Between Issues Blog by Bernie Reeves

Why Tenure Harms Education

As Ohio State University President Gordon Gee realizes in his recent call to study whether or not tenure should be modified or abolished, a guaranteed job for life for academics annoys most people. This negative feeling has been exacerbated in the last 30 years during the rise of the radical scholars in liberal arts departments in most colleges and universities. Once ensconced in their ivy towers, tenured activists are granted a free ride to propagandize students and make public pronouncements behind the skirts of the university. The Ward Churchill scandal at the University of Colorado is a sadly common example of professors politicizing and poisoning the commonweal.

But it is within academe, out of the glare of the media, that radical scholars do the most damage. In case after case, qualified scholars are either refused tenure or never hired because they do not adhere to the leftist party line. At Duke in the mid-90s, an American History professor – who served in the Army in Vietnam – assumed his academic career was unimpeded, until the agit-prop started to deny tenure.

Radical professors set out to destroy him with innuendo, whispering that he was chauvinist, racist, homophobic and imperialistic – the code words that strike fear in university administrators. There was no proof he was any of these labels, but the damage to his reputation was becoming permanent as the drums grew louder. The professor picked up on the slander and decided to accept a position offered from the University of Kentucky to remove himself from the machinations of the Duke apparat.

Undeterred, the radical scholars intensified and transferred their campaign to Kentucky. With anonymous phone calls and unsigned letters, they mobilized their comrades in the Blue Grass state to vilify the professor. The president of the University of Kentucky capitulated and the job offer was withdrawn. The professor finally found a position at West Point.

Running off scholars they don’t like advances the cause of the radical scholars, but even more effective is the campaign to block potential heretics from entering the teaching ranks at all. This happened to a Harvard history genius who earned his PhD at UK’s Cambridge University (where, by the way, there is no tenure), making him imminently qualified with enviable credentials. He applied to Georgetown and the Air Force Academy for an entrance level teaching job, only to be told he “just wouldn’t fit in” - the euphemism adopted by the radical scholars that actually means you are not one of us. He now teaches at Marine University, and two schools lost the services of one of the country’s top military scholars.

Duke has allegedly weeded out some of the most pernicious of the radical scholars that infiltrated the school in the 80s and 90s – including the notorious radical Stanley Fish. But during the Duke Lacrosse incident, a group from the remaining leftist culprits publically attempted to destroy the reputation of the five team members by signing a newspaper ad as part of the now discredited Group of 88 that allegedly represented the views of the Duke academic family. Thus, despite the effort at cleansing, it is clear the school remains stuck with a phalanx of politically correct, socialist professors who hide behind tenure to affect university and public policy.

Professors are realizing the radical scholars are jeopardizing their cozy life sinecures, but it could be too late. The public is outraged at their antics and appalled that graduates from top-tier schools are functionally ignorant of the world around them. Instead, they have been inculcated with warmed-over anti-American and Marxist platitudes due to the intrigues of the radical – and often tenured – scholars who still hold sway in the liberal arts.

Gordon Gee’s courage to broach the subject is commendable. However, he does not mention the concept of tenure reaches deep into academic establishment to public school teachers. In my home state, a teacher is automatically extended tenure after only three years on the job. It is nearly impossible to remove bad teachers; and good teachers lessen their standards to accommodate their often vociferous co-workers to protect themselves from attack.

No wonder teacher unions have enormous sway. The mediocre gravitate to solidarity to mask their incompetence. And teacher unions are rarely interested in improving academic performance, instead focusing on legislative lobbying to increase salaries and benefits totally unrelated to educating kids

Steve Forbes For President?

There is a huge demand for health services and health insurance. Whenever demand is high, democratic capitalism stokes into gear and provides product. And customers receive the best bang for the buck as providers compete.

So why are we allowing government control of health care services and insurance when the market plainly calls for competitive capitalism, asked former presidential candidate and magazine editor Steve Forbes in a recent stop to promote his new book: How Capitalism Will Save US, co-written with journalist Elizabeth Ames.

Forbes is more animated today than during his presidential campaign, and well he should be as the economic meltdown under Barack Obama dramatizes his key issue: capitalism is the answer to prosperity, as stated in the subtitle of his new book – Why Free People and Free Markets Are the Best Answer in Today’s Economy.

Forbes is astonished that, 20 years after the Reagan Revolution, “neo-socialism” has replaced democratic capitalism as the mantra for the US economy. Forbes forcefully maintains it is time for another Reagan to tear down the wall of Obama’s command economy policies as we did Soviet communism. As an example, Forbes relates that if the huge demand for cell phones had been parked under the provenance of government, we’d be talking on inefficient, bread-box sized contraptions rather than slim and lightweight instruments that can connect even Third World citizens to satellites that instantly direct callers worldwide and to Internet sites and GPS coordinates.

Health care and insurance are certain to remain costly and inefficient under government control. Forbes points out the appalling inefficiencies of Medicare and Medicaid that exemplify government run health programs. He points out that the ridiculous prohibition preventing inter-state commerce in health insurance, stating that annual fees for an average customer in New Jersey are twice as high than in nearby Pennsylvania. There again, government regulation stifles free market competition – and affordable rates.

The new book ranges across all the hot spots of economic activity and reiterates the campaign plank that gave Forbes traction: the Flat Tax. As GDP declines in an atmosphere of gloom with more onerous taxation glowering over the horizon, the timing is right to free Americans from the yoke of tyrannical apparatchiks and nomenclatura that soak citizens to fund their schemes – and their pocketbooks.

The Killers Within

The killings at Fort Hood in Texas are now connected to terrorism. But in some ways they are also linked to shootings in an Orlando, FL office building the same day.

These incidents are examples of a time bomb that began ticking in the mid-1970s when the psychiatric and mental health professions went politically correct and identified the mentally ill as “victims” who required advocates. While in general patients need assistance, the activists turned caring into political action that changed the American cityscape and endangered our well-being.

Announcing in the mid-1970s that confining mental patients violated their civil rights, a cadre set to work to release as many patients as they could, resulting in the huge homeless phenomenon of the 1980s that remains with us now. Suddenly the streets of major cities and small towns hosted a permanent population of vagrants who harassed passersby and businesses. The media spin maintained these abandoned citizens were the victims of the cruel American capitalist society. In other words, it was our fault that people marginalized by society existed, dramatizing that the public deserved this inconvenience for living selfish lives.

Upon examination, it was discovered - but not reported by a compliant mass media - that over 80% of the homeless were actually newly released mental patients, not dispossessed victims of the economic system. If members of a community complained, they were told the street people were fine – as long as they took their meds. With no one in charge to enforce and administer dosages, the problem grew into a national scandal. Other nations saw the phenomenon as the underside of America’s economic system, when actually the homeless were purposefully inflicted on US society by political radicals.

Whether coincidentally or in a clever conspiracy, by the time the first waves of homeless hit the streets after their release, activist lawyers assured their “rights” to roam at will by having all the vagrancy and loitering laws in the country struck down in various court rulings. Citizens who asked why they weren’t protected from attacks by street vagrants were told by the police their hands were tied. The entire homeless problem appears to be a plot to embarrass Americans for being Americans and to send a message that capitalism had failed.

You know the rest. Cities now care for the homeless at great cost, in several cases actually busing them into town in the morning and picking them up and returning them to county or city shelters at night. And even though we may all be homeless soon in the Obama economy, the problem was caused by political radicals.

But the homeless problem is not the entire story. Another consequence appeared, one that more seriously endangers our well-being.

But first, an explanations of how this happened. It’s actually simple, and most Americans were co-conspirators without knowing it. The radicalization of mental health treatment began with a few kooky psychiatrists in the zany 1960s. The leading proponent was British psychiatrist RD Laing, who proffered the ridiculous theory that schizophrenics were actually more in touch with the world than ordinary people. Laing, pointing to the lucidity and intellectual prowess of many schizophrenics, switched places with his patients, allowing them to be the doctor and the doctors the patients.

All this would have passed into the smoky cloud of pop nonsense except for a novel and play written by UC- Berkeley professional graduate student Ken Kesey, known for his role in popularizing the use of LSD. But he is better known for penning One Flew Over The Cuckoo’s Nest in 1962, influenced by the teachings and theories of RD Laing. The play became a huge film in 1975 and the world was introduced to the case for freeing the seriously mentally ill.

Recall the plot line. RP McMurphy – played by Jack Nicholson – was a schizophrenic confined to a mental ward where we meet the doctors and the cruel and unfeeling Nurse Ratched, the character created by Kesey to represent the medical profession’s contempt for mental patients. Audiences fell for the plot line, adding popular sentiment to the scheme to release schizophrenics with the newly freed homeless.



Since then mass murders by deranged killers have become a commonplace in America. And each incident can be laid at the feet of Laing and Kesey and their co-conspirators in the psychiatric and legal professions who exploited illness to make a political statement.



A famous and instructive case occurred in Chapel Hill, NC in 1995. Wendell Williamson, a law student at UNC went on a rampage with an assault rifle, killing two and wounding 13. Williamson made more news by suing his psychiatrist, claiming he should have been confined due to his schizophrenia. He won the first round in court but lost on appeal. He wrote a book about his life titled Nightmare: A Schizophrenia Native that lays out the frightening internal life of patients with the disease.



Williamson thought he could read minds, and that others could read his. He heard Bill Clinton, Kurt Cobain and John Lennon urging him to carry out directives, including the command to kill. The book provides readers with the reality of delusion endured by patients, making it clear they are ordered to kill – the same explanation offered by nearly every mass murderer who lives to make a statement.



The 1.4 million other Americans with the same condition are living among us, listening to voices, ready to kill. Their parents or spouses or friends or co-workers have no recourse to intervene. Then it happens.

Why You Can't Sell Your House

I caught the piece today in the N&O about the plunge in real estate values, and the attendant problems caused by the new appraisal rules.

But you left out something: the city/county property valuations of 2008 have attached an anchor to home sales. If a citizen is selling a home today in this economy, their asking price is as much as 40% below the market value of two years ago. Thus, the buyer is looking at paying property taxes based on valuations imposed using the highest year for values in the past ten.

This burdensome taxation is stifling home sales in the upper range and impeding transactions.

Worse, after 18 months of what is now considered the deepest recession since the Great Depression, homeowners are forced to pay exorbitant property taxes based on inflated values to fund bloated and – in my opinion - overpaid bureaucracies in local government and Wake Schools.

I have copied Mayor Meeker and Paul Coble to ask them to examine the burden they are imposing on their own citizens – and the risk we face of triggering even more economic bad news for the community.

This is serious. The United States deficit will soar to 10% of GDP in 2009, the highest percentage since 1945. As the economic decline steepens, onerous property taxes will unhinge any hope of recovery for years to come.

The property taxes imposed on our citizens appear to be an unethical power grab by the county and city. Instead of averaging home and property values over a set period of time, our leaders chose the highest year in history and used the basis for valuations. Now, values are down and taxes are exorbitant - a sure recipe for disaster.

I hope the N&O will strive to bring this to public attention – as I have in the past – and investigate the property tax valuations of 2008. I believe the actions of the city and county were blatantly self-serving and injurious to the people. I will also speak to public policy lawyers to discuss a class action against the city and county for their actions.

In sum, our city and county leaders have screwed their citizens to enrich city, county and school workers.

Nazis And Commies

How much is the fascination with Nazis in Western culture a product of natural interest or an unspoken pact by novelists and filmmakers to obscure the greater atrocities committed by the Soviets - most notably under Stalin, who ruled in the same era as Hitler?



A recent documentary on the Turner Classic Movie cable channel illustrated the point. Said the commentators, when all else fails in selecting a villain, make Nazis the sinister evil force and success is assured. Yet the idea to create Soviet villains never appears to occur to novelists and filmmakers, except in spy thrillers where each side is usually defined as morally equivalent.



For example, why can’t the suspenseful movie The House on Carroll Street, about Nazi spies in New York City in the 1950s, be about Soviet spies burrowed into a peaceful New York neighborhood in an era when they were indeed a serious threat? Or in the 1989 Gene Hackman suspense film The Package, why do proto-Nazis plan to assassinate political figures in America 45 years after World War 11 as the Cold War against the Soviets was still raging? The real danger since end of World War 11 has been the KGB, not imaginary Nazis.



There must be hundreds of films and books that rely on or mention the theme that Nazi fascist brotherhoods are everywhere -even today, more than 65 years after Hitler was defeated. The truth is, as newly declassified files from the US and the USSR prove, Soviet spies were the villains who infiltrated every department of the FDR administration and continued espionage activity against the US until their collapse in 1991. But no real Nazi threat has appeared anywhere except in books and movies.



It’s always the Nazis, never the Communists, although the murderous rampages of Stalin make Hitler seem tame in comparison. The number of non-military deaths under the Nazis is estimated at 6 million in approximately ten years. The number killed under Bolshevism surpasses 100 million worldwide, according to the latest estimates. Hitler wreaked havoc for a decade; the Soviets for 75 years. And the communists tortured and executed far more Jews than the Nazis.



One apparent reason is the existence of the film archive from the Nazi death camps in Germany, Poland and Rumania. In the USSR, few outsiders witnessed the carnage, and the only film known to exist was staged by Stalin - the cover-up of the massacre of the Katyn Forest, an effort to pin the blame on the Germans for the execution of thousands of Polish officers by the Soviets.



No one dared say a word or run film as the communists killed their victims routinely, usually in the middle of the night. And the millions of prisoners who died in gulags were located hundreds of miles from scrutiny in the vast frozen tundra. In addition, the saga of the founding of Israel in the post-war period kept Nazi atrocities vividly alive, while those that died at the hands of the communists had no witnesses or advocates.





And we didn’t liberate Russia or their death camps as we did Germany’s. They were our allies after all. Obscured from view by a tyrannical and brutal system - exemplified during the Cold War for the West to view by the construction of the Berlin Wall in East Germany - the post-war Iron Curtain concealed an entire charnel house we couldn’t see.



