[Posted 7:00 AM ET / 6:00 Central…Lincoln, Nebraska]
I’m sure glad Wall Street has this post-Katrina era figured out,
because I sure as heck don’t. Last week at this time we were all
still in a state of shock, not just over the destruction but at the
staggering display of gross incompetence across all levels of
government. Now with the luxury of more time and analysis,
I’m going to throw everything at you but the kitchen sink. All
sides will be represented…as I also hope the news cycle calms
down a bit over the succeeding weeks.
President Bush told us at the beginning of the week, “There will
be ample time to figure out what went wrong and what went
right.” No, no, no. In this case, there is no time. Figure it out,
now, before the next catastrophe.
One man I observe closely is NBC’s Washington Bureau Chief
Tim Russert. It’s safe to say the hardest-working man on
television is closer than ever to his own Walter Cronkite /
Vietnam moment. First, Russert was duped with the rest of us on
the issue of Iraq’s weapons of mass destruction, a theme he
trumpeted himself with every guest in the run-up to war.
Second, he’s frustrated Iraq has gone so badly; understanding as
well as anyone what a disaster defeat would be. And now he’s
seen the worst in our government with Hurricane Katrina.
On Sunday’s “Meet the Press,” Russert asked Homeland Security
chief Michael Chertoff, “Are you ready to resign?” Chertoff
babbled incoherently for a spell. Then when asked about the
timing of the levees being breached and the federal response,
Chertoff said “I opened newspapers (Tuesday morning) that said
New Orleans dodged a bullet,” adding he didn’t realize the
seriousness of the situation until much later in the day.
But the levees broke Monday evening! And as I sat watching
Russert, like him, stupefied, my first thought was “Why didn’t
you just turn on the TV that morning, you moron!” There was
NBC’s Brian Williams in New Orleans, for example, telling the
“Today” show audience that there had been a huge development
overnight. The city was flooding.
On last Tuesday’s Imus program, Russert expressed his
frustration further, especially with those saying an investigation
can wait.
“You have to call the government accountable! People have to
be held accountable…It’s so painful. The job of government is
to protect its people.”
He kept repeating that last bit over and over again. “The job of
government is to protect its people.”
Anyone with half a brain now knows that when the next large-
scale terror attack occurs on U.S. soil, our very way of life will
be threatened. Without a coherent response on the part of
authorities, the nation will quickly devolve into anarchy on a far
wider scale than New Orleans.
For his part, it’s also incredible President Bush could make the
statement “no one expected the levees to be breached.” This is
the same man who seems to take pride in not reading
newspapers. Mr. President, with all due respect, you may want
to try it sometime. On this issue, every major paper and
periodical in the country at one time or another had something on
New Orleans. What an embarrassment. What a disgrace.
But before I address Wall Street’s supposed prescience, I want to
spend some time looking at what others have been saying,
overseas and at home, liberal and conservative. You may think
when you read a particular point, well, who cares what Iran
thinks? Just understand how Katrina is being used on the
propaganda front.
France’s Liberation
“Bush is completely out of his depth in this disaster. Katrina has
revealed America’s weaknesses: its racial divisions, the poverty
of those left behind by its society, and especially its president’s
lack of leadership.”
Germany’s Die Welt
“Hurricane Katrina will bury itself into the American
consciousness in the same way 9/11 or the fall of Saigon did.
The storm did not just destroy America’s image of itself, but also
has the power to bring an end to the Republican era sooner than
expected. America is ashamed.”
Media Indonesia
“The superpower United States has finally succumbed to nature’s
wrath. The U.S. must eventually admit that it is unable to deal
with the victims itself. Something has changed: Hurricane
Katrina has destroyed some of the U.S.’s arrogance.”
Venezuelan President Hugo Chavez, quoted in El Nacional
“The rich were able to leave, the poor stayed there, and it is now
that they are evacuating them; four, five days later. That is the
model they want to sell us. Racial segregation – the mayor of
New Orleans said it – is a question of social classes; the rich
were able to leave, the poor were left, enduring the hurricane. It
is capitalism, in its extreme individualist phase.”
Malaysia’s Berita Harian
“What’s more saddening is that there have been riots and looting
in New Orleans. It turns out that in a developed country with the
most powerful economy in the world, some of its citizens are not
much different from the poor in Third World countries.”
Turkey’s Radikal
“The biggest power of the world is rising over poor black
corpses. We are witnessing the collapse of the American myth.
In terms of the USA’s relationship with itself and the world,
Hurricane Katrina seems to leave its mark on our century as an
extraordinary turning point.”
Iran’s Siyasat-e Ruz
“Hurricane Katrina has proved that America cannot solve its
internal problems and is incapable of facing these kinds of
natural disasters, so it cannot bring peace and democracy to other
parts of the world. Americans now understand that their rulers
are only seeking to fulfill their own hegemonistic goals.”
[Source for the above: BBC News]
From an article by Seth Mydans / International Herald Tribune
“In Aceh, where a tsunami last December hit hardest, the first
reaction to the disaster in New Orleans was sympathy, said
Azwar Hasan, a social worker in the Indonesian province where
at least 126,000 people died.
