Year: 2002

FREE ADVICE WORTH MORE THAN YOU PAY FOR IT

Jack Bogle is a hero, and Jack Bogle is the investor’s friend. I have linked to his wisdom before. For those of you who wish I’d write more about money and less about politics – read this recent speech once or twice. It ranges from the Big Picture all the way to variable annuities.

DEEPLY DISCOUNTED SOFTWARE FOR NONPROFITS

Also, if you support or work at or run a nonprofit organization, you will certainly want to be sure your group knows about DiscounTech.com, source of deeply discounted software for nonprofits, written up in yesterday’s New York Times.

FUNNY – HE DOESN’T LOOK DUTCH

Judith: ‘I’m sure you’ve gotten a million emails about this, but I thought I’d point it out anyway – it’s Bruce Springsteen, not Springstein. I realize I know way too much about Bruce, but I grew up in New Jersey.’

REBUTTING AXELROD REBUTTING KENNEDY

Tony Gurley: ‘While I disagree with much of what Sen. Kennedy said in the speech that you published a few days ago, Mr. Axelrod is dead wrong on a major point of his comments. It was not until the mid-90’s that ANYONE in the U.S. (incl. Pres. Kennedy, McNamara or the JCS in the Cuban Missile crisis) learned that Soviet commanders in Cuba had authority to use tactical nukes in combat on their own prerogative without getting Moscow’s approval. Had an invasion taken place, a nuclear exchange may have occurred. I cite the excellent book, One Hell of a Gamble, as a reference. The title is ironic inasmuch as no one, at that time, had any concept of just how much of a gamble it really was!’

Dara G: ‘Michael Axelrod demonstrates such dangerous ignorance about Ireland that I have to respond. How can someone who is seemingly articulate and intelligent claim that Ireland has waged and is waging a proxy terrorist war with Britain through the IRA. This claim is absolutely and patently absurd. What shocks me as an Irish citizen living in London is that such a ludicrous lie could be passed off so casually. To a citizen of a neutral western liberal democracy with some of the strongest anti-terrorism laws in Europe (specifically targeted against the IRA) and which has full and cordial diplomatic relations with the UK, this suggestion is deeply insulting. Michael Axelrod should be more careful. Even the most cursory of investigations of Irish and British affairs would reveal that his assertion is almost diametrically opposed to reality.’

OTHER THOUGHTS

Paul Romaine: ‘I was surprised that you didn’t link to Paul Krugman’s cover story in this past Sunday’s New York Times about the end of the American middle class and the triumph of the plutocrats.’

Rob Myhre: ‘I can’t believe your reader, Robert A. Smith, accused the Democrats of vote buying. What was that $300 tax rebate? If that wasn’t vote buying, what is? The Republicans have a great game going. Tell the voters they’re going to let the people keep more of their money, then give most of it to the rich. The deficit goes up in the meantime, but winning the election is the important thing. Not the future of the country.’

Mary: ‘About Social Security….I wish it had been called Social Insurance. To draw an analogy, we all have to pay for insurance (on home, car, etc.) that most of us never use; we consider ourselves lucky if we don’t lose a home to fire, for instance. The wealthy should look at Social Security the same way; they should thank their lucky stars they don’t have to use it, and leave it to the less fortunate.’

FINALLY . . .

Some of you may be interested in this Washington Post piece, describing Republican plans once they regain control of the Senate and have, thus, something of a lock on all three branches of government. And Dianne Moore offers this article linking to a 90-page report that describes Republican plans for, well, world domination. (Not that, if someone has to dominate the world, I wouldn’t want it to be us.)

But first . . . we started the week with this:

<< The man recruits three ships full of men to make this unbelievably dangerous, scary voyage to what turns out to be America . . . and we can’t close the stock market for one rotten little day? >>

To which Bob responds: ‘What about the argument that by the account of his own diary he murdered and enslaved the majority of natives that welcomed him with open arms?’

☞ Ouch. I promise to write a column next Columbus Day.

CHURCH AND STATE

Billionaire TV evangelist Pat Robertson may most recently be remembered for his dialog with Jerry Falwell in the wake of 9/11.