Perhaps a large segment of Western writers refused to expose Soviet atrocities for fear of undermining their belief in the utopian goals of the communist system. If they did not believe, their friends probably did; the fear of being ostracized is a driving force in the literary world. This tradition of ignoring Soviet brutality goes back to George Bernard Shaw and 20 other writers and artists who visited the USSR in the particularly murderous 1930s, causing Shaw to write a letter to a British newspaper:



We the undersigned are recent visitors to the USSR. Some of us travelled throughout the greater part of its civilized territory. We desire to record that we saw nowhere evidence of such economic slavery, privation, unemployment and cynical despair of betterment as are accepted as inevitable and ignored by the press as having “no news value” in our own countries. Everywhere we saw the hopeful and enthusiastic working-class, self-respecting and free up to the limits imposed on them by nature and a terrible inheritance from tyranny and incompetence of their former rulers, developing public works, increasing health services, extending education, achieving the economic independence of woman and the security of the child - and in spite of many grievous difficulties and mistakes which social experiments involve at first (and which they have never concealed nor denied) setting an example of industry and conduct which would greatly enrich us if our systems supplied our workers with any incentive to follow it.



Even through the purge of 30,000 Red Army officers by Stalin in the late 1930s; the morally corrupt Nazi-Soviet pact at the dawn of World War 11; the kidnapping of Eastern Europe after the war; and the instigation of the Korean War, Western Leftists, influenced by Shaw and his ilk, refused to face facts and denounce the USSR. This habit took hold across the literary spectrum and has held on right through the collapse of the communist system in 1991. And, as recent research has verified, Soviet-led American communists recruited literary and film artists to the cause, requiring party members to insinuate socialist themes in their work.



This process led to Congressional hearings to expose communists in the film industry, resulting in the canonization of the Hollywood Ten – all of whom had been members of the Communist Party - rather than repudiation of Soviet misadventure. The McCarthy hearings that ensued in the early 1950s to identify communists in the United States government caused the same ironic result: those who fought communism, like McCarthy, became the villains. The result has been a subtle conspiracy to denigrate anti-communists and elevate the guilty. Students today, otherwise ignorant of the history of their own culture, know that McCarthy was bad and the communists were innocent victims.



A cadre of idealists continues to believe communism is the best system to govern mankind, even in the face of the overwhelming truth that the Soviet experiment has no parallel in history for murderous brutality. That millions of people suffered under a doctrine of social advancement should serve as a dramatic warning in today’s political environment in the West.



Instead we get Nazis, lots and lots of Nazis.

Attack Of The Green Meanies

Saving the planet has grabbed the imagination of the naïve in the same grip as the old worker's paradise promised by the Bolsheviks.


These two manifestoes share the common elements of absurdity, dogmatic conviction and the predictable dimension that the more their doctrines are proved false, the more their advocates defend them. In the case of Bolshevism, people's courts, midnight executions and propaganda were the instruments of coercion; in the case of man-made global warming, it's the Internet, politicized scientists and a mentally disabled mainstream media.


Disciples of world communism actually believed the workers of the world would unite and rule the planet with wisdom and generosity. Even in the wake of 100 million deaths in the name of communism, most left-leaning devotees supported the principles of the USSR until the regime fell in a rubble from within. The rise and fall of Bolshevism took just over seven deadly decades. If the man-made global warming movement takes that long, more than 100 million could die before it's over, mostly from starvation caused by the end of free market capitalism -- this time on the chopping block for raping Mother Earth and exploiting the proletariat.


While we wait for the end of times, look for other similarities. For example, the Communists were great liars. Forgery and treachery were woven into the fabric of their every act on earth, from informing their own people they lived in a worker's paradise, breaking treaties with abandon and concocting fake news stories about America and the West. The KGB's Department X-1 specialized in whoppers designed to undermine Western political stability, many of which have refused to die. Some have been elevated to gospel truth in the common culture. For example, the "fact" that FBI director J. Edgar Hoover and his assistant Clyde Tolson dressed in women's clothing is a nefarious fabrication straight from Moscow Center.


The story was planted in an English-speaking news service in India controlled by the KGB. Compliant media and news services -- as usual -- picked it up and ran, never asking the source or verifying the facts.


This is just one of dozens of other examples of making up the big lie and using the media to disseminate fake news worldwide, including the 1990s concoction that the US created the AIDS virus and introduced it into the black and gay community to decimate their ranks. The CIA director at the time actually jumped up from pressing business and flew to Los Angeles to field questions ginned up by the media that the agency was responsible for alleged genocide.


The environmental loonies aren't as organized as the KGB -- yet. But their strategies are similar and the mass media, instead of becoming more diligent after the revelations of murder and mayhem beeping from the black box buried in the massive wreck of the Soviet Union, are right there to carry the message without checking the facts or questioning sources. The greenies have only to make up a huge lie and sit back as the useful idiots in the press pass it along faster than swine flu.


These fabrications usually concern another shocking result of the evil of mankind against Mother Earth and her animal inhabitants --- polar bears drifting off on icebergs detached by warming seas; dead fish washing up on sunny shores; predictions of the extinction of species after species; dire statements the ozone is poisoned; reports of the coming disappearance of entire nations from coastal flooding; estimates of drought and starvation just around the bend -- and on like that until people start to believe it, spawning outrageous expenditures to fund loony schemes such as wind farms, tidal power, chicken dropping plants and any scheme that promises an alternative to the use of fossil fuels and the curtailment of capitalist production.


There are so many nutty public and private initiatives based on false premises floating around that it's hard to keep count. One example ranks right up there with X-1 antics, reported as usual by the media as truth: the belief the earth is losing 40,000 species a year, to them a shocking result of mankind's predatory rape of the earth. A little research divulged this "fact" emanated from a British ecologist who "estimated" there are several hundred thousand species we have yet to discover. He figured we must be losing a percentage of these phantom species regularly -- and the scientific community and media actually fell for it.


The origins of the modern green movement can be dated to another loony scientist, Paul Ehrlich, author of The Population Bomb published in 1968 that predicted the world would collapse into starvation and poverty by the year 2000 due to overpopulation. Ehrlich was wrong about everything he predicted, yet he is canonized as the spiritual leader of the environmental religion and serves as a darling of the ever-enfeebled media. Worse, nations that fell for his theories and reduced their birth rates are on the edge of ethnic extinction, frantically seeking "guest workers" to immigrate to boost population levels to keep their economies going.


Not only are the green movement and its predictions grounded in sketchy science, their insistence on action now jeopardizes human safety and the world's economy. Already Americans are in danger of attacks by species rescued from alleged extinction. Reports arrive daily of fox, bear, moose, alligator, coyote and wild bird assaults crowded up against human habitats due to the insistence of environmentalists to save them for reasons that make no sense. Very soon energy police may monitor your use of gas and electricity and enforce a carbon tax, already floated in UK and France. And note that the hare-brained policies coming down on humans are couched in macro-speak, the refuge of unrepentant Marxists: "if only everyone in the world would take one less automobile or airplane trip; or eat meat once a week; not eat fresh fruit in winter to eliminate the danger to the atmosphere of delivery by jets and trucks and trains that expand the human-generated carbon footprint - then we would save the earth."


Like the Bolsheviks, they couch their inanities in global terms, and work to create world-wide decision-making entities to replace local government where sanity has a chance to breathe. As those who were herded into gulags or shot in the back of the neck under the communists would tell you, beware grandiose utopian schemes and international agencies that enforce impossible outcomes. If they decide you are in the way of the collective good, you are likely to be removed or eliminated.


Deep environmentalists, like the communists, brook no dissent. In the Soviet Union, truth-tellers were walked through show trials before being liquidated or pressed into gulags. In today's more civilized green tribunals, the accused is pilloried and stained in public and sent before a kangaroo court of his peers to be tried and punished by banishment and character assassination.


The case of Bjorn Lomborg is instructive. The Danish green scientist visited California in the 1990s to study the archival records of the heroes of modern environmentalism in situ where the movement began. Lomborg was startled to discover that what passed for science in the field of ecology was unscientific and often simply invented out of thin air for political purposes. He returned to Denmark and continued his study and published the Skeptical Environmentalist, the book that turned the movement on its ear -- but only briefly.


True to form, Lomborg's academic peers accused him of being a traitor to the green cause, forcing the installation of a tribunal to investigate his research -- and of course to ruin his reputation for daring to contradict the principles they held so dear. The inquisition went on for months, reported daily across Europe until finally the verdict was announced: Not guilty. In other words, Lomborg proved that the basic theses of environmentalism were suspect and unsupportable. Now he is a footnote, ignored by the greenies and the media, although he has written other books and added sanity to the insanity of the environmental manifestoes popping up like whack-a-moles across the globe.


The righteous green activists are dedicated to continuing the war against capitalism by other means by promoting one-world government; subsuming the self-esteem of human beings to the vague collective good; and calling on enforcement of their policies by international fiat that trumps national interests -- just like their Bolshevik forbears.

Political Inquisition Of CIA And Afghan War Dangerous To National Sanity

The elephant in the Justice Department hearing room investigating excessive force in the interrogation of terrorist suspects will be the large majority of the American public. They do not care if we water board or inflict pain on people who blow up innocent bystanders – and often themselves – in a maniacal melee for purposes beyond the ability of rational people to comprehend. It’s difficult to get up a head of steam over practices instigated by the deadly attacks of 9-11, the subsequent cowardly and heinous murder of American troops in Iraq and the explosions in public places in Spain, the UK, India and Indonesia.

Since the people don’t care and generally approve of terrorist interrogations, why are we impaneling an inquisition against our own operatives in the war on terror? Because, as usual, a small cadre of anti-war, anti-American activists are getting their way on the force of a self-righteous head of steam. This hard left crowd has been at it since 2003, so none of this is new. They have been calling for war tribunals against the CIA and the Bush White House relentlessly, even after Obama swept into office. I know - I see their bulletins. And right there with them are the ridiculously biased mass media who offer no perspective in their febrile advocacy of what is essentially an undermining of American policy and security.

Obama backed away from tribunals against the CIA and other agencies, but passed the baton to Attorney General Eric Holder. After a decent interval, Holder announced he will indeed investigate his own countrymen for doing their duty. The hard Left says he is not going far enough – they want Bush and Cheney, remember. But the reality is we are risking our national security by staining the men and women on the front lines of the war on terror.

As I understand it – via my contacts from producing the Raleigh Spy Conference since 2003 – intelligence officers are afraid to act for fear of recriminations, leaving us vulnerable to attack and watching in horror war tribunals against the public servants who protect us. But get used to it. Public policy under Obama is in the hands of the chosen few who act as if the wishes of the people don’t count. The administration’s health care plan is embraced by the Washington Democrat elite but disdained by the people in poll after poll; elections are manipulated by unpublicized legislation that allowes new voters to register and vote during one visit to the elections board (a change more than any other that ensured Obama’s ascendancy); muddled pronouncements about the need to cut defense spending to please the hard Left that sends a mixed and weak message to our allies and enemies; and economic policies that are not working for the majority of Americans.

But the big one is the war in Afghanistan. I admire our armed forces and feel pride at the deployment of our technically advanced weapons and intelligence-gathering equipment. But I do not approve of this war in a country unconquerable since the time of Alexander the Great. Worse, I think we are there as part of the ongoing campaign against the presidency of George W. Bush.

During the last weeks of the past presidential election, the “surge” in Iraq worked. Yet every Democrat I met said “so what”, it made no difference because Iraq is not our war. I asked what was "our war" and the reply was Afghanistan. Could it be we are there for political reasons to maintain the cover-up of the success of the “surge” in Iraq just to keep on beating up George Bush?

The Taliban is not our enemy. They are certainly bad characters, but then so was Saddam Hussein, whom the Left said wasn’t worth the effort to invade Iraq. Pundits justify the war in Afghanistan saying we are fighting al-Qaeda, there but we beat them in Iraq already. They are in Pakistan, but does that mean we should be in Afghanistan for no rational reason?

But then it’s not rational to haul up the CIA for doing its job - so there is a consistency to the war tribunals and the war in Afghanistan: politics, Obama-style.

END

The Big Lie About Health Care

We already have national health care in the United States. It is disingenuous and meretricious for the Left and the media to insinuate that we are a cruel and heartless people by incessantly bellowing that 40 million citizens do not have health insurance, implying they are denied care. This big lie is fomenting the Obama health care initiative under false pretenses. By starting with the truth and de-politicizing the argument, it is possible to streamline health care delivery.



If free care for those who cannot afford it is provided by health insurance policy holders and tax dollars, then why is this basic fact kept out of the argument on health care now raging across the country? And how did we arrive at this waypoint? Are we really going to toss away the most excellent health care system in the world based on a politically motivated lie?



I commissioned an investigation in 1986 in the business journal I operated then to find out why the group health insurance premiums for our company were rising 30% to 50% a year, requiring the ordeal of enduring tedious presentations from new providers offering a better price. The next year, the reduced costs in yet another new plan would skyrocket and the process continued. Running a company became more like managing a day care center for over-sized children; reading the Tax Code was a break from the tedium of reviewing complicated clauses in health plans. But worse, management became intertwined personally with each employee’s personal life.



The problem began with two arms of the federal government that regulate hospitals. One department mandated that hospitals must break-even or show a profit to keep their charter. This was instigated by money-losing hospitals repeating services and equipment, endangering the solvency of profitable facilities. Another set of federal regulators ordered that all hospitals in the US must provide indigent care to any person who arrives at their door. Any American without the ability to pay - or lacking health insurance - can visit any hospital in the US and receive cradle-to-grave care free of charge. The services range from dental care to maternity to heart surgery.



These requirements at first led to cost increases where the hospital had total control: room rates rose overnight from $75 to $90 a night to $400 to $600. This move, augmented by rising costs in every aspect of health care delivery - combined with the spiraling price of new technology and expanding longevity - created a bubble in health expenses that continues to expand 25 years later.



Going back 30 years before the mandates, health insurance was prohibitively expensive for an individual. Companies, allowed to pay for health plans out of pre-tax dollars, offered group plans to provide cost efficient coverage as an employee benefit, paid for by the employee. As the 1980s wore on, employee rights became the issue du jour, mostly caused by the huge influx of women into the work force. New laws and regulations spewed forth monthly to sanitize the workplace from the provenance of males. Sexual harassment led the way, but the problem of dealing with pregnancy was one of the key drivers in the need to expand the parameters of health insurance. Under federal law, pregnancy was deemed a disability, and woe to the company that did not accommodate maternity needs in company policy.



The rise of hip tech firms, coupled with a booming economy, transformed health insurance from simple access to affordable care to the jewel in the crown of employee benefits. Led by government agencies and universities, the bells and whistles attached to a group plan became multi-faceted and complex. Insurance purveyors made huge commissions selling the latest model, knowing they had ensnared a captive customer since businesses were the key option for affordable plans.