“ ‘Is there any food there?’ he asked. ‘Any water? I’m really
sorry to hear what has happened.’
“But then he made a statement that is being repeated around
Southeast Asia, where America is remembered with gratitude
and admiration for its fast, well-organized assistance to victims
of the tsunami.
“ ‘America is the best-developed country in the world,’ Azwar
said. ‘This kind of thing shouldn’t be happening in America.
We are wondering what is going on in America, and why.’ …
“Paulynn Sicam, a government official in the Philippines who
has studied and lived in the United States, also sounded
disappointed. And she sounded angry.
“ ‘It’s so heartbreaking to see how helpless America has
become,’ she said. ‘You’re not strong any more. You can’t even
save your own countrymen and there you are, out there trying to
control the world.’ She said there was no excuse in a nation like
America for the suffering and apparent incompetence she had
seen on television.
“ ‘Why are people hungry?’ she said. ‘That really bothers me.
Why are they hungry? The first thing you do, you feed them.’ …
“Newspapers around the region reflected these views, sharing
sympathy while expressing shock and amazement at this unusual
view of what one called ‘the planet’s most powerful country.’
They contrasted it with scenes from the tsunami, where the chaos
seemed mostly the work of nature, not man, and where the
suffering was not for the most part compounded by violence and
anarchy.
“ ‘In stark contrast to the tsunami’s aftermath, when survivors
huddled to hang on to what was left of their shattered
communities, Katrina’s poor and mostly black victims reacted
with explosive anger,’ wrote the New Straits Times in Malaysia.”
From a story in the Wall Street Journal, more impact from
Katrina.
“It is too early to say whether a shift in Chinese popular views
might affect official relations, which have frayed over such
issues as Chinese piracy of U.S. goods and Beijing’s rising trade
surplus. But Liu Jinzhi, a professor of international relations at
Peking University, points out that in the past 50 years, Chinese
people’s views have gone from one extreme to the other: Vilified
under the communist system, the U.S. has been idealized during
the past two decades of market changes.
“ ‘I think now Chinese people are coming close to a true picture
of the U.S.,’ Prof. Liu says. He adds that in the long run, the
change in public opinion toward the U.S. could ‘restrict Chinese
leaders’ [options] in making foreign policy’ and pressure them to
take tougher positions.”
Ralph Peters / New York Post
“As for our ‘friends’ in Europe, they’ve been gloating over the
tragedy that struck our country. If you follow the European
media, the self-righteousness is disgraceful – and they’re just
plain mean.
“When the last water recedes, we may find that a few thousand
Americans died in a great natural catastrophe. But two years
ago, during a heat-wave, 25,000 elderly Europeans died
unnecessarily in France, Italy and Germany while their political
leaders, medical personnel and even their children went on
vacation – and stayed on vacation. Katrina wasn’t preventable,
but those elderly deaths were.
“America has suffered terrible natural disasters. There’ll be
more in the future, and we need to be better prepared. But
Europe’s disasters – far worse than any of ours – have been made
by human beings.
“I’ll take America. On our worst day.”
Gloria Borger / U.S News & World Report
“Then there’s this: the underlying story that so many of those
trapped in New Orleans or Gulfport or Biloxi were stranded
because they didn’t have enough money to leave. They are poor,
mostly black; now they are destitute. [So much for the GOP
outreach to African-Americans.] Now they need charity and
federal assistance. And we need to know why they were left to
suffer and die. George W. Bush needs to tell us and to find a
way to help them put their lives back together while they mourn
their dead. That’s what presidents do. No bullhorn amid the
rubble, just an outstretched hand and palpable help.
“After the president flew over the affected areas last week, he
told ABC: ‘The image that sticks in my mind the most is
somebody sitting on a rooftop waving a flag saying, ‘Come and
get me.’’
“So why didn’t we?”
George Will / Newsweek
“Regardless of where individual Americans begin or end in
fitting Katrina into their interpretation of reality, the storm’s
furies and, even more, the social furies it unleashed will deepen
Americans’ sense that, in Aristophanes’ words, ‘whirl is King,
having driven out Zeus.’ In the dystopia that is New Orleans as
this is written, martial law is a utopian aspiration. Granted,
countless acts, recorded and unrecorded, of selflessness and
heroism attest to the human capacity for mobility. But this, too,
is true: The swiftness of New Orleans’ descent from chaos into
barbarism must compound the nation’s nagging anxiety that
more irrationality is rampant in the world just now than this
nation has the power to subdue or even keep at bay….
“(It) is hard to imagine New Orleans benefiting in any way, or
even recovering, from Katrina. The city relied for its prosperity
too much on merchandisable charm – tourism, conventions,
gambling – that may be impossible to revive for Americans who
have seen the bodies floating in the sewage. Neither Newark nor
Detroit has really recovered from the 1967 rioting.
“In Katrina’s collision with New Orleans, the essence of
primitivism, howling nature, met one of mankind’s most
sophisticated works, a modern city. But what makes cities such
marvels – the specializations and divisions of labor that sustain
myriad webs of dependencies – also makes them fragile.