FALWELL: ‘I really believe that the pagans, and the abortionists, and the feminists, and the gays and the lesbians who are actively trying to make that an alternative lifestyle, the ACLU, People For the American Way – all of them who have tried to secularize America – I point the finger in their face and say ‘you helped this happen.”

PAT ROBERTSON: ‘Well, I totally concur.’

One might think this would put Pat outside the American mainstream. But those of you who agree with Chief Justice Rehnquist that ‘separation of church and state’ was never the founders’ intention, will be pleased by this news that Pat has gotten a ‘faith-based’ grant from the Bush administration. Click here for the story.

And in other recent news . . .

MEDIEVAL MEDICINE FOR WOMEN

The Bush administration plans to appoint Dr. W. David Hager – who refuses to prescribe birth control to unmarried women – to head the advisory panel on women’s health of the Food and Drug Administration. In 1998, Hager and his wife authored Stress and the Woman’s Body, a book that puts ‘an emphasis on the restorative power of Jesus Christ in one’s life, not on self-healing’ and recommends specific Scripture readings and prayers as treatment for premenstrual syndrome and other ailments.

And back to your money . . .

MAKING THE TAX CUT PERMANENT

Under current law, the benefits of the tax cut for the top 1% of taxpayers phase in over the next few years until 2010. At that point, according to a recently released study, the top 1% will be getting 51.8% of the cuts.

But that’s also the point at which the law is set to expire. In 2011, we’d all be back to where we were in 2001.

The Republicans don’t want to see that happen. They feel it’s important to make permanent the tax cuts for everyone.

Most Democrats feel it would be enough to lock in the tax cuts for just the bottom 99%.

If we did that – making permanent the cuts for 99% of American taxpayers but freezing tax rates for the remaining 1% at their current levels – we would, by 2010, be saving 51.8% of the cost of the tax cut. That huge savings could be used for things like a prescription drug benefit, smaller classroom sizes, and honoring the Social Security ‘lock box.’

What are we talking here in actual dollars? Well, as you can see if you click the link above, the study estimates an average 2010 tax saving of $85,000 for those in the top 1%. That compares with about $1,700 for the next best-off 19% of taxpayers . . . and about $800 for the 60% of taxpayers in the middle. (The study has a great table that shows all this.)

Some of you will say that the $85,000 is fair in comparison with the $800 because, of course, it’s our money not the government’s, and, in any event, of course the rich will save a little more, because they pay so much more.

But consider these two points:

First, while the top bracket was going down from 90% to 70% to 28% from Eisenhower’s day to Kennedy’s to Reagan’s, the brackets most people faced did not fall much, if at all. And the payroll tax – ‘the working man’s tax’ – was skyrocketing. So we had decades where one small group of Americans was seeing a huge cut in marginal rates while the rest of us were not. What would be so terrible if the rest of us now got a modest tax cut without giving a big tax cut to those at the top?

Second, the top 1% have legal ways to soften that 39.6% top bracket considerably – key among them, a 0% tax rate on municipal bond interest and a 20% rate on long-term capital gains.

I don’t begrudge the top 1% these things. I just don’t see that further tax relief, to the tune of $85,000 a year in 2010, is the wisest economic policy.

The country and the world face desperate needs, daunting challenges, and exciting opportunities. The Bush administration and many Republicans seem to feel that by far the highest priority among these needs, challenges, and opportunities – and thus the place to target a huge portion of our resources – is the plight of the rich.

Please don’t hand the Senate gavel back to Trent Lott on November 5.

A quick word about war . . .

COUNTERPOINT TO SENATOR KENNEDY’S SPEECH

Roger Farley: ‘Here is a link to the full testimony of Eliot Cohen, Professor of Strategic Studies at the Johns Hopkins University School of Advanced International Studies, who makes a compelling argument for the removal of Saddam Hussein.’

And, finally, let’s make ME a little money . . .