Soon the health plans took on a life of their own, requiring a management component that competed for resources with the core product of a company. Plans offered an array of options, including doctor visits, check-ups, prescription discounts, mental illness care, scores of co-pay options and advanced maternity care. The elemental definition of health insurance – major medical in case of a catastrophic event – became obscured. Employees began to view their health plan and all the attendant services as a right.



Until the early 1990s this seemed to work. Then thousands of firms closed their doors due to the burdensome cost of health insurance during the worse recession on record since the Depression. By the end of the 90s, only a very few firms – and of course government employee and educators – offered fully funded plans. Today, employees pay a large proportion of the premium, and free dependent care is a relic of the past -even for teachers. The salad days of corporate sponsored health care were nearly over. In today’s horrific economy, now reaching even more dramatic lows than any before, the health care crisis is the top priority of the Obama administration, but action by the administration is not driven by the economy. Their plan is focused on political and social engineering.



That’s why Obama’s plan is centered on the corporate model. Businesses will be forced to provide group health care or pay a penalty. This punitive concept is driven by the anti-business attitude of the President’s elitist advisors who are dedicated to leveling society and the marketplace. And they miss the point history has demonstrated: group plans are a cumbersome and inefficient burden, especially to the small businesses that comprise 90% of the employment and productivity of the GDP.



There is proof this imposition on business is punitive and directed against a defined group. Today, citizens no longer need to join a group to obtain affordable health insurance. Health providers now extend lower rates to applicants by placing them in an existing group.



It’s time to end the madness. First, government and media must admit we already have national health care, and indigent services should be covered by an assigned risk policy guaranteed by the government; secondly, health insurance must be made tax-deductible for individuals. This construct allows the government to assist all its citizens and refrain from punishing the few to please the many. Better, this method revolves around the options of the individual operating in an open marketplace for services - a concept fading into the past under Obama’s world view.





END

Walter Cronkite's Great Betrayal

Some say things haven’t been right in America since the assassination of John F. Kennedy in 1963. I’d push the date forward a bit to 1968, the year we became unraveled with the murder of RFK, the crippling of Alabama segregationist George Wallace and the shooting death of Martin Luther King Jr. on a hotel balcony in Memphis. Black rioters caused curfews in most American cities, and allegedly spontaneous student riots erupted in Paris and on college campuses in the US. Eschatologists had a field day, with television feeding the frenzy - most notoriously the avuncular Walter Cronkite, the dean of the evening news - considered the most ‘trusted man in America”. As the narrator of the CBS program “You Were There”, he held great sway with the emerging boomer generation who were turning against the older generation

Now that Cronkite has passed away, the mass media can hardly contain itself. Lavish praise spewed out of the tube for three days, remembering Cronkite as the last great broadcaster, the man we could trust. During his days on the air, the Swedish term for an anchorman evolved into “Cronkiter”, as if the man and his role were the Trinity of media secularism: father to the nation; keeper of our values and the go-to man when trouble came.

I could not make myself look or listen or read a word of the praise for Cronkite. All that went through my mind was his betrayal of America in 1968 in the aftermath of the Tet offensive in Vietnam. The US had withstood and won what appeared to be a last-gasp assault by the North Vietnamese army and the Viet Cong, their communist cohorts in the South. Although US and allied divisions held on bravely and repulsed the attack, the “heralds” of modern-day warfare – the media – following the lead of the supreme herald of all, the venerated and beatified Walter Cronkite, declared the battle a victory for the North Vietnamese.

Addressing the nation at the end of his CBS Evening News broadcast, Cronkite – still calling himself “this reporter” - told the nation he wished to depart from the news and take three minutes to offer a “subjective” analysis of Tet. He told the nation he “wasn’t sure” the US had actually won the battle, ignoring the evidence the North Vietnamese had been handed a major defeat representing a “turning point” in the war in favor of the Americans, our allies and the South Vietnamese army. On the contrary, Cronkite maintained Tet symbolized that “we are mired in a stalemate” and the only solution was to “negotiate” with the enemy.


If the heralds after Agincourt had declared the French the victors over the English, history would be different. And that’s what Cronkite accomplished: he used his influence to cause his own country to lose its first war. Granted, heralds of old could be second-guessed by later testimony, but Cronkite’s pronouncement was disseminated as the one and only version, accepted as truth to this day. American General William Westmoreland and his staff and troops were stunned. Their efforts to counter Cronkite’s pronouncement were either ignored or ridiculed by the mass media. As if on cue, the “mood of the country” turned against the war on any level. President Lyndon Johnson refused to run for a second term. The student activists and their fellow travelers against the war stepped up demonstrations and riots against their own country. The military establishment was stained with accusations for brutality that still cling.

The American defeat in Vietnam was the victory of the far Left. Mark Rudd, Tom Hayden, Bill Ayers and their cohorts made their bones undermining US war policy, and they haven’t stopped yet in their goal to turn Americans against America. The mind-set that the United States is “evil and racist”, as President Obama’s buddy Bill Ayers puts it, is now a prevalent attitude. Schools kids now regard their forebears as slave-owning chauvinists who plundered the earth in the name of capitalism. Self-esteem is low and the future has been transformed from promise and opportunity to an ongoing mea culpa that begs the world to forgive us for being Americans.

Thanks Walter. Due to you “that’s the way it is”.

END

No Revenge Too Harsh For Bankers

The name Lyndon LaRoache started beeping out of the recesses of my memory as I watched a recent PBS Frontline program about the forced merger of investment house Merrill Lynch and Bank of America. The back story of the recent crash of the American economy – caused by the unethical antics and squalor of the American banking system - brought him up again in my mind, taking me back to the 1970s when an old-timer mailed me pages of conspiracy theory postulating that a greedy, secret cabal of bankers was manipulating the global financial system.

The centerpiece of the conspiracy theory was the Trilateral Commission, organized by David Rockefeller of Chase Bank in 1973 to bring together “private citizens” from the US, Europe and Japan to push the banking sector along the road to globalization. LaRoache, who made a career out of denouncing the Trilateral Commission as an international cabal, saw a web of conspiracy along the lines of the infamous Protocols of the Elders of Zion forgery, circulated by Russian and German anti-Semites in the late 19th century. I hear you can buy copies of this scurrilous attack on Jewry and the international conspiracy of Jewish bankers in book stalls throughout the Middle East, where it continues as a best-seller. But I haven’t heard much of anything from the Trilateral conspiracy crowd now their paranoia has become reality.

Whether or not the Trilateral Commission had a direct hand in the recent meltdown, the beeping noise I keep hearing is telling me we are victims of something akin to a conspiracy – and it is related to global banking.

The sweep and depth of the current economic collapse, caused by corruption in the banking system, is astonishing. The rich and poor - upper middle, middle and lower classes - have all suffered. But worse, the fiasco has smothered small business, the backbone of the economy – a reality the Obama administration has missed entirely, thinking that shoring up banks, the very people who created the mess, will stimulate the economy.

Perhaps it was a conspiracy of eager beaver MBAs who eschew practical management for the glory of theory. Certainly they were well represented in the creation of the mortgage-backed security instrument. At first brush, these investment vehicles, the rat that gnawed the sinews of the banking system, are a nefarious concoction designed to con investors. But no, the investment units were actually contrived as “safe” investments, at least on paper.

The thinking went, that if we take good, medium and bad mortgages and gang them up, the investor will have a built-in safety net. The very design would ensure their integrity, at least in the thinking of callow upstarts who lacked the wisdom of practical experience. Better they were simply crooks. Instead they exemplify the sorry state of decision-making in our post-modern culture. We’ve been screwed not only by crooks, but by well-meaning idiots as well.

Or perhaps the conspiracy should be laid at the front door of Fannie Mae and Freddie Mac, the huge US government secondary market in mortgages. Again, lofty theoretical constructs jumped up and bit us in the ass. Prodded by left-leaning Members of Congress and US Senators, the agencies were ordered to enforce the Community Reinvestment Act of 1978 (passed under the beatified Jimmy Carter) that instructed bank and mortgage lenders to advance home loans to minorities, whether or not they qualified. The idea was to cure “red-lining”, the perceived practice that banks were inherently racist and refused to lend to blacks and Hispanics.

But it took CRIA 30 years to bring down the financial system. Under the Clinton administration in the 1990s, activism to extend loans to bad credit risks was energized, including paying ACORN – the notorious voting rights group – to monitor lending and threaten banks that refused to make bad loans for affirmative action purposes. In the years building up to the coronation of Barack Obama, the portfolio of dicey home loans up streamed to Fannie and Freddie reached into the billions. No matter, said Chris Dodd and Barney Frank and their dedicated cronies: It was worth the effort so that “every America can own a home”, no matter the consequences.

As for Wall Street bankers, a conspiracy was not required for them to play their predatory role in the calamity. So-called central bankers dwell in the upper hinterlands – literally and figuratively – where deals come to them for financing. If you want to start a new company, go public or raise money, hire them and they charge huge fees and actually buy the shares of the offering and turn around and sell it to investors for a nice commission. Investment bankers also trade on behalf of customers - and their own accounts - using money borrowed from New York banks. The hucksters enjoy daily lines of credit in the several millions they can in turn leverage 30 to one on the dollar.

When they hit a streak there’s no stopping the greed and the flow of credit and money. Through the mid-2000s, they ginned up billons in profits before the roof caved in, leaving billions more in losses and heavy debts to their lenders. Thus fell Bear Stearns and Lehman, with Merrill Lynch hanging over the precipice. At this juncture, the Secretary of the Treasury and the Federal Reserve chairman realized that if Merrill went, the entire system was going down with them.

The unlikely White Knight was Ken Lewis, at that time in 2008 the CEO and Chairman of Bank of America. Lewis wanted Merrill as the shiniest jewel in the crown of his banking and financial services empire - started by Hugh McColl, who was obsessed with beating the Wall Street boys with his Charlotte, NC-based North Carolina National Bank. McColl began by defying the Glass-Steagall Act, passed in 1934 to prevent banks from causing another Great Depression by confining their activities to their home state.

In 1985, under the de-regulatory atmosphere of the Reagan administration, McColl marched into Florida, then South Carolina, Virginia and into Texas, where NCNB took over the troubled Republic Bank in Dallas with the blessings of the government during the throes of the 1988-1994 savings and loan crisis. Then McColl acquired the name he needed by buying Bank of America in California. McColl led the way and the banking industry followed suit, expanding into state after state – and country after country. (Wachovia, another North Carolina bank, famous for its conservative practices, followed suit and recently had to be absorbed by Wells-Fargo Bank of California or go under. Wachovia expanded beyond management control even before they merged with First Union Bank, another NC lender, six years ago. Wachovia hands blame FUNB management for their fall, but they had already stuck their neck out too far chasing McColl before the merger to blame it all on FUNB).

Soon, formerly restricted local banks were global – and largely unregulated. They were too big and covered too much ground to be reined in, or even effectively managed by their own executives. New banking practices and products went hand- in- hand with the open range mentality. B of A and most other banks turned away from lending money to their communities and became local-yokel copycats of the big New York banks. They bought deposits and leveraged their assets to trade in exotic investments – hedge funds, commodities, oil and gas, currencies and, alas, mortgage backed investment instruments. Bank customers were converted into victims, absorbing outrageous fees and rarely able to land a loan. The 90-day note and compound interest went out the window.


Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke – who summoned 700 of the top US bank chiefs to an emergency meeting in Washington as the financial system imploded - knew Lewis wanted Merrill and orchestrated a meeting between him and Merrill chief John Thain. They said Lewis had to save Merrill or the financial system would collapse, even forcing Lewis to swallow Thain’s demand that $5.9 billion be set aside at closing to compensate Merrill executives, even though they had brought their company (and America) to its knees. Thain also insisted on a $10 million "fincer's fee" for bringing Merrill to Lewis. These guys have no shame.

Lewis, propelled by his own goals to take Merrill, and enthused to save America for Paulson and Bernanke, signed off and waited for the three month post due diligence period. In those few weeks, Merrill managed to lose another $15 billion. Lewis wanted out of the deal. He flew to New York and said so, only to be threatened by Paulson and Bernanke that if the merger fell through, the US government would come after Bank of America. Lewis gave in, and was soon stripped of his job as chairman of B of A but remaining as CEO. He did, however, have the distinct pleasure of firing John Thain.

The truth is the old Trilateral Commission conspiracy theorists were on to something. The bankers did enrich themselves at the expense of us all. Once they were able to fly across state and national borders and sell exotic products with no real regulation, the system became too big and unmanageable and corrupt. And LaRoache was right. Due to the earlier influence of the Trilateral Commission, they infected the world with ruin.

Sadly, instead of being hauled before a tribunal and tried and executed, the culprits are living in tax havens or lounging about exotic resorts with their tainted commissions ripped out of the marrow of the economy. The rest of us are left holding the proverbial bag. No revenge is too harsh.

END

Wall Street Journal Misses Point In Spy Agency Article

The link is to a piece in the Wall Street Journal: http://online.wsj.com/article/SB124346895354660517.html

Below is my letter to the writer saying the article was sadly typical of attitudes about intelligence data.

Dear Stephen Fidler:

I was hugely disappointed with your piece in the Wall Street Journal May 28, 2009 concerning the 100th birthday of Britain's spy agencies MI5 and MI6. Instead of emphasizing the truly important publication of the book Defence of the Realm: The Authorized History of MI5 by Christopher Andrew, recognized as the world’s top intelligence scholar, you focused on the frivolous details of a “ball” planned by MI6, considered the upper crust branch of Britain’s secret intelligence services.

You had a good opportunity to mention Chris Andrew in your brief discussion of MI6 chief John Scarlett, who was involved in the drama of the defection of KGB colonel Oleg Gordeivsky, considered the most important double agent working for the West during the Cold War. For your information, Andrew and Gordeivsky co-authored KGB: The Inside Story in 1990, revealing key data on Soviet operations. The book was a world-wide sensation and served as a prelude to the collapse of the USSR at the end of 1991. Chris Andrew also co-authored the 2-volume Mitrokhin Archives, considered the standard text for Cold War scholars.

While you ignored critical information on Andrew and the historic significance of the MI5 book, you also omitted background on MI5 chiefs in your zeal to patronize MI6. Readers would presume from your article that MI5 had no leaders who served with distinction, for instance Stella Rimington, the first female chief of any spy agency. And you obviously did not perform even perfunctory research into the reasons for the early split between MI5’s role in domestic security and the assignment of MI6 to overseas espionage - a model followed by the US at the creation of CIA in 1947.