Forgetting that is hubris, an ingredient of tragedy.
“So Katrina has provided a teaching moment. This is a liberal
hour in that it illustrates the indispensability, and dignity, of the
public sector. It also is a conservative hour, dramatizing the
prudence of pessimism, and the fact that the first business of
government, on which everything depends, is security.”
David Brooks / New York Times
“(The) key fact to understanding why this is such a huge cultural
moment is this: Last week’s national humiliation comes at the
end of a string of confidence-shaking institutional failures that
have cumulatively changed the nation’s psyche.
“Over the past few years, we have seen intelligence failures in
the inability to prevent Sept. 11 and find WMDs in Iraq. We
have seen incompetent postwar planning. We have seen the
collapse of Enron and corruption scandals on Wall Street. We
have seen scandals at our leading magazines and newspapers,
steroids in baseball, the horror of Abu Ghraib.
“Public confidence has been shaken too by the steady rain of
suicide bombings, the grisly horror of Beslan and the world’s
inability to do anything about rising oil prices.
“Each institutional failure and sign of helplessness is another
blow to national morale. The sour mood builds on itself, the
outraged and defensive reaction to one event serving as the
emotional groundwork for the next….
“The scrapbook of history accords but a few pages to each
decade, and it is already clear that the pages devoted to this one
will be grisly. There will be pictures of bodies falling from the
twin towers, beheaded kidnapping victims in Iraq and corpses
still floating in the waterways of New Orleans five days after the
disaster that caused them.
“It’s already clear this will be known as the grueling decade, the
Hobbesian decade. Americans have had to acknowledge dark
realities that it is not in our nature to readily acknowledge: the
thin veneer of civilization, the elemental violence in human
nature, the lurking ferocity of the environment, the limitations on
what we can plan and know, the cumbersome reactions of
bureaucracies, the uncertain progress good makes over evil.
“As a result, it is beginning to feel a bit like the 1970’s, another
decade in which people lost faith in their institutions and lost a
sense of confidence about the future…
“Reaganite conservatism was the response to the pessimism and
feebleness of the 1970’s. Maybe this time there will be a
progressive resurgence. Maybe we are entering an age of
hardheaded law and order. [Rudy Giuliani, an unlikely GOP
nominee a few months ago, could now win in a walk.] Maybe
there will be a call for McCainist patriotism and nonpartisan
independence. All we can be sure of is that the political culture
is about to undergo some big change.
“We’re not really at a tipping point as much as a bursting point.
People are mad as hell, unwilling to take it anymore.”
Wall Street
The stock guys would have you believe it’s clear sailing ahead;
assuming you can avoid all the flotsam and sewage being washed
into Pontchartran and the Gulf. But what was so idiotic about
this week’s equity rally is that the picture did not brighten, unless
you take particular joy in Mayor Ray Nagin’s original estimate
on the death count possibly being far too high. [This guy has
less credibility than Rafael Palmeiro.]
While we did receive some clarity on the energy front, the fact is
60% of Gulf production is still out and a large portion of that
may remain sidelined for months to come. And yes, crude itself
is off $6 from its recent $70+ high, and gasoline prices will
shortly fall below $3, if only briefly, but the overall picture is
still one where production and capacity, globally, remain
stretched to the limit; especially if one is calling for the world
economy to be robust, as the market was saying, in essence, this
past week.
Granted, some economic indicators, such as the lead reading on
the service sector and the Fed’s gauge of regional economic
activity, revealed underlying strength; but the mood in the
country is sour, large segments of our population are being
hammered by fuel costs with winter promising more pain,
retailers will not have a jolly Christmas, the real estate market
has peaked in many key regions and, I’m convinced, earnings
will generally disappoint. Plus, the Fed seems hellbent on
raising interest rates further. So what the heck is everyone so
happy about? asked the Grinch.
Street Bytes
–Ask me in another two weeks, after the Federal Reserve has
acted on Sept. 20, whether this week’s rally was for real.
Nonetheless, the Dow Jones did have its best run in months, up
2.2% to 10678, the S&P 500 gained 1.9% to 1241 and Nasdaq
picked up 1.6% to 2175 (meaning it’s now exactly unchanged on
the year). Oil may have acted as the chief catalyst in falling to
the $64 level but, again, Katrina exposed the fragile nature of the
relationship between production, refining and getting it to the
pump or pipeline. Another shock would send us over the edge,
that is unless the global recession comes first, which has been my
scenario all along.
By the way, the latest consensus among strategists, as polled by
Barron’s, is for earnings on the S&P 500 to be $80 in 2006. Put
a 16 multiple on that, the upper end of the range, historically, and
you get an S&P of 1280, or just 40 points from where we now
sit. [Merrill Lynch’s Richard Bernstein says earnings will be
closer to $74.]
–U.S. Treasury Yields
6-mo. 3.72% 2-yr. 3.87% 10-yr. 4.12% 30-yr. 4.40%
Rates rose across the board as some leading Fed officials said
inflation remained a concern and that there was no compelling
reason, Katrina aside, for not continuing to hike interest rates in a
measured fashion. But Chairman Alan Greenspan and Co. also
can’t ignore the humongous costs of Katrina…easily $100
billion+ and counting ($62.3 billion of which has already been
appropriated by Congress). So stay tuned. The Open Market
Committee meeting of 9/20 will be as closely watched as any in
recent memory.
