Obama campaign tells us of the percentage of times McCain voted with Bush. In McCain's own words!!

Debate reaction

Yesterday's debate followed the same format as the last two McCain/Obama debates. So much so that I will use the same words that I used to describe the last debate - because it fit the bill this time too...

Watching the debates yesterday, I noticed a wheezing, breathless, cantankerous old man barely managing to latch onto questions and mounting vapid combative responses at the debate yesterday.

No doubts, Obama won. Of course, this time, McCain anger and frustration were on full display. Say it ain't so, Joe Plumber...

Jon Stewart sums up the continuously spinning McCain conundrum with this hilarious take on last weeks events.

The TED spread is moving up and the 3 month US treasury's are lower this morning... Not a good thing...

Poem/Photo

You'er Alone the Swift Cried

You'er alone the swift cried
wringing out a wonderful dive
on the azure coast
remember it for yourself
like a cork shot
from a champagne bottle
you're someone important
the violin sang
someone like me
only bady tuned
you're silent
and dry
whispered the letter
the paper
you have to beware
of fireworks.

--- Translated from the Polish by Wayne Miller and Katarzyna Komorowska. From Volume 25 Number 1, 2005 edition of the Pleiades magazine

Stark white chronicles

The stark whiteness of the McCain campaign is undeniable. Every once in a while it spills its creamy guts out in public… This bit is both sad and funny from the weekend Times…

There are indeed so few people of color at McCain events that a black senior writer from The Tallahassee Democrat was mistakenly ejected by the Secret Service from a campaign rally in Panama City in August, even though he was standing with other reporters and showed his credentials. His only apparent infraction was to look glaringly out of place.

Jay Leno featured Wanda Sykes recently and she had this to say on the bailout. She tells it like it is – a bailout for the rich and a sucker punch for the rest of us.

What the repackaged bailout really means...

Yesterday, Mr. Paulson in his infinite wisdom decided that we are going to scrap the original plan to buy distressed, toxic assets from banks and instead decided to invest about 250 billion directly into some select banks and financial institutions. The plan is to take an equity stake in the banks thus guaranteeing the taxpayer that we will see some kind of a return on the investment. In case none of these banks fail, the taxpayer will see a return on the investment. What was conspicuously absent in the plan was any form of regulatory framework, compensation ceilings or change in management teams.

If I were to explain in laymans terms what this kabuki play of a handout from the Treasury's perspective, this is what it might look like:

"Banks, here is an investment of taxpayer money that Secretary Paulson would like to make in your company. You were singled out just because of the fact that I know some of the CEO’s personally, you are a 'leading financial institution' and if I may use euphemistic phrases, ‘you are too big to fail’. You may take this money and do what you like. If you profit from our investment, the taxpayer gets a part of the profits. If you go under, I will just count this as a bad investment gone awry. Either way, you are free to do exactly what you did for the last 10 years leading up to the bubble and you are free to carry on doing the same thing - we really do not care. What this really means to the bottom line is that way you will be able to continue your high risk bets in overleveraged financial instruments that has become your de-facto business model, your stupendous compensation packages that the CEO's and the board have gotten used to and you get to keep your current management board that got us into this mess. Go ahead, let the good times roll!!"

This looks increasingly like a very wealthy investor indulging in high stakes investments in large blue chip companies.

OK, all this sounds very, very interesting, but what about that homeowner who is being foreclosed?

Oh, that individual. Hmm… Well, they need to fend for themselves. Hey, this is the free market.

Subconcious associations

A study about how people might subconsciously link being American with being white...

On a conscious level, the participants had no trouble identifying Obama and Clinton as American, and Blair as a foreigner. But Devos and Ma found that the subconscious associations mattered: People who were slower to see Obama as American on a subconscious level were less likely to be willing to vote for the senator from Illinois than people who more easily associated him with American symbols. This was true of both Republicans and Democrats.

You could take an implicit association test here.

I am happy for Paul Krugman on winning the Nobel. Here is a little bit of a writeup on how he works (little bit of philosophy thrown in)...

Simplify, simplify: Fortunately, there is a strategy that does double duty: it both helps you keep control of your own insights, and makes those insights accessible to others. The strategy is: always try to express your ideas in the simplest possible model. The act of stripping down to this minimalist model will force you to get to the essence of what you are trying to say (and will also make obvious to you those situations in which you actually have nothing to say). And this minimalist model will then be easy to explain to other economists as well.