But the most grievous omission was elevating MI6’s planned centenary ball over MI5’s historic decision to allow a scholar full access to their secret files, an unprecedented and bold gesture.

As founder of the Raleigh Spy Conference in 2003 (Chris Andrew was the keynote speaker), I have strived to present to the public over the past seven years the critical importance of declassified material pouring out of spy agencies all over the world. The new information now available is the engine that is re-writing modern history.

It is extremely annoying the Wall Street Journal is associated with the mainstream media’s refusal to recognize - underneath the fascination with James Bond - the serious sea change in our perception of the real facts of modern history provided by the recent avalanche of declassified documents.

The MI5 centenary book is certain to add substantially to our knowledge of the key events and important players of the 20th century. You missed the point entirely in your article.

END

Jeopardy Exposes New York Times

Jeopardy has been a habit with Americans since the 1960s when Art Fleming was the host and college kids cut class to catch the challenging Q&A program that remained popular through quiz show scandals and the rise of banality permeating the genre. Somehow Jeopardy’s birth date was changed to the 1980s under the aegis of talk show host, crooner and later Las Vegas impresario Merv Griffin, who claims paternal rights - although the program was over 20 years old before he took possession.

Under Fleming’s successor Alex Trebek, audiences have accepted the dandy Canadian’s frail attempts at humor and his nightly reference to his native land in at least one clue, thinking Canada needs help with its self-esteem as the “frozen attic of America”. And we forgive Alex for his inane banter sometimes obsequious flirtations with attractive female contestants - and his inability to decide on a moustache. But there is another development on Jeopardy that has advanced to the point comment is required.

Since Merv took over, ad placements in the clues have become a commonplace, such as entire categories extolling the virtues of Las Vegas, or Campbell’s soup – and the most consistent and flagrant of them all, the New York Times. As the gray lady’s finances have plummeted, placing ads hidden as questions on Jeopardy has become a weekly occurrence. But now the newspaper’s paid product placement has taken on a politically charged tone.

In one program recently, the clues revealed uniformly unattractive talking heads from the Times offering “answers” for contestants, but with a new twist. In each case the Times men and women boasted that they had influenced public policy: such as, “due to my column, the administration changed its policy”; or “my in-depth coverage changed the course of the war in Iraq, which I was against.”

They just can’t help themselves can they? The vanity of newspaper folk knows no bounds. Inserting their own views – or the opinions of the editorial board – is one of the reasons the public has demonstrated it no longer trusts daily newspapers. And here is the epitome of journalistic bias buying space on Jeopardy and reminding 20 million Americans why they hate them. You’d think they would take the opportunity to persuade the public they are improving their wrecked credibility. Alas, their demise is in their DNA.

This is sad since the reading public is ready to hear their case as newspapers continue their steep decline. And their story is a good one, if they would only tell it.

Their problem started in the 1950s when the Associated Press, the membership organization comprised of dailies, weeklies, business journals and magazines, allowed broadcasters to join. According to a former president of AP, they liked the money paid in dues by radio and TV stations – although broadcast outlets rarely contributed to the pool of stories members could use. AP members can carry stories from any other member. If there is a breaking story in Chicago, any other member paper has full use of on-the-spot reportage. Yet you can count on your right hand how many times a newspaper carried a story from a TV or radio station.

Then comes the Internet. Mostly engineered by broadcast outlets and satellite and cable sources, as members of AP the new instant information systems simply took the available content and ran the news as if it was their own. Although newspapers were aware of the Internet, and spent billions going online, their stodgy, button-down old habits didn’t translate well to the new paradigm that relies on graphic exposition, eye-catching elements and four-color presentations. The newspapers were beat by showmanship, not content. And sizzle counts online.

It is galling to newspapers that they actually employ live human reporters who cover the main beats, a feat a TV station can’t accomplish with their emphasis on show business, talking heads and cameras rather than actual reporting. If the newspapers were to drop out of AP and copyright their content, Internet outlets would lose 90% of their news. That’s why Rupert Murdoch purchased the The Wall Street Journal – to capture real reporters to feed his Fox Business News cable channel. The sly Aussie knew his on-air “personalities” couldn’t cover a shopping center ribbon cutting.

Yet even so, why would an Internet user prefer the web site produced by the local TV station over the effort by the source of news, the newspaper? Could it be a deep resentment of daily paper bias and arrogance over the past 50 years? I think so, and the New York Times makes the point on Jeopardy.

END

PBS Presents The Real Stalin - No Kidding!

Could it be the Gauleiters of the Left - who assiduously guard the real truth about the USSR – have been caught napping? Or is the series World War 11: Behind Closed Doors – Stalin, The Nazis and the The West the dawning of a new era finally heralding long-ignored revelations about the human carnage under the Soviet communists? The program is such a surprise it takes a moment to believe it is really happening. Having dedicated two decades to exposing to the public in columns - and via the Raleigh Spy Conference - that the real story of the 20h century is lying there available in the record, I can hardly contain myself.



And it’s not too late to catch up and enjoy this monumental event. Episode One of Three aired Wednesday evening May 6; the program continues for two more consecutive Wednesday evenings May 13 and 20. Tune up your DVRS and TIVOS for history in the making, and a truly absorbing experience. The production values are excellent, featuring a mélange of docudrama, documentary and actual film and photographs. The actors such create life-like characters you will think Stalin was rolled out of his grave to play the part. In the first episode, Ribbentrop and Molotov – the foreign ministers who hacked up Poland and Eastern Europe on behalf of Stalin and Hitler – exude evil personified as they meet and greet surrounded by other diplomats, military officers, personal aids and servants.



It is a stunning visual accomplishment, presenting the best production values I’ve ever seen on television. Period automobiles deliver the players - gussied up in authentic Nazi and Soviet uniforms - to Kremlin dining rooms where they dine in Czarist splendor, with footmen and butlers delivering steaming plates of haute cuisine; or take care of business in offices and conference rooms outfitted to the smallest detail in mid-century furnishings. Maps and newsreels and lucid photography literally draw viewers into the moments that signal death for thousands among the millions who perished at the hands of what even Hitler called an ”international guild of criminals”.



Hitler and Germany and Nazis are also served up on their home turf, while the British, and later the Americans, are introduced for their roles in the upcoming episodes. Tantalizing previews intimate the reaction to Stalin as the war wears on, most tellingly a scene dramatizing FDR slamming down a report of Soviet atrocities, exclaiming he refused to believe Stalin capable of mass murder. This is a telling scene, as Roosevelt will never remove the stain of his inability to see Stalin for what he was: an evil and heinous tyrant personally responsible for the death of at least 20 million innocent civilians.



The massacre of 17,000 Polish military officers held prisoner in the Katyn Forest in occupied Poland is presented in chilling detail. Night after night, several hundred are removed from three different prisons and trucked to secret facilities where they are met by Soviet executioners draped in leather aprons and gloves for the evening’s work – a pistol shot to the back of the head. But Stalin and his gang are just getting started, as we will learn in future episodes. And there is after all a war going on, but with a twist. Hitler, after arranging the Ribbentrop-Molotov agreement to destroy Poland – and allowing secret codicils for the parties to control Eastern Europe – wheels around and attacks his erstwhile ally.



Stalin is literally stopped in his tracks, unable to believe Hitler’s treachery until the Panzers arrive at the door. He hides out in his dacha awaiting the Politburo to have him shot for being wrong about his pact with Hitler. Instead, they ask him to return and save Mother Russia. A Russian winter and the aid of the Western Allies help him succeed, along with the ruthless practice of shooting deserters or shirkers on the front lines. The depiction of these scenes, amidst the newsreels of other warfare on several fronts, is riveting television.



Meanwhile, back in the USA, thousands of Americans happily signed on as agents and spies for their hero Stalin. The Communist Party United States vehemently denied any connection with the Soviet Union. Yet in revelations from formerly classified documents, scholars John Haynes and Harvey Klehr have proved that Moscow ran the American party and its cells and agents of influence in every detail. During the one-year Polish accommodation between Stalin and Hitler – the man the Communist Party hated the most - it was tough to justify the policies of the Kremlin. Yet the CPUSA soldiered on without much popular success. But after the Germans attacked the USSR, the CPUSA was in full throat and gaining converts while praising their maximum leader to the rafters. They knew Stalin was a mass murderer, but stayed with him and the manifestos of the communists into the 1980s until the entire evil and corrupt edifice collapsed at the end of 1991.



How does history depict this despicable state of affairs? It hasn’t had a chance to. The keepers of the communist flame in the US won the decisive battles by discrediting any attempt to expose the truth about the communists – from Whittaker Chambers to Joe McCarthy. Relying on agents and fellow travelers in government, the media and on campus, American communists and sympathizers won the hearts and minds of the intellectual community in the West. KGB political agents also used the United Nations and a host of non-government organizations to perpetuate the big lie about the USSR. Even after the collapse of the “evil empire”, they continue to fight for their tainted cause, stating that communism is still the best form of government, even if the USSR had a few problems – like the murder of millions.



That’s why the series on Stalin and the Nazis and the West is a watershed event, worthy of high hosannas. The truth is out and it is based and verified by recently unassailable declassified documents. I don’t think the Left can put this series back in the bottle, but we know they will try.

Hell Will Freeze Over Before Banks Lend

We are saving the banks so people can incur more debt? Is that what I am hearing President Obama saying? Sounds as if he is in the thrall of the economic theorists that reside in the cloudy confines of the netherworld where doctrine trumps reality, - a place the president feels comfortable. Community organizers, law professors and Chicagoland ward heelers can’t claim a brush with the practical nitty-gritty of running a business. Yet they emote certitude in direct proportion to how little they actually know.

The business of America ain’t GM and it ain’t banks. The business of America is actually small business, 90% of whom do less than $1 million in annual sales. The little guys and the slightly bigger guys make the economy go around, not the Federal Reserve and certainly not New York central banks. Add in that 80% of the economy is consumer and retail driven and the fatal flaw in the Obama policy to pump up banks becomes apparent.

The proper course of action is to cut taxes sharply – personal and corporate – to create a layer of discretionary income so people can buy something besides necessities. Until retail gets moving, no one is moving very far soon. The second policy should be to crank up homebuilding. One house under construction requires over 40 sub-contractors and vendors, the small businesses the American economy is all about.. Money spun off to them goes directly into hiring, which stimulates retail and the capitalist merry-go-round spins again.

I addressed our state association of bankers election eve before Obama inherited the save the banks scheme from the previous administration. I saw trouble ahead then since banks don’t really lend money to the small business sector anyway – haven’t since the 1989-1994 savings and loan bust. Banks like to charge fees, extend ATM credit to kids and buy deposits online they can leverage 10 to 1 or more to wheel and deal like the Big Apple investment banks who borrow millions every day to invest in hedge funds, commodities and currencies.

The neighborhood bank isn’t a bank in the traditional sense any more. They are service centers for checking accounts and selling home equity loans for fees. Not so long ago the branch manager was a loan officer who knew his or her customers. Clients could obtain a 90-day note, renew it for 90 days and then amortize it if they couldn’t pay it all back. At each stage the bank made money on interest payments, formerly their main source of income. And customers used to keep a nice nest-egg in the local bank augmented by compound interest. There are no 90-day notes and no compound interest anymore. No matter how much “stimulus money” comes to your bank, lending it out – as Obama thinks – is low on the list of priorities.

If the banks undergo an religious conversion and go back to being banks by lending to their customers, then we create another round of high consumer debt, the problem that needs curing today. You can’t borrow your way out of recession, but you can spend your way out, as proven over and over in the past. That’s not likely to happen anyway. Instead the economy will trudge along waiting for the banks to supply liquidity until deflation hammers in the nails as homebuilding and retail sales go paws up.

END

Ignoring Colonialism A Sticky Wicket

A terror group operating in Pakistan, allegedly connected to the Taliban, has finally hit a target that arouses emotions. Not a Christian church or US bases or a resort hotel with western tourists. They attacked a cricket team, from all places Sir Lanka, where domestic political violence is a long-running national sport of its own. Hitting a visiting British or Commonwealth cricket team seems more appropriate for a terrorist group seeking to make a point. But no matter, the Sri Lankan team was the target. But there is one connection; Sri Lanka too was once part of the British Empire.

News coverage of the attack appeared most prominently on the BBC World Service, heard regularly in the US via National Public Radio. But do Americans have any idea of the role of cricket in the world, and most especially its antecedents? Cricket and the English language - prominently used in India and Pakistan - are a legacy from the days of the British Empire, proving that old bonds still tie former colonies to the mother country.

It is doubtful Americans understand any of this. Even academics in security studies – the only conservative curriculum on campus in the age of multiculturalism and post-modern theory – will not approach the subject of the old British Empire for fear of contamination by actual, rather than theoretical history

I can testify directly to this attitude. The three major universities in the Research Triangle community of North Carolina – UNC-Chapel Hill, NC State University and Duke University – formed the Triangle Institute of for Security Studies as an “interdisciplinary consortium” to study security policy in 1958. It is a lively relic born in the teeth of the Cold War that has survived the fads in higher education to retain at least the remnants of traditional scholarship.

To celebrate the group’s 50th birthday, top scholars in the field were invited to Duke and the UNC Rizzo Center for three days to examine the relativity new field of American Grand Strategy after the major wars of the 20th century. Yale’s John Lewis Gaddis, who fathered the field of Grand Strategy, kicked off the “research conference”. He described the three-semester course he still teaches by emphasizing the necessity to commence each course with a study of the classics in history and even literature (to add a human dimension as he puts it). In other words, college students, deprived of traditional western teaching, require remedial reading, says Gaddis, to avoid “being swept away because they lack conceptual gravity” after 30+ years of radical scholarship from K through college.

Following Gaddis, top security scholars from Notre Dame, Stanford, Duke, UNC, Penn, Columbia, Cornell and Marine Corps University outlined their previously submitted papers on the subject of Grand Strategy and US presidents. Three panelists praised or criticized their points before the audience was allowed to ask questions about whether or not US presidents implemented any strategy at all, and if so, did it work?

Here is where I dropped a stink bomb. I simply asked why one of the speakers maintained that the atlas of the world today demonstrates the wisdom of the American strategy under FDR to run Britain out of its colonies after World War 11. I said, “what about Africa? The continent is falling into chaos. Was it wise to run off European colonizers before assuring stability? Couldn’t we have supported Britain as it worked to move the former colonies to commonwealth status and independence? Isn’t America constantly engaged in the Middle East to fill the vacuum left by the colonizers?”