–Japan’s Prime Minister Koizumi appears to be headed to a solid
victory in the polls on Sunday. The Nikkei stock index hit
another multi-year high on hopes Koizumi would then have a
new mandate to pass his reform agenda. Elsewhere in Asia, the
South Korean stock market hit an all-time high on strength in the
consumer sector.
–Boeing’s machinist strike, which has shut down production for
about 10 days now, is beginning to have a ripple effect among its
suppliers. [Former chairman Lewis Platt died, 64. He helped
lead the company out of the procurement mess.]
–Barron’s had an interview in its 9/5 edition with money
managers Mark Miller and Lee Mikles, who are primarily short
sellers. You will recognize some of these themes.
Q: Why do you think we are at an inflection point?
Mikles: Bottom line, the consumer is broke and he doesn’t know
it yet. But he is about to find out. All the buckets that propelled
consumer spending are empty now, whether it is the increase in
mortgage debt, the increase in consumer debt or the reduction in
the savings rate. No one statistic will tip the scale at the end of
the day. But one very obvious and very curious statistic is that
we have dipped into a negative savings rate for the first time.
That is not only unsustainable, it is sustainable only for a few
months. That’s important to note because it tells you consumers
are borrowing money to make debt payments. The U.S.
consumer has become payment driven. He is driven not by the
aggregate amount of debt he possesses but by the amount of the
payment.
Miller: Every month there is some increase in consumer
borrowing that has to occur just for the consumer to stay level.
The consumer is treating his balance sheet much the way the
government is treating theirs, but, of course, the consumer can’t
create currency like the government can. The point is the
consumer cannot continue to borrow to make his debt-service
payments for very long. How did we get here? We got here
because of the huge differential between wage growth and what
we spend and what we consume.
Q: What about the argument that consumers may not be saving
but the appreciation they have seen on their houses is a form of
savings?
Mikles: The consumer doesn’t know he is broke because his
house hasn’t stopped going up yet. It hasn’t started going down,
it just hasn’t stopped going up. Once it stops going up, the
consumer will immediately – and I mean a matter of months –
find out that he is, in fact, broke.
–Texas Instruments helped the tone of the technology sector
with news it expected to report substantially higher earnings for
the third quarter than the Street was anticipating. But Intel’s
update was less than exciting and the shares fell.
–Homebuilder Hovanian warned on both the rest of ’05 as well
as 2006. But by week’s end the sector had regained some of its
lost luster. Of course the still tame interest rate environment
continues to lend support to real estate values. [Remember, I’ve
been touting stagnation, not a collapse…for now.]
–Last week I forgot to include a timely comment from an old
friend of mine, high school classmate Brad K. who has his own
business, International Swimming Pools. There were so many
different aspects of the damage wrought by Katrina and he
brought one to light; that being that at least initially, about 30%
of the nation’s hydrogen was out. And hydrogen is used in the
manufacturing of steel. [Brad’s pools employ this.] So anyone
using steel is being squeezed. After Brad’s note to me, there
were all kinds of confirming pieces from across the country.
–For once I’d like a rational debate on tax cuts. Revenues are
soaring. It’s the level of spending that’s been the problem, sports
fans.
–Ford recalled 3.8 million trucks and SUVs because the cruise
control system can catch fire. And General Motors announced it
is ending its latest employee pricing program on Sept. 30, opting
for a new “Total Value Promise” campaign, whereby, GM
promises, you will be paying more. I promise sales will
plummet.
–An FDA advisory committee is recommending the approval of
the first inhaled form of insulin, Exuberia; a product
manufactured in a combined venture by Pfizer, Sanofi-Aventis
and Nekter Therapeutics.
–Reporters Without Borders is citing Yahoo for its complicity in
helping Chinese authorities track down a writer whose Web
postings slammed China’s press restrictions. This is far from the
first time America’s internet companies have participated in
action of this kind. It’s scandalous, but not in the least
surprising. Some of our defense contractors and weapons
laboratories, after all, have colluded with the Chinese for decades
in the name of ‘commerce.’
–EBay’s shares slid on word it was in talks with Swedish
internet-based phone company Skype. It’s seen as a worrisome
search for new revenues and a change in the business model.
–Delta is laying off another 1,000 workers and is slashing its
route schedule as it faces imminent bankruptcy. Meanwhile,
Northwest is staring at a similar fate and is also being
investigated by the FAA for possible safety issues as a result of
the strike by its mechanics. Lastly, Continental Airlines says it
will spend $1.3 billion more for jet fuel in ’05 than ’04.
–British Prime Minister Tony Blair is demanding an end to all
farm subsidies in five years as part of the next round of world
trade talks in December.