Weekend Pictures

Martin Luther King recalling when he first became painfully aware of prejudice:

When I was 14, I had travelled from Atlanta to Dublin, Georgia, with a dear teacher of mine, Mrs. Bradley; she's dead now. I had participated there in a oratorial contest sponsored by the Negro Elks. It turned out to be a memorable day, for I had succeeded in winning the contest. My subject, I recall, ironically enough, was "The Negro and the Constitution." Anyway, that night Mrs. Bradley and I were on a bus returning to Atlanta, and at a small town along the way some white passengers boarded the bus, and the white driver ordered us to get up and give the whites our seats. We didn't move quickly enough to suit him; so began cursing us, calling us "black sons of bitches." I intended to stay right in the seat, but Mrs. Bradley finally urged me up, saying we had to obey the law. And so we stood up in the aisle for the 90 miles to Atlanta. That night will never leave my memory. It was the angriest I have ever been in my life.

- published in a Jan 65' Playboy interview with Martin Luther King.

Readers,

This blog turned two years old today. I wanted to take this opportunity and thank each one of you who come here on a daily basis (numbering about 300 a day) and make it worth my while. Please keep coming. Thank you once again.

An Alaska state investigation concluded yesterday that Gov. Sarah Palin abused her power as Alaska's governor and violated state ethics laws. Full report here (pdf).

McCain's family values...

The real story of John McCain III here in this month's Rolling Stone magazine...

On the reasons behind going on a 'study' trip to Rio:

On the grounds between the two brick colleges, the chitchat between the scion of four-star admirals and the son of a prizefighter turns to their academic travels; both colleges sponsor a trip abroad for young officers to network with military and political leaders in a distant corner of the globe.

"I'm going to the Middle East," Dramesi says. "Turkey, Kuwait, Lebanon, Iran."

"Why are you going to the Middle East?" McCain asks, dismissively.

"It's a place we're probably going to have some problems," Dramesi says."Why? Where are you going to, John?"

"Oh, I'm going to Rio."

"What the hell are you going to Rio for?"

McCain, a married father of three, shrugs."I got a better chance of getting laid.".

On how he met his second wife:

In the spring of 1979, while conducting official business for the Navy, the still-married McCain encountered Cindy Lou Hensley, a willowy former cheerleader for USC. Mutually smitten, the two lied to each other about their ages. The 24-year-old Hensley became 27; the 42-year-old McCain became 38. For nearly a year the two carried on a cross-country romance while McCain was still living with Carol: Court documents filed with their divorce proceeding indicate that they "cohabitated as husband and wife" for the first nine months of the affair.

On his anger:

During his 1992 campaign, at the end of a long day, McCain's wife, Cindy, mussed his receding hair and needled him playfully that he was "getting a little thin up there." McCain reportedly blew his top, cutting his wife down with the kind of language that had gotten him hauled into court as a high schooler: "At least I don't plaster on the makeup like a trollop, you cunt." Even though the incident was witnessed by three reporters, the McCain campaign denies it took place.

Edward Winkleman unloads on the McCain/Palin race baiting.

Buckley buckles

I was at lunch today and a colleague told me over the cutlery clashing din on Stone Street that Christopher Buckley, son of the super-arch conservative William F. Buckley endorsed Obama. I really did not believe him, but I got back into work and indeed, there it was...

"This campaign has changed John McCain. It has made him inauthentic. A once-first class temperament has become irascible and snarly; his positions change, and lack coherence; he makes unrealistic promises, such as balancing the federal budget “by the end of my first term.” Who, really, believes that? Then there was the self-dramatizing and feckless suspension of his campaign over the financial crisis. His ninth-inning attack ads are mean-spirited and pointless. And finally, not to belabor it, there was the Palin nomination. What on earth can he have been thinking?"

Black Friday?

I sincerely hope today's selloff will not result in Black Friday.

U.S. stocks shed $872,000,000,000.00 in market value yesterday, $2,500,000,000,000.00 over the last seven days, and $8,400,000,000,000.00 since all-time highs exactly one year ago.

This video on communication techniques that one can learn from Gov. Sarah Palin's style is hilarious. It may not be suitable for viewing at work though...