I may as well have stripped and mooned the assembled scholars. I had mentioned the C-word, colonialism. Yet, all I suggested is that to ignore the imperial era was to obliterate the historical perspective necessary to create a Grand Strategy in the modern era. But no, a thousand times no. The consequence is that security scholars, who end up advising the National Security Council, the Department of State and the Pentagon, are making judgments applying dysfunctional perspective. Attempting to understand the world without regard to the role of colonialism is like trying to pay cricket without a wicket.

Which brings us back to Pakistan and the fall-out from the attacks on the Sri Lankan cricket team: The first consideration is the reality that India and Pakistan and most of Africa are the premiere coverage areas for the BBC. Why? Because people there speak English. And why do they speak English – and play cricket with passion, thus elevating the attacks to the hot front burner of conflict. Because they are former British colonies.

The recent phenomenon of the success of the film Slum-Dog Millionaire owes much of its appeal to the fact that Indians (and Pakistanis) speak English. I doubt the film would have burst into international significance if set in Kazakhstan. The fascination in the West with India’s ancient and complicated secular and religious history is largely based on the bridge of a common language. India, The recent 4-part documentary on public television by the excellent researcher and presenter Michael Wood, never makes the connection that the only reason he is there is due to the bonds created by a common language. To mention it would smack of colonialism, and we know what happens if the subject is even mentioned.

Outside the academic medieval castles and their wide moats – as John Lewis Gaddis put it – there are researchers who realize the era of colonialism is in drastic need of study. Niall Fergusson’s book Empire comes to mind, though he fell on his sword and denied his own work in a TV documentary when he realized he had violated the taboo on the subject. But empirical and current evidence abounds that scholars and policy-makes must address the legacy of colonialism in order to deal with the disintegration of key regions of the world. Africa and the Middle East come directly to mind.

Including the colonial era in the study of modern day relationships between nations would balance out the emotionally fraught ignorance that colors the subject and ferret out the true events that created empires. It would soon became apparent that the majority of colonial occurrences evolved from the same issues that plague diplomacy today: one ethnic group seeking assistance to protect against the predations and genocides of another group; the need to provide security for trade routes - like the current issue of piracy in the Indian Ocean in the sea lanes where oil is transported; strategic alliances to keep the peace in volatile areas of the world with nuclear weapons hovering on the horizon; protection of foreign property and citizens in dangerous locales; building and maintaining infrastructure, such as electrical grids, railways and airports; helping implement democratic entities and free elections; and providing access to modern health care and sanitation facilities.

That’s how colonialism took hold in most cases. And it’s exactly what the US is finding itself doing across the globe. Does it not make sense to learn from how it used to be done?

I wrote 20 years ago that if I were Rwandan or Zimbabwean or Kenyan or Palestinian, I would fall on my knees and beg the British to reestablish relations with their former colonies. With the cultural, commercial and language links already in place from the bad old days, weaker nations in dangerous situations can maximize their natural resources, stabilize and grow out of Third World hopelessness and perhaps evolve into healthy and free members of the leading nations of the world.

After 60 years of anti-colonialism rhetoric, and the attendant rise in indigenous values that institutionalize warfare and chaos in unstable areas, can this happen? It should, before more and more of the world becomes more inaccessible, more dangerous and more of a threat to us.

END

Why Obama Should Sing

As Barack Obama is allegedly scornful of the national anthem, I recall feeling the same way, but for different reasons. I thought a tune easier to sing would be more up-lifting than The Star-Spangled Banner. Obama’s objections are generated from the radical view that America is “racist and evil”, the view he adopted from former domestic terrorist Bill Ayers. Fortunately, the Atlantic Monthly magazine published a history of the National Anthem in the 1970s that changed my mind.

In 1814, as Fort McHenry in Maryland prepared anxiously for an attack by a huge British fleet bobbing in Chesapeake Bay, the American defenders, reeling after the torching of Washington by British troops, mustered provisions and courage and awaited destruction. The fort commandant kept the non-combatant occupants busy sewing a huge edition of the American flag, the Stars and Stripes, to lift morale.

On land, British grenadiers, marching from the destruction of Washington back to the fleet, passed through Upper Marlborough, Maryland where they heard the sounds of a major party hosted by a Dr. Beans to celebrate the departure of the Red Coats. The British unit decided to drop in and enjoy a tankard of mead and ran into the ire of their host.

Beans castigated the soldiers, calling them cowards and poltroons. The soldiers drank their fill and marched on, only to have Beans screaming after them. Enough was enough decided the British commander, who sent a detail to fetch the offensive American and placed him under arrest. He was dragged kicking and screaming to the fleet and deposited on the flag ship where the admiral was surveying the impending attack on Fort McHenry.

As this was a more gentlemanly and ladylike age, efforts were made to calm Beans down, but to no avail. Beans did not let up his profane diatribes, infuriating the British admiral who ordered Beans to be hanged by the neck, the sentence to be carried out after the bombardment of Fort McHenry.

Meanwhile, the American government was on the run and unable to return immediately to the rubble of Washington. President James Madison had much on his mind, including a report that that this Dr. Beans had been snatched from his home and imprisoned with the British fleet. One of his staff, attorney Francis Scott Key, was a friend of Beans and was outraged over the incident and the violation of the Articles of War in vogue then that protected civilians. He pleaded with Madison to protest and send a delegation to fetch Beans. With his capital burned to the ground and Fort McHenry about to be pulverized by the British fleet, Beans was not the president’s first priority.

Key decided to take matters into his own hands and headed down to the Potomac River where he commandeered a small sail boat and sailed down the river and out into the Chesapeake into the heart of the British fleet. He was taken aboard the flag ship where he demanded the release of his friend Beans. The admiral was not swayed by Key. Beans remained unrepentant and continued apace his abuse of the British people and their army and navy.

The admiral had a job to do, so Key and Beans were sent below decks where they had a nearly sea level view of the bombardment of Fort McHenry. The attack was dramatized by the use of the newly developed Congreve rocket with a tailing red flare that fascinated the imprisoned Americans. All in all, it was quite an impressive sight but it didn’t look promising for the Americans.

As Key and Beans watched in terror as the red glare of the Congreve rockets sailed overhead and the giant cannons boomed from the dozens of ships in the British fleet, all seemed lost. Then, as if choreographed by the gods, a gigantic American flag rose above the streaking dawn, signifying that Fort McHenry – and the American republic - still stood.

So yes, I sing our national anthem right out loud, and so should President Obama

END

Learning To Love Israel - The Hard Way

As Israel invades Gaza, justifiably in my view, the news coverage is a striking contrast to reports since 1948 extolling the brave Israelis that continued through the 1980s. In the media view during this era, the Jews had conquered the desert, defeated their Arab foes, created a parliamentary government and set an example of derring-do and survival envied world-wide.

Then things began to change in the early 1980s, beginning with the Left in Great Britain (remember Vanessa Redgrave demonstrating for Palestinian rights?). The Soviets began active measures campaigns in the refugee camps in Jordan and Lebanon, and the USSR placed Yasser Arafat on the KGB payroll to stir up trouble against Israel as a beard to thwart the United States.

In the US, Jewish anti-defamation organizations had been quite effective and big givers to political campaigns, especially Democrats. Far right Republicans didn’t fall into that camp until North Carolina US Senator Jesse Helms, the most powerful Conservative in the mid-1980s, suddenly performed a volte-face and began supporting Israel. I asked Republican king-maker Tom Ellis how this happened.

“Well”, he said, “they flew Jesse over to the Holy Land and let him walk where Jesus walked and he hadn’t been the same since”. Thus, even as activists began their campaign for the Palestinians against Israel, it took until the 1990s for the shift in public opinion in the US to move against Israel. But it did, and today - in one of the most stunning reversals in world opinion - Israel is now the bête noir of the chattering classes across the globe. The coverage of the invasion of Gaza ironically stains the Israelis as the Gestapo of the Middle East, an amazing turn of events.

In 1982, before this sea change began to swell, the Jewish Defense League came to call on me. The three gentlemen asked if I knew what the JDL was. I answered I certainly have heard of you, but was unclear on your role. The visitors said they monitor area media wherever Jews live, seeking out reportage they construe as anti-Semitic. I said I was not an anti-Semite, and they said they didn’t think so either as readers of my city weekly Spectator in Raleigh, NC. But there was a problem about an editorial I had written that caused them concern.

And then I knew my crime. I had written I was furious that Israeli Prime Minister had refused to meet with the American ambassador over some issue - and I didn’t like it. My reasoning was the US funds and secures the existence of Israel, making them to me, if not a vassal state, at least a dependent entity on the largess of America. I also wrote that Israel had been sauntering around the region in jack boots ordering everyone about, and worse, had engaged in espionage against the US. When caught, remorse was replaced by righteousness, as if Israel answers to a higher calling as the Chosen People. In their view, the usual rules of statecraft don’t apply.

The JDL gents thought they had a point, but I said they didn’t. Criticism of the behavior of a sovereign state is not religious bigotry – or in this case anti-Semitism. I looked them straight in the eye and said so. Not used to people standing up to them, the JDL SWAT Team looked at each other and said they would be back to me later. Fine, I said, but don’t go around accusing me of anti-Semitism in the meantime. Shalom.

Two days later I received a call asking if I would attend a “debate” at the Hillel Foundation auditorium in Chapel Hill, a town in our coverage area. I agreed and the date was set for a mid-week evening.

I walked into the auditorium and felt a frisson of exotic adventure. Crowded in the 200-seat hall were Jews of all sizes and stripes - Einstein-looking professors; Middle Eastern dressed women; Hasidic Jews with beards; many short-sleeved men in yarmulkes and uniformed soldiers of the IDF - the Israeli Defense Forces. They looked agitated.

The debate was actually a front for an inquisition. A token writer for the Chapel Hill newspaper was introduced and promptly disappeared into the woodwork. It was only I and a room full of angry Jews – angry at me.

Immediately, questions fired out from the audience accusing me of being a racist bigot and anti-Semite for daring to criticize Israeli Prime Minister Menachem Begin for his snub to the American ambassador. I took this hostile fusillade for a half-hour and then held up my hand and said “wait a minute”.

You are proving to me tonight why anti-Semitism exists. You are attacking me based on a pre-conception that anyone who dares criticize Israel for its actions as an alleged democratic state is an anti-Semite. My points about Begin’s behavior had not one iota of racial or religious bias. Yet, because it suits you to switch identities to win an argument, you abandon your democratic identity (the only democracy in the Middle East etc) and hoist the Ark of the Covenant on your shoulder in order to take the moral high ground on a purely secular issue.

On the other hand, if your religious arguments are losing ground, you elevate your secular views above others as a democratic state, taking the disingenuous view that religion has nothing to do with the position you are taking on issues. You want it both ways in any argument. In the process, you force outsiders to question your tactics and motives. And when you insult America, the one nation that supports you through thick and thin, you undermine the loyalty of US Jewry to the United States.

This did not go over well, especially when I added that Jews have got to stop seeing ovens whenever anyone criticizes the national state of Israel. No other country will take you seriously if you keep this up, jumping from the Chosen Ones to the Elected Ones to suit your argument du jour.

You’d think I would be lynched, but actually we all became friends. I think they saw my point – you will make me into an anti-Semite by attacking me for criticizing the elected official of your democratic state. Had I launched into the Protocols of the Elders of Zion or argued for Holocaust denial, I would indeed be guilty of anti-Semitism. And vigilance against the conspiracy nut cases and authentic anti-Semites is a necessary reality. But leave the people alone who accept you as a nation by feeling free to point out your diplomatic mistakes.

Today, I stand four-square behind Israel, who have emerged again as our true friends in a region where Anti-Americanism is the real danger. In the light that reveals the Arab lunacy gripping the Middle East today, Israel has proved to be - despite the bad patches with the US in the recent past - a sane, democratic island surrounded by an ocean of hate and self-destructive mayhem. Fatah, Hamas, Hezbollah and the rest are not credible entities for the world to support. Israel is - and the world media need to abstain from bashing them for protecting their existence.


END

I Know Why Daily Papers Are Dying

I know what happened to daily newspapers, from hard experience going up against a powerful and arrogant monopoly with my urban weeklies in the late 1970s.

By then, dailies were reaching the peak of their profitability and asset value, enhanced in the 1980s by the abandonment of the principles of the Newspaper Preservation Act of the 1950s. The original concept was to protect competition for news in local areas by preserving the declining evening papers as subsidiaries of morning papers. In the agreements made under the Act, the evening paper kept its own editorial staff and continued to be printed separately for late afternoon distribution. Advertising and business operations were left to the morning operation.

This bargain worked somewhat, providing two sources in one town as television news had not yet earned creditability. Under the de-regulatory atmosphere of the Reagan years, newspaper firms began to shed themselves of these cumbersome dual operations in different ways. Those with some morality went “all day” by combining the AM and PM titles in one paper distributed morning and afternoon. The Bugle and the Herald, for example, became the Bugle Herald. In other instances, the morning paper simply closed the evening paper and dared the government to sue them. In the end the evening paper became extinct - with some exceptions in the few markets where the evening paper was dominant.

By the mid-1980s, morning newspaper operations became true monopolies. Hiding behind the freedom of the wide skirts granted under the First Amendment, they ruled their communities, deciding what news was and who were their friends or enemies. Raking in enormous profits (the estimated average net profit as a percentage of revenues ran around 30%), they extended their grip with “shoppers” and purchases of small papers surrounding their main market. Fortunately, FCC rules kept them from owning TV and radio except under stringent rules.

By the late 1980s, newspapers were selling for enormous prices. It was not uncommon for buyers to pay seven times sales revenue for choice markets. Owners, old and new, became rich and ignored the editorial direction of their newspapers. One observer, in an effort to figure out why the New York Times had become a hotbed of radicalism, claimed owners were guilty over their obscene profits and assuaged their consciences by allowing editors to espouse a socialist line, first on the opinion page – and later in news articles.

Under the new regimes ascendant at major dailies in the early 80s, news was viewed through the prism of affirmative action, race, gender and sex. The New York Times required Caucasian new hires to wear placards around their necks for weeks beseeching co-workers to insult them for being white so they would know what it’s like to be a minority. And sure enough problems began with the validity of news stories. The Janet Cooke scandal at the Washington Post was one of dozens that occur to the present day. Out of control news rooms were not held to the old standards of journalism in their zeal to re-define their mission from objective coverage to using the power of the press to change the world to their own vision. Janet Cooke to this day does not see what she did wrong by fabricating an 8-year-old fictitious character who sold drugs. After all, she thinks she did her job by pointing out the problem. A remnant of this distorted reality appeared recently when major papers in the US admitted proudly their coverage of the 2008 presidential race was heavily biased for Barack Obama and against John McCain. In their world Obama had to win, no matter if objectivity was abandoned for their vision of the public good.