–Foreign investment in Mexico has plummeted 36% the first
half of 2005 vs. 2004. “Foreign investors don’t see a lot going
on here to excite them,” said one Mexico City economist. [Los
Angeles Times]
–PartyGaming, the world’s largest internet gaming outfit,
warned of slower growth as “player yields” are declining at rates
“greater than expected.” The poker craze is peaking.
–Julius Westheimer died at the age of 88. Long-time viewers of
“Wall Street Week” with Louis Rukeyser should fondly recall
him, the lone stockbroker on the panel who was a throwback to
an era so many in this business mourn the passing of.
Foreign Affairs
Iraq: Former Secretary of State Colin Powell, in his first
interview since leaving the Bush administration with ABC’s
Barbara Walters.
“What we didn’t do in the immediate aftermath of the war was to
impose our will on the whole country with enough troops of our
own.”
Powell goes on to say how ashamed he was over his UN
presentation on Saddam’s WMD, something that will be part of
his legacy.
As for the situation on the ground, it was more of the same this
week. The sectarian strife that represents a low-grade civil war
while threatening to become a far bigger one, got a boost from
Moqtada al-Sadr who vowed revenge against Sunnis for the
stampede in Baghdad that claimed 950 lives. After a year’s
truce, al-Sadr is back to condemning the American occupation.
Meanwhile, few of the dollars targeted for aid projects are
actually being spent; totally confounding members of Congress
who approved the largesse in the first place. And of dollars that
are allocated, much of it never ends up where it was supposed to.
For example the Washington Post’s Jim Hoagland recently wrote
of $70 million that was earmarked for cleaning up polluted Basra
rivers and was instead shifted to the “corruption-drenched
Ministry of Defense.” [Basra was the scene of this week’s worst
violence, incidentally.]
Iran: The mullahs vowed not to stop their uranium enrichment
program, in response to the European threat to take it to the UN
Security Council. But, as I told you weeks ago would happen,
Russia has already said it would not support any such UN action.
Two other items. French President Jacques Chirac’s illness
could hurt the West’s efforts in the Iran sphere since Chirac was
just getting heated up in promising to take action in the UN.
[While he left the hospital Friday after his vascular ‘incident,’ he
will undoubtedly be taking it easy for some time to come.] The
other item involved the latest guesstimate on Iran’s ability to
build a nuclear weapon. A London think tank said no sooner
than five years. So in the past few months, we’ve heard anything
from one to ten years…take your pick. The West would be crazy
to think beyond a year or two.
China: After I posted my column last Saturday, the White House
announced it had canceled its meeting with President Hu Jintao
as a result of Hurricane Katrina and President Bush’s need to
focus on the crisis. But there are some in China who wonder
who really canceled it? I think the American people, for
example, would have understood if Bush had kept the visit on the
schedule, and it’s not as if it required an inordinate amount of
time and preparation on Bush’s part. [Then again, you never
know with him.] So did Hu himself suggest they do it some
other time? After all, tensions have been rising on a number of
fronts and Hu’s standing back home may have been hurt if the
discussions were deemed disappointing. The issue I raised
myself last week, whether or not it was a “state visit,” was also
important to the Chinese and maybe the extra time gives Beijing
a chance to smooth this over.
On the issue of Taiwan, which should have been at the top of
Hu’s and Bush’s agenda, President Chen Shui-bian trimmed his
defense appropriation bill to $11 billion from $15 billion, much
to the chagrin of Washington, because it was Chen’s only way to
gain support in Parliament. But the opposition Kuomintang
doesn’t believe any new aid is needed, which helps spell the
death of an independent Taiwan should this position prevail.
Regarding relations with Japan, Hu Jintao said the following in
final remarks commemorating the 60th anniversary of the end of
World War II.
“History tells us that any attempt by a country to realize its
interests through the use or threat of force…will get nowhere.
Such attempts are against…the fundamental interests of people
all over the world.”
Hu also reiterated his “four nevers” policy towards Taiwan,
while making overtures to the island’s opposition parties.
“We will never waver in our commitment to the one-China
principle, never give up efforts to strive for peaceful
reunification, never change our policy of placing hopes on the
people of Taiwan and never compromise in our opposition to
secessionist activities.” [South China Morning Post]
Notice how he skillfully avoided threatening the use of force.
Ahem.
North Korea: The six-party talks are slated to resume again this
week. Haven’t you missed them? This round could represent a
truly defining moment, for Pyongyang is now insisting on it
being allowed to develop a peaceful nuclear program. China,
Russia and South Korea support this, while the U.S. and Japan
are against. If the North’s goal is to split this shaky coalition, it
is succeeding.
Egypt: President Hosni Mubarak held his country’s first multi-
candidate presidential election this week but it was far from fair.
In fact it was your basic sham as no foreign monitors were
allowed and clear cases of voter intimidation and fraud were
rampant. Nonetheless, the government announced a Mubarak
landslide; specifically, he polled 88.6% of the vote, though
surprisingly the government admitted turnover was all of 23%.
So as I’ve been noting, what does Washington do? It’s been
trumpeting democracy across the region, after all, and it has
another opportunity to pressure Mubarak this fall as the country
holds important parliamentary elections.
