Nobel Oblige

Regarding NYTimes OP-ED Sunday, Oct 18 and the many other fandangos about the Nobel Peace Prize—
Reading Bono's furthering of discourse today on Nobel Oblige, it occurred to me that right-wing radicals opposing the peace prize such as Rush Limbaugh, Fox Fascist News and certain congressmen might award their own peace prize—or Belligerance Prize—to another candidate. Wouldn't this be more productive for Mr Limbaugh than to ram his millions into St. Louis? And even on the so-called "left" there are many with a spare million-plus to give who could announce their candidates too. Rather like our marathon election here some years ago to re-call Governor Grey Davis, almost anyone can award a peace prize.

Contrarian Conservative
David Johannesen
Topanga, CA

Is Congress Awake? Radical White House and the Present Fiscal Nightmare

ECONOMIC CONSEQUENCES OF SEIGNORAGE: IS THE HOUSE OF REP AWAKE? 

Since graduating from The Wharton School forty years ago, followed by thirty years as a Wall Street banker,  I have watched markets and fiscal policy all along, and have done extremely well in stocks and real estate—moving 75% of BOTH in 2005-2006. As a voter since 1968, I have never seen such a failure of fiscal stewardship as we have experienced during the past eight years under a radical Republican regime posturing as conservatives. Most economic reportage these days (e.g., Summer, Wharton Alumni Magazine; Sunday, 8/17  NYTimes Magazine discussion of forecaster Professor Nouriel Roubini) fails to evaluate two abject causes of the American malaise: 1. Rampant use of "Seignorage", or the printing of money to finance the war in Iraq, which should be paid for by the House of Representatives raising taxes—unless they find the courage to begin to cut funding; and 2. The reality that there has long been ample regulation and supervision in this country over financial institutions—The Federal Reserve, Controller of the Currency,  fifty state banking authorities, etc—and their failure can be tied directly to a lapse in White House leadership, as if the Administration had slyly winked at banks to suggest they rather than the public were the customers, and so allowed the collapse of of government enforcement to undermine these markets like a virus.

Those old enough to recall the early seventies—when "stagflation" (no economic growth coupled with inflation) arose because of similar sienorage payment of Vietnam—may recognize what is happening today! By contrast, we actually paid for World War Two and Korea through bonds, taxes and other valid investment devices. In no other manner can the country afford long, expensive wars. Professor Roubini, whose forecasts saved me big losses over the past three years, concludes, "Once you run current account deficits, you depend upon the kindness of strangers. This might be the beginning of the end of the American Empire." All empires must eventually pay their bills: Britain's went out with great courage and dignity; ours is limping into to its final decade cloaked  in mendacity. The acknowledged, "on the books" current account deficit last year reached $800 billion, and national debt is escalating in proportions which almost escape rational measurement: Try a discounted future value out five years, using an IRR (internal rate of return) weighted to 10-year Treasury Note holders' coupons of 5%!

IRAN, THE REAL THREAT: ARE THE CANDIDATES AWAKE?

While these notes—and I have privately invited dozens of worthy economists and solvent bankers whose rigor and sagacity far exceed my own to comment—are primarily economic, public policy, if widely corrosive, must be considered in a political and historic context. In my banking years in Bahrain (1979-1982) I had many "sotto-voce", or "off the record conversations with British and American intelligence officials. To a person, they agreed that 1. Iraq would NEVER be a serious threat to the United States (or Israel) because Saddam in his mania was self-destructing the country the country (viz, invasion of Iran in 1980) and that Iran posed the greatest long-term danger because of its will and resources to wrest hegemony of the Islamic world from Saudi Arabia; and 2. If we ever put an army in Iraq, the result would be incendiary. I've kept up my research over the decades and this intelligence pretty much held ground through 2003. Note that we could have spent the past five years developing strategies to contain Iran which would have included the Russians, but today our aggressive posturing over the intervention in Georgia have pushed the Bear back into his millennial cave. Unlike French Foreign Minister Tallyrand's challenging disagreements with Napoleon, how has our Stanford-seasoned Secretary of State failed to recognize Czar Putin I and wake up our president? She should be prevented from re-entering the university gates in Palo Alto when she leaves office! In 1981, Israel freely took out Iraq's nuclear reactor, but today Israel will need permission from Russia to do the same in Iran. As a banker long involved with the Middle East, I suggest the "War on Terror" today is radical Republican political moniker, perhaps somewhat in the manner "Peace with Honor" rantings in Nixon's time amounted to "patrioteering" rather than patriotism.

ADMIRING THE PROBLEM

One policy characteristic emerges from the behavior of Congress and the president, as well as the rhetoric of the candidates: all are admiring the problem rather than facing the music. My friend, former Congressman Mickey Edwards, author of "Reclaiming Conservatism" (Oxford: 2008) agrees that damage to the Constitution has been severe, and that the Administration has been guilty of "High Crimes and Misdemeanors" far out-stripping those of Presidents Andrew Johnson (1865-68), Clinton or even Nixon. Yet, as conservatives, we  believe deeply in the in the elasticity and healing power of the Constitution, even beneath the heel of the present bench—who, after all, administered the first coup d' etat in our history—and trust in the abundant good faith and fellowhip of Americans to navigate the ship of state out of its present self-inflicted maelstrom, and try to remember that this Administration cynically realized from the beginning, that a president who goes to war—any war—gets much more unquestioned power.