Journalism schools, mostly funded by daily papers, took up the new cause that elevated social justice above professional ethics. Their enrollments were boosted in the late 70s in what the Atlantic Monthly called the Woodstein Phenomenon – named for Bob Woodward and Carl Bernstein, the two reporters for the Washington Post who brought down the government and imbued Boomers with a mission. The curriculum in J-schools was already sketchy at best, so they became easily vulnerable to the radial trends incubated on campus. Graduates carried their views to the monopoly dailies where they found their ideas accepted. A reputational killing spree was kicked of by the newly minted ideologues against “enemies of the people” who made the hit list of major papers. Objective reporting was replaced with a manifesto directed at American values in the name of the victimized.

Fundamentals

As a publisher of weeklies, including the first business journals in our state, the frequency of the daily was our toughest problem – in coverage and ad sales. The big ole daily came out very damn day, so if we had an exclusive story, our sources had to sit on it before we could publish. As for ad sales, department stores, banks and airlines advertised price, interest rates and fares every few days. Our weekly deadline cost us plenty of business that went to the daily.

Yet, in a splendid irony, at least from my point of view, it is the daily frequency of newspapers causing them the most anguish today. Instant delivery of information via broadcast, satellite and online, makes the daily too slow for breaking news and the ever-shrinking news cycle. The old bludgeon of daily frequency is now turned on them. Due to their relative slowness in the new media era, newspapers are in serious threat of extinction. It just doesn’t register to them that a front page story on a major storm is old news by the time it hits the stands. Most people watched the storm arrive, hit and be cleaned up before the newspaper report.

Additionally, editors and owners have learned that no one loves them. Seeing themselves as a national treasure working on behalf of the “people”, it’s been hard to grasp their core audience is sick of them imposing elitist social theory down their throats with their morning coffee. In effect, like a morality play, the newspapers became sodden with power and abandoned their readers and advertisers who became tired of paying exorbitant prices. The Letters columns – allegedly where readers could correct the often abysmal bias - were policed and edited to avoid criticism to keep the party line viable under the guise of fairness. Because of their bias, the major dailies have lost the ability to sense what news actually is. They aren’t even capable of selecting worthy and interesting stories from the dozens of wire services buzzing away in their newsrooms (what is called “rip and read” in the biz), and certainly unable to choose and assign pertinent local stories outside the “agenda”.


Even though newspapers are quite aware of their fall below the water line, many continue with their self-important social agendas rather than reacting to the crisis and fixing their content. There is still the conceit they are the only credible source for news, even as new outlets appear. And most papers can’t change their behavior, continuing to impose their social views as news. You may think the editors meet every day to decide how best to cover the news, but actually they are building the front page from the point of view of the “victimized” or “un-enabled” to remind their mostly older, fairly affluent readers they are guilty for society’s shortcomings.

It’s their vanity they can’t shed, not just on the news pages, but on the business side where they foster the perception that circulation is king - and advertisers are the enemy. Actually, circulation revenue is less than 5% of the total revenue of a daily paper. Ads pay the bills, despite the posturing from their days as a valid monopoly that advertisers are secondary - almost a necessary evil - in the mission to change society. After all, don’t advertisers demand news coverage and soil themselves by making money - thus tainting the perfect world sought by journalists today – including writers for the business pages who still think circulation revenue pays their salaries.

Too Late

This posturing by the dailies prevented them for doing the one thing that could save them. They should have gone “free” in the 1990s, abandoned the façade of paid circulation and admitted that without t advertisers they are dead. TV and radio are free as is every city weekly in major markers in the US – including the Village Voice. My weeklies were pioneers in free circulation in 1983 after being paid for over five years, but the daily papers clung to their distinction as paid to protect their puffed up self-image. Now the world of media has passed them by. If they convert to free now, it will appear a desperate move.

What about the Internet? Certainly dailies were seriously harmed by the movement of classified ads to online as they sat in their smug splendor. If they had gone free and placed a paper on every demographically correct doorstep in the community, they could have stopped the trend. Now the real problem is web display advertising. Although papers have large sites recording millions of visitors, the price they can charge online is around 10% of what they used to charge for a print ad. Sure, their web sites have lots of ads, but sales are abysmal compared to print revenue. But since their circulation pattern is now antiquated, profitable print display clients have moved to other media.

Look for drastic steps very soon as dailies struggle against the changed marketplace – and against their own conceit. Newspapers need a new look, using paper that can reproduce color properly. Television, magazines and online sites are graphically appealing; daily newspapers are drab relics from an age gone by. But they do have a distribution system in place to accomplish effective free delivery. Since the paper is delivered in the early morning hours, they are able to hire adults who often complete their routes before heading to day jobs. This system is a big plus that papers are under-utilizing as they wallow in the useless pride of their once powerful paid system. And they know that “inserts” are their bread and butter; with home delivery to every desirable household, advertisers will find it more effective than junk mail.

And newspapers have something else – boots on the ground. Neither TV nor radio - and certainly not cable and Internet outlets – have real reporters covering beats, from city council to the state legislature; from school boards to business events. That's why, despite their economic decline, newspapers continue to set the national news agenda, still serving up bias rather than hard objective coverage. Thier content is copied by the broadcast and Internet media who continue to operate with no real news staffs. The papers compromised this raw power during their monopoly years when they allowed broadcasters to join the Associated Press, a non-profit membership news service that allows participants to run content from any other member. Broadcasters and web sites cannibalize AP - and the actual daily print edition for free – without contributing to the pool of available news. Today, all non-print media steal newspaper beat reporting without payment. Daily papers need to rein in this give-away and get paid for gathering the news others are using to compete with them.

The biggest crucial step is to remove the bias from the news pages, a bad habit that rages on unabated, especially in the nationally known papers. The New York Times and the Washington Post are the most notorious culprits in politicizing the news, setting a tone imitated by smaller market papers and spread into the culture via the airwaves. That’s the real reason dailies are dying.

(Bernie Reeves founded the first city-weekly in the South in 1978 and the first business journals in North Carolina. He was the first successful editor/publisher to compete successfully with the entrenched regional daily newspaper in Raleigh, NC. He is editor and publisher of Raleigh Metro Magazine (www.metronc.com) and founder of the Raleigh Spy Conference (www.raleighspyconference.com ).

END

Radosh, Reeves and Bill Ayers

First is my reply to pajamasmedia.com to a piece by Ron Radosh – which follows - criticizing the New Yorker for praising Bill Ayers as he re-issues his 2001 book Fugitive Days about his career with the Weather Underground. (Thanks to Arch T. Allen for forwarding.)



Reeves reply to Radosh piece:

I think I am the only person to confront Bill Ayers and challenge his book and his career as a terrorist. I wrote an account in my monthly Raleigh Metro Magazine in February of 2006. Go to www.metronc.com and enter key words Bill Ayers or Weatherman.

Of note was the appearance on stage with Ayers of the FBI special agent who investigated the Weather Underground. He went on about the excitement of those heady days and praised Ayers and his cohorts as smart and hip and well versed in "tradecraft".

Ron Radosh, who was a speaker at my annual Raleigh Spy Confernce in 2005 (www.raleighspyconference.com),does not broach the similarities of the Weathermen and their brothers in terror to the Soviet model. In his book Ayers says a guy showed up regularly with a suitcase of money. We thought it was DB Cooper Ayers laughingly explained.



Radosh article:

Shame on The New Yorker
Shame on The New Yorker and its editor David Remnick for playing a role in the attempt of Bill Ayers and his publisher to resurrect both Ayers’ book and his reputation. Beacon Press has announced that they are releasing an updated version of Ayers’ 2001 book Fugitive Days on November 12th, a publication date purposely held until after the election. As most everyone knows, the original edition had the misfortune of being published on 9/11/2001, a date that led to cancellation of Ayers’ book tour, and to reams of negative publicity. The last thing the American public wanted to hear about was the glamorization of a 1960’s terrorist.

But in our celebrity driven culture, the attention to Ayers in the election campaign has made him a hot number, and he has decided to make his views known in a new afterword that appears at the end of the book.

And now the current edition of the elite Manhattan weekly has helped Ayers in his new campaign, with a fawning “Talk of the Town” article. That the piece is written by its editor-in-chief David Remnick, a first rate writer and a very smart man, makes it even more inexcusable.

Remnick lets Ayers get away with almost every point about his time in The Weather Underground. Attacks on him were all “guilt by association; ” he was made a “cartoon character.” Ayers expresses sympathy with Rev. Jeremiah Wright, who also was, Ayers told Remnick, “treated grotesquely and unfairly.” Evidently listening to, watching and reading Wright’s actual sermons is not enough for one to be allowed to render judgment.

Most egregious is that Remnick also lets Ayers get away with his excuse that he never meant to imply in the 2001 Times article about him that he wished they had engaged in more violence and bombings. When he told them “I wish I had done more,” Ayers claims, “it doesn’t mean I wish we’d bombed more shit.” He never had been responsible for violence against other people, he said. He was only acting politically to end the war in Vietnam. His only sin was to use juvenile rhetoric, and he says that he only engaged in “extreme radicalism against property.”

Ayers and Remnick must think people cannot read for themselves. Ayers actually said: “I don’t regret setting bombs. I feel we didn’t do enough.” Asked whether he would advocate bombing again, he answered: “I don’t want to discount the possibility.” Or as he writes in his memoir: “I can’t imagine entirely dismissing the possibility.”

By repeating Ayers’ false excuses, and without challenging or correcting him, Remnick allows his publication’s readers to conclude that Ayers is, not as his enemies have claimed, an unrepentant advocate of terrorism, but a wise 1960’s activist, who has learned bitter lessons and who is now much wiser. I assume Remnick has not read Ayers two year old interview in Revolution and his speech in Venezuela standing next to Hugo Chavez, two examples which alone would quickly disabuse anyone of Ayers’ having learned anything in the past decades.

Most outrageous is letting Ayers get away with his claim that he and his comrades only bombed property and harmed no one. Remnick does not ask him about their planned bombing of Fort Dix in New Jersey. The explosion there would have occurred had the bombmakers not prematurely exploded their homemade device while putting it together on March 6, 1970, killing themselves and destroying the Greenwich Village town house in which they were making the explosives. The bomb was an antipersonnel bomb meant to be placed at a dance for new soldiers and their dates at the fort clubhouse. Had it gone off, thousands would have been murdered. The bomb was an explosive wrapped in nails, meant to maim and cause severe pain as well as death. Had it been set off, historian Jeremy Varon writes, “it is possible that Americans would now speak of the 1970’s ‘as a decade of terrorism.’” The New York Times was correct when it editorially commented that the Weather Underground were “criminals, not idealists.”

The basic text that presents the truth about the group is the book by Peter Collier and David Horowitz, Destructive Generation:Second Thoughts About the Sixties. The authors spent thirty hours interviewing all the factions of the Weather Underground, and ten hours alone interviewing Bill Ayers. It is to them that Ayers first uttered the words he used at the end of his own memoir, “Free as a bird-guilty as sin. America is a great country.” Perhaps Mr. Remnick should have read the Collier-Horowitz book before setting forth to speak to Ayers. Clearly, the life and times of Ayers’ terrorist comrades is not anything he has any real familiarity with.

It is apparent from reading David Remnick’s words that in fact, he has not even read Fugitive Days. Even a cursory reading of the book reveals clearly that Bill Ayers is lying through his teeth in The New Yorker interview. At the end of this blog, I am posting my own detailed review of Ayers’ book, which appeared soon after 9/11 in the pages of The Weekly Standard. I dissect the book and what Ayers actually writes about his experiences and his view of bombing American targets. What he says disproves virtually all the claims he makes about himself to David Remnick. Or does Remnick really believe, As Ayers writes, that his actions were not terrorist, since they “intimidate, while we aimed only to educate?” Ayers also tells Remnick “I wish I had been wiser.” If this is true, how come he writes in his memoir that when people tell him the United States is a great country, he answers “It makes me want to puke?”

I ask readers one thing only. Please circulate and pass on my review. The new Ayers release will get much media attention. And I believe my critique will be effective in countering it. Let’s do what we can to foil Beacon Press’ campaign to sell his autobiography anew, and let them and Bill Ayers know that the American public may have elected Barack Obama President, but they have not changed their mind about the sordid role of Ayers and the Weather Underground in our country’s past.

END

Police Chief Writes Concerning The Fog Line

Police Chief Makes Points

Atlantic Beach, NC Chief of Police Responds to the "fog line" issue responding to a mention of the incident in the October, 2008 print ediiton of Raleigh Metro Magazine (www.metronc.com). Following his letter is my reply.

My name is Allen Smith, the police chief for the town of Atlantic Beach. Normally I do not respond to inaccurate reports, but feel I must in this case concerning the writings of Metro Editor and Publisher Bernie Reeves in the October 2008 issue that may be affecting our businesses during these economically stressed times when we cannot afford to lose one visitor.

I have read the inaccurate comments you have written about me and my department and to this point have not responded to any of your comments. I would, however, like to know where you are getting your information? Do you have any facts to support your comments? I bet not because there is no truth to anything you have written thus far other than the fact that you didn't know what a 'fog line' was. My officer did exactly what he was trained to do by stopping you and your friend that day. And by your own admission he was professional and polite. He didn't write you a ticket; he told you the truth about why he stopped you. He was checking to see why your vehicle was weaving and crossing the 'fog line' — and yes that is one of the things we are trained to observe to detect drinking drivers.

I have been the police chief here for a little over a year now, and we have made great strides in our community policing program with a solid buy-in from citizens, business owners and our fine officers. Why don't you take the time to research this by speaking to some of these folks before you report non-truths?

In case you are not aware, there is no incentive for me or our town to simply go out and, as you put it, write as many traffic tickets as possible. The town receives no revenue from traffic citations. Fines and fees go to the court and school systems. We do not generate revenue by writing traffic tickets. Our policy for issuing a traffic citation is that it must be a clear cut and substantial violation.