Ukraine: President Viktor Yushchenko fired his entire cabinet
amidst a massive corruption scandal; a big blow to his image, for
starters.
Syria / Lebanon: Monday, Detlev Mehlis, who is spearheading
the rejuvenated UN investigation into the assassination of former
Lebanese Prime Minister Rafik Hariri, is slated to visit
Damascus for the purpose of interviewing Syrian officials after
he placed four former intelligence chiefs under arrest. The
German prosecutor should be a strong candidate for the Nobel
Peace Prize if he can continue his assault on the Syrian
thugocracy, thereby improving the prospects for Lebanon as a
whole.
Germany: The race between Chancellor Gerhard Schroeder and
opponent Angela Merkel has tightened, with Merkel’s lead
slipping to 41-34. Both have key coalition partners but even
when you take those into consideration, neither would have a
majority in parliament as of today.
Austria: Every country has a tragedy that galvanizes the public.
Austria had an unbelievable one when a helicopter, transporting
cement to the top of a mountain for a building project,
accidentally dropped a big chunk on a cable, violently pitching
gondolas and throwing some passengers out the windows. At
least nine died. Now I’ll admit I haven’t followed the post-
mortem on this one, but it begs the obvious question. What the
heck was a helicopter, hauling giant chunks of cement, doing
flying over the cable car lift? What about to the side of it? Then
again, my degree was in political science.
Random Musings
–Let me get something off my chest that I danced around last
week. New Orleans was the scariest place I’ve ever been to in
my life. I felt safer walking the slums of Istanbul than I did here.
And I am not for rebuilding it as it once was.
But you know what will happen. The politicians are already
rushing to spend every freakin’ dollar they can to bring New
Orleans back to its former glory, whatever the heck that means.
[If you’re really looking for some good places to eat, drink and
be merry, I have a whole list of ‘em from around the world.]
And corruption being what makes the world go round, much of
the $billions being spent will just end up going down a rat hole,
rats having been among the survivors of Katrina.
–Here’s my suggestion for 9/11 commemorations each year.
Every town and state should review its evacuation plans for
various scenarios and publish them in the papers and on the Web.
Each family should review its own. We use the twice a year
change in time to check the batteries in our smoke detectors, this
is the least we can do on 9/11.
–Gang warfare: There is no greater problem in America, save
post-Katrina recovery and securing the nation against another
terror attack, than this one. The violence after the hurricane that
was on display in New Orleans was sickening, brutal, and far too
often par for the course nationwide. Living as I do near some of
the worst cities in the land in this regard, Irvington and Newark,
New Jersey, nothing depresses me more when I think of our
future.
A headline last Sunday in the Star-Ledger read “Surging violence
by gangs targeted.” The Assistant U.S. Attorney in charge of the
latest operation to combat this problem said “Right now we’re
losing. Violent gangs are surging across the country, taking over
neighborhoods and adding members by recruiting and training in
prisons.” [See Los Angeles and the recent arrests of inmates
with links to terrorists.]
I’ve written before of a single black parent I befriended years
ago, Mary, who lives in Newark. I helped pay for Mary’s son’s
tuition his senior year in high school and he went on to a full
basketball scholarship. Unfortunately, he blew the opportunity
after I did my best as a friend to keep him going, but he’s stayed
out of trouble and I continue to hope for the best.
Mary and I remain in close contact and you’ll recall about a year
ago that a kid I knew through her was gunned down in Irvington
by a bunch of gang members. They put a bullet in his head after
forcing him to the ground, all over his jewelry. Omar was
executed.
So the other day I’m reading the paper and I see that another kid
was killed where Mary used to live. I called her for details and
she said her friend, who still lives across the street, told her all
about it; the shot, the cries, the police showing up, and catching
the killer in her friend’s backyard.
“Mary, it’s just getting worse, isn’t it?” I said to her.
“It is worse than ever,” she said. “They’re killing ‘em up and
thinking nothing of it.”
As reader Bob S. wrote me the other day, it’s not even about
drugs anymore. It’s just about committing violence for the sake
of violence. And it’s spreading like crazy, witness the awful
problems the Washington, D.C. / Virginia / Maryland suburbs
are beginning to face with the arrival of the fiercest Central
American gangs.
And whether anyone wants to hear it or not, the gangs were a big
part of the Katrina aftermath. The threat to rescue workers and
the innocent was all too real.
Phil W. is an old friend of mine who passed along the thoughts
of his sister’s friend, Crystal, who was stranded in New Orleans
for a few days before escaping from Hell. These are Crystal’s
words on the Superdome.
“Gangs of boys from the projects wielding sticks and guns. They
were beating up every white person they saw, threatening,
shooting people, raping children….gang members beat one guy
to death who was (in turn) involved in a separate rape…
“When the buses came, the gang members blocked the way and
would not let on those with babies / children first.”
Crystal’s fear of going to a shelter is that the gang members will
be there too.
I beg Rudy Giuliani to add this issue to his campaign platform.
Innocent Americans are crying out for help, especially those
parents who are fighting a losing battle in trying to keep their
kids out of trouble.