MAMMY

I mentioned that I have a piece of Jolson & Company, which opened at the Century Theater in New York a couple of weeks ago. The reviews have been good and audiences are giving resounding, standing ovations at every performance … yes, every performance. For some of the older Jolson fans, that’s no simple gesture. Buy your tickets, spread the word – I didn’t know or care about Al Jolson either until I show the show. But that’s one of the things that make it so much fun. You enter his world and come out the other end knowing a man’s life and having revisited an era. (You will love the young Mae West.) And singing.

Have a great weekend.

For those who missed it, this speech was delivered on the floor of the Senate on October 7.

We face no more serious decision in our democracy than whether or not to go to war. The American people deserve to fully understand all of the implications of such a decision.

The question of whether our nation should attack Iraq is playing out in the context of a more fundamental debate that is only just beginning — an all-important debate about how, when and where in the years ahead our country will use its unsurpassed military might.

On September 20, the Administration unveiled its new National Security Strategy. This document addresses the new realities of our age, particularly the proliferation of weapons of mass destruction and terrorist networks armed with the agendas of fanatics. The Strategy claims that these new threats are so novel and so dangerous that we should “not hesitate to act alone, if necessary, to exercise our right of self-defense by acting pre-emptively.”

But in the discussion over the past few months about Iraq, the Administration, often uses the terms “pre-emptive” and “preventive” interchangeably. In the realm of international relations, these two terms have long had very different meanings.

Traditionally, “pre-emptive” action refers to times when states react to an imminent threat of attack. For example, when Egyptian and Syrian forces mobilized on Israel’s borders in 1967, the threat was obvious and immediate, and Israel felt justified in pre-emptively attacking those forces. The global community is generally tolerant of such actions, since no nation should have to suffer a certain first strike before it has the legitimacy to respond.

By contrast, “preventive” military action refers to strikes that target a country before it has developed a capability that could someday become threatening. Preventive attacks have generally been condemned. For example, the 1941 sneak attack on Pearl Harbor was regarded as a preventive strike by Japan, because the Japanese were seeking to block a planned military buildup by the United States in the Pacific.

The coldly premeditated nature of preventive attacks and preventive wars makes them anathema to well-established international principles against aggression. Pearl Harbor has been rightfully recorded in history as an act of dishonorable treachery.

Historically, the United States has condemned the idea of preventive war, because it violates basic international rules against aggression. But at times in our history, preventive war has been seriously advocated as a policy option.

In the early days of the Cold War, some U.S. military and civilian experts advocated a preventive war against the Soviet Union. They proposed a devastating first strike to prevent the Soviet Union from developing a threatening nuclear capability. At the time, they said the uniquely destructive power of nuclear weapons required us to rethink traditional international rules.

The first round of that debate ended in 1950, when President Truman ruled out a preventive strike, stating that such actions were not consistent with our American tradition. He said, “You don’t ‘prevent’ anything by war…except peace.” Instead of a surprise first strike, the nation dedicated itself to the strategy of deterrence and containment, which successfully kept the peace during the long and frequently difficult years of the Cold War.

Arguments for preventive war resurfaced again when the Eisenhower Administration took power in 1953, but President Eisenhower and Secretary of State John Foster Dulles soon decided firmly against it. President Eisenhower emphasized that even if we were to win such a war, we would face the vast burdens of occupation and reconstruction that would come with it.

The argument that the United States should take preventive military action, in the absence of an imminent attack, resurfaced in 1962, when we learned that the Soviet Union would soon have the ability to launch missiles from Cuba against our country. Many military officers urged President Kennedy to approve a preventive attack to destroy this capability before it became operational. Robert Kennedy, like Harry Truman, felt that this kind of first strike was not consistent with American values. He said that a proposed surprise first strike against Cuba would be a “Pearl Harbor in reverse. “For 175 years,” he said, “we have not been that kind of country.” That view prevailed. A middle ground was found and peace was preserved.

Yet another round of debate followed the Cuban Missile Crisis when American strategists and voices in and out of the Administration advocated preventive war against China to forestall its acquisition of nuclear weapons. Many arguments heard today about Iraq were made then about the Chinese communist government: that its leadership was irrational and that it was therefore undeterrable. And once again, those arguments were rejected.