Friday poem/photo

What Beauty Knows About Itself by Chard deNiord

That it is a genius in its diversity and therefore ruthless.
That it is not enough in the end to hold the beloved,
although it seems to be at first, more than seems.
That it hosts a worm that is capable of consuming the heart in a day.
That it is perishable, like fruit, if left out too long.
That it needs a sister, like Antigone, to add something essential
to its otherwise cowardly character.
That it is transcendent form, criminal catalyst.
That it might as well be motherless since death is its mother.
That it fades much quicker than it appears.

From the Antioch Review Fall 2007 Volume 65, Number 4

Sorry, could not resist ripping this from the latest New Yorker...

Strangely, the government might be the solution...

On reading the following piece of news, that the next time the mavericky people tell me that government is the problem and not the solution, I might have to politely tell them that they suffer from an extreme state of delusion and might need checking into the nearest mental institution...

Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials. Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

First, they tried bailing out individual companies, then they tried a large scale 700 billion dollar bailout, then they tied lending to the banks directly, then they tried buying up short term commercial paper. The latest today is to take up ownership stakes in large banks directly. This might just work. This will give the taxpayers a larger stake in the game, might actually produce return on taxpayer monies invested rather than the previous ideas that were designed purely with the private enterprise in mind. Yes, the ownership stakes idea put out by the Treasury might work, but the downstream effects of locked up credit markets will be long drawn.

The caller on NPR this morning had a term for the current crisis where one is witnessing stocks, wealth and capital simply vanish into thin air so quickly: He called it ‘evaporational exuberance’.

Below the belt

First they tried the elitist track, then the inexperienced track - neither really seemed to stick to Obama's public perceptions. This was especially when his opponent, Sen. McCain was seen to be the ultimate elitist and the years of McCain's experience in the Senate seems to have come to nought. Now desperate, they are trying the terrorist track.

In this video here, Obama says it like it is and explains the facts (in his words). Essentially, he tells us that he sat on the same school board with an individual who did some bad things when Obama was 8 years old. Yes, when Obama was 8 years old.

Ayers is a guy who engaged in some despicable acts forty years ago when I was 8 years old. By the time I met him 10 or 15 years ago he was a college Professor of Education at the University of Illinois and we served on a school reform board together. A board by the way that was funded by Walter Annenberg who had been an ambassador and close friend of Ronald Regan's. So, I have talked to him about school reform issues, and the notion that somehow he has been involved in my campaign, that he has been advisor of mine, that I have palled around with a terrorist, all these statements are made simply to try to score cheap political points. You know, look, I can handle these attacks with the remaining four weeks, but it is certainly not serving our democracy. We need to be having a debate about how we are going to yank ourselves out of a very difficult situation and that is what I am going to spend my time talking about...

Gail Collins of the Times analyzes the Ayers connection to Obama and warns us of the slippery slope the nation will go down as the McCain camp rolls out the 'guilt by perceived association' strategy.

When I was a teenager, Charles Keating came to my Catholic girls high school in Cincinnati in his capacity as the founder of Citizens for Decent Literature, an anti-pornography group. His theme was the evil of wearing shorts in the summertime. Keating said he knew a young mother who took her child for a walk while wearing Bermuda shorts. A motorist, overwhelmed with lust at the sight of the back of her uncovered calves, lost control of his car and slammed into them. Everybody was killed, and it was all her fault. We were then asked to sign pledge cards promising to conform to standards of modesty that would have satisfied the Taliban.
If Barack Obama is responsible for the Weather Underground, and if the mother in Bermuda shorts was responsible for the car crash, I am pretty sure that I am on the hook as well.

Not good

The dow dropped 600 today. Not a good sign...

The quadrillion dollar derivative market and how one woman tried unsuccessfully to regulate it

The Times had a great article about how a lady chairing the Commodity Futures Trading Commission (CFTC) ten years ago was thwarted by the all knowing Mr. Greenspan in her attempts at bringing greater regulatory authority over options, swaps and futures (derivative instruments). These are the very instruments that led to our current global financial meltdown. The value of these instruments have ballooned from about $100 trillion six years ago to $0.5 quadrillion dollars (yes, quadrillion – I did not make it up). When people say that the bailout amounts ($700 billion) proposed is just a drop in the bucket, they are absolutely right...

In 1997, the CFTC, a federal agency that regulates options and futures trading, began exploring derivatives regulation. The commission, then led by a lawyer named Brooksley Born, invited comments about how best to oversee certain derivatives. Born was concerned that unfettered, opaque trading could "threaten our regulated markets or, indeed, our economy without any federal agency knowing about it," she said in Congressional testimony. She called for greater disclosure of trades and reserves to cushion against losses.

Born's views incited fierce opposition from Greenspan and Robert Rubin, the Treasury secretary then. Treasury lawyers concluded that merely discussing new rules threatened the derivatives market. Greenspan warned that too many rules would damage Wall Street, prompting traders to take their business overseas.

"Greenspan told Brooksley that she essentially didn't know what she was doing and she'd cause a financial crisis," said Michael Greenberger, who was a senior director at the commission. "Brooksley was this woman who was not playing tennis with these guys and not having lunch with these guys. There was a little bit of the feeling that this woman was not of Wall Street."

This summer, the Bank for International Settlements, estimated that the face value of derivatives floating around the world is $1.14 quadrillion. That is $1,140,000,000,000,000.00. The breakup was distributed between $548 trillion in listed derivatives or traded on organized exchanges and $596 trillion under over-the-counter derivatives that were basically unregulated and unmonitored.

Maybe Mr. Greenspan should have listened to that little lady warning him then in 1997. Maybe, but hey, she would not play tennis with the guys nor have lunch with the guys... How can such a lady give credible advice? It also does not help that Greenspan was an avid follower of that libertarian cheerleader Ms. Ayn Rand.

Meanwhile, the National Debt Clock in midtown Manhattan has run out of digits to record the growing debt.

Lighter note

A video library of Gov. Palin's greatest hits that feature a witch doctor blessing her to visions of Putin rearing his head over the US airspace. The potential for this kind of stuff from the wrinkle/wink team is astounding considering that the wrinkle and the wink were anointed as a team just a couple of months ago...

Will the real McCain please stand up?

About a year back, McCain said that homeowners were responsible for their own futures and they were primarily to blame for bad investment decisions taken during the purchase of their homes. Yesterday, McCain proposed a $300 billion bailout for homeowners and a sketchy plan for buying up distressed mortgages. So, he is now for government backed spending before he was against it?

A couple of weeks back McCain said that the fundamentals of the economy were strong. That same day in the afternoon he said that the economy is on the brink of a collapse. He flip flopped from being a believer in the strength of our economy before he came against it in the same day! All of his life, McCain has been a deregulator and believer in the fundamentally flawed assumption that the free markets know best. Now he is an ardent supporter of tightly regulated markets. Which one does he really believe in? I think there is a clear credibility problem.

While he is busy abandoning the 'free markets know best' principle by the wayside as it starts to become an inappropriate calling card, he is planning on reviving the same failed principles to our health care. He plans on forking out $2500 to individual Americans per year hoping that this is going to cover the rising individual healthcare costs. Added to the healthcare proposal are plans on deregulating the entire health care industry. Now that we have failed utterly with the deregulation of the financial services industry, let us try and apply the same failed deregulation policies to our health. Will the real McCain please stand up?

Watching the debates yesterday, I noticed a wheezing, breathless, cantankerous old man barely managing to latch onto questions and mounting vapid combative responses at the debate yesterday. Maybe this is the real McCain.

Oh, I forgot to add. It was clear that Obama won the debate.

Quick reaction to the debates

Knee jerk reaction to the second debate between would be Presidents:
McCain refers to Barack Obama as 'That one'. It is borderline racist! As far as I know, 'that' refers to inanimate objects/things. Andrew Sullivan has it here. As is his style, McCain seemed to come off as condescending and uppity (multiple times).

Image ripped from here.

Pitiful Pitbull

Keith Olberman’s on-screen kinetic energy is a bit too much for me to handle, but his convincing rebuttal yesterday of Gov. Sarah 'pitbull' Palin’s insinuation that Sen. Obama is pallin’ around with terrorists (it does not get more desperate that that) is worth the ten minutes.

How we got here.

Link that explains how we got into this financial mess.

Meanwhile, we might see an emergency rate cut. Desperate measures, but pumping more money into the system may be a recipe towards postponing disaster.

Mavericky behavior alert!

The Federal Reserve Board announced today the creation of the Commercial Paper Funding Facility (CPFF), to help provide money to large corporations and companies. Fed officials didn't say how much commercial paper, which hundreds of companies use to finance payrolls and meet other cash needs, it plans to purchase. The program will continue to run till April 30, 2009.

A bottomless cash withdrawal mechanism, I betcha'.

The Federal Reserve said yesterday that it would start to pay interest on bank deposits for the first time and double its auctions of cash to banks to as much as $900 billion by year-end.

These two moves are over and above the $700,000,000,000.00 bailout.

Say it ain't so, but 1 million Joe six-pack Americans lost homes over the last two years and another million will lose their homes over the next 12 months. I am yet to see a single coordinated initiative on their behalf.

Meanwhile, life goes on as usual for the million dollar bonus CEO's as is evident from this report:

Less than a week after the federal government offered an $85 billion bailout to insurance giant AIG, the company held a week-long retreat for its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running up a tab of $440,000. The executives spent $200,000 for rooms, $150,000 for meals and $23,000 for the spa.

Flawed on many levels

Below are four news snippets that have hidden issues associated with the $700,000,000,000.00 bailout in the papers today: The first smacks of 'inbred nepotism', the second an instance of 'the fox guarding the henhouse', the third reeks of 'siphoning public cash to the CEOs' whilst the fourth talks about 'a clear conflict of interest'.

• The Treasury Department said that it would soon post help-wanted ads on its Web site for asset managers to run the bailout program and that because of the urgency, the hiring may be “through other than full and open competition.”
• Former Goldman Sachs employee, Neel Kashkari has been appointed the bailout czar and will lead the bailout. By the way, a useful way to pronounce this Indian last name is ‘Cash Carry’ per Michelle. Fitting indeed.
• Under a proposal being discussed with the Treasury Department, the Fed could buy vast amounts of the unsecured short-term debt that companies rely on to finance their day-to-day activities. The move would put more taxpayer dollars at risk. Buying commercial paper could open the Fed to difficult conflicts of interest, because it would be juggling the goals of protecting its investment portfolio with its traditional goals of promoting stable prices and low unemployment.
• Administration officials plan to outsource almost the entire bailout effort, which will largely rely on “reverse auctions” in which the government accepts bids from financial institutions that want to sell their troubled assets. The Treasury is accepting bids only from experienced investment managers, almost all of which are likely to be either sellers or buyers of mortgage-backed securities.

Is it any wonder that the economy is in shambles? Meanwhile, the presidential candidates seem to be busy launching personal attacks at each other. Nero fiddles while... The bailout looks more and more like a big 'up yours' neon sign out of D.C.

Photos of Kwang-Young Chun's mulberry paper on small polystyrene form sculptures at the Robert Miller Gallery (exhibition on from Sept 4 - Oct 11)

John McCain and Keating Five: A documentary

From here: The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators, Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ), and Donald W. Riegle (D-MI), were accused of improperly intervening in 1987 on behalf of Charles H. Keating, Jr., chairman of the Lincoln Savings and Loan Association, which was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB). The FHLBB subsequently backed off taking action against Lincoln.

Painting Post

'Moksha II', Oil on canvas, 88" X 84", 2008

Continuing the series of paintings started here, I completed this last night. This took about three weeks to complete. I used a deep cadmium red hue and it seemed to contrast and overlay well over the un-stretched, non-gessoed canvas. I liked it.

Priceless! VP debate on SNL

Link here. Really worth a watch.

In a very telling comment yesterday, Palin called Afghanistan, our neighboring country.

“They are also building schools for the Afghan children so that there is hope and opportunity in our neighboring country of Afghanistan,” she told several hundred supporters at a fundraising event in San Francisco.

Fox guarding the henhouse alert...

From here:

Ed Forst, a former Goldman Sachs executive was hired by Paulson to head the bailout transition team. He started work last week and is charged with helping establish the new Office of Financial Stability. Treasury Secretary Henry Paulson is hiring as many as 10 asset-management companies to join the lawyers and bankers he is recruiting to kickstart the government's new $700 billion bank-rescue program.

AFL-CIO Treasurer Richard Trumka on Obama

My mother was a factory worker.

Feeding on the remains..

Well, now that the $700,000,000,000.00 bailout has passed, the vultures on Wall Street can move in... Here is a precursor to what we will see. In short, a feeding frenzy.

From here.

The U.S. Treasury hired State Street Bank and Trust Co. and Barclays PLC to manage its mortgage-backed securities purchase program announced last month. The Treasury hired the firms on two-year contracts that can be extended for up to three more years, the department said today in Washington. Barclays and State Street will receive fees of 3 basis points for the first $5 billion in assets under management, or a potential total of $1.5 million. They get 2 basis points on the next $5 billion, and 1 basis point on assets above $10 billion.

For Main Street homeowners facing foreclosures who saw little relief in the bill, here is a way out of the toxic mess:

Fannie Mae said it will set aside the loan of a woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home. Fannie Mae foreclosed on the Akron, Ohio, home of Addie Polk, 90, after acquiring the mortgage in 2007. Addie Polk, 90, of Akron, Ohio, became a symbol of the nation's home mortgage crisis when she was hospitalized after shooting herself at least twice in the upper body day before yesterday afternoon.

Cow patty with marshmallows and pork lard - Part deux

Michelle Malkin is liveblogging the latest attempt to pass the cow patty with marshmallows bailout bill (the Senate seems to have added lots of pork lard to the stinking concoction).

Rep. Jeb Hensarling talking about the bailout in the floor of the House today:

“I fear that the legislation before us still remains more of a bailout than a work out. I fear it undermines the ethic of personal responsibility. I fear that it rewards bad behavior and punishes good. But my greatest fear is that it changes the role of the federal government in our free market economy, which despite its current problems, remains the envy of the world. How can we have capitalism on the way up and socialism on the way down? If we lose our ability to fail will we not in turn lose our ability to succeed? If Congress bails out some firms and sectors, how can it say no to others?

We must be very careful as we address this financial crisis to ensure that any short-term gain does not come at the cost of even greater long-term pain – that being the slippery slope to socialism. The thought of my children growing up in America with less freedom and less opportunity is a long-term pain I cannot bear. Therefore, I will again vote ‘no’ on this legislation. And as I told my colleagues before the last vote, when I cast my ‘no’ vote, I will cast it with some doubt.

"You can breed the pigs and buy the corn and get on; You can raise the corn and buy the pigs and get on; If you buy the corn and buy the pigs to feed, you haven't got a chance; But if you breed the pigs and raise the corn you'll make money." - Louis Bromfield

On yesterday's debate - II

After reading my previous post on the debate last night, a reader wrote this in... I could not have said it better...

Since when is it the American standard for our top leaders to be like us? Shouldn’t they be exceptional? Why can’t we demand people who can answer the questions they’re asked articulately, people who live by the rules they impose on others and lead by example? Why do we want someone who could have a cup of coffee with us at a soccer game?

I just find it entirely frightening that Palin could be president, and doesn’t know anything about the country, our issues, international relations, or even thinking on her feet. And I remain resentful of the notion that because I voted for Clinton in the primaries, I’d vote for Palin now, regardless of an entirely opposite worldview.

So – I feel pretty strongly about her, if you couldn’t tell. I thought Biden did well, but definitely had to pull some punches or he’d be seen as patronizing. I would have liked for him to have torn her apart, but that would’ve been politically disastrous.

On yesterday's debate

If yesterday's debate was a contest on who could appear folksier, homely and cutesy then Gov. Sarah Palin hit the ball out of the park. Of course, that is not what debates that help us choose leaders for our nation are about - or is it? With nowhere to go but upwards, she did not have a meltdown that most predicted. In fact, she came off as very articulate, very clear and lucid on every answer - except that her responses were not really answers to the questions posed. She managed to go off tangent to just about any and every question asked of her on policy, healthcare, Iraq and domestic affairs. She also relied on this strange circular logic where on the one hand she said that Sen. McCain will enforce strict governmental oversight while in a retort right after said that government is the problem and needs to get out of the way… One cannot have it both ways!
When did expectations sink so low that when reactions the next day are 'Thank god she did not embarrass us' became the standard to judge vice presidential candidates?

Sen. Biden on the other hand was fairly calm and collected with his answers. His answers were more direct and to the point and he managed to produce pertinent answers to questions asked of him. In particular, I was shocked by the following factoid ‘we have spent more money -- we spend more money in three weeks on combat in Iraq than we spent on the entirety of the last seven years that we have been in Afghanistan building that country’. I have not fact checked this, but if true is simply an astounding example of misguided leadership. Of course, expectations that his answers would be long winded, empty and airy were not fulfilled. Here again we breathed a sigh of relief and said, ‘Thank god, he did not shame the campaign with his gaffes’. Of course, he was definitely, very definitely more Presidential of the two and handily won the debate.

In our fervent prayers that candidates scrape by and not embarrass themselves, we are lowering the bar for ourselves in general and for the country at large.

In keeping with her style, Palinesque moments that had a 'Kouric interview' feel to them abounded - some of them here:

• “Nuclear weaponry, of course, would be the be all, end all of just too many people in too many parts of our planet” – magnetic poetry alert.
• “The reason we don't read about Afghanistan anymore in the paper, it's succeeded.” – the last I checked there was a growing Taliban insurgency in Afghanistan slowing winding its way into Pakistan.
• “As we discuss ANWR there, at least we can agree to disagree on that one. I will keep pushing him on ANWR” – I have no idea what she meant here…

Full transcript here.

On today's Vice-Presidential debates

Gov. Sarah 'pitbull' Palin will debate Sen. Joe 'gaffe' Biden tonight. Ms. Palin is someone who took the national stage at the Republican National Committee a month back and derided individuals involved in community organizing and community service. She is someone who makes sure women are made to pay for rape kits after they file a rape report. The list goes on – there is no need to repeat it here… Of course, with the loquacious Joe Biden’s ‘let me ramble on’ demeanor juxtaposed alongside Sarah’s ‘short on substance’ rants (of late especially), it promises to be an interesting evening.

At this point, short of Ms. Palin actually passing out or throwing up on the podium, her handlers have lowered expectations so much that all she has to do is remain mum through the whole debate and she will be declared winner…

This was her recent response when asked about the newspapers she reads: “Um... all of 'em... any of 'em that... um.. have been in front of me over all these years... um...”
Biden is not too far behind. Just last week Biden told us that Franklin D. Roosevelt had appeared on TV to explain the market crash of 1929. The problem with that statement was that Herbert Hoover was president at that time and television did not start appearing in American homes until years after.

I forgot to mention, among her moderate list of accomplishments, pathological lying is under-reported but does stand out prominently. Her list of lies keep growing (see Andrew Sullivan’s list of 15 absolute lies told by her here). I am almost inclined to say, let the best person win, but in this case, I am sure that Palin’esque politics might not be the best for us at this stage. As someone was joking the other day, while her boss Mr. McCain might suffer from incontinence, she seems to suffer from a different malady - incompetence...

Bailouts and excise taxes for wooden arrows designed for children

From a three page 'give all ye have to King Henry' bill to a 451 page bailout behemoth (pdf) - the bailout proposal has come a long way and is being voted in the Senate tonight. I am actually tired of laying out its defects (I laid it out here, here and here). As reported by dealbreaker first, the section on excise tax for certain wooden arrows designed for use by children in the bill makes no sense. No, I am not kidding. If you go to page 300 and 301 of the bailout bill you will find it. Indications are that this is going to pass - warts and all.

Bailout angst on Wall Street continues - pictures

Stepping outside for lunch, one is greeted nowadays by signs that seem to exude a labor union type dispute in a factory setting. It was funny to see Main Street collide with robotic pin striped suits strutting around Wall Street...

An intrepid man and woman team from dirtymoney.com managed to climb up a couple of flagpoles behind the iconic bull in Lower Manhattan and plant an American flag with the words FORECLOSED? emblazoned on it. They seem to have climbed the narrow poles using makeshift harnesses and cords. Impressive and dangerous, I must say. The scene below them was fairly chaotic with at least a hundred police officers and emergency workers looking to find some way to coax them down the poles.

It was an interesting scene - a busload of fairly clueless Oriental tourists somehow descended from nowhere and added to the general pandemonium.

Finally, the guy gets off the pole after about a half hour. He was greeted by the waiting arms of the officers who were fairly helpless in dissuading him earlier...

He was promptly read his rights and handcuffed and whisked away. His lady compatriot had scaled down earlier and faced a similar fate.

Meanwhile at a building overlooking the Stock Exchange, an enterprising group of young women decided to don these masks and placards around their necks with the words 'Greed Kills'.

I thought the most interesting part of the afternoon was this old individual casually resting against a trash can with his flute enjoying his dulcet production while the girls were protesting with their death masks above him. He seemed to be out of the whole system - in his own world..

Two links

For the policy wonks, here is a Brookings institution guide on fixing the financial quagmire that talks about longer term fix's to the economy and ideas for a better regulatory framework. Both of which are absent from the current bailout plan that the Senate hope to vote on this evening...

The report gives examples of how the following high level recommendations that actually could create a better regulatory system to prevent such a quagmire from occurring in the future.

First, financial instruments and institutions should be more transparent. Second, financial institutions should be less leveraged and more liquid. Third, financial institutions should be supervised more effectively, with greater regard for systemic risks.

Wow, this is the second time I seen the word quagmire being used to describe a set of catastrophic global events that have happened over the last six years. The first being Iraq...

Crude, How Wall Street is screwing America: A cogent explanation of how we came to $4/gallon oil and the eminent contributions of Mr. Clinton and the current POTUS. Of how actual regulation was whittled away slowly but surely to create a feeding orgy for commodities traders on Wall Street and of how the word ‘stay-cation’ became suddenly popular.

In stark opposition to the oil crisis of the 1970s that left Washington in a state of panic and Americans lined up at the gas pumps, the seeds of the current condition may well have been planted not in the Middle East by the OPEC nations, but right here at home, by the very lawmakers now scrambling to undo what they set in motion.

oil is going down. Has India and China dramatically cut back? Nothing has changed and, in fact, the supply-demand factor has probably gotten worse because of Russia's aggression [and] the severe weather, but oil is sinking, sinking, sinking. How can that possibly be?"

Preventing another Bremer disbanding in Iraq

Even if McCain credits the violence reduction in Iraq to the ‘surge’ (supposedly his creation where we bolster American forces on the ground in Iraq with additional forces until stability was reached), it is clear that the current lull in violence in Iraq was due to a combination of forces at play. The surge was one of them. The other forces at play were the creation of a volunteer army called the Sunni Awakening and a truce agreement by Moqtada al-Sadr. These disparate forces fortuitously came together at about the same time helping restore a relative calm which has prevailed for the last 8 – 10 months. McCain uses this to his political advantage, but that is another story.

Of course, the Sunni Awakening involved the United States paying $300 per month per person to about 100,000 Sunni volunteers (many of whom are former insurgents themselves who fought and killed American forces) to take up arms against the Al Queda.

Today, October 1st, the program to pay, train, coordinate and manage the armed Sunni volunteers will shift from our hands to the Shiite controlled Iraqi authorities – to the hands of the interim government of Iraq.

The following statement by the government of Iraq is cause for extreme alarm (from here):

Baghdad has said 20 percent of them would be absorbed into the country's security forces and that most of the remainder would be considered for civilian jobs.

It may not a wise decision to lay off about 80,000 volunteers telling them that they would be ‘considered’ for future civilian positions. One of the main reasons for the civil war quagmire that we were in can be easily traced back to a flawed decision in 2003 by the interim administrator for Iraq. Paul Bremer’s decided on a whim that it is in Iraq’s best interests to disband an entire standing Iraqi army, it’s civilian Baath party based government and the police force and start from scratch. Elements of the civilian and military population (armed to the teeth) left over from that fateful Bremer purge were absorbed into a still fomenting insurgency helping fan its flames higher and wider. The rest was history variously described as quagmire and chaos.

My fear is that this strange decision by the Iraqi government to absorb just about 20% of the existing armed volunteers of the Sunni Awakening will lead to a repeat of the results seen from the fateful 'Bremer disbanding' – a legion of armed young men out on the streets with little to do, no work to keep them busy and devoid of any real responsibilities.
Guess where they will turn to next. More violence…

Like they say, an idle mind is a devils…

Jodie Carey, Untitled Wall Hanging, Bone, feathers and calico, 108" X 74", 2008. On view at the Daneyal Mahmood Gallery in Chelsea (4 Sept - 11 Oct, 08')