–Mark Helprin, contributing editor to the Wall Street Journal
“The war in Iraq has been poorly planned and executed from the
beginning, and now, like a hurricane over warm water, the
insurgency is in a position to take immense energy from the
fundamental divisions in that nation. The rise of Chinese
military power, although lately noted, has met with no response.
America’s borders are open, its cities vulnerable, its civil defense
nonexistent, its armies stretched thin. We have taken only
deeply inadequate steps to prepare for and forestall a viral
pandemic that by the testimony of experts is a high probability
and could kill scores of millions in this country alone. That we
do not see relatively simple and necessary courses of action, and
are not led and inspired to them, represents a catastrophic failure
of leadership that bridges party lines.
“Perhaps this and previous administrations have had an effective
policy just too difficult to comprehend because they have
ingeniously sheltered it under the pretense of their incompetence.
But failing that, the legacy of this generation’s presidents will be
promiscuous declarations and alliances, badly defined war aims,
opportunities inexplicably forgone, ill-supported troops sent into
the field, a country at risk without adequate civil protections, and
a military shaped to fight neither the last war nor this one nor the
next.”
–From an op-ed by economist Robert Samuelson / Washington
Post. Samuelson is writing of our refusal to work out underlying
causes of national tragedies.
“A final example: immigration. The Census Bureau reported last
week that since 1989 about 70 percent of the increase in people
below the government’s official poverty line occurred among
Hispanics. Over the same period, Hispanics accounted for more
than half of the increase in people without health insurance. It
seems incontestable that the uncontrolled immigration of poor
Latinos increases poverty in the United States, even if many
immigrants successfully assimilate (as they do). Yet, illegal
immigration is rampant.
“We have trouble taking costly and disruptive actions in the
present to minimize more costly and more disruptive
consequences in the future. To wit: Americans regard cheap
gasoline as a quasi-constitution right, not to be governed by the
geography of oil. Similarly, they see Social Security and
Medicare benefits as inviolate, not to be compromised by an
aging population or longer life expectancies. We deal with
inconvenient facts by ignoring them.
“The post-Katrina investigations will reveal blunders and may
improve our capacity to deal with future natural disasters or acts
of terrorism. But we won’t address the larger problem of public
delusion, because it is so embedded in our democratic process.
Not every national tragedy or crisis can be anticipated or
avoided; but some can be defused or mitigated. Up to a point,
you can blame politicians for not leading public opinion. But
you can’t blame them for not leading where the public
steadfastly refuses to go.”
–Nicholas D. Kristof, op-ed, New York Times
“If it’s shameful that we have bloated corpses on New Orleans
streets, it’s even more disgraceful that the infant mortality rate in
America’s capital is twice as high as in China’s capital. That’s
right – the number of babies who died before their first birthdays
amounted to 11.5 per thousand live births in 2002 in
Washington, compared with 4.6 in Beijing.”
–So with the above in mind, I bring to you the thoughts of a
fraternity brother / classmate of mine who I will be seeing soon
at our 25th reunion…Dr. Whit W. Let me say at the outset this is
not my normal fare for this column. I offer no opinion of my
own on the topic, just that this gives you all something else to
chew on, as if we don’t already have enough on our plate. Whit
was spurred to pass on his thoughts with the sudden vacancies on
the Supreme Court.
“One of my great concerns as a Neonatologist (taking care of our
smallest and most fragile population of future leaders and
taxpayers) is the continuing progression of poverty that I see. I
live in a relatively prosperous section of South Carolina with low
unemployment and a nice mixture of stable blue and white collar
jobs (if you exclude the textile industry which has been dying for
decades). However, our population of patients in our Neonatal
ICU continues to grow with slowly increasing numbers of
premature infants, infants born to Spanish speaking mothers and
infants born who qualify for Medicaid (in the past decade, the
most premature infants have increased from 1.5% of all births to
almost 2% nationally, our percentage of mothers speaking only
Spanish has increased from 0% to 12% locally and the
percentage of infants eligible for Medicaid has increased from
50% to 61% statewide).
“Although the statistics are a little unreliable, there are numerous
reports that list the number of legal abortions in this country at
1.3 million per annum, the vast majority of which are born to
indigent patients (there are approximately 4 million births each
year in the U.S.). Finally, there are approximately 130,000
adoptions in the U.S. per year (the majority of which are
interfamily or friends or foreign adoptions). Only a few (50,000)
American born infants / children are adopted each year.
“Ignoring all the ethical and religious arguments (if you can), I
am deeply concerned about the practical issues of providing care
for another 1 million new indigent born infants each year. Will
the conservative supporters of adoption step up to the plate?
Where do we get the teachers and infrastructure to handle 1
million new first graders each year – and each grade subsequent
to that first wave of students? Where are states supposed to get
the funding to handle the influx of Medicaid enrollees, etc.?
“Obviously, this point is moot unless Roe v. Wade is overturned.
However, as the aftermath of Katrina has shown us, there is an
enormous gulf between the middle class and affluent of America
and the rapidly growing underclass. If we aren’t willing to
consider Europeanizing our governmental support of the less
well off (as much as I would hate some of the baggage that
would bring), I am afraid that we may be setting ourselves up for
another potential revolution a generation or so from now. And, if
there is one thing those of us at the more fortunate end of the
economic spectrum should consider, it is that America has
always supported the right to bear arms. That is one purchase the
less fortunate have taken advantage of.”
–Heck, Whit is talking about a generation from now. I say it
could start with the 2006 mid-term election at the rate we’re
going. Thankfully for some of us Republicans, the Democrats
are bereft of leadership.
–When I think of the late Chief Justice William Rehnquist, I
think of strength and character. I wish I could say that of even a
small minority of our elected officials.
–It’s amazing to think of the mess Katrina left on the legal front;
including all the lost records, witnesses, and lawyers.
–Speaking of law enforcement, New Orleans’ superintendent of
police, Eddie Compass is so far in over his head it’s just amazing
someone selected him for that position. His deputy, however,
Warner Riley, really has his act together. As for the cowardice
on display by the hundreds who left the force in the days after
Katrina, why is anyone surprised? This was the real New
Orleans.
–So much has been written on the UN oil-for-food scandal that I
won’t bother you on this matter. It’s just incredible that
Secretary General Kofi Annan, who admits he was to blame, if
not criminally liable, remains in the top slot. How’s Vaclav
Havel’s health these days?
–New York City is holding its Democratic primary for mayor
this week and according to the polls, Republican Mayor Michael
Bloomberg would capture 42% of the Democratic vote were he
on the ballot. I told you years ago the field was pitiful; there’s
your perfect example. It’s so bad for the Dems here that in a
local television report, an unemployed black man said of Mayor
Mike, “He’s done a wonderful job.”
–Here’s another sign of the coming apocalypse. Actor Bob
Denver, “Gilligan,” died the other day, at which point a
California state senator got the legislature to adjourn in his
memory because she once worked with him. Seriously.
–Uh oh. More news on the China food front. In the northeastern
part of the country, a restaurant was illegally advertising tiger
meat dishes (not allowed), but was found to be selling donkey
meat marinated in tiger urine instead. [South China Morning
Post] Next time you’re traveling over there, stick to the leading
hotels and their restaurants.
–Happy Birthday to Arnold Palmer who turns 76 today.
–Here in Nebraska, I stayed in Norfolk on Wednesday, the home
of Johnny Carson. There is a terrific museum in town with a
large exhibit on his life. I’ve commented elsewhere on the site
on this favorite of mine, but I was struck by a comment of a
former writer of his who said “He was disciplined, with a low
tolerance for incompetence.” Johnny wouldn’t have put up with
FEMA Director Michael Brown, let alone the state and local
officials in Louisiana. Now let’s work on Chertoff.
–I did some extensive driving Wednesday and Thursday, passing
one small town after another and playing the game “This is one
place I could live, and this is one I’d avoid.” I was struck by
some talk on local radio (though far from surprised) concerning
seminars for children and parents on the methamphetamine
crisis that is sweeping the country. Parents are given free drug-
testing kits here.
But as I went through the towns, and explored Johnny’s home of
Norfolk, I also couldn’t stop thinking of, nor playing,
Montgomery Gentry’s 2002 song “My Town.” After hearing it
on the radio, I picked up the CD at Wal-Mart and have been
wearing the darn thing out ever since.
My Town…written by Jeffrey Steele and Reed Neilson
[Just the first verse]
There’s a “For Sale” sign on a big old rusting tractor.
You can’t miss it, it’s the first thing that you see.
Just up the road, a pale-blue water tower.
With “I love Jenny” painted in bright green.
Hey, that’s my Uncle Bill, there by the courthouse.
He’ll be lowerin’ the flag when the sun goes down.
And this is my town [Na na na na na]
Yeah, this is my town [Na na na na na]
Hey!
[chorus]
Where I was born, where I was raised.
Where I keep all my yesterdays.
Where I ran off ‘cos I got mad.
An’ it came to blows with my old man.
Where I came back to settle down.
It’s where they’ll put me in the ground.
This is my town. [Na na na na na]
Yeah this is my town. [Na na na na na]
My town.
[Guess there’s another reason why some can’t leave the Gulf
Coast, too.]
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $453
Oil, $64.08
Returns for the week 9/5-9/9
Dow Jones +2.2% [10678]
S&P 500 +1.9% [1241]
S&P MidCap +1.8%
Russell 2000 +2.2%
Nasdaq +1.6% [2175]
Returns for the period 1/1/05-9/9/05
Dow Jones -1.0%
S&P 500 +2.4%
S&P MidCap +8.6%
Russell 2000 +4.1%
Nasdaq 0.00% [unchanged]
Bulls 52.1
Bears 28.1 [Source: Chartcraft / Investors Intelligence]
Shout out to LT!
And to Ken and Colene, I had a delightful time at dinner the
other night. [They took me to one of Ted Turner’s restaurants in
Omaha. Great spot. Super people.]
Finally, if you want to read a good piece on the issue of global
warming, read our own Dr. Bortrum’s column, 8/31.
Go DEACS! [Wake Forest – Nebraska……be there!]
Brian Trumbore