As these earlier cases show, American strategic thinkers have long debated the relative merits of preventive and pre-emptive war. Although nobody would deny our right to pre-emptively block an imminent attack on our territory, there is disagreement about our right to preventively engage in war.

In each of these cases a way was found to deter other nations, without waging war.

Now, the Bush Administration says we must take pre-emptive action against Iraq. But what the Administration is really calling for is preventive war, which flies in the face of international rules of acceptable behavior. The Administration’s new National Security Strategy states “As a matter of common sense and self-defense, America will act against such emerging threats before they are fully formed.”

The circumstances of today’s world require us to rethink this concept. The world changed on September 11th, and all of us have learned that it can be a drastically more dangerous place. The Bush Administration’s new National Security Strategy asserts that global realities now legitimize preventive war and make it a strategic necessity.

The document openly contemplates preventive attacks against groups or states, even absent the threat of imminent attack. It legitimizes this kind of first strike option, and it elevates it to the status of a core security doctrine. Disregarding norms of international behavior, the Bush Strategy asserts that the United States should be exempt from the rules we expect other nations to obey.

I strongly oppose any such extreme doctrine and I’m sure that many others do as well. Earlier generations of Americans rejected preventive war on the grounds of both morality and practicality, and our generation must do so as well. We can deal with Iraq without resorting to this extreme.

It is impossible to justify any such double standard under international law. Might does not make right. America cannot write its own rules for the modern world. To attempt to do so would be unilateralism run amok. It would antagonize our closest allies, whose support we need to fight terrorism, prevent global warming, and deal with many other dangers that affect all nations and require international cooperation. It would deprive America of the moral legitimacy necessary to promote our values abroad. And it would give other nations — from Russia to India to Pakistan — an excuse to violate fundamental principles of civilized international behavior.

The Administration’s doctrine is a call for 21st century American imperialism that no other nation can or should accept. It is the antithesis of all that America has worked so hard to achieve in international relations since the end of World War II.

This is not just an academic debate. There are important real world consequences. A shift in our policy toward preventive war would reinforce the perception of America as a “bully” in the Middle East, and would fuel anti-American sentiment throughout the Islamic world and beyond.

It would also send a signal to governments the world over that the rules of aggression have changed for them too, which could increase the risk of conflict between countries such as Russia and Georgia, India and Pakistan, and China and Taiwan.

Obviously, this debate is only just beginning on the Administration’s new strategy for national security. But the debate is solidly grounded in American values and history.

It will also be a debate among vast numbers of well-meaning Americans who have honest differences of opinion about the best way to use U.S. military might. The debate will be contentious, but the stakes – in terms of both our national security and our allegiance to our core beliefs – are too high to ignore. I look forward to working closely with my colleagues in Congress to develop an effective and principled policy that will enable us to protect our national security and respect the basic principles that are essential for the world to be at peace.

— Edward M. Kennedy.

Did you see Jeb Bush on yesterday’s Today Show? Part one ran in the 7am hour – a thing I know exclusively thanks to the wonders of TiVo – and part two, about Jeb’s daughter’s drug addiction, ran an hour later.

Jeb was as heartfelt as any good father would be in his anguish over his 25-year-old daughter’s problem, which has been ongoing for some years. She may even wind up in prison at some point if she can’t kick the addiction, Jeb acknowledged.

The Today Show was much too polite to ask why, with all his compassion and first-hand experience, Jeb slashed Florida’s drug treatment budget by 85%.

How could the Today Show not ask this question?

It’s nice to know Jeb loves his daughter, and I’m sure he does. But what about the rest of Florida’s children?

For more on the reasons for this budget cut – it was made in order to cut taxes for Florida’s wealthiest families – click here.

Tomorrow: A Speech on War and Peace

The man recruits three ships full of men to make this unbelievably dangerous, scary voyage to what turns out to be America . . . and we can’t close the stock market for one rotten little day?

Sorry there was no column yesterday – I thought it was a long weekend.

We will get back to your good comments on Rob and the Mideast tomorrow, but for today, just this one, from Paul Berkowitz, who writes: ‘The most succinct summary of the Mid East I have seen: If the Arabs laid down their weapons, there would be no more violence. If the Jews laid down their weapons, there would be no more Israel.’

Okay. Let’s talk Iraq. Two ‘must-reads’ are the relatively short statements of the junior Senator from New York – who voted with the President – and of a long-time Democratic congressman from California, who did not:

• Senator Hillary Clinton “will take the President at his word that he will try hard to pass a UN resolution and will seek to avoid war, if at all possible.”

• Congressman Pete Stark “doesn’t trust this president and his advisors.”

Which of these two statements most closely reflects your views (click to see them)? Whichever it is, my great hope is that by rattling our saber we will not have to use it – or not without UN sanction, anyway.  Or, at the very least, not without considerable allied support.

The fear is that the White House hawks really don’t see the huge downside in a unilateral invasion.  Nicholas Lemann had a really important piece in the September 16 issue of The New Yorker – long, but very much worth reading if you can find the time.

In part:

The contrast between the Democrats’ faith in international treaties and organizations and the hawks’ mistrust of them [the piece reads in small part] couldn’t be more deep-seated; it reflects fundamentally different views of human nature. Do you get people to behave the way you’d like them to through power and force, or by encouragement and friendship?

As one of you kindly wrote me not long ago, it’s sort of the difference between a martial plan and a Marshall Plan.  (Both, of course, may be needed.  But Democrats tend to get more excited by the latter than the former, and vice versa.)

We made a terrible mistake declaring war on terror generally and not on Al-Qaeda specifically, Lemann’s piece argues.  And we badly bungled Tora Bora and the subsequent Operation Anaconda.

One of the most thought-provoking passages in the piece comes from Harvard Professor Stephen Walt.  He tells Lemann:

We didn’t get Mullah Omar and Osama bin Laden. We’re killing civilians. We’re killing friendly forces. This is ultimately a battle for the hearts and minds of people around the world. When your village just got levelled by an American mistake, the conclusions you draw will be rather different from what we’d want them to be.

Americans do not yet perceive a cost to having a freewheeling foreign policy. We stayed in the Persian Gulf for ten years, and lost fewer than three hundred people. We knocked off the Taliban in a few weeks. But imagine going into Iraq. If things go badly, we end up there for a long time. There’s a point where the costs start adding up. It will generate higher and higher levels of resentment. Empires start generating a lot of resentment. I’d leave Saddam right where he is. Keep him bottled up. Wait for him to die. What do we do if we’re successful? How many coups were there in Iraq between 1958 and 1968? It’s a country riven with internal divisions. That’s why the Bush people didn’t go to Baghdad in 1991. Iran is much more powerful and important than Iraq—how do Iranians react? I have limited confidence in our ability to run countries we don’t understand. Why, in the middle of pursuing Al Qaeda, would you decide, “Oh, let’s take a big country and invade it and create a giant political mess there!” We’ve seen people attempting this in the Middle East before, and it hasn’t worked. You never know how these operations will go. History is not on the side of the advocates here.

The one thing we know for sure is that the timing of all this is starkly cynical.  After all, George W. Bush knew as a candidate all the things about Saddam he has told us as President.  Saddam’s gassing of the Kurds, the invasion of Kuwait, the plot to kill his dad, the absence of inspectors since 1998 . . . he knew all this!  (“It’s as if he’s been watching the History Channel and thinks it’s Headline News!” moans CNN’s Paul Begala.  “Wait til they show him the briefing book on Tiananmen Square!”)  Why didn’t candidate Bush campaign on this then?  “And if you elect me, I will lead us into a unilateral invasion and American occupation of Iraq!”  Or if not during the campaign, in his inaugural address?  Or over the summer of 2001?  Or last spring?  Or – having held off over this summer – why not hold off to November 6?  Why just now has the debate been so necessary?  Why just now is he truly alarmed about Saddam?

Republican strategists have made it very clear that the war is their way to win the election November 5 – thereby to get a more conservative Judiciary for their rightwing base and to make permanent their multi-trillion-dollar tax cut for the best off.

The first slide of the PowerPoint found on a floppy disk near the White House in June outlining Karl Rove’s strategy for Republican candidates in the midterm election was titled: “Focus on War.”  Get prescription drugs and educational and job losses and Social Security and deficits and Harken and Halliburton off the front page.  Focus on War.

They are a tough crowd when it comes to winning elections.  Florida in 2000 may have been just the beginning.

Rob [in response to ‘Harvard’s President on Anti-Semitism,’ October 1]: ‘I believe that a lot of people does not trust Jews, becouse while they complain that they have been hystorically harrased, they discriminate others like there is no tommorow. Even you in your everyday writings – you sponsor mostly Jewish writers. Let’s be fair and start treating people equally. I think it is great that the President of Harvard is Jew. Maybe he should go back to live in Isreal – to understand the situation better and see how Palestinians are treated like dogs and murdered without any warnings. Then maybe he will give scholarships to Arabs, becouse they are people too. This is what Europe dislikes. Isreal is one horrible country that treats Arabs like the Nazi. What we won’t allow here in US is Jewish pressure to push our sons and daughters to a war against Iraq (which is mostly Isreal-i enemy).

‘Is it great to see Arabs and US soldiers (mostly Christians) die, for the Jewish sake? You might think so. I thought of you as a great writer. Many non jewish people are reading you too. You can do better than this. Religion is not worth the paper it is written on (including Christian or Muslim too).’

☞ Gosh – where to start? I guess by explaining why I post this message at all. It is because it sounds sincere to me, even though terribly wrong-headed; and because the more that people feel heard, the less they may seethe with frustration. And also because it’s important to know what others think, and to respond.

(As to posting the message unedited, I’m not sure I made the right choice. Normally, I clean up grammar and spelling. But it seemed to me in this case that the jarring point of view came through, also, in the jarring writing, and I would not tamper with it. No disrespect meant.)

Where do I agree with Rob? In believing that people should be treated fairly and equally . . . in feeling awful for innocent Palestinians who have suffered or even been killed . . . in thinking that religion, taken to extremes, can be horrendously negative instead of the positive force it is meant to be.

Where do I disagree? Well, in every other respect. I recognize that Rob is ‘venting’ here. But venting against Jews – or any other group – is very dangerous business. I think we should all lean over backwards to avoid it, and to temper our remarks with sympathy and respect. There is, for example, no question in my mind that Palestinians have been suffering terribly, and that we need desperately to find some way to resolve this. (The Bush administration’s notion of just butting out and letting the two sides handle it themselves proved disastrous. The Clinton administration came so close to helping to broker an agreement – but Yasir Arafat could not take yes for an answer . . . or even put forth a counter-proposal.) But where is Rob’s acknowledgement of the thousands of Israelis recently murdered and maimed by Palestinians? Of the wars launched against Israel and the long-stated goal of its destruction? Or the millennia of persecution? Or the systematic murder of 6 million Jews less than 60 years ago? Does he not see how an event like that, and subsequent attacks, could lead a people to complain? Perhaps even – when a peace plan is rejected and the mass murder of civilians resumes – to strike back?

All this seems so obvious to me and, I would expect, to most of this column’s readers (who, Rob is surely right, come from all faiths). But there are hundreds of millions of people who feel as he does – hundreds of thousands of them if not millions in the U.S. – so I don’t think it makes sense just to ignore it or fail to respond.

Harvard does, of course, give scholarships to Arab students. And as to my sponsoring mostly Jewish writers, I don’t know the religion, ethnicity or nationality of many of those who write in – including Rob himself.

Comparing Israelis to Nazis, meanwhile, is both wildly offensive and completely absurd. It is some of the Arab militants who have called for Israeli extermination, not Israelis who have called for, let alone embarked upon, the extermination of millions of Palestinians.

President Summers’ great speech wasn’t anti-Palestinian, it was anti-anti-Semitism. What decent, fair-minded person could be against that?

Peace, Rob – peace!