I don't understand your narrow views and continued attacks on people you don't even know. I have asked the mayor and manager to please invite you to stop in and meet me and my officers and give us the chance to prove to you that your rumor mill is filled with inaccuracies. Statistically speaking, our officers average writing about 70 citations per month. This includes many different charges and most are not traffic related. That's just over two citations per day (remember this includes many other law violations, not just traffic).

The majority of the time when you see one of our officers with a vehicle stopped, they are warning a motorist about some vehicle equipment problem or motor vehicle violation committed. Often times when you see officers sitting on the shoulder of the road, most people assume they are running radar. Often times they are not, they are simply conserving fuel, filling out paperwork or simply being visible because of complaints in the area by citizens. High visibility is a deterrent.

I again offer you the opportunity to stop by and visit. I am a retired State Trooper and believe that the key to reducing vehicle collisions is public awareness and education. Sometimes we have no choice but to raise awareness or educate by issuing a traffic citation because that's unfortunately the only way a small percentage of people learn. Please stop your attacks on my fine officers and department until you have tangible proof for your thus far inaccurate reports.

Allen Smith
Chief of Police
Atlantic Beach, NC


Editor's Reply:

Dear Chief Smith,

Thank you for your letter … the mayor wrote a detailed letter too that I posted on our magazine's Web site under my online-only column 'Between Issues' (www.metronc.com). With your permission, I will add your letter so that the record is kept straight — an important consideration as issues arise. I have found in my 30 years of publishing that airing all sides contributes to a consensus, and perhaps solutions.

I am sorry I have not been able to get to the beach in order to visit with your department. I am certainly willing, so please don't think I am avoiding a meeting.

I appreciate your points. The problem is perhaps more perception than reality. I am not exaggerating when I state that I hear complaints about police activity every trip I make to the beach during the summer months. My driving companion and I were actually discussing that very topic when I was stopped in Atlantic Beach for crossing the 'fog line' this past Labor Day weekend.

Many of these complaints I'm sure involve other police jurisdictions in the area, so the comments I hear are not necessarily directed at the Atlantic Beach PD. And I appreciate your explanation that ticket revenue does not go directly into town coffers. Most people assume they do.

The policy of emptying taxis to administer breathalyzers to kids is one of the most talked about. The drinking age restrictions today are creating a backlash from kids, diminishing their respect for the law. It is also causing dangerous drinking habits. Instead of learning to drink socially in public at 18, kids — old enough to be drafted and enter college — are isolating themselves from society creating an environment where binge drinking is the norm. Add to this their fear of the police and you have a volatile problem.

That they take cabs is a good thing for the public safety. Dragging them out and arresting them does not seem a sensible solution as they pose no danger on the highway. Is this still a policy at your department?

Police cars hiding beside the road may be benign, but the perception to visitors is unsettling. And issuing tickets to people for passing on the right of a left-turning car on Salter Path Road — another complaint I have heard several times — seems unnecessary. Traffic can back up for miles if motorists don't take action.

I have yet to meet anyone who has heard of the 'fog line.' Drivers should certainly avoid crossing the center line, but not an arbitrary white stripe on the right side of the lane. There are several feet of pavement remaining over this line; seems to me unless a driver crosses the pavement, he is driving safely.

I suggest signs be posted delineating this feature ... if no one in North Carolina has heard of the 'fog line,' I'm sure no one from out of state knows about it either.

The factor that drives these problems is the feeling people have for the beach. You assume the coastal communities want you to come often and spend money — to relax. This factor creates the need — in my mind at least — for beach police to be more tolerant than other non-tourist towns.

I guess it's down to the age-old question: Who is the customer? Merchants say they approve of your policies and they pay taxes. But what about the resort home owner, the renters and the hotel visitors? By elevating merchants above visitors, you risk losing the real customer.

The recent mess with tax evaluations has added fuel to the fire. This is hardly your fault, but you should know this action is talked about second only to the police issues.

I will contact you as soon as I can arrange a trip to the beach.


-Bernie Reeves, Editor & Publisher

END

Bankers Not Lending Could Tank Bail-Out

October 27, 2008

Address to the NC Bankers Association

(Note: The same day of this talk the New York Times reported the same issue)

Thanks for inviting me to address this distinguished gathering. I will try to be My Usual Charming Self.

With so much going on every minute as the election approaches, it’s difficult to keep up.

Just today:

Rep Barney Frank announced he would lobby to cut defense spending 25%;
Gas prices are the lowest in a decade, but world financial markets continue to tank;
The latest reports indicate the polar ice caps are freezing back up;
And the media are after Sarah Palin for daring to buy new clothes.


All this portends a loony upheaval as Nov 4 approaches. Here are my thoughts:



I remember the regional exec for a big bank in Raleigh saying to me in 1992: “Bernie, do you know the new word in banking today?
I said what’s that?
He said: NO.

That was in the teeth of the last catastrophic economic meltdown. I had a unique perspective. I had founded the weekly Spectator and Triangle Business Journal, the first area business publication in North Carolina.

Therefore, I saw what was going on from inside our own business - where advertising revenues were sinking like a rock- and out there in the larger business community where the pain was audible and visible.

Now we are in immersed another economic catastrophe. And once again banks are the centerpiece of the crisis.


But there are major differences today, some good, some not so good.

In the 1987-1994 debacle, banks were affected by policy directed by the Comptroller of the Currency, who dispatched squads of examiners across the US to comb through loan portfolios like the grim reaper.

They were literally ordered to trim their real estate portfolio to 20% of loans. Retailers and media were also “business non grata”, including my company.


As you old hands in the audience know, this scenario played itself out all over town and the state and the nation. Banks not only stopped the flow of cash - they reversed the hose and sucked the life out of the economy.

Worse, under George Bush the First, the federal powers to be let it happen. They only addressed the real estate portion of the problem ex post facto, via the establishment of the Resolution Trust Corporation, an immature rescue plan thrown together helter-skelter and staffed by kids off the street. The pain was prolonged for long seven years. Not until the last quarter of 1994 did the economy recover.

Today’s Crisis

In today’s crisis there is plenty of others to blame for the meltdown caused by the incestuous scheme to force bad mortgages on the market: ----

Fannie and Freddie and the Congress of course;
The entry by the Wall Street sharks who concocted mortgage backed security instruments to unload on the naïve but willing;
The rating firms who gave Triple-A ratings to dicey mortgage packages if they carried insurance, which turned out to be naked betting on outcomes;
The insurance giants who backed the creditworthiness of mortgage-backed instruments by underwriting these “credit default swaps” - resulting in the US taxpayers owning 80% if AIG;
Crooked short-sellers who flaunted the uptick rule to run firms like Bear Stearns in the ground as the SEC stood by;
And the universal greed and stupidity of most of the players.

At least George Bush 2 met the crisis head-on rather than waiting as his father did in 1991. The result should mean a short downturn rather than the slow death of `1987-1994.

But only if banks lend.


And therein lies the rub. The public has learned, before the economic mess unfolded before their eyes, that their bank has changed and isn’t really interested in lending money for household requirements or small business growth – unless it’s via a high-interest credit card or re-financing their house – adding to the mortgage bubble.

As I asked a banker recently, what happened to the 90-day note?

It’s gone.

The banker and the economist say households should save more, implying if they did, they wouldn’t be bothering the bank.

But wait a minute: I asked the same banker if he offered compound interest, for generations an effective trigger to encourage savings.

He gave me a blank stare.

So, I can turn over my cash and you hold it for several months and give me a ridiculously low interest return.

Meanwhile, as Warren Buffett himself pointed out in the Wall Street Journal only two weeks ago, my cash asset is depleted by inflation.

It’s a lose-lose proposition.

The only upside in this environment is that low rates force investments in the stock market. I shudder to guess where the Dow would be today if interest rates were high. It would indeed catapult the country into Depression.

Thus, while ordinary people and small businesses are chastised for borrowing and not saving enough – living in constant fear that the KGB-like credit rating agencies can ruin their future, banks have accelerated their emphasis even further away from taking in deposits and lending it out to become mini- investment banks who leverage assets – like Lehman and Bear – to make a large return – hopefully.

A telling example: new banks often don’t even solicit local depositors anymore. They simply go on-line and buy them – then they leverage them. There really isn’t much of a local customer anymore except for services, driving banks ever further from the community they serve and the function they were designed to achieve.


Today, Wall Street is taking the rap, but as the economy continues to stagnate because banks are not lending out the new cash provided by the bail-out, the crisis will continue.



The Political Consequences

The banking crisis has altered American politics at a crucial moment with the election on a week away. Only a month ago, John McCain was ahead in the polls. Yet somehow Bush’s actions to stave off disaster with a rescue plan have harmed the McCain campaign and strengthened the Obama effort.

First, it is obvious the mass media in the US are biased. A recent Rasmussen poll reported that 71% of Americans think the media are based on the side of Obama. A poll just this weekend reports that negative coverage of McCain is running 57% and only 29% negative against Obama.

I’m in the media business and I can assure you the print and TV big boys are part and parcel of the long sought wish fulfillment to achieve a multicultural utopia in America. This movement started with radical students in the 60s and 70s and grabbed hold of academe in the mid-80s. The battle cry of the radicals claims that the Western cultural tradition is no longer valid because it is grounded on racism, chauvinism and homophobia.

Obama is the messiah of this radical multiculturalist agenda . It makes no difference if he has good or bad points to make. He is simply the symbol of the final victory over free-market Western Culture and all its perceived evil – now unfortunately magnified as capitalism appears once again on the verge of collapse – the same environment that drove intellectuals and workers alike into the arms of the Communist Party in the 1930s.

Is it no wonder then, with the economy tanking, requiring government intervention, that many Americans are mesmerized by Obama’s “spread the wealth” campaign and refuse to listen to facts?

Like, how did the Obama campaign pin the financial crisis on McCain - who is on record warning about the bubble at Fannie and Freddie as early as 2002, and every year afterward?

Angry and disillusioned, many Americans refuse to recognize that Obama and his cohorts – Barney Frank, Chris Dodd for example – are largely to blame for the crisis. They encouraged affirmative action sub-prime lending and received large contributions from the unethical executives at Fannie and Freddie to expand the bubble bigger and bigger. Yet McCain sinks in the polls and Obama rises.

Bill Ayers/The Media and North Carolina

The most dramatic symbol of the reality of the Obama message is the presence in his life of former domestic terrorist Bill Ayers. As far as I know, I am the only person who has ever confronted the unrepentant Weatherman in public. It was in 2006 and you can read about it on the Metro web site (www.metronc.com) and read my views on Ayers in my current column in the October issue.

Bill Ayers is the personification of the radical mindset displayed by Obama, who cut his political teeth in the Ayers –dominated Chicago socialist community. The effort by the McCain camp to connect Ayers and Obama could be working, creating the fear by the majority of voters that Obama will indeed take the socialist cause to Washington if he wins.

It’s coming down to a contest between Bill Ayers and Joe the Plumber.

So will the radicals have their day and elect the Messiah of Multiculturism November 4?

I do know media and I know Americans might not be able tell a Rembrandt from a Picasso – but they do know television. And they are not stupid, as so many pundits think. And they don’t like being bought.

They know that the self-righteous always take the moral high ground with no right to claim it. For example, they know McCain stuck to his pledge to campaign under the limitations of the public financing rules for elections. Obama, who assumes righteous superiority, did not.

Therefore he has lots more money - but the reason why is not lost on voters. They don’t like being bought.

And the race angle skews polling. Voters don’t want to answer negatively to Obama for fear of being labeled a racist.

I’m sticking my neck out and picking McCain. And Elizabeth Dole. As for Congress, sadly these races are merely charades. The strict enforcement of the Voting Rights Acts has created safe seats for both parties.

As for the governor’s race, the corruption in Raleigh is inexcusable and on the minds of the voters. I endorsed Pat McCrory, but made it clear I know and like Bev Perdue. But eight years under Mike Easley have dragged the state down to a level of avarice and incompetence inconceivable to us who remember the famous words of State Treasurer Edwin Gill:

Good government is a habit in North Carolina.

We need our old habits back.

Conclusion

As the bonfire of vanities – fueled by the meltdown in the economy - burns brightly leading up to November 4, most American voters are quietly going about their business as households and small businesses generally do. It is their courage and effort that constitute the ground zero of the good faith and credit of the United States- the quality that will bring us through if the global forces at work give them a break.


You bankers know this. What you do every day to fuel the real America is commendable. I beg of you to re-focus on your home customers and help lead this great state and nation out of an economic mess that can ruin our quality of life for decades.

It’s up to you.

Zeno and Liston

Let me end commenting on Obama’s use of ACORN, the radical reform group left over from the 60s and 70s that is registering new voters for Obama so fast they are under investigation in 12 states.

But voter fraud is an old tradition in the US and North Carolina.

Lobbyist Zeb Alley swears this is true. When old-line politician Liston Ramsey was a young man studying politics under the infamous Zeno Ponder in the mountains of North Carolina, they visited a church graveyard to gather voter names for an upcoming election.

Liston said he spent all morning working and writing down names.

He wiped his brow anb said to Zeno: can we go home now?

Zeno looked at him and asked if he had gotten the names from the poor side of the cemetery.

Liston told Zeno it was all covered up and full of brambles and couldn’t we just leave them alone for now?

Zeno looked at Liston with a stern expression.

Let me tell you something Liston. Those people in the lower part of the cemetery have just as much right to vote as the rich folks on the high ground.

Thanks very much!

END

How Dare Bankers Blame Americans For Low Savings Rates

In response to another of the usual attacks on the American family for borrowing, I sent the following response to the head of an association of bankers:

It’s great to save, but families have to leverage their assets
to survive in a culture where taxes are oppressive and the cost of
living is high. Even so, most Americans save via their IRA because there
is an incentive. Outside that one break, there are few savings
opportunities. Meanwhile life continues to be too expensive as
government grows and inflation ravages. And while income taxes are lower
than a generation ago, local taxes and fees are eating up any extra cash
a household is able to save.

On the other side of the coin (to coin a phrase – a double entendre) we
have been living in a low interest rate environment for over a decade.
Your bank members offer 1.5% interest savings and no compound interest
that I can locate. Where is the incentive to save?

The good side of this is that the stock market, which represents the
economic engine of the nation, is kept from tanking entirely in bad
times because money has to come back because there is no advantage in
cash investments with rates so low.

And on the macroeconomic level, too much saving dulls the economy. Japan
has this problem.

But here is the real issue to me. The investment world on Wall Street
and the banks on Main Street exist entirely on the leverage of credit.
So it’s okay for Bear Stearns to borrow $50 to $100 million a week to invest for
themselves and their clients, but anathema for a couple to do the same
so they have a car, a washer-dryer and a health club membership – or
have to send their kids to private school. Your local bank members
borrow from each other and other sources to achieve their goals too. And
the government does not step in to save householders as it does banks
when they can’t pay back.

Our culture maligns ordinary people for leveraging in order to survive - and condemn them with credit agency ratings that brand them like unhealthy cattle -
while ignoring the entire financial system’s addiction to credit until
the credit house of cards collapses, as just happened.

It is hypocritical in the extreme for bankers to
berate the people of this nation and state for borrowing money on a
small level while your entire industry borrows on a gigantic level,
setting the stage for inflation and headlong plunges when credit dries
up – carrying the rest of us poor suckers down with you.

Worse, family borrowers are subjected to the vilest sort of usury and
collection tactics while Wall Street and Main Street executives walk off
with golden parachutes and a life of ease based on the obscene income
they generated for themselves by – you guessed it – borrowing money to
make money.

30

What Happened To The Economy?

Diane, this is in response to your question below, what happened to Wachovia and what’s going on with banking?

Wachovia merged with First Union, a bank known for sketchy behavior. It was a FUNB guy who took the reins at Wachovia and purchased Golden West mortgage for $24 billion, saddling Wachovia with what turned out to be mostly bad loans. That was the main problem.

But Wachovia also invested depositor and borrowed funds into funds comprised of even more bad mortgages; the bank also made several business loans that went bad from lack of due diligence.

Big banks like Wachovia have de-emphasized the old practice of taking in deposits and lending it, and moved into investments using borrowed money. Thus Wachovia’s base business is okay (lots of branches engaged in normal banking activity) but at the top, the officers led them into very bad decisions.

The credit squeeze then caught Wachovia, as it has all the big banks. This means there is not enough liquidity for them to borrow from other banks to make more investments or loans. This is what the crisis is all about. Liquidity is stifled because the sources for money – the banks that comprise and own the Federal Reserve –are out on the limb from bad mortgage-backed investments and can’t lend to each other.

In the US we don’t have a central bank controlled by the government to provide liquidity. That’s why Bush is meeting today with the Cabinet to discuss the US buying shares in US banks to provide cash for them to lend to each other. Some say this is socialism, and some say it’s about time the government got involved rather than relying on the banks themselves to keep each other liquid.

There are many other factors. For example, after the Enron scandal accounting rules were passed forcing banks and other financial institutions to degrade the value of mortgage loans on their books. It’s called “mark to market”. This means if you hold a mortgage on your books, you can’t say the house or building you are financing is worth a price based on its future value. It’s worth what you can get for it today.

This means institutions holding billions of dollars of mortgages can’t leverage the underlying asset to borrow. For example, if your house is supposedly worth $1 million in the market in the Triangle, you can’t borrow much against that value because demand is down. So what is it worth if you had to sell it tomorrow? $200 thousand maybe? That’s “mark to market”.

If approval to rescind “mark to market” happened today, suddenly the assets of these banks would be much higher, allowing them to leverage these assets to borrow money to lend and invest.

Two really bad things coalesced to cause this mess. Since the Community Reinvestment Act was passed in 1978, banks are required to proved they are not “red-lining” (meaning not lending) certain neighborhoods and groups due to race. In the 1990s under Clinton, the government undertook active measures to force banks to make bad loans to minorities. Fannie Mae and Freddie Mac encouraged this, fueled by certain members of Congress (Chris Dodd and Barney Frank and later Obama). So these institutions agreed to buy packages of mortgages from mortgage bankers even with bad loans included. This caused a huge bubble of money, and the lax standards to force affirmative action for potential black and Hispanic homeowners trickled down to all mortgage loans…the bubble got bigger.

The other really bad thing was the greed on Wall Street. All these new mortgages gave some guys the idea of creating an investment instrument secured by mortgages. They packaged huge portfolios and sold investors (including US banks and international central banks) mortgage backed security interests. They assured investors these instruments were rated Triple AAA by rating agencies and that each package contained a range of very good to only so-so mortgages.

Well, said the investors, if they are rated then I will buy them. When they became unraveled, it comes out the rating agencies never actually rated them. Instead, insurance companies offered insurance that backed them. These are called default credit swaps. The word insurance was avoided to avoid insurance regulations.

When it all came apart, AIG, the largest provider of these “swaps” couldn’t pay the claims and imploded. The government had to rescue them or the collapse would have ended the world as we know it.

Wall Street creeps (you know: slicked back hair, Armani suits, obscenely rich at 40 from illegal commissions) also circumvented SEC rules on short-selling. Teams of corrupt traders would pick a company and conspire to run down its share price. They were successful because the “uptick rule” (meaning you can’t buy a short position unless there is a corresponding long position) was not enforced.

For example, Bear Stearns was liquid when the short sellers went to work. With their share price driven down, Bear couldn’t borrow off its value to cover trading each day. They went under.

Let me add that George Bush and John McCain are both on the record attempting to stop the madness at Fannie Mae and Freddie Mac. Obama encouraged the scandal.

But remember, underneath all this doom and gloom is the gigantic asset of the “good faith and credit of the United States”. That’s you and I and everyone else getting up and going to work no matter what happens in the corrupt and rarified air of international finance.

Hope this helps.

Diane's email question below:

From: Diane Lea
Sent: Wednesday, October 15, 2008 11:23 AM
To: bernie reeves
Subject: RE: Wachovia

Speaking of the Wachovia Building. I have been at several gatherings lately and heard good ol North Carolinians waxing eloquent on the loss of Wachovia. Many noted that this is the loss of a 143 year institution. Others remembered that they got their first bank account at Wachovia when they were UNC students and still have it. My business account has always been with Wachovia. Some have had Wachovia managing their retirement funds. What's happening? I'm only smart about a narrow range of topics. But, a concerned citizen who has been a stalwart volunteer for preservation and conservation for decades. What do people like me need to know? You're my window on the NC world. Kindly direct me to any columns I should reread. Ciao. d

END

Letter From Mayor of Atlantic Beach In Response To My Letter About Police Activities On The NC Coast

Dear Mr. Reeves:
I hope this letter finds you well.
I received your letter regarding the concern of over-zealous police protection along the Crystal
Coast. We understand your concerns and I believe your impression was once shared by many in
Atlantic Beach. But, if I may play the role of publicist for a bit, that is no longer the story; the
story is what we are doing to correct the problem.
A little over a year ago, when I began my campaign for mayor, the concern over our “police
state” was one of the things I heard about most often. Since then, our town has worked hard to
change that impression with excellent results. The credit belongs to Chief Allen Smith. Chief
Smith took over the department last September. He came to us with an impressive resume in law
enforcement and emergency management, but equally importantly he came to us as a native of
Atlantic Beach. As a side note, Allen’s grandfather was Police Chief of Atlantic Beach in the
1950’s when my Grandfather was mayor. The police department and the town council share a
desire to restore the atmosphere in town to that of the golden era of Atlantic Beach.
During the past year, we’ve made great progress in this regard and I would appreciate the
opportunity to introduce you to Chief Smith and show you first hand what we are doing to
address this issue. It is a multi-faceted approach that is beyond the scope of this letter. I can,
however, relate its success. During the nine months that I have been in office, your letter is the
only complaint we have received about our police department. In contrast, we have received
several letters complimenting our officers. We have even received compliments from motorists
who were written tickets.
Public safety remains the highest priority for the police department. But, we realize that in a
beach community our officers must be more than law enforcement officers. They must also be
ambassadors for our town and a welcoming resource for our visitors.
I have investigated the complaint regarding your stop across from the Sheraton. While I
understand your misgivings with regard to this incident, I support our officer’s actions. Any car
crossing painted lines on the highway should be a concern for an officer. This is especially true
in an area of town where there is significant bike and pedestrian traffic on the shoulder of the
road. I believe that the officer was legitimately concerned and that the stop was justified. I hope
that the officer handled himself in a professional manner and made this uncomfortable situation
as bearable as possible. Again, safety comes first but it should not come at the expense of
courtesy. If the officer was not professional and respectful please let me know.
In reading your comments about property taxes, it struck me that you may have confused property
valuations and property tax rates. The county and municipal governments of Carteret County
pride ourselves in providing a high level of service while keeping tax rates down. In fact,
Carteret County currently has the lowest property tax rate of all 100 North Carolina counties.
Similarly, in Atlantic Beach, our new town council voted to reduce our property tax rates nearly
20% this year. For comparison, a property at Beacon’s Reach in Pine Knoll Shores is subject to a
county tax of 23 cents per 100 dollars of valuation and a city tax of 11 cents. The same property
in Raleigh would be subject to 53 cents of county taxes and 37 cents of city taxes. The total tax
burden in Pine Knoll Shores is 34 cents per 100 in valuation, in Raleigh it is 90 cents. In short,
your Raleigh tax rate is 264% higher than your tax rate at the beach.
Two years ago, we had the first revaluation of property in Carteret County in 8 years. This
resulted in many properties on the beach having their assessed value increase dramatically. Even
with steady or declining tax rates, a large increase in value could result in increased tax payments.
This is one of the few downsides of a wise and increasingly valuable investment.
Thank you for sharing your concerns with the Atlantic Beach Town Council and me. I assure you
that we value the presence of second home owners and visitors and are working to revive the fun,
relaxing, welcoming, courteous and safe atmosphere that existed here for so long. I am a native
of Atlantic Beach—my new niece is the 5th generation of our family on the island. I ran for
Mayor because I felt it was imperative to change the tone of government in the town. We are
making progress in that regard and, with your tacit permission, I will call you soon to invite you
down for a more thorough explanation of what we are doing on this front. It goes far beyond the
police department.
In closing, I would like to compliment you on your magazine. I am an avid reader of Metro.
When I moved back to Atlantic Beach after spending several years in New York City and San
Francisco, I was worried that I would be giving up the cultural riches of city life for the natural
beauty of my home town and home state. A friend from Raleigh was aware of this concern and
brought me a copy of Metro as an example of how Raleigh and eastern North Carolina had
evolved in the decade that I had been away. Upon reading that issue I breathed a sigh of relief
and I have not missed many issues since. Our community on the coast is not limited to those who
live hear year round. It includes our neighbors and visitors who spend their winters in Raleigh,
Wilson, Kinston and all the other towns in eastern North Carolina. Your magazine recognizes
this with its “from the Triangle to the Coast” philosophy, and serves to keep all of us in the
eastern NC community informed about what our neighbors are up to. Thank you for publishing
it.
I look forward to talking with you soon.
Sincerely,
Trace Cooper
Mayor

Go Down On Vacation, Come Back On Probation

Following is a letter I sent to the town councils of Atlantic Beach and Morehead City, NC after an encounter with the law.

Every visit I make to my condominium at Beacon's Reach, the conversation on the beach, golf courses, restaurants and docks always turns to the "police state" atmosphere created along the Bogue Banks communities and Morehead City. Everyone has a story: kids being hauled out of cabs to see if they have been drinking; unnecessary stops; road blocks; frivolous citations and the general feeling visitors are not welcome.

This is odd behavior indeed for communities that rely on tourists and second home owners for their livelihood.

I have been coming to the area for 55 years. I even went to Camp Morehead and later owned the weekly Maritimes until we moved our coverage to Wilmington and Wrightsville after the completion of 1-40. I founded Raleigh Metro Magazine with a mission to re-connect Raleigh and the Triangle to eastern NC and the coast. We are praised and respected for this decision and we have many readers in your community - and thousands here in Raleigh who frequent your coastal communities.

I know the beach areas well and I know dozens of people with homes there. No one I know is happy with the creepy feeling that our favorite destination - where we have invested money - has taken a turn away from hospitality to tyranny.

It starts upon arrival, adding a sinister tone to the coming weekend.
Each time I arrive via Emerald Isle coming in from Hwy 24, I count as many as six hidden police cruisers hidden along Hwy 58, as if to say to folks arriving: "we're here to get you." Early Sunday mornings officers appear to be hoping to catch motorists on the way to church. And young people are especially targeted for simply walking around and enjoying the freedom of being at the beach - a feeling we all remember fondly.

Friend Smedes York and I were talking about this very subject in my car returning from a golf game last Saturday during the Labor Day weekend.
We turned out of Ocean Ridge and headed west on Hwy 58 towards Pine Knoll Shores when an Atlantic Beach police cruiser fell in behind us.
After driving along a few hundreds yards, we were pulled over across the street from the Sheraton.

The officer introduced himself and said he had followed us and noted I had crossed the "fog line" four times. Mr. York and I looked at him with blank stares, not understanding what he was talking about. The office explained the "fog line" was the painted white stripe on the right hand side of the lane. We thought he was joking. There is another 3 to 4 feet of pavement beyond the "fog line" to the shoulder. Most drivers tend to bend away from the center line for safety purposes - but do they know it is a violation to cross the "fog line"? We sure didn't, and Mr. York is a former mayor of Raleigh and ran a large city.

Knowing the reputation of the town's police, I simply said I had no idea I had done anything and thought to myself this needs to be aired in court as the most ludicrous and petty infraction in the annals of traffic law enforcement. The officer did take my license and registration and I assumed a ticket was forthcoming. He returned and said he was letting me off with a verbal warning. He told he was "concerned" I was driving so recklessly because there was a problem with my car.

What I think is that I was the victim of harassment by a police officer on a fishing expedition hoping I had been drinking a beer or had some problem with my license and registration. No one I have mentioned this to has ever heard of a "fog line" but they all are aware of the persecutory attitude of the local police.

Something has gone dreadfully wrong at the beach. The contemptuous manner undertaken by the County and some of the towns to gouge second home owners with a preposterous property tax hike sent a message heard all over Raleigh and other eastern NC cities: the beach communities are intent on using visitors as patsies to line their budgets. This same attitude is illuminated by the tactics undertaken by the area police to alienate motorists and kids trying to relax and enjoy themselves.

One day you are going to look up and the homeowners and tourists will be elsewhere - where they can enjoy themselves without the fear of police tyranny and government avarice. It might be sooner than you think, as prices for residential real estate fall and owners sell for fear of the oppressive tax burden. Add in that we don't feel welcome there anymore, and you've got a recipe for disaster.

By the way, the negative feelings about the police are not confined to visitors. A local told me recently: "You come down here on vacation and leave on probation".

I am sickened that these petty issues have diminished my enjoyment of the beach communities I have loved all my life. You ought to be ashamed of yourselves